SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-B/A
(Amendment No. 1 to Registration Statement on Form 8-B)
FOR REGISTRATION OF SECURITIES OF CERTAIN
SUCCESSOR ISSUERS FILED PURSUANT TO SECTION
12(b) OR (g) OF THE SECURITIES EXCHANGE
ACT OF 1934
CMS ENERGY CORPORATION
___________________________________
(Exact name of registrant as specified in its charter)
Michigan 38-2726431
________________________ ____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
________________________________ ______________
(Address of principal (Zip Code)
executive offices)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION
12(b) OF THE ACT:
Common Stock, $.01 par value per share New York Stock Exchange
______________________________________ _______________________
(Title of Class) (Name of Exchange)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION
12(g) OF THE ACT:
None.
CMS ENERGY CORPORATION
CMS Energy Corporation ("CMS Energy") hereby amends in its
entirety Item 4 of CMS Energy's Registration Statement on Form 8-B filed
with the Securities and Exchange Commission on May 6, 1987 as follows:
ITEM 4. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED
The description of the capital stock of CMS Energy required to be
described in this Item 4 is qualified in its entirety by reference to, and
is contained in, Article III of the Restated Articles of Incorporation of
CMS Energy ("Articles of Incorporation"), designated as Exhibit (3)(i) to
CMS Energy's Form S-4 Registration Statement (Registration No. 33-60007)
filed with the Securities and Exchange Commission on June 6, 1995, and
under the caption "Description of Capital Stock - CMS Energy Common Stock"
of the CMS Energy Class G Common Stock Prospectus in Post Effective
Amendment No. 3 to Form S-3 Registration Statement (Registration No.
33-57719) filed with the Securities and Exchange Commission on June 28, 1995.
Capitalized terms not defined herein have the meanings specified in the
Articles of Incorporation.
The total number of shares of all classes of stock which CMS Energy
has authority to issue is 320,000,000, of which 10,000,000 shares, par
value $.01 per share, are of a class designated Preferred Stock
("Preferred Stock"), 250,000,000 shares, par value $.01 per share, are of
a class designated Common Stock ("CMS Energy Common Stock"), and
60,000,000 shares, no par value, are of a class designated Class G Common
Stock ("Class G Common Stock"). As of November 20, 1996, 94,709,391
shares of CMS Energy Common Stock and 7,850,818 shares of Class G Common
Stock were issued and outstanding and there were no shares of Preferred
Stock issued or outstanding. The CMS Energy Common Stock and the Class G
Common Stock are hereinafter collectively referred to as the "Common
Stock". The outstanding shares of Common Stock are fully paid and non-
assessable, and any additional Common Stock, when issued, will be fully paid
and non-assessable. The shares of Common Stock may be issued from time to
time as the Board of Directors shall determine for such consideration as
shall be fixed by the Board of Directors.
A summary of the designations and the voting and other powers,
preferences and rights, and the qualifications, limitations or
restrictions thereof, of the Common Stock and of the Preferred Stock is as
follows:
CLASS G COMMON STOCK
DIVIDENDS: Dividends on the Class G Common Stock are limited to the
lesser of (i) the assets of CMS Energy legally available for dividends
under Michigan law and (ii) the Available Class G Dividend Amount.
Michigan law prohibits a dividend, if after giving it effect, CMS Energy
would not be able to pay its debts as they become due in the usual course
of business, or CMS Energy's total assets would be less than the sum of
its total liabilities plus, unless the Articles of Incorporation of CMS
Energy are amended to provide otherwise, the amount that would be needed,
if CMS Energy were to be dissolved at the time of the dividend, to satisfy
the preferential rights upon dissolution of any shareholders whose
preferential rights are superior to those receiving the assets.
Consequently, the amount allowed under clause (i) above will reflect the
amount of any net losses of CMS Energy, including the businesses
attributed to the natural gas distribution, storage and transportation
businesses conducted by Consumers Power Company and Michigan Gas Storage
Company (such businesses, collectively, will be attributed to the
"Consumers Gas Group"), and any dividends or distributions on the Class G
Common Stock or the CMS Energy Common Stock. However, such net losses,
dividends or distributions would not reduce assets legally available for
distribution on the Class G Common Stock unless the legally available
assets of CMS Energy are less than the Available Class G Dividend Amount
limitations set forth in the Articles of Incorporation. Subject to the
express terms of any outstanding Preferred Stock, the foregoing
limitations and the contractual limitations described under "Dividend
Policy," the Board of Directors may, in its sole discretion, declare and
pay dividends exclusively on either class of Common Stock, in equal or
unequal amounts, notwithstanding the respective amounts of assets
available for dividends on each class, the respective voting rights of
each class, the amounts of prior dividends declared on each class or any
other factor. It is the Board of Directors' current intention that the
declaration or payment of dividends with respect to the Class G Common
Stock shall not be reduced, suspended or eliminated as a result of factors
arising out of or relating to the electric utility business or the
non-utility businesses of CMS Energy unless such factors also require, in
the Board of Directors' sole discretion, the omission of the declaration
or reduction in payment of dividends on both the CMS Energy Common Stock
and the Class G Common Stock.
