<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
THE CINCINNATI GAS & ELECTRIC COMPANY
.................................................................
(Name of Registrant as Specified In Its Charter)
THE CINCINNATI GAS & ELECTRIC COMPANY
.................................................................
(Name of Person(s) Filing Proxy Statement if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................
2) Aggregate number of securities to which transaction applies:
.......................................................................
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):
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
5) Total fee paid:
.......................................................................
/X/ 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:
..........................
2) Form, Schedule or Registration Statement No.:
..........................
3) Filing Party:
..........................
4) Date Filed:
..........................
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<PAGE>
OFFER TO PURCHASE AND PROXY STATEMENT
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF
CUMULATIVE PREFERRED STOCK OF THE CINCINNATI GAS & ELECTRIC COMPANY
270,000 SHARES, CUMULATIVE PREFERRED STOCK, 4% SERIES AT A PURCHASE PRICE OF
$64.00 PER SHARE
130,000 SHARES, CUMULATIVE PREFERRED STOCK, 4 3/4% SERIES AT A PURCHASE PRICE OF
$80.00 PER SHARE
800,000 SHARES, CUMULATIVE PREFERRED STOCK, 7 7/8% SERIES AT A PURCHASE PRICE OF
$116.00 PER SHARE
800,000 SHARES, CUMULATIVE PREFERRED STOCK, 7 3/8% SERIES AT A PURCHASE PRICE OF
$110.00 PER SHARE
----------------
THE CINCINNATI GAS & ELECTRIC COMPANY
PROXY STATEMENT
WITH RESPECT TO ITS COMMON STOCK AND CUMULATIVE PREFERRED STOCK
------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
------------------
Cinergy Corp., a Delaware corporation ("Cinergy"), invites the holders of
each series of cumulative preferred stock listed above (each a "Series of
Preferred," and the holder thereof a "Preferred Shareholder") of The Cincinnati
Gas & Electric Company, an Ohio corporation and direct utility subsidiary of
Cinergy ("CG&E"), to tender any and all of their shares of a Series of Preferred
("Shares") for purchase at the purchase price per Share listed above for the
Shares tendered, net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase and Proxy Statement and in the
accompanying Letter of Transmittal and Proxy (which together constitutes the
"Offer"). Cinergy will purchase all Shares validly tendered and not withdrawn,
upon the terms and subject to the conditions of the Offer. See "Terms of the
Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension
of Tender Period; Termination; Amendments."
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS
CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED
BELOW, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING. SEE "TERMS OF THE
OFFER -- CERTAIN CONDITIONS OF THE OFFER."
Concurrently with the Offer, the Board of Directors of CG&E is soliciting
proxies for use at the Special Meeting of Shareholders of CG&E to be held at its
principal office, 139 East Fourth Street, Cincinnati, Ohio 45202, on September
18, 1996, or any adjournment or postponement of such meeting (the "Special
Meeting"). The Special Meeting is being held to consider an amendment (the
"Proposed Amendment") to CG&E's Amended Articles of Incorporation (the
"Articles") which would remove a provision of the Articles that limits CG&E's
ability to issue unsecured debt. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER
THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED
AMENDMENT, THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED
AND ADOPTED AT THE SPECIAL MEETING. IN ADDITION, PREFERRED SHAREHOLDERS HAVE THE
RIGHT TO VOTE FOR THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR
SHARES. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED, CG&E WILL MAKE A
SPECIAL CASH PAYMENT IN THE AMOUNT OF $1.00 PER SHARE TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT SUCH
SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. THOSE PREFERRED
SHAREHOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO THE
PURCHASE PRICE PER SHARE LISTED ABOVE.
IMPORTANT
Any Preferred Shareholder desiring to accept the Offer and tender all or any
portion of his or her Shares should either (i) request his or her broker,
dealer, commercial bank, trust company or nominee to effect the transaction for
him or her, or (ii) complete and sign the Letter of Transmittal and Proxy or a
facsimile thereof, in accordance with the instructions in the Letter of
Transmittal and Proxy, mail or deliver it and any other required documents to
The Bank of New York (the "Depositary"), and deliver the certificates for such
Shares to the Depositary, along with the Letter of Transmittal and Proxy, or
tender such Shares pursuant to the procedure for book-entry transfer set forth
below under "Terms of the Offer -- Procedure for Tendering Shares," prior to the
Expiration Date (as defined below). A Preferred Shareholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
nominee must contact such broker, dealer, commercial bank, trust company or
nominee if he or she desires to tender such Shares. Any Preferred Shareholder
who desires to tender Shares and whose certificates for such Shares are not
immediately available, or who cannot comply in a timely manner with the
procedure for book-entry transfer, should tender such Shares by following the
procedures for guaranteed delivery set forth below under "Terms of the Offer --
Procedure for Tendering Shares."
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND PROXY, AND
ONLY THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY FOR SUCH SERIES OF PREFERRED
OR A NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO TENDER SHARES OF
SUCH SERIES OF PREFERRED.
------------------
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR ANY OF
THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER
AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER.
------------------
This Offer to Purchase and Proxy Statement is first being mailed to
Preferred Shareholders on or about August 20, 1996.
--------------------
Each Series of Preferred is listed and traded on The New York Stock
Exchange, Inc. (the "NYSE"). On August 15, 1996, the last reported sale prices
on the NYSE were $58.75 for the 4% Series of Preferred (on August 15, 1996),
$71.25 for the 4 3/4% Series of Preferred (on August 14, 1996), $108.75 for the
7 7/8% Series of Preferred (on May 31, 1996) and $105.50 for the 7 3/8% Series
of Preferred (on July 16, 1996). Preferred Shareholders are urged to obtain a
current market quotation, if available, for the Shares. On August 20, 1996,
there were issued and outstanding 270,000 Shares of the 4% Series of Preferred,
130,000 Shares of the 4 3/4% Series of Preferred, 800,000 Shares of the 7 7/8%
Series of Preferred and 800,000 Shares of the 7 3/8% Series of Preferred.
------------------
Questions or requests for assistance or for additional copies of this Offer
to Purchase and Proxy Statement, the Letter of Transmittal and Proxy for a
Series of Preferred, or other tender offer or proxy solicitation materials may
be directed to MacKenzie Partners, Inc. (the "Information Agent") or Smith
Barney Inc. and Morgan Stanley & Co. Incorporated (the "Dealer Managers") at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase and Proxy Statement.
------------------
The Dealer Managers for the Offer are:
SMITH BARNEY INC. MORGAN STANLEY & CO.
INCORPORATED
--------------------
The date of this Offer to Purchase and Proxy Statement is August 20, 1996.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
CINERGY OR CG&E AS TO WHETHER PREFERRED SHAREHOLDERS SHOULD TENDER SHARES
PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE
CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL AND PROXY. IF GIVEN OR
MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY CINERGY OR CG&E.
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
SUMMARY.................................................................................................... 2
TERMS OF THE OFFER......................................................................................... 4
Number of Shares; Purchase Prices; Expiration Date; Dividends............................................ 4
Procedure for Tendering Shares........................................................................... 4
Withdrawal Rights........................................................................................ 6
Acceptance of Shares for Payment and Payment of Purchase Price and Dividends............................. 7
Certain Conditions of the Offer.......................................................................... 7
Extension of Tender Period; Termination; Amendments...................................................... 9
PROPOSED AMENDMENT AND PROXY SOLICITATION.................................................................. 10
Introduction............................................................................................. 10
Voting Securities, Rights and Procedures................................................................. 10
Proxies.................................................................................................. 10
Cash Payments............................................................................................ 11
Security Ownership of Certain Beneficial Owners and Management........................................... 11
Business to come before the Special Meeting.............................................................. 12
Explanation of the Proposed Amendment.................................................................... 12
Reasons for the Proposed Amendment....................................................................... 13
Financial and Other Information Relating to CG&E......................................................... 14
Relationship with Independent Public Accountants......................................................... 14
PRICE RANGE OF SHARES; DIVIDENDS........................................................................... 14
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER......................................................... 16
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................................................... 17
SOURCE AND AMOUNT OF FUNDS................................................................................. 18
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES.......................................................... 19
FEES AND EXPENSES ASSOCIATED WITH THE OFFER................................................................ 19
CERTAIN INFORMATION REGARDING CINERGY AND CG&E............................................................. 19
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION.............................................................. 21
ADDITIONAL INFORMATION REGARDING CINERGY................................................................... 22
MISCELLANEOUS.............................................................................................. 22
</TABLE>
1
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS PROVIDED SOLELY FOR THE CONVENIENCE OF THE
PREFERRED SHAREHOLDERS. THIS SUMMARY IS NOT INTENDED TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT AND MORE SPECIFIC
DETAILS CONTAINED IN THE OFFER AND ANY AMENDMENTS HERETO. PREFERRED SHAREHOLDERS
ARE URGED TO READ THIS OFFER IN ITS ENTIRETY. EACH OF THE CAPITALIZED TERMS USED
IN THIS SUMMARY AND NOT DEFINED HEREIN HAS THE MEANING SET FORTH ELSEWHERE IN
THIS OFFER TO PURCHASE AND PROXY STATEMENT.
<TABLE>
<S> <C>
The Companies..................... Cinergy is a registered holding company under the Public
Utility Holding Company Act of 1935 (the "Holding
Company Act"), and is the parent company of CG&E, PSI
Energy, Inc. ("PSI"), Cinergy Services, Inc. ("Cinergy
Services") and Cinergy Investments, Inc. ("Cinergy
Investments"). CG&E is an operating utility primarily
engaged in providing electric and gas service in the
southwestern portion of Ohio and, through its principal
subsidiary, The Union Light, Heat and Power Company
("ULH&P"), in adjacent areas in Kentucky. PSI is an
operating utility primarily engaged in providing
electric service in north central, central, and southern
Indiana. Cinergy Services provides management, finan-
cial, administrative, engineering, legal and other
services to Cinergy, CG&E, PSI Energy, Cinergy
Investments and subsidiaries thereof. Cinergy conducts
its non-utility businesses through Cinergy Investments
and its subsidiaries.
The Shares........................ CG&E 4% Cumulative Preferred Stock ($100 par value)
CG&E 4 3/4% Cumulative Preferred Stock ($100 par value)
CG&E 7 7/8% Cumulative Preferred Stock ($100 par value)
CG&E 7 3/8% Cumulative Preferred Stock ($100 par value)
The Offer......................... Offer to purchase any or all shares of each Series of
Preferred at the price per Share set forth below.
Purchase Price.................... $64.00 per 4% Share
$80.00 per 4 3/4% Share
$116.00 per 7 7/8% Share
$110.00 per 7 3/8% Share
Independent Offer................. The Offer for one Series of Preferred is independent of
the Offer for any other Series of Preferred. The Offer
is not conditioned upon any minimum number of Shares of
the applicable Series of Preferred being tendered, but
is conditioned upon the Proposed Amendment being
approved and adopted at the Special Meeting. The Offer
is subject to certain other conditions.
Expiration Date of the Offer...... The Offer expires at 5:00 p.m., New York City time, on
Wednesday, September 18, 1996, unless extended (the
"Expiration Date").
How to Tender Shares.............. See "Terms of the Offer -- Procedure for Tendering
Shares." For further information, call the Information
Agent or the Dealer Managers or consult your broker for
assistance.
Withdrawal Rights................. Tendered Shares of any Series of Preferred may be
withdrawn at any time until the Expiration Date with
respect to such Series of Preferred and, unless
theretofore accepted for payment, may also be withdrawn
after Tuesday, October 15, 1996. See "Terms of the Offer
-- Withdrawal Rights."
Purpose of the Offer.............. Cinergy is making the Offer because it believes that the
purchase of Shares is attractive to Cinergy, its
shareholders and CG&E. In
</TABLE>
2
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<TABLE>
<S> <C>
addition, the Offer gives Preferred Shareholders the
opportunity to sell their Shares at a premium over the
market price and without the usual transaction costs
associated with a market sale. See "Purpose of the
Offer; Certain Effects of the Offer."
Dividends......................... A regular quarterly dividend has been declared on each
Series of Preferred, payable on October 1, 1996 to the
owners of record on September 3, 1996 (the "October 1996
Dividend"). A tender and purchase of Shares pursuant to
the Offer will not deprive a Preferred Shareholder of
his or her right to receive the October 1996 Dividend on
Shares held of record on September 3, 1996. Tendering
Preferred Shareholders will not be entitled to any
dividends in respect of any later dividend periods (or
any portion thereof).
