<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14-a6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Central Hudson Gas & Electric Corporation
- ------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Merrill Corporation
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
Appendix to Electronic Format Document
Pursuant to Reg. 232.304 of Regulation S-T, this appendix describes all
graphic and image information in the foregoing documents which will appear in
the paper format of such documents:
1. On the form of proxy, a map providing directions to the offices of CH
Energy Group, Inc./Central Hudson Gas & Electric Corporation, where
the special shareholders meeting will be held.
<PAGE>
[LOGO]
July 31, 1998
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
of the Corporation on Friday, September 25, 1998 at 10:30 a.m. The meeting will
be held at the Corporation's headquarters, 284 South Avenue, Poughkeepsie, New
York 12601-4879.
The meeting will give you the opportunity to consider and vote on a
proposal to provide the Corporation with the financial and regulatory
flexibility needed to engage effectively in competitive businesses while it
continues to operate its regulated electric and gas utility business. The Board
of Directors has unanimously approved a holding company structure for the
Corporation in which the Corporation will become a subsidiary of a Holding
Company and holders of the Corporation's Common Stock will become the holders of
the Holding Company's Common Stock. The Holding Company is named CH Energy
Group, Inc.
Enclosed is the combined Prospectus and Proxy Statement of the
Corporation and the Holding Company which will answer important questions about
how the proposed holding company structure and the related share exchange will
affect you as a shareholder.
I encourage you to vote "FOR" the proposal. PLEASE SIGN AND RETURN
YOUR PROXY CARD, whether or not you plan to attend the meeting, in the enclosed
postage-paid envelope. You may vote in person at the meeting even if you
previously sent in a proxy.
Every vote counts. Approval of the holding company proposal will
require the affirmative vote of the holders of two-thirds of the outstanding
shares of the Corporation's Common Stock. AN ABSTENTION OR FAILURE TO VOTE WILL
HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL.
Sincerely,
[LOGO]
John E. Mack III
Chairman of the Board
and Chief Executive Officer
<PAGE>
[LOGO]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
SEPTEMBER 25, 1998
To the Holders of Common Stock:
A Special Meeting of Shareholders of Central Hudson Gas & Electric
Corporation ("Central Hudson" or "Corporation") will be held at the offices of
the Corporation, 284 South Avenue, Poughkeepsie, New York 12601-4879, on Friday,
September 25, 1998, at 10:30 a.m. for the following purposes:
1. To adopt a holding company structure for the Corporation in which the
Corporation will become a subsidiary of a holding company, CH Energy
Group, Inc. ("Holding Company"), pursuant to an Agreement and Plan of
Exchange that provides for all of the outstanding shares of the
Corporation's Common Stock to be exchanged automatically on a
share-for-share basis for shares of the Holding Company's Common
Stock, as more fully described in the accompanying Proxy Statement
and Prospectus ("Holding Company Proposal"); and
2. To act upon such other matters as may properly come before the
meeting, or any adjournments or postponements of the meeting.
Holders of record of outstanding shares of the Corporation's Common Stock
as of the close of business on July 28, 1998, the record date, are entitled to
receive notice of, and to vote at, the meeting.
PLEASE SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. Approval of the Holding Company Proposal will require the affirmative
vote of the holders of two-thirds of the outstanding shares of Central Hudson
Common Stock. AN ABSTENTION OR FAILURE TO VOTE WILL HAVE THE SAME EFFECT AS A
VOTE AGAINST THE HOLDING COMPANY PROPOSAL.
By Order of the Board of Directors,
Ellen Ahearn
Corporate Secretary
Dated: July 31, 1998
<PAGE>
PROXY STATEMENT
FOR
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
------------------------
PROSPECTUS
FOR
CH ENERGY GROUP, INC.
COMMON STOCK
This Proxy Statement and Prospectus contains information relating to a
proposal to be voted upon at a Special Meeting of Shareholders of Central Hudson
Gas & Electric Corporation ("Corporation") to be held on Friday, September 25,
1998 at 10:30 a.m. or at any adjournment or postponement of the meeting
("Special Meeting"). The Special Meeting will be held at the Corporation's
offices, 284 South Avenue, Poughkeepsie, New York 12601-4879.
PROPOSAL--THE "HOLDING COMPANY PROPOSAL" is to adopt a holding company
structure for the Corporation in which, pursuant to an Agreement and Plan
of Exchange (the "Exchange Agreement"), the Corporation will become a
subsidiary of CH Energy Group, Inc. ("Holding Company") and the
outstanding shares of the Corporation's Common Stock, $5.00 par value
("Central Hudson Common Stock") will be exchanged automatically on a
share-for-share basis ("Share Exchange") for shares of the Holding
Company's Common Shares, $.10 par value ("Holding Company Common Stock").
Up to 16,700,000 shares of Holding Company Common Stock may be issued in
the Share Exchange. The Exchange Agreement may be amended or terminated
and the Share Exchange is subject to certain conditions. See "THE SHARE
EXCHANGE-- CONDITIONS TO EFFECTIVENESS OF THE SHARE EXCHANGE" AND
"AMENDMENT OR TERMINATION OF THE EXCHANGE AGREEMENT".
THE CORPORATION'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE HOLDING
COMPANY PROPOSAL AND RECOMMENDS THAT YOU VOTE "FOR" SUCH PROPOSAL.
Please vote for the Holding Company Proposal and mail your proxy card to
us in the enclosed postage-paid envelope. The Holding Company Proposal must be
approved by the affirmative vote of the holders of two-thirds of the outstanding
shares of Central Hudson Common Stock. This means that AN ABSTENTION OR FAILURE
TO VOTE WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE HOLDING COMPANY
PROPOSAL.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT AND PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The principal executive offices of both the Corporation and the Holding
Company are located at 284 South Avenue, Poughkeepsie, New York 12601; telephone
number for both entities: (914) 452-2000.
This Proxy Statement and Prospectus, dated July 31, 1998, was first mailed to
shareholders on or about July 31, 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
QUESTIONS AND ANSWERS ABOUT THE HOLDING COMPANY PROPOSAL.................................................. 3
LIST OF DEFINED TERMS..................................................................................... 9
RISK FACTORS.............................................................................................. 10
Future Performance of the Holding Company Common Stock Cannot Be Assured............................ 10
Dividends on the Holding Company Common Stock Will Initially Depend on Common Stock Dividends Paid
by the Corporation................................................................................. 10
Non-Utility Businesses May Involve More Risks....................................................... 10
Restructuring May Have Certain Anti-takeover Effects................................................ 11
INTRODUCTION.............................................................................................. 11
Shareholders Entitled to Vote....................................................................... 12
Adjournment of Meeting.............................................................................. 12
Proxies............................................................................................. 12
Cost of Proxy Solicitation.......................................................................... 13
Proposal: Holding Company and Adoption of the Exchange Agreement.................................... 13
REASONS FOR THE HOLDING COMPANY PROPOSAL.................................................................. 14
General............................................................................................. 14
Competing in the New Regulatory Environment......................................................... 14
Flexibility of Utility and Non-Utility Businesses................................................... 15
THE HOLDING COMPANY'S BUSINESS............................................................................ 15
The Holding Company................................................................................. 15
The Corporation..................................................................................... 16
The PSC............................................................................................. 17
Other Holding Company Subsidiaries.................................................................. 19
DIRECTORS AND OFFICERS OF THE HOLDING COMPANY............................................................. 20
DIRECTORS AND EXECUTIVE OFFICERS OF THE CORPORATION....................................................... 21
THE SHARE EXCHANGE........................................................................................ 22
Exchange Agreement.................................................................................. 22
Vote Required....................................................................................... 22
Regulatory Approvals................................................................................ 23
Conditions to Effectiveness of the Share Exchange................................................... 23
Exchange of Stock Certificates...................................................................... 23
Stock Purchase Plan................................................................................. 24
Amendment or Termination of the Exchange Agreement.................................................. 24
Listing of Holding Company Common Stock............................................................. 24
Dividend Policy..................................................................................... 24
Certain Federal Income Tax Consequences............................................................. 26
Treatment of the Corporation's Preferred Stock...................................................... 27
Holding Company Capital Stock....................................................................... 27
Possible Effect of Certain Holding Company Provisions and the New York Law.......................... 29
Comparative Shareholders' Rights.................................................................... 32
Statutory Appraisal Rights.......................................................................... 35
VALIDITY OF THE HOLDING COMPANY COMMON STOCK.............................................................. 35
FORWARD-LOOKING STATEMENTS................................................................................ 35
EXPERTS................................................................................................... 36
SUBMISSION OF SHAREHOLDER PROPOSALS....................................................................... 36
WHERE YOU CAN GET MORE INFORMATION........................................................................ 36
EXHIBIT A AGREEMENT AND PLAN OF EXCHANGE................................................................. A-1
EXHIBIT B RESTATED CERTIFICATE OF INCORPORATION OF THE HOLDING COMPANY................................... B-1
EXHIBIT C BY-LAWS OF THE HOLDING COMPANY................................................................. C-1
</TABLE>
2
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE HOLDING COMPANY PROPOSAL
THESE QUESTIONS AND ANSWERS ADDRESS THE HOLDING COMPANY PROPOSAL THAT WILL BE
VOTED ON AT A SPECIAL MEETING OF SHAREHOLDERS OF THE CORPORATION TO BE HELD ON
FRIDAY, SEPTEMBER 25, 1998 AT 10:30 A.M., BUT MAY NOT INCLUDE ALL THE
INFORMATION ABOUT THE PROPOSAL THAT IS IMPORTANT TO YOU. FOR MORE COMPLETE
INFORMATION, PLEASE READ THIS ENTIRE PROXY STATEMENT AND PROSPECTUS, INCLUDING
THE EXHIBITS, AND THE OTHER DOCUMENTS REFERRED TO IN THIS DOCUMENT. SEE "WHERE
YOU CAN GET MORE INFORMATION".
WHAT IS THE HOLDING COMPANY PROPOSAL? WHY IS IT BEING PROPOSED?
The Holding Company Proposal will result in a structure in which the Holding
Company will be the parent corporation of other entities including the
Corporation. If approved, the Holding Company will provide financial and other
administrative services for its subsidiaries. Upon consummation of the Holding
Company Proposal, Holding Company Common Stock will be held by the former
holders of Central Hudson Common Stock.
Federal and state initiatives are promoting competition in the sale of
electricity and gas by "unbundling" the integrated services that electric and
gas utilities have traditionally provided and enabling customers to purchase
electricity and gas directly from suppliers other than their local utilities. In
February 1998, the New York State Public Service Commission ("PSC") modified,
and as modified, approved an Amended and Restated Settlement Agreement among the
Corporation, the PSC staff and certain other parties (as modified, the "PSC
Settlement Agreement") that provides for a transition of the Corporation to a
competitive electric market in the Corporation's franchise territory and
authorizes a corporate reorganization of the Corporation into a holding company
structure. (See "THE HOLDING COMPANY'S BUSINESS--THE PSC".) The holding company
structure will provide the financial and regulatory flexibility needed to engage
effectively in competitive businesses and take advantage of the opportunities
presented by the changing business environment of the energy industry while the
Corporation continues to operate its regulated electric and gas utility
business. The Holding Company will be able to establish and fund new businesses
without PSC approval and the delay inherent in the PSC approval process. (SEE
"REASONS FOR THE HOLDING COMPANY PROPOSAL".)
WHAT IS THE SHARE EXCHANGE?
The Share Exchange is the means by which the holding company structure will be
established. If shareholders approve the Holding Company Proposal at the Special
Meeting, common shareholders of the Corporation will automatically become
holders of the Holding Company Common Stock and each share of Central Hudson
Common Stock will become one share of Holding Company Common Stock. Following
the Share Exchange, the Holding Company will own all of the Corporation's Common
Stock and all but one (1) of the Corporation's subsidiaries will become direct
subsidiaries of the Holding Company. (See "THE SHARE EXCHANGE".)
WILL THE VALUE OF MY SHARES BE AFFECTED BY THE SHARE EXCHANGE?
The value of a company's stock is affected by a number of factors including
market and economic conditions. Consequently, no prediction can be made as to
what the value of the Holding Company Common Stock will be after consummation of
the Share Exchange.
3
<PAGE>
The future performance of the Holding Company Common Stock will depend, in part,
on the results of operations of the Corporation and the Holding Company's other
subsidiaries. The Corporation is expected to be the largest subsidiary of the
Holding Company for the next several years. The Corporation believes that the
Holding Company Common Stock should initially perform as if it were Central
Hudson Common Stock. Over time, to the extent the Holding Company's investments
increase (by expanding existing subsidiaries and adding new subsidiaries), the
investment performance of the Holding Company Common Stock will be affected
increasingly by the results of operations of subsidiaries other than the
Corporation.
HOW WILL DIVIDENDS BE AFFECTED?
Following consummation of the Holding Company Proposal, former Central Hudson
Common shareholders, who will then be Holding Company Common shareholders, will
receive the dividends on Holding Company Common Stock declared by the Board of
Directors of the Holding Company. Dividends declared by Central Hudson will be
paid to the Holding Company. Dividends on Central Hudson preferred stock, which
will remain outstanding, will continue to be declared by the Corporation's Board
of Directors and will be paid by the Corporation to its preferred shareholders.
Dividends on Holding Company Common Stock are expected to be paid initially at
least at the same rate and on the same schedule as is now paid on Central Hudson
Common Stock. The most recent dividend declared on Central Hudson Common Stock
was $.54 per share, to be paid on August 1, 1998.
While dividends on Holding Company Common Stock will depend primarily on the
dividends and other distributions that the Corporation and the other
subsidiaries of the Holding Company pay to the Holding Company and the capital
requirements of the Holding Company and its subsidiaries, the Holding Company
initially expects to maintain a policy, like that of the Corporation, of paying
an appropriate percentage of earnings to its shareholders. There can be no
assurance that the subsidiaries of the Holding Company other than the
Corporation will have earnings or pay any dividends to the Holding Company in
the foreseeable future. Under the PSC Settlement Agreement, the Corporation's
ability to pay dividends to the Holding Company is subject to certain
restrictions. (See "THE SHARE EXCHANGE--DIVIDEND POLICY".)
WILL I HAVE TO EXCHANGE MY CENTRAL HUDSON STOCK CERTIFICATES FOR NEW HOLDING
COMPANY CERTIFICATES?
No. Your present certificates for Central Hudson Common Stock will automatically
represent an equal number of shares of Holding Company Common Stock when the
Share Exchange occurs and will no longer represent Central Hudson Common Stock.
WHERE WILL MY HOLDING COMPANY COMMON STOCK BE TRADED? WHAT WILL BE THE TICKER
SYMBOL?
Upon consummation of the Share Exchange, the Holding Company Common Stock will
be listed on the New York Stock Exchange ("NYSE"), and will trade under the
ticker symbol "CNH".
Central Hudson Common Stock is presently listed and traded on the NYSE. The
reported closing price of the Central Hudson Common Stock on July 15, 1998 was
$45 9/16. After the Share Exchange, Central Hudson Common Stock will no longer
trade and will be delisted.
4
<PAGE>
WHAT WILL BE THE BUSINESS OF THE HOLDING COMPANY?
Upon consummation of the Holding Company Proposal, the Corporation will become a
subsidiary of the Holding Company and Holding Company Common Stock will be held
by the former holders of Central Hudson Common Stock. Three (3) current
Corporation subsidiaries, Central Hudson Enterprises Corporation, CH Resources,
Inc. and Greene Point Development Corporation, and any new subsidiaries,
established before the Holding Company Proposal is consummated, will also become
direct subsidiaries of the Holding Company. One (1) current Corporation
subsidiary, Phoenix Development Company, Inc., will continue to be a direct
subsidiary of the Corporation after the Holding Company proposal is consummated.
The Holding Company may establish other subsidiaries from time to time,
including one or more intermediate subsidiary holding companies, to hold its
Central Hudson Common Stock and the stock of its other subsidiaries. (See "THE
HOLDING COMPANY'S BUSINESS--OTHER HOLDING COMPANY SUBSIDIARIES".)
The Corporation will continue to operate its utility business subject to
regulation by the PSC, the Federal Energy Regulatory Commission ("FERC"), the
Nuclear Regulatory Commission ("NRC") and other governmental agencies. The PSC
regulates, among other things, the Corporation's electric and gas rates and the
issuance of its securities. The FERC regulates, among other things, the
Corporation's rates for sales at wholesale, rates for electric transmission and
interconnections with other utilities. The NRC regulates Unit No. 2 of the Nine
Mile Point Nuclear Station ("Nine Mile 2 Plant"), located in Scriba, New York,
in which the Corporation has a 9% co-tenancy interest with certain other New
York utilities.
The Holding Company will not be subject to regulation by the PSC, FERC, or the
NRC, except to the extent that the rules or orders of these agencies impose
restrictions on the Holding Company's relationships with the Corporation or the
Corporation's relationships with the Holding Company's other subsidiaries. The
Holding Company expects to be an exempt public utility holding company under the
Public Utility Holding Company Act of 1935 ("1935 Act"). (See "THE HOLDING
COMPANY'S BUSINESS--THE HOLDING COMPANY".)
5
<PAGE>
WHAT WILL THE HOLDING COMPANY STRUCTURE LOOK LIKE?
[LOGO]
- --------
* Presently, the Corporation has a subsidiary which, on consummation of the
Share Exchange, will become the Holding Company owner of the Corporation as
shown in the "Proposed Structure". The Holding Company may establish other
subsidiaries from time to time, including one or more intermediate subsidiary
holding companies, to hold its Central Hudson Common Stock and the stock of
its other subsidiaries. Any new subsidiaries of the Corporation established
before the Holding Company Proposal is implemented will also become
subsidiaries of the Holding Company.
WHO WILL MANAGE THE HOLDING COMPANY?
The Board of Directors of the Corporation will become the directors of the
Holding Company if the Holding Company Proposal is consummated. In the future,
the directors of the Holding Company and the Corporation may or may not be the
same persons. Certain officers of the Corporation will also serve as officers of
the Holding Company. (See "DIRECTORS AND OFFICERS OF THE HOLDING COMPANY".) The
PSC Settlement Agreement approving the Holding Company Proposal contains certain
restrictions on managerial interlocks between the Corporation and the Holding
Company and other subsidiaries of the Holding Company and the Corporation.
WHEN WILL THE HOLDING COMPANY PROPOSAL BE CONSUMMATED?
The Corporation expects that the Holding Company Proposal will be consummated as
soon as practicable following approval of such Proposal by the holders of
Central Hudson's Common Stock, which consummation is expected to occur by
November 1, 1998. However, consummation is subject to certain conditions,
including the receipt of certain regulatory approvals, the listing of Holding
Company Common Stock on the NYSE and the filing of the Holding Company's
Restated Certificate of Incorporation and a Certificate of Exchange with the New
York State Department of State ("Department"). (See "THE SHARE
EXCHANGE--CONDITIONS TO EFFECTIVENESS OF THE SHARE EXCHANGE".)
6
<PAGE>
The Corporation's Board of Directors may amend or terminate the Exchange
Agreement, abandon the Share Exchange or amend the Holding Company's Restated
Certificate of Incorporation, at any time before or after approval of the
Holding Company Proposal by holders of Central Hudson Common Stock. No
amendment, however, may materially and adversely affect the rights of the
holders of Central Hudson's Common Stock, as determined in the sole judgment of
the Corporation's Board of Directors. (See "THE SHARE EXCHANGE--AMENDMENT OR
TERMINATION OF THE EXCHANGE AGREEMENT".)
WHAT REGULATORY APPROVALS ARE REQUIRED?
PSC, FERC and NRC approvals are required. In February 1998, the PSC approved the
PSC Settlement Agreement which provides for a transition to a competitive
electric market and authorizes a corporate reorganization of the Corporation
into a holding company structure. In July 1998, the FERC and the NRC issued
their respective consents authorizing the Corporation to adopt the holding
company structure. The Holding Company proposal is subject to the continued
effectiveness of all necessary regulatory approvals. The Holding Company will
file with the Securities and Exchange Commission ("SEC") for an exemption from
the 1935 Act. (See "THE SHARE EXCHANGE--REGULATORY APPROVALS".)
HOW WILL MY RIGHTS AS A SHAREHOLDER BE AFFECTED?
Following consummation of the Holding Company Proposal, the former holders of
Central Hudson Common Stock will automatically become holders of Holding Company
Common Stock, and their rights will be governed by the Holding Company's
Restated Certificate of Incorporation and By-laws (the forms of which are
included as Exhibits B and C, respectively, to this Proxy Statement and
Prospectus) rather than those of the Corporation. Since the Corporation's
preferred stock is not being exchanged, the Share Exchange will not change the
rights of holders of preferred stock as set forth in the Corporation's
Certificate of Incorporation.
The Holding Company's Restated Certificate of Incorporation provides the Holding
Company with broad corporate powers to engage in any lawful act or activity for
which a corporation may be formed under New York law. In contrast, the
Corporation is organized as an electric and gas corporation. The Holding
Company's Restated Certificate of Incorporation and By-laws will be different
from the Corporation's Certificate of Incorporation and By-laws with respect to
the classification of the board of directors, removal of directors, authorized
shares, advance notice of shareholder proposals and director nominations and
certain other matters. (See "THE SHARE AGREEMENT--COMPARATIVE SHAREHOLDERS'
RIGHTS".)
ARE THERE FEDERAL INCOME TAX CONSEQUENCES TO COMMON SHAREHOLDERS?
The Corporation has received an opinion from its general counsel, Gould &
Wilkie, that no income gain or loss will be recognized under federal income tax
laws as a result of the consummation of the Holding Company Proposal.
Immediately following the consummation, the aggregate tax basis for any future
gain or loss on any sale of Holding Company Common Stock will be the same as the
aggregate tax basis in Central Hudson Common Stock immediately before the
consummation. (See "THE SHARE EXCHANGE--CERTAIN FEDERAL INCOME TAX
CONSEQUENCES".)
7
<PAGE>
WILL THE CORPORATION'S PREFERRED STOCK OR BONDS BE EXCHANGED?
No. The Corporation's preferred stock will not be exchanged and will continue as
outstanding shares of the Corporation's preferred stock. The rights of holders
of the preferred shares as provided for in the Corporation's Certificate of
Incorporation will not change. The Corporation's bonds will not change and will
continue to be obligations of the Corporation. (See "THE SHARE
EXCHANGE--EXCHANGE AGREEMENT" AND "TREATMENT OF THE CORPORATION'S PREFERRED
STOCK".)
HOW WILL MY PARTICIPATION IN THE STOCK PURCHASE PLAN BE AFFECTED?
All shares of Central Hudson Common Stock held under the Corporation's Stock
Purchase Plan will be automatically exchanged for shares of the Holding Company
Common Stock. The Stock Purchase Plan will be continued with Holding Company
Common Stock after the Share Exchange. (See "THE SHARE EXCHANGE -- STOCK
PURCHASE PLAN".)
WILL THE HOLDING COMPANY HAVE A COMMON STOCK REPURCHASE PLAN LIKE THE
CORPORATION?
The Holding Company has not yet determined whether it will have a Holding
Company Common Stock repurchase plan like that of the Corporation. (See "THE
SHARE EXCHANGE--HOLDING COMPANY CAPITAL STOCK--COMMON STOCK REPURCHASE PLAN".)
WHAT DO I NEED TO DO NOW?
Just mail your signed proxy card in the enclosed postage-paid return envelope as
soon as possible, so that your shares may be represented at the Special Meeting.
The meeting will take place on Friday, September 25, 1998 at Central Hudson's
headquarters, 284 South Avenue, Poughkeepsie, New York.