The "Available Class G Dividend Amount," on any date ("calculation
date"), means the excess of:
(i) the product of (a) the Gas Group Fraction as of such
calculation date and (b) an amount equal to the total assets
attributed to the Consumers Gas Group less the total liabilities
attributed to the Consumers Gas Group as of such calculation date
determined in accordance with generally accepted accounting principles
as in effect at such time applied on a basis consistent with that
applied in determining Consumers Gas Group income; over
(ii) the product of (a) the Gas Group Fraction as of such
calculation date and (b) the amount that would be needed to satisfy
any preferential rights to which holders of any outstanding shares of
preferred stock attributed to the Consumers Gas Group are entitled as
of such calculation date;
provided that such excess will be reduced by an amount, if any, sufficient
to ensure that the Consumers Gas Group will be able to pay its debts as
they become due in the usual course of business.
The "Gas Group Fraction," as of any calculation date, represents the
fractional interest in the businesses attributed to the Consumers Gas
Group that is held by the holders of the outstanding Class G Common Stock.
It is a fraction, the numerator of which is the number of shares of Class
G Common Stock outstanding on such date and the denominator of which is
the sum of the number of shares of Class G Common Stock issued and
outstanding on such date plus the number of Retained Interest Shares on
such date, but such fraction will never be greater than one.
The "Retained Interest Shares" as of any date represents the interest
in the businesses attributed to the Consumers Gas Group that is not held
by the holders of the outstanding shares of Class G Common Stock, but is
retained by CMS Energy. The Retained Interest Shares are not deemed to be
outstanding shares of Class G Common Stock and have no voting rights. The
number of Retained Interest Shares will initially be the number of shares
of Class G Common Stock that the Board of Directors deems, prior to the
first issuance of Class G Common Stock, to represent 100% of the common
shareholders' equity of CMS Energy attributable to the Consumers Gas
Group, less the number of shares of Class G Common Stock to be first
issued. The number from time to time will be:
(i) adjusted as appropriate to reflect subdivisions (by stock
split or otherwise) and combinations (by reverse stock split or
otherwise) of Class G Common Stock and dividends or distributions of
shares of Class G Common Stock to holders thereof and other
reclassifications of Class G Common Stock;
(ii) decreased by (A) the number of Retained Interest Shares
issued or sold by CMS Energy, including any sold pursuant to the
Offering, (B) the number of Retained Interest Shares issued upon
conversion or exercise of Convertible Securities (as defined below)
which are not attributed to the Consumers Gas Group, (C) the number of
Retained Interest Shares issued by CMS Energy as a dividend or
distribution or by reclassification or exchange to holders of CMS
Energy Common Stock and (D) the number (rounded, if necessary, to the
nearest whole number) equal to the aggregate fair value (as determined
by the Board of Directors) of assets or properties of CMS Energy which
cease to be attributable to the Consumers Gas Group in consideration
for a decrease in the Retained Interest Shares determined by dividing
such amount by the Fair Market Value of one share of Class G Common
Stock as of the date such assets or properties cease to be
attributable to the Consumers Gas Group; and
(iii) increased by (A) the number of issued and outstanding shares
of Class G Common Stock repurchased by CMS Energy with assets which
are not attributed to the Consumers Gas Group, and (B) the number
(rounded, if necessary, to the nearest whole number) equal to the
aggregate fair value (as determined by the Board of Directors) of
assets or properties of CMS Energy that are attributed to the
Consumers Gas Group in consideration for an increase in the number of
Retained Interest Shares divided by the Fair Market Value of one share
of Class G Common Stock as of the date of such attribution.
"Convertible Securities" means any securities of CMS Energy that are
convertible into or exercisable for or evidence the right to acquire any
shares of CMS Energy Common Stock or Class G Common Stock, whether
at such time or upon the occurrence of certain events, pursuant to antidilution
provisions of such securities or otherwise.
