Bangor Hydro Electric Co – ‘S-3DPOS’ on 1/14/97

As of:  Tuesday, 1/14/97   ·   Effective:  1/14/97   ·   Accession #:  896058-97-9   ·   File #:  33-44819

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Post-Effective Amendment to an S-3D   —   Form S-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-3DPOS     Amendment No. 2 to Form S-3                           37    145K 
 2: EX-23.01    Consent of Independent Accountants                     1      5K 

S-3DPOS   —   Amendment No. 2 to Form S-3
Document Table of Contents

S-3DPOS
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                                                     Registration No. 33-44819
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------------

 AMENDMENT NO. 2
To
Form S-3
REGISTRATION STATEMENT
 UNDER
THE SECURITIES ACT OF 1933

----------------------

 BANGOR HYDRO-ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)

MAINE                                       01-0024370
(State or other jurisdiction of            (I.R.S. Employer Identification No.) 
incorporation or organization)                                                  

 33 State Street
 Bangor, Maine 04401
(207) 945-5621
 (Address, including zip code, and telephone number, including
 area code, of registrant's principal executive offices)

----------------------

 Frederick S. Samp, Esq.
 Vice-President--Finance and Law
 Bangor Hydro-Electric Company
 33 State Street
 Bangor, Maine 04401
(207) 945-5621
 (Name, address, including zip code, and telephone number, including
area code, of agent for service)

----------------------

         Approximate  date of commencement of proposed sale to the public:  From
time to time after the effective date of the Registration Statement.            

----------------------

         If the only securities  being registered on this Form are being offered
pursuant to dividend or interest  reinvestment plans, please check the following
box.                                                                            
 [X]

         If any of the  securities  being  registered  on  this  Form  are to be
offered  on a  delayed  or  continuous  basis  pursuant  to Rule 415  under  the
Securities Act of 1933,  other than  securities  offered only in connection with
dividend or interest reinvestment plans, check the following box.               
 [ ]

         If this Form is filed to register additional securities for an offering
pursuant to rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering.                         
 [ ]

         If this  Form is a  post-effective  amendment  filed  pursuant  to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  registration
statement for the same offering.                                                
 [ ]

         If delivery of the  prospectus  is expected to be made pursuant to Rule
434, please check the following box.                                            

 [ ]

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PROSPECTUS                                                                      

 BANGOR HYDRO-ELECTRIC COMPANY

119,760 Shares

COMMON STOCK

 DIVIDEND REINVESTMENT AND
COMMON STOCK PURCHASE PLAN

         Bangor   Hydro-Electric   Company   (the   "Company")   hereby   offers
participation  in its Dividend  Reinvestment and Common Stock Purchase Plan (the
"Plan").  The Plan is designed to provide holders of the Company's common stock,
$5 par value (the "Common Stock") and cumulative preferred stock, $100 par value
(the "Preferred Stock") with a convenient way to purchase shares of Common Stock
by having their cash  dividends  automatically  reinvested  or, if they wish, by
making additional cash payments.                                                

Participants in the Plan may:                                 

         o        Reinvest  all or a portion  of cash  dividends  paid on Common
                  Stock and Preferred Stock  registered in their names or Common
                  Stock  credited  to their  Plan  accounts  in shares of Common
Stock.                                      

         o        Make  optional  cash  payments at any time of at least $25 for
                  any single investment, up to a maximum of $25,000 per calendar
year.                                       

         o        Receive,  upon written request,  certificates for whole shares
    of Common Stock credited to their Plan accounts.

         o         Deposit certificates  representing Common Stock into the Plan
for safekeeping.                          

         o         Sell shares of Common Stock  credited to their Plan  accounts
through the Plan.                         

         Shares of Common Stock will be purchased  under the Plan, at the option
of the Company, from shares purchased in the open market, newly issued shares or
shares held in the treasury of the                                              

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Company. Any open market purchases will be effected through an Independent Agent
(as hereinafter  defined) selected by the Company. The Common Stock is listed on
The New York Stock Exchange.                                                    

         The purchase  price of newly issued or treasury  shares of Common Stock
purchased under the Plan for an Investment Date (as hereinafter defined) will be
the average of the daily closing  prices of the Common Stock reported on The New
York Stock  Exchange  Composite Tape as published in The Wall Street Journal for
the five trading days  preceding  that  Investment  Date. The price of shares of
Common Stock  purchased or sold in the open market will be the weighted  average
price per share  (adjusted,  in the case of shares sold in the open market,  for
brokerage commissions,  any related service charges and applicable taxes) of the
aggregate number of shares purchased or sold,  respectively,  in the open market
for the relevant  period.  There will be no discount from these purchase  prices
offered for shares of Common Stock  purchased  under the Plan.  The Company will
pay the costs of  administration  of the  Plan,  except  that Plan  participants
("Participants")  will  bear  the cost of  brokerage  commissions,  any  related
service charges and applicable  taxes relating to shares of Common Stock sold in
the open market.                                                                

         This  Prospectus  contains the  provisions of the Plan and,  therefore,
this Prospectus should be retained by Participants for future reference.        

 -------------------

 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
 COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

 -------------------

The date of this Prospectus is January 14, 1997.

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 AVAILABLE INFORMATION

       The  Company  is  subject  to  the  informational   requirements  of  the
Securities  Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange  Commission  (the  "Commission").  All such reports,
proxy statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at  Northwestern  Atrium Center,  500 West Madison  Street,  14th Floor,
Chicago,  Illinois 60661 and at Seven World Trade Center,  13th Floor, New York,
New York 10048. Copies of such material can be obtained at prescribed rates from
the  Public  Reference  Section of the  Commission  at its  principal  office at
Judiciary Plaza, 450 Fifth Street,  N.W.,  Washington,  D.C. 20549. In addition,
the Commission maintains a Web site that contains reports, proxy and information
statements  and  other  information  regarding  reporting  companies  under  the
Exchange  Act that  file  electronically  with  the  Commission  (including  the
Company)  at  http:\www.sec.gov.   Such  reports,  proxy  statements  and  other
information  concerning  the Company may also be inspected at the offices of The
New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which the
Common Stock is listed.                                                         

       This Prospectus  constitutes a part of a registration statement (together
with all amendments and exhibits thereto, the "Registration Statement") filed by
the Company with the  Commission  under the  Securities  Act of 1933, as amended
(the  "Securities  Act").  As  permitted  by the  rules and  regulations  of the
Commission,   this  Prospectus  omits  certain  information   contained  in  the
Registration Statement,  and reference is made to the Registration Statement for
further  information  with respect to the Company and the shares of Common Stock
registered under the  Registration  Statement.  Any statements  contained herein
concerning   the  provisions  of  any  document  filed  as  an  exhibit  to  the
Registration   Statement  or  otherwise   filed  with  the  Commission  are  not
necessarily complete, and in each instance reference is made to the copy of such
document so filed.  Each such  statement  is  qualified  in its entirety by such
reference.                                                                      

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 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

       The  following  documents,  which have been filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated by reference into this
Prospectus and shall be deemed to be a part hereof:                             

       (1)      the  Company's  Annual  Report on Form  10-K for the year  ended
December 31, 1995;                              

       (2)      the  Company's  Quarterly  Reports on Form 10-Q for the quarters
               ended March 31, 1996, June 30, 1996 and September 30, 1996; and

       (3)      the  Company's  Current  Reports on Form 8-K dated  January  12,
               1996, August 21, 1996, September 6, 1996 and December 26, 1996.

       All  documents  subsequently  filed by the  Company  with the  Commission
pursuant to Section 13(a),  13(c),  14 or 15(d) of the Exchange Act prior to the
termination  of the  offering of Common Stock made by this  Prospectus  shall be
deemed to be  incorporated  herein by reference and to be a part hereof from the
date of filing of such documents.  Such documents, and the documents referred to
above, are hereinafter referred to as "Incorporated Documents."                 

       Any statement  contained  herein or in an Incorporated  Document shall be
deemed to be modified or  superseded  for  purposes  of this  Prospectus  to the
extent  that a statement  contained  herein or in any other  subsequently  filed
Incorporated Document modifies or supersedes such statement.  Any such statement
so  modified  or  superseded  shall  not be  deemed,  except as so  modified  or
superseded, to constitute a part of this Prospectus.                            

       The  information  relating to the Company  contained  in this  Prospectus
summarizes,  is based upon, or refers to,  information and financial  statements
contained  in one or  more  of the  Incorporated  Documents;  accordingly,  such
information  contained  herein is qualified in its entirety by reference to such
Incorporated Documents and should be read in conjunction therewith.             

       The Company hereby undertakes to provide without charge to each person to
whom this  Prospectus is  delivered,  on the written or oral request of any such
person, a copy of any or all of the Incorporated Documents,  other than exhibits
to such  documents  (unless  such  exhibits  are  specifically  incorporated  by
reference  into such  documents).  Requests for copies of such  documents or for
additional  information  regarding  the Plan  and its  Administrator  should  be
directed to Bangor Hydro-Electric Company, Stockholder Services Department, P.O.
Box 1599, Bangor, Maine 04401-1599 (telephone 207-990-6936).                    

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 THE COMPANY

       The  Company,  incorporated  under the laws of the  State of Maine,  is a
public utility engaged in the generation, purchase,  transmission,  distribution
and sale of electric energy,  with a service area of approximately  5,275 square
miles having a population of  approximately  191,000 people.  The Company serves
approximately  103,000  customers  in  portions of the  counties  of  Penobscot,
Hancock,  Washington,  Waldo,  Piscataquis and Aroostook. The Company also sells
energy to other utilities for resale.  In 1995, 29.6% of the Company's  kilowatt
hour sales were to residential  customers,  29.3% were to commercial  customers,
39.9% were to industrial customers and 1.2% were to other customers.            