Brokerage Commissions............. Not payable by Preferred Shareholders.
Solicitation Fee.................. Cinergy will pay to each designated Soliciting Dealer a
solicitation fee of $1.50 per Share (except that for
transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of
$1.25 per Share) for any Shares tendered, accepted for
payment and paid for pursuant to the Offer. However,
Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
Proposed Amendment................ Concurrently with the Offer, the Board of Directors of
CG&E is soliciting proxies for use at the Special
Meeting of Shareholders of CG&E. The Special Meeting is
being held to consider an amendment to CG&E's Articles
which would remove a provision that limits CG&E's
ability to issue unsecured debt.
Special Cash Payment.............. Preferred Shareholders have the right to vote for the
Proposed Amendment regardless of whether they tender
their Shares. If the Proposed Amendment is approved and
adopted by CG&E's shareholders, CG&E will make a special
cash payment of $1.00 per Share to each Preferred
Shareholder who voted in favor of the Proposed
Amendment, provided that such Shares have not been
tendered pursuant to the Offer. Preferred Shareholders
who validly tender their Shares will be entitled only to
the purchase price per Share listed on the front cover
of this Offer to Purchase and Proxy Statement.
Stock Transfer Tax................ Cinergy will pay or cause to be paid any stock transfer
taxes with respect to the sale and transfer of any
Shares to it or its order pursuant to the Offer. See
Instruction 6 of the applicable Letter of Transmittal
and Proxy. See "Terms of the Offer -- Acceptance of
Shares for Payment of Purchase Price and Dividends."
Payment Date...................... Promptly after the Expiration Date.
Further Information............... Additional copies of this Offer to Purchase and Proxy
Statement and the applicable Letter of Transmittal and
Proxy may be obtained by contacting MacKenzie Partners
Inc., 156 Fifth Avenue, New York, NY 10010, telephone
(800) 322-2885 (toll-free) and (212) 929-5500 (brokers
and dealers). Questions about the Offer should be
directed to Smith Barney Inc. at (800) 655-4811 or
Morgan Stanley & Co. Incorporated at (800) 223-2440
Extension 1965.
</TABLE>
3
<PAGE>
TERMS OF THE OFFER
NUMBER OF SHARES; PURCHASE PRICES; EXPIRATION DATE; DIVIDENDS
Upon the terms and subject to the conditions described herein and in the
applicable Letter of Transmittal and Proxy, Cinergy will purchase any and all
Shares that are validly tendered on or prior to the applicable Expiration Date
(and not properly withdrawn in accordance with "Terms of the Offer -- Withdrawal
Rights") at the purchase price per Share listed on the front cover of this Offer
to Purchase and Proxy Statement for the Shares tendered, net to the seller in
cash. See "Terms of the Offer -- Certain Conditions of the Offer" and "Terms of
the Offer -- Extension of Tender Period; Termination."
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS
CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED
HEREIN, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING. SEE "TERMS OF THE
OFFER -- CERTAIN CONDITIONS OF THE OFFER."
The Offer is being sent to all persons in whose names Shares are registered
on the books of CG&E on the Record Date (as defined below) and on August 15,
1996. Only a record holder of Shares on the Record Date may vote in person or by
proxy at the Special Meeting. No record date is fixed for determining which
persons are permitted to tender Shares. Any person who is the beneficial owner
but not the record holder of Shares must arrange for the record transfer of such
Shares prior to tendering.
With respect to each Series of Preferred, the Expiration Date is the later
of 5:00 p.m., New York City time, on Wednesday, September 18, 1996 or the latest
time and date to which the Offer with respect to such Series of Preferred is
extended. Cinergy expressly reserves the right, in its sole discretion, and at
any time and/or from time to time, to extend the period of time during which the
Offer for any Series of Preferred is open, by giving oral or written notice of
such extension to the Depositary, without extending the period of time during
which the Offer for any other Series of Preferred is open. There is no assurance
whatsoever that Cinergy will exercise its right to extend the Offer for any
Series of Preferred. If Cinergy decides, in its sole discretion, to decrease the
number of Shares of any Series of Preferred being sought or to increase or
decrease the consideration offered in the Offer to holders of any Series of
Preferred and, at the time that notice of such increase or decrease is first
published, sent or given to holders of such Series of Preferred in the manner
specified herein, the Offer for such Series of Preferred is scheduled to expire
at any time earlier than the tenth business day from the date that such notice
is first so published, sent or given, such Offer will be extended until the
expiration of such ten-business-day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS WILL BE ACCEPTED.
The October 1996 Dividend has been declared on each Series of Preferred,
payable October 1, 1996 to owners of record on September 3, 1996. A tender and
purchase of Shares pursuant to the Offer will not deprive a Preferred
Shareholder of his or her right to receive the October 1996 Dividend on Shares
held of record on September 3, 1996. Tendering Preferred Shareholders will not
be entitled to any dividends in respect of any later dividend periods (or any
portion thereof).
PROCEDURE FOR TENDERING SHARES
To tender Shares pursuant to the Offer, the tendering owner of Shares must
either:
(a) send to the Depositary (at one of its addresses set forth on the
back cover of this Offer to Purchase and Proxy Statement) a properly
completed and duly executed Letter of Transmittal and Proxy or facsimile
thereof, together with any required signature guarantees and any other
documents required by the Letter of Transmittal and Proxy and either (i)
certificates for the Shares to be tendered
4
<PAGE>
must be received by the Depositary at one of such addresses or (ii) such
Shares must be delivered pursuant to the procedures for book-entry transfer
described herein (and a confirmation of such delivery must be received by
the Depositary), in each case by the Expiration Date; or
(b) comply with the guaranteed delivery procedure described under
"Guaranteed Delivery Procedure" below.
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company and Philadelphia Depository Trust Company (collectively
referred to as the "Book-Entry Transfer Facilities") for purposes of the Offer
within two business days after the date of this Offer to Purchase and Proxy
Statement, and any financial institution that is a participant in the system of
any Book-Entry Transfer Facility may make delivery of Shares by causing such
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the procedures of such Book-Entry Transfer Facility.
Although delivery of Shares may be effected through book-entry transfer, such
delivery must be accompanied by either (i) a properly completed and duly
executed Letter of Transmittal and Proxy or facsimile thereof, together with any
required signature guarantees and any other required documents or (ii) an
Agent's Message (as hereinafter defined) and, in any case, must be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase and Proxy Statement by the Expiration Date.
The term "Agent's Message" means a message, transmitted by one of the
Book-Entry Transfer Facilities, received by the Depositary and forming a part of
the book-entry transfer when a tender is initiated, which states that the
Book-Entry Transfer Facility has received an express acknowledgment from a
participant tendering Shares that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and Proxy and that Cinergy may
enforce such agreement against such participant.
Except as otherwise provided below, all signatures on a Letter of
Transmittal and Proxy must be guaranteed by a firm that is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States that is a participant in an
approved Signature Guarantee Medallion Program (each of the foregoing being
referred to as an "Eligible Institution"). Signatures on a Letter of Transmittal
and Proxy need not be guaranteed if (a) the Letter of Transmittal and Proxy is
signed by the registered owner of the shares tendered therewith and such owner
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal and Proxy,
(b) such Shares are tendered for the account of an Eligible Institution or (c)
such Letter of Transmittal and Proxy is being used solely for the purpose of
voting Shares which are not being tendered pursuant to the Offer. See
Instructions 1 and 5 of the Letter of Transmittal and Proxy.
GUARANTEED DELIVERY PROCEDURE. If a Preferred Shareholder desires to tender
Shares pursuant to the Offer and such Preferred Shareholder's certificates are
not immediately available or the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such Shares may nevertheless
be tendered if all of the following guaranteed delivery procedures are complied
with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy, substantially in the form provided by Cinergy and CG&E
herewith, is received (with any required signatures or signature guarantees)
by the Depositary as provided below prior to the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer or a Book-Entry Confirmation with respect to all tendered Shares,
together with a properly completed and duly executed Letter of Transmittal
and Proxy (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal and Proxy, are received by the
Depositary no later than 5:00 p.m., New York City time, within three NYSE
trading days after the date of such Notice of Guaranteed Delivery and Proxy.
5
<PAGE>
THE NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE DELIVERED BY HAND OR
TRANSMITTED BY FACSIMILE TRANSMISSION OR MAILED TO THE DEPOSITARY AND MUST
INCLUDE AN ENDORSEMENT BY AN ELIGIBLE INSTITUTION IN THE FORM SET FORTH IN SUCH
NOTICE OF GUARANTEED DELIVERY AND PROXY.
In all cases, Shares shall not be deemed validly tendered unless a properly
completed and duly executed Letter of Transmittal and Proxy (or a manually
signed facsimile thereof) or, if applicable, an Agent's Message is received by
the Depositary.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer in all cases will be made only after timely
receipt by the Depositary of certificates for (or an Agent's Message with
respect to) such Shares, a Letter of Transmittal and Proxy or a manually signed
facsimile thereof, properly completed and duly executed, with any required
signature guarantees and all other documents required by the Letter of
Transmittal and Proxy.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
BECAUSE IT IS THE TIME OF RECEIPT, NOT THE TIME OF MAILING, WHICH DETERMINES
WHETHER A TENDER HAS BEEN MADE PRIOR TO THE EXPIRATION DATE, SUFFICIENT TIME
SHOULD BE ALLOWED FOR DELIVERY.
TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE PURSUANT TO THE OFFER, EACH TENDERING PREFERRED SHAREHOLDER MUST
NOTIFY THE DEPOSITARY OF SUCH PREFERRED SHAREHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY PROPERLY
COMPLETING AND EXECUTING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL AND PROXY. FOREIGN PREFERRED SHAREHOLDERS MUST SUBMIT A PROPERLY
COMPLETED FORM W-8 IN ORDER TO AVOID THE APPLICABLE BACKUP WITHHOLDING;
PROVIDED, HOWEVER, THAT BACKUP WITHHOLDING WILL NOT APPLY TO FOREIGN
STOCKHOLDERS SUBJECT TO 30% (OR LOWER TREATY RATE) WITHHOLDING ON GROSS PAYMENTS
RECEIVED PURSUANT TO THE OFFER. SEE "CERTAIN FEDERAL INCOME TAX CONSEQUENCES."
EACH PREFERRED SHAREHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR REGARDING THE TAX CONSEQUENCES OF THE OFFER.
All questions as to the form of documents and the validity, eligibility
(including the time of receipt) and acceptance for payment of any tender of
Shares will be determined by Cinergy, in its sole discretion, and its
determination will be final and binding. Cinergy reserves the absolute right to
reject any or all tenders of Shares that (i) it determines are not in proper
form or (ii) the acceptance for payment of or payment for which may, in the
opinion of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute
right to waive any defect or irregularity in any tender of Shares. None of
Cinergy, the Dealer Managers, the Depositary, the Information Agent or any other
person will be under any duty to give notice of any defect or irregularity in
tenders, nor shall any of them incur any liability for failure to give any such
notice.
WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after Tuesday, October 15, 1996, unless theretofore
accepted for payment as provided in this Offer to Purchase and Proxy Statement.
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Depositary, at one of its addresses set forth on
the back cover of this Offer to Purchase and Proxy Statement, and must specify
the name of the person who tendered the Shares to be withdrawn and the number of
Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the
Depositary, a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution (except in the case of Shares tendered by an
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<PAGE>
Eligible Institution) must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered owner (if different from that of the
tendering Preferred Shareholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at one of
the Book-Entry Transfer Facilities to be credited with the withdrawn Shares and
the name of the registered holder (if different from the name of such account).
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered by again following one of the procedures described in "Terms of the
Offer -- Procedure for Tendering Shares" at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Cinergy, in its sole discretion, and
its determination will be final and binding. None of Cinergy, the Dealer
Managers, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defect or irregularity in any notice
of withdrawal or will incur any liability for failure to give any such
notification.
ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT OF PURCHASE PRICE AND DIVIDENDS
Upon the terms and subject to the conditions of the Offer, and as promptly
as practicable after the Expiration Date, Cinergy will accept for payment (and
thereby purchase) and pay for Shares validly tendered and not withdrawn as
permitted in "Terms of the Offer -- Withdrawal Rights." In all cases, payment
for Shares accepted for payment pursuant to the Offer will be made promptly but
only after timely receipt by the Depositary of certificates for such Shares (or
of an Agent's Message), a properly completed and duly executed Letter of
Transmittal and Proxy (or facsimile thereof) and any other required documents.