VOTING: Except as set forth below and except as otherwise provided by
law, the holders of both classes of Common Stock vote together as a single
class on all matters as to which all holders of Common Stock are entitled
to vote. On all matters to be voted on by the holders of both classes of
Common Stock voting together as a single class (i) each share of
outstanding CMS Energy Common Stock would have one vote and (ii) each
share of outstanding Class G Common Stock would have one vote. If shares
of only one class of Common Stock are outstanding, each share of that
class will have one vote. If any class of Common Stock of CMS Energy is
entitled to vote separately as a class, with respect to any matter, each
share of that class shall be entitled to one vote in the separate vote on
such matter. Such right to vote is not cumulative.
Under Michigan law, the approval of the holders of a majority of the
outstanding shares of a class of Common Stock, voting as a separate class,
would be necessary for authorizing, effecting or validating the merger or
consolidation of CMS Energy into or with any other corporation if such
merger or consolidation would adversely affect the powers or special
rights of such class of stock, and to authorize any amendment to the
Articles of Incorporation that would increase or decrease the aggregate
number of authorized shares of such class or alter or change the powers,
preferences or special rights of the shares of such class so as to affect
them adversely. The Articles of Incorporation also provide that unless
the vote or consent of a greater number of shares shall then be required
by law, the approval of the holders of a majority of the outstanding
shares of either class of Common Stock, voting as a separate class, will
be necessary for authorizing, effecting or validating the merger or
consolidation of CMS Energy into or with any other corporation if such
merger or consolidation would adversely affect the powers or special
rights of such class of Common Stock, either directly by amendment to the
Articles of Incorporation or indirectly by requiring the holders of such
class to accept or retain, in such merger or consolidation, anything other
than (i) shares of such class or (ii) shares of the surviving or resulting
corporation, having, in either case, powers and special rights identical
to those of such class prior to such merger or consolidation. The effect
of these provisions may be to permit the holders of a majority of the
outstanding shares of either class of Common Stock to block any such
merger or amendment which would adversely affect the powers or special
rights of holders of such class of Common Stock.
EXCHANGE OR REDEMPTION: The Class G Common Stock is
subject to exchange or redemption, as the case may be, upon the terms
described below.
At any time after the date on which all of the consolidated assets and
liabilities attributed to the Consumers Gas Group (and no other assets or
liabilities) become the consolidated assets and liabilities of a single
corporation, all of the common stock of which is owned by CMS Energy ("Gas
Group Subsidiary"), the Board of Directors, in its sole discretion,
provided that there are assets of CMS Energy legally available therefor,
may declare that all of the outstanding shares of Class G Common Stock
will be exchanged for a number of outstanding shares of common stock of
the Gas Group Subsidiary equal to the product of the Gas Group Fraction
and the number of all of the outstanding shares of common stock of the Gas
Group Subsidiary, on a pro rata basis, each of which shall, upon issuance,
be fully paid and nonassessable. CMS Energy would retain the balance of
the outstanding shares of the common stock of the Gas Group Subsidiary.
Upon the Disposition, in one transaction or a series of related
transactions, by CMS Energy of all or substantially all of the properties
and assets attributed to the Consumers Gas Group (other than in connection
with the Disposition by CMS Energy of all of its properties and assets in
one transaction or a series of related transactions which results in the
dissolution, liquidation or winding up of CMS Energy as set forth under
"Liquidation" below) to any person, entity or group (other than (a)
holders of all outstanding shares of Class G Common Stock on a pro rata
basis or (b) a person, entity or group in which CMS Energy, directly or
indirectly, owns a majority equity interest), CMS Energy is required, on
or prior to the first Business Day (as defined below) following the 90th
day following the consummation of such Disposition, to exchange each
outstanding share of Class G Common Stock for a number of fully paid and
nonassessable shares of CMS Energy Common Stock having a Fair Market Value
equal to 110% of the Fair Market Value of one share of Class G Common
Stock as of the date of the first public announcement by CMS Energy of
such Disposition.
If immediately after any event, CMS Energy, directly or indirectly,
owns less than a majority equity interest in any person, entity or group
in which CMS Energy, directly or indirectly, owned a majority equity
interest immediately prior to the occurrence of such event, a Disposition
of all of the properties and assets attributed to the Consumers Gas Group
owned by such person, entity or group shall be deemed to have occurred.
In the case of a Disposition of properties and assets in a series of
related transactions, such Disposition shall not be deemed to have been
consummated until the consummation of the last of such transactions.
"Business Day" means each weekday other than any day on which any
relevant class of Common Stock is not traded on any national securities
exchange or the National Association of Securities Dealers Automated
Quotations National Market or in the over-the-counter market.