       The Company  holds a 7% ownership  interest in Maine Yankee  Atomic Power
Company's  nuclear  generating  facility  ("Maine  Yankee")  which  entitles the
Company to purchase an approximately equal amount of the output of Maine Yankee,
an entitlement of  approximately  61 megawatts.  Maine Yankee,  which  commenced
commercial  operation on January 1, 1973, is the only nuclear  facility in which
the Company has an ownership  interest.  Pursuant to a power  purchase  contract
with Maine  Yankee,  the Company is obligated to pay its pro rata share of Maine
Yankee's operating expenses,  including fuel costs and decommissioning costs. In
addition,  under a Capital Funds  Agreement  entered into by the Company and the
other sponsor utilities,  the Company may be required to make its pro rata share
of future  capital  contributions  to Maine Yankee if needed to finance  capital
expenditures.                                                                   

       The  Company,  along  with  the  major  investor-owned  utilities  of New
England,  has been a party to the New England  Power Pool  Agreement  ("NEPOOL")
since 1971.  NEPOOL  provides for joint planning and operation of generating and
transmission  facilities in New England, and governs generating capacity reserve
obligations and provisions  regarding the use of major  transmission  lines. The
Company, as a member of NEPOOL, has a capability  responsibility  which involves
carrying an  allocated  share of a New  England  capacity  requirement  which is
determined for each period based on certain regional reliability criteria.      

       The Company is subject to the  regulatory  authority  of the Maine Public
Utilities  Commission  as  to  retail  rates,  accounting,   service  standards,
territory served,  the issuance of securities  maturing more than one year after
the date of issuance,  certification of generation and transmission projects and
various other matters.  The Company is also subject to the  jurisdiction  of the
Federal Energy Regulatory Commission as to certain matters,  including licensing
of its hydroelectric stations, rates for wholesale purchases and sales of energy
and capacity  and  transmission  services.  Maine Yankee is subject to extensive
regulation by the Nuclear Regulatory Commission. Other activities of the Company
from time to time are  subject to the  jurisdiction  of various  other state and
federal regulatory agencies.                                                    

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       The  principal  executive  offices of the Company are located at 33 State
Street,  Bangor,  Maine  04401  where  its  general  telephone  number  is (207)
945-5621.                                                                       

 CERTAIN SIGNIFICANT FACTORS AFFECTING THE COMPANY

       The  Company  has  experienced  and will  continue  to be  challenged  by
important  issues and developments  facing the electric  industry in general and
the Company in particular. These investment factors include:                    

       o        Increasing  competitive  pressures caused by economic conditions
                in the Company's  service area and the Company's  currently high
rate structure;                                 

       o        The prospect of rapid changes in the nature of federal and state
                regulation  affecting  the Company  which,  among other  things,
could increase competitive pressures;           

       o        The Company's  relatively high level of  indebtedness,  incurred
                primarily to buy out certain high cost power purchase contracts;
and                                             

o        The Company's ownership participation in Maine Yankee.   

       These and other  significant  factors  are more  fully  discussed  in the
Incorporated  Documents,  which  also  contain  financial  statements  and other
important financial information concerning the Company.                         

 APPLICATION OF PROCEEDS

       Because  purchases of Common Stock under the Plan may be satisfied by any
of (i) the  purchase  of  shares of Common  Stock in the open  market,  (ii) the
purchase  of new  shares of Common  Stock  issued  by the  Company  or (iii) the
purchase of shares of Common Stock held in the Company's treasury, the number of
shares of Common Stock, if any, that the Company  ultimately will sell under the
Plan is not  known.  If newly  issued or  treasury  shares  of Common  Stock are
purchased  under the Plan, the proceeds from such sales will be used for general
corporate purposes,  including, without limitation, the repayment of outstanding
indebtedness  of the Company,  the costs of the Company's  ongoing  construction
program,  and working  capital  requirements.  The Company  will not receive any
proceeds  when shares of Common Stock are  purchased  under the Plan in the open
market.                                                                         

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THE PLAN

       The Plan was originally approved by the Board of Directors of the Company
and  implemented  in 1978 (such  predecessor  plan, as amended and restated from
time to time prior to the date of this Prospectus,  the "Predecessor  Plan"). In
January,  1997, the Board of Directors amended and restated the Predecessor Plan
in its entirety as the Plan, as set forth herein.                               

The following is the entire text of the Plan:                     

Purpose                                                                         

       The  purpose of the Plan is to provide a  convenient  way for  holders of
Common  Stock and  Preferred  Stock to  purchase  shares of Common  Stock by (i)
reinvesting  all or a portion  of the cash  dividends  paid on Common  Stock and
Preferred Stock in shares of Common Stock or (ii) making optional cash payments.

Advantages                                                                      

       o        Record  or  registered  holders  of  Common  Stock  not  already
                Participants  may  become   Participants  by  electing  to  have
                dividend  payments  on all or a portion  of their  Common  Stock
                reinvested   in  Common  Stock,   by   depositing   certificates
                representing  Common Stock into the Plan for  safekeeping  or by
                making an optional  minimum cash  investment  of at least $25 to
purchase Common Stock through the Plan.         

       o        Record or  registered  holders of  Preferred  Stock not  already
                Participants  may  become   Participants  by  electing  to  have
                dividend  payments on all or a portion of their  Preferred Stock
                reinvested in Common Stock or by making an optional minimum cash
                investment of at least $25 to purchase  Common Stock through the
Plan.                                           

       o        In addition to having  their  dividend  payments on Common Stock
                and Preferred Stock reinvested in Common Stock, Participants may
                invest  additional  funds in Common Stock through  optional cash
                investments  of at least  $25 for any  single  investment  up to
                $25,000 per calendar year. Optional cash investments may be made
                occasionally  or  at  regular  intervals,   as  the  Participant
desires.                                        

       o        Funds  invested in the Plan are fully  invested in Common  Stock
                through the  purchase of whole  shares and  fractions of shares,
                and  proportionate  cash  dividends  on  fractions  of shares of
                Common  Stock are used to purchase  additional  shares of Common
Stock.                                          

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       o        The Plan offers a "safekeeping" service whereby Participants may
                deposit, free of any service charges,  certificates representing
                Common Stock held in certificate  form into the Plan.  Shares of
                Common Stock so deposited will be credited to the account of the
                Participant  (an  "Account").  This  service  can be selected by
                Participants  without  participating in any other feature of the
Plan.                                           

       o        A Participant may direct the Company, at any time and at no cost
                to the  Participant,  to transfer all or a portion of the shares
                of Common Stock credited to its Account  (including those shares
                of Common Stock deposited into the Plan for  safekeeping) to the
                Account of another  Participant  (or to set up an Account  for a
                new  Participant  in connection  with such  transfer) or to send
                certificate(s)  representing  such shares to the  Participant or
another designated person or entity.            

      o         Statements of account  ("Statements  of Account") will be mailed
                to a Participant  following each month in which such Participant
                has cash dividend payments  reinvested in Common Stock, makes an
                optional  cash  investment  or deposits,  transfers or withdraws
                shares of Common Stock credited to such  Participant's  Account.
                In addition,  annual  Statements  of Account will be provided to
                each  Participant  whose Account  experienced  any such activity
                during  the  prior  calendar  year,   showing  all  transactions
                completed  during  such  year,  total  shares  of  Common  Stock
                credited  to the  Participant's  Account  and other  information
                relating to the Participant's Account. Participants will also be
                provided a confirmation promptly after each sale of Common Stock
                under the Plan. (Note: Participants should retain all statements
for tax purposes.)                              

       o        Participants  may direct that all or a portion of their dividend
                payments on Common Stock and Preferred  Stock,  including shares
                of Common Stock  purchased for a Participant  under the Plan and
                shares of Common Stock deposited into the Plan for  safekeeping,
                be reinvested in shares of Common Stock.  Dividend  payments not
reinvested will be paid in the usual manner.    

       o        Participants  may sell shares of Common Stock  credited to their
                Accounts  (including those shares of Common Stock deposited into
                the Plan for safekeeping)  through the Plan,  subject to payment
of expenses. (See "--Sales of Common Stock.")   

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Disadvantages                                                                   

      o         A Participant  has no control over the price and, in the case of
                shares of Common  Stock  purchased or sold in the open market by
                an  Independent  Agent,  the  time,  at  which  Common  Stock is
                purchased or sold, respectively,  for the Participant's Account.
                Purchases   in  the  open  market  may  begin  on  the  relevant
                Investment  Date and  ordinarily  should be completed  within 15
                days after that  Investment  Date.  Funds not invested in Common
                Stock within 35 days after receipt of optional cash payments, or
                30 days after a Dividend  Payment Date (as hereinafter  defined)
                for  reinvested   dividends,   will  be  promptly   returned  to
                Participants.  The  Company  assumes no  responsibility  for the
                manner  of  purchases  of  shares  in  the  open  market  by the
                Independent  Agent. Sales by Participants under the Plan will be
                made  by an  Independent  Agent  as soon  as  practicable  after
                processing the sales request.  Therefore,  Participants bear the
                market risk  associated  with  fluctuations  in the price of the
                Common Stock. (See "--Investment  Dates," "--Purchases of Common
Stock" and "--Sales of Common Stock.")          

       o        No interest will be paid on funds held by the  Administrator (as
       hereinafter defined) pending investment under the Plan.

       o        Funds for  optional  cash  investments  must be  received by the
                Administrator  no later  than  five  business  days  prior to an
                Investment  Date to be  invested  beginning  on that  Investment
                Date. Otherwise, the investment may be held by the Administrator
                and invested  beginning on the next Investment  Date.  Funds for
                optional cash  investments  need not be returned to Participants
                unless a written  request is  received by the  Administrator  no
                later than five business days prior to the applicable Investment
                Date,  or 35 days have passed since  receipt.  (See  "--Optional
Cash Investments.")                             

       o        Participants  that reinvest cash  dividends  will be treated for
                United States federal  income tax purposes as having  received a
                dividend on the Dividend  Payment  Date;  such dividend may give
                rise to a  liability  for the  payment  of  income  tax  without
                providing  Participants with immediate cash to pay such tax when
                it   becomes   due.   (See   "--Certain   Federal   Income   Tax
Consequences.")                                 

       o        Shares of Common Stock deposited in a Participant's  Account may
                not be pledged  until the shares  are  withdrawn  from the Plan.
(See "--Certificates for Shares.")              