WHAT SHAREHOLDER VOTE IS REQUIRED FOR APPROVAL OF THE HOLDING COMPANY PROPOSAL?
Holders of record of Central Hudson Common Stock on July 28, 1998 are entitled
to vote at the Special Meeting. Two-thirds of the outstanding shares of Central
Hudson Common Stock must be voted "FOR" the Holding Company Proposal at the
Special Meeting in order to approve the Holding Company Proposal.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROXY STATEMENT AND PROSPECTUS. NEITHER THE CORPORATION NOR THE HOLDING
COMPANY HAS AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THIS
DOCUMENT IS DATED JULY 31, 1998. DO NOT ASSUME THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE IN THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN
THAT DATE, AND NEITHER THE MAILING OF THIS DOCUMENT NOR THE ISSUANCE OF HOLDING
COMPANY COMMON STOCK SHALL CREATE ANY IMPLICATION TO THE CONTRARY.
8
<PAGE>
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
DEFINED TERM PAGE
- ---------------------------------------------------------------------------------------------------------- -----------
<S> <C>
Auction Incentive......................................................................................... 18
Central Hudson By-laws.................................................................................... 28
Central Hudson Charter.................................................................................... 28
Central Hudson Common Stock............................................................................... 1
CHEC...................................................................................................... 10
Corporation............................................................................................... 1
Corporation's Form 10-K................................................................................... 19
Danskammer Plant.......................................................................................... 17
Department................................................................................................ 6
Effective Time............................................................................................ 23
Energy Act................................................................................................ 14
Exchange Agreement........................................................................................ 1
FERC...................................................................................................... 5
Fossil-Fueled Units....................................................................................... 17
Holding Company........................................................................................... 1
Holding Company By-Laws................................................................................... 11
Holding Company Charter................................................................................... 11
Holding Company Common Stock.............................................................................. 1
Holding Company Proposal.................................................................................. 1
Interested Shareholder.................................................................................... 31
Nine Mile 2 Plant......................................................................................... 5
NRC....................................................................................................... 5
NYBCL..................................................................................................... 28
NYPSL..................................................................................................... 15
NYSE...................................................................................................... 4
PSC....................................................................................................... 3
PSC Order................................................................................................. 17
PSC Settlement Agreement.................................................................................. 3
Record Date............................................................................................... 12
Roseton Plant............................................................................................. 17
SEC....................................................................................................... 7
SFAS...................................................................................................... 19
Share Exchange............................................................................................ 1
Special Meeting........................................................................................... 1
1935 Act.................................................................................................. 5
1998 Proxy Statement...................................................................................... 21
</TABLE>
9
<PAGE>
RISK FACTORS
FUTURE PERFORMANCE OF THE HOLDING COMPANY COMMON STOCK CANNOT BE ASSURED
The purpose of the Share Exchange is to establish a holding company
structure that will enhance the ability of the Corporation to take advantage of
competitive business opportunities beyond the Corporation's present regulated
utility business. The Corporation's Board of Directors believes the Share
Exchange and holding company structure to be in the best interests of the
Corporation and its shareholders. Nevertheless, the success of the Holding
Company in realizing its goals and the future performance of Holding Company
Common Stock cannot be assured.
DIVIDENDS ON THE HOLDING COMPANY COMMON STOCK WILL INITIALLY DEPEND ON COMMON
STOCK DIVIDENDS PAID BY THE CORPORATION
For a period of time following consummation of the Share Exchange, the
funds required by the Holding Company to enable it to pay dividends on Holding
Company Common Stock are expected to be derived predominantly from the dividends
paid by the Corporation. Accordingly, the ability of the Holding Company to pay
such dividends, as a practical matter, will be governed by the ability of the
Corporation to pay common stock dividends. It is anticipated that such cash
dividends paid by the Corporation to the Holding Company will be sufficient to
enable the Holding Company to pay cash dividends on Holding Company Common Stock
and to meet operating and other expenses. The ability of the Corporation to pay
dividends on its common stock will continue to be subject to the preferential
dividend rights of the holders of the Corporation's preferred stock. In
addition, although it has no present intention to do so, it is possible that the
Corporation may need to issue additional preferred stock in the future to meet
its capital requirements. Such additional preferred stock will also have
preferential dividend rights. Because the Corporation will remain subject to
regulation by the PSC, the amount of its earnings and dividends will be affected
by the manner in which the PSC regulates the Corporation. In addition, pursuant
to the terms of the Settlement Agreement, common stock dividends paid by the
Corporation to the Holding Company will generally be limited in any calendar
year to 100% of net income available for common stock. There can be no
guarantee, however, of the amount of the initial quarterly dividend on the
Holding Company Common Stock or of the payment of future dividends, as the
declaration of such dividends will primarily be dependent upon the receipt of
dividends from subsidiaries of the Holding Company which, in turn, will be
dependent upon the future earnings and financial condition of these
subsidiaries. See "THE SHARE EXCHANGE--DIVIDEND POLICY".
NON-UTILITY BUSINESSES MAY INVOLVE MORE RISK
The Corporation's principal subsidiary, Central Hudson Enterprises
Corporation ("CHEC"), participates and owns investments in cogeneration,
marketing and other energy related services. The Corporation will transfer CHEC
to the Holding Company at the time of, or shortly following, the Share Exchange.
It is the current intention to have the Holding Company's non-utility
subsidiaries engage primarily in energy-related businesses which will not be
regulated by state or federal agencies which regulate public utilities. Such
unregulated businesses may encounter competitive and
10
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other factors not previously experienced by the Corporation, and may have
different, and perhaps greater, investment risks than those involved in the
regulated electric and gas utility business of the Corporation. There can be no
assurance that such businesses will be successful or, if unsuccessful, that they
will not have a direct or indirect adverse effect on the Holding Company.
The Holding Company will obtain funds to invest in non-utility
subsidiaries and other businesses from dividends it receives from the
Corporation, borrowings and other financings, and dividends the Holding Company
may in the future receive from any non-utility subsidiaries. There can be no
assurance that non-utility subsidiaries will have earnings or pay any dividends
to the Holding Company in the foreseeable future.
RESTRUCTURING MAY HAVE CERTAIN ANTI-TAKEOVER EFFECTS
Certain provisions of the Holding Company's Restated Certificate of
Incorporation ("Holding Company Charter") and the By-Laws of the Holding Company
("Holding Company By-Laws") to be in effect at the Effective Time could
discourage certain types of transactions that may involve an actual or
threatened change of control of the Holding Company. While these provisions are
designed to improve the ability of the Holding Company Board of Directors to
prevent transactions that, in the Holding Company Board's opinion, do not have
the effect of maximizing long-term shareholder value or are otherwise not in the
best interests of the shareholders of the Holding Company, they may,
individually or in the aggregate, delay, discourage or prevent an unsolicited
takeover attempt that a shareholder might believe to be in the shareholders'
interest, including those attempts that might result in a premium over the
market price for Holding Company Common Stock. Such provisions may also
adversely affect the market price for Holding Company Common Stock. The form of
the Holding Company Charter is attached hereto as Exhibit B and the form of the
Holding Company By-Laws are attached hereto as Exhibit C. See "THE SHARE
EXCHANGE--POSSIBLE EFFECT OF CERTAIN HOLDING COMPANY PROVISIONS AND THE NEW YORK
LAW".
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INTRODUCTION
This Proxy Statement and Prospectus and the accompanying Proxy are
furnished in connection with the solicitation by the Board of Directors of the
Corporation of proxies for use at the Corporation's Special Meeting of
Shareholders to be held on Friday, September 25, 1998, and are first being sent
to shareholders on or about July 31, 1998. The mailing address of the
Corporation's principal executive offices is 284 South Avenue, Poughkeepsie, New
York 12601-4879.
SHAREHOLDERS ENTITLED TO VOTE
Only holders of record of Central Hudson Common Stock on July 28, 1998
("Record Date") are entitled to receive notice of the Special Meeting. As of the
close of business on the Record Date, there were 16,975,387 shares of Central
Hudson Common Stock outstanding. Only holders of record of Central Hudson Common
Stock on the Record Date are entitled to vote at the Special Meeting or any
adjournments thereof. Such holders are entitled to one (1) vote per share at the
Special Meeting. No other class of securities is entitled to vote at the Special
Meeting.
ADJOURNMENT OF MEETING
The Corporation reserves the right to adjourn the Special Meeting one or
more times, and to continue to solicit proxies, if insufficient affirmative
votes are present in person or by proxy to adopt the Holding Company Proposal.
PROXIES
Any shareholder giving the enclosed Proxy has the right to revoke it at
any time before it is voted. To revoke a proxy, the shareholder must file with
the Secretary of the Corporation either a written revocation or a duly executed
proxy bearing a later date. Also, a shareholder who attends the Special Meeting
in person may vote by ballot at the meeting, thereby canceling any proxy
previously given.
The accompanying Proxy provides shareholders with the opportunity to
specify their approval or disapproval of, or abstention with respect to, the
Holding Company Proposal. The Holding Company Proposal requires the approval of
the holders of two-thirds of the outstanding shares of Central Hudson Common
Stock (not just two-thirds of the votes cast). AN ABSTENTION OR BROKER NON-VOTE
WILL NOT BE COUNTED AS A VOTE IN FAVOR OF ADOPTION OF SUCH PROPOSAL, AND AS A
RESULT WILL HAVE THE EFFECT OF A VOTE AGAINST SUCH PROPOSAL. THE HOLDING COMPANY
PROPOSAL IS CONSIDERED "NON-DISCRETIONARY," AND BROKERS WHO HAVE RECEIVED NO
INSTRUCTIONS FROM THEIR CLIENTS DO NOT HAVE THE AUTHORITY TO VOTE ON SUCH
PROPOSAL.
With respect to all matters, other than the Holding Company Proposal,
that may properly come before the Special Meeting, the affirmative vote of the
majority of shares of Central Hudson Common Stock present in person or
represented by proxy at the Special Meeting, voting on the subject matter, in
person or by proxy, will be the act of the shareholders. Abstentions and broker
non-votes are voted neither "for" nor "against", and have no effect on
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<PAGE>
the vote on these matters, but are counted in the determination of a quorum.
Holders of a majority of the shares of Central Hudson Common Stock entitled to
vote at the Special Meeting constitute a quorum.
COST OF PROXY SOLICITATION
The cost of preparing, printing and mailing the notice of meeting, proxy
and combined Proxy Statement and Prospectus will be borne by the Corporation.
Proxy solicitation other than by use of the mail may be made by regular
employees of the Corporation by telephone and personal solicitation. Banks,
brokerage houses, custodians, nominees and fiduciaries are being requested to
forward the soliciting material to their principals and to obtain authorization
for the execution of proxies, and may be reimbursed for their out-of-pocket
expenses incurred in that connection. In addition, the Corporation has retained
D.F. King & Co., Inc. of New York, New York, a proxy solicitation organization,
to assist in the solicitation of proxies. The fee of such organization in
connection therewith is estimated to be $25,000, plus reasonable out-of-pocket
expenses.
PROPOSAL: HOLDING COMPANY AND ADOPTION OF THE EXCHANGE AGREEMENT
To carry out the holding company restructuring, the Corporation has
caused to be incorporated a New York corporation, CH Energy Group, Inc.
(referred to in this Proxy Statement and Prospectus as the "Holding Company"),
which now has a nominal amount of stock outstanding and no present business or
properties of its own. All of the currently outstanding shares of the Holding
Company Common Stock are owned by the Corporation.
The Boards of Directors of each of Central Hudson and the Holding Company
have adopted the Agreement and Plan of Exchange (attached as Exhibit A to this
Proxy Statement and Prospectus and herein called the "Exchange Agreement") under
which, subject to approval of the Holding Company Proposal by the holders of
Central Hudson Common Stock and the satisfaction of other conditions, the
Corporation will become a subsidiary of the Holding Company through the exchange
of the outstanding shares of Central Hudson Common Stock on a share-for-share
basis for shares of Holding Company Common Stock (referred to in this Proxy
Statement and Prospectus as the "Share Exchange"). In connection with the Share
Exchange, all but one (1) of the Corporation's existing subsidiaries will be
transferred to the Holding Company and become subsidiaries of the Holding
Company. See "THE HOLDING COMPANY'S BUSINESS--OTHER HOLDING COMPANY
SUBSIDIARIES".
THE CORPORATION'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE HOLDING
COMPANY PROPOSAL AND RECOMMENDS THAT THE HOLDERS OF CENTRAL HUDSON COMMON STOCK
VOTE IN FAVOR OF ADOPTION OF THE HOLDING COMPANY PROPOSAL.
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<PAGE>
REASONS FOR THE HOLDING COMPANY PROPOSAL
GENERAL
In making its decision to recommend the Holding Company Proposal to
shareholders, the Board of Directors of the Corporation considered many factors.
All material factors considered by the Board of Directors of the Corporation in
recommending approval of the proposed Plan of Exchange are discussed below.
COMPETING IN THE NEW REGULATORY ENVIRONMENT
The Board of Directors of the Corporation believes that a holding company
structure will provide the financial and regulatory flexibility needed to engage
effectively in competitive businesses while permitting the Corporation to
continue to operate its regulated electric and gas utility business. This
structure is a well-established form of organization for companies engaging in
multiple lines of business, and is increasingly prevalent in the utility
industry.
In recent years, federal and state initiatives have promoted the
development of competition in the sale of electricity and gas. In general, these
initiatives have sought to unbundle the integrated services that electric and
gas utilities have traditionally provided and to enable customers to purchase
electricity and gas directly from suppliers other than their local utilities.
With the passage of the Energy Policy Act of 1992 ("Energy Act"), there
has been a significant increase in the level of competition in the market for
the generation and sale of electricity. The Energy Act reduces barriers to
market entry for companies that wish to build, own and operate electric
generating facilities, and it also promotes competition by authorizing the FERC
to require transmission service for wholesale power transactions. In 1996, the
FERC issued Order 888 requiring electric utilities to file open access
transmission tariffs that would make the utility transmission systems available
to wholesale sellers and buyers of electric energy on a non-discriminatory
basis. The Corporation filed an open access tariff with the FERC which was
approved in May 1997. In January 1997, the Corporation, along with the other New
York State electric utilities, submitted a filing to FERC for approval of a
restructuring of the wholesale electric market in New York State, including the
establishment of an "independent system operator" that would control and operate
most electric transmission facilities in New York as an integrated system on a
non-discriminatory basis. In June 1998, the FERC conditionally approved such
filing.
At the retail level many states are implementing "retail access" programs
giving electric and gas retail customers the option to choose among energy
suppliers. The PSC, in its "Competitive Opportunities" proceeding, endorsed a
fundamental restructuring of the electric utility industry in New York State
based on competition in the generation and energy services sectors of the
industry. In February 1998, the PSC approved the PSC Settlement Agreement which
provides for a transition to a competitive electric market and authorizes a
corporate reorganization of the Corporation into a holding company structure.
See--"THE HOLDING COMPANY'S BUSINESS--THE PSC".
A decade ago, the price of gas was controlled by regulation and statutes
from the original producer and supplier through the ultimate end-user.
Currently, there is no longer
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<PAGE>
regulation over the sale price of natural gas as a commodity, and the regulation
of interstate transmission at the federal level has been reduced. Similar
regulatory initiatives are taking place at the state level, including in New
York, to extend competition into the retail sector. All of the Corporation's gas
customers, either individually or by aggregating their demand with other
customers, have had the option to purchase gas from other suppliers since 1997.
FLEXIBILITY OF UTILITY AND NON-UTILITY BUSINESSES
The Corporation operates under the regulatory requirements of the New
York Public Service Law ("NYPSL") and the PSC. Under Section 107 of the NYPSL,
the Corporation must obtain the PSC's approval before it may invest in any
business other than its own utility business. Prior to the PSC Settlement
Agreement, the Corporation received limited authority from the PSC under Section
107 of the NYPSL to invest up to an aggregate of approximately $10 million in
CHEC, its energy services subsidiary. The limited nature of these approvals, the
delay brought about by the approval process for these investments in competitive
businesses and the ability to invest only retained earnings represented a
significant constraint on the Corporation's ability to move rapidly in an
increasingly competitive and fast-evolving environment. Pursuant to the PSC
Settlement Agreement, the Corporation is authorized to transfer up to $100
million from the retained earnings of the Corporation prior to the effectiveness
of the Share Exchange to invest in unregulated businesses. The Holding Company
will not be subject to Section 107 of the NYPSL.
Under Section 69 of the NYPSL, the Corporation cannot issue debt or
equity securities for other than certain specified utility purposes. This
restriction has not posed a practical problem in the past because the
Corporation's competitive businesses (principally CHEC) have been limited in
both scope and magnitude. However, such a restriction is no longer appropriate
given the prospective regulatory and competitive environment, particularly
because many of the Corporation's present and potential competitors are not
subject to similar constraints. The Holding Company and its subsidiaries other
than the Corporation will be able, without PSC approval under Section 69 of the
NYPSL, to issue securities for general corporate purposes and will be able to
finance various transactions that may be undertaken, including possible
acquisitions of other companies and repurchases of Holding Company Common Stock.
THE HOLDING COMPANY'S BUSINESS
THE HOLDING COMPANY
The Holding Company is a New York corporation incorporated by the
Corporation for purposes of implementing the Holding Company Proposal. The
principal executive offices of the Holding Company are located at 284 South
Avenue, Poughkeepsie, New York 12601-4879, and its telephone number is
914-452-2000. The Holding Company has not had any business operations. The
currently outstanding shares of Holding Company Common Stock are owned by the
Corporation and will be canceled when the Holding Company Proposal is
implemented.
Following consummation of the Holding Company Proposal, the Holding
Company will own all the outstanding Central Hudson Common Stock and the stock
of other subsidiaries that will engage in competitive businesses. The investment
performance of Holding Company
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<PAGE>
Common Stock will depend on the results of operations of the Corporation and the
Holding Company's other subsidiaries. The Holding Company may establish one or
more intermediate, subsidiary holding companies to hold its Central Hudson
Common Stock and the stock of its other subsidiaries.
The Holding Company will finance its operations, investments in its
subsidiaries and various transactions that may be undertaken, including possible
acquisitions of other companies and repurchases of Holding Company Common Stock,
from dividends and other distributions it receives from the Corporation and its
other subsidiaries, borrowings and the sale of equity or debt securities. The
PSC Settlement Agreement, with certain exceptions, limits the dividends that the
Corporation can pay to the Holding Company to not more than 100 percent of the
Corporation's income available for common stock, calculated on a two-year
rolling average basis. See "THE SHARE EXCHANGE--DIVIDEND POLICY". There can be
no assurance that the subsidiaries of the Holding Company other than the
Corporation will have earnings or pay any dividends to the Holding Company.
The Holding Company will not be subject to regulation by the PSC, FERC or
the NRC, except to the extent that the rules and orders of these agencies impose
restrictions on the Holding Company's relationships with the Corporation or the
Corporation's relationships with the Holding Company's other subsidiaries.
The Holding Company will be a "public utility holding company" under the
1935 Act. The staff of the SEC, which administers the 1935 Act, has recommended,
and several bills have been introduced in Congress that would repeal the 1935
Act. Unless or until the 1935 Act is repealed, the Holding Company expects to
seek an exemption under Section 3(a)(1) of the 1935 Act on the basis that the
Holding Company and the Corporation are each organized and carry on their
businesses substantially in the State of New York and that neither will derive
any material part of its income from a public utility company organized outside
of the State of New York. This exemption is available even though Holding
Company subsidiaries that are neither an "electric utility company" nor a "gas
utility company" under the 1935 Act will engage in interstate activities. The
exemption would exempt the Holding Company from all provisions of the 1935 Act
except Section 9(a)(2), which requires SEC approval for a direct or indirect
acquisition by a utility holding company of five percent (5%) or more of the
voting securities of any other electric or gas utility company. To maintain this
exemption, the Holding Company must file an exemption statement each year prior
to March 1 with the SEC. The exemption may be revoked by the SEC if a
substantial question of law or fact exists as to whether the Holding Company is
within the parameters of the exemption, or if it appears that the exemption may
be detrimental to the public interest or the interest of investors or consumers.
THE CORPORATION
The Corporation is a combination gas and electric utility engaged
principally in the generation, transmission, distribution and sale of electric
energy and the sale, transportation and distribution of natural gas in the
Hudson Valley area of New York. The Corporation provides electricity to more
than 262,000 customers and natural gas to more than 61,000 customers. Following
consummation of the Holding Company Proposal, the Corporation will continue to
operate its regulated electric and gas utility business.
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<PAGE>
The Corporation's utility business is subject to regulation by the PSC,
FERC, the NRC and other governmental agencies. The PSC regulates, among other
things, the Corporation's electric and gas retail rates and the issuance of its
securities. The FERC regulates, among other things, the Corporation's rates for
sales at wholesale, rates for electric transmission and interconnections with
other utilities. The NRC regulates the Nine Mile 2 Plant in which the
Corporation has a nine percent (9%) co-tenancy interest.
THE PSC
The PSC, in its "Competitive Opportunities" proceeding, endorsed a
fundamental restructuring of the electric utility industry in New York State
based on competition in the generation and energy services sectors of the
industry. As part of that proceeding, the Corporation, the PSC Staff and certain
other parties entered into an Amended and Restated Settlement Agreement, dated
January 2, 1998. The PSC, by Orders, issued and effective February 19, 1998 and
June 30, 1998 (collectively, the "PSC Order"), modified the Settlement Agreement
and, as modified, adopted same so that it became effective on February 19, 1998.
Said Settlement Agreement was modified to reflect the PSC Order (as modified,
herein called the "PSC Settlement Agreement"). The PSC Settlement Agreement
provides for a transition to a competitive electricity market in the
Corporation's franchise territory by June 30, 2001. The PSC Settlement Agreement
will remain effective whether or not the Holding Company Proposal is
implemented. In the event that the Holding Company Proposal is not consummated,
the Corporation will not be able to realize the benefits it expects from the
holding company structure. The term of the PSC Settlement Agreement expires June
30, 2001, except for certain provisions thereof which do not expire. The
material provisions of the PSC Settlement Agreement are:
RETAIL ACCESS. The Corporation will implement a retail access program,
beginning in the Fall of 1998, which will permit other sellers of
electricity to use the Corporation's transmission and distribution
facilities to make sales to the Corporation's customers. The program will be
phased in and is targeted to be available to all of the Corporation's
customers not later than June 30, 2001.
ELECTRIC RATE FREEZE. The Corporation's base electric rates are frozen at
current levels until June 30, 2001 except for certain adjustments permitted
by the PSC Settlement Agreement.
DIVESTITURE OF FOSSIL-FUELED ASSETS. The Corporation will auction (in one or
more auctions) its fossil-fueled electric generating units (i.e., the
Corporation's interest in the Roseton Electric Generating Station ("Roseton
Plant") and the Corporation's Danskammer Point Steam Electric Generating
Station ("Danskammer Plant"), (collectively, the "Fossil-Fueled Units")),
with the final sale and transfer to be completed by June 30, 2001, subject
to the right of the PSC to require an earlier auction and sale if the PSC
finds it is in the public interest. At December 31, 1997, the book value of
the Fossil-Fueled Units represented approximately 20% of the Corporation's
net utility plant. The Corporation has the right to bid in the auction
through an affiliate. The Corporation must submit an auction plan for
approval by the PSC at least six (6) months prior to any scheduled auction
date. The PSC approved an auction incentive in which the Corporation would
receive ten
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percent (10%) of the gross sales proceeds above net book value not to exceed
$17.5 million after taxes, provided no affiliate of the Corporation bids in
the auction ("Auction Incentive"). Any net proceeds of an auction above net
book value not retained by the Corporation will be used in the following
order: FIRST, to offset regulatory assets related to the auctioned
Fossil-Fueled Units; SECOND, to reduce the unrecovered book cost of the Nine
Mile 2 Plant; and THIRD, to provide other customer benefits. If the sale
price of the Fossil-Fueled Units is below their then current net book value,
the difference will be preserved for recovery as "strandable costs".