"Disposition" means a sale, transfer, assignment or other disposition
(whether by merger, consolidation, sale or contribution of assets,
properties or stock or otherwise), but does not include (1) an attribution
of assets or properties of CMS Energy to the Consumers Gas Group if such
attribution increases the Retained Interest Shares, or (2) assets or
properties of CMS Energy ceasing to be attributed to the Consumers Gas
Group if the result is a decrease in the Retained Interest Shares.
"Fair Market Value" of shares of either class of Common Stock on
any date means the average of the daily closing prices thereof for the
period of 20 consecutive Business Days commencing on the 30th Business Day
prior to such date. The closing price of shares of a class of Common
Stock for each Business Day shall be (i) if such shares are listed or
admitted to trading on a national securities exchange, the closing price
on the New York Stock Exchange Composite Tape (or any successor composite
tape reporting transactions on national securities exchanges) or, if such
New York Stock Exchange Composite Tape shall not be in use or shall not
report transactions in such shares, the last reported sales price regular
way on the principal national securities exchange on which such shares are
listed or admitted to trading (which shall be the national securities
exchange on which the greatest number of such shares of stock has been
traded during such 20 consecutive Business Days), or, if there is no
transaction on any such Business Day in any such situation, the mean of
the bid and asked prices on such Business Day, or (ii) if such shares are
not listed or admitted to trading on any such exchange, the closing price,
if reported, or, if the closing price is not reported, the average of the
closing bid and asked prices as reported by the National Association of
Securities Dealers Automated Quotations or a similar source selected from
time to time by CMS Energy for this purpose, and (iii) reduced, if such
Business Day is prior to any "ex" date or any similar date occurring
during such period for any dividend or distribution (other than as
contemplated in (iv) below) paid or to be paid with respect to such
shares, by the fair market value (as determined by the Board of Directors)
of the per share amount of such dividend or distribution, and (iv)
appropriately adjusted, if such Business Day is prior to (A) the effective
date of any subdivision (by stock split, stock dividend, or otherwise) or
combination (by reverse stock split or otherwise) of such shares, or
(B) the "ex" date or any similar date for any dividend or distribution of
shares of such class of Common Stock on the outstanding shares of such
class of Common Stock, occurring during such period, to reflect such
subdivision, combination, dividend or distribution. In the event such
closing or bid and asked prices are unavailable, the Fair Market Value of
such shares shall be determined by the Board of Directors.
"Substantially all of the properties and assets attributed to the
Consumers Gas Group" means a portion of such properties and assets (A)
that represents at least 80% of the then-current fair market value (as
determined by the Board of Directors) of the properties and assets
attributed to the Consumers Gas Group as of such date or (B) from which
were derived at least 80% of the aggregate revenues for the immediately
preceding twelve fiscal quarterly periods of CMS Energy (calculated on a
pro forma basis to include revenues derived from any of such properties
and assets acquired during such periods) derived from the properties and
assets attributed to the Consumers Gas Group as of such date.
In addition, CMS Energy may, by a majority vote of the Board of
Directors then in office, at any time exchange for each outstanding share
of Class G Common Stock a number of fully paid and nonassessable shares of
CMS Energy Common Stock having a Fair Market Value equal to 115% of the
Fair Market Value of one share of Class G Common Stock as of the date of
the first public announcement by CMS Energy of such exchange.
After the exchange date on which all outstanding Class G Common Stock
was exchanged, any share of Class G Common Stock that is issued on
conversion or exercise of any Convertible Securities will, immediately
upon issuance pursuant to such conversion or exercise and without any
notice or any other action on the part of CMS Energy or the Board of
Directors or the holder of such share of Class G Common Stock: (A) in the
event the then-outstanding Class G Common Stock was exchanged for CMS
Energy Common Stock on such exchange date as set forth in the first or
sixth immediately preceding paragraphs, be exchanged for the kind and
amount of shares of capital stock and other securities and property that a
holder of such Convertible Security would have been entitled to receive
pursuant to the terms of such Convertible Security had such terms provided
that the conversion or exercise privilege in effect immediately prior to
any exchange by CMS Energy of any of its capital stock for shares of any
other capital stock of CMS Energy would be adjusted so that the holder of
any such Convertible Security thereafter surrendered for conversion or
exercise would be entitled to receive the number of shares of capital
stock of CMS Energy and other securities and property such holder would
have owned immediately following such action had such Convertible Security
been converted or exercised immediately prior thereto; or (B) in the event
the then-outstanding Class G Common Stock was exchanged for common stock
of the Gas Group Subsidiary as set forth in the seventh immediately
preceding paragraph, be redeemed, to the extent of the assets of CMS
Energy legally available therefor, for $.01 in cash. The provisions of
clause (A) above do not apply to the extent that equivalent adjustments
are otherwise made pursuant to the provisions of such Convertible
Securities.