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Administration                                                                  

       Administration  of the Plan is  conducted  by the  bank,  trust  company,
brokerage firm or other entity  (including  the Company)  appointed from time to
time by the Company to act as administrator  of the Plan (the  "Administrator").
The  Administrator's  appointment to serve as such may be revoked by the Company
at any time. The  Administrator may resign at any time upon reasonable notice to
the Company. If no Administrator is appointed, the Company shall be deemed to be
the Administrator for purposes of the Plan. The First National Bank of Boston is
currently the  Administrator.  The First  National Bank of Boston also serves as
dividend  disbursement agent,  transfer agent and registrar for the Common Stock
and the  Preferred  Stock  and  currently  serves as the  Independent  Agent (as
defined below).                                                                 

       The Administrator is responsible for  administering  the Plan,  receiving
all  cash  investments  made  by  Participants,   maintaining  records  of  each
Participant's   Account   activities,   issuing   Statements   of  Account   and
confirmations   and   performing   other  duties   required  by  the  Plan.  The
Administrator or its nominee,  as custodian,  will hold one or more certificates
registered  in its name  representing  the  aggregate  number of whole shares of
Common Stock purchased  under,  or deposited for safekeeping  into, the Plan and
credited to Participants'  Accounts.  The Administrator will forward funds to be
used to purchase  shares of Common Stock in the open market to an agent selected
by the Company (an  "Independent  Agent") that is an "agent  independent  of the
issuer," as that term is defined in the rules and regulations under the Exchange
Act, and that otherwise  satisfies  applicable  legal  requirements  (including,
without  limitation,  Rule 10b-6 and Rule 10b-18  promulgated under the Exchange
Act). In addition, the Administrator will promptly forward sales instructions to
the Independent  Agent. The Independent  Agent is responsible for purchasing and
selling shares of Common Stock in the open market for Participants'  Accounts in
accordance  with the provisions of the Plan.  Under certain  circumstances,  the
Administrator may be an Independent Agent.                                      

       The  officers  of the  Company  shall  make such  arrangements  regarding
compensation, reimbursement of expenses and indemnification of the Administrator
and any  Independent  Agent  as they  from  time to  time  deem  reasonable  and
appropriate.  The Administrator  and the Company,  or either of them, shall make
such  arrangements and enter into such agreements with the Independent  Agent in
connection with the activities contemplated by the Plan as the Administrator and
the Company, or either of them, deem reasonable and appropriate.                

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Participants may contact the Administrator by writing:            

           The First National Bank of Boston
      c/o Boston EquiService, L.P.
P.O. Box 644          
Boston, MA  02102-0644

or by telephoning 800-736-3001 or 617-575-3100 between 9 a.m. and 6 p.m., Monday
through Friday, Boston time.                                                    

Eligibility                                                                     

       Any individual,  corporation,  partnership,  limited  liability  company,
joint venture, association, joint-stock company, trust, estate or unincorporated
association ("Person") which is a record or registered holder of Common Stock or
Preferred  Stock is eligible to participate in the Plan,  provided that (i) such
Person  fulfills  the  prerequisites  for  participation  described  below under
"--Enrollment  Procedures"  and (ii) in the case of any Person that is a citizen
or resident of, or is  organized or  incorporated  under,  or has its  principal
place of business in, a country other than the United  States,  its  territories
and possessions, such Person provides evidence satisfactory to the Administrator
that its  participation  would not violate local laws applicable to the Company,
the Plan and the Participant.                                                   

Eligible Securities                                                             

       The only  classes of  securities  of the  Company  with  respect to which
holders may currently elect to reinvest  distributions  are the Common Stock and
the Preferred Stock. The Company may from time to time or at any time designate,
in its sole  discretion,  other equity or debt securities of the Company and its
subsidiaries  as  eligible  for  participation  in the  Plan  by  notifying  the
Administrator in writing of such designation.                                   

Enrollment Procedures                                                           

       Holders of Common Stock currently  participating in the Predecessor Plan,
which is being  replaced by the Plan (by means of  amendment  and  restatement),
will  automatically  be  Participants  in  the  Plan  without  sending  in a new
enrollment form ("Enrollment Form"). However, a Participant who wishes to change
its  participation  in any way (e.g.,  from partial to full  reinvestment)  must
submit a new Enrollment Form. As described below under  "--Reinvestment  of Cash
Dividend  Payments,"  the current  reinvestment  treatment  of dividends on each
Participant's  shares held under the Plan will  continue  unless and until a new
Enrollment Form is submitted by the Participant.                                

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       After being furnished with a copy of this Prospectus, eligible applicants
may join the Plan at any time by completing  and signing an  Enrollment  Form in
the manner set forth below.  Requests for copies of Enrollment Forms, as well as
copies of other Plan forms and this Prospectus,  should be made in writing or by
telephone to the  Administrator's  address and  telephone  numbers  listed under
"--Administration"  above.  Record or  registered  holders  of  Common  Stock or
Preferred  Stock  should be sure to sign their  name(s) on the  Enrollment  Form
exactly as they appear on their certificates or instruments.                    

       In order to become a Participant in the Plan, an eligible  applicant must
complete and sign an Enrollment Form and return it to the  Administrator and (i)
elect to have cash dividends paid on Common Stock of which such applicant is the
record or registered  holder invested in additional  shares of Common Stock (see
"--Reinvestment of Cash Dividend  Payments"),  (ii) elect to have cash dividends
paid on  Preferred  Stock of which such  applicant  is the record or  registered
holder  invested  in  Common  Stock  (see   "--Reinvestment   of  Cash  Dividend
Payments"),  (iii) deposit certificates representing shares of Common Stock into
the Plan for safekeeping (see "--Safekeeping  Service") or (iv) make an optional
cash  investment of at least $25 to purchase  Common Stock through the Plan (see
"--Optional Cash Investments").                                                 

       Beneficial  owners of  Common  Stock or  Preferred  Stock  registered  in
"street name" (e.g., in the name of a bank,  broker, or trustee) may participate
in the Plan with respect to such  securities  by either (i)  transferring  those
shares of Common Stock and  Preferred  Stock that they wish to be subject to the
Plan into their own name and electing to reinvest cash dividend payments on such
shares in shares of Common Stock and/or (in the case of shares of Common  Stock)
depositing  such  shares  of Common  Stock  into the Plan for  safekeeping  (see
"--Transfer of Common  Stock--From a Broker") or (ii) making  arrangements  with
the record or registered holder (e.g.,  their bank, broker or trustee,  who will
become the  Participant)  of such  securities to  participate in the Plan on the
beneficial owner's behalf.                                                      

       A Person will become a Participant after a properly completed  Enrollment
Form has been received and accepted by the Administrator.                       

Optional Cash Investments                                                       

       Participants  may make  optional  cash  investments  by delivering to the
Administrator  (a) a  completed  optional  cash  investment  form  which will be
attached to each  Participant's  Statement of Account or an Enrollment  Form and
(b) a  personal  check or money  order  payable  to The First  National  Bank of
Boston.  PLEASE  DO NOT SEND  CASH.  NO THIRD  PARTY  CHECKS  WILL BE  ACCEPTED.
Optional cash investments must be at least $25 for any single investment and may
not exceed  $25,000 in the aggregate  per calendar year (the "Maximum  Amount"),
which                                                                           

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amount  may be  invested  all at one time.  There is no  obligation  to make any
optional cash investment, and the amount and timing of such investments may vary
from time to time.  The  Company  reserves  the right  and  option,  in its sole
discretion, to waive the Maximum Amount limitation.                             

       Participants  who wish to make  optional  cash  investments  on a regular
basis  may  contact  the  Administrator  to  request  an  automatic   investment
authorization  form. This program provides the convenience of automatic  monthly
investments  deducted directly from your bank account,  without the need to mail
checks.                                                                         

       The Company  anticipates  that an  Investment  Date will occur once every
month. See  "--Investment  Dates." Optional cash investments will be invested in
Common Stock  beginning on the first  Investment Date following their receipt by
the Administrator, provided that such funds are received by the Administrator no
later  than  five  business  days  prior to an  Investment  Date to be  invested
beginning on that Investment Date. Otherwise,  the investment may be held by the
Administrator and invested beginning on the next succeeding Investment Date. See
"--Investment Dates" and "--Purchases of Common Stock." No interest will be paid
on funds held by the Administrator pending investment. Accordingly, Participants
should transmit cash investments so as to reach the  Administrator  shortly (but
not less than five business days) before an Investment Date.                    

       Upon a Participant's  written request,  received by the  Administrator no
later than five business days prior to the  applicable  Investment  Date, a cash
investment  not  already  invested  in  Common  Stock  will be  returned  to the
Participant. However, no refund of a check or money order will be made until the
funds from such instruments have been actually  collected by the  Administrator.
Accordingly,  such refunds may be significantly  delayed. If the written request
to stop  investment is received by the  Administrator  within five business days
prior to an Investment Date, any cash investment then held by the  Administrator
will be invested in Common Stock beginning on such Investment Date.             

       Funds for optional cash investments,  pending investment  pursuant to the
Plan,  will be credited to a  Participant's  Account and held in a bank  account
that will be segregated from any other funds or monies of the Company. Funds not
invested in Common Stock within 35 days of receipt will be promptly  returned to
the  Participant.  All funds are subject to collection by the  Administrator  of
full face value in U.S.  funds.  The method of  delivery  of any funds is at the
election and risk of the  Participant  and will be deemed received when actually
received by the  Administrator.  If the delivery is by mail,  it is  recommended
that the mailing be made sufficiently in advance of the Investment Date.        

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       Cash dividends paid on shares of Common Stock credited to a Participant's
Account that were purchased through the Plan with optional cash investments will
be  reinvested in shares of Common Stock in  accordance  with the  Participant's
reinvestment  election  designated  on  an a  completed  Enrollment  Form  or an
optional cash  investment  form,  as the case may be. If a Participant  does not
make an election,  cash  dividends  paid on shares of Common Stock credited to a
Participant's Account that were purchased through the Plan will be reinvested.  

Reinvestment of Cash Dividend Payments                                          

       Participants  may elect to invest in Common Stock by reinvesting all or a
portion  of cash  dividends  paid on all or a portion  of (i)  Common  Stock and
Preferred Stock registered in their names,  (ii) Common Stock purchased  through
the Plan and credited to their  Accounts and (iii) Common Stock  deposited  into
the Plan for safekeeping, by designating such election on their Enrollment Form.
If a Participant  does not make an election,  cash  dividends  paid on shares of
Common Stock credited to a Participant's Account that were purchased through the
Plan or deposited into the Plan for safekeeping will be reinvested. Participants
electing partial  reinvestment of cash dividend  payments on any Common Stock or
Preferred  Stock must designate the specific shares of Common Stock or Preferred
Stock for which  such  partial  reinvestment  is  desired  and the whole  number
thereof. Once a Participant elects reinvestment,  cash dividend payments made on
the designated  Common Stock and Preferred Stock will be reinvested in shares of
Common  Stock.  The amount so  reinvested  will be reduced by any amount that is
required to be  withheld  under any  applicable  tax or other  statutes.  If the
Participant has specified  partial  reinvestment,  that portion of cash dividend
payments not  designated  for  reinvestment  will be sent to the  Participant by
check in the usual  manner or, with regard to the partial  reinvestment  of cash
dividends on Common Stock credited to the Participant's  Account,  by electronic
direct deposit,  if the  Participant has elected the direct deposit option.  See
"--Direct Deposit of Dividends Not Reinvested."                                 

