-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UvkXvVJLhLvAM7Frzz7zHaQN70aV47UKruYda1hBArcqUxcb3HbCAoVNwxkCwqb5 VaX31m1vyuOJeH+eSKIyJA== /in/edgar/work/0000899652-00-000126/0000899652-00-000126.txt : 20001114 0000899652-00-000126.hdr.sgml : 20001114 ACCESSION NUMBER: 0000899652-00-000126 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CINERGY CORP CENTRAL INDEX KEY: 0000899652 STANDARD INDUSTRIAL CLASSIFICATION: [4931 ] IRS NUMBER: 311385023 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: SEC FILE NUMBER: 070-09789 FILM NUMBER: 759102 BUSINESS ADDRESS: STREET 1: 139 E FOURTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5132872644 MAIL ADDRESS: STREET 1: 139 E FOURTH STREET STREET 2: P.O BOX 960 CITY: CINCINATI STATE: OH ZIP: 45202 U-1 1 0001.txt U-1 File No. 70-9731 SECURITIES AND EXCHANGE COMMISSION 450 FIFTH STREET WASHINGTON, D.C. 20549 ------------------------------------------ FORM U-1 DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 -------------------------------------------- Cinergy Corp. 139 East Fourth Street Cincinnati, Ohio 45202 (Name of company filing this statement and address of principal executive offices) Cinergy Corp. (Name of top registered holding company) Lisa D. Gamblin George Dwight II Vice President & Treasurer Senior Counsel Cinergy Corp. Cinergy Corp. 139 East Fourth Street, 24AT2 139 East Fourth Street, 25AT2 Cincinnati, Ohio 45202 Cincinnati, Ohio 45202 513-287-2643 (ph) 513-287-3810 (f) gdwight@cinergy.com (Name and address of agents for service) Item 1. Description of Proposed Transactions Cinergy Corp., a Delaware corporation and registered public utility holding company ("Cinergy" or the "Company"), seeks Commission authorization under the Public Utility Holding Company Act of 1935, as amended (the "Act"), to amend its certificate of incorporation and to solicit proxies with respect thereto, as described below. As a preliminary matter, so that it may mail proxy solicitation materials in a timely manner, Cinergy requests issuance of a combined notice of the proposed transactions and order authorizing the solicitation of proxies by not later than February 15, 2001. By order dated June 23, 2000 in File No. 70-9577 (HCAR No. 27190), the Commission authorized Cinergy over a five-year period commencing with the date of the Commission's order to engage in various financing transactions, including issuing preferred securities, subject to the terms and conditions specified in the order. Under its certificate of incorporation, Cinergy is currently authorized to issue one class of stock, namely, 600 million shares of common stock, $0.01 par value per share (the "Common Stock"), 158,967,661 shares of which were issued and outstanding on October 31, 2000. Cinergy intends to amend its certificate of incorporation to permit the Company to issue preferred securities (the "Proposed Amendment"), in addition to the Common Stock. Under the Delaware General Corporation Law, Cinergy may amend its certificate of incorporation to create new classes of stock upon appropriate action by the Board of Directors and shareholders duly adopting the proposed amendment. In particular, in order for the Proposed Amendment to be duly adopted, following adoption of the Proposed Amendment by Cinergy's Board of Directors, not less than a majority of the outstanding shares of Common Stock entitled to vote thereon must vote in favor of the Proposed Amendment. Cinergy's Board of Directors will consider the Proposed Amendment at a meeting scheduled to occur on December 14, 2000. It is anticipated that the Proposed Amendment will be submitted for consideration by Cinergy's shareholders at the next annual meeting thereof, scheduled to take place on or about May 1, 2001. Cinergy anticipates that it will begin mailing its proxy solicitation materials in connection therewith on or about March 20, 2001. Item 2. Fees, Commissions and Expenses The fees, commissions, and expenses paid or to be paid or incurred by Cinergy or any associate company thereof in connection with the proposed transactions are estimated as follows: Fees of proxy solicitation consultant $8,500 Printing, mailing, miscellaneous $150,000 TOTAL $158,500 Item 3. Applicable Statutory Provisions Section 12(e) of the Act and Rules 62 and 65 thereunder are applicable to the proxy solicitation described herein. Section 6(a)(2) is applicable to the Proposed Amendment. Rule 54 under the Act is also applicable to the proposed transactions. Rule 54 provides that in determining whether to approve the issue or sale of a security by a registered holding company for purposes other than the acquisition of an exempt wholesale generator (as defined in section 32 of