RECOVERY OF PRIOR INVESTMENTS. The Corporation will be given a reasonable
opportunity to recover all prudently incurred, verifiable and appropriately
mitigated production-related electric strandable costs (i.e., those prior
production utility investments and commitments that might otherwise not be
recoverable in a competitive electric market) through a non-bypassable
charge to customers. That charge will begin July 1, 2001 unless the Fossil-
Fueled Units are transferred from the Corporation to another entity (which
could be an affiliate of the Corporation) prior to that date, in which case
the non-bypassable charge to customers could commence on the date of the
transfer subject to PSC approval. The amount of strandable costs for the
Fossil-Fueled Units cannot be estimated at this time due, among other
things, to the uncertainties surrounding the amount of proceeds that might
be realized from their auction(s).
CORPORATE STRUCTURE AND OTHER PROVISIONS. The PSC Settlement Agreement
authorizes a holding company structure for the Corporation. With certain
exceptions, it limits the dividends that the Corporation can pay to not more
than 100 percent of the Corporation's income available for common stock,
calculated on a two-year rolling average basis. See "THE SHARE
EXCHANGE--DIVIDEND POLICY". The Corporation is prohibited from making loans
to, or guaranteeing the obligations of, the Holding Company or any other
affiliate, or pledging its assets as security for the indebtedness of the
Holding Company or any other affiliate. The Corporation, the Holding Company
and the Holding Company's other subsidiaries must operate as separate
entities, and transfers of assets, services and information between the
Corporation and its affiliates are subject to certain restrictions.
Non-administrative operating officers of the Corporation may not be
operating officers of any unregulated affiliate. No more than five (5)
officers of the Corporation may also serve as officers of the Holding
Company except that the Secretary and Treasurer of the Corporation may serve
in the equivalent position of the Holding Company and other affiliates. The
line officers of the Corporation with direct responsibility for engineering,
generation resources acquisition or customer services may not serve as
officers of any affiliate of the Corporation. The Corporation and the
Holding Company's other subsidiaries must have separate operating employees
and any transfers of employees from the Corporation to the Holding Company
and the Holding Company's affiliates are also restricted, generally, for a
period ending February 4, 2000. To fund competitive businesses prior to
effecting the Holding Company restructuring, the Corporation is authorized
to transfer up to $100 million from the retained earnings of the Corporation
to invest in unregulated businesses. There are no limitations on the
businesses in which the Holding Company or any of its subsidiaries may
invest. The Corporation, however, may not own a major electric generation
facility within its existing electric franchise territory in addition to
that already owned. And, for a period of five (5) years from the transfer of
the
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<PAGE>
last of the Fossil-Fueled Units, the Corporation and all of its affiliates
may not own more than 1700 Mw of electric generating capability from any
source located or to be located at the Danskammer Plant/Roseton Plant site.
Neither the Corporation, the Holding Company nor any of their affiliates are
restricted in their right to own or operate any form of electric generation
outside of the Corporation's existing electric franchise territory.
ACCOUNTING EFFECT. As a result of the PSC Settlement Agreement, there have
been changes to certain of the Corporation's accounting policies. The
Corporation's accounting policies conform to generally accepted accounting
principles which, for regulated public utilities, include Statement of
Financial Accounting Standards ("SFAS") No. 71, "Accounting for the Effects
of Certain Types of Regulation". In February 1998, the Corporation applied
the standards in SFAS No. 101, "Regulated Enterprises--Accounting for the
Discontinuation of Application of FASB Statement No. 71" to the
Fossil-Fueled Units portion of its business that is being deregulated as a
result of the PSC Settlement Agreement. This application of SFAS No. 101 had
no material adverse effect on the Corporation's financial position or
results of operations.
For additional information about the PSC Settlement Agreement, including
information about effects of the PSC Settlement Agreement on the Corporation's
accounting policies, see (i) "Competition/Deregulation" in the Management's
Discussion and Analysis sections of the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1997 ("Corporation's Form 10-K") and the
Corporation's Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1998, (ii) the Corporation's Current Reports on Form 8-K, dated February 10,
1998 and July 24, 1998, and (iii) "WHERE YOU CAN GET MORE INFORMATION".
OTHER HOLDING COMPANY SUBSIDIARIES
It is currently anticipated that the Holding Company initially will have
three (3) subsidiaries in addition to the Corporation: CHEC, Greene Point
Development Corporation, and CH Resources, Inc. These corporations are
wholly-owned subsidiaries of the Corporation that will be transferred to the
Holding Company. Phoenix Development Corporation will remain a wholly-owned
subsidiary of the Corporation.
CHEC is a domestic corporation organized under the laws of New York. CHEC
was incorporated in 1960 as an unregulated wholly-owned subsidiary of Central
Hudson and has been active in its present business since 1982. For more than the
past five years, CHEC has been engaged in the business of conducting energy
audits, providing services related to design, financing, installation, and
maintenance of energy conservation measures and cogeneration systems for private
businesses, institutional organizations and governmental entities. CHEC also
participates in cogeneration, small hydro and alternate energy production
projects, directly through limited partnership investments and its wholly-owned
subsidiary, Cencogen--West Delaware Corp., and CHEC is licensed by FERC as a
power marketer. At December 31, 1997, the Corporation's investment in CHEC was
approximately $11.6 million (about 1% of the Corporation's total consolidated
assets).
CH Resources, Inc., Phoenix Development Company, Inc. (which will remain
as a subsidiary of the Corporation), and Greene Point Development Corporation
were established
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to either hold real property for the future use of the Corporation or to
participate in energy-related ventures. Currently, the assets held by these
corporations are not material.
Under Section 107 of the NYPSL, the Corporation must obtain the PSC's
approval before it may invest in any business other than its own utility
business. Prior to the PSC Settlement Agreement, the Corporation received
limited authority from the PSC to invest up to an aggregate of approximately $10
million in CHEC. Pursuant to the PSC Settlement Agreement, the Corporation is
authorized to invest up to $100 million in unregulated subsidiaries prior to
consummation of the Holding Company Proposal. The Corporation expects that any
new subsidiaries established and funded pursuant to this authorization would
also be transferred to the Holding Company upon consummation of the Holding
Company Proposal. The Holding Company will not be subject to Section 107 of the
NYPSL.
The Holding Company (or the Corporation prior to the consummation of the
Holding Company Proposal) may establish one or more energy supply subsidiaries.
An energy supply subsidiary could become an unregulated owner and operator of
electric generating plants (including any that may be purchased at auction from
the Corporation) and marketer of electricity. Energy supply subsidiaries might
also market electricity directly to energy service companies and through
exchanges where buyers and sellers trade electricity, contract for operations
and maintenance work and participate in building new generating facilities.
The Holding Company may also establish other subsidiaries to engage in
competitive businesses and one or more intermediate, subsidiary holding
companies to hold its Central Hudson Common Stock and the stock of its other
subsidiaries.
DIRECTORS AND OFFICERS OF THE HOLDING COMPANY
Pursuant to the Holding Company's Charter and By-laws, the Holding
Company's Board of Directors will, as of the first Annual Meeting of
Shareholders after the Effective Time, be divided into three (3) classes of
directors, with the directors in each class generally being elected for a
three-year term. The Holding Company's By-laws will permit the Board of
Directors to fix from time to time the number of directors in a range of three
(3) to 25, and the Board of Directors has fixed its initial size at eight (8),
effective as of the Effective Time.
Immediately after the Effective Time, the Board of Directors of the
Holding Company shall consist of those persons who are directors of the
Corporation immediately prior to the Effective Time. If the Corporation's
shareholders approve the Holding Company Proposal, they will be considered also
to have ratified the election of such persons as the directors of the Holding
Company. It is anticipated that the directors of the Corporation immediately
after the Effective Time will be those persons who are directors of the
Corporation immediately prior to the Effective Time. It is also anticipated that
the Holding Company and its subsidiaries will have some common officers. After
consummation of the Share Exchange, the Holding Company Board of Directors
vacancies may be filled by action of the Holding Company's Board of Directors.
It is expected that the majority of the Holding Company officers will
initially also be officers of the Corporation and that the Holding Company will
have few employees. In the future, the Holding Company may employ additional
officers and employees.
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DIRECTORS AND EXECUTIVE OFFICERS OF THE CORPORATION
Information concerning the names, ages, positions and business experience
of the Board of Directors and executive officers of the Corporation and
information about executive compensation is incorporated by reference herein
from Items 1, 10, 11 and 13 of the Corporation's Form 10-K (which incorporates
portions of the Corporation's definitive proxy statement, dated March 2, 1998,
for its Annual Meeting of Shareholders held on April 7, 1998 ("1998 Proxy
Statement")). For restrictions on officers holding common positions in the
Corporation, the Holding Company and/or any affiliate thereof, see "THE HOLDING
COMPANY'S BUSINESS--THE PSC" AND "CORPORATE STRUCTURE AND OTHER PROVISIONS".
The following table lists the number of shares of Common Stock
beneficially owned, as of June 30, 1998, by each director, and each executive
officer listed in the table under the caption "Executive Compensation" in the
1998 Proxy Statement and by all directors and executive officers of the
Corporation as a group:
<TABLE>
<CAPTION>
NAME NO. OF SHARES (1) % OF CLASS (2)
- ----------------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
Jack Effron.................................................................. 2,068 less than 1%
Frances D. Fergusson......................................................... 1,803 less than 1%
Heinz K. Fridrich............................................................ 2,866 less than 1%
Edward F. X. Gallagher....................................................... 2,394 less than 1%
Paul J. Ganci................................................................ 9,561(3) less than 1%
Charles LaForge.............................................................. 3,715 less than 1%
John E. Mack III............................................................. 12,288(3) less than 1%
Edward P. Swyer.............................................................. 8,268 less than 1%
Joseph J. DeVirgilio, Jr..................................................... 1,446 less than 1%
Carl E. Meyer................................................................ 1,550 less than 1%
Allan R. Page................................................................ 2,639 less than 1%
All directors and executive officers as a group (18 persons)................. 53,270 less than 1%
</TABLE>
- ------------------------
(1) Based on information furnished to the Corporation by the directors and
executive officers as of June 30, 1998.
(2) The percentage ownership calculation for each owner has been made on the
basis that there are outstanding 16,975,387 shares of Central Hudson Common
Stock on the Record Date.
(3) Includes shares owned by the respective spouses of the named individuals as
follows: Mrs. Mack-850 shares and Mrs. Ganci-2,044 shares. The shares owned
by Mrs. Mack and Mrs. Ganci are considered to be beneficially owned by Mr.
Mack and Mr. Ganci, respectively, only for the purpose of this proxy
statement and the respective named individuals disclaim any beneficial
interest in such shares for all other purposes.
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THE SHARE EXCHANGE
EXCHANGE AGREEMENT
The Exchange Agreement has been unanimously adopted by the Boards of
Directors of the Corporation and the Holding Company and is subject to adoption
by the holders of at least two-thirds of the outstanding shares of Central
Hudson Common Stock. See "VOTE REQUIRED". In the Share Exchange, (i) each share
of Central Hudson Common Stock outstanding immediately prior to the Effective
Time will be exchanged for one new share of Holding Company Common Stock, (ii)
the Holding Company will become the owner of all outstanding Central Hudson
Common Stock, and (iii) the shares of the Holding Company Common Stock held by
the Corporation immediately prior to the Effective Time will be canceled.
As a result, upon consummation of the Share Exchange, the Holding Company
will become a holding company, the Corporation will become a subsidiary of the
Holding Company and all of the Holding Company Common Stock outstanding
immediately after the Share Exchange will be owned by the former holders of
Central Hudson Common Stock outstanding immediately prior to the Share Exchange.
The Exchange Agreement is attached to this Proxy Statement and Prospectus as
Exhibit A and is incorporated herein by reference.
The Corporation's outstanding shares of preferred stock will not be
exchanged in the Share Exchange, but will continue to be outstanding as shares
of the Corporation's preferred stock. The Share Exchange will not change the
rights of the holders of such preferred stock as currently provided in the
Corporation's Certificate of Incorporation. Debt of the Corporation will
continue as outstanding obligations of the Corporation after the Share Exchange.
VOTE REQUIRED
Under New York law, the affirmative vote of the holders of record on the
Record Date of two-thirds of the outstanding shares of Central Hudson Common
Stock is required to approve the Holding Company Proposal. Holders of record on
the Record Date will be entitled to one (1) vote per share of Central Hudson
Common Stock. Under the rules of the NYSE, member brokerage firms that hold
shares in street name for beneficial owners may, to the extent that such
beneficial owners do not furnish voting instructions with respect to any or all
proposals submitted for stockholder action, vote in their discretion upon
proposals which are considered "discretionary" proposals under the rules of the
NYSE. Member brokerage firms that have received no instructions from their
clients as to "non-discretionary" proposals do not have discretion to vote on
these proposals. Under the rules of the NYSE, the Holding Company Proposal is
considered a "non-discretionary item" whereby brokerage firms may not vote in
their discretion on behalf of their clients if such clients have not furnished
voting instructions. Such "broker non-votes" will not be considered as votes
cast in determining the outcome of the Holding Company Proposal. Accordingly,
such "broker non-votes" will have the same legal effect as a vote against the
Holding Company Proposal.
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REGULATORY APPROVALS
NEW YORK PUBLIC SERVICE COMMISSION. By the PSC Order, the PSC approved
the PSC Settlement Agreement, which provides for the holding company
restructuring. For a description of the PSC Settlement Agreement, see "THE
HOLDING COMPANY'S BUSINESS--THE PSC".
FERC AND NRC CONSENTS. On July 2, 1998, the FERC issued its consent to
the Holding Company restructuring under Section 203 of the Federal Power Act. On
July 19, 1998, the NRC consented, under 10 C.F.R. Section50.80, to the Holding
Company restructuring as it relates to the possessory license of the Corporation
with respect to the Nine Mile 2 Plant. The NRC's Order includes a provision
allowing any person adversely affected by the Order to request, by August 19,
1998, a hearing relative to the NRC's issuance of the Order.
CONDITIONS TO EFFECTIVENESS OF THE SHARE EXCHANGE
The Share Exchange is subject to the satisfaction of the following
conditions (in addition to approval of the Holding Company Proposal by the
holders of Central Hudson Common Stock): (i) all necessary orders,
authorizations, approvals or waivers from the PSC, the FERC and the NRC and all
other jurisdictive regulatory bodies, boards or agencies have been received,
remain in full force and effect, and do not include, in the sole judgment of the
Board of Directors of the Corporation, unacceptable conditions; (ii) shares of
the Holding Company Common Stock to be issued in connection with the Share
Exchange have been listed, subject to official notice of issuance, on the NYSE;
(iii) the Holding Company Charter (Exhibit B to this Proxy Statement and
Prospectus) has been filed with the Department; (iv) a registration statement is
effective under the Securities Act of 1933 relating to the Holding Company
Common Stock to be issued in the Share Exchange; and (v) a favorable opinion of
counsel covering certain United States federal income tax matters has been
received and such favorable rulings have been received from the New York State
and/or Federal tax authorities with respect to the Share Exchange and related
transactions as the Boards of Directors of the Corporation and the Holding
Company shall determine are necessary and appropriate.
Following satisfaction of these conditions, the Share Exchange will
become effective upon (or at a specified time) filing with the Department a
certificate of exchange pursuant to Section 913(d) of the New York Business
Corporation Law ("Effective Time"). The Corporation cannot predict when all
conditions will be satisfied, but expects that the Share Exchange will become
effective on or about November 1, 1998.
EXCHANGE OF STOCK CERTIFICATES
If the Share Exchange is effected, it will not be necessary for holders
of Central Hudson Common Stock physically to exchange their existing stock
certificates for certificates of Holding Company Common Stock. The certificates
which represent shares of Central Hudson Common Stock outstanding immediately
prior to the Effective Time will automatically represent an equal number of
shares of Holding Company Common Stock immediately after the Effective Time and
will no longer represent Central Hudson Common Stock. New certificates bearing
the name of the Holding Company will be issued after the Share Exchange, if and
as
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certificates representing shares of Central Hudson Common Stock outstanding
immediately prior to the Share Exchange are presented for exchange or transfer.
STOCK PURCHASE PLAN
Shares of Central Hudson Common Stock (including uncertificated whole and
fractional shares) held in its Stock Purchase Plan will automatically become a
like number of shares of the Holding Company Common Stock at the Effective Time.
At the Effective Time, the Holding Company will succeed to that Plan as in
effect immediately prior to the Effective Time, and shares of the Holding
Company Common Stock will be issued under that Plan on and after the Effective
Time.
AMENDMENT OR TERMINATION OF THE EXCHANGE AGREEMENT
The Boards of Directors of the Corporation and the Holding Company may
amend any of the terms of the Exchange Agreement at any time before or after its
adoption by the holders of Central Hudson Common Stock and prior to the
Effective Time, but no such amendment may, in the sole judgment of the Board of
Directors of the Corporation, materially and adversely affect the rights of the
Corporation's shareholders.
The Exchange Agreement may be terminated and the Share Exchange abandoned
at any time before or after the shareholders of the Corporation adopt the
Holding Company Proposal, and prior to the Effective Time, if the Board of
Directors of the Corporation determine, in their sole judgment, that
consummation of the Share Exchange would, for any reason, be inadvisable or not
be in the best interests of the Corporation or its shareholders.
LISTING OF HOLDING COMPANY COMMON STOCK
The Holding Company is applying to have its common stock listed on the
NYSE. It is expected that such listing will become effective at the Effective
Time. The stock exchange ticker symbol of Holding Company Common Stock will be
"CNH". Following the Share Exchange, Central Hudson Common Stock will no longer
trade and will be delisted and no longer be registered pursuant to Section 12 of
the Securities Exchange Act of 1934.
DIVIDEND POLICY
The Holding Company does not now, nor will it immediately after the Share
Exchange, conduct directly any business operations from which it will derive any
revenues. The Holding Company plans to obtain funds for its own operations from
dividends paid to the Holding Company by its subsidiaries, and from sales of
securities or debt incurred by the Holding Company. Dividends on the Holding
Company Common Stock will initially depend upon the earnings, financial
condition and capital requirements of the Corporation, and the dividends that
the Corporation pays to the Holding Company. In the future, dividends from the
Holding Company's subsidiaries other than the Corporation may also be a source
of funds for dividend payments by the Holding Company. Payment of Central Hudson
Common Stock dividends to the Holding Company will be subject to the prior
rights of holders of the Corporation's preferred stock. In addition, although it
has no present intention to do so, the Corporation may
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issue additional preferred stock in the future to meet its capital requirements.
Such additional preferred stock will also have preferential dividend rights.
It is presently anticipated that, initially, the Holding Company will pay
quarterly dividends on the Holding Company Common Stock at least equal to the
rate, and on approximately the same schedule, as the dividend most recently
declared by the Corporation on the Central Hudson Common Stock. While future
dividends will depend on the earnings, financial condition and capital
requirements of the Corporation and the Holding Company's other subsidiaries,
the Holding Company presently expects that the Holding Company will maintain a
policy, like that of the Corporation, of paying an appropriate percentage of
earnings to its shareholders. The Corporation currently pays about 75.3% of its
income as dividends.
Following consummation of the Share Exchange, CHEC and certain other
subsidiaries of the Corporation will be transferred to the Holding Company and
will not be available to the holders of the Corporation's preferred stock as a
source of cash for the payment of dividends or other amounts. CHEC and the
Corporation's other subsidiaries have not paid dividends to the Corporation in
the past.
The PSC Settlement Agreement contains conditions imposing limitations on
dividend payments by the Corporation to the Holding Company, which limitations
could reduce the funds available to the Holding Company to pay dividends on
Holding Company Common Stock. These limitations are as follows: (1) during the
first two (2) years after the consummation of the Share Exchange, dividends on
Central Hudson Common Stock cannot exceed the income available for such
dividends and after such two (2) year period, dividends on Central Hudson Common
Stock cannot exceed a rate equal to 100% of the annual average income available
for such dividends, calculated on a two-year rolling average basis; (2) in the
event that the Corporation has senior rated debt and is downgraded below BBB+ by
more than one credit rating agency due to the performance of or concerns about
the financial condition of the Holding Company or any affiliate, other than the
Corporation, the Corporation's dividends will be limited to 75% of the average
annual income available for common stock (calculated on a two-year rolling
average basis); (3) in the event that such senior rated debt is placed on
"Credit Watch" (or the equivalent) for a rating below BBB by more than one
rating agency due to the performance of or concerns about the financial
condition of the Holding Company or any affiliate other than the Corporation,
common stock will be limited to a rate of not more than 50% of the average
annual income available for common stock, on a two-year rolling average basis;
and (4) in the event of a downgrade of the Corporation's senior debt rating
below BBB- by more than one credit rating agency, due in substantial part to the
performance of or concerns about the financial condition of the Holding Company
or any affiliate other than the Corporation, no dividends will be paid until the
Corporation's senior debt rating has been restored to BBB- or higher by all
credit rating agencies then rating the Corporation. Any such limitations on
dividend payments by the Corporation to the Holding Company are likely to result
in a reduction in the dividends paid by the Holding Company to its shareholders.
These limitations will survive the expiration of the PSC Settlement Agreement on
June 30, 2001.
The Corporation's current Standard & Poor's Corporation, Moody's
Investors Service, Inc., Duffs & Phelps Credit Rating Co. and Fitch Investors
Service unsecured senior debt ratings are A-, A2, A and A, respectively.
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No dividends may be paid, or funds set apart for payment, on Central
Hudson Common Stock unless all dividends accrued on the Corporation's
outstanding preferred stock have been paid, or declared and set apart for
payment.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Corporation and the Holding Company have received an opinion from
Gould & Wilkie, their general counsel, regarding material Federal income tax
consequences of the Share Exchange, to the effect that, based on certain
assumptions and factual representations:
(1) no gain or loss will be recognized by a holder of Central Hudson
Common Stock upon the exchange solely of such holder's Central Hudson
Common Stock solely for Holding Company Common Stock;
(2) the basis of shares of Holding Company Common Stock received by a
former holder of shares of Central Hudson Common Stock in an exchange
described in (1) above in the aggregate will equal the basis of such
former holder's shares of Central Hudson Common Stock exchanged therefor,
and the holding period for such shares of Holding Company Common Stock
will include the holding period for shares of Central Hudson Common Stock
exchanged therefor to the extent that such shares of Central Hudson Common
Stock were held as a capital asset at the effective time of the Share
Exchange;
(3) no gain or loss will be recognized by the Holding Company or the
Corporation on account of the Share Exchange or the issuance of shares of
Holding Company Common Stock to the former holders of shares of Central
Hudson Common Stock pursuant to the Exchange Agreement; and
(4) the consummation of the Share Exchange will not result in the
termination of the existence of the affiliated group of corporations of
which the Corporation has been the common parent, and the Corporation will
be included in such affiliated group of corporations of which the Holding
Company will become the new common parent.
Shareholders of the Corporation will be required to attach to their
income tax returns a complete statement of all the facts relating to the Share
Exchange. The facts to be disclosed include the shareholder's basis in the
shares of Central Hudson Common Stock transferred to the Holding Company and the
nature and amount of shares of Holding Company Common Stock received in the
Share Exchange. Shareholders of the Corporation will also be required to keep
permanent records of any information relating to the Share Exchange that is
required to be filed with their income tax returns.