Under Section 303 of the Michigan Business Corporation Act ("MBCA"),
upon the prior approval of shareholders, a board of directors may amend a
corporation's articles of incorporation to increase the number of
authorized shares of any class or series of stock to the number that will
be sufficient, when added to the previously authorized but unissued shares
of such class or series, to satisfy the conversion privileges of any
convertible securities of the corporation. The Articles of Incorporation
deem the required exchange after the Disposition, in one transaction or a
series of related transactions, of all or substantially all of the
properties and assets attributed to the Consumers Gas Group and the
optional exchange at a 15% Premium of Class G Common Stock by CMS Energy
for CMS Energy Common Stock, each as discussed above, as conversion
privileges within the meaning of Section 303 of the MBCA. Accordingly, in
order to give effect to any such exchange, the Board of Directors would
have the authority to amend the Articles of Incorporation to increase the
authorized shares of capital stock generally and of CMS Energy Common
Stock specifically to the number that would be sufficient, when added to
the previously authorized but unissued shares of capital stock and CMS
Energy Common Stock, to give effect to such exchange.
GENERAL EXCHANGE PROVISIONS: In the event of any exchange of
Class GCommon Stock, CMS Energy will cause to be given to each holder of
Class GCommon Stock to be so exchanged a notice stating (A) that shares of Class
G Common Stock will be exchanged, (B) the date of the exchange, (C) the
kind and amount of shares of capital stock or cash and/or securities or
other property to be received by such holder with respect to each share of
such Class G Common Stock held by such holder, including details as to the
calculation thereof, (D) the place or places where certificates for shares
of Class G Common Stock, properly endorsed or assigned for transfer
(unless CMS Energy shall waive such requirement), are to be surrendered
for delivery of certificates for shares of such capital stock or cash
and/or securities or other property and (E) that, except as provided in
the following paragraph, dividends or other distributions on Class G
Common Stock will cease to be paid as of such exchange date. Such notice
shall be sent by first-class mail, postage prepaid, not less than 30 days
nor more than 60 days prior to the exchange date and in any case to each
holder of the Class G Common Stock to be exchanged at such holder's
address as the same appears on the stock transfer books of CMS Energy.
Neither the failure to mail such notice to any particular holder of Class
G Common Stock nor any defect therein shall affect the sufficiency thereof
with respect to any other holder of Class G Common Stock.
No adjustments in respect of dividends or other distributions will be
made upon the exchange of any shares of Class G Common Stock; provided,
however, that if the exchange date with respect to Class G Common Stock
shall be subsequent to the record date for the payment of a dividend or
other distribution thereon or with respect thereto, the holders of shares
of Class G Common Stock at the close of business on such record date shall
be entitled to receive the dividend or other distribution payable on or
with respect to such shares on the date set for payment of such dividend
or other distribution, notwithstanding the exchange of such shares or CMS
Energy's default in payment of the dividend or distribution due on such
date.
Before any holder of shares of Class G Common Stock will be entitled
to receive certificates representing shares of any capital stock or cash
and/or securities or other property to be received by such holder with
respect to any exchange, such holder shall surrender at such office as CMS
Energy shall specify certificates for such shares of Common Stock,
properly endorsed or assigned for transfer (unless CMS Energy shall waive
such requirement). CMS Energy will as soon as practicable after such
surrender of certificates representing such shares of Class G Common Stock
deliver to the person for whose account such shares of Class G Common
Stock were so surrendered, or to the nominee or nominees of such person,
certificates representing the number of whole shares of the kind of
capital stock or cash and/or securities or other property to which such
person shall be entitled as aforesaid, together with any fractional
payment referred to in the next paragraph.
CMS Energy will not be required to issue or deliver fractional shares
of any class of capital stock or any fractional securities to any holder
of Class G Common Stock upon any exchange, dividend or other distribution.
If more than one share of Class G Common Stock shall be held at the same
time by the same holder, CMS Energy may aggregate the number of shares of
any class of capital stock that shall be issuable or the amount of
securities that shall be deliverable to such holder upon any exchange,
dividend or other distribution (including any fractions of shares or
securities). If the number of shares of any class of capital stock or the
amount of securities remaining to be issued or delivered to any holder of
Class G Common Stock is a fraction, CMS Energy will, if such fraction is
not issued or delivered to such holder, pay a cash adjustment in respect
of such fraction in an amount equal to the fair market value of such
fraction on the fifth Business Day prior to the date such payment is to be
made. For purposes of the preceding sentence, "fair market value" of any
fraction will be (i) in the case of any fraction of a share of any class
of Common Stock, the product of such fraction and the Fair Market Value of
one share of such Common Stock and (ii) in the case of any other
fractional security, such value as is determined by the Board of
Directors.