       Dividends  designated by a Participant for reinvestment  shall be paid to
the  Administrator  or its  nominee  on behalf of such  Participant  and will be
invested in Common Stock beginning on the date of payment,  which is usually the
20th day of January,  April,  July and  October.  See  "--Investment  Dates" and
"--Purchases  of Common Stock."  Dividend  payments not invested in Common Stock
within 30 days of receipt  will be promptly  returned to the  Participant.  Cash
dividend payment reinvestment amounts,  pending investment pursuant to the Plan,
will be credited to a Participant's Account and held in a bank account that will
be segregated from any other funds or monies of the Company.  See  "--Investment
Dates." No interest will be paid on such funds held by the Administrator pending
investment.                                                                     

       Under the  Predecessor  Plan,  dividends  on all  shares of Common  Stock
credited to a Participant's Account were fully reinvested,  irrespective of such
Participant's previous election                                                 

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to  participate  in the  Predecessor  Plan  on a "full  dividend  reinvestment,"
"partial  dividend  reinvestment"  or "optional  cash only"  basis.  The current
reinvestment  treatment of dividends on each Participant's shares held under the
Plan will continue  unless and until a new  Enrollment  Form is submitted by the
Participant.                                                                    

Changing Plan Options                                                           

       A Participant may change his or her Plan options,  including (i) changing
the reinvestment  levels (i.e., full, partial or none) of cash dividend payments
on Common Stock and Preferred  Stock and (ii) changing the designation of Common
Stock and  Preferred  Stock on which  cash  dividend  payments  are  subject  to
reinvestment,  by delivering  written  instructions  or a new Enrollment Form to
that effect to the  Administrator.  To be effective with respect to a particular
cash  dividend   payment,   any  such  instructions  must  be  received  by  the
Administrator  on or before  the  record  date  relating  to such cash  dividend
payment. If such instructions are not received by the Administrator on or before
the record date, the  instructions  will not become  effective  until after such
dividend is paid.  The shares of Common Stock  purchased with such funds will be
credited to the  Participant's  Account.  After the  Administrator's  receipt of
effective option changing  instructions,  cash dividend payments on Common Stock
and Preferred Stock as to which the reinvestment  election has been revoked will
be paid in cash or by electronic direct deposit,  if the Participant has elected
the direct deposit option.  See "--Direct Deposit of Dividends Not Reinvested." 

Direct Deposit of Dividends Not Reinvested                                      

       A Participant  who elects not to reinvest all cash dividends on shares of
Common Stock and Preferred Stock may receive such  nonreinvested  cash dividends
by electronic direct deposit to the Participant's predesignated bank, savings or
checking  account.  To receive such direct deposit of funds,  Participants  must
complete  and sign a Direct  Deposit  Authorization  Form and  return  it to the
Administrator.  Direct deposit will become  effective as promptly as practicable
after  receipt of a completed  Direct  Deposit  Authorization  Form.  Changes in
designated  direct deposit accounts may be made by delivering a completed Direct
Deposit Authorization Form to the Administrator.                                

       Cash  dividends  on  shares  of  Common  Stock  and  Preferred  Stock not
designated for reinvestment and not directly  deposited will be paid by check on
the applicable payment date therefor.                                           

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Investment Dates                                                                

       An  "Investment  Date"  under  the Plan  will be (i) each  date that cash
dividends are paid on Common Stock (a "Dividend  Payment  Date") and (ii) in any
month in which no such Dividend Payment Date occurs, the 20th day of such month;
provided  that, in each case, if such date is not a business day, the Investment
Date will be the immediately  following  business day. The Dividend Payment Date
is set by the  Board  of  Directors  and  historically  has been the 20th day of
January, April, July and October. Purchases in the open market will begin on the
relevant  Investment  Date  and may be  completed  over a period  of  time.  See
"--Purchases of Common Stock."                                                  

       Dividends  are  paid as and  when  declared  by the  Company's  Board  of
Directors.  There can be no  assurance as to the  declaration  or payment of any
dividend,  and nothing contained in the Plan obligates the Company to declare or
pay any such dividend on Common  Stock.  The Plan does not represent a guarantee
of future dividends.                                                            

Purchases of Common Stock                                                       

       Shares of Common Stock purchased for Participants  under the Plan will be
either  shares of Common Stock  purchased  in the open market by an  Independent
Agent or newly issued  shares or shares held in the treasury of the Company,  at
the Company's  option.  The primary  consideration  in determining the source of
shares of Common Stock to be used for purchases under the Plan is expected to be
the  Company's  determination  to  increase  equity  capital.  As of  the  first
Investment  Date following the date of this  Prospectus,  shares of Common Stock
purchased for  Participants  under the Plan will be purchased in the open market
by an Independent  Agent.  The Company may not change the source of purchases of
the shares (i.e.,  from the Company or in the open market) more than once in any
three-month  period.  At any time that shares of Common Stock are  purchased for
Participants  under the Plan in the open  market,  the Company will not exercise
its right to change the source of  purchases  of shares of Common Stock absent a
determination by the Company's Board of Directors or the Chief Financial Officer
that the Company has a need to increase equity capital or there is another valid
reason for such change.                                                         

       Purchases  of  shares  of  Common   Stock  from  the   Company,   whether
newly-issued or treasury shares, will be made on the relevant Investment Date at
the Company  Share  Purchase  Price for such  Investment  Date.  "Company  Share
Purchase  Price"  means,  with  respect  to any date,  the  average of the daily
closing  prices of the Common  Stock  reported  on The New York  Stock  Exchange
Composite Tape as published in The Wall Street Journal for the five trading days
preceding   such  date.  In  the  absence  of  knowledge  of   inaccuracy,   the
Administrator may rely upon such prices as published in The Wall Street Journal.
In the event no trading is reported for the applicable trading days, the Company
Share  Purchase  Price may be  determined  by the  Company  on the basis of such
market quotations as                                                            

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it deems  appropriate.  No  brokerage  commissions  will be  charged  on  shares
acquired directly from the Company.                                             

       Purchases in the open market will begin on the relevant  Investment  Date
and shall be completed no more than 30 days after that Investment  Date,  unless
such  completion  at a later date is necessary  or advisable  (i) to comply with
applicable law, including,  without limitation,  any federal securities laws, or
(ii) to maintain an orderly  market in the Common  Stock.  Funds not invested in
Common Stock within 35 days of receipt of optional cash investments,  or 30 days
after the applicable Dividend Payment Date in the case of reinvested  dividends,
will be  promptly  returned to  Participants.  The price of any shares of Common
Stock purchased in the open market for Participants will be the weighted average
price per share (excluding  brokerage  commissions,  any related service charges
and  applicable  taxes) of the  aggregate  number of  shares  purchased  for the
relevant Investment Date.                                                       

       The number of shares  (including any fraction of a share rounded to three
decimal  places) of Common Stock  credited to the Account of a Participant  with
respect to a particular Investment Date will be determined by dividing the total
amount of cash  dividends and optional cash  investments to be invested for such
Participant on such  Investment  Date by the relevant  purchase price per share.
Such shares shall be registered in the name of the  Administrator or its nominee
as custodian for the Participants.                                              

       With  regard to open  market  purchases  of shares of Common  Stock by an
Independent Agent, none of the Company, the Administrator (if it is not also the
Independent Agent) or any Participant will have any authority or power to direct
the time or price at which  shares may be  purchased,  the  markets on which the
shares  are to be  purchased  (including  on  any  securities  exchange,  in the
over-the-counter market or in negotiated transactions),  or the selection of the
broker  or  dealer  (other  than any  Independent  Agent)  through  or from whom
purchases  may be made,  except  that the  timing of such  purchases  must be in
accordance with the terms and conditions of the Plan. Open market  purchases may
be upon such terms and  conditions  with  respect to price and delivery to which
the Independent  Agent (including the Administrator if it is also an Independent
Agent) may agree. The Independent Agent may commingle each  Participant's  funds
with  those  of  other  Participants  for  the  purpose  of  executing  purchase
transactions.  Dividend and voting rights will commence upon settlement, whether
shares are purchased from the Company or any other source.                      

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Safekeeping Service                                                             

       At the time of enrollment,  or at any later time,  Participants  may take
advantage of the Plan's  cost-free  safekeeping  services.  Common Stock held in
certificate  form by,  and  registered  in the name  of,  a  Participant  may be
deposited  into the Plan,  to be held by the  Administrator  or its nominee,  by
delivering  a  completed   Enrollment   Form  and  such   certificates   to  the
Administrator.  If  the  delivery  is  by  mail,  it  is  recommended  that  the
Participant use properly insured, registered mail with return receipt requested.
Such  certificates  should  not be  endorsed.  The  shares  of  Common  Stock so
deposited will be transferred into the name of the Administrator or its nominee,
as custodian, and credited to the Participant's Account. Thereafter, such shares
of Common  Stock will be treated  in the same  manner as shares of Common  Stock
purchased under the Plan and credited to the Participant's  Account.  References
herein to shares  of Common  Stock  credited  to a  Participant's  Account  will
include shares of Common Stock  deposited into the Plan for  safekeeping  unless
otherwise indicated. Cash dividends paid on shares of Common Stock credited to a
Participant's  Account that were deposited into the Plan for safekeeping will be
reinvested  in shares  of  Common  Stock in  accordance  with the  Participant's
reinvestment election designated on its Enrollment Form.                        