The foregoing discussion does not cover the tax consequences of the Share
Exchange under state, local or foreign income or other tax laws. Shareholders of
the Corporation are urged to consult with their own tax advisors with respect to
the effects of such laws.
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TREATMENT OF THE CORPORATION'S PREFERRED STOCK
Shares of the Corporation's preferred stock will not be exchanged in the
Share Exchange, but will continue as preferred stock of the Corporation.
Therefore, holders of the Corporation's preferred stock will not become holders
of Holding Company preferred or Common Stock as a result of the Share Exchange.
The Share Exchange and the holding company structure will not change the rights
of holders of the outstanding shares of the Corporation's preferred stock. The
Corporation's preferred stock will continue to rank senior to the Corporation's
Common Stock as to dividends and as to the distribution of the Corporation's
assets upon any liquidation.
HOLDING COMPANY CAPITAL STOCK
GENERALLY. Since the Exchange Agreement is conditioned on the Holding
Company Charter being filed prior to the Share Exchange with the Department,
approval of the Holding Company Proposal will constitute approval and
ratification of the Holding Company Charter. The Holding Company's Board of
Directors will adopt the Holding Company By-laws prior to the Share Exchange.
These documents will govern certain rights of the holders of Holding Company
Common Stock after the Share Exchange as discussed under this caption and under
"COMPARATIVE SHAREHOLDERS' RIGHTS" below.
The following statements with respect to Holding Company Common Stock are
based on certain provisions of the Holding Company Charter and By-laws, in the
form to be effective as of the Effective Time. A copy of the Holding Company
Charter and By-laws, substantially in the form to be effective at the Effective
Time, are attached as Exhibits B and C hereto and are incorporated herein by
reference.
The Holding Company is authorized to issue 30,000,000 shares of common
stock, $.10 par value (of which approximately 16,700,000 shares are expected to
be outstanding at the Effective Time of the Share Exchange), and 1,200,000
shares of preferred stock, $.10 par value. The Holding Company preferred stock
may be issued from time to time in series as the Holding Company's Board of
Directors may determine, and the respective dividend rates, redemption terms (if
any), amounts payable on liquidation, voting rights (if any), number of votes
per share, conversion rights (if any), and other terms will be fixed by the
Holding Company's Board of Directors with respect to any such series prior to
issuance.
When issued in the Share Exchange, shares of the Holding Company Common
Stock will be fully paid and nonassessable. Holders of the Holding Company
Common Stock and preferred stock are not entitled to preemptive rights.
DIVIDENDS. Subject to prior rights of the Holding Company's preferred
stock (if any should become outstanding), the Holding Company's Common Stock is
entitled to such dividends as may be declared by the Holding Company's Board of
Directors, and the Holding Company may purchase or otherwise acquire outstanding
shares of the Holding Company Common Stock out of funds legally available
therefor.
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As summarized above, the PSC Settlement Agreement imposes certain
limitations on the dividends that the Corporation may pay to the Holding Company
after the Share Exchange. See "DIVIDEND POLICY".
LIQUIDATION RIGHTS. Upon liquidation of the Holding Company, any net
assets remaining after payment to the holders (if any) of the Holding Company
preferred stock of the full amounts to which they are entitled to receive are
distributable pro rata to the holders of the Holding Company Common Stock.
VOTING RIGHTS. Holders of the Holding Company Common Stock are entitled
to one vote per share. Holders of Holding Company preferred stock shall have no
voting rights unless, in connection with the issuance of a series of preferred
stock, the Holding Company's Board of Directors provides voting rights or unless
otherwise required by law. There are no cumulative voting rights. The Holding
Company's Board of Directors is divided into three classes, with directors
elected generally to serve for terms of three (3) years.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for the
Holding Company Common Stock will be First Chicago Trust Company of New York,
Jersey City, New Jersey.
INDEMNIFICATION AND LIMITATION OF LIABILITY. As generally do the
Corporation's by-laws ("Central Hudson By-laws"), the Holding Company By-laws
will provide that the Holding Company shall indemnify to the full extent
permitted by law any person made, or threatened to be made, a party to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person or such person's testator
or intestate is or was a director, officer or employee of the Holding Company,
or serves or served at the request of the Holding Company with any other
enterprise as a director, officer or employee. Expenses incurred by any such
person in defending any such action, suit or proceeding will be paid or
reimbursed by the Holding Company promptly upon receipt by it of an undertaking
of such person to repay such expenses if it shall ultimately be determined that
such person is not entitled to be indemnified by the Holding Company. No
amendment of this by-law provision will impair the rights of any person arising
at any time with respect to events occurring prior to such amendment.
As does the Corporation's certificate of incorporation ("Central Hudson
Charter"), the Holding Company Charter will provide that no director shall have
personal liability to the Holding Company or its shareholders for damages for
any breach of duty in such capacity, except for the liability for acts or
omissions in bad faith or involving intentional misconduct or a knowing
violation of law, or if such director personally gained in fact a financial
profit or other advantage to which such director was not legally entitled or if
such act violated Section 719 of the New York Business Corporation Law
("NYBCL"). Any amendment or repeal of such liability limitation provision may
not apply to or have any effect on the liability or alleged liability of any
director for or with respect to any acts or omissions of such director occurring
prior to such amendment or repeal.
COMMON STOCK REPURCHASE PLAN. The Corporation currently has a repurchase
plan under which it can acquire up to 2.5 million shares of issued and
outstanding Central Hudson
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Common Stock. Since January 1, 1997 and through April 30, 1998, the Corporation
repurchased 621,200 shares of Central Hudson Common Stock. The Holding Company
has not yet determined whether it will establish a plan to repurchase Holding
Company Common Stock.
POSSIBLE EFFECT OF CERTAIN HOLDING COMPANY PROVISIONS AND THE NEW YORK LAW
It is not the intention of the Corporation's Board of Directors to
discourage legitimate offers to enhance shareholder value. However, certain
provisions of the Holding Company Charter and By-laws could have the effect of
discouraging unsolicited attempts to take over and acquire the Holding Company.
To the extent that these provisions discourage potential takeover bids, they
might limit the opportunity for the Holding Company's shareholders to sell their
shares at a premium over then prevailing market prices.
NON-CUMULATIVE VOTING. The Holding Company will not provide for
cumulative voting in the election of directors. Cumulative voting means that the
total number of votes which a holder of common stock may cast for the election
of directors shall equal the number of directors to be elected multiplied by the
number of shares held, and such shareholder may cast all of such votes for a
single nominee for director or may distribute them among all or several
nominees, as such shareholder sees fit.
Under cumulative voting, it is possible for representation on a board of
directors to be obtained by an individual or group of individuals who own less
than a majority of the voting stock. Such a shareholder or group may have
interests and goals which are not consistent with, and indeed might be in
conflict with, those of a majority of the shareholders. The Board of Directors
of the Holding Company believes that each director should represent all
shareholders, rather than the interests of any special constituency, and that
the presence on the Holding Company's Board of Directors of one or more
directors representing such a constituency could disrupt and impair the
efficient management of the Holding Company. The lack of cumulative voting could
discourage the accumulation of blocks of Holding Company Common Stock and
therefore could tend to make increases in the market price of Holding Company
Common Stock, which could result therefrom, less likely to occur. Therefore,
shareholders may not be able to sell their shares of Holding Company Common
Stock at a market price influenced by this type of activity.
ADVANCE NOTICE OF BUSINESS TO BE BROUGHT BEFORE SHAREHOLDER
MEETINGS. Under the Holding Company By-laws shareholders must provide the
Holding Company prior written notice of any business to be brought before an
annual or special meeting (including the nomination of directors) in order for
it to be considered. With respect to any annual meeting, the Holding Company
By-laws require the written notice to be received by the Secretary of the
Holding Company no earlier than 90 days nor later than 60 days prior to the
first anniversary of the preceding year's annual meeting, except that if the
date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, the Holding Company By-laws require the written
notice to be received by the Secretary of the Holding Company no earlier than 90
days nor later than the later of 60 days prior to the date of, or 10 days after
the public announcement of, such annual meeting. With respect to any special
meeting, the Holding Company By-laws require the written notice to be received
by the Secretary of the
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Holding Company no earlier than 90 nor later than the later of 60 days prior to,
or 10 days after the announcement of, such special meeting.
These advance notice by-laws provisions are intended to provide an
orderly process for shareholder action and provide the Holding Company's Board
of Directors with a meaningful opportunity to consider a proposal or director
nomination by a shareholder and, to the extent deemed necessary or desirable by
that Board, inform all of its shareholders of any recommendation of that Board.
The provisions may provide sufficient time for the Holding Company to institute
litigation or take other steps to respond to a shareholder proposal, or to
prevent the proposal from being acted upon, if such response or prevention is
thought to be necessary or desirable. The provisions for advance notice of
director nominations may inhibit shareholders from participating in the
nomination process for directors. Such provisions may also provide sufficient
time for the Holding Company to institute litigation or take other steps to
prevent the nominee from being elected or serving if such prevention is thought
to be necessary or desirable.
"BLANK-CHECK" STOCK. The Holding Company Charter will authorize the
issuance of 1,200,000 shares of Holding Company preferred stock. In addition,
after giving effect to the Share Exchange, approximately 13,300,000 shares of
Holding Company Common Stock will be authorized but unissued and not reserved
for issuance. An effect of the existence of unissued Holding Company Common
Stock and preferred stock may be to enable the Holding Company Board of
Directors to render more difficult or discourage a transaction to obtain control
of the Holding Company without the consent of the Holding Company Board of
Directors. Such shares might be issued by the Holding Company Board of Directors
without shareholder approval in transactions that might prevent or render more
difficult or costly the completion of a takeover transaction, as by diluting
voting or other rights of the proposed acquiror. The Holding Company Charter
will grant the Holding Company Board of Directors broad power to establish the
rights and preferences of the authorized and unissued preferred stock, one or
more classes or series of which could be issued entitling holders to vote
separately as a class on any proposed merger or consolidation, to convert such
stock into shares of Holding Company Common Stock or possibly other securities,
to demand redemption at a specified price under prescribed circumstances related
to a change of control, or to exercise other rights designed to impede a
takeover.
SECTION 912 OF THE NEW YORK BUSINESS CORPORATION LAW. Section 912 of the
NYBCL applies to the Corporation and will apply to the Holding Company upon
consummation of the Share Exchange. Section 912 of the NYBCL would prohibit a
"business combination" (as defined in Section 912, generally including mergers,
sales and leases of assets, issuances of securities and similar transactions) by
the Holding Company or a subsidiary with an "interested shareholder" (as defined
in Section 912, generally the beneficial owner of 20 percent or more of the
Holding Company's voting stock) within five (5) years after the person or entity
becomes an interested shareholder, unless (i) prior to the person or entity
becoming an interested shareholder, the business combination or the transaction
pursuant to which such person or entity became an interested shareholder shall
have been approved by the Holding Company's Board of Directors, or (ii) the
business combination is approved by the holders of a majority of the outstanding
voting stock of the Holding Company, excluding shares held by the interested
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shareholder, at a meeting called for such purpose not earlier than five (5)
years after such interested shareholder's stock acquisition date.
SECTION 70 OF THE NEW YORK PUBLIC SERVICE LAW. Under Section 70 of the
NYPSL, unless authorized by the PSC, no gas corporation or electric corporation
may directly or indirectly acquire the stock or bonds of any other corporation
incorporated for, or engaged in, the same or a similar business, or proposing to
operate or operating under a franchise from New York State or any other state or
any other municipality. In general, no stock corporation other than a gas
corporation or electric corporation or street railroad corporation may purchase
or acquire, take or hold, more than ten percent (10%) of the voting capital
stock of any gas corporation or electric corporation organized or existing under
or by virtue of the laws of New York unless with the consent of, and subject to
the terms and conditions set by, the PSC. No consent may be given by the PSC to
any such acquisition unless it has been shown that such acquisition is in the
public interest. Any contract, assignment, transfer or agreement for transfer of
any stock in violation of Section 70 will be void and of no effect, and no such
transfer or assignment may be made upon the books of any such gas corporation or
electric corporation, or will be recognized as effective for any purpose. An
"electric corporation" is defined generally to include any corporation, company,
partnership and person owning, operating or managing any electric plant. A "gas
corporation" is defined generally to include any corporation, company,
partnership and person owning, operating or managing any gas plant. In the event
of a merger, consolidation or takeover transaction involving the Holding
Company, any regulatory approvals required for such a transaction would depend
on the structure and other details of the transaction. The necessary approvals
could include approval of the PSC under Section 70 of the NYPSL.
FAIR PRICE PROVISIONS. The Holding Company Charter (Article 10) contains
a "fair price" provision which is essentially the same as the "fair price"
provision contained in the Central Hudson Charter. This "fair price" provision
is designed generally to assure that all shareholders receive the same price
and/or equal treatment for their shares of Holding Company Common Stock upon an
offer for the Holding Company Common Stock under a proposed business
combination. The "fair price" provision prohibits certain business combinations
with a controlling or substantial shareholder ("Interested Shareholder") unless
(i) the minimum price and procedural requirements are satisfied thereof, (ii) a
majority of disinterested directors approve the transaction, or (iii) the
required supermajority shareholder vote is obtained, consisting of the
affirmative vote of at least 80% of the Holding Company's voting shares, in
which vote at least two thirds of the disinterested shareholders approve the
transaction. Such provision supplements the "fair price" protection available
under Section 912 of the NYBCL, as described above. See the proposed Holding
Company Charter attached hereto as Exhibit B.
OTHER PROVISIONS. Some other provisions of the Holding Company's Charter
or By-laws may also tend to discourage potential offers to take over and acquire
the business of the Holding Company. The Holding Company's Board of Directors
will be divided into three classes, with directors in each class generally being
elected to serve a three-year term. Also, special shareholder meetings may be
called only by the Board pursuant to a resolution adopted by a majority of the
entire Board. The Holding Company By-laws also provide that directors may not be
removed without cause by the shareholders, except in the case of a
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director elected by the holders of any class or series of stock (other than
Holding Company Common Stock), voting as a class or series, when so entitled by
the applicable provisions of the Holding Company Charter. Finally, certain
provisions of the Holding Company Charter and By-laws (relating to, for example,
limitation on director liabilities, the ability to call special meetings of
shareholders, presiding at meetings of shareholders, classified Board of
Directors, election and removal of directors, advance notice requirements for
shareholder proposals and nomination of directors at shareholder meetings, and
indemnification) may only be amended by the affirmative vote of not less than
75% of the shares entitled to vote at a shareholder meeting and with respect to
certain such provisions, the affirmative vote of not less than 75% of the entire
Board of Directors also is required.
COMPARATIVE SHAREHOLDERS' RIGHTS
The Corporation and the Holding Company are both New York corporations.
When the Share Exchange becomes effective, holders of Central Hudson Common
Stock will become holders of Holding Company Common Stock, and their rights will
be governed by the Holding Company Charter and By-laws instead of those of the
Corporation.
Certain differences between the rights of holders of Holding Company
Common Stock and those of holders of Central Hudson Common Stock are summarized
below. Such summary is qualified in its entirety by reference to the information
included in the exhibits hereto, in exhibits to the Registration Statement of
which this Proxy Statement and Prospectus is a part, and in materials
incorporated herein by reference.
PURPOSE CLAUSE. The corporate purposes for which the Corporation may
engage in business are those related to electricity, gas and other forms of
energy and related activities. The Holding Company is authorized to engage in
any and all lawful acts and activities.
AUTHORIZED SHARES. Authorized Holding Company Common Stock and Central
Hudson Common Stock are 30,000,000 each. As of the Record Date, there were
16,975,387 shares of Central Hudson Common Stock issued and outstanding. Up to
approximately 16,700,000 shares of Holding Company Common Stock may be issued in
the Share Exchange.
As of the Record Date, there were 560,300 outstanding shares of the
Corporation's preferred stock and 639,700 authorized but unissued shares of the
Corporation's preferred stock. On consummation of the Share Exchange, the
Holding Company will have 1,200,000 authorized shares of preferred stock.
PREFERRED STOCK. The respective Boards of Directors of the Holding
Company and the Corporation are authorized to issue preferred stock in series.
The Central Hudson Charter does not establish voting rights, preferences
or other rights with respect to the Corporation's preferred stock, except for
the Corporation's 4 1/2% Cumulative Preferred Stock. For all series of preferred
stock issued after the Corporation's 4 1/2% Cumulative Preferred Stock, the
Corporation's Board of Directors is given full authority to establish and
designate each particular series of preferred stock and fix the preferences,
privileges and voting power of each particular series including, but not limited
to, the following: (i) the serial designation, (ii) the dividend rate and
payments dates, (iii) liquidation provisions,
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(iv) redemption provisions, and (v) provisions relating to the exchangeability
of the shares of such series into shares of any other series of the same or any
other class or classes of stock of the Corporation. The Corporation's
outstanding preferred stock is generally not entitled to vote, but only has
limited voting rights as required by law and as set out in the Central Hudson
Charter, which rights generally arise only in the event of certain arrearages in
payment of dividends or in the event it is proposed to amend the Central Hudson
Charter to alter the preferences of outstanding, preferred stock of the
Corporation, or which authorizes shares having preferences superior to those of
outstanding preferred stock of the Corporation or which increases the authorized
amount of the Corporation's preferred stock, certain corporate transactions
affecting the Corporation's preferred stock. Certain series of the Corporation's
preferred stock are subject to redemption and sinking fund provisions. After the
Share Exchange, outstanding preferred stock of the Corporation will continue as
equity securities of Central Hudson with the same preferences, designations,
relative rights, privileges and powers, and subject to the same restrictions,
limitations and qualifications, as were applicable to outstanding Corporation
preferred stock prior to the Share Exchange.
The Holding Company Charter will not establish voting rights, preferences
or other rights with respect to the Holding Company preferred stock. The Holding
Company's Board of Directors is given full authority to establish and designate
each particular series of preferred stock and to fix the rights, preferences and
limitations of each particular series, and the relative rights, preferences and
limitations between series, as follows: (i) the serial designation; (ii) the
number of shares in such series; (iii) the dividend rate or rates and the date
or dates upon which such dividends shall be payable; (iv) whether dividends on
such series will be cumulative, and, if so, from which date or dates; (v)
liquidation provisions; (vi) provisions relating to the purchase, redemption or
acquisition; (vii) provisions relating to sinking or other similar funds; (viii)
provisions relating to the conversion or exchange of shares of such series into
shares of any class of stock (except that conversion or exchange may not be made
into shares having superior dividend or liquidation preferences); (ix) the
voting rights, if any, in addition to those required by law and the number of
votes per share; and (x) any other relative rights, preferences or limitations
of such series not inconsistent with the Holding Company Charter or with
applicable law.
PAR VALUE. A designated par value per share is not required under the
NYBCL and serves no useful purpose in modern corporate practice. Pursuant to
Section 180 of the New York State Tax Law, every corporation organized under New
York law is subject to a tax of one-twentieth of one percent on the amount of
the par value of all the shares that it is authorized to issue. Authorized stock
without par value is taxed (based upon an assumed par value of $100 per share)
at $.05 per share. To reduce taxes in connection with the formation of the
Holding Company, the respective par values of shares of Holding Company Common
Stock ($.10 par value) and the Holding Company preferred stock ($.10 par value)
have been designated as a lower amount than those of the Corporation's Common
Stock ($5 par value) and the Corporation's preferred stock ($100 par value). It
is not anticipated that the lower par value of shares of Holding Company Common
Stock or Holding Company preferred stock will affect the market value of these
shares.
SPECIAL MEETINGS OF SHAREHOLDERS. The Holding Company By-laws will
provide that a special meeting of shareholders may be called only by the Holding
Company Board of
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Directors pursuant to a resolution approved by a majority of the entire Holding
Company Board of Directors. The Central Hudson By-laws provide that a special
meeting of shareholders may be called by the Board of Directors, the Chairman of
the Board of Directors, the President or by the shareholders together holding at
least one-third of the capital stock of the Corporation entitled to vote or act
with respect to the business to be brought before that meeting.
CLASSIFIED BOARD. The Holding Company Charter and By-laws will provide
(i) for the Board of Directors to determine the number of directors in a range
of three (3) to 25; and (ii) for the division of the Board of Directors into
three classes with directors in each class generally being elected for a
three-year term. The Central Hudson Charter does not provide for a classified
board.
REQUIRED VOTE FOR CERTAIN TRANSACTIONS. For corporations, like the
Holding Company, incorporated after February 22, 1998, the NYBCL requires the
approval of the board of directors of a corporation followed by the affirmative
vote of a majority of all outstanding shares entitled to vote thereon to
authorize a merger or consolidation (Section 903), the sale, lease, exchange or
other disposition of all or substantially all the assets of a corporation
(Section 909) or a binding share exchange (Section 913) unless the certificate
of incorporation of such corporation expressly provides otherwise. For
corporations, like the Corporation, in existence on February 22, 1998, the NYBCL
requires approval of the board of directors of a corporation followed by the
affirmative vote of two-thirds of all outstanding shares entitled to vote
thereon to authorize any such transaction, unless the certificate of
incorporation of such corporation expressly provides otherwise. The Holding
Company Charter requires that any such transaction with respect to the Holding
Company and an Interested Shareholder be authorized by the approval of the
Holding Company's Board of Directors followed by the affirmative vote of 80% of
all outstanding shares of the Holding Company entitled to vote thereon
(so-called "fair price" provision; see "FAIR PRICE PROVISIONS"). The Central
Hudson Charter has the same "fair price" provision. However, in all such
transactions not involving an Interested Shareholder, the Holding Company
Charter would require approval of the Corporation's Board of Directors followed
by the affirmative vote of a majority of all outstanding shares of Holding
Company Common Stock and the Central Hudson Charter would require approval of
the Corporation's Board of Directors followed by the affirmative vote of
two-thirds of all outstanding shares of Central Hudson Common Stock entitled to
vote thereon.
REMOVAL OF DIRECTORS, FILLING OF VACANCIES. The Holding Company Charter
will provide that directors may be removed only for cause by the shareholders or
the Board of Directors, except in the case of a director elected by the holders
of any class or series of stock (other than Holding Company Common Stock),
voting as a class or series, when so entitled by the applicable provisions of
the Holding Company Charter. The Central Hudson By-laws govern removal of a
director and removal may be done by the shareholders with or without cause. The
Holding Company By-laws will provide that vacancies on the Board of Directors
occurring for any reason may be filled by a majority of the Board of Directors
then in office, although less than a quorum exists, and not by shareholders. The
Central Hudson By-laws are the same except that they provide that vacancies on
the Board of Directors, occurring by reason of the removal of a director without
cause, may be filled only by a vote of the shareholders.
OTHER PROVISIONS. Certain provisions of the Holding Company Charter and
By-laws not provided for in the Central Hudson Charter and By-laws (relating to,
for example, preferred
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stock, limitation on director liabilities, the ability to call special meetings
of shareholders, classified Board of Directors, election and removal of
directors, advance notice requirements for shareholder proposals and nomination
of directors at shareholder meetings) may only be amended by the affirmative
vote of not less than 75% of the shares then entitled to vote at shareholder
meetings and with respect to certain such provisions, the affirmative vote of
not less than 75% of the entire Board of Directors also is required.
STATUTORY APPRAISAL RIGHTS
Pursuant to changes in the NYBCL made in February 1998, holders of
Central Hudson Common Stock and the Corporation's preferred stock will not have
statutory appraisal rights (i.e., dissenter's rights) in connection with the
Share Exchange because the Central Hudson Common Stock is listed on a national
securities exchange and because the Corporation's preferred stock will not be
exchanged in the Share Exchange.
