[Federal Register Volume 68, Number 17 (Monday, January 27, 2003)]
[Notices]
[Pages 3904-3905]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1701]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-27640]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

January 21, 2003.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated under the Act. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendment(s) is/are available for public 
inspection through the Commission's Branch of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by February 14, 2003, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549-0609, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts or law that 
are disputed. A person who so requests will be notified of any hearing, 
if ordered, and will receive a copy of any notice or order issued in 
the matter. After February 14, 2003, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Allegheny Energy Inc. (70-10109)

Notice of Proposed Charter Amendment To Eliminate Preemptive Rights of 
Stockholders and Order Authorizing Solicitation of Proxies In 
Connection With the Proposed Amendment

    Allegheny Energy Inc. (``Allegheny''), 10435 Downsville Pike, 
Hagerstown, Maryland 21740, a registered holding company under the Act, 
has filed a declaration (``Application'') under sections 6(a), 7 and 
12(e) of the Act and rules 62 and 65 under the Act.
    Allegheny seeks authorization to: (i) Amend its charter 
(``Charter'') to eliminate preemptive rights of stockholders and (ii) 
solicit proxies in connection with the proposed charter amendment.
    Allegheny proposes to amend its Charter to eliminate any preemptive 
right of stockholders to subscribe for newly issued securities of 
Allegheny. Under Maryland law, a preemptive right is the preferential 
right of existing stockholders to purchase any issuance of stock or any 
issuance of a security convertible into an additional issuance of 
stock. Preemptive rights do not accrue unless expressly granted in a 
charter. Under the existing provisions of the Charter, stockholders of 
Allegheny possess preemptive rights to purchase, on a pro rata basis, 
any new issuance by Allegheny in a non-public offering for money, of 
common stock or securities convertible into common stock of Allegheny. 
On December 5, 2002, the Board of Directors of Allegheny unanimously 
approved resolutions proposing to amend and restate article VII of the 
Charter to provide that preemptive rights shall not exist with respect 
to Allegheny's securities. It is proposed that the current article VII, 
section B of the Charter be deleted and a new article VII, section B be 
inserted

[[Page 3905]]

so that article VII, section B of the Charter as amended shall read in 
full and in its entirety as follows:

    B. No holder of Common Stock shall be entitled to preemptive rights 
and preemptive rights shall not exist with respect to shares or 
securities of the Corporation.

The affirmative vote of a majority of all the votes entitled to be cast 
is required for the approval of the proposal.
    Allegheny states that elimination of preemptive rights will give 
the Board of Directors of Allegheny greater flexibility and reduce the 
cost of financings, such as the sale through private placements of new 
shares of common stock or senior securities convertible into common 
stock. The company states that the preemptive rights provision in the 
Charter serves as a significant impediment to any private sale of 
equity securities for cash to institutional or strategic investors. 
These types of issuances of equity can be important in times like these 
when both Allegheny and the capital markets, at least for energy 
companies, are under great stress, Allegheny states.
    Allegheny would like to submit the proposed amendments to its 
Charter as described in this Application to stockholders and to solicit 
proxies from stockholders at a special meeting during the first quarter 
of 2003. Adoption of the proposed amendments will require the 
affirmative vote of the holders of a majority of the outstanding shares 
of Allegheny's common stock entitled to vote at the special meeting.
    The cost of the solicitation of proxies will be borne by Allegheny. 
In addition to the solicitation of proxies by use of the mails, 
Allegheny, or its subsidiaries, may use the services of its officers, 
directors and regular employees (none of whom will receive any 
compensation other than their regular compensation) to solicit proxies, 
personally or by telephone. Arrangements may also be made with banks, 
brokerage houses and other custodians, nominees and fiduciaries to 
forward the proxy materials to the beneficial owners, and Allegheny may 
reimburse such banks, brokerage houses, custodians, nominees and 
fiduciaries for reasonable expenses. Allegheny has hired MacKenzie 
Partners, Inc. to assist in soliciting proxies and has agreed to pay a 
customary fee for these services, in addition to expenses incurred in 
connection with the solicitation of proxies.
    The following estimated fees and expenses, including expenses of 
the special meeting of stockholders, are expected to be incurred by 
Allegheny in connection with the proposed proxy solicitation and 
special meeting: Proxy Solicitation, $50,000; Printing, $15,000; 
Mailings, $100 to $150,000; Legal Fees, $100,000. The total estimated 
fees and expenses are $265,000 to $315,000.
    No state or federal commission, other than this Commission, has 
jurisdiction over the proposed transactions.
    Allegheny has requested that an order be issued authorizing the 
solicitation of proxies from shareholders in connection with the 
proposed Charter amendment. It appears to the Commission that 
Allegheny's declarations regarding the proposed solicitation of proxies 
should be permitted to become effective immediately under rule 62(d).
    It is ordered, under rule 62 under the Act, that the declaration 
regarding the proposed solicitation of proxies from Allegheny 
shareholders in connection with the proposed Charter amendment become 
effective immediately, subject to the terms and conditions contained in 
rule 24 under the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-1701 Filed 1-24-03; 8:45 am]
BILLING CODE 8010-01-P