For purposes of the Offer, Cinergy will be deemed to have accepted for
payment (and thereby purchased) Shares that are validly tendered and not
withdrawn as, if and when it gives oral or written notice to the Depositary of
its acceptance for payment of such Shares. Cinergy will pay for Shares that it
has purchased pursuant to the Offer by depositing the purchase price therefor
with the Depositary, which will act as agent for tendering Preferred
Shareholders for the purpose of receiving payment from Cinergy and transmitting
payment to tendering Preferred Shareholders. Under no circumstances will
interest be paid on amounts to be paid to tendering Preferred Shareholders,
regardless of any delay in making such payment.
Certificates for all Shares not validly tendered will be returned or, in the
case of Shares tendered by book-entry transfer, such Shares will be credited to
an account maintained with a Book-Entry Transfer Facility, as promptly as
practicable, without expense to the tendering Preferred Shareholder.
If certain events occur, Cinergy may not be obligated to purchase Shares
pursuant to the Offer. See "Terms of the Offer -- Certain Conditions of the
Offer."
Cinergy will pay or cause to be paid any stock transfer taxes with respect
to the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to any person other
than the registered owner, or if tendered Shares are registered in the name of
any person other than the person signing the Letter of Transmittal and Proxy,
the amount of any stock transfer taxes (whether imposed on the registered owner,
such other person or otherwise) payable on account of the transfer to such
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Instruction
6 of the accompanying Letter of Transmittal and Proxy.
CERTAIN CONDITIONS OF THE OFFER
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES. IF THE PROPOSED
AMENDMENT IS APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT, AS
DESCRIBED HEREIN, TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE
PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES HAVE NOT BEEN
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<PAGE>
TENDERED PURSUANT TO THE OFFER. PREFERRED SHAREHOLDERS WHO TENDER THEIR SHARES
WILL ONLY BE ENTITLED TO THE PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER
OF THIS OFFER TO PURCHASE AND PROXY STATEMENT.
Notwithstanding any other provision of the Offer, Cinergy will not be
required to accept for payment or pay for any Shares tendered, and may terminate
or amend the Offer or may postpone (subject to the requirements of the
Securities Exchange Act of 1934 [the "Exchange Act"] for prompt payment for or
return of Shares) the acceptance for payment of, or payment for, Shares
tendered, if at any time after August 20, 1996, and at or before acceptance for
payment of or payment for any Shares, any of the following shall have occurred:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic
or foreign, or before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in
any manner relates to or affects the Offer or (ii) could materially and
adversely affect the business, condition (financial or otherwise), income,
operations or prospects of Cinergy and its subsidiaries taken as a whole, or
otherwise materially impair in any way the contemplated future conduct of
the business of Cinergy or any of its subsidiaries or materially impair the
Offer's contemplated benefits to Cinergy;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or Cinergy or any
of its subsidiaries, by any legislative body, court, authority, agency or
tribunal that would or might directly or indirectly (i) make the acceptance
for payment of, or payment for, some or all of the Shares illegal or
otherwise restrict or prohibit consummation of the Offer, (ii) delay or
restrict the ability of Cinergy, or render Cinergy unable, to accept for
payment or pay for some or all of the Shares, (iii) materially impair the
contemplated benefits of the Offer to Cinergy or (iv) materially affect the
business, condition (financial or otherwise), income, operations or
prospects of Cinergy and its subsidiaries taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the business
of Cinergy or any of its subsidiaries;
(c) there shall have occurred (i) any significant decrease in the market
price of the Shares or any change in the general political, market, economic
or financial conditions in the United States or abroad that could have a
material adverse effect on Cinergy's business, operations, prospects or
ability to obtain financing generally or the trading in the other equity
securities of Cinergy, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or any
limitation on, or any event that might affect the extension of credit by
lending institutions in the United States, (iii) the commencement of war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (v) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
a material acceleration or worsening thereof or (vi) any decline in either
the Dow Jones Industrial Average or the Standard and Poor's Composite 500
Stock Index by an amount in excess of 15% measured from the close of
business on August 15, 1996;
(d) any tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger, acquisition or other business
combination proposal for Cinergy, shall have been proposed, announced or
made by any person or entity;
(e) there shall have occurred any event or events that have resulted, or
may result, in an actual or threatened change in the business, condition
(financial or otherwise), income, operations, stock ownership or prospects
of Cinergy and its subsidiaries; or
8
<PAGE>
(f) the Securities and Exchange Commission (the "SEC") shall have
withheld approval, under the Holding Company Act, of the acquisition of the
Shares by Cinergy pursuant to the Offer or the approval and adoption of the
Proposed Amendment at the Special Meeting;
and, in the sole judgment of Cinergy, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment or payment. With respect to the approval of the SEC referenced in clause
(f) above, the SEC must find that the acquisition of the Shares by Cinergy is
not detrimental to the public interest or the interest of the investors or
consumers, and that the consideration paid in connection with the acquisition
and the adoption of the Proposed Amendment, including fees, commissions and
other remuneration, is reasonable.
The foregoing conditions (including the condition that the Proposed
Amendment be approved and adopted at the Special Meeting) are for the sole
benefit of Cinergy and may be asserted by Cinergy regardless of the
circumstances (including any action or inaction by Cinergy) giving rise to any
such condition, and any such condition may be waived by Cinergy, in whole or in
part, at any time and from time to time in its sole discretion. The failure by
Cinergy at any time to exercise any of the foregoing rights shall not be deemed
a waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time. Any determination by
Cinergy concerning the events described above will be final and binding on all
parties.
EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
Cinergy expressly reserves the right, in its sole discretion, and at any
time and/or from time to time, to extend the period of time during which the
Offer for any Series of Preferred is open by giving oral or written notice of
such extension to the Depositary, without extending the period of time during
which the Offer for any other Series of Preferred is open. There can be no
assurance, however, that Cinergy will exercise its right to extend the Offer for
any Series of Preferred. During any such extension, all Shares of the subject
Series of Preferred previously tendered will remain subject to the Offer, except
to the extent that such Shares may be withdrawn as set forth in "Terms of the
Offer -- Withdrawal Rights." Cinergy also expressly reserves the right, in its
sole discretion, to terminate the Offer and not accept for payment or pay for
any Shares tendered, subject to Rule 13e-4(f)(5) under the Exchange Act, which
requires Cinergy either to pay the consideration offered or to return the Shares
tendered promptly after the termination or withdrawal of the Offer, upon the
occurrence of any of the conditions specified in "Terms of the Offer -- Certain
Conditions of the Offer" by giving oral or written notice of such termination to
the Depositary, and making a public announcement thereof.
Subject to compliance with applicable law, Cinergy further reserves the
right, in its sole discretion, to amend the Offer in any respect. Amendments to
the Offer may be made at any time and/or from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. Any public announcement made
pursuant to the Offer will be disseminated promptly to Preferred Shareholders
affected thereby in a manner reasonably designed to inform such Preferred
Shareholders of such change. Without limiting the manner in which Cinergy may
choose to make a public announcement, except as required by applicable law,
Cinergy shall have no obligation to publish, advertise or otherwise communicate
any such public announcement other than by making a release to the Dow Jones
News Service.
If Cinergy materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, Cinergy
will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) under the Exchange Act. Those rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer (other than a change in price
or change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms or information.
The SEC has stated that, in its view, an offer should remain open for a minimum
of five business days from the date that a notice of such a material change is
first published, sent or given. If the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date
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<PAGE>
that Cinergy publishes, sends or gives to Preferred Shareholders a notice that
it will (a) increase or decrease the price it will pay for Shares or (b)
decrease the percentage of Shares it seeks, the Offer will be extended until the
expiration of such period of ten business days.
PROPOSED AMENDMENT AND PROXY SOLICITATION
INTRODUCTION
This Offer to Purchase and Proxy Statement is first being mailed on or about
August 20, 1996 to the shareholders of CG&E in connection with the solicitation
of proxies by the Board of Directors (the "Board") of CG&E for use at the
Special Meeting. At the Special Meeting, the shareholders of CG&E will vote upon
the Proposed Amendment to the Articles.
While Preferred Shareholders who wish to tender their Shares pursuant to the
Offer need not vote in favor of the Proposed Amendment, the Offer is conditioned
upon the Proposed Amendment being approved and adopted at the Special Meeting.
In addition, Preferred Shareholders have the right to vote for the Proposed
Amendment regardless of whether they tender their Shares. If the Proposed
Amendment is approved and adopted by CG&E's shareholders, CG&E will make a
special cash payment in the amount of $1.00 per Share (the "Cash Payment") to
each Preferred Shareholder who voted in favor of the Proposed Amendment,
provided that such Shares have not been tendered pursuant to the Offer. If a
Preferred Shareholder votes against the Proposed Amendment or abstains, such
Preferred Shareholder shall not be entitled to the Cash Payment (regardless of
whether the Proposed Amendment is approved and adopted). Those Preferred
Shareholders who validly tender their Shares will be entitled only to the
purchase price per Share listed on the front cover of this Offer to Purchase and
Proxy Statement.
VOTING SECURITIES, RIGHTS AND PROCEDURES
Only holders of record of CG&E's voting securities at the close of business
on July 22, 1996 (the "Record Date") will be entitled to vote in person or by
proxy at the Special Meeting. The outstanding voting securities of CG&E are
divided into two classes: common stock and cumulative preferred stock. The class
of cumulative preferred stock has been issued in the four Series of Preferred
with the record holders of all Shares of the cumulative preferred stock voting
together as one class. The shares outstanding as of the Record Date, and the
vote to which each share is entitled in consideration of the Proposed Amendment,
are as follows:
<TABLE>
<CAPTION>
VOTES PER
CLASS SHARES OUTSTANDING SHARE
- ------------------------------------------------------------------- ------------------ --------------
<S> <C> <C>
Common Stock (Par Value $8.50 per share)........................... 89,663,086 1 vote
Cumulative Preferred Stock (Par Value $100 per Share).............. 2,000,000 1 vote
</TABLE>
The affirmative vote of the holders of two-thirds of the outstanding shares
of each of CG&E's (i) common stock and (ii) cumulative preferred stock, all
series voting together as one class, is required to approve the Proposed
Amendment to be presented at the Special Meeting. Abstentions and broker non-
votes will have the effect of votes against the Proposed Amendment. CINERGY HAS
ADVISED CG&E THAT IT INTENDS TO VOTE ALL OF THE OUTSTANDING SHARES OF COMMON
STOCK OF CG&E IN FAVOR OF THE PROPOSED AMENDMENT.
Votes at the Special Meeting will be tabulated preliminarily by the
Depositary. Inspectors of Election, duly appointed by the presiding officer of
the Special Meeting, will definitively count and tabulate the votes and
determine and announce the results at the meeting. CG&E has no established
procedure for confidential voting. There are no rights of appraisal in
connection with the Proposed Amendment.
PROXIES
THE ENCLOSED PROXY, WHICH IS CONTAINED WITHIN THE LETTER OF TRANSMITTAL AND
PROXY (AND THE NOTICE OF GUARANTEED DELIVERY AND PROXY), IS SOLICITED BY CG&E'S
BOARD, WHICH RECOMMENDS VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES OF CG&E'S
COMMON STOCK WILL BE VOTED IN ACCORDANCE WITH THE BOARD'S RECOMMENDATION. Shares
of CG&E's cumulative preferred stock represented by properly executed proxies
received at or prior to the Special Meeting will be voted in accordance with the
instructions thereon. If no instructions are indicated, duly executed proxies
will be voted in accordance with the recommendation of the
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<PAGE>
Board. It is not anticipated that any other matters will be brought before the
Special Meeting. However, the enclosed proxy gives discretionary authority to
the proxy holders named therein should any other matters be presented at the
Special Meeting, and it is the intention of the proxy holders to act on any
other matters in accordance with their best judgment.
Execution of a proxy will not prevent a shareholder from attending the
Special Meeting and voting in person. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of CG&E written
notice of revocation bearing a later date than the proxy, by delivering a duly
executed proxy bearing a later date, or by voting in person by ballot at the
Special Meeting.
CG&E will bear the cost of the solicitation of proxies by the Board. CG&E
has engaged MacKenzie Partners, Inc. to act as Information Agent in connection
with the solicitation of proxies for a fee of $12,500 plus reimbursement of
reasonable out-of-pocket expenses. Proxies will be solicited by mail or by
telephone. In addition, officers and employees of CG&E may also solicit proxies
personally or by telephone; such persons will receive no additional compensation
for these services. The Information Agent has not been retained to make, and
will not make, solicitations or recommendations in connection with the Proposed
Amendment. The Dealer Managers have not been retained to act in any capacity in
connection with the solicitation of proxies.