VALIDITY OF THE HOLDING COMPANY COMMON STOCK
The validity of the shares of the Holding Company Common Stock to be
issued in the Share Exchange will be passed upon by Gould & Wilkie, general
counsel to the Corporation and the Holding Company, One Chase Manhattan Plaza,
New York, New York 10005-1401.
FORWARD-LOOKING STATEMENTS
This Proxy Statement and Prospectus contains certain forward-looking
statements. These statements are based upon management's current expectations
and information currently available and are subject to risks and uncertainties
that could cause actual results to differ materially from those projected in
such statements. Whenever the words "anticipate", "believe", "estimate",
"expect", "project", "objective", or similar expressions are used, they are
intended to identify forward-looking statements. For example, such
forward-looking statements may include, without limitation, statements in
connection with the future payment of dividends, statements as to the pursuit of
business in new markets, statements in connection with the regulatory approval
process or future regulation of the Holding Company and its subsidiaries,
statements in connection with the future businesses or management of the Holding
Company and its subsidiaries, and statements in connection with the effects or
benefits of a holding company structure. In addition to the assumptions and
other factors referred to specifically in connection with such statements,
factors that could cause the Corporation's actual results to differ materially
from those contemplated in any forward-looking statements include, among others,
regulatory developments, the rapidly changing and increasingly competitive
electric and gas utility environment, the ability to obtain adequate and timely
rate relief, cost recovery (including the potential impact of stranded costs),
legal or administrative proceedings, business conditions, technological
developments, changes in the cost or availability of capital, labor
developments, nuclear or environmental incidents, factors affecting the utility
industry in general, such as deregulation and the unbundling of energy services,
weather conditions and changes in fuel supply or cost, and other considerations
that may be disclosed from time to time in the Holding Company's or the
Corporation's publicly disseminated documents or filings. The Holding Company
and the Corporation undertake no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
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EXPERTS
The consolidated financial statements of the Corporation incorporated by
reference herein have been audited by Price Waterhouse LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
report.
SUBMISSION OF SHAREHOLDER PROPOSALS
If the Share Exchange is consummated, proposals of the holders of Holding
Company Common Stock intended to be presented at the 1999 annual meeting of
shareholders of the Holding Company to be included in the proxy material related
to that meeting must be received by the Holding Company by November 23, 1998. If
the Share Exchange is not consummated, proposals of holders of Central Hudson
Common Stock intended to be presented at the 1999 annual meeting of shareholders
of the Corporation to be included on the proxy material related to that meeting
must be received by the Corporation by October 30, 1998. Any such proposals must
be sent to the Secretary of the Holding Company or the Corporation, as the case
may be, at 284 South Avenue, Poughkeepsie, New York 12601-4879.
Matters intended to be presented by holders of Holding Company Common
Stock at the 1999 annual meeting of shareholders of the Holding Company must be
stated in writing and delivered to the Secretary of the Holding Company by such
shareholders during the period 90 and 60 days prior to the date of that meeting,
which is expected to be held on April 27, 1999.
If the Share Exchange is consummated, the Corporation will no longer be
publicly held and the Holding Company will be the sole owner of Central Hudson
Common Stock. In such event there will be no meeting of shareholders of the
Corporation in 1999 or thereafter at which the holders of Holding Company Common
Stock can attend.
WHERE YOU CAN GET MORE INFORMATION
The Corporation files annual, quarterly and special reports, proxy
statements and other information with the SEC. Following consummation of the
Holding Company Proposal, the Holding Company will also make these filings. You
may read and copy any information the Corporation has filed or the Holding
Company will file at the SEC's public reference rooms in Washington, D.C., New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. The Corporation's and the
Holding Company's SEC filings are also available to the public from commercial
document retrieval services or at the Internet web site maintained by the SEC at
"http://www.sec.gov". In addition, the Corporation's SEC filings may be
inspected at the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
The Holding Company has filed a Registration Statement on Form S-4 to
register with the SEC Holding Company Common Stock to be issued when the Holding
Company Proposal is consummated. This Proxy Statement and Prospectus is a part
of that Registration Statement and constitutes a prospectus of the Holding
Company in addition to being a proxy statement of the Corporation for the
Special Meeting. As permitted by SEC rules, this Proxy Statement and
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Prospectus does not contain all the information you can find in the Registration
Statement or in its exhibits. Statements made in this Proxy Statement and
Prospectus about the contents of any document included as an exhibit are
qualified in their entirety by reference to that exhibit.
The SEC allows the Corporation to "incorporate by reference" information
into this Proxy Statement and Prospectus, which means that important information
can be disclosed to you by referring you to another document filed separately
with the SEC. The information incorporated by reference is legally deemed to be
part of this Proxy Statement and Prospectus, except for any information
superseded by information in this Proxy Statement and Prospectus or information
that is subsequently incorporated by reference in this Proxy Statement and
Prospectus. The following documents of the Corporation which have been filed
with the SEC (File No. 1-3268) are incorporated by reference in this Proxy
Statement and Prospectus:
Annual Report on Form 10-K for the year ended December 31, 1997;
Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1998;
Current Reports on Form 8-K, dated February 10, 1998 and July 24, 1998;
and
Definitive proxy statement, dated March 2, 1998, for the Corporation's
Annual Meeting of Shareholders held on April 7, 1998.
The Corporation is also incorporating by reference any additional
documents that the Corporation files with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 between the date of
this Proxy Statement and Prospectus and up until the consummation of the Holding
Company Proposal.
If you are a shareholder of the Corporation, you may have already
received some of the documents incorporated by reference. If you need copies of
the documents, you can obtain them through the SEC's Internet website or as
otherwise described above. In addition, the Corporation's shareholders may
obtain from the Corporation copies of documents that have been or may be
incorporated in this Proxy Statement and Prospectus, other than exhibits to
certain documents, by requesting them in writing or by telephone from:
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
SHAREHOLDER RELATIONS
284 South Avenue
Poughkeepsie, New York 12601-4879
(914) 486-5204
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EXHIBIT A
AGREEMENT AND PLAN OF EXCHANGE
THIS AGREEMENT AND PLAN OF EXCHANGE (the "Agreement"), dated as of April
24, 1998, is between CENTRAL HUDSON GAS & ELECTRIC CORPORATION, a New York
corporation and the corporation whose shares of Common Stock, par value $5.00
per share, will be acquired pursuant to the "Exchange" provided for in this
Agreement (the "Subject Corporation") and CH ENERGY GROUP, INC., a New York
corporation and the corporation which will acquire the foregoing shares of
Common Stock of the Subject Corporation (the "Acquiring Corporation"). The
Subject Corporation and the Acquiring Corporation are hereinafter referred to,
collectively, as the "Corporations."
WITNESSETH:
WHEREAS, the authorized capital of the Subject Corporation consists of:
(a) 30,000,000 shares of Common Stock, par value $5.00 per share
("Subject Corporation Common Stock"), of which 17,101,987 were issued and
outstanding as of April 17, 1988 (which number of issued and outstanding shares
is subject to change prior to the Effective Time (as hereinafter defined) of the
Exchange pursuant to the Subject Corporation's Stock Purchase Plan); and
(b) 1,200,000 shares of Cumulative Preferred Stock, $100 par value of
which the following are outstanding as of the date hereof: (i) 70,300 shares of
its 4 1/2% Cumulative Preferred Stock; (ii) 20,000 shares of its 4.75%
Cumulative Preferred Stock; (iii) 60,000 shares of its Cumulative Preferred
Stock, Series D; (iv) 60,000 shares of its 4.96% Cumulative Preferred Stock,
Series E; (v) 200,000 shares of its 6.20% Redeemable Cumulative Preferred Stock;
and (vi) 150,000 shares of its 6.80% Redeemable Cumulative Preferred Stock (each
of the series set forth in (i) through and including (v) herein being
hereinafter referred to collectively as the "Subject Corporation Preferred
Stock");
WHEREAS, the Acquiring Corporation is a wholly-owned subsidiary of the
Subject Corporation with authorized capital stock consisting of 30,000,000
shares of Common Stock, par value $.10 per share ("Acquiring Corporation Common
Stock"), of which ten (10) shares are issued and outstanding and owned by the
Subject Corporation;
WHEREAS, the Boards of Directors of the Corporations deem it desirable
and in the best interest of the Corporations and the shareholders of the Subject
Corporation that, at the Effective Time, (a) the Acquiring Corporation acquire
and become the owner and holder of each share of Subject Corporation Common
Stock issued and outstanding at the Effective Time, (b) each share of Subject
Corporation Common Stock issued and outstanding immediately prior to the
Effective Time be automatically exchanged for one share of Acquiring Corporation
Common Stock, and (c) each holder of shares of Subject Corporation Common Stock
issued and outstanding immediately prior to the Effective Time becomes the
holder of a like number of shares of Acquiring Corporation Common Stock, all on
the terms and conditions hereinafter set forth; and
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WHEREAS, the Boards of Directors of the Corporations have each approved
and adopted this Agreement, and the Board of Directors of the Subject
Corporation has recommended that the shareholders of the Subject Corporation
approve and adopt the Exchange and this Agreement pursuant to Section 913 of the
New York Business Corporation Law (the "BCL").
NOW, THEREFORE, the Corporations hereby agree as follows:
ARTICLE I
The Exchange and this Agreement shall be submitted to the holders of the
Subject Corporation Common Stock for approval and adoption as provided by
Section 913 of the BCL. The affirmative vote of the holders of at least
two-thirds of the issued and outstanding Subject Corporation Common Stock shall
be necessary to approve and adopt the Exchange and this Agreement.
ARTICLE II
Subject to the terms and conditions of this Agreement, the Exchange shall
become effective immediately following the close of business on the date of
filing with the New York Department of State (the "Department of State") of a
certificate of exchange pursuant to Section 913(d) of the BCL ("Certificate"),
or at such later time and date as may be stated in the Certificate (the time and
date at and on which the Exchange becomes effective being referred to herein as
the "Effective Time").
ARTICLE III
A. At the Effective Time:
(1) each share of Subject Corporation Common Stock issued and outstanding
immediately prior to the Effective Time shall be automatically exchanged for one
share of Acquiring Corporation Common Stock, which shares shall be fully paid
and nonassessable by the Acquiring Corporation;
(2) the Acquiring Corporation shall acquire and become the owner and
holder of each issued and outstanding share of Subject Corporation Common Stock
so exchanged;
(3) each share of Acquiring Corporation Common Stock issued and
outstanding immediately prior to the Effective Time shall be canceled and shall
thereupon constitute an authorized and unissued share of Acquiring Corporation
Common Stock;
(4) each share of Subject Corporation Common Stock held under the Subject
Corporation's Stock Purchase Plan immediately prior to the Effective Time shall
be automatically exchanged for a like number of shares (including fractional and
uncertificated shares) of Acquiring Corporation Common Stock, which shares shall
be held under and pursuant to the Stock Purchase Plan, as hereinafter provided
and each share of such Common Stock held in
A-2
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the treasury of the Subject Corporation immediately prior to the Effective Time
shall be canceled and shall be restored to the status of an authorized but
unissued share of Subject Corporation Common Stock.
(5) the former holders of Subject Corporation Common Stock shall be
entitled only to receive shares of Acquiring Corporation Common Stock in
exchange therefor as provided in this Agreement; no statutory appraisal rights
under Section 910 of the BCL are applicable to such former holders.
B. Shares of Subject Corporation Preferred Stock shall not be exchanged
or otherwise affected by or in connection with the Exchange. Each share of
Subject Corporation Preferred Stock issued and outstanding immediately prior to
the Effective Time shall continue to be issued and outstanding following the
Exchange and shall continue to be one share of Subject Corporation Preferred
Stock of the applicable series designation.
C. Prior to the Effective Time, the Acquiring Corporation's Certificate
of Incorporation shall be amended and restated substantially in the form set
forth as Attachment 1 to this Agreement.
D. As of the Effective Time, the Acquiring Corporation shall succeed to
the Stock Purchase Plan as in effect immediately prior to the Effective Time,
and the Stock Purchase Plan shall be appropriately modified to provide for the
issuance or delivery of Acquiring Corporation Common Stock on and after the
Effective Time pursuant thereto.
ARTICLE IV
The filing of the Certificate with the Department of State and the
consummation of the Exchange shall be subject to satisfaction of the following
conditions at or prior to the Effective Time:
(1) the affirmative vote of the holders of Subject Corporation Common
Stock provided for in Article I of this Agreement shall have been received;
(2) such orders, authorizations, approvals or waivers from the New York
Public Service Commission and all other jurisdictive regulatory bodies, boards
or agencies required to consummate the Exchange and related transactions shall
have been received, shall remain in full force and effect, and shall not
include, in the sole judgment of the Boards of Directors of the Subject
Corporation and the Acquiring Corporation, unacceptable conditions;
(3) a registration statement is effective under the Securities Act of
1933 relating to the Acquiring Corporation Common Stock to be issued or reserved
for issuance in connection with the Exchange;
(4) the Acquiring Corporation Common Stock to be issued in connection
with the Exchange shall have been listed, subject to official notice of
issuance, by the New York Stock Exchange;
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(5) a favorable opinion of counsel covering certain United States federal
income tax matters shall have been received, and such favorable rulings shall
have been received from state and federal tax authorities as to the Exchange and
related matters as the Boards of Directors of the Subject Corporation and the
Acquiring Corporation, in their sole judgment, shall determine are necessary and
appropriate for the consummation of the Exchange; and
(6) the Restated Certificate of Incorporation of the Acquiring
Corporation shall have been filed with the Department of State.
ARTICLE V
Following the Effective Time, each holder of an outstanding certificate
or certificates theretofore representing shares of Subject Corporation Common
Stock may, but shall not be required to, surrender the same to the Acquiring
Corporation's Transfer Agent for cancellation and reissuance of a new
certificate or certificates in such holder's name or for cancellation and
transfer, and each such holder or transferee shall be entitled to receive a
certificate or certificates representing the same number of shares of Acquiring
Corporation Common Stock as the shares of Subject Corporation Common Stock
previously represented by the certificate or certificates surrendered. Until so
surrendered or presented for exchange or transfer, each outstanding certificate
which, immediately prior to the Effective Time, represents Subject Corporation
Common Stock shall be deemed and shall be treated for all purposes to represent
the ownership of the same number of shares of Acquiring Corporation Common Stock
as though such surrender or exchange or transfer had taken place. The holders of
Subject Corporation Common Stock at the Effective Time shall have no right at
and after the Effective Time to have their shares of Subject Corporation Common
Stock transferred on the stock transfer books of the Subject Corporation (such
stock transfer books being deemed closed for this purpose at the Effective
Time), and at and after the Effective Time such stock transfer books may be
deemed to be the stock transfer books of the Acquiring Corporation.
ARTICLE VI
A. This Agreement may be amended, modified or supplemented, or compliance
with any provision hereof may be waived, at any time prior to the Effective Time
(including, without limitation, after receipt of the affirmative vote of holders
of Subject Corporation Common Stock as provided in Article IV(1) hereof), by the
mutual consent of the Boards of Directors of the Subject Corporation and the
Acquiring Corporation at any time prior to the Effective Time; provided,
however, that no such amendment, modification, supplement or waiver would, in
the sole judgment of the Board of Directors of the Subject Corporation,
materially and adversely affect the shareholders of the Subject Corporation.
B. This Agreement may be terminated and the Exchange and related
transactions abandoned, at any time prior to the Effective Time (including,
without limitation, after receipt of the affirmative vote of holders of Subject
Corporation Common Stock as provided in Article IV(1) hereof), if the Board of
Directors of the Subject Corporation determines, in its sole judgment, that
consummation of the Exchange would for any reason be inadvisable or not in the
best interests of the Subject Corporation or its shareholders.
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IN WITNESS WHEREOF, each of the Corporations, pursuant to authorization
and approval given by its Board of Directors, has caused this Agreement and Plan
of Exchange to be executed as of the date first above written.
CENTRAL HUDSON GAS &
ELECTRIC CORPORATION
By: __John E. Mack, III____
CH ENERGY GROUP, INC.
By: __John E. Mack, III____
A-5
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EXHIBIT B
(ATTACHMENT 1 TO THE
EXCHANGE AGREEMENT)
RESTATED CERTIFICATE OF INCORPORATION
OF
CH ENERGY GROUP, INC.
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
The undersigned, being respectively, the Chairman of the Board and the Secretary
of CH Energy Group, Inc., a New York corporation, in accordance with Section 807
of the Business Corporation Law of the State of New York, do hereby certify
that:
FIRST: The name under which the corporation was originally incorporated
was CH Energy Group, Inc. (the "Corporation").
SECOND: The Certificate of Incorporation of the Corporation was filed by
the Department of State on April 24, 1998.
THIRD: The Certificate of Incorporation is amended to effect one or more
amendments authorized by the Business Corporation Law of the State of New York,
namely: Article 4 is amended to provide for the issuance of preferred stock and
for the establishment of the relative rights limitations and preferences related
thereto; new Article 7 is added to provide provisions for the election and
removal of directors of the Corporation; new Article 8 is added to require a
super-majority vote for certain changes in the Certificate of Incorporation; new
Article 9 is added to provide for amendment of the Corporation's By-Laws and to
require a super-majority vote for changes in certain provisions thereof; and new
Article 10 is added to require a super-majority vote of shareholders with
respect to certain Business Combinations. The text of the Certificate of
Incorporation is hereby restated as so amended to read in its entirety as
follows:
1. The name of the Corporation is CH Energy Group, Inc. (the
"Corporation").
2. The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under the Business
Corporation Law of the State of New York; provided that the Corporation is not
formed to engage in any act or activity which requires the consent or approval
of any state official, department, board, agency or other body, without such
consent or approval first being obtained.
3. The office of the Corporation in the State of New York is to be
located in the City of Poughkeepsie, County of Dutchess.
4. The aggregate number of shares which the Corporation shall have
authority to issue is (a) 30,000,000 shares of Common Stock, with a par value of
$.10 per share (the "Common Stock"), and 1,200,000 shares of Preferred Stock,
with a par value of $.10 per share (the "Preferred Stock").
B-1
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The relative rights, preferences and limitations of the shares of such
classes of stock are as follows:
A. The Preferred Stock may be issued from time to time by the Board of
Directors as shares of one or more series of Preferred Stock, and the Board of
Directors is expressly authorized, prior to issuance, in the resolution or
resolutions providing for the issue of shares of each particular series, to
establish and designate each particular series and to fix before issuance the
designations, rights, preferences, privileges, voting powers, limitations,
restrictions or qualifications of each particular series, and the relative
rights, preferences and limitations between series, including, but without
limitation of the foregoing general powers:
(i) The distinctive serial designation of such series which shall
distinguish it from other series;
(ii) The number of shares included in such series, which number may be
increased or decreased from time to time unless otherwise provided by the
Board of Directors in creating such series;
(iii) The annual or other dividend rate or rates (or method of
determining such rate or rates) for shares of such series and the date or
dates upon which such dividends shall be payable;
(iv) Whether dividends on the shares of such series shall be
cumulative, and, in the case of shares of any series having cumulative
dividend rights, the date or dates (or method for determining such date or
dates) from which dividends on the shares of such series shall be
cumulative;
(v) The amount or amounts which shall be paid out of the assets of the
Corporation to the holders of the shares of such series upon voluntary or
involuntary liquidation, dissolution, or winding up of the Corporation;
(vi) The price or prices (cash or otherwise) at which, the period or
periods within which and the terms and conditions upon which the shares of
such series may be purchased, redeemed or acquired (by exchange or
otherwise), in whole or in part, at the option of the Corporation;
(vii) Provision or provisions, if any, for the Corporation to purchase,
redeem or acquire (by exchange or otherwise), in whole or in part, shares
of such series pursuant to a sinking or other similar fund, and the price
or prices (cash or otherwise) at which, the period or periods within which
and the terms and conditions upon which the shares of such series shall be
so purchased, redeemed or acquired, in whole or in part, pursuant to such
provision or provisions;
(viii) The period or periods within which and the terms and conditions,
if any, including the price or prices or the rate or rates of conversion
or exchange and the terms and conditions of any adjustments thereof, upon
which the shares of such series shall be convertible or exchangeable at
the option of the holder or the Corporation or both into shares of any
class of stock or into shares of any other series of Preferred
B-2
<PAGE>
Stock, except into shares having rights or preferences as to dividends or
the distribution of assets upon liquidation, dissolution or winding up of
the Corporation which are prior or superior in rank to those of the shares
being converted or exchanged;
(ix) The voting rights, if any, of the shares of such series in
addition to those required by law, including the number of votes per share
(which may be fractional or more or less than one) and any requirement for
the approval by the holders of up to two-thirds of the shares of Preferred
Stock, or of the shares of one or more series, or of both, as a condition
to specified corporate action or amendments to the Certificate of
Incorporation; and
(x) Any other relative rights, preferences or limitations of the shares
of such series not inconsistent herewith or with applicable law.
B. All issued and outstanding series of Preferred Stock (i) shall rank
prior or superior to the Common Stock in respect of the right to receive
dividends and the right to receive payments out of the assets of the Corporation
upon voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, (ii) shall be of equal rank, regardless of series, and (iii) shall
be identical in all respects except as provided in Paragraph A of this Article
4. The shares of any particular series of the Preferred Stock shall be identical
with each other in all respects except as to the date from and after which
dividends thereupon shall be cumulative or accrue if declared. In case dividends
or amounts payable on liquidation, dissolution or winding up of the Corporation
are not paid in full on the Preferred Stock, the shares of all series of the
Preferred Stock shall share ratably in the payment of dividends, including
accumulations, if any, in accordance with the sums which would be payable on
such shares if all dividends were declared and paid in full, and in any
distribution of assets other than by way of dividends in accordance with the
sums which would be payable on such distributions if all sums payable were
discharged in full. All Preferred Stock redeemed, purchased or otherwise
acquired by the Corporation (including shares surrendered for conversion or
exchange or acquired by conversion or exchange or otherwise) shall be canceled
and thereupon restored to the status of authorized and unissued shares of
Preferred Stock undesignated as to series.
C. No holder of shares of the Corporation of any class or series, now or
hereafter authorized, shall have any preferential or preemptive right to
subscribe for, purchase or receive, or have any preferential or preemptive right
with respect to, any shares of the Corporation of any class or series
whatsoever, now or hereafter authorized, or any options or warrants for any such
shares, or any rights to subscribe for or purchase any such shares, or any
securities convertible into or exchangeable for any such shares whatsoever,
whether now or hereafter authorized and whether issued for cash or other
consideration or by way of dividend or otherwise, which may at any time be
issued, sold, delivered or offered by the Corporation.
D. Except as may from time to time be required by law and except as
otherwise may be provided by the Board of Directors in accordance with Paragraph
A of this Article 4 in respect of any particular series of Preferred Stock, all
voting rights of the Corporation shall be vested exclusively in the holders of
the Common Stock who shall be entitled to one vote per share on all matters.
B-3
<PAGE>
5. The Secretary of State of the State of New York is designated as the
agent of the Corporation upon whom any process in any action or proceeding
against it may be served. The post office address to which the Secretary of
State shall mail a copy of any such process served upon such Secretary is CH
Energy Group, Inc., 284 South Avenue, Poughkeepsie, New York 12601-4879,
Attention: Corporate Secretary.
6. No director of the Corporation shall have personal liability to the
Corporation or its shareholders for damages for any breach of duty in such
capacity, provided that the foregoing shall not eliminate or limit the liability
of any director if a judgment or other final adjudication adverse to such
director establishes that such director's acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law or that such
director personally gained in fact a financial profit or other advantage to
which such director was not legally entitled or that such director's act
violated Section 719 of the Business Corporation Law of New York. No amendment
to or repeat of this Article 6 shall apply to or have any effect on the
liability or alleged liability of any director of the Corporation for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal. If the Business Corporation Law of the State of New York is
amended hereafter to expand or limit the liability of a director, then the
liability of a director of the Corporation shall be expanded to the extent
required or limited to the extent permitted by the Business Corporation Law of
the State of New York, as so amended.