From and after any applicable exchange date, all rights of a holder of
shares of Class G Common Stock that were exchanged shall cease except for
the right, upon surrender of the certificates representing such shares of
Class G Common Stock, to receive certificates representing shares of the
kind and amount of capital stock or cash and/or securities or other
property for which such shares were exchanged or redeemed, together with
any fractional payment contemplated by the immediately preceding paragraph
and rights to dividends or other distributions as provided in the third
immediately preceding paragraph. No holder of a certificate that
immediately prior to the applicable exchange date for Class G Common Stock
represented shares of Class G Common Stock will be entitled to receive any
dividend or other distribution with respect to shares of any kind of
capital stock into which such Class G Common Stock was exchanged until
surrender of such holder's certificate for a certificate or certificates
representing shares of such capital stock. Upon such surrender, there
shall be paid to the holder the amount of any dividends or other
distributions (without interest) which theretofore became payable with
respect to a record date after the exchange date, but that were not paid
by reason of the foregoing, with respect to the number of whole shares of
the kind of capital stock represented by the certificate or certificates
issued upon such surrender. From and after an exchange date for Class G
Common Stock, CMS Energy will, however, be entitled to treat the
certificates for such Class G Common Stock that have not yet been
surrendered for exchange as evidencing the ownership of the number of
whole shares of the kind or kinds of capital stock for which the shares of
such Class G Common Stock represented by such certificates shall have been
exchanged, notwithstanding the failure to surrender such certificates.
CMS Energy will pay any and all documentary, stamp or similar issue or
transfer taxes that may be payable in respect of the issue or delivery of
any shares of capital stock on exchange of shares of Class G Common Stock.
CMS Energy will not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issue and delivery of
any shares of capital stock in a name other than that in which the shares
of the Class G Common Stock so exchanged were registered, and no such
issue or delivery shall be made unless and until the person requesting
such issue has paid to CMS Energy the amount of any such tax, or has
established to the satisfaction of CMS Energy that such tax has been paid.
LIQUIDATION: In the event of the dissolution, liquidation or winding
up of CMS Energy, whether voluntary or involuntary, after payment or
provision for payment of the debts and other liabilities of CMS Energy
and after there shall have been paid or set apart for the holders of
Preferred Stock the full preferential amounts (including any accumulated
and unpaid dividends) to which they are entitled, the holders of CMS
Energy Common Stock and Class G Common Stock shall be entitled to receive,
on a per share basis, the same portion of all of the assets of the
Corporation remaining for distribution to the holders of Common Stock,
regardless of whether or not any of such assets were attributed to the
Consumers Gas Group. Neither the merger or consolidation of CMS Energy
into or with any other corporation, the merger or consolidation of any
other corporation into or with CMS Energy, nor any sale, transfer or lease
of all or any part of the assets of CMS Energy, shall be deemed to be a
dissolution, liquidation or winding up for the purposes of this provision.
Because CMS Energy has subsidiaries which have debt obligations and
other liabilities of their own, CMS Energy's rights and the rights of its
creditors and its shareholders to participate in the distribution of
assets of any subsidiary upon the latter's liquidation or recapitalization
will be subject to prior claims of the subsidiary's creditors, except to
the extent that CMS Energy may itself be a creditor with recognized claims
against the subsidiary.
SUBDIVISION AND COMBINATION: If CMS Energy subdivides (by
stock split, stock dividend or otherwise) or combines (by reverse stock split or
otherwise) the outstanding shares of either Class G Common Stock or CMS
Energy Common Stock, the voting and liquidation rights of shares of CMS
Energy Common Stock relative to Class G Common Stock will be appropriately
adjusted so as to avoid any dilution in aggregate voting or liquidation
rights of either class of Common Stock. For example, in case of CMS
Energy were to effect a two-for-one split of Class G Common Stock, the per
share liquidation rights of CMS Energy Common Stock would be multiplied by
two in order to avoid dilution in the aggregate liquidation rights of
holders of CMS Energy Common Stock and each post-split share of Class G
Common Stock would have one-half of a vote.
DETERMINATIONS BY THE BOARD OF DIRECTORS: Any determinations
made in compliance with applicable law by the Board of Directors under any of
the provisions in the Articles of Incorporation would be final and binding on
all shareholders of CMS Energy.