the Act, "EWG") or a foreign utility company (as defined in section 33 of the Act, "FUCO"), or other transactions by such registered holding company or its subsidiaries other than with respect to EWGs or FUCOs, the Commission shall not consider the effect of the capitalization or earnings of any subsidiary which is an EWG or a FUCO upon the registered holding company if paragraphs (a), (b) and (c) of Rule 53 are satisfied. Cinergy currently does not meet the conditions of Rule 53(a). As of September 30, 2000, Cinergy's "aggregate investment," as defined in Rule 53(a)(1), in EWGs and FUCOs was approximately $751,983,000. This amount is equal to approximately 67% of Cinergy's average "consolidated retained earnings," also as defined in Rule 53(a)(1), for the four quarters ended September 30, 2000, of approximately $1,122,511,250, which exceeds the 50% "safe harbor" limitation contained in the rule. By order dated March 23, 1998 (HCAR No. 26848) ("1998 Order"), the Commission authorized Cinergy to increase its aggregate investment in EWGs and FUCOs to an amount equal to 100% of Cinergy's average "consolidated retained earnings." By order dated June 23, 2000 (HCAR No. 27190) ("2000 Order"), the Commission granted Cinergy additional authorization to invest in EWGs and FUCOs beyond that granted in the 1998 Order, specifically, $1,000,000,000 in addition to Cinergy's aggregate investment at the date of such order (approximately $731,000,000). Therefore, although Cinergy's aggregate investment at September 30, 2000 exceeds the 50% "safe harbor" limitation, this investment is below the limitation authorized by the 1998 and 2000 Orders. With respect to capitalization, there has been no material adverse impact on Cinergy's consolidated capitalization resulting from Cinergy's investments in EWGs and FUCOs. As of September 30, 1997, the most recent period for which financial statement information was evaluated in the 1998 Order, Cinergy's consolidated capitalization consisted of 44.1% equity and 55.9% debt. As of September 30, 2000, Cinergy's consolidated capitalization consisted of 42.2% equity and 57.8% debt. These ratios are within acceptable ranges, as further reflected by the fact that at September 30, 2000 Cinergy's senior unsecured debt was rated "investment grade" by all the major rating agencies. The proposed transactions have no impact on Cinergy's consolidated capitalization. With respect to earnings, Cinergy's interests in EWGs and FUCOs have made consistent and significant contributions to Cinergy's consolidated retained earnings, as reflected in the quarterly certificates filed by Cinergy in Docket Nos. 70-9011 and 70-9577. Although Cinergy's consolidated earnings for the year ended December 31, 1997 were negatively affected by Cinergy's 50% ownership interest in Midlands Electricity plc ("Midlands"), a FUCO, this was solely as a result of the imposition by the United Kingdom of a one-time, non-recurring windfall tax. Significantly, this tax did not affect earnings from ongoing operations, and therefore would not have any negative impact on earnings in future periods. In July 1999, Cinergy sold all of its ownership in Midlands, realizing a substantial profit. Cinergy satisfies all of the other conditions of paragraphs (a) and (b) of Rule 53. With reference to Rule 53(a)(2), Cinergy maintains books and records in conformity with, and otherwise adheres to, the requirements thereof. With reference to Rule 53(a)(3), no more than 2% of the employees of Cinergy's domestic public utility companies render services, at any one time, directly or indirectly, to EWGs or FUCOs in which Cinergy directly or indirectly holds an interest. With reference to Rule 53(a)(4), Cinergy will concurrently provide a copy of this application to each regulator referred to therein, and will otherwise comply with the requirements thereof concerning the furnishing of information. With reference to Rule 53(b), none of the circumstances enumerated in subparagraphs (1), (2) and (3) thereunder have occurred. Finally, Rule 53(c) by its terms is inapplicable since the proposed transactions do not involve the issue or sale of a security to finance the acquisition of an EWG or FUCO. Item 4. Regulatory Approval The proposed transactions are not subject to the jurisdiction of any state or federal commission other than this Commission. Item 5. Procedure Cinergy requests that the Commission issue and publish as soon as practicable the requisite notice under Rule 23 with respect to the filing of this Declaration, together with an order under Section 12(e) and Rule 62 permitting Cinergy to solicit proxies with respect to the Proposed Amendment. Cinergy waives a recommended