7. The following provisions shall relate to the Board of Directors of the
Corporation:
A. The size of the Board of Directors shall be fixed by or pursuant to
the By-Laws. At the first annual meeting of shareholders following the adoption
of this Restated Certificate of Incorporation, or any special meeting in lieu
thereof, the Board of Directors shall be divided into three classes designated
Class I, Class II and Class III, which classes shall be as nearly equal in
number as the then total number of directors constituting the entire Board
permits. Class I, Class II and Class III directors shall be so elected for terms
expiring at the next succeeding annual meeting, the second succeeding annual
meeting and the third succeeding annual meeting, respectively, and until their
respective successors are elected and qualified. At each annual meeting of
shareholders after such first annual (or special) meeting of shareholders
following the adoption of this Restated Certificate of Incorporation, the
directors chosen to succeed those in the class whose terms then expire shall be
elected by shareholders for terms expiring at the third succeeding annual
meeting after election, or for such lesser term for which one or more may be
nominated in a particular case in order to assure that the number of directors
in each class shall be appropriately constituted, and until their respective
successors are elected and qualified. Newly created directorships or any
decrease in directorships resulting from increases or decreases in the number of
directors shall be so apportioned among the classes of directors as to make all
the classes as nearly equal in number as possible. Vacancies on the Board of
Directors at any time for any reason may be filled by a majority of the
directors then in office, although less than a quorum.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of stock (other than the Common Stock), now or hereafter
authorized, shall have the right, voting separately or by class or series, to
elect directors at an annual or special meeting of shareholders, the election,
term of office, filling of vacancies and other features of such
B-4
<PAGE>
directorships shall be governed by any provisions of the Certificate of
Incorporation applicable thereto, and such directors so elected shall not be
divided into one or more classes pursuant to this Article 7A unless expressly
provided by such provisions.
B. Subject to the rights of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
directors under specified circumstances, any director may be removed from office
by a vote of the shareholders entitled to vote thereon only for cause and any
director may be removed from office by action of the Board of Directors only for
cause.
8. In addition to any vote that may be required by law or in the
Certificate of Incorporation in respect of any class or series of stock, now or
hereafter authorized, ranking prior or superior in right of payment to the
Common Stock in respect of the right to receive dividends or the right to
receive payments out of the assets of the Corporation upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
provisions of Articles 4C, 4D, 6, 7, 8, 9 and 10 of the Certificate of
Incorporation shall not be amended or repealed, or a new provision adopted
inconsistent therewith, without the approval of not less than 75% of the entire
Board of Directors at any regular or special meeting of directors and the
affirmative vote of not less than 75% of the shares entitled to vote thereon at
such annual or special meeting of shareholders at which any such action is
proposed.
9. Except as otherwise provided in the Certificate of Incorporation in
respect of any class or series of stock, now or hereafter authorized, ranking
prior or superior in right of payment to the Common Stock in respect of the
right to receive dividends or the right to receive payments out of the assets of
the Corporation upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the By-Laws of the Corporation may be amended or
repealed, or new By-Laws may be adopted, either (a) by a vote of shareholders
entitled to vote at any annual or special meeting of shareholders, or (b) by a
vote of the majority of the entire Board of Directors at any regular or special
meeting of directors; provided, however, that any amendment or repeal of, or the
adoption of any new By-Law or provision inconsistent with, Article I (Section
1.2--"Special Meetings", 1.4--"Presiding at Meetings" or 1.12--"Notice of
Shareholder Business and Nominations"), Article II (Section 2.1--"Number of
Directors", 2.2--"Elections, Terms and Vacancies" or 2.8--"Removal of
Directors"), Article VI--"Indemnification", or Article VIII--"Amendments to
By-Laws" of the By-Laws, if by action of such shareholders, shall be only upon
the affirmative vote of not less than 75% of the shares entitled to vote thereon
at such annual or special meeting of shareholders at which any such action is
proposed and, if by action of the Board of Directors, shall be only upon the
approval of not less than 75% of the entire Board of Directors at any regular or
special meeting of directors.
10. The vote of the shareholders of the Corporation required to approve
any Business Combination shall be as set forth in this Article 10. The term
"Business Combination" shall mean any transaction that is referred to in any one
or more clauses (A) through (E) of subparagraph (a) of this Article 10. Each
other capitalized term shall have the meaning ascribed to it in subparagraph (c)
of this Article 10.
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<PAGE>
(a) In addition to any affirmative vote required by law or this
Certificate of Incorporation and except as otherwise expressly provided in
subparagraph (b) of this Article 10:
(A) any merger, consolidation or binding share exchange of the
Corporation or any Subsidiary with (i) any Interested Shareholder or
(ii) any other person (whether or not itself an Interested
Shareholder) which is, or after such merger, consolidation or binding
share exchange would be, an Affiliate of an Interested Shareholder; or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to
or with any Interested Shareholder or any Affiliate of any Interested
Shareholder of assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value of $5,000,000 or more; or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Shareholder or any Affiliate of any Interested Shareholder in exchange
for cash, securities or other property (or a combination thereof)
having an aggregate Fair Market Value of $5,000,000 or more, other
than the issuance of securities upon the conversion of convertible
securities of the Corporation or any Subsidiary which were not
acquired by such Interested Shareholder (or such Affiliate) from the
Corporation or a Subsidiary; or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an
Interested Shareholder or any Affiliate of any Interested Shareholder;
or
(E) any transaction involving the Corporation or any Subsidiary
(whether or not with or into or otherwise involving an Interested
Shareholder), and including, without limitation, any reclassification
of securities (including any reverse stock split), or recapitalization
or reorganization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any self tender
offer for or repurchase of securities of the Corporation by the
Corporation or any Subsidiary or any other transaction (whether or not
with or into or otherwise involving an Interested Shareholder), which
in any such case has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class of
equity securities or securities convertible into equity securities of
the Corporation or any Subsidiary which is directly or indirectly
beneficially owned by any Interested Shareholder or any Affiliate of
any Interested Shareholder;
shall require the affirmative vote of the holders of at least 80
percent of the combined voting power of the then outstanding shares of
the Voting Stock, in each case voting together as a single class,
which vote shall include the affirmative vote of at least two-thirds
(2/3) of the combined voting power of the outstanding shares of Voting
Stock held by shareholders other than the Interested Shareholder. Such
affirmative vote shall be required notwithstanding any provision of
law or any other provision of this Restated Certificate of
Incorporation or any agreement with any
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<PAGE>
national securities exchange or otherwise which might permit a lesser
vote or no vote and in addition to any affirmative vote required of
the holders of any class or series of Voting Stock pursuant to law,
this Restated Certificate of Incorporation or any class or series of
Preferred or Preference Stock Designation (a "Preferred or Preference
Stock Designation") being any designation of the rights, powers and
preferences of any class or series of Preferred or Preference Stock
made pursuant to Paragraph 4A of this Restated Certificate of
Incorporation).
(b) The provisions of subparagraph (a) of this Article 10 shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as may be required by
law, any other provision of this Restated Certificate of Incorporation,
any Preferred or Preference Stock Designation and any agreement with any
national securities exchange, if, in the case of a Business Combination
that does not involve any cash or other consideration being received by
the shareholders of the Corporation, solely in their respective capacities
as shareholders of the Corporation, the condition specified in the
following subparagraph (1) is met, or, in the case of any other Business
Combination, the conditions specified in the following subparagraph (1) or
the conditions specified in the following subparagraph (2) are met:
(1) such Business Combination shall have been approved by a majority of
the Disinterested Directors; or
(2) each of the five conditions specified in the following clauses (A)
through (E) shall have been met:
(A) the aggregate amount of the cash and the Fair Market Value
as of the Consummation Date of any consideration other than cash to be
received per share by holders of Common Stock in such Business
Combination shall be at least equal to the highest of the following
(it being intended that the requirements of this clause (2)(A) shall
be required to be met with respect to all shares of Common Stock
outstanding whether or not the Interested Shareholder has acquired any
shares of the Common Stock):
(i) if applicable, the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of Common Stock beneficially
owned by the Interested Shareholder which were acquired beneficially
by such Interested Shareholder (x) within the two-year period
immediately prior to the Announcement Date or (y) in the transaction
in which it became an Interested Shareholder, whichever is higher;
or
(ii) the Fair Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is higher;
or
(iii) the amount which bears the same percentage relationship to
the Fair Market Value of the Common Stock on the Announcement Date
as the highest per share price determined in (2)(A)(i) above bears
to the Fair Market Value of the Common Stock on the date of the
commencement of the acquisition of the Common Stock by such
Interested Shareholder; and
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<PAGE>
(B) the aggregate amount of the cash and the Fair Market Value
as of the Consummation Date of any consideration other than cash to be
received per share by holders of the shares of any class or series of
Voting Stock (other than Common Stock) shall be at least equal to the
highest of the following (it being intended that the requirements of
this clause (2)(B) shall be required to be met with respect to every
class and series of such outstanding Voting Stock, whether or not the
Interested Shareholder has previously acquired any shares of a
particular class or series of Voting Stock):
(i) if applicable, the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of such class or series of
Voting Stock beneficially owned by the Interested Shareholder which
were acquired beneficially by such Interested Shareholder (x)within
the two-year period immediately prior to the Announcement Date or
(y)in the transaction in which it became an Interested Shareholder,
whichever is higher; or
(ii) if applicable, the highest preferential amount per share to
which the holders of shares of such class or series of Voting Stock
are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; or
(iii) the Fair Market Value per share of such class or series of
Voting Stock on the Announcement Date or the Determination Date,
whichever is higher; or
(iv) the amount which bears the same percentage to the Fair
Market Value of such class or series of Voting Stock on the
Announcement Date as the highest per share price in (2)(B)(i) above
bears to the Fair Market Value of such Voting Stock on the date of
the commencement of the acquisition of such Voting Stock by such
Interested Shareholder; and
(C) the consideration to be received by holders of a particular
class or series of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as was previously paid in order
to acquire beneficially shares of such class or series of Voting Stock
that are beneficially owned by the Interested Shareholder and, if the
Interested Shareholder beneficially owns shares of any class or series
of Voting Stock that were acquired with varying forms of
consideration, the form of consideration to be received by each holder
of such class or series of Voting Stock shall be, at the option of
such holder, either cash or the form used by the Interested
Shareholder to acquire beneficially the largest number of shares of
such class or series of Voting Stock beneficially acquired by it prior
to the Announcement Date; and
(D) after such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business
Combination:
(i) such Interested Shareholder shall not have become the
beneficial owner of any additional shares of Voting Stock of the
Corporation, except as part
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<PAGE>
of the transaction in which it became an Interested Shareholder or
upon conversion of convertible securities acquired by it prior to
becoming an Interested Shareholder or as a result of a pro rata
stock dividend or stock split; and
(ii) such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other
financial assistance or tax credits or other tax advantages provided
by the Corporation or any Subsidiary, whether in anticipation of or
in connection with such Business Combination or otherwise; and
(iii) such Interested Shareholder shall not have caused any
material change in the Corporation's business or capital structure,
including, without limitation, the issuance of shares of capital
stock of the Corporation to any third party; and
(iv) there shall have been (x) no failure to declare and pay at
the regular date therefor the full amount of dividends (whether or
not cumulative) on any outstanding Preferred or Preference Stock,
except as approved by a majority of the Disinterested Directors, (y)
no reduction in the rate of dividends, annualized on the basis of
the last dividend declaration, paid on Common Stock (except as
necessary to reflect any subdivision of the Common Stock), except as
approved by a majority of the Disinterested Directors and (z) an
increase in such annual rate of dividends (as necessary to prevent
any such reduction) in the event of any reclassification (including
any reverse stock split), recapitalization, reorganization, self
tender offer or any similar transaction which has the effect of
reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate was approved by a
majority of the Disinterested Directors; and
(E) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules and
regulations), whether or not the Corporation is then subject to such
requirements, shall be mailed by and at the expense of the Interested
Shareholder at least 30 days prior to the Consummation Date of such
Business Combination to the public shareholders of the Corporation
(whether or not such proxy or information statement is required to be
mailed pursuant to such Act or subsequent provisions), and shall
contain at the front thereof in a prominent place (i) any
recommendations as to the advisability (or inadvisability) of the
Business Combination which the Disinterested Directors, if any, may
choose to state, and (ii) the opinion of a reputable national
investment banking firm as to the fairness (or not) of such Business
Combination from the point of view of the remaining public
shareholders of the Corporation (such investment banking firm to be
engaged solely on behalf of the remaining public shareholders, to be
paid a reasonable fee for their services by the Corporation upon
receipt of such opinion, to be unaffiliated with such Interested
Shareholder, and, if there are at the time any Disinterested
Directors, to be selected by a majority of the Disinterested
Directors).
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(c) For purposes of this Article 10:
(1) A "person" shall include, without limitation, any individual, firm,
corporation, group (as such term is used in Regulation 13D-G of the
General Rules and Regulations under the Securities Exchange Act of 1934,
as in effect on , 1998) or other entity.
(2) "Interested Shareholder" shall mean any person (other than the
Corporation or any Subsidiary or any employee benefit plan of the
Corporation or any Subsidiary) who or which:
(A) is the beneficial owner, directly or indirectly, of more
than 10 percent of the combined voting power of the then outstanding
shares of Voting Stock; or
(B) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 10 percent or more of the
combined voting power of the then outstanding shares of Voting Stock;
or
(C) is an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Stock that were at any
time within the two-year period immediately prior to the date in
question beneficially owned by an Interested Shareholder, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
(3) A person shall be a "beneficial owner" of any Voting Stock:
(A) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(B) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether or not such right is exercisable
immediately) pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights, warrants
or options, or otherwise, or (b) the right to vote or direct the vote
pursuant to any agreement, arrangement or understanding; or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
Voting Stock.
(4) For the purposes of determining whether a person is an Interested
Shareholder pursuant to subparagraph (c)(2) of this Article 10, the number
of shares of Voting Stock deemed to be outstanding shall include shares
deemed owned by such Interested Shareholder through application of
subparagraph (c)(3) of this Article 10, but shall not
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<PAGE>
include any other shares of Voting Stock that may be issuable pursuant to
any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
(5) "Affiliate" and "Associates" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on , 1998.
(6) "Subsidiary" shall mean any company more than 50 percent of whose
outstanding equity securities having ordinary voting power in the election
of directors is owned, directly or indirectly, by the Corporation or by a
Subsidiary or by the Corporation and one or more Subsidiaries; provided,
however, that for the purposes of the definition of Interested Shareholder
set forth in subparagraph (c)(2) of this Article 10, the term "Subsidiary"
shall mean only a company of which a majority of each class or series of
capital stock entitled to vote generally in the election of directors of
such company is owned, directly or indirectly, by the Corporation.
(7) "Disinterested Director" shall mean any member of the Board of
Directors of the Corporation who is unaffiliated with, and not a nominee
of, the Interested Shareholder and was a member of the Board prior to the
time that the Interested Shareholder became an Interested Shareholder, and
any successor of a Disinterested Director who is unaffiliated with, and
not a nominee of, the Interested Shareholder and who is recommended to
succeed a Disinterested Director by a majority of Disinterested Directors
then on the Board of Directors.
(8) "Fair Market Value" shall mean (1) in the case of stock, the
highest closing sale price during the 30-day period commencing on the 40th
day preceding the date in question of a share of such stock on the
Composite Tape for New York Stock Exchange-Listed Stocks, or, if such
stock is not quoted on the New York Stock Exchange-Composite Tape, on the
principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing sale price
or bid quotation with respect to a share of such stock during the 30-day
period commencing on the 40th day preceding the date in question on the
National Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or if no such quotations are available,
the fair market value on the date in question of a share of such stock as
determined by a majority of the Disinterested Directors in good faith; and
(2) in the case of property other than cash or stock, the fair market
value of such property on the date in question as determined by a majority
of the Disinterested Directors in good faith.
(9) In the event of any Business Combination in which the Corporation
survives, the phrase "any consideration other than cash to be received" as
used in subparagraph (b)(2)(A) and (B) of this Article 10 shall include
the shares of Common Stock and/ or the shares of any other class or series
of outstanding Voting Stock retained by the holders of such shares.
(10) "Announcement Date" shall mean the date of first public
announcement of the proposed Business Combination.
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<PAGE>
(11) "Determination Date" shall mean the date on which the Interested
Shareholder became an Interested Shareholder.
(12) "Consummation Date" shall mean the date of the consummation of the
Business Combination.
(13) The term "Voting Stock" shall mean all outstanding shares of
capital stock of all classes and series of the Corporation entitled to
vote generally in the election of directors of the Corporation, in each
case voting together as a single class.
(d) A majority of the Disinterested Directors shall have the power and
duty to determine, on the basis of information known to them after
reasonable inquiry, all facts necessary to determine compliance with this
Article 10 including, without limitation:
(1) whether a person is an Interested Shareholder;
(2) the number of shares of Voting Stock beneficially owned by
any person;
(3) whether a person is an Affiliate or Associate of another
person;
(4) whether the requirements of subparagraph (b)(2) of this
Article 10 have been met with respect to any Business Combination;
(5) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any Subsidiary in any
Business Combination has, an aggregate Fair Market Value of $5,000,000
or more; and
(6) such other matters with respect to which a determination is
required under this Article 10. The good faith determination of a
majority of the Disinterested Directors on such matters shall be
conclusive and binding for all purposes of this Article 10.
(e) Nothing contained in this Article 10 shall be construed to relieve
any Interested Shareholder from any fiduciary obligation imposed by law.
(f) Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at
least 80 percent of the combined voting power of the Voting Stock, voting
together as a single class, shall be required to alter, amend or repeal
this Article 10 or to adopt any provisions inconsistent therewith;
provided, however, that if there is an Interested Shareholder on the
record date for the meeting at which such action is submitted to the
shareholders for their consideration, such 80 percent vote must include
the affirmative vote of at least two-thirds (2/3) of the combined voting
power of the outstanding shares of Voting Stock held by shareholders other
than the Interested Shareholder.
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(g) Nothing contained in this Article 10 is intended, or shall be
construed, to affect any of the relative rights, preferences or
limitations, within the meaning of such terms under Section 801(b)(12) of
the New York Business Corporation Law or any successor statute, of any
shares of any authorized class or series thereof of the Corporation,
whether issued or unissued.
FOURTH: The foregoing Restated Certificate of Incorporation was
authorized by the Board of Directors of the Corporation at a meeting of the
Board of Directors held on , 1998, followed by the written consent of the
sole shareholder of the Corporation, dated , 1998.
IN WITNESS WHEREOF, I have subscribed and affirm the statements contained
in this Restated Certificate of Incorporation as true under the penalties of
perjury this day of , 1998.
-------------------------------------------
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EXHIBIT C
BY-LAWS
of
CH ENERGY GROUP, INC.
, 1998
POUGHKEEPSIE, NEW YORK
INDEX
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE I MEETINGS OF SHAREHOLDERS
Section 1.1 Annual Meetings............................................................................... C-3
Section 1.2 Special Meetings.............................................................................. C-3
Section 1.3 Place of Meetings............................................................................. C-3
Section 1.4 Presiding at Meetings......................................................................... C-3
Section 1.5 Quorum........................................................................................ C-3
Section 1.6 Adjournment................................................................................... C-4
Section 1.7 Notice of Meetings............................................................................ C-4
Section 1.8 Waiver and Consent............................................................................ C-4
Section 1.9 Fixing Record Date............................................................................ C-5
Section 1.10 List of Shareholders at Meetings............................................................. C-5
Section 1.11 Proxies...................................................................................... C-5
Section 1.12 Notice of Shareholder Business and Nominations............................................... C-6
Section 1.13 Inspectors of Elections...................................................................... C-8
Section 1.14 Vote of Shareholders......................................................................... C-8
ARTICLE II BOARD OF DIRECTORS
Section 2.1 Number of Directors........................................................................... C-9
Section 2.2 Elections, Terms and Vacancies................................................................ C-9
Section 2.3 Meetings of the Board......................................................................... C-9
Section 2.4 Notice and Adjournment........................................................................ C-10
Section 2.5 Quorum........................................................................................ C-10
Section 2.6 Unanimous Written Consent..................................................................... C-10
Section 2.7 Resignation of Directors...................................................................... C-10
Section 2.8 Removal of Directors.......................................................................... C-10
Section 2.9 Compensation of Directors..................................................................... C-11
Section 2.10 Time and Place of Meetings................................................................... C-11
Section 2.11 Special Meetings............................................................................. C-11
Section 2.12 Telephonic Meetings.......................................................................... C-11
ARTICLE III COMMITTEES
Section 3.1 Organization and Authority.................................................................... C-11
Section 3.2 Executive Committee........................................................................... C-11
Section 3.3 Action by a Committee......................................................................... C-12
Section 3.4 Quorum........................................................................................ C-12
Section 3.5 Reports to Board of Directors................................................................. C-12
Section 3.6 Compensation of Committee Members............................................................. C-12
Section 3.7 Resignation and Removal of Committee Members.................................................. C-12
Section 3.8 Unanimous Written Consent..................................................................... C-12
Section 3.9 Place of Committee Meetings................................................................... C-12
Section 3.10 Notice....................................................................................... C-12
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ARTICLE IV OFFICERS AND THEIR DUTIES
Section 4.1 Officers...................................................................................... C-12
Section 4.2 Term of Office; Resignation; Removal; Vacancies............................................... C-13
Section 4.3 Powers and Duties............................................................................. C-13
Section 4.4 Salaries...................................................................................... C-13
Section 4.5 Chairman of the Board of Directors............................................................ C-13
Section 4.6 Vice Chairman................................................................................. C-13
Section 4.7 President..................................................................................... C-14
Section 4.8 Vice President................................................................................ C-14
Section 4.9 Secretary..................................................................................... C-14
Section 4.10 Treasurer.................................................................................... C-14
Section 4.11 Controller................................................................................... C-15
Section 4.12 Other Officers............................................................................... C-15
ARTICLE V SHARES CERTIFICATED SHARES
Section 5.1 Certificates, Registrar and Transfer Agent.................................................... C-15
Section 5.2 Authorization of Facsimile Signatures and Seal................................................ C-15
Section 5.3 Transfer of Certificated Shares............................................................... C-16
Section 5.4 Lost, Stolen or Destroyed Share Certificates.................................................. C-16
ARTICLE VI INDEMNIFICATION
Section 6.1 General Applicability......................................................................... C-16
Section 6.2 Scope of Indemnification...................................................................... C-16
Section 6.3 Other Indemnification Provisions.............................................................. C-17
Section 6.4 Survival of Indemnification................................................................... C-17
Section 6.5 Inability to Limit Indemnification............................................................ C-17
Section 6.6 Severability.................................................................................. C-17
ARTICLE VII OTHER MATTERS
Section 7.1 Books to be Kept.............................................................................. C-17
Section 7.2 Corporate Seal................................................................................ C-18
Section 7.3 When Notice or Lapse of Time Unnecessary...................................................... C-18
Section 7.4 Contracts, etc., How Executed................................................................. C-18
Section 7.5 Loans......................................................................................... C-18
Section 7.6 Deposits...................................................................................... C-19
Section 7.7 General and Special Bank Accounts............................................................. C-19
Section 7.8 Fiscal Year................................................................................... C-19
ARTICLE VIII AMENDMENTS TO BY-LAWS
Section 8.1 By Directors.................................................................................. C-19
Section 8.2 By Shareholders............................................................................... C-19
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<PAGE>
CH ENERGY GROUP, INC.