Sales of Common Stock                                                           

       A  Participant  may  request,  at any time,  that all or a portion of the
shares of Common  Stock  credited  to its Account be sold by  delivering  to the
Administrator   a   completed   Sale/Transfer/Withdrawal   Request   Form.   The
Administrator  (if it is not also an  Independent  Agent) will  forward the sale
instructions to an Independent Agent as soon as practicable after (i) receipt of
Sale/Transfer/Withdrawal  Request  Forms  relating  to a total of at  least  100
shares and (ii) at least ten business  days have  elapsed  since the most recent
forwarding of sale instructions to the Independent Agent, except as described in
the  following  paragraph.  (The intent is to forward sale  instructions  to the
Independent  Agent every ten business  days, if sale requests  totaling at least
100 shares have been  received.) An  Independent  Agent will sell such shares as
soon as practicable (in accordance with stock transfer  requirements and federal
and state  securities  laws) after  processing  the request and will transmit by
first class mail to the  Participant  the  proceeds of the sale (less  brokerage
commissions,  any related  service  charges and applicable  taxes).  Proceeds of
shares of Common Stock sold through the Plan will be paid to the  Participant by
check.                                                                          

       The price of any  shares  of Common  Stock  sold in the open  market  for
Participants  will  be the  weighted  average  price  per  share  (adjusted  for
brokerage commissions,  any related service charges and applicable taxes) of the
aggregate  number of shares sold for the  relevant  period.  With regard to open
market sales of Common Stock by an Independent  Agent, none of the Company,  the
Administrator (if it is not also the Independent  Agent) or any Participant will
have any  authority  or power to direct the time or price at which shares may be
sold, the markets on which the shares are                                       

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to be sold (including on any securities exchange, in the over-the-counter market
or in negotiated transactions),  or the selection of the broker or dealer (other
than any Independent  Agent) through or from whom sales may be made, except that
the timing of such sales must be in accordance  with the terms and conditions of
the Plan.                                                                       

       If  instructions  for the sale of shares of  Common  Stock on which  cash
dividends are not being reinvested are received by the Administrator on or after
the record date  relating  to a Dividend  Payment  Date but before the  Dividend
Payment Date, the sale will be processed as described above and a separate check
for the  dividends  will be mailed to the  Participant  at its address of record
following  the  Dividend  Payment  Date or will be directly  deposited  into the
Participant's designated direct deposit account, as applicable.  If instructions
for the sale of  shares  of  Common  Stock on which  cash  dividends  are  being
reinvested  are  received  by the  Administrator  on or after  the  record  date
relating to a Dividend  Payment Date but before the Dividend  Payment Date,  the
dividends  paid on the  Dividend  Payment  Date will be invested in Common Stock
through the Plan, and (i) if the Participant's sale instructions cover less than
all of the shares of Common  Stock  credited  to its  Account,  the sale will be
processed as described above and the newly purchased  shares will be credited to
its  Account or (ii) if the  Participant's  sale  instructions  cover all of the
shares of Common Stock credited to its Account,  the sale  instructions will not
be  processed  until after the  dividends  have been  invested  in Common  Stock
through  the  Plan at which  time all of the  shares  credited  to its  Account,
including the newly purchased shares, will be sold and the proceeds  transmitted
to the Participant.  See  "--Reinvestment  of Dividends on Remaining Shares" for
the  reinvestment  level of dividends  on shares of Common  Stock  credited to a
Participant's Account after a sale.                                             

Withdrawal of Shares of Common Stock                                            

       A Participant  may withdraw all or any part (other than fractions) of the
Common Stock  credited to its Account from the Plan at any time by delivering to
the Administrator (i) appropriate  instructions,  if the Participant will be the
record  holder  of such  Common  Stock  after  withdrawal,  or (ii) a  completed
Sale/Transfer/Withdrawal  Request Form and a stock assignment  (stock power), if
the  Participant  will  not be the  record  holder  of the  Common  Stock  after
withdrawal.  Upon  the  Administrator's  receipt  of the  proper  documentation,
certificates  representing  the  designated  Common  Stock will be mailed to the
Participant,  the Participant's  broker or any other Person that the Participant
has designated.                                                                 

       If a  completed  Sale/Transfer/Withdrawal  Request  Form  with  regard to
shares of  Common  Stock  credited  to a  Participant's  Account  on which  cash
dividends  are not being  reinvested  is  received  on or after the record  date
relating to a Dividend  Payment Date but before the Dividend  Payment Date,  the
withdrawal  will be processed as  described  above and a separate  check for the
dividends will be mailed to the  Participant at its address of record  following
the Dividend Payment Date or will be                                            

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directly deposited into the Participant's  designated direct deposit account, as
applicable. If a completed  Sale/Transfer/Withdrawal Request Form with regard to
shares of  Common  Stock  credited  to a  Participant's  Account  on which  cash
dividends are being reinvested is received by the  Administrator on or after the
record date relating to a Dividend  Payment Date but before the Dividend Payment
Date, the dividends paid on the Dividend Payment Date will be invested in Common
Stock through the Plan,  and (i) if the  Participant's  withdrawal  instructions
cover less than all of the shares of Common Stock  credited to its Account,  the
withdrawal will be processed as described  above and the newly purchased  shares
will  be  credited  to its  Account  or  (ii)  if the  Participant's  withdrawal
instructions  cover all of the shares of Common  Stock  credited to its Account,
the withdrawal instructions will not be processed until after the dividends have
been  invested  in Common  Stock  through the Plan,  at which time  certificates
representing  all of the shares  credited to its  Account,  including  the newly
purchased shares, will be sent to the Participant or other designated recipient.
See "--Reinvestment of Dividends on Remaining Shares" for the reinvestment level
of dividends on shares of Common Stock credited to a Participant's Account after
a withdrawal.                                                                   

       Certificates representing whole shares of Common Stock withdrawn from the
Plan  will  be  sent  to  the  Participant  at its  address  of  record,  or the
Participant's  designated recipient,  by first class mail as soon as practicable
following the Administrator's receipt of the required documentation,  subject to
the provisions of the preceding paragraph.  Withdrawal of shares of Common Stock
does not affect  reinvestment of cash dividends on the shares  withdrawn  unless
(i) the  Participant  is no longer the record  holder of such  shares,  (ii) the
reinvestment is specifically  discontinued by the Participant  (see  "--Changing
Plan Options") or (iii) the Participant terminates its participation in the Plan
(see "--Termination of Participation by a Participant").                        

Transfer of Common Stock                                                        

       From  a   Broker--Owners   of  Common  Stock  or  Preferred   Stock  held
beneficially  in "street name" may  participate in the Plan with respect to such
securities by either (i) transferring  those shares that they wish to be subject
to the Plan into their own name and  depositing  shares of Common Stock into the
Plan for safekeeping  and/or electing to reinvest cash dividend payments on such
shares  of Common  Stock or  Preferred  Stock in shares of Common  Stock or (ii)
making  arrangements  with the record or registered  holder  (e.g.,  their bank,
broker or  trustee,  who will  become the  Participant)  of such  securities  to
participate in the Plan on the beneficial  owner's behalf.  In order to transfer
such securities  under clause (i), a Participant must instruct the "street name"
holder to transfer the Common Stock or the  Preferred  Stock to the  Participant
or, in the case of Common Stock to be deposited  into the Plan for  safekeeping,
to the Administrator for credit to the Participant's  Account.  If the Person is
already a  Participant,  the shares of Common Stock and Preferred  Stock must be
transferred  to the  Participant  in the same  name in which  the  Participant's
Account is registered. If the Person does not have an Account,  participation in
the Plan will commence when the shares of                                       

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Common  Stock or  Preferred  Stock  are  registered  in its name and a  properly
completed Enrollment Form is received by the Administrator.                     

       To a Broker--A  Participant  wishing to  transfer  all or any part of the
shares of Common Stock credited to its Account to a brokerage  account may do so
by delivering to the Administrator a completed  Sale/Transfer/Withdrawal Request
Form and a stock assignment (stock power), acceptable to the Administrator.  The
completed Sale/Transfer/Withdrawal Request Form must specify the whole number of
shares of Common Stock, if less than all of such shares credited to its Account,
and the name and  address  of the  brokerage  firm to which the shares are to be
transferred,  including the name of the specific broker handling the account and
the broker's  telephone  number.  The  transfer  will be handled as described in
"--Withdrawal of Shares of Common Stock" above.                                 

       Gift or Transfer of Shares of Common Stock Within  Plan--If a Participant
wishes to transfer, whether by gift, private sale or otherwise, ownership of all
or a part of the shares of Common  Stock  credited to its Account to the Account
of another  Participant or to establish by such transfer an Account for a Person
not  already a  Participant,  the  Participant  may do so by  delivering  to the
Administrator  a  completed  Sale/Transfer/Withdrawal  Request  Form and a stock
assignment  (stock power).  The transfer will be effected as soon as practicable
following the Administrator's receipt of the required documentation,  subject to
the provisions of the second  paragraph under  "--Withdrawal of Shares of Common
Stock." No  fraction  of a share of Common  Stock  credited  to a  Participant's
Account may be transferred  unless one whole share is transferred.  Requests for
interaccount  transfers are subject to the same requirements as for the transfer
of securities  generally,  including the requirement of a guarantee of signature
on the stock  assignment.  Stock  power  forms  are  available  at local  banks,
brokerage firms and from the Administrator.  See "--Reinvestment of Dividends on
Remaining  Shares" for the  reinvestment  level of dividends on shares of Common
Stock credited to a Participant's Account after a transfer.                     

       Shares  of  Common  Stock  so   transferred   will  be  credited  to  the
transferee's Account. Unless a transferee who is already a Participant otherwise
directs the  Administrator  in writing by completion of an Enrollment  Form, the
reinvestment  of  cash  dividends  on the  transferred  shares  will  be made in
proportion to the reinvestment  level (i.e., full, partial or none) of the other
shares of Common Stock credited to the transferee's  Account.  If the transferee
is not already a Participant, an Account will be opened in the transferee's name
and it may make elections with regard to  reinvestment of cash dividends on such
transferred  shares and other  services  provided by the Plan on the  Enrollment
Form that is provided to such transferee. If no election is made, cash dividends
will  be  fully  reinvested.  Unless  otherwise  requested  by  the  transferor,
transferees  will be sent a Statement  of Account  showing the  transfer of such
shares into their  Accounts.  The  transferor may request that such Statement of
Account be returned to the transferor for personal  delivery.  The Administrator
shall comply with                                                               

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any such request of a transferor  relating to  Statements  of Account as soon as
practicable following receipt of such request.                                  