OTHER RIGHTS: The Articles of Incorporation provide that holders of
Common Stock will not have any preemptive rights to subscribe for or
purchase any additional shares of the capital stock of CMS Energy of any
class now or hereafter authorized, or Preferred Stock, bonds, debentures,
or other obligations or rights or options convertible into or exchangeable
for or entitling the holder or owner to subscribe for or purchase any
shares of capital stock, or any rights to exchange shares issued for
shares to be issued.
RETAINED INTEREST OF CMS ENERGY IN CONSUMERS GAS GROUP;
GAS GROUP FRACTION: The "Retained Interest" represents the interest in the
common shareholders' equity of CMS Energy attributed to the Consumer Gas Group
that would be deemed to be retained by CMS Energy after shares of Class G
Common Stock are distributed or sold in the Offering or subsequent public
offerings.
The Gas Group Fraction is the percentage interest in the common
shareholders' equity attributed to the Consumers Gas Group that would be
represented at any time by the issued and outstanding shares of Class G
Common Stock. If shares of Class G Common Stock other than Retained
Interest Shares were sold, the Retained Interest Shares would not be
reduced, but the Retained Interest as a percentage of the common
shareholders' equity attributed to the Consumers Gas Group would nonethe-
less be reduced, and the Gas Group Fraction would be increased
accordingly. As shares of Class G Common Stock are offered and sold from
time to time by CMS Energy, it will identify the number of shares of Class
G Common Stock offered and sold which would (i) decrease the Retained
Interest Shares, or (ii) increase the Gas Group Fraction; the sum of the
percentage equal to the Gas Group Fraction and the percentage of the
common shareholders' equity represented by the Retained Interest would
always equal 100%. A determination as to whether shares of Class G Common
Stock which are sold are or are not Retained Interest Shares would be made
by the Board of Directors, in its sole discretion, after consideration of
a number of factors, including, among others, the relative levels of
internally generated cash flows of each business of CMS Energy, the
capital expenditure plans of and investment opportunities available to
each business of CMS Energy and the availability, cost and time associated
with alternative financing sources.
Any issuance of shares of Class G Common Stock would dilute the
relative voting power of holders of shares of Class G Common Stock
outstanding prior to such issuance.
The Board of Directors could, in its sole discretion, determine from
time to time to cause cash or other property attributed to the Consumers
Gas Group to cease to be attributed to the Consumers Gas Group, which
would decrease the Retained Interest Shares and the Retained Interest as a
percentage of the common shareholders' equity attributed to the Consumers
Gas Group, and would increase the Gas Group Fraction. The Board of
Directors could, in its sole discretion, determine from time to time to
attribute additional cash or other property to the Consumers Gas Group,
which would increase the Retained Interest Shares and the Retained
Interest as a percentage of the common shareholders' equity attributed to
the Consumers Gas Group, and decrease the Gas Group Fraction. The Board
of Directors could determine, in its sole discretion, to make such
attributions after consideration of a number of factors, including, among
others, the relative levels of internally generated cash flows of each
business of CMS Energy, the long-term business prospects for each business
of CMS Energy, including the Consumers Gas Group, the capital expenditure
plans of and the investment opportunities available to each business of
CMS Energy and the availability, cost and time associated with alternative
financing sources.
In the event of any dividend or other distribution on outstanding
shares of Class G Common Stock while CMS Energy has a Retained Interest,
the Consumers Gas Group's financial statements would be charged in respect
of the Retained Interest with an amount equal to the product of (i) the
aggregate amount paid in respect of such dividend or other distribution,
times (ii) a fraction, the numerator of which is the Retained Interest
Shares and the denominator of which is the total number of shares of Class
G Common Stock then issued and outstanding.
In the event that CMS Energy repurchases shares of Class G Common
Stock for consideration that is not attributed to the Consumers Gas Group,
the Retained Interest Shares and the Retained Interest as a percentage of
the common shareholders' equity attributed to the Consumers Gas Group
would increase, and the Gas Group Fraction would decrease accordingly. In
the event that CMS Energy repurchases shares of Class G Common Stock for
consideration that is attributed to the Consumers Gas Group, the Retained
Interest Shares would not change, but the Retained Interest as a
percentage of the common shareholders' equity attributed to the Consumers
Gas Group would increase, and the Gas Group Fraction would decrease
accordingly. The Board of Directors could, in its sole discretion,
determine whether repurchases of Class G Common Stock should be made with
consideration attributed to the Consumers Gas Group by considering a
number of factors, including, among others, the relative levels of
internally generated cash flows of each business of CMS Energy, the
long-term business prospects for each business of CMS Energy, the capital
expenditure plans of and the investment opportunities available to each
business of CMS Energy and the availability, cost and time associated with
alternative financing sources.