CG&E has requested that brokerage houses and other custodians, nominees and
fiduciaries forward solicitation materials to the beneficial owners of shares of
CG&E's cumulative preferred stock held of record by such persons and will
reimburse such brokers and other fiduciaries for their reasonable out-of-pocket
expenses incurred in connection therewith.
The solicitation of proxies has been approved by the SEC under the Holding
Company Act. An application has been filed with the SEC under the Holding
Company Act requesting approval of the Proposed Amendment and the acquisition of
the Shares by Cinergy pursuant to the Offer.
CASH PAYMENTS
Subject to the terms and conditions set forth in this Offer to Purchase and
Proxy Statement, if (but only if) the Proposed Amendment is approved and adopted
by the shareholders of CG&E, CG&E will make a Cash Payment to each Preferred
Shareholder who voted in favor of the Proposed Amendment, in person by ballot or
by proxy, at the Special Meeting in the amount of $1.00 for each Share held by
such Preferred Shareholder on the Record Date which is so voted, provided that
such Shares have not been tendered pursuant to the Offer. CASH PAYMENTS WILL BE
MADE TO PREFERRED SHAREHOLDERS AS OF THE RECORD DATE (IF SUCH SHARES HAVE NOT
BEEN TENDERED PURSUANT TO THE OFFER) ONLY IN RESPECT OF EACH SHARE WHICH IS
VOTED FOR THE ADOPTION OF THE PROPOSED AMENDMENT; PROVIDED, HOWEVER, THAT THOSE
PREFERRED SHAREHOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO
THE PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER OF THIS OFFER TO PURCHASE
AND PROXY STATEMENT. If the Proposed Amendment is approved and adopted, Cash
Payments will be paid out of CG&E's general funds, promptly after the Proposed
Amendment shall have become effective.
Only Preferred Shareholders on the Record Date (or their legal
representatives or attorneys-in-fact) are entitled to vote at the Special
Meeting and to receive Cash Payments from CG&E. Any beneficial holder of Shares
who is not the registered holder of such Shares as of the Record Date (as would
be the case for any beneficial owner whose Shares are registered in the name of
such holder's broker, dealer, commercial bank, trust company or other nominee)
must arrange with the record Preferred Shareholder to execute and deliver a
proxy form on such beneficial owner's behalf. If a beneficial holder of Shares
intends to attend the Special Meeting and vote in person, such beneficial holder
must obtain a legal proxy form from his or her broker, dealer, commercial bank,
trust company or other nominee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As noted above, Cinergy owns all the outstanding common stock of CG&E.
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<PAGE>
Pursuant to Section 13(d) of the Exchange Act, a beneficial owner of a
security is any person who directly or indirectly has or shares voting or
investment power over such security. No person or group is known by management
of CG&E to be the beneficial owner of more than 5% of CG&E's class of cumulative
preferred stock as of the Record Date.
CG&E's directors and executive officers do not beneficially own any Shares
as of the Record Date. The beneficial ownership of Cinergy's common stock held
by each director, as well as directors and executive officers as a group, as of
June 30, 1996, is set forth in the following table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNER (1) OF BENEFICIAL OWNERSHIP (2)
- ----------------------------------------------------------------- -------------------------------------
<S> <C>
Jackson H. Randolph.............................................. 79,239 shares
James E. Rogers.................................................. 264,979 shares
William J. Grealis............................................... 22,462 shares
All directors and executive officers as a group.................. 732,372 shares
(representing 0.47% of the class)
</TABLE>
- ------------------------
(1) No individual listed beneficially owned more than 0.17% of the outstanding
shares of common stock of Cinergy.
(2) Includes shares which there is a right to acquire within 60 days pursuant to
the exercise of stock options in the following amounts: Mr. Rogers --
189,403; Mr. Grealis -- 20,000; and all directors and executive officers as
a group -- 472,922.
BUSINESS TO COME BEFORE THE SPECIAL MEETING
The following Proposed Amendment to CG&E's Articles is the only item of
business expected to be presented at the Special Meeting:
To remove in its entirety ARTICLE FOURTH, Clause 6-A(b), limiting CG&E's
ability to issue unsecured indebtedness.
EXPLANATION OF THE PROPOSED AMENDMENT
Without the consent of the holders of CG&E's cumulative preferred stock, the
Articles currently prohibit the issuance or assumption of any unsecured notes,
debentures or other securities representing unsecured indebtedness (other than
for the purpose of refunding outstanding unsecured indebtedness or for the
redemption or retirement of outstanding shares of stock ranking prior to the
cumulative preferred stock with respect to the payment of dividends or upon the
dissolution, liquidation or winding up of CG&E) if, immediately after such
issuance or assumption, the total outstanding principal amount of all securities
representing unsecured debt (including unsecured securities then to be issued or
assumed) would exceed 20% of the aggregate of (1) the total principal amount of
all outstanding secured debt of CG&E at the time of such issuance or assumption
and (2) the capital and surplus of CG&E, as stated on CG&E's books. The Proposed
Amendment, if adopted, would eliminate in its entirety clause 6-A(b), as set
forth below, from the Articles.
Clause 6-A.
* * * *
"(b) Issue any unsecured notes, debentures or other securities
representing unsecured indebtedness, or assume any such unsecured
securities, for purposes other than the refunding of outstanding
unsecured indebtedness theretofore incurred or assumed by the Company or
the redemption or other retirement of outstanding shares of stock
ranking prior to the Cumulative Preferred Stock with respect to the
payment of dividends or upon the dissolution, liquidation or winding up
of the Company, whether voluntary or involuntary, if, immediately after
such issue or assumption, the total principal amount of all unsecured
notes, debentures or other securities representing unsecured
indebtedness issued or assumed by the Company and then outstanding
(including unsecured securities then to be issued or assumed) would
exceed 20% of the aggregate of (i) the total
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<PAGE>
principal amount of all bonds and other securities representing secured
indebtedness issued or assumed by the Company and then to be
outstanding, and (ii) the capital and surplus of the Company as then to
be stated on the books of account of the Company;"
REASONS FOR THE PROPOSED AMENDMENT
CG&E believes that regulatory, legislative and market developments will lead
to a more competitive environment in the electric and gas utility industry. As
competition intensifies, flexibility and cost leadership will be even more
crucial to success in the future. Given that the electric and gas industry is
extremely capital intensive, controlling and minimizing financing costs are
essential ingredients to operating effectively in the new competitive
environment. It is, therefore, for those two reasons, flexibility and cost
leadership, that you are being asked to vote in favor of the Proposed Amendment.
CG&E believes that adoption of the Proposed Amendment is key to meeting the
objectives of flexibility and cost leadership. If adopted, the amendment would
eliminate the current provision of CG&E's Articles that limits the total amount
of CG&E's unsecured indebtedness to 20% of the total amount of CG&E's secured
indebtedness, plus capital and surplus. Historically, CG&E's debt financing
generally has been accomplished through the issuance of long-term first mortgage
bonds and a modest amount of unsecured short-term debt. First mortgage bonds
represent secured indebtedness because they place a first priority lien on
substantially all of CG&E's assets. The First Mortgage Indenture between CG&E
and its bondholders contains certain restrictive covenants with respect to,
among other things, the disposition of assets and the ability to issue
additional first mortgage bonds. Short-term debt, usually the lowest cost debt
available to CG&E, represents one type of unsecured indebtedness. While the
Proposed Amendment will not only allow CG&E to issue a greater amount of
unsecured debt, it will also allow CG&E to issue a greater amount of total debt;
however, CG&E presently has no intention of issuing a greater amount of total
debt than it otherwise would have issued absent the adoption of the Proposed
Amendment. It is, however, CG&E's intention to change the mix of debt securities
toward more issuances on a short-term and unsecured basis.
Inasmuch as the 20% provision contained in the Articles limits CG&E's
flexibility in planning and financing its business activities, CG&E believes it
ultimately will be at a competitive disadvantage if the provision is not
eliminated. The industry's new competitors (for example, power marketers,
independent power producers and cogenerating facilities) generally are not
subject to the type of financing restrictions the Articles impose on CG&E.
Recently, several other utilities with the same or similar charter restrictions
have successfully eliminated such provisions by soliciting their shareholders
for the same or similar amendments. Therefore, many potential utility
competitors, and even CG&E's Indiana affiliate, PSI, have no comparable
provision restricting the use of unsecured debt. While CG&E's current low-cost
structure has been instrumental in reducing the ability of other competitors to
attract CG&E's large bulk power customers, CG&E must continue to explore new
ways of reducing costs and enhancing flexibility. CG&E believes that the
adoption of the Proposed Amendment will be in the best long-term competitive
interests of shareholders by enhancing its ability to meet the two objectives
described below.
FINANCIAL FLEXIBILITY
CG&E believes that in the long run, various types of unsecured debt
alternatives will increase in importance as an option in financing its
construction program and refinancing high-cost mortgage bonds. The availability
and flexibility of unsecured debt is necessary to take full advantage of
changing conditions in securities markets. CG&E intends to continue to rely on
unsecured debt up to the 20% maximum currently allowable under the Articles. In
addition, although CG&E's earnings currently are sufficient to meet the earnings
coverage tests that must be satisfied before issuing additional first mortgage
bonds and preferred stock, there have been periods, including virtually all of
the year 1994, when, because of its inability to meet the Articles test, CG&E
was unable to issue any additional preferred stock. A similar inability to issue
preferred stock in the future, combined with the inability to issue additional
unsecured debt, would limit CG&E's financing options to either additional first
mortgage bonds (assuming that the earnings coverage test could be met) or
additional common stock.
CG&E's use of unsecured short-term debt is subject to the 20% provision
contained in the Articles. CG&E believes that the prudent use of such debt in
excess of this provision is vital to effective financial
13
<PAGE>
management of the business. Not only is unsecured short-term debt generally the
least expensive form of capital, it also provides flexibility in meeting
seasonal fluctuations in cash requirements, acts as a bridge between issues of
permanent capital and can be used when unfavorable conditions prevail in the
market for long-term capital.
With these benefits in mind, in 1995, CG&E sought and received the approval
of The Public Utilities Commission of Ohio (the "PUCO") to increase the maximum
amount of short-term debt it is permitted to have outstanding from $200 million
to $400 million. However, because of the 20% provision of the Articles, CG&E had
only $150 million of short-term debt capacity available, based on capitalization
as of June 30, 1996. Beyond that, the amount of short-term debt available to
CG&E will continue to decline as additional unsecured long- and short-term debt
is issued.
LOWER COSTS
As previously mentioned, CG&E's short-term debt issuances generally
represent the lowest-cost form of financing. The corporate reorganization during
1994 resulted in the formation of Cinergy, a combined company that is larger and
financially stronger than either CG&E or PSI would have been on a stand-alone
basis. Accordingly, CG&E has been able to reassess its historically modest use
of short-term debt. By increasing its use of short-term debt, it may be possible
for CG&E to lower its cost structure further, thereby making its products more
competitive, increasing earnings and reducing its business risks. However, with
the Articles' 20% provision in place and with CG&E's increasing reliance on
unsecured debt, the availability and concomitant benefits of short-term debt
diminish. And although short-term debt, by its nature, exposes the borrower to
potentially more volatility in interest rates, it should be noted that the cost
of short-term debt rarely exceeds the cost of other forms of capital available
at the same time.
IT IS FOR ALL THE ABOVE REASONS THAT CG&E'S BOARD BELIEVES THE BEST
LONG-TERM INTERESTS OF SHAREHOLDERS ARE SERVED BY, AND ENCOURAGES SHAREHOLDERS
TO VOTE FOR, THE ADOPTION OF THE PROPOSED AMENDMENT.
FINANCIAL AND OTHER INFORMATION RELATING TO CG&E
The financial statements of CG&E and related information included in its
Annual Report on Form 10-K for the year ended December 31, 1995, and its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June
30, 1996, each as filed with the SEC, are hereby incorporated by reference. CG&E
will provide without charge, upon the written or oral request of any person
(including any beneficial owner) to whom this Offer to Purchase and Proxy
Statement is delivered, a copy of such information (excluding certain exhibits).