Reinvestment of Dividends on Remaining Shares                                   

       If a Participant is reinvesting  cash dividends paid on only a portion of
the shares of Common  Stock  credited  to its  Account  through the Plan and the
Participant  elects  to sell,  withdraw  or  transfer  a portion  of the  shares
credited to its Account,  cash dividends on the remainder of the shares credited
to its Account,  up to the number of shares designated for reinvestment prior to
such sale,  withdrawal or transfer,  will continue to be reinvested  through the
Plan, except where the Participant  gives specific  instructions to the contrary
in  connection  with such  sale,  withdrawal  or  transfer.  For  example,  if a
Participant  who had  elected  to have cash  reinvested  through  the Plan on 50
shares of a total of 100 shares of Common Stock credited to its Account  elected
to sell,  withdraw  or transfer 25 shares,  cash  dividends  on 50 shares of the
remaining  75 shares  credited to its Account  would be  reinvested  through the
Plan.  If instead  the  Participant  elected to sell,  withdraw  or  transfer 75
shares,  cash dividends on the remaining 25 shares credited to his Account would
be reinvested through the Plan.                                                 

Reports to Participants                                                         

       Statements of Account will be mailed to each  Participant  following each
month where the  Participant  has cash  dividend  payments  reinvested in Common
Stock,  makes an optional cash  investment  or deposits,  transfers or withdraws
shares  of Common  Stock.  With  respect  to each any  calendar  year in which a
Participant's   Account  experiences  any  of  the  foregoing   activity,   such
Participant  will also  receive,  following  such year,  a Statement  of Account
showing all  transactions  for the  Participant's  Account during such year, the
number of shares of Common  Stock  credited to the  Account,  the amount of cash
held in the Account and other  information  for the Account.  The  Administrator
also will send each  Participant  a  confirmation  promptly  after  each sale of
Common Stock under the Plan.  Participants  should  retain these  Statements  of
Account and confirmations for tax purposes.                                     

       Participants will receive copies of all communications sent to holders of
Common  Stock.  This may include  semi-annual  reports to  stockholders,  annual
reports to  stockholders,  proxy material,  consent  solicitation  materials and
Internal Revenue Service  information,  if appropriate,  for reporting  dividend
income.  All notices,  Statements of Account and other  communications  from the
Administrator to Participants will be addressed to the latest address of record.
Therefore,  it is important that Participants  promptly notify the Administrator
of any change of address.                                                       

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Certificates for Shares                                                         

       A Participant  may obtain,  free of charge at any time, a certificate for
all or a part of the whole shares of Common  Stock  credited to its Account upon
written  request to the  Administrator.  Such  certificate(s)  will be mailed by
first class mail to the Participant's  address of record. Any remaining whole or
fractional  shares  of  Common  Stock  will  continue  to  be  credited  to  the
Participant's Account.                                                          

       Except for transfers described in "--Transfer of Shares of Common Stock,"
shares of Common Stock credited to a Participant's Account may not be pledged or
assigned.  A  Participant  who wishes to pledge or assign shares of Common Stock
must request that they be withdrawn from the Plan. See  "--Withdrawal  of Shares
of Common Stock."                                                               

       Certificates for fractional  shares of Common Stock will not be issued to
Participants under any circumstances.                                           

Termination of Participation by a Participant                                   

       A Participant may at any time terminate its  participation in the Plan by
delivering   a   completed   Sale/Transfer/Withdrawal   Request   Form   to  the
Administrator to that effect. Upon the  Administrator's  receipt of such written
notification,  the  Participant  will receive (i) a  certificate  for all of the
whole shares of Common Stock  credited to its Account,  (ii) any  dividends  and
cash investments credited to its Account and (iii) a check for the cash value of
any fraction of a share of Common Stock  credited to its Account.  Such fraction
of a share will be valued at the closing  price of the Common Stock  reported on
The New York Stock  Exchange  Composite  Tape as  published  in The Wall  Street
Journal    with    respect   to   the   date   of   receipt   of   a   completed
Sale/Transfer/Withdrawal  Request  Form. In the event no trading is reported for
the  applicable  trading day, the value may be  determined by the Company on the
basis of such market quotations as it deems appropriate.                        

Costs                                                                           

       The Company will pay all  administrative  costs and  expenses  associated
with the Plan.  Participants  will bear the cost of brokerage  commissions,  any
related service charges and applicable  taxes incurred on all sales of shares of
Common Stock made in the open market.  All of such foregoing  costs borne by the
Participants will be included as adjustments to sales prices. It is estimated at
this time (but not assured) that such brokerage  commissions  will not exceed 15
cents  per  share  and  that  such  service  charges  will  not  exceed  $10 per
transaction.  The  Company  will  bear the cost of  brokerage  commissions,  any
related  service  charges and  applicable  taxes on all  purchases  of shares of
Common Stock made in the open market. There will be no brokerage  commissions or
related service  charges for shares of Common Stock purchased  directly from the
Company.                                                                        

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Certain Federal Income Tax Consequences                                         

       The  following  discussion  is a summary of the  material  United  States
federal  income  tax  consequences  of  participation  in the  Plan and does not
purport to be complete. The effect of such tax consequences upon any Participant
will depend upon such Participant's  individual circumstances and, together with
the state and local tax  consequences of  participation,  should be discussed by
each Participant with its own tax advisor.                                      

       A  Participant  will be required  to include in income for United  States
federal  income tax purposes  amounts  reinvested  in Common Stock in respect of
dividends on its Common  Stock and  Preferred  Stock  subject to the Plan in the
manner  that  would  be  required  if it had  instead  received  such  dividends
directly,  even though no such amount is actually received by the Participant in
cash,  but instead is applied to the  purchase of shares of Common Stock for the
Participant's  Account.  A Participant  whose Account is credited with shares of
Common Stock  purchased in the open market with respect to which the Company has
paid the Participant's  share of brokerage  commissions and service fees will be
treated as having received  additional dividend income for United States federal
income  tax  purposes  in the  amount of the  Participant's  share of  brokerage
commissions and service fees paid by the Company.                               

       A Participant's  tax basis for shares of Common Stock purchased  pursuant
to the Plan will be equal to the cost of such shares as  discussed  above (which
cost in the case of shares  purchased in the open market will include amounts in
respect of brokerage  commissions,  service  charges and any applicable  taxes).
Such  shares of Common  Stock will have a holding  period  beginning  on the day
after the shares are allocated to the Participant's Account.                    

       All or a portion of the dividends  reinvested in Common Stock pursuant to
the Plan may be a return  of  capital  and,  as such,  would not be  taxable  as
ordinary  dividend  income.  Reports will be provided to stockholders  that will
indicate  if the Company  has made a return of capital  distribution  during the
year.  Stockholders receiving a return of capital distribution must reduce their
tax basis in the shares on which such  distribution is made by the amount of the
distribution  that is a return of  capital.  If the  amount  that is a return of
capital exceeds the tax basis, the excess must be reported as capital gain.     

       A  Participant  will not  realize  any  taxable  income  when it receives
certificates for whole shares previously credited to its Account under the Plan.
Gain or loss will be  recognized  by the  Participant  when it sells  such whole
shares  previously  received in  certificated  form, when shares of Common Stock
credited to its  Account are sold  through the Plan or when cash is paid for any
fractional shares credited to its Account upon termination of participation. The
amount of such gain or loss will be the                                         

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difference  between  the amount the  Participant  receives  for such  shares (or
fractional shares) and its tax basis in those shares (or fractional shares).    

Miscellaneous                                                                   

Stock Splits, Stock Dividends and Rights Offerings                

       Any shares or other securities representing stock splits or other noncash
distributions on shares of Common Stock credited to the Account of a Participant
will be credited  to the  Participant's  Account.  Stock  splits,  combinations,
recapitalizations  and similar events  affecting shares of Common Stock credited
to a Participant's  Account will be credited to the  Participant's  Account on a
pro rata basis.                                                                 

       In the event of a rights  offering,  a  Participant  will receive  rights
based upon the total  number of whole  shares of Common  Stock  credited  to its
Account.                                                                        

Voting of Proxies                                                 

       A Participant will have the exclusive right to exercise all voting rights
respecting  shares of Common Stock  credited to its Account.  The  Administrator
will  forward  all  stockholder  materials  relating  to shares of Common  Stock
credited to a Participant's  Account to the Participant.  A Participant may vote
any shares of Common  Stock  credited  to its  Account in person or by proxy.  A
Participant's  proxy card will include  shares of Common  Stock  credited to its
Account  and shares of Common  Stock  registered  in its name.  Shares of Common
Stock  credited  to a  Participant's  Account  will  not  be  voted  unless  the
Participant or its proxy votes them.                                            

       Solicitation  of the  exercise  of  Participants'  voting  rights  by the
management  of the  Company  and  others  under a  proxy  or  consent  provision
applicable to all holders of Common Stock shall be permitted.  The Administrator
shall notify the  Participants of each occasion for the exercise of their voting
rights or rights  with  respect to a tender  offer or  exchange  offer  within a
reasonable time before such rights are to be exercised.  Such notification shall
include all  information  distributed to the  stockholders of the Company by the
Company regarding the exercise of such rights.                                  

Limitation of Liability                                           

       None of the Company,  the  Administrator  (including the Company if it is
acting as such) or any Independent Agent will be liable for any act done in good
faith,  or for the good faith  omission  to act,  in  connection  with the Plan,
including,  without limitation, any claim of liability arising out of failure to
terminate a Participant's  Account upon such Participant's death or adjudication
of incompetence                                                                 

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prior  to  receipt  of  notice  in  writing  of such  death or  adjudication  of
incompetence,  or with respect to the prices at which shares of Common Stock are
purchased  or sold  for  the  Participant's  Account  and the  times  when  such
purchases and sales are made, or with respect to any loss or  fluctuation in the
market value after the purchase or sale of such shares.                         

       The Participants should recognize that the Company cannot assure a profit
or protect against a loss on the shares purchased by a Participant.             