decision by a hearing officer or other responsible officer of the Commission; consents that the Staff of the Division of Investment Management may assist in the preparation of the Commission's order; and requests that there be no waiting period between the issuance of the Commission's order and its effectiveness. Item 6. Exhibits and Financial Statements (a) Exhibits A-1 Certificate of incorporation of Cinergy (incorporated by reference from Cinergy's 1993 Form 10-K in File No. 1-11377) A-2 By-laws of Cinergy, as amended on April 27, 2000 (incorporated by reference from Cinergy's March 31, 2000 Form 10-Q in File No. 1-11377) B-1 Proxy statement with respect to Proposed Amendment (to be filed by amendment) B-2 Form of proxy with respect to Proposed Amendment (to be filed by amendment) C Not applicable D Not applicable E Not applicable F-1 Preliminary opinion of counsel (to be filed by amendment) G Form of notice and order permitting proxy solicitation (b) Financial Statements NOTE: Cinergy corporate and consolidated actual and pro forma financial statements are omitted since the proposed transactions will have no impact thereon. Item 7. Information as to Environmental Effects (a) The Commission's action in this matter will not constitute any major federal action significantly affecting the quality of the human environment. (b) No other federal agency has prepared or is preparing an environmental impact statement with regard to the proposed transactions. SIGNATURE Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this application to be signed on its behalf by the officer indicated below. Dated: November 10, 2000 Cinergy Corp. By: /s/Lisa D. Gamblin Vice President & Treasurer EX-99.G 2 0002.txt EXHIBIT G Exhibit G Form of Notice and Order Permitting Proxy Solicitation Securities and Exchange Commission (Release No. 35-_________) Cinergy Corp., a Delaware corporation and registered public utility holding company ("Cinergy"), at 139 East Fourth Street, Cincinnati, Ohio 45202, has filed a declaration with the Commission under sections 6(a)(2) and 12(e) of the Public Utility Holding Company Act of 1935, as amended ("Act"), and Rules 54, 62 and 65 thereunder requesting authority (1) to amend its certificate of incorporation to issue preferred securities and (2) to solicit proxies from the holders of its outstanding shares of common stock in connection therewith. By order dated June 23, 2000 in File No. 70-9577 (HCAR No. 27190), the Commission authorized Cinergy over a five-year period commencing with the date of the Commission's order therein to engage in various financing transactions, including issuing preferred securities, subject to the terms and conditions specified in the order. Under its certificate of incorporation, Cinergy is currently authorized to issue one class of stock, namely, 600 million shares of common stock, $0.01 par value per share (the "Common Stock"), 158,967,661 shares of which were issued and outstanding on October 31, 2000. Cinergy intends to amend its certificate of incorporation to permit the Company to issue preferred securities (the "Proposed Amendment"), in addition to the Common Stock. Under the Delaware General Corporation Law, Cinergy may amend its certificate of incorporation to create new classes of stock upon appropriate action by the Board of Directors and shareholders duly adopting the proposed amendment. In particular, in order for the Proposed Amendment to be duly adopted, following adoption of the Proposed Amendment by Cinergy's Board of Directors, not less than a majority of the outstanding shares of Common Stock entitled to vote thereon must vote in favor of the Proposed Amendment. Cinergy states that its Board of Directors will consider the Proposed Amendment at a meeting scheduled to occur on December 14, 2000. Cinergy further states that it anticipates that the Proposed Amendment will be submitted for consideration by Cinergy's shareholders at the next annual meeting thereof, scheduled to take place on or about May 1, 2001. Fees and expenses in connection with the proposed transactions are estimated to total approximately $158,500. It appearing to the Commission that the Declaration to the extent that it relates to the proposed solicitation of proxies should be permitted to become effective immediately under Rule 62(d)Cinergy requests approval of the Proposed Amendment, IT IS THEREFORE ORDERED, that the Declaration, to the extent that it relates to the proposed solicitation of proxies be, and it hereby is, permitted to become effective immediately under Rule 62. For the Commission, by the Division of Investment Management, pursuant to delegated authority. -----END PRIVACY-ENHANCED MESSAGE-----