CMS ENERGY COMMON STOCK
DIVIDENDS: The Board of Directors has stated its intention to declare
and pay dividends on the CMS Energy Common Stock based primarily on the
earnings and financial condition of CMS Energy. See "Dividend Policy"
above. The results of operations and financial condition of the
businesses attributed to the Consumers Gas Group will continue to be
reflected in the consolidated financial statements of CMS Energy, and such
financial statements will disclose the interest of the holders of
outstanding shares of Class G Common Stock in the Consumer Gas Group.
VOTING: Except as described herein, the holders of outstanding Class
G Common Stock will vote together with the holders of the outstanding CMS
Energy Common Stock as a single class on all matters as to which all
common shareholders are entitled to vote.
On all matters to be voted on by the holders of Class G Common Stock
and CMS Energy Common Stock together as a single class, subject to the
antidilution provisions set forth under "Class G Common Stock --
Liquidation, Subdivision and Combination" above, each outstanding share of
Class G Common Stock and each outstanding share of CMS Energy Common
Stock will have one vote. Such right to vote is not cumulative.
Under Michigan law, the approval of the holders of a majority of the
outstanding shares of a class of Common Stock, voting as a separate class,
would be necessary for authorizing, effecting or validating the merger of
consolidation of CMS Energy into or with any other corporation if such
merger or consolidation would adversely affect the powers or special
rights of such class of stock, and to authorize any amendment to the
Articles of Incorporation that would increase or decrease the aggregate
number of authorized shares of such class or alter or change the powers,
preferences or special rights of the shares of such class so as to affect
them adversely. The Articles of Incorporation also provide that unless
the vote or consent of a greater number of shares shall then be required
by law, the approval of the holders of a majority of the outstanding
shares of either class of Common Stock, voting as a separate class, will
be necessary for authorizing, effecting or validating the merger or
consolidation of CMS Energy into or with any other corporation if such
merger or consolidation would adversely affect the powers or special
rights of such class of Common Stock, either directly by amendment to the
Articles of Incorporation or indirectly by requiring the holders of such
class to accept or retain, in such merger or consolidation, anything other
than (i) shares of such class or (ii) shares of the surviving or resulting
corporation, having, in either case, powers and special rights identical
to those of such class prior to such merger or consolidation. The effect
of these provisions may be to permit the holders of a majority of the
outstanding shares of either class of Common Stock to block any such
merger or amendment which would adversely affect the powers or special
rights of holders of such class of common Stock.
Neither CMS Energy nor any holders of CMS Energy Common Stock would
be entitled to vote with respect to Retained Interest Shares.
LIQUIDATION, SUBDIVISION AND COMBINATION: The rights, if any,
of the holders of CMS Energy Common Stock upon the voluntary or involuntary
liquidation, merger, subdivision, combination, consolidation, distribution
or sale of assets, dissolution or winding up of CMS Energy are as set
forth under "Class G Common Stock--Liquidation" and "Class G Common
Stock--Subdivision and Combination" above.
EXCHANGE OR REDEMPTION: The Articles of Incorporation do
not provide for either the mandatory or optional exchange or redemption of
CMS Energy Common Stock but do provide that Class G Common Stock
may be exchanged for CMS Energy Common Stock as described below.
CMS Energy cannot predict the impact of the potential for such exchanges
on the market price of CMS Energy Common Stock.
At any time after CMS Energy has transferred all of the assets and
liabilities attributed to the Consumers Gas Group to a subsidiary of CMS
Energy which has no other assets or liabilities, CMS Energy, in the sole
discretion of the Board of Directors, may exchange for all outstanding
shares of Class G Common Stock a number of shares of common stock of
such subsidiary equal to the fractional interest in the common shareholders
equity attributed to Consumers Gas Group represented by the outstanding
shares of Class G Common Stock multiplied by the number of outstanding
shares of common stock of such subsidiary. CMS Energy will retain the
balance of the outstanding shares of common stock of such subsidiary,
which balance will be attributed to CMS Energy on account of its retaining
that interest in the common shareholders equity of CMS Energy attributed
to Consumers Gas Group that is not represented by the outstanding shares
of Class G Common Stock.
In the event of a disposition by sale, transfer, assignment or other
disposition ("Disposition") of all or substantially all of the properties
and assets attributed to the Consumers Gas Group to any person (other than
to the holders of all outstanding shares of Class G Common Stock or to a