Interpretation and Regulation of the Plan                         

       The officers of the Company are  authorized to take such actions to carry
out the Plan as may be consistent  with the Plan's terms and conditions and with
applicable  law. The Company  reserves  the right to interpret  and regulate the
Plan as the Company deems  desirable or necessary in connection  with the Plan's
operations.                                                                     

Change or Termination of the Plan                                 

       The  Company  reserves  the right,  in its sole  discretion,  to suspend,
modify, amend or terminate the Plan at any time, in whole, in part or in respect
of  Participants  in  one  or  more  jurisdictions,   without  the  approval  of
Participants,  provided  that no such action  shall  decrease the Account of any
Participant. Notice of such suspension,  modification,  amendment or termination
will be sent to all affected  Participants  (which notice may be before or after
the fact), who will in all events have the right to withdraw from participation.
Upon any whole or partial termination of the Plan by the Company,  each affected
Participant will receive (i) a certificate for all of the whole shares of Common
Stock credited to its Account,  (ii) any dividends and cash investments credited
to its Account and (iii) a check for the cash value for any  fraction of a share
of Common  Stock  credited  to its  Account.  Such  fraction of a share shall be
valued at the closing  price of the Common Stock  reported on The New York Stock
Exchange  Composite Tape as published in The Wall Street Journal with respect to
the date of termination.                                                        

Termination of Participation by the Company                       

       The  Company  reserves  the  right,  in its sole  discretion  and for any
reason, to terminate any  Participant's  participation in the Plan after written
notice   mailed  to  such   Participant   at  the  address   appearing   on  the
Administrator's  records.  The Company anticipates that (without limitation) the
participation  of any  Participant who does not have at least one whole share of
Common  Stock  credited  to its  Account,  and does not own any Common  Stock or
Preferred Stock for which cash dividend payments are designated for reinvestment
pursuant to the Plan, will be so terminated.  A Participant whose  participation
has been  terminated  will receive (i) a certificate for all of the whole shares
of                                                                              

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Common Stock  credited to its Account,  (ii) any dividends and cash  investments
credited to its Account and (iii) a check for the cash value of any  fraction of
a share of Common Stock credited to its Account.  Such fraction of a share shall
be valued at the  closing  price of the Common  Stock  reported  on The New York
Stock  Exchange  Composite  Tape as  published  in The Wall Street  Journal with
respect to the date of termination.                                             

Governing Law; Acceptance of Terms and Conditions                 

       The Plan shall be construed, regulated and administered under the laws of
the State of Maine. Each Participant,  by completing an Enrollment Form and as a
condition  of  participation  in the Plan,  for  itself,  its heirs,  executors,
administrators,  legal  representatives  and assigns,  approves and agrees to be
bound by the provisions of the Plan and any subsequent  amendments thereto,  and
all actions of the Company and the Administrator thereunder.                    

PLAN OF DISTRIBUTION

       The Common Stock being  offered  hereby is offered  pursuant to the Plan,
the terms of which  provide for the purchase of shares of Common  Stock,  either
newly issued shares or shares held in the treasury of the Company, directly from
the Company,  or, at the Company's  option,  by an Independent Agent on the open
market.  Initially,  shares of Common Stock purchased for Participants under the
Plan will be  purchased  in the open market by an  Independent  Agent.  The Plan
provides that the Company may not change its determination  regarding the source
of purchases of shares under the Plan more than once in any three-month period. 

       The Company will pay all  administrative  costs and  expenses  associated
with the Plan.  Participants  will bear the cost of brokerage  commissions,  any
related service charges and applicable  taxes incurred on all sales of shares of
Common  Stock  made in the open  market.  The  Company  will  bear the  costs of
brokerage  commissions,  any related service charges and applicable taxes on all
purchases  of  shares  of  Common  Stock  made in the open  market.  All of such
foregoing  costs borne by the  Participants  will be included as  adjustments to
sales prices. It is estimated at this time (but not assured) that such brokerage
commissions  will not  exceed 15 cents per share and that such  service  charges
will not exceed $10 per transaction.  There will be no brokerage  commissions or
related service  charges for shares of Common Stock purchased  directly from the
Company.                                                                        

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 DESCRIPTION OF COMMON STOCK

       The following description is a summary of certain provisions with respect
to the  Company's  Common  Stock  contained  in  the  Company's  Certificate  of
Organization and By-Laws.  Such summary is qualified in its entirety to the more
detailed provisions of such documents, which have been incorporated by reference
as exhibits to the Registration Statement.                                      

Dividend Rights                                                                 

       Holders of Common Stock are entitled to  participate  in dividends as and
when declared by the Company's Board of Directors out of funds legally available
therefor,  provided that all dividends on the Company's  Preferred  Stock (which
are fully cumulative) have been paid or provided for to the date of payment of a
proposed  dividend  on  Common  Stock.  Cash  dividends  historically  have been
declared and paid on Common Stock on a quarterly basis. The Company is currently
subject to certain financing  agreements that contain provisions  restricting to
various  degrees the  declaration  and  payment of  dividends  on the  Company's
capital stock, and may enter into additional such agreements in the future.     

Voting Rights                                                                   

       Holders  of  Common  Stock   currently  have  general  voting  rights  of
one-twelfth  of one vote per share.  Holders  of  Preferred  Stock have  general
voting rights of one vote per share,  except for holders of the Company's  8.76%
Preferred  Stock,  which does not carry voting rights except as discussed below.
On issues  determined by general voting  rights,  it would be possible for votes
represented by Preferred Stock to combine with votes  represented by less than a
majority  of Common  Stock so as to affect  the  rights of holders of all Common
Stock.                                                                          

       Neither the Common Stock nor the Preferred  Stock has  cumulative  voting
rights.                                                                         

       Holders of  Preferred  Stock,  including  holders of the 8.76%  Preferred
Stock,  have the power to elect the smallest  number of  directors  necessary to
constitute  a majority of the full board of  directors in the event of a default
in the  payment  of an amount  equal to or  exceeding  four  quarterly  dividend
payments or in the event of a failure to make any required  sinking fund payment
with respect to the Preferred Stock.                                            

Liquidation Rights                                                              

       Subject to the rights of senior  securities,  holders of Common Stock are
entitled  to a  distribution  of assets  upon  liquidation,  according  to their
respective shares.                                                              

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Preemptive Rights                                                               

       The  Company's  By-Laws  provide  that prior to the issuance of any stock
having voting rights,  the Company's Board of Directors shall determine  whether
such stock will be subject to  preemptive  rights of the holders of  outstanding
stock. No holders of the Company's  outstanding  Common Stock or Preferred Stock
will be given any such  preemptive  rights in respect of shares of Common  Stock
issued under the Plan.  The By-Laws  further  provide that,  with respect to the
issuance of additional  shares of authorized but unissued  Preferred  Stock, the
Board of Directors may confer special voting rights (including,  in the event of
default in payment of dividends, the power to elect a majority of directors) and
the power to consent or object to any matter  which the Board of  Directors  may
specify.                                                                        

Other Provisions                                                                

       The Company's Certificate of Organization requires that certain "Business
Combinations," including mergers, consolidations, share exchanges and sales of a
substantial  amount of assets,  between the  Company  and a "Related  Person" be
approved  by  the  affirmative  vote  of  the  holders  of at  least  80% of the
outstanding  "Voting Stock" unless the  transaction is approved by a majority of
the "Continuing  Directors" of the Company. A "Related Person" is defined as any
person who is the  beneficial  owner of (i) 10% or more of the then  outstanding
shares of any class of "Voting Stock" (as hereinafter defined) of the Company or
(ii) Voting Stock  representing  10% or more of the votes entitled to be cast by
the holders of all the then  outstanding  shares of Voting Stock of the Company.
"Continuing  Directors" are defined as members of the Board as constituted prior
to the time such Related  Person  became a Related  Person with such  additional
persons  as  such  members  shall  appoint  or  nominate  for  election  by  the
stockholders.  In  addition  to the voting  requirements  set forth  above,  the
Certificate  of  Organization  requires  that  as  a  result  of  such  Business
Combination,  stockholders of every class or series of outstanding securities of
the Company  receive at least a certain  minimum price for their shares and that
certain other conditions are satisfied. The Company's "Voting Stock" consists of
all  outstanding  shares of capital stock of the Company  having  general voting
rights.                                                                         

       Subject to the rights  described  above of the holders of Preferred Stock
to elect  directors  upon a failure to pay an amount equal to or exceeding  four
quarterly periods, the Company's Certificate of Organization contains provisions
stating that: (i) the Board of Directors shall be divided into three classes, as
nearly  equal in number as  possible,  each of which will serve for three years,
with one class being elected each year,  (ii)  directors may be removed  without
cause  only  with the  approval  of the  holders  of at least  80% of the  votes
entitled to be cast by the holders of all the then outstanding  shares of Voting
Stock of the  Company,  (iii) any  vacancy  on the Board of  Directors  shall be
filled  by a  majority  vote of the  Continuing  Directors,  though  less than a
quorum, and (iv) unless recommended by a majority of Continuing  Directors,  the
foregoing  provisions  may be amended  only by the approval of the holders of at
least 80% of the votes entitled to be cast by the holders of all the            

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then  outstanding  shares of Voting  Stock,  voting  together as a single class.
These provisions,  along with the "fair price"  provisions  discussed above, may
deter attempts to change control of the Company (by proxy contest,  tender offer
or  otherwise)  and may make more  difficult  a change in control of the Company
that is opposed by the Company's Board of Directors.                            

       The  Common  Stock has no  conversion  rights  nor is it  subject  to any
redemption or sinking fund provisions.  The issued and outstanding  Common Stock
is, and any  additional  shares of Common  Stock  issued under the Plan will be,
after issuance,  fully paid and nonassessable.  No Common Stock may be purchased
by the Company when there is an arrearage of dividends on Preferred Stock.      

       The First  National  Bank of Boston is the Transfer  Agent for the Common
Stock and the Preferred Stock of the Company.                                   

 EXPERTS

       The consolidated  balance sheets and the statements of  capitalization as
of  December  31,  1995 and  1994 and the  consolidated  statements  of  income,
retained earnings and cash flows for each of the three years in the period ended
December 31, 1995,  incorporated  by  reference  in this  Prospectus,  have been
incorporated  herein in  reliance  on the report of  Coopers & Lybrand,  L.L.P.,
independent  accountants,  given on the  authority  of that Firm as  experts  in
accounting and auditing.                                                        

LEGAL OPINIONS

       Legal matters with respect to the Common Stock  offered  hereby have been
passed upon by Frederick S. Samp, Esq., who is currently Vice President--Finance
and Law of the Company.                                                         

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 INDEMNIFICATION

       Section 719 of the Maine  Business  Corporation  Act provides  that every
corporation shall have the power to indemnify any officer, director, employee or
agent of the Company against certain  liabilities.  Section 10 of Article VII of
the By-Laws of the  Company  provides in  pertinent  part that every  current or
former  director,  officer,  employee  or agent of the  Company who was, or is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed  action by reason of the fact he is or was  serving  in such  capacity
shall be  indemnified  by the  Company  against  expenses,  judgments,  fees and
settlements reasonably incurred to the full extent permitted by Maine law.      