Such requests for information should be directed to CG&E's principal office at
139 East Fourth Street, Cincinnati, Ohio 45202, Attention: Corporate Secretary;
telephone (513) 381-2000.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Audit Committee of Cinergy's board of directors,
such board employed on January 25, 1996 Arthur Andersen LLP as independent
public accountants for Cinergy and its subsidiaries, including CG&E, for the
year 1996. Representatives of Arthur Andersen LLP are expected to be present at
the Special Meeting with the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.
PRICE RANGE OF SHARES; DIVIDENDS
CG&E's Cumulative Preferred Stock 4% Series, 4 3/4% Series, 7 7/8% Series
and 7 3/8% Series are listed and traded on the NYSE under the symbols "CIN-A,"
"CIN-B," "CIN-I" and "CIN-G," respectively. The last reported sale price on the
NYSE, as of the close of business on August 15, 1996, for each of the Series of
Preferred is shown on the front cover of this Offer to Purchase and Proxy
Statement.
PREFERRED SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS, IF
AVAILABLE, FOR THE SHARES.
14
<PAGE>
The following table sets forth the high and low sales prices of each Series
of Preferred on the NYSE and the cash dividends paid thereon for the fiscal
quarters indicated.
<TABLE>
<CAPTION>
4% SERIES OF PREFERRED 4 3/4% SERIES OF PREFERRED
--------------------------------- ---------------------------------
CASH CASH
DIVIDENDS DIVIDENDS
HIGH LOW PER SHARE HIGH LOW PER SHARE
--------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
1994
1st Quarter...................... $ 58.500 $ 53.000 $ 1.000 $ 68.000 $ 63.250 $ 1.188
2nd Quarter...................... $ 56.000 $ 52.000 $ 1.000 $ 65.000 $ 61.500 $ 1.188
3rd Quarter...................... $ 53.000 $ 46.500 $ 1.000 $ 62.000 $ 55.000 $ 1.188
4th Quarter...................... $ 51.000 $ 46.500 $ 1.000 $ 57.000 $ 52.500 $ 1.188
1995
1st Quarter...................... $ 50.500 $ 47.000 $ 1.000 $ 59.000 $ 52.500 $ 1.188
2nd Quarter...................... $ 52.500 $ 49.000 $ 1.000 $ 67.625 $ 57.000 $ 1.188
3rd Quarter...................... $ 56.000 $ 51.500 $ 1.000 $ 67.000 $ 64.000 $ 1.188
4th Quarter...................... $ 58.500 $ 53.500 $ 1.000 $ 72.500 $ 64.000 $ 1.188
1996
1st Quarter...................... $ 57.000 $ 53.250 $ 1.000 $ 73.375 $ 64.500 $ 1.188
2nd Quarter...................... $ 56.000 $ 50.500 $ 1.000 $ 67.000 $ 63.500 $ 1.188
</TABLE>
<TABLE>
<CAPTION>
7 3/8% SERIES OF PREFERRED 7 7/8% SERIES OF PREFERRED
----------------------------------- -----------------------------------
CASH CASH
DIVIDENDS DIVIDENDS
HIGH LOW PER SHARE HIGH LOW PER SHARE
---------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
1994
1st Quarter................. $ 106.500 $ 104.500 $ 1.844 $ 112.375 $ 112.375 $ 1.969
2nd Quarter................. * * $ 1.844 $ 106.875 $ 106.500 $ 1.969
3rd Quarter................. * * $ 1.844 * * $ 1.969
4th Quarter................. * * $ 1.844 $ 107.250 $ 105.000 $ 1.969
1995
1st Quarter................. $ 94.250 $ 93.797 $ 1.844 * * $ 1.969
2nd Quarter................. $ 105.000 $ 101.703 $ 1.844 * * $ 1.969
3rd Quarter................. $ 104.500 $ 104.031 $ 1.844 * * $ 1.969
4th Quarter................. * * $ 1.844 * * $ 1.969
1996
1st Quarter................. * * $ 1.844 $ 112.188 $ 112.188 $ 1.969
2nd Quarter................. * * $ 1.844 $ 108.750 $ 108.750 $ 1.969
</TABLE>
- ------------------------
* No trades reported on the NYSE.
Dividends for a Series of Preferred are payable when, as and if declared by
CG&E's Board of Directors at the rate per annum included in such title of the
Series of Preferred listed on the front cover of this Offer to Purchase and
Proxy Statement. The October 1996 Dividend has been declared on each Series of
Preferred, payable October 1, 1996 to owners of record on September 3, 1996. A
tender and purchase of Shares pursuant to the Offer will not deprive a Preferred
Shareholder of his or her right to receive the October 1996 Dividend on Shares
held of record on September 3, 1996. Tendering Preferred Shareholders will not
be entitled to any dividends in respect of any later dividend periods (or any
portion thereof).
15
<PAGE>
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
Cinergy believes that the purchase of the Shares at this time represents an
attractive opportunity that will benefit Cinergy, its shareholders, and CG&E. In
addition, the Offer gives Preferred Shareholders the opportunity to sell their
Shares at a premium to the market price on the date of the announcement of the
Offer and without the usual transaction costs associated with a sale.
After the consummation of the Offer, Cinergy may determine to purchase
additional Shares on the open market, in privately negotiated transactions,
through one or more tender offers or otherwise. Any such purchases may be on the
same terms as, or on terms which are more or less favorable to holders of Shares
than, the terms of the Offer. However, Rule 13e-4(f)(6) under the Exchange Act
prohibits Cinergy and its affiliates (including CG&E) from purchasing any Shares
of a Series of Preferred, other than pursuant to the Offer, until at least ten
business days after the Expiration Date with respect to that Series of
Preferred. Any future purchases of Shares by Cinergy would depend on many
factors, including the market price of the Shares, Cinergy's business and
financial position, restrictions on Cinergy's ability to purchase Shares imposed
by law or by NYSE listing requirements and general economic and market
conditions.
Preferred Shareholders are not under any obligation to tender Shares
pursuant to the Offer. The Offer does not constitute notice of redemption of any
Series of Preferred pursuant to CG&E's Articles, nor does Cinergy or CG&E intend
to effect any such redemption by making the Offer. The Offer does not constitute
a waiver by CG&E of any option it has to redeem Shares. The 7 3/8% Series of
Preferred is subject to mandatory redemption in an amount sufficient to retire
on each August 1, beginning in 1998, and in each year thereafter, 40,000 Shares,
at a price of $100 per Share, plus accrued dividends, and CG&E has the
noncumulative option to redeem up to 40,000 additional Shares in each such year.
In addition, the 7 3/8% Series of Preferred is redeemable, upon call, after
August 1, 2002 at a price of $100 per Share, plus accrued dividends. The entire
7 7/8% Series of Preferred is subject to mandatory redemption on January 1, 2004
at a price of $100 per Share, plus accrued dividends. The Shares of each Series
of Preferred have no preemptive or conversion rights.
Upon liquidation or dissolution of CG&E, owners of the Shares would be
entitled to receive an amount equal to the liquidation preference per share
($100) plus all accrued and unpaid dividends (whether or not earned or declared)
thereon to the date of payment, prior to the payment of any amounts to the
holders of CG&E's common stock.
Shares validly tendered to the Depositary pursuant to the Offer and not
withdrawn in accordance with the procedures set forth herein shall be held until
the Expiration Date (or returned to the extent the Offer is terminated in
accordance herewith). To the extent that the Proposed Amendment is approved and
the Shares tendered are accepted for payment and paid for in accordance with the
terms hereof, Cinergy intends to transfer its Shares to CG&E and, at that time,
it is expected that CG&E will retire and cancel the Shares. However, in the
event the Proposed Amendment is not adopted at the Special Meeting, Cinergy may
elect, but is not obligated, to waive, subject to applicable law, such
condition. In that case, subsequent to Cinergy's waiver and purchase of the
Shares, CG&E anticipates, as promptly as practicable thereafter, that it would
call another special meeting of its shareholders and solicit proxies therefrom
for an amendment substantially similar to the Proposed Amendment. At that
meeting, Cinergy would vote any Shares acquired by it pursuant to the Offer or
otherwise (together with its shares of common stock) in favor of such amendment,
thereby maximizing the prospects for the adoption of the amendment. Therefore,
if the Proposed Amendment (or an amendment similar thereto) is ultimately
successful, it is likely that the Offer will reduce the number of Shares of each
of the Series of Preferred that might otherwise trade publicly or become
available for purchase and/or sale and likely will reduce the number of owners
of Shares of each of the Series of Preferred, which could adversely affect the
liquidity and sale value of the Shares not purchased in the Offer. Depending on
the number of Shares tendered and purchased pursuant to the Offer, the Series of
Preferred may no longer meet the requirements of the NYSE for continued listing,
which could adversely affect the market for the Shares. In addition, the Series
of Preferred are currently registered under Section 12(g) of the Exchange Act.
Registration of the Shares under the Exchange Act may be terminated upon the
application by CG&E to the SEC if the Shares are neither listed on a national
securities exchange nor held by more than
16
<PAGE>
300 holders of record. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be furnished
to Preferred Shareholders and could make certain provisions of the Exchange Act
no longer applicable to CG&E.
Except as disclosed in this Offer to Purchase and Proxy Statement, Cinergy
and CG&E have no plans or proposals that relate to or would result in: (a) the
acquisition by any person of additional securities of CG&E or the disposition of
securities of CG&E; (b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving CG&E or any of its
subsidiaries; (c) a sale or transfer of a material amount of assets of CG&E or
any of its subsidiaries; (d) any change in the present Board or management of
CG&E; (e) any material change in the present dividend rate or policy, or
indebtedness or capitalization of CG&E; (f) any other material change in CG&E's
corporate structure or business; (g) any change in CG&E's Articles or
Regulations or any actions that may impede the acquisition of control of CG&E by
any person; (h) a class of equity securities of CG&E being delisted from a
national securities exchange; (i) a class of equity securities of CG&E becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or (j) the suspension of CG&E's obligation to file reports
pursuant to Section 15(d) of the Exchange Act.
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR ANY OF
THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER
AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Taft, Stettinius & Hollister, tax counsel to Cinergy and
CG&E, the following summary describes the principal United States federal income
tax consequences of sales of Shares pursuant to the Offer and the receipt of
Cash Payments in connection with the approval and adoption of the Proposed
Amendment. This summary is based on the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), administrative pronouncements, judicial
decisions and existing and proposed Treasury Regulations, changes to any of
which subsequent to the date of this Offer to Purchase and Proxy Statement may
adversely affect the tax consequences described herein, possibly on a
retroactive basis. This summary is addressed to United States Holders, as
defined below, who hold Shares as capital assets within the meaning of Section
1221 of the Code. This summary does not discuss all of the tax consequences that
may be relevant to a Holder in light of his particular circumstances or to
Holders subject to special rules (including certain financial institutions,
insurance companies, dealers in securities, Holders who acquired their Shares
pursuant to the exercise of stock options or other compensation arrangements
with CG&E, and Holders who are not citizens or residents of the United States).
Holders of Shares should consult their tax advisors with regard to the
application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
As used herein, the term "United States Holder" means an owner of a Share
that (a) is (i) for United States federal income tax purposes a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof or (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source or (b)
is not described in (a) and whose income from a Share is effectively connected
with such Holder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States.
TENDER OFFER
A United States Holder will recognize gain or loss equal to the difference
between the tax basis of his or her Shares and the amount of cash received in
exchange therefor. A United States Holder's gain or loss will be long-term
capital gain or loss if the holding period for the Shares is more than one year
as of the date of the sale of such Shares. The excess of net long-term capital
gains over net short-term capital losses is taxed at
17
<PAGE>
a lower rate than ordinary income for certain non-corporate taxpayers. The
distinction between capital gain or loss and ordinary income or loss is also
relevant for purposes of, among other things, limitations on the deductibility
of capital losses.
CASH PAYMENTS/MODIFICATION
Cash Payments will be treated as fees for voting in favor of the Proposed
Amendment and will constitute ordinary income to recipient United States
Holders. United States Holders, whether or not they receive Cash Payments, will
not recognize any taxable income or loss with respect to the Shares as a result
of the modification of the Articles by the Proposed Amendment.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Certain noncorporate United States Holders may be subject to backup
withholding at a rate of 31% on Cash Payments. Each United States Holder
entitled to receive a Cash Payment pursuant to the Offer will be asked to
provide such Holder's correct taxpayer identification number and certify that
such Holder is not subject to backup withholding by completing the Substitute
Form W-9 included herewith.
The amount of any backup withholding from a payment to a United States
Holder will be allowed as a credit against such Holder's United States federal
income tax liability and may entitle such Holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
SOURCE AND AMOUNT OF FUNDS
Assuming that Cinergy purchases all outstanding Shares pursuant to the
Offer, the total amount required by Cinergy to purchase such shares will be
approximately $208 million, exclusive of the dividend payments, fees and other
expenses. Cinergy intends to use its general funds (which, in the ordinary
course, include funds from CG&E) and funds borrowed pursuant to its revolving
credit agreement with a group of banks to purchase shares pursuant to the Offer.
This revolving credit agreement currently extends to May, 2001. The borrowing
limit of this facility, applicable to the transaction contemplated herein, is
$100 million. The facility permits Cinergy to borrow funds at a fluctuating
interest rate determined by the prime lending market in New York, and also
permits Cinergy to borrow money for fixed periods of time specified by Cinergy
at fixed interest rates determined by the Eurodollar interbank market in London,
or by offering its banks the opportunity to bid to make loans at competitive
rates, at Cinergy's option. If a material adverse change in the business,
operations, affairs, assets or condition, financial or otherwise, or prospects
of Cinergy and its subsidiaries, on a consolidated basis, should occur, the
banks may decline to lend additional money to Cinergy under this revolving
credit agreement, although borrowings outstanding at the time of such an
occurrence would not then become due and payable.
18
<PAGE>
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES
Each of Cinergy and CG&E has been advised by its directors and executive
officers that no directors or executive officers of the respective companies own
any Shares. Based upon the companies' records and upon information provided to
each company by its directors and executive officers, neither company nor, to
the knowledge of either, any of their subsidiaries, directors, or executive
officers has engaged in any transactions involving Shares during the 40 business
days preceding the date hereof. Neither company nor, to the knowledge of either,
any of its directors or executive officers is a party to any contract,
arrangement, understanding or relationship relating directly or indirectly to
the Offer with any other person with respect to any securities of CG&E.
FEES AND EXPENSES ASSOCIATED WITH THE OFFER
DEALER MANAGER FEES. Smith Barney Inc. and Morgan Stanley & Co.
Incorporated will act as Dealer Managers for Cinergy in connection with the
Offer, but will not provide services to CG&E in connection with the Proposed
Amendment or the solicitation of proxies therewith. Cinergy has agreed to pay
each Dealer Manager a combined fee of $0.50 per Share for any Shares tendered,
accepted for payment and paid for pursuant to the Offer. Each Dealer Manager
will also be reimbursed by Cinergy for its reasonable out-of-pocket expenses,
including attorneys' fees, and will be indemnified against certain liabilities,
including certain liabilities under the federal securities laws, in connection
with the Offer. Each Dealer Manager has rendered, is currently rendering and is
expected to continue to render various investment banking services to Cinergy
and CG&E. Each Dealer Manager has received, and will continue to receive,
customary compensation from the companies for such services. Cinergy has
retained The Bank of New York as Depositary and MacKenzie Partners, Inc. as
Information Agent in connection with the Offer. The Depositary and Information
Agent will receive reasonable and customary compensation for their services and
will also be reimbursed for certain out-of-pocket expenses. Cinergy has agreed
to indemnify the Depositary and Information Agent against certain liabilities,
including certain liabilities under the federal securities law, in connection
with the Offer. Neither the Depositary nor the Information Agent has been
retained to make solicitations or recommendations in connection with the Offer.
SOLICITED TENDER FEES. Pursuant to Instruction 10 of the accompanying
Letter of Transmittal and Proxy, Cinergy will pay to designated brokers and
dealers a solicitation fee of $1.50 per Share (except that for transactions for
beneficial owners equal to or exceeding 5,000 Shares, Cinergy will pay a
solicitation fee of $1.25 per Share) for any Shares tendered, accepted for
payment and paid for pursuant to the Offer. However, Soliciting Dealers will not
be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
STOCK TRANSFER TAXES. Cinergy will pay all stock transfer taxes, if any,
payable on account of the acquisition of Shares by Cinergy pursuant to the
Offer, except in certain circumstances where special payment or delivery
procedures are utilized pursuant to Instruction 6 of the accompanying Letter of
Transmittal and Proxy.
CERTAIN INFORMATION REGARDING CINERGY AND CG&E
JOINT VENTURE. During the second quarter of 1996, Avon Energy Partners plc
("Avon Energy"), a joint venture between Cinergy and General Public Utilities
Corporation, began to acquire all of the capital shares of Midlands Electricity
plc ("Midlands"). As of August 13, 1996, Avon Energy owned 381.3 million of
Midlands' shares, representing approximately 97.1% of the issued share capital
of Midlands. The remaining shares are expected to be acquired during the third
quarter of 1996. The total consideration to be paid by Avon Energy is estimated
to be approximately $2.6 billion.
Midlands is one of twelve regional electricity companies in the United
Kingdom. Midlands primarily distributes and supplies electricity to 2.2 million
industrial, commercial, and residential customers. In addition, Midlands,
together with its subsidiaries, generates power, supplies natural gas to
industrial and commercial customers, and performs electrical contracting
services.
19
<PAGE>
Following the announcement of the potential acquisition of Midlands, three
major credit rating agencies, Duff & Phelps Credit Rating Co., Fitch Investors
Service, Inc., and Standard & Poor's Corporation, affirmed the current ratings
of Cinergy's operating subsidiaries after their consideration of the effects of
the potential acquisition. The other major credit rating agency, Moody's
Investors Service ("Moody's"), placed the credit ratings of Cinergy's operating
subsidiaries, CG&E, PSI, and ULH&P, under review for possible downgrade. Moody's
indicated that its review will focus on the likelihood of the transaction being
completed and will assess the operating strategies of the combined companies and
the anticipated benefits of the transaction. It will also focus on the financial
impact the transaction will have on Cinergy and its operating subsidiaries,
including the credit implications. Cinergy cannot predict the outcome of this
review.
For further information relating to the Midlands acquisition, reference is
made to Cinergy's Current Reports on Form 8-K dated May 7, 1996 and June 6, 1996
(as amended) and Cinergy's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996 (as amended), which are hereby incorporated by reference.
COMPETITION AND CORPORATE STRUCTURE. The primary factor influencing the
future profitability of Cinergy and CG&E is the changing competitive environment
for energy services, including the impact of emerging technologies, and the
related commoditization of electric power markets. Changes in the industry
include increased competition in wholesale power markets and ongoing pressure
for "customer choice" by large industrial customers and, ultimately, by all
retail customers. Cinergy and CG&E support increased competition in the electric
utility industry and have chosen to take a leadership role in state and Federal
debates on industry reform.
As the electric utility industry moves toward a competitive environment,
Cinergy is reassessing its corporate structure, including the issue of whether
to remain vertically integrated. As a first step toward "unbundling" the
business for a competitive environment, Cinergy announced its intention to
reorganize into strategic business units. This functional reorganization will
separate Cinergy's utility businesses into an energy services business unit, an
energy delivery business unit and an energy commodities business unit. The
design of these new organizations is expected to be completed by the end of the
year. Cinergy continues to analyze what benefits, if any, may exist in the
future for its various stakeholders of separating the business units into
different corporations.
20
<PAGE>
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
Set forth below is certain consolidated historical financial information of
CG&E and its subsidiaries. The historical financial information (other than the
ratios of earnings to fixed charges) was derived from the audited consolidated
financial statements included in CG&E's Annual Report on Form 10-K for the year
ended December 31, 1995 and from the unaudited consolidated financial statements
included in CG&E's Quarterly Reports on Form 10-Q for the period ended June 30,
1996 and the period ended June 30, 1995, which statements are hereby
incorporated by reference. More comprehensive financial information is included
in such reports and the financial information which follows is qualified in its
entirety by reference to such reports and all of the financial statements and
related notes contained therein, copies of which may be obtained as set forth
herein. The data as of and for the six months ended June 30, 1996 and June 30,
1995 has been derived from unaudited financial statements which, in the opinion
of CG&E, reflect all adjustments, consisting of any normal recurring
adjustments, necessary for a fair representation of such data. The results of
operations for such six month periods do not purport to be indicative of the
results to be expected for a full year.
CONDENSED INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------- --------------------
1995 1994 1996 1995
--------- ------------ --------- ---------
(UNAUDITED)
(THOUSANDS, EXCEPT RATIOS)
<S> <C> <C> <C> <C>
Operating Revenues........................... $1,848,075 $1,788,185 $1,012,113 $ 918,665
Operating Income............................. 360,032 291,336(a) 189,507 180,237
Allowance for Borrowed and Equity Funds Used
During Construction......................... 5,644 4,948 2,633 2,757
Phase-In Deferred Return..................... 8,537 15,351 4,186 4,268
Net Income................................... 236,201 158,311(a) 131,184 117,646
Preferred Dividend Requirement............... 17,673 22,377 6,948 10,724
Net Income Applicable to Common Stock........ 218,528 135,934(a) 124,236 106,922
Ratio of Earnings to Fixed Charges........... 3.40 2.60(a) 4.00 3.39
</TABLE>
- ------------------------
(a) In 1994, CG&E recognized charges to earnings of approximately $64 million
($46 million, net of taxes) primarily for certain merger-related and other
expenditures which cannot be recovered from customers under the merger
savings sharing mechanism authorized by the PUCO. The charges include the
PUCO electric jurisdictional portion of merger costs incurred through
December 31, 1994, previously capitalized information systems development
costs, and severance benefits to former officers of CG&E. Of the total $64
million charge, $52 million is reflected in "Operating Income."
21
<PAGE>
CONDENSED BALANCE SHEET DATA (AT END OF PERIOD):
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------- ----------------------
1995 1994 1996 1995
---------- ---------- ---------- ----------
(UNAUDITED)
(THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS:
Net Utility Plant In Service............ $3,698,240 $3,720,655 $3,679,128 $3,714,888
Construction Work In Progress........... 77,661 74,989 77,271 74,400
Cash and Temporary Cash Investments..... 6,612 52,516 31,855 3,500
Other Current Assets.................... 600,184 544,180 399,892 514,701
Other Assets............................ 814,699 789,325 796,534 786,448
---------- ---------- ---------- ----------
$5,197,396 $5,181,665 $4,984,680 $5,093,937
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
LIABILITIES:
Common Equity........................... $1,528,463 $1,532,972 $1,565,586 $1,528,894
Cumulative Preferred Stock.............. 200,000 290,000 200,000 200,000
Long-term Debt.......................... 1,702,650 1,837,757 1,694,627 1,774,404
Current Liabilities..................... 632,600 427,528 401,218 490,220
Other Liabilities....................... 1,133,683 1,093,408 1,123,249 1,100,419
---------- ---------- ---------- ----------
$5,197,396 $5,181,665 $4,984,680 $5,093,937
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
ADDITIONAL INFORMATION REGARDING CINERGY
Cinergy is subject to the informational requirements of the Exchange Act and
in accordance therewith files periodic reports, proxy statements and other
information with the SEC. Cinergy is required to disclose in such proxy
statements certain information, as of particular dates, concerning its directors
and officers, their remuneration, stock options granted to them, the principal
holders of its securities and any material interest of such persons in
transactions with Cinergy. In connection with the Offer, Cinergy has also filed
an Issuer Tender Offer Statement on Schedule 13E-4 with the SEC that includes
certain additional information relating to the Offer.
Such material can be inspected and copied at the public reference facilities
of the SEC, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
its regional offices at Seven World Trade Center, 13th Floor, New York, New York
10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Reports, proxy materials and other information
about Cinergy are also available at the offices of the NYSE, 20 Broad Street,
New York, New York 10005. Copies may also be obtained by mail from the SEC's
Public Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 20549.
Cinergy's Schedule 13E-4 will not be available at the SEC's regional offices.
MISCELLANEOUS
The Offer is not being made to, nor will Cinergy accept tenders from, owners
of Shares in any jurisdiction in which the Offer or its acceptance would not be
in compliance with the laws of such jurisdiction. Cinergy is not aware of any
jurisdiction where the making of the Offer or the tender of Shares would not be
in compliance with applicable law. If Cinergy becomes aware of any jurisdiction
where the making of the Offer or the tender of Shares is not in compliance with
any applicable law, Cinergy will make a good faith effort to comply with such
law. If, after such good faith effort, Cinergy cannot comply with such law, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the owners of Shares residing in such jurisdiction. In any jurisdiction in which
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on Cinergy's
behalf by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
CINERGY CORP.
THE CINCINNATI GAS & ELECTRIC COMPANY
22
<PAGE>
Facsimile copies of the Letter of Transmittal and Proxy will be accepted.
The Letter of Transmittal and Proxy and, if applicable, certificates for Shares
should be sent or delivered by each tendering or voting Preferred Shareholder of
CG&E or his or her broker, dealer, bank or trust company to the Depositary at
one of its addresses set forth below.
The Depositary is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
(FOR ELIGIBLE INSTITUTIONS
ONLY)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR INFORMATION,
TELEPHONE:
(800) 507-9357
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective telephone numbers and addresses
listed below. Requests for additional copies of this Offer to Purchase and Proxy
Statement, the Letter of Transmittal and Proxy or other tender offer or proxy
materials may be directed to the Information Agent or the Dealer Managers, and
such copies will be furnished promptly at the companies' expense. Preferred
Shareholders may also contact their local broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
The Information Agent:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free -- (800) 322-2885
The Dealer Managers:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
23
<PAGE>
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $64.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
<TABLE>
<S> <C>
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
<TABLE>
<S> <C>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
<TABLE>
<S> <C>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4 3/4% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $80.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
<TABLE>
<S> <C>
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
<TABLE>
<S> <C>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
<TABLE>
<S> <C>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 7 7/8% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $116.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
<TABLE>
<S> <C>
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
<TABLE>
<S> <C>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
<TABLE>
<S> <C>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 7 3/8% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $110.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
<TABLE>
<S> <C>
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
<TABLE>
<S> <C>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
<TABLE>
<S> <C>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
<PAGE>
NOTICE OF GUARANTEED DELIVERY AND PROXY
FOR
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES
OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
Cumulative Preferred Stock ($100 par value):
4% Series
4 3/4% Series
7 7/8% Series
7 3/8% Series
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for shares of a series of
cumulative preferred stock of The Cincinnati Gas & Electric Company ("CG&E"), an
Ohio corporation and direct utility subsidiary of Cinergy Corp., listed above
(each a "Series of Preferred") to be tendered pursuant to the Offer (the
"Shares") are not immediately available, if the procedure for book-entry
transfer cannot be completed on a timely basis, or if time will not permit all
other documents required by the Letter of Transmittal and Proxy to be delivered
to the Depositary on or prior to the Expiration Date (as defined in the Offer to
Purchase and Proxy Statement referred to below). Such form may be delivered by
hand or transmitted by mail or by facsimile transmission, to the Depositary. See
"Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase
and Proxy Statement.
A SEPARATE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE USED FOR EACH
SERIES OF PREFERRED.
THE ELIGIBLE INSTITUTION WHICH COMPLETES THIS FORM MUST COMMUNICATE THE
GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND PROXY
AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN.
FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRMATION BY TELEPHONE:
(800) 507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal and Proxy is required to be guaranteed by an Eligible
Institution (as defined in the Letter of Transmittal and Proxy) under the
instructions thereto, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal and Proxy.
<PAGE>
The undersigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), upon the terms and subject to the conditions set forth in the Offer
to Purchase and Proxy Statement, dated August 20, 1996 (the "Offer to Purchase
and Proxy Statement"), and the related Letter of Transmittal and Proxy (which
together constitute the "Offer"), receipt of which is hereby acknowledged, the
number of Shares listed below, pursuant to the guaranteed delivery procedure set
forth in "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to
Purchase and Proxy Statement. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER
THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED
AMENDMENT TO CG&E'S AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER
TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). IN
ADDITION, PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THE ACCOMPANYING LETTER OF TRANSMITTAL
AND PROXY OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED
AMENDMENT IS APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH
PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED
THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
The undersigned hereby also appoints Jackson H. Randolph, James E. Rogers,
and William J. Grealis, or any of them, as proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all shares of cumulative preferred
stock of CG&E which the undersigned is entitled to vote at the Special Meeting
of Shareholders to be held on September 18, 1996, or any adjournment(s) or
postponement(s) thereof.
THIS NOTICE OF GUARANTEED DELIVERY AND PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF CG&E. THE PROXY CONTAINED HEREIN, WHEN PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S).
If no direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
Series of Preferred (check one):
Cumulative Preferred Stock ($100 par value):
<TABLE>
<S> <C>
/ / 4% Series
/ / 4 3/4% Series
/ / 7 7/8% Series
/ / 7 3/8% Series
</TABLE>
Number of Shares:
- ---------------------------------------------
Certificate Nos. (if available):
- ---------------------------------------------
- ---------------------------------------------
- ---------------------------------------------
- ---------------------------------------------
Please check box if you plan to attend the Special Meeting. / /
<PAGE>
SIGNATURE(S) OF OWNER(S)
X_______________________________________________________________________________
X_______________________________________________________________________________
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5 to the Letter of Transmittal and Proxy.)
If Shares will be tendered by
book-entry transfer, Name of Tendering
Institution:
- --------------------------------------
Account No. at (check one)
/ / The Depository Trust Company
/ / Philadelphia Depository Trust
Company
- --------------------------------------
Signature(s)
- --------------------------------------
Name(s) of Record Holders(s)
(Please Print)
- --------------------------------------
Address
- --------------------------------------
Area Code and Telephone Number
<PAGE>
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States,
guarantees (a) that the above-named person(s) has a net long position in the
Shares being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, (b) that such tender of Shares
complies with Rule 14e-4 and (c) to deliver to the Depositary at one of its
addresses set forth above certificate(s) for the Shares tendered hereby, in
proper form for transfer, or a confirmation of the book-entry transfer of the
Shares tendered hereby into the Depositary's account at The Depository Trust
Company or Philadelphia Depository Trust Company, in each case together with
properly completed and duly executed Letter(s) of Transmittal and Proxy (or
facsimile(s) thereof), with any required signature guarantee(s) and any other
required documents, all within three New York Stock Exchange trading days after
the date hereof.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Name of Firm Authorized Signature
- --------------------------------------------- ---------------------------------------------
Address Name
- --------------------------------------------- ---------------------------------------------
City, State, Zip Code Title
- ---------------------------------------------
Area Code and
Telephone Number
Dated: , 1996
</TABLE>
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK
CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
<PAGE>
<PAGE>
SMITH BARNEY INC. MORGAN STANLEY & CO. INCORPORATED
THE DEALER MANAGERS FOR
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF
THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
<TABLE>
<CAPTION>
CUSIP PURCHASE
TITLE OF SERIES OF PREFERRED NUMBER PRICE
- -------------------------------------------------- ----------- -----------
(PER SHARE)
<S> <C> <C>
Cumulative Preferred Stock
($100 par value)
4% Series......................................... 172070 203 $ 64.00
4 3/4% Series..................................... 172070 302 $ 80.00
7 7/8% Series..................................... 172070 864 $ 116.00
7 3/8% Series..................................... 172070 849 $ 110.00
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
August 20, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
In our capacity as Dealer Managers, we are enclosing the material listed
below relating to the invitation of Cinergy Corp., a Delaware corporation
("Cinergy"), to the holders of each series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), listed above (each a "Series of Preferred") to
tender any and all of their shares of a Series of Preferred ("Shares") for
purchase at the purchase price per Share listed above, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and
Proxy Statement"), and in the Letter of Transmittal and Proxy for the Shares
tendered. As to each Series of Preferred, the Offer to Purchase and Proxy
Statement, together with the applicable Letter of Transmittal and Proxy,
constitutes the "Offer". Cinergy will purchase all Shares validly tendered and
not withdrawn, upon the terms and subject to the conditions of the Offer. The
Offer for a Series of Preferred is not conditioned upon any minimum number of
Shares of such Series of Preferred being tendered and is independent of the
Offer for any other Series of Preferred. WHILE PREFERRED SHAREHOLDERS WHO WISH
TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE
PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN
THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER
IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). IN
ADDITION, PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES. SEE "PROPOSED
AMENDMENT AND PROXY SOLICITATION", "TERMS OF THE OFFER -- CERTAIN CONDITIONS OF
THE OFFER" AND "TERMS OF THE OFFER -- EXTENSION OF TENDER PERIOD; TERMINATION;
AMENDMENTS" IN THE OFFER TO PURCHASE AND PROXY STATEMENT.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible.
<PAGE>
Cinergy will pay a solicitation fee of $1.50 per Share (except that for
transactions for beneficial owners equal to or exceeding 5,000 Shares of a
particular Series of Preferred, Cinergy will pay a solicitation fee of $1.25 per
Share) for any Shares tendered, accepted for payment and paid pursuant to the
Offer covered by a Letter of Transmittal and Proxy which designates, as having
solicited and obtained the tender, the name of (i) any broker or dealer in
securities, including the Dealer Managers in their capacity as a broker or
dealer, which is a member of any national securities exchange or of the National
Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or
dealer not eligible for membership in the NASD which agrees to conform to the
NASD's Rules of Fair Practice in soliciting tenders outside the United States to
the same extent as though it were an NASD member, or (iii) any bank or trust
company (each of which is referred to herein as a "Soliciting Dealer"). No such
fee shall be payable to a Soliciting Dealer with respect to the tender of Shares
by a holder unless the Letter of Transmittal and Proxy accompanying such tender
designates such Soliciting Dealer. No such fee shall be payable to a Soliciting
Dealer in respect of Shares registered in the name of such Soliciting Dealer
unless such Shares are held by such Soliciting Dealer as nominee and such Shares
are being tendered for the benefit of one or more beneficial owners identified
on the Letter of Transmittal and Proxy or on the Notice of Solicited Tenders
(included below). No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary (as defined below), the Dealer
Managers or the Information Agent for purposes of the Offer.
Cinergy will also, upon request, reimburse Soliciting Dealers for reasonable
and customary handling and mailing expenses incurred by them in forwarding
materials relating to the Offer to their customers. Cinergy will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 6 of the Letter of Transmittal and Proxy.
In order for a Soliciting Dealer to receive a solicitation fee, The Bank of
New York, as Depositary (the "Depositary"), must have received from such
Soliciting Dealer a properly completed and duly executed Notice of Solicited
Tenders in the form attached hereto (or facsimile thereof) within three business
days after the expiration of the Offer.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name (or in the name of your nominee), we are
enclosing the following documents:
1. The Offer to Purchase and Proxy Statement, dated August 20, 1996.
2. A separate Letter of Transmittal and Proxy for each Series of
Preferred for your use and for the information of your clients.
3. A letter to shareholders of CG&E from its Chairman of the Board and
its Vice Chairman and Chief Executive Officer.
4. A Notice of Guaranteed Delivery and Proxy to be used to accept the
Offer if the Shares and all other required documents cannot be delivered to
the Depositary by the applicable Expiration Date (as defined in the Offer to
Purchase and Proxy Statement).
5. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space for obtaining such clients' instructions with regard to
the Offer and with regard to the proxy solicitation by CG&E.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9, providing information
relating to backup federal income tax withholding.
7. A return envelope addressed to The Bank of New York, the Depositary.
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND PROXY, AND
ONLY THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY FOR A PARTICULAR SERIES OR A
NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO TENDER SHARES OF SUCH
SERIES OF PREFERRED.
2
<PAGE>
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR ANY OF THEIR
RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO
WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR
HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to MacKenzie Partners, Inc., the Information
Agent, or to us, as Dealer Managers, at the respective addresses and telephone
numbers set forth on the back cover of the enclosed Offer to Purchase and Proxy
Statement.
Very truly yours,
Smith Barney Inc. Morgan Stanley & Co.
Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON AS THE AGENT OF CINERGY, CG&E, THE DEALER MANAGERS, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
3
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders. PLEASE
DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY".
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS
CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE
DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY
WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE.
<TABLE>
<CAPTION>
TO BE COMPLETED BY TO BE COMPLETED ONLY BY
THE SOLICITING DEALER DEPOSITARY
- ---------------------------------------------------------------------------------- -----------------------------
SERIES OF NUMBER OF SHARES NUMBER OF SHARES
BENEFICIAL OWNERS PREFERRED TENDERED ACCEPTED FEE*
- -------------------------------------------- ----------------- ----------------- ----------------- ----------
<S> <C> <C> <C> <C>
No. 1.......................................
No. 2.......................................
No. 3.......................................
No. 4.......................................
No. 5.......................................
No. 6.......................................
No. 7.......................................
No. 8.......................................
No. 9.......................................
No. 10......................................
Total.......................................
</TABLE>
- ------------------------
* $1.50 per Share (except that for transactions for beneficial owners equal to
or exceeding 5,000 Shares of a particular Series of Preferred, fee is $1.25
per Share) for any Shares tendered, accepted for payment and paid pursuant
to the Offer.
All questions as to the validity, form and eligibility (including time of
receipt) of Notices of Solicited Tenders will be determined by the Depositary,
in its sole discretion, which determination will be final and binding. Neither
the Depositary nor any other person will be under any duty to give notification
of any defects or irregularities in any Notice of Solicited Tenders or incur any
liability for failure to give such notification.
The undersigned hereby confirms that: (i) it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer; (iii) in soliciting tenders of
Shares, it has used no soliciting materials other than those furnished by
Cinergy; and (iv) if it is a foreign broker or dealer not eligible for
membership in the NASD, it has agreed to conform to the NASD's Rules of Fair
Practice in making solicitations.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Firm Name Address (Including Zip Code)
- -------------------------------------------- --------------------------------------------
By: Area Code and Telephone Number
Title:
</TABLE>
4
<PAGE>
<PAGE>
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES
OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
<TABLE>
<CAPTION>
Outstanding Purchase Price
Title of Series of Preferred Shares (per share)
- ------------------------------------------------------- ------------- ---------------
<S> <C> <C>
Cumulative Preferred Stock
($100 par value)
4% Series.............................................. 270,000 $ 64.00
4 3/4% Series.......................................... 130,000 $ 80.00
7 7/8% Series.......................................... 800,000 $ 116.00
7 3/8% Series.......................................... 800,000 $ 110.00
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
August 20, 1996
To Our Clients:
Enclosed for your consideration are the Offer to Purchase and Proxy
Statement, dated August 20, 1996, and a separate Letter of Transmittal and Proxy
for each series of cumulative preferred stock listed above (each a "Series of
Preferred") of The Cincinnati Gas & Electric Company, an Ohio corporation and
direct utility subsidiary of Cinergy Corp. ("CG&E"), of which you own shares. As
to each Series of Preferred, the Offer to Purchase and Proxy Statement, together
with the applicable Letter of Transmittal and Proxy, constitutes the "Offer" of
Cinergy Corp. ("Cinergy") to purchase any and all shares of the Series of
Preferred ("Shares") at the purchase price per Share listed above, net to the
seller in cash, upon the terms and subject to the conditions of the Offer.
Cinergy will purchase all Shares validly tendered and not withdrawn, upon the
terms and subject to the conditions of the Offer. The Offer for a Series of
Preferred is not conditioned upon any minimum number of Shares of such Series of
Preferred being tendered and is independent of the Offer for any other Series of
Preferred. While Preferred Shareholders who wish to tender their Shares pursuant
to the Offer need not vote in favor of the proposed amendment to CG&E's Amended
Articles of Incorporation, as set forth in the Offer to Purchase and Proxy
Statement (the "Proposed Amendment"), the Offer is conditioned upon the Proposed
Amendment being approved and adopted at the Special Meeting (as defined in the
Offer to Purchase and Proxy Statement). In addition, Preferred Shareholders have
the right to vote for the Proposed Amendment regardless of whether they tender
their Shares. See "Proposed Amendment and Proxy Solicitation", "Terms of the
Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension
of Tender Period; Termination; Amendments" in the Offer to Purchase and Proxy
Statement.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT BUT NOT
REGISTERED IN YOUR NAME. A TENDER OR A VOTE OF SUCH SHARES CAN BE MADE ONLY BY
US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. ANY LETTER OF
TRANSMITTAL AND PROXY FURNISHED TO YOU IS SOLELY FOR YOUR INFORMATION AND CANNOT
BE USED BY YOU TO TENDER OR VOTE SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender and/or vote any
or all of the Shares held by us for your account, upon the terms and subject to
the conditions set forth in the Offer.
PLEASE READ THE FOLLOWING INFORMATION CAREFULLY:
<PAGE>
(1) The Offer is for any and all Shares outstanding as of August 20,
1996. The Offer for a Series of Preferred is independent of the Offer for
any other Series of Preferred.
(2) The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on September 18, 1996, unless the Offer is extended with respect
to a Series of Preferred. Your instructions to us should be forwarded to us
in ample time to permit us to submit a tender on your behalf by the
expiration of the Offer. If you would like to withdraw your Shares that we
have tendered, you can withdraw them so long as the Offer remains open or at
any time after the expiration of forty business days from the commencement
of the Offer if such tendered Shares have not been accepted for payment.
(3) While Preferred Shareholders who wish to tender their Shares
pursuant to the Offer need not vote in favor of the Proposed Amendment, the
Offer is conditioned upon the Proposed Amendment being approved and adopted
at the Special Meeting.
(4) Preferred Shareholders have the right to vote in favor of the
Proposed Amendment regardless of whether they tender their Shares.
(5) Any stock transfer taxes applicable to the sale of Shares to Cinergy
pursuant to the Offer will be paid by Cinergy, except as otherwise provided
in Instruction 6 of the Letter of Transmittal and Proxy.
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR ANY OF THEIR
RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO
WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR
HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
If you wish to have us tender and/or vote any or all of your Shares held by
us for your account upon the terms and subject to the conditions set forth in
the Offer, please so instruct us by completing, executing, detaching and
returning to us the instruction form on the detachable part hereof. An envelope
to return your instructions to us is enclosed. If you authorize tender of your
Shares, all such Shares will be tendered unless otherwise specified on the
detachable part hereof. Your instructions should be forwarded to us in ample
time to permit us to submit a tender and/or vote on your behalf by the
expiration of the Offer or the Special Meeting, as applicable.
The Offer is being made to all holders of Shares. Cinergy is not aware of
any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If Cinergy becomes aware of
any valid state statute prohibiting the making of the Offer, Cinergy will make a
good faith effort to comply with such statute. If, after such good faith effort,
Cinergy cannot comply with such statute, the Offer will not be made to, nor will
tenders be accepted from or on behalf of, holders of Shares in such state. In
those jurisdictions where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of Cinergy by the Dealer Managers (as defined in the Offer) or
one or more registered brokers or dealers licensed under the laws of such
jurisdictions.
2
<PAGE>
INSTRUCTIONS
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF
THE PREFERRED STOCK OF,
AND PROXY SOLICITATION BY,
THE CINCINNATI GAS & ELECTRIC COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase and Proxy Statement, dated August 20, 1996, and a separate Letter of
Transmittal and Proxy for each series of preferred stock of The Cincinnati Gas &
Electric Company (each a "Series of Preferred") in which the undersigned owns
shares (as to each Series of Preferred, the Offer to Purchase and Proxy
Statement, together with the applicable Letter of Transmittal and Proxy,
constitutes the "Offer") in connection with the invitation of Cinergy Corp.
("Cinergy") to the holders of each Series of Preferred to tender any and all of
their shares of a Series of Preferred ("Shares") for purchase at the purchase
price per Share listed on the front cover of the Offer to Purchase and Proxy
Statement, net to the seller in cash, upon the terms and subject to the
conditions of the Offer, and in connection with the proxy solicitation being
conducted by the Board of Directors of The Cincinnati Gas & Electric Company.
This will instruct you to tender to Cinergy the number of Shares indicated
below (or, if no number is indicated below, all Shares) which are held by you
for the account of the undersigned, upon the terms and subject to the conditions
of the Offer.
<TABLE>
<S> <C>
Series of Preferred Number of Shares to be Tendered*
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
</TABLE>
You are further instructed to vote as designated hereunder in respect of the
Proposed Amendment all shares which the undersigned is entitled to vote at the
Special Meeting:**
/ / FOR / / AGAINST / / ABSTAIN
SIGN HERE
<TABLE>
<S> <C> <C>
Signature(s): ------------------------------------------------------
Name(s):
------------------------------------------------------
Address:
------------------------------------------------------
------------------------------------------------------
Dated: , 1996
Social Security
or Taxpayer
Identification
No.: ------------------------------------------------------
</TABLE>
* By executing and returning these Instructions, unless otherwise indicated,
it will be assumed that all Shares held by us for your account are to be
tendered.
** By executing and returning these Instructions, unless otherwise indicated,
it will be assumed that all Shares held by us for your account are to be
voted FOR the Proposed Amendment.
3
<PAGE>
<PAGE>
[LOGO]
The Cincinnati Gas & Electric Company
139 East Fourth Street, Cincinnati, Ohio 45202
[LOGO]
August 20, 1996
Dear Shareholder:
Please find enclosed important information pertaining to the following two
items:
(i) a proposed amendment to the Amended Articles of Incorporation (the
"Articles") of The Cincinnati Gas & Electric Company ("CG&E") which will
be considered at a Special Meeting of its Shareholders; and
(ii) an offer by Cinergy Corp. to purchase the outstanding shares of CG&E's
cumulative preferred stock.
We will greatly appreciate your giving prompt attention to the enclosed material
which you are urged to read in its entirety.
The Articles presently limit CG&E's ability to issue securities representing
unsecured indebtedness, including short-term debt, to no more than 20% of the
aggregate of its capital, surplus and secured debt. This 20% restriction limits
CG&E's flexibility in planning and financing its business activities. With
flexibility and cost leadership being crucial factors to being successful in the
new competitive utility environment, CG&E ultimately may be placed at a
competitive disadvantage if this restriction is not removed from the Articles.
The proposed amendment, as set forth and explained in the enclosed Offer to
Purchase and Proxy Statement, would remove the 20% restriction.
Concurrently with CG&E's proxy solicitation, Cinergy Corp. is offering to
purchase the outstanding shares of CG&E's cumulative preferred stock. While you
need not vote in favor of the proposed amendment in order to tender your shares,
Cinergy's offer is conditioned upon the proposed amendment being approved and
adopted at the Special Meeting. In addition, you have the right to vote for the
proposed amendment regardless of whether you tender your shares. If you vote in
favor of the proposed amendment and it passes, you will be entitled to receive a
special cash payment in the amount of $1.00 per share for each share that you
vote, provided your shares have not been tendered. Instructions for tendering
your shares and information pertaining to the special cash payment are included
with the enclosed material.
It is important to your interests that all shareholders, regardless of the
number of shares owned, participate in the affairs of the Company. Even if you
plan to attend the Special Meeting, WE URGE YOU TO MARK, SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS INCLUDED WITHIN THE ENCLOSED LETTER OF TRANSMITTAL AND
PROXY, AND RETURN IT PROMPTLY. By signing and returning your proxy promptly, you
are assuring that your shares will be voted.
You are cordially invited to attend the Special Meeting which will be held
at CG&E's principal office, 139 East Fourth Street, Cincinnati, Ohio, on
Wednesday, September 18, 1996 at 4:00 p.m., eastern daylight saving time.
If you have questions regarding the proposed amendment or the Special
Meeting, please call MacKenzie Partners, Inc., the Information Agent, at (800)
322-2885. Questions about Cinergy's tender offer should be direct to Smith
Barney Inc. at (800) 655-4811 or Morgan Stanley & Co. Incorporated at (800)
223-2440 Extension 1965.
Thank you for your continued interest in the Company.
Sincerely yours,
<TABLE>
<S> <C>
[/S/ JACKSON H. RANDOLPH] [/S/ JAMES E. ROGERS]
Jackson H. Randolph James E. Rogers
Chairman of the Board Vice Chairman and
Chief Executive Officer
</TABLE>
<PAGE>
<PAGE>
THE CINCINNATI GAS & ELECTRIC COMPANY
139 EAST FOURTH STREET
CINCINNATI, OHIO 45202
--------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 18, 1996
-------------
To the Shareholders Of
The Cincinnati Gas & Electric Company:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of The
Cincinnati Gas & Electric Company ("CG&E") will be held at its principal office,
139 East Fourth Street, Cincinnati, Ohio, on Wednesday, September 18, 1996 at
4:00 p.m., eastern daylight saving time, for purposes of considering the removal
from the Amended Articles of Incorporation ARTICLE FOURTH, Clause 6-A(b), which
Clause limits CG&E's ability to issue unsecured indebtedness and transacting
such other business as may legally come before the meeting.
Only shareholders of record at the close of business on Monday, July 22,
1996, will be entitled to vote at the meeting and at any adjournment thereof.
Holders of cumulative preferred stock ("Preferred Shareholders"), whether or not
they now expect to be present at the meeting, are requested to mark, date and
sign the proxy contained within the accompanying Letter of Transmittal and
Proxy, and return it promptly. Preferred Shareholders who execute and deliver
the proxy contained within the accompanying Letter of Transmittal and Proxy have
the power to revoke such proxy at any time before the authority granted by the
proxy is exercised.
THE CINCINNATI GAS & ELECTRIC COMPANY
BY CHERYL M. FOLEY, SECRETARY
Dated: August 20, 1996