(THE "COMPANY")
BY-LAWS
, 1998
ARTICLE I
MEETINGS OF SHAREHOLDERS
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SECTION 1.1 The annual meeting of the shareholders, for the election of Annual Meetings
directors and the transaction of such other business as may be brought before
the meeting, in accordance with these By-Laws, shall be held each year on the
fourth Tuesday in April (or if said day be a legal holiday, then on the next
succeeding business day), at such place and time of day as the Directors may
determine.
SECTION 1.2 Subject to the rights of the holders of any series of stock Special Meetings
having a preference over the Common Stock of the Company as to dividends or
upon liquidation ("Preferred Stock") with respect to such series of Preferred
Stock, special shareholders' meetings may be called only by the Chairman of
the Board of Directors pursuant to a resolution adopted by a majority of the
total number of directors which the Company would have if there were no
vacancies. At any special meeting, only such business may be transacted which
is related to the purpose(s) set forth in the notice of such special meeting
given pursuant to Section 1.7 of these By-laws.
SECTION 1.3 Shareholders' meetings shall be held at the principal office Place of Meetings
of the Company or at such other place as designated by the Board of Directors
and stated in the notice of such meeting.
SECTION 1.4 At all shareholders' meetings, the Chairman of the Board of Presiding at
Directors, Vice Chairman, the President or a Vice President, shall act as Meetings
Chairman of the meeting as provided for in Sections 4.5, 4.7 and 4.8 and the
Secretary or Assistant Secretary shall act as Secretary of the meeting as
provided for in Section 4.9.
SECTION 1.5 Holders of a majority of the votes of the outstanding shares Quorum
of the Company entitled to vote generally in the election of Directors must
be present, in person or by proxy, at each shareholders' meeting to
constitute a quorum at such meeting. When a specified item of business is
required to be voted on by a class or series, voting as a class, the holders
of a majority of the votes of the shares of such class or series shall
constitute a quorum for the transaction of such specified item of business.
When a quorum is once present to organize a meeting, it is not broken by the
subsequent withdrawal of any shareholders.
Except as may be provided by or pursuant to the Certificate of Incorporation,
at all shareholders' meetings each shareholder entitled to vote shall be
entitled to one vote for each share held by him or her, and may vote and
otherwise act either in person or by proxy, as provided for in Section 1.11.
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SECTION 1.6 The Chairman of the meeting, or a majority of the shares so Adjournment
represented at the meeting, may adjourn the meeting despite the absence of a
quorum. When a shareholders' meeting is adjourned to another time or place,
it shall not be necessary to give any notice of the adjourned meeting if the
time and place to which the meeting is adjourned are announced at the meeting
at which the adjournment is taken, and at the adjourned meeting any business
may be transacted that might have been transacted on the original date of the
meeting. However, if after the adjournment the Board of Directors fixes a new
record date for the adjourned meeting, a notice of the adjourned meeting
shall be given to each shareholder of record on the new record date entitled
to notice under this Section 1.6.
SECTION 1.7 Written notice of the date, time and place of every Notice of Meetings
shareholders' meeting shall be given personally, or by first class mail (not
less than ten (10) nor more than sixty (60) days before the date of the
meeting) or by third class mail (not less than twenty-four (24) nor more than
sixty (60) days before the date of the meeting) or as otherwise may be
permitted by law, to each shareholder of record as of the date fixed by the
Board of Directors, pursuant to Section 1.9 hereof, and such other notice
shall be given as may be required by law.
Notice of a special shareholders' meeting shall indicate that it is being
issued by or at the direction of the person or persons calling the meeting
and shall state the purpose(s) for which the meeting is called.
If mailed, such notice shall be deemed given when deposited in the United
States mail, with postage thereon prepaid, directed to the shareholder at his
or her address as it appears on the shareholders' list or record, or, if he
or she shall have filed with the Secretary of the Company a written request
that notices to him or her be mailed to some other address, then directed to
him or her at such other address.
An affidavit of the Secretary of the Corporation or other person giving the
notice or of a transfer agent of the Corporation that the notice required by
this Section 1.7 has been given shall be supplied at the meeting to which it
relates.
SECTION 1.8 Notice of meeting need not be given to any shareholder who Waiver and Consent
submits a signed waiver of notice, in person or by proxy, whether before or
after the meeting. The attendance of any shareholder at a meeting, in person
or by proxy, without objecting to the lack of notice of such meeting prior to
the conclusion of the meeting, shall constitute a waiver of notice by such
shareholder.
The transactions of any shareholders' meeting, however called and noticed,
are as valid as though had at a meeting duly held after regular call and
notice, if a quorum is present either in person or by proxy, and if, either
before or after the meeting, each of the persons entitled to vote, not
present in person or by proxy, signs a written waiver of notice, or a consent
to the holding of the meeting, or an approval of the minutes thereof.
All such waivers, consents or approvals shall be filed with the corporate
records or made a part of the minutes of the meeting. Executors,
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administrators, guardians, trustees, and other fiduciaries entitled to vote
shares may sign such waivers, consents and approvals.
SECTION 1.9 For the purpose of determining the shareholders entitled to Fixing Record Date
notice of or to vote at any shareholders' meeting or any adjournment thereof,
or for the purpose of determining shareholders entitled to receive payment of
any dividend or the allotment of any rights, or for the purpose of any other
action, the Board of Directors may fix, in advance, a date as the record date
for any such determination. Such date shall not be more than sixty (60) nor
less than ten (10) days before the date of such meeting, nor more than sixty
(60) days before the date of such action.
SECTION 1.10 A list of shareholders as of the record date, certified by List of
the Secretary or any Assistant Secretary or by a transfer agent, shall be Shareholders at
produced at any shareholders' meeting upon the request thereat or prior Meetings
thereto of any shareholder. If the right to vote at any meeting is
challenged, the inspectors, or the person presiding thereat, shall require
such list of shareholders to be produced as evidence of the right of the
persons challenged to vote at such meeting, and all persons who appear from
such list to be shareholders entitled to vote thereat may vote at such
meeting.
SECTION 1.11 (a) GENERALLY. Every shareholder entitled to vote or execute Proxies
consents shall have the right to do so either in person or by one or more
agents authorized by a written proxy executed by such person or his or her
duly authorized agent and filed with the Secretary of the Company. Any
executor, administrator, guardian, trustee or other fiduciary may give
proxies.
(b) TERM OF PROXIES. A proxy is not valid after the expiration of eleven (11)
months from the date of its execution, unless the length of time for which
such proxy is to continue in force is otherwise specified therein, which in
no case shall exceed seven (7) years from the date of its execution.
(c) REVOCATION AND SUSPENSION OF PROXIES. Any proxy duly executed continues
in full force and effect and is not revoked until a written instrument
executed by such person or his or her duly authorized agent revoking it, or
until a duly executed proxy bearing a later date, is filed with the Secretary
of the Company. A proxy is not revoked by the death or incapacity of the
maker unless, before the vote is counted or the authority is exercised,
written notice of the death or incapacity is given to the Secretary of the
Company. Notwithstanding that a valid proxy is outstanding, if the person
executing the proxy is present at the meeting and elects to vote in person,
then the powers of the proxy holder are suspended, except in the case of a
proxy coupled with an interest (which states that fact on its face).
(d) VOTING BY TWO OR MORE PROXIES. If any instrument of proxy designates two
or more persons to act as proxy, in the absence of any provision in the proxy
to the contrary, the persons designated may represent and vote the shares in
accordance with the vote or consent of the majority of the persons named as
such proxies. If only one such proxy is present, such proxy may vote all the
shares, and all the shares standing in the name of the principal(s) for whom
such proxy acts shall be deemed represented for the purpose of obtaining a
quorum. The foregoing provisions shall apply to the voting of shares by
proxies
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for any two or more administrators, executors, trustees, or other
fiduciaries, unless an instrument or order of court appointing them otherwise
directs.
(e) DIRECTORS' DETERMINATION OF EXECUTION AND USE OF PROXIES. The Board of
Directors may, in advance of any annual or special meeting of the
shareholders, prescribe additional regulations concerning the manner of
execution and filing of proxies and the validation of the same, which are
intended to be voted at any such meeting.
SECTION 1.12
A. ANNUAL SHAREHOLDERS' MEETINGS
(1) Nominations of persons for election to the Board of Directors of the Notice of
Company and the proposal of business to be considered by the shareholders may Shareholder
be made at an annual shareholders' meeting (a) pursuant to the Company's Business and
notice of meeting, (b) by or at the direction of the Board of Directors or Nominations
(c) by any shareholder of the Company who was a shareholder of record at the
time of giving of notice provided for in this Section 1.12 who is entitled to
vote at the meeting and who complies with the notice of procedures set forth
in this Section 1.12.
(2) For nominations or other business to be properly brought before an annual
meeting by a shareholder pursuant to clause (c) of paragraph A.(1) of this
Section 1.12, the shareholder must have given timely notice thereof in
writing to the Secretary of the Company and such other business must
otherwise be a proper matter for shareholder action. To be timely, a
shareholder's notice shall be delivered to the Secretary at the principal
executive offices of the Company not later than the close of business on the
60th day nor earlier than the close of business on the 90th day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days
before or more than 60 days after such anniversary date, notice by the
shareholder to be timely must be so delivered not earlier than the close of
business on the 90th day prior to such annual meeting and no later than the
close of business on the later of the 60th day prior to such annual meeting
or the 10th day following the day on which the date of such meeting is first
publicly announced or disclosed (in a public filing or otherwise) by the
Company. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a shareholder's
notice as described above. Such shareholder's notice shall set forth (a) as
to each person whom the shareholder proposes to nominate for election or
reelection as a Director all information relating to such person that is
required to be disclosed in solicitations of proxies for election of
Directors in an election contest, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Rule 14a-11 thereunder (including such
person's written consent to being named in the proxy statement as a nominee
and to serving as a Director if elected); (b) as to any other business that
the shareholder proposes to bring before the meeting, a brief description of
the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material interest in such
business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the shareholder giving the notice
and the beneficial owner, if any, on whose behalf
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the nomination or proposal is made (i) the name and address of such
shareholder, as they appear on the Company's books, and of such beneficial
owner and (ii) the class and number of shares of the Company which are owned
beneficially and of record by such shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph A.(2) of
this Section 1.12 to the contrary, in the event that the number of Directors
to be elected to the Board of Directors of the Company is increased and there
is no public announcement by the Company naming all of the nominees for
Director or specifying the size of the increased Board of Directors at least
70 days prior to the first anniversary of the preceding year's annual
meeting, a shareholder's notice required by paragraph A. of Section 1.12
shall also be considered timely, but only with respect to nominees for any
new positions created by such increase, if it shall be delivered to the
Secretary at the principal executive offices of the Company not later than
the close of business on the 10th day following the day on which such public
announcement is first made by the Company.
B. SPECIAL SHAREHOLDERS' MEETINGS
Only such business shall be conducted at a special shareholders' meeting as
shall have been brought before the meeting pursuant to the Company's notice
of meeting. Nominations of persons for election to the Board of Directors may
be made at a special shareholders' meeting at which Directors are to be
elected pursuant to the Company's notice of meeting (a) by or at the
direction of the Board of Directors or (b) provided that the Board of
Directors has determined that Directors shall be elected at such meeting, by
any shareholder of the Company who is a shareholder of record at the time of
giving of notice provided for in this Section 1.12 who is entitled to vote at
the meeting and who complies with the notice procedures set forth in this
Section 1.12. In the event the Company calls a special shareholders' meeting
for the purpose of electing one or more Directors to the Board of Directors,
any such shareholder may nominate a person or persons (as the case may be),
for election to such position(s) as specified in the Company's notice of
meeting, if the shareholder's notice required by paragraph A.(2) of this
Section 1.12 shall be delivered to the Secretary at the principal executive
offices of the Company not earlier than the close of business on the 90th day
prior to such special meeting and not later than the close of business on the
later of the 60th day prior to such special meeting or the 10th day following
the day on which public announcement or other disclosure (in a public filing
or otherwise) is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In
no event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a shareholder's notice as
described above.
C. GENERAL
(1) Only such persons who are nominated in accordance with the procedures set
forth in this Section 1.12 shall be eligible to serve as Directors and only
such business shall be conducted at a shareholders' meeting as shall have
been brought before the meeting in accordance with the procedures set forth
in this Section 1.12. Except as otherwise provided by law, the Chairman of
the
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meeting shall have the power and duty to determine whether a nomination or
any business proposed to be brought before the meeting was made or proposed,
as the case may be, in accordance with the procedures set forth in this
Section 1.12 and, if any proposed nomination or business is not in compliance
with this Section 1.12, to declare that such defective proposal or nomination
shall be disregarded.
(2) For purposes of this Section 1.12, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document
publicly filed by the Company with the Securities and Exchange Commission
pursuant to Section 13, 14, or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 1.12, a
shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 1.12. Nothing in this Section 1.12 of
Article I shall be deemed to affect any rights (i) of shareholders to request
inclusion of proposals in the Company's proxy statement pursuant to Rule
14a-8 under the Exchange Act or (ii) of the holders of any series of
Preferred Stock to elect Directors under specified circumstances.
SECTION 1.13 The Board of Directors by resolution shall appoint, or shall Inspectors of
authorize an officer of the Company to appoint, one or more inspectors, which Elections
inspector or inspectors may include individuals who serve the Company in
other capacities, including, without limitation, as officers, employees,
agents or representatives, to act at the meetings of shareholders and make a
written report thereof. One or more persons may be designated as alternate
inspector(s) to replace any inspector who fails to act. If no inspector or
alternate has been appointed to act or is able to act at a meeting of
shareholders, the Chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging such
person's duties, shall take and sign an oath to execute faithfully the duties
of inspector with strict impartiality and according to the best of such
person's ability. The inspector(s) shall have the duties prescribed by law.
The Chairman of the meeting shall fix and announce at the meeting the date
and time of the opening and the closing of the polls for each matter upon
which the shareholders will vote at a meeting.
SECTION 1.14 Subject to the rights of holders of any series of Preferred Vote of
Stock, Directors shall, except as otherwise required by law or by the Shareholders
Certificate of Incorporation or by a specific provision of these By-Laws
adopted by the shareholders, be elected by a plurality of the votes cast at a
meeting of shareholders by the holders of shares entitled to vote in the
election. Subject to the rights of holders of any series of Preferred Stock,
whenever any corporate action, other than the election of Directors, is to be
taken by vote of the shareholders, it shall, except as otherwise required by
law or by the Certificate of Incorporation, be authorized by a majority of
the votes cast at a meeting of shareholders by the holders of shares entitled
to vote thereon.
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ARTICLE II
BOARD OF DIRECTORS
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SECTION 2.1 The affairs of this Company shall be managed by no less than Number of
three (3) nor more than twenty-five (25) Directors as fixed by resolution Directors
adopted by a majority of the entire Board of Directors. Each director shall
be at least 18 years of age. No person who has reached age 70 shall stand for
election as a Director.
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SECTION 2.2 At the first annual meeting of shareholders following the Elections, Terms
adoption of the Restated Certificate of Incorporation of the Company, or any and Vacancies
special meeting in lieu thereof, the Board of Directors shall be divided into
three classes designated Class I, Class II and Class III, which classes shall
be as nearly equal in number as the then total number of Directors
constituting the entire Board permits. Class I, Class II and Class III
Directors shall be so elected for terms expiring at the next succeeding
annual meeting, the second succeeding annual meeting and the third succeeding
annual meeting, respectively, and until their respective successors are
elected and qualified. At each annual shareholders' meeting after such first
annual (or special) meeting of shareholders following the adoption of the
Restated Certificate of Incorporation of the Company, the Directors chosen to
succeed those in the class whose terms then expire shall be elected by
shareholders for terms expiring at the third succeeding annual meeting after
election, or for such lesser term for which one or more may be nominated in a
particular case in order to assure that the number of Directors in each class
shall be appropriately constituted and until their respective successors are
elected and qualified. Newly created Directorships or any decrease in
Directorships resulting from increases or decreases in the number of
Directors shall be so apportioned among the classes of Directors as to make
all the classes as nearly equal in number as possible. Vacancies on the Board
at any time may be filled by a majority of the Directors then in office,
although less than a quorum exists and regardless of how such vacancy shall
have been created. A Director elected to fill a vacancy, unless elected by
the shareholders, shall hold office until the next meeting of shareholders at
which the election of Directors is in the regular order of business, and
until his or her successor has been elected and qualified.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Stock (other than the Common Stock) shall have the
right, voting separately by class or series, to elect Directors at an annual
or special shareholders' meeting, the election, term of office, filling of
vacancies and other features of such Directorships shall be governed by any
terms of the Certificate of Incorporation of the Company applicable thereto,
and such Directors so elected shall not be divided into classes pursuant to
this Section 2.2 unless expressly provided by such terms.
SECTION 2.3 An annual meeting of the Board of Directors shall be held in Meetings of the
each year as soon as practicable after the annual meeting of shareholders. Board
Regular meetings of the Board shall be held at such times as may be fixed by
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the Board. No notice need be given of annual or regular meetings of the Board
of Directors.
SECTION 2.4 Notice of each special meeting of the Board shall be given to Notice and
each director either by mail not later than noon, New York time, on the fifth Adjournment
business day prior to the meeting or by telegram, by facsimile transmission,
by written message or orally to the Directors not later than noon, New York
time, on the day prior to the meeting. Notices shall be deemed to have been
given by mail when deposited in the United States mail, by telegram at the
time of filing, by facsimile transmission upon confirmation of receipt, and
by messenger at the time of delivery by the messenger. Notices by mail,
telegram, facsimile transmission or messenger shall be sent to each Director
at the address or facsimile number designated by him or her for that purpose,
or, if none has been so designated, at his or her last known residence or
business address. Notice of a meeting of the Board of Directors need not be
given to any Director who submits a signed waiver of notice whether before or
after the meeting, or who attends the meeting without protesting, prior
thereto or at its commencement, the lack of notice to him or her. A notice or
waiver of notice need not specify the purpose of any meeting of the Board of
Directors. A majority of the Directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. Notice of any
adjournment of a meeting to another time or place shall be given in the
manner described above to the Directors who were not present at the time of
the adjournment and, unless such time and place are announced at the meeting,
to the other Directors.
SECTION 2.5 Unless a greater quorum is required by law, one-third of the Quorum
number of Directors at the time serving on the Board of Directors shall
constitute a quorum for the transaction of business, or of any specified item
of business. Except where otherwise provided by law or in the Certificate of
Incorporation or these By-Laws, the vote of a majority of the Directors
present at a meeting at the time of such vote, if a quorum is then present,
shall be the act of the Board.
SECTION 2.6 Any action authorized, in writing, by all of the Directors Unanimous Written
entitled to vote thereon and filed with the minutes of the Company shall be Consent
the act of the Board with the same force and effect as if the same had been
passed by unanimous vote at a duly called meeting of the Board.
SECTION 2.7 Any Director of the Company may resign at any time. Such Resignation of
resignation shall be made in writing and shall take effect at the time Directors
specified therein, or, if no time be specified, at the time of its receipt by
the Chairman of the Board or Secretary. The acceptance of a resignation shall
not be necessary to make it effective unless so specified therein.
SECTION 2.8 Subject to the rights of any class or series of stock having a Removal of
preference over the Common Stock as to dividends or upon liquidation to elect Directors
Directors under specified circumstances, any Director may be removed from
office by a vote of the shareholders entitled to vote thereon only for cause
and any Director may be removed from office by action of the Board only for
cause.
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SECTION 2.9 Members of the Board shall receive such fees and compensation Compensation of
fixed from time to time by the Board and shall be reimbursed for reasonable Directors
expenses for attending Board Meetings.
SECTION 2.10 Meetings of the Board of Directors shall be held in such Time and Place of
month on such day at such hour and at such place as the Board may from time Meetings
to time direct.
SECTION 2.11 Special meetings of the Board may be held on the call of the Special Meetings
Chairman of the Board of Directors, the President or the Secretary or upon
written request of a majority of the Directors at the time serving on the
Board addressed to the Secretary. The person or persons authorized to call
special meetings of the Board may fix the place and time of the meeting.
SECTION 2.12 With the concurrence of the Chairman of the Board, any one or Telephonic
more members of the Board or any committee of the Board may participate in a Meetings
meeting of the Board or committee by means of a conference telephone or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time; and participation by such means
shall constitute presence in person at a meeting.
ARTICLE III
COMMITTEES
SECTION 3.1 The Board of Directors, by resolution adopted by a majority of Organization and
the entire Board, may designate from among its members, such committees as Authority
the Board of Directors may from time to time determine, including the
committee created by Section 3.2 of this Article III, with such number of
Directors as set forth in the resolution, and each of which, to the extent
provided in the resolution, shall have all the authority of the Board, except
that no such committee shall have authority as to (1) the submission to
shareholders of any action that needs shareholders' approval; (2) the filling
of vacancies in the Board or in any committee thereof; (3) the fixing of
compensation of the Directors for serving on the Board or on any committee
thereof; (4) the amendment or repeal of the By-Laws, or the adoption of new
By-Laws; (5) the amendment or repeal of any resolution of the Board which, by
its terms, shall not be so amendable or repealable; (6) the fixing or
changing of the size of the Board; or (7) the removal or indemnification of
Directors. In the event of the absence of any member(s) from a meeting of a
committee, replacements may be made from Directors designated as alternate
members of such committee by the Board. The Chairman of the Board of
Directors, or in his absence or should he so direct, the President, or in his
absence, a Vice President, if such officers are members of the committee,
shall preside at meetings of the committee, otherwise the presiding officer
shall be designated by majority vote of the committee. Vacancies in the
membership of the committee shall be filled by the Board of Directors at a
regular or special meeting of the Board of Directors. Unless the Board of
Directors otherwise provides, each committee designated by the Board may
adopt, amend and repeal rules for the conduct of its business.
SECTION 3.2 There shall be an Executive Committee of two (2) or more of Executive
the Directors to be designated by the Board, which, together with the Committee
Chairman of the Board of Directors and the President, shall constitute an
Executive
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Committee. The Executive Committee shall have and may exercise all of the
authority and powers of the Board subject to limitations prescribed by law or
these By-Laws. The Secretary of the Company shall be the Secretary of the
Executive Committee.
SECTION 3.3 The act of a majority of the members of a committee present at Action by a
any meeting at which a quorum is present shall be the act of such committee. Committee
The members of a committee shall act only as a committee, and the individual
members thereof shall have no individual powers as such. Each committee may
make such rules as it may deem expedient for the regulation and carrying on
of its meetings and proceedings.
SECTION 3.4 A majority of the members of a committee shall constitute a Quorum
quorum.
SECTION 3.5 Each such committee shall keep a record of its proceedings and Reports to Board
make reports to the Board at its next regular meeting. of Directors
SECTION 3.6 Members of committees of the Board shall receive such fees and Compensation of
compensation as fixed from time to time by the Board and shall be reimbursed Committee Members
for reasonable expenses for attending committee meetings.
SECTION 3.7 Any member of any committee may resign at any time. Such Resignation and
resignation shall be made in writing and shall take effect at the time Removal of
specified therein, or, if no time be specified, at the time of its receipt by Committee Members
the Chairman of the Board of Directors or Secretary. The acceptance of a
resignation shall not be necessary to make it effective unless so specified
therein. Committee members may be removed by action of the Board of
Directors, with or without cause.
SECTION 3.8 Any action authorized in writing, by all of the members of a Unanimous Written
committee and filed with the minutes of the Company shall be the act of that Consent
committee with the same force and effect as if the same had been passed by
unanimous vote at a duly called meeting of such committee.
SECTION 3.9 Meetings of each committee shall be held in such month on such Place of Committee
day at such hour and at such place as such committee may from time to time Meetings
direct.
SECTION 3.10 Unless otherwise provided by resolution of the Board or by Notice
vote of a majority of the members of the relevant committee, notice of
committee meetings shall be given in the same manner as notice of special
meetings of the Board is to be given under Section 2.4 of these By-Laws.
ARTICLE IV
OFFICERS AND THEIR DUTIES
SECTION 4.1 The Board of Directors, at its regular annual meeting, shall Officers
elect or appoint from their number a Chairman of the Board of Directors, the
Chairmen of Committees of the Board and may elect or appoint a Vice Chairman
of the Board of Directors and Vice Chairmen of Committees of the Board, which
officers shall be officers of the Board; and it shall elect or appoint a
President, one or more Vice Presidents, a Secretary, a Treasurer, and a
Controller which officers shall be officers of the Company. Each of said
officers,
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subject to the provisions of Sections 4.2 and 4.3 hereof, shall hold officer,
if elected, until the meeting of the board following the next Annual Meeting
of shareholders and until his or her successor has been elected and
qualified, or, if appointed, for the term specified in the resolution
appointing him or her and until his or her successor has been elected or
appointed. Any two or more offices may be held by the same person. Should any
of the officers of the Board or the President cease to be a director, he
shall ipso facto cease to be such officer.
SECTION 4.2 Except as otherwise provided in the resolution of the Board of Term of office;
Directors electing or appointing any officer, all officers shall be elected Resignation;
or appointed to hold office until the meeting of the Board of Directors Removal; Vacancies
following the next succeeding annual meeting of shareholders. Each officer
shall hold office for the term for which he or she is elected or appointed,
and until his or her successor has been elected or appointed and qualified.
Any officer may resign at any time by giving written notice to the Board or
to the Chairman of the Board of Directors, if any, or the President or the
Secretary of the Company. Such resignation shall take effect at the time
specified therein, and unless otherwise specified therein no acceptance of
such resignation shall be necessary to make it effective. Any officer may be
removed by the Board, with or without cause, at any time. Removal of an
officer without cause shall be without prejudice to his or her contract
rights, if any, with the Company, but the election or appointment of an
officer shall not of itself create contract rights. Any vacancy occurring in
any office of the Company by death, resignation, removal or otherwise may be
filled for the unexpired portion of the term by the Board.
SECTION 4.3 The officers of the Company shall have such authority and Powers and Duties
perform such duties in the management of the Company as may be prescribed by
the Board of Directors and, to the extent not so prescribed, as generally
pertain to their respective offices, subject to the control of the Board.
Securities of other companies held by the Company may be voted by any officer
designated by the Board and, in the absence of any such designation, by the
Chairman of the Board of Directors, the President, any Vice President, the
Secretary or the Treasurer. The Board may require any officer, agent or
employee to give security for the faithful performance of his duties.
SECTION 4.4 Salaries of all officers of the Company shall be fixed by the Salaries
Board from time to time; and salaries of all other employees of the Company
shall be regulated by the Chief Executive Officer.
SECTION 4.5 The Chairman of the Board of Directors shall preside at all Chairman of the
meetings of the shareholders and the Board of Directors at which he or she Board of Directors
shall be present. When the Chairman of the Board of Directors is also
designated the Chief Executive Officer, he or she shall have general and
active management of the business of the Company and shall see that all
orders and policies of the Board of Directors are carried into effect.
SECTION 4.6 The Vice Chairman shall do and perform all such duties as Vice Chairman
shall be assigned to him or her by the Chairman of the Board of Directors. In
the absence of the Chairman of the Board of Directors, the Vice Chairman
shall, when present, preside at all meetings of the shareholders and the
Board of Directors. He shall have such powers and perform such duties as the
Chairman of the Board of Directors shall delegate to him.
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SECTION 4.7 In the absence of a Chairman of the Board of Directors or President
should the Chairman of the Board of Directors so direct, the President shall
preside at meetings of the shareholders and of the Board of Directors at
which he or she shall be present. In the case of the Chairman of the Board of
Directors having been designated as Chief Executive Officer, the President
shall (subject to the direction of the Chairman of the Board of Directors)
exercise general control and supervision over all the affairs of the Company
and generally do and perform those duties as usually appertain to the office
of the President, or which may be assigned to him or her by the Board of
Directors. Should there be no Chairman of the Board of Directors or should
the President be designated Chief Executive Officer of the Company, the
President shall have general and active management of the business of the
Company and shall see that all orders and policies of the Board of Directors
are carried into effect; and the salaries of all employees of the Company,
other than officers, shall be regulated by him or her. If the office of the
Chairman of the Board of Directors is vacated, due to the incumbent's death,
retirement, or inability to act or otherwise, or should the Directors elect
to leave such office vacant, the President shall be the Chief Executive
Officer and shall assume all the duties as outlined in Section 4.5, until
directed otherwise by the Board of Directors.
SECTION 4.8 The Vice Presidents, respectively, shall do and perform all Vice President
such duties as shall be assigned to them by the Chairman of the Board of
Directors or the President or required of them by the Board of Directors. If
designated by the Board of Directors as a member of the Executive Committee,
a Vice President shall perform the duties of President in case of the
President's absence or inability to act or in case of a vacancy in that
office. An Assistant Vice President in the absence or disability of a Vice
President may at the discretion of the Chairman of the Board of Directors or
the President perform the duties of a Vice President and shall perform such
other duties as may be assigned to him or her.
SECTION 4.9 It shall be the duty of the Secretary to keep and attest true Secretary
records of the proceedings of all meetings of the Board and Executive
Committee, to see that all notices are duly given in accordance with the
provisions of these By-Laws or as required by law and safely keep and account
for all documents, papers and property of the Company which may come into his
or her possession. He or she shall be the custodian of the Corporate Seal of
the Company and shall affix and attest the same whenever it is necessary and
proper so to do, and shall perform such other duties as may be assigned to
him or her by the Board. In the absence or disability of the Secretary, an
Assistant Secretary or any Vice President shall perform his or her duties and
such other duties as may be assigned to him or her.
SECTION 4.10 The Treasurer shall have the custody of all money, funds and Treasurer
securities of the Company. He or she shall furnish such security for the
faithful performance of his or her duties as may be required by the Board of
Directors. He or she shall receive all money due to the Company and deposit
the same in its corporate name in such banks or trust companies as the Board
of Directors shall determine. He or she shall sign all checks, drafts or
orders for the payment of money; and perform such other duties as may be
required of him or her by the Board of Directors. An Assistant Treasurer
shall, in the absence or disability of the Treasurer, perform his or her
duties and such other duties as may be assigned to him or her. In the absence
or disability of the
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Treasurer and Assistant Treasurers, any Vice President shall perform his or
her duties and such other duties as may be assigned to him or her. The
Treasurer shall, when directed by the Board of Directors, open special
accounts in the Company's depositories; all checks, drafts or orders for the
payment of money out of such special accounts shall be signed in such manner
and by such officers or employees of the Company as the Board of Directors
shall designate; such checks, drafts or orders for the payment of money shall
also be signed, if, as and when so directed by resolution of the Board of
Directors, by such persons and in such manner as the Board of Directors shall
determine.
SECTION 4.11 The Controller shall: Controller
(a) Keep at the office of the Company correct books of account of all
its business and transactions;
(b) Exhibit at all reasonable times his or her books of accounts and
records to any of the directors upon application during business hours at the
office of the Company where such books and records are kept;
(c) Render a full statement of the financial condition of the Company
whenever requested so to do by the Board of Directors, the Chairman of the
Board or the President; and
(d) In general, perform such duties as may be from time to time
assigned to him or her by the Board of Directors, the Chairman of the Board
or the President.
SECTION 4.12 Other officers, including one or more additional Vice Other Officers
Presidents, may from time to time be appointed by the Board of Directors or
by any officer or committee upon whom a power of appointment may be conferred
by the Board of Directors, which other officers shall have such powers and
perform such duties as may be assigned to them by the Board of Directors, the
Chairman of the Board of Directors or the President and shall hold office for
such terms as may be designated by the Board of Directors or the officer or
committee appointing them.
ARTICLE V
SHARES
CERTIFICATED SHARES
SECTION 5.1 Certificates for shares of the capital stock of the Company Certificates,
shall be in such form as shall be approved by the Board of Directors. The Registrar and
certificates shall be numbered, as nearly as may be, in the order of their Transfer Agent
issue and shall be signed by the Chairman of the Board of Directors or by the
President or a Vice President, and by the Secretary or an Assistant Secretary
or the Treasurer or an Assistant Treasurer, and sealed with the seal of the
Company.
SECTION 5.2 The signatures of the officers upon a certificate, and the Authorization of
seal of the Company, may be facsimiles if the certificate is countersigned by Facsimile
a transfer agent or registered by a registrar other than Company itself or Signatures and
its employee. Seal
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SECTION 5.3 Shares of the capital stock of the Company shall be Transfer of
transferable by the holder thereof in person or by duly authorized attorney Certificated
upon surrender of the certificate or certificates for such shares properly Shares
endorsed. Every certificate of stock exchanged or returned to the Company
shall be appropriately canceled. A person in whose name shares of stock stand
on the books of the Company shall be deemed the owner thereof as regards the
Company. The Board of Directors may make such other and further rules and
regulations as they may deem necessary or proper concerning the issue,
transfer and registration of stock certificates.
SECTION 5.4 The Company may issue a new certificate for shares in place of Lost, Stolen or
any certificate theretofore issued by it, alleged to have been lost or Destroyed Share
destroyed, and the Company may require the owner of the lost or destroyed Certificates
certificate, or such owner's legal representative, to give the Company a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss or destruction of any such certificate or the
issuance of any such new certificate.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 Except to the extent expressly prohibited by the New York General
Business Corporation Law, the Company shall indemnify each person made, or Applicability
threatened to be made, a party to or involved in any action, suit or
proceeding, whether criminal, civil, administrative or investigative by
reason of the fact that such person or such person's testator or intestate is
or was a Director or Officer of the Company, against judgments, fines,
penalties, amounts paid in settlement and reasonable expenses, including
attorney's fees and expenses, reasonably incurred in enforcing such person's
right to indemnification, incurred in connection with such action or
proceeding, or any appeal therein, provided that no such indemnification
shall be made if a judgment or other final adjudication adverse to such
person establishes that such person's acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or that such person personally gained in fact
a financial profit or other advantage to which such person was not legally
entitled, and provided further that no such indemnification shall be required
with respect to any settlement or other nonadjudicated disposition of any
threatened or pending action or proceeding unless the Company has given its
prior consent to such settlement or other disposition.
SECTION 6.2 The Company shall advance or reimburse upon request, within 20 Scope of
days after receipt by the Company of a statement or statements from the Indemnification
claimant requesting such advance or advances of reimbursements, to any person
entitled to indemnification hereunder all reasonable expenses, including
attorney's fees and expenses, reasonably incurred in defending any action or
proceeding in advance of the final disposition thereof upon receipt of an
undertaking by or on behalf of such person to repay such amount if such
person is ultimately found not to be entitled to indemnification or, where
indemnification is granted, to the extent the expenses so advanced or
reimbursed exceed the amount to which such person is entitled; provided,
however, that such person shall cooperate in good faith with any request by
the Company that common counsel be used by the parties to an action or
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proceeding who are similarly situated unless to do so would be inappropriate
due to actual or potential differing interests between or among such parties.
SECTION 6.3 Nothing herein shall limit or affect any right of any Other
Director, Officer or other corporate personnel otherwise than hereunder to Indemnification
indemnification or expenses, including attorney's fees, under any statute, Provisions
rule, regulation, certificate of incorporation, By-Law, insurance policy,
contract or otherwise; without affecting or limiting the rights of any
Director, Officer or other corporate personnel pursuant to this Article VI,
the Company is authorized to enter into agreements with any of its Directors,
Officers or other corporate personnel extending rights to indemnification and
advancement of expenses to the fullest extent permitted by applicable law.
Unless limited by resolution of the Board of Directors or otherwise, the
Company shall advance the payment of expenses to the fullest extent permitted
by applicable law to, and shall indemnify, any Director, Officer or other
corporate person who is or was serving at the request of the Company, as a
director, officer, partner, trustee, employee or agent of another
corporation, whether for profit or not-for-profit, or a partnership, joint
venture, trust or other enterprise, whether or not such other enterprise
shall be obligated to indemnify such person.
SECTION 6.4 Anything in these By-Laws to the contrary notwithstanding, no Survival of
elimination or amendment of this Article VI adversely affecting the right of Indemnification
any person to indemnification or advancement of expenses hereunder shall be
effective until the 60th day following notice to such person of such action,
and no elimination of or amendment to this Article VI shall deprive any such
person's rights hereunder arising out of alleged or actual occurrences, acts
or failures to act prior to such 60th day.
SECTION 6.5 The Company shall not, except by elimination or amendment of Inability to Limit
this Article VI in a manner consistent with the preceding Section 6.4 and Indemnification
with the provisions of Article VIII ("Amendments to By-Laws"), take any
corporate action or enter into any agreement which prohibits, or otherwise
limits the rights of any person to, indemnification in accordance with the
provisions of this Article VI. The indemnification of any person provided by
this Article VI shall continue after such person has ceased to be a Director
or Officer of the Company and shall inure to the benefit of such person's
heirs, executors, administrators and legal representatives.
SECTION 6.6 In case any provision in this Article VI shall be determined Severability
at any time to be unenforceable in any respect, the other provisions of this
Article VI shall not in any way be affected or impaired thereby, and the
affected provision shall be given the fullest possible enforcement in the
circumstances, it being the intention of the Company to afford
indemnification and advancement of expenses to its Directors or Officers,
acting in such capacities or in the other capacities mentioned herein, to the
fullest extent permitted by law.
ARTICLE VII
OTHER MATTERS
SECTION 7.1 The Company shall keep (a) correct and complete books and Books to be Kept
records of account, (b) minutes of the proceedings of the shareholders,
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Board of Directors and Executive Committee, if any, and (c) a current list of
the Directors and Officers and their residence addresses. The Company shall
also keep, at its office located in the County of Dutchess in the State of
New York or at the office of its transfer agent or registrar in the State of
New York, if any, a record containing the names and addresses of all
shareholders, the number and class of shares held by each and the dates when
they respectively became the owners of record thereof. Any of the foregoing
books, minutes or records may be in written form or in any other form capable
of being converted into written form within a reasonable time. The Board of
Directors shall, subject to the laws of the State of New York, have power to
determine from time to time, whether, to what extent, and under what
conditions and regulations the accounts and books of the Corporation or any
of them shall be open to the inspection of the shareholders, and no
shareholder shall have any right to inspect any account book or document of
the Corporation except as conferred by the laws of the State of New York
unless and until authorized so to do by resolution of the Board of Directors
or shareholders of the Corporation.
SECTION 7.2 The Board of Directors may adopt a corporate seal, alter such Corporate Seal
seal at pleasure, and authorize it to be used by causing it or a facsimile to
be affixed or impressed or reproduced in any other manner.
SECTION 7.3 Whenever for any reason the Company or the Board of Directors When Notice or
or any committee thereof is authorized to take any action after notice to any Lapse of Time
person or persons or after the lapse of a prescribed period of time, such Unnecessary
action may be taken without notice and without the lapse of such period of
time if at any time before or after such action is completed the person or
persons entitled to such notice or entitled to participate in the action to
be taken or, in the case of a shareholder, his or her attorney-in-fact,
submit a signed waiver of notice of such requirements.
SECTION 7.4 The Board of Directors, except as in these By-Laws otherwise Contracts, etc.,
provide, may authorize any officer or officers, agent or agents, to enter How Executed
into any contract or execute and deliver any instrument in the name of and on
behalf of the Company, and such authority may be general or confined to
specific instances, and, unless so authorized by the Board of Directors, no
officer or agent or employee shall have any power or authority to bind the
Company by any contract or engagement or to pledge its credits or to render
it liable pecuniarily for any purpose or to any amount.
SECTION 7.5 No loans shall be contracted on behalf of the Company and no Loans
negotiable paper shall be issued in its name, unless authorized by the vote
of the Board of Directors. When so authorized, any officer or agent of the
Company may effect loans and advances for the Company from any bank, trust
company or other institution, or from any firm, Company or individual and for
such loans and advances may make, execute and deliver promissory notes, bonds
or other evidences of indebtedness of the Company. When so authorized any
officer or agent of the Company, as security for the payment of any and all
loans, advances, indebtedness and liabilities of the Company, may pledge,
hypothecate or transfer any and all stocks, securities and other personal
property at any time held by the Company, and to that end endorse, assign and
deliver the same. Such authority may be general or confined to specific
instances. The Board of Directors may authorize any mortgage or
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pledge of, or the creation of a security interest in, all or any part of the
corporate property, or any interest therein, wherever situated.
SECTION 7.6. All funds of the Company shall be deposited from time to time Deposits
to its credit in such banks, trust companies or other depositaries as the
Board of Directors may select, or as may be selected by an officer or
officers, agent or agents of the Company to whom such power, from time to
time, may be delegated by the Board of Directors and, for the purpose of such
deposit, checks, drafts and other orders for the payment of money which are
payable to the order of the Company may be endorsed, assigned and delivered
by the President or a Vice President, or the Treasurer or the Secretary, or
by any officer, agent or employee of the Company to whom any of said
officers, or the Board of Directors, by resolution, shall have delegated such
power.
SECTION 7.7. The Board of Directors may from time to time authorize the General and
opening and keeping of general and special bank accounts with such banks, Special Bank
trust companies or other depositaries as the Board may select and may make Accounts
such special rules and regulations with respect thereto, as it may deem
expedient.
SECTION 7.8. The fiscal year of the Company shall be the calendar year. Fiscal Year
ARTICLE VIII
AMENDMENTS TO BY-LAWS
SECTION 8.1 These By-Laws may be adopted, amended, or repealed or new By Directors
By-Laws may be adopted by the vote of a majority of the entire Board of
Directors at any regular or special meeting of the Board at which a quorum is
present; provided, however, that any adoption of, amendment to or repeal of
any new By-Law or provision inconsistent with Article I (Section
1.2--"Special meetings", 1.4--"Presiding at Meetings" or 1.12--"Notice of
Shareholder Business and Nominations"), Article II (Section 2.1--"Number of
Directors", 2.2--"Elections, Terms and Vacancies" or 2.8--"Removal of
Directors"), Article VI--"Indemnification" or this Article VIII--"Amendments
to By-Laws" hereof, if by action of the Board, shall be only upon the
approval of not less than 75% of the entire Board at any such regular or
special meeting of the Board of Directors
SECTION 8.2 These By-Laws may be adopted, amended, or repealed by the vote By Shareholders
of a majority of the shareholders entitled to vote in the election of any
Directors (as herein provided) at any annual or special shareholders' meeting
at which a quorum is present, if notice of such proposed action shall have
been given in accordance with the notice requirements of Section 1.12 of
these By-laws; provided, however, that any adoption of, amendment to or
repeal of any new By-Laws or provision inconsistent with Article I (Section
1.2--"Special meetings", 1.4--"Presiding at Meetings" or 1.12--"Notice of
Shareholder Business and Nominations"), Article II (Section 2.1--"Number of
Directors", 2.2--"Elections, Terms and Vacancies" or 2.8--"Removal of
Directors"), Article VI--"Indemnification" or this Article VIII--"Amendments
to By-Laws" hereof, if by action of shareholders, shall be only upon the
affirmative vote of not less than 75% of the shares entitled to vote thereon
at such annual or special shareholders' meeting at which any such action is
proposed.
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<PAGE>
| | Please mark your
| X | vote as in this 1535
| | example.
BELOW IS YOUR PROXY CARD. PLEASE READ BOTH SIDES, SIGN, VOTE AND RETURN IN THE
ENCLOSED ENVELOPE. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, SUCH SHARES WILL BE VOTED FOR THE
HOLDING COMPANY PROPOSAL.
- --------------------------------------------------------------------------------
THE DIRECTORS RECOMMEND A VOTE "FOR".
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
The Holding | | | | | |
Company Proposal | | | | | |
| | | | | |
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL ACTION
- --------------------------------------------------------------------------------
If you plan to attend the Annual Meeting, place an X in this box. | |
| |
| |
If you indicated a change of address or comments on reverse side, | |
place an X in this box. | |
| |
- --------------------------------------------------------------------------------
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE
o FOLD AND DETACH HERE o
ROUTE TO CENTRAL HUDSON
[MAP]
<PAGE>
FROM NEW YORK CITY AREA:
o Taconic State Parkway North to Interstate 84 (I-84)
o I-84 West to Exit 13 (Route 9)
o Turn right off ramp onto Route 9 North
o Route 9 approximately 12 miles to the Academy Street / South Avenue Exit
o Bear left at end of ramp and go under the overpass
o Turn right into Central Hudson entrance
FROM CONNECTICUT:
o I-84 West to Exit 13 (Route 9)
o Continue as above
FROM PENNSYLVANIA:
o I-84 East to Exit 13 (Route 9)
o Turn left off ramp onto Route 9 North
o Continue as above
FROM NEW JERSEY AND UPSTATE NEW YORK:
o New York Thruway (I-87) to Exit 18 (New Paltz)
o Turn right onto Route 299
o Route 299 approximately 5 miles, turn right onto route 9W South o Route
9W approximately 2 miles, bear right for Mid-Hudson Bridge o After
crossing bridge take first right (Route 9 South) o Route 9
approximately 1 mile to Academy Street/South Avenue Exit o Bear right
off exit ramp into Central Hudson entrance
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Please date and sign on reverse side.
P The undersigned hereby appoints John E. Mack III, Jack Effron, Heinz
R K. Fridrich and Paul J. Ganci, and each or any of them with power of
O substitution, proxies to vote all stock of the undersigned (including
X any shares held through the Company's Stock Purchase Plan) at the
Y Special Meeting of Shareholders on Friday, September 25, 1998 at 10:30
a.m. at 284 South Avenue, Poughkeepsie, New York, 12601-4879 or at any
adjournment thereof, and on the proposal more fully set forth in the
proxy statement, and in their discretion on any matters that may
properly come before the Special Meeting.
THIS PROXY WILL BE VOTED AS Change of Address/Comments (If Any)
DIRECTED ON THE REVERSE SIDE,
BUT IF NO CHOICE IS MADE, THIS ----------------------------------------
PROXY WILL BE VOTED "FOR" THE
HOLDING COMPANY PROPOSAL. ----------------------------------------
----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
<PAGE>
--------------------
SEE REVERSE SIDE
--------------------
[LOGO]
CENTRAL
HUDSON
Your Energy Solutions Company TM
ADMISSION TICKET
Present to the Central Hudson Representative at the
entrance to the auditorium
SPECIAL MEETING OF SHAREHOLDERS September
25, 1998, 10:30 a.m.
Office of the Corporation
284 South Avenue, Poughkeepsie, NY
- --------------------------------------------------------------------------------
AGENDA
Approval of the Holding Company Proposal
o
Take action upon any matters that may properly
come before the Special Meeting
- --------------------------------------------------------------------------------
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING,
WHETHER OR NOT YOU ATTEND THE MEETING IN PERSON.
TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE URGE YOU TO
COMPLETE AND MAIL THE PROXY CARD ABOVE.
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If you plan to attend the Special Meeting, please mark the
appropriate box on the reverse side of this proxy card.
Present this Admission Ticket to the representative at the
entrance to the Special Meeting room.
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