       Insofar as indemnification  for liabilities  arising under the Securities
Act  may  be  permitted  to  directors,  officers  or  persons  controlling  the
registrant  pursuant  to the  foregoing  provisions,  the  registrant  has  been
informed that in the opinion of the Commission such  indemnification  is against
public policy as expressed in the Securities Act and is therefore unenforceable.

       The Company also maintains  insurance for officers and directors  against
certain  liabilities,  including  liabilities  under  the  Securities  Act,  the
premiums for which are paid by the Company.  The effect of this  insurance is to
indemnify any officer or director of the Company  against  expenses,  including,
without  limitation,  attorneys'  fees,  judgments,  fines and  amounts  paid in
settlement,  incurred by an officer or director upon a  determination  that such
person acted in good faith.                                                     

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================================================================================

     No  dealer,  salesman  or  other  person  has been  authorized  to give any
information  or to make any  representations  in  connection  with this offering
other than those  contained  in this  Prospectus,  and,  if given or made,  such
information or representations must not be relied upon as having been authorized
by the Company.  This  Prospectus  does not  constitute  an offer to sell,  or a
solicitation  of an offer to buy, any of the  securities  offered  hereby in any
jurisdiction  to any  person  to  whom it is  unlawful  to make  such  offer  or
solicitation in such  jurisdiction.  Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any  circumstances,  create any implication
that there has been no change in the affairs of the Company, its subsidiaries or
the Plan since the date of this  Prospectus  or that the  information  set forth
herein is correct as of any time  subsequent  to the date  hereof or the date of
filing of any documents incorporated by reference herein.                       

--------------------------

 TABLE OF CONTENTS

                                                                          Page
                                                                          ----

PROSPECTUS            

Available Information .....................................................   2 
Incorporation of Certain Documents                                              
  by Reference............................................................   3
The Company................................................................   4 
Certain Significant Factors Affecting                                           
    the Company...........................................................   5
Application of Proceeds....................................................   5 
The Plan...................................................................   6 
Plan of Distribution.......................................................  26 
Description of Common Stock................................................  27 
Experts....................................................................  29 
Legal Opinions.............................................................  29 
Indemnification............................................................  30 

================================================================================

================================================================================

[LOGO]

119,760 Shares

Common Stock
($5 par value)

------------------- 

PROSPECTUS

------------------- 

DIVIDEND
REINVESTMENT AND
COMMON STOCK
PURCHASE PLAN 

January 14, 1997

================================================================================

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PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.  Other Expenses of Issuance and Distribution.                          

         Set forth below is an estimate* of the  approximate  amount of fees and
expenses  payable by the Registrant in connection  with the issuance and sale of
the Common Stock.                                                               

Registration Fee under the Securities                         
        Act of 1933, as amended................................... $ 2,754
      Blue Sky Fees and Expenses..................................   6,000
      Printing and Engraving......................................   7,500
      Accounting Fees and Expenses................................  10,000
      Legal Fees and Expenses.....................................  35,000
      Miscellaneous Expenses......................................  20,246
                                                                   -------

               TOTAL.............................................. $81,500
                                                                   =======

*All items are estimated except the first.                    

Item 15.  Indemnification of Directors and Officers.                            

                  As permitted by the Maine Business Corporation Act, Section 10
of Article  VII of the ByLaws of the  Company  requires  indemnification  by the
Company of any person who is or was a director,  officer,  employee or agent, or
is or was serving at the request of the Company as a director, officer, employee
or agent of another  enterprise,  against expenses,  including  attorneys' fees,
judgments,  fines and  amounts  paid,  in  settlement  actually  and  reasonably
incurred in connection with an action, suit or proceeding, civil or criminal, if
he acted in good faith and in a manner he reasonably  believed to be in the best
interests of the Company or, with respect to any criminal  action or proceeding,
if he had  no  reasonable  cause  to  believe  his  conduct  was  unlawful.  The
indemnification  applies in the case of  threatened  actions  and in the case of
actual proceedings where the person being indemnified has been successful on the
merits.  Expenses may be advanced by the Company prior to final disposition of a
proceeding,  upon certain  determinations  and with the  understanding  that the
advance shall be refunded unless it is ultimately  determined that the person is
entitled to indemnification.  The indemnification provided by the By-Laws is not
exclusive  of other  rights  of  indemnification  under any  agreement,  vote of
stockholders,  disinterested directors or otherwise.  The Company also maintains
insurance  for officers and directors  against  certain  liabilities,  including
liabilities under the Securities Act of 1933. The effect of this insurance is to
indemnify any officer or director of the Company  against  expenses,  including,
without  limitation,  attorneys'  fees,  judgments,  fines and  amounts  paid in
settlement,  incurred by an officer or director upon a  determination  that such
person  acted in good faith.  The premiums  for such  insurance  are paid by the
Company.                                                                        

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Item 16.  Exhibits.                                                             

         The  following  documents  are  filed  as  part  of  this  Registration
Statement or incorporated by reference herein:                                  

        4.01(a)   Certificate of Organization,  together with amendments thereto
                  (Filed as Exhibit 3.1 to the Company's  Registration Statement
                  on Form S-2 (File No.  33-39181) and incorporated by reference
herein).                                    

        4.01(b)   Articles of Amendment  (Filed as Exhibit 4.3 to the  Company's
                  Registration  Statement  on Form S-2 (File No.  33-63500)  and
incorporated by reference herein).          

        4.01(c)   Articles of Amendment  (Filed as Exhibit 3(a) to the Company's
                  report on Form 10-K for the year ended December 31, 1995 (File
     No. 0-505) and incorporated by reference herein).

           4.02   By-Laws  (Filed as Exhibit 4.4 to the  Company's  Registration
                  Statement on Form S-2 (File No.  33-63500) and incorporated by
reference herein).                          

        *  5.01   Opinion of  Frederick  S. Samp,  Esq.  as to  legality  of the
Common Stock offered hereby.                

23.01   Consent of Coopers & Lybrand, L.L.P.                

        * 23.02   Consent of  Frederick  S.  Samp,  Esq.  (contained  in Exhibit
5.01).                                      

* 24.01   Power of attorney (previously filed as Exhibit 25.01) 

* Previously filed.                                             

Item 17.  Undertakings                                                          

         The  undersigned  Registrant  hereby  undertakes  that for  purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  that is  incorporated  by  reference  in this
Registration  Statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.      

The undersigned Registrant hereby also undertakes:            

                  (1) to file,  during any  period in which  offers or sales are
        being made, a post-effective amendment to this Registration Statement:

                          (i) to  include  any  prospectus  required  by Section
10(a)(3) of the Securities Act of 1933;     

                         (ii) to reflect in the  prospectus  any facts or events
                  arising  after  the  effective   date  of  this   Registration
                  Statement  (or  the  most  recent   post-effective   amendment
                  thereof) which, individually or in the aggregate,  represent a
                  fundamental  change  in the  information  set  forth  in  this
Registration Statement; and                 

                        (iii) to include any material  information  with respect
                  to the plan of distribution  not previously  disclosed in this
                  Registration   Statement  or  any  material   change  to  such
information in this Registration Statement; 

         provided,  however,  that paragraphs (1)(i) and (1)(ii) do not apply if
         the information  required to be included in a post-effective  amendment
         by those  paragraphs  is  contained  in periodic  reports  filed by the
         Registrant  pursuant to Section 13 or Section  15(d) of the  Securities
         Exchange  Act of  1934  that  are  incorporated  by  reference  in this
Registration Statement;                                       

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                  (2) that, for the purpose of determining  any liability  under
         the Securities Act of 1933, each such post-effective amendment shall be
         deemed to be a new  registration  statement  relating to the securities
         offered  therein and the offering of such securities at that time shall
be deemed to be the initial bona fide thereof; and            

                  (3) to remove from  registration by means of a  post-effective
         amendment any of the securities being registered which remain unsold at
the termination of the offering.                              

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SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended,
the  Registrant  certifies  that  it  has  duly  caused  this  amendment  to the
registration statement to be signed on its behalf by the undersigned,  thereunto
duly  authorized,  in the City of  Bangor  and State of Maine on the 14th day of
January, 1997.                                                                  

                                     BANGOR HYDRO-ELECTRIC COMPANY
                          (Registrant)

                                  By: /s/  FREDERICK S. SAMP
                                         _________________________
                                 Frederick S. Samp
                                               Vice President--Finance and Law
                                               (Principal Financial Officer)

         Pursuant to the requirements of the Securities Act of 1933, as amended,
this  amendment to the  registration  statement has been signed below on January
14, 1997 by the following persons in the capacities indicated.                  

Signatures                              Title                 
----------                              -----                 

*                                                             
________________________       President and Chairman of the Board of Directors 
Robert S. Briggs                                                                

/s/  FREDERICK S. SAMP         Vice President--Finance and Law (Principal)      
________________________       Financial Officer)                               
Frederick S. Samp                                                               

/s/  DAVID R. BLACK                                                             
________________________       Controller (Principal Accounting Officer)        
David R. Black                                                                  

*                                                             
________________________       Director                                         
William C. Bullock, Jr.                                                         

*                                                             
________________________       Director                                         
Jane J. Bush                                                                    

*                                                             
________________________       Director                                         
David M. Carlisle                                                               

*                                                             
________________________       Director                                         
Alton E. Cianchette                                                             

________________________       Director                                         
Marion M. Kane                                                                  

*                                                             
________________________       Director                                         
G. Clifton Eames                                                                

________________________       Director                                         
Norman A. Ledwin                                                                

*                                                             
________________________       Director                                         
Carroll R. Lee                                                                  

*By:     /s/  FREDERICK S. SAMP                                                 
______________________                                        
Frederick S. Samp                                             
(Attorney-in-Fact)                                            

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-3DPOS’ Filing		Date		First		Last			Other Filings
Filed on / Effective on:		1/14/97		3		37
		12/26/96		5					8-K
		9/30/96		5					10-Q
		9/6/96		5					8-K
		8/21/96		5					8-K
		6/30/96		5					10-Q
		3/31/96		5					10-Q
		1/12/96		5					8-K
		12/31/95		5		35			10-K,  DEF 14A,  U-3A-2
		12/31/94		31					10-K,  DEF 14A,  U-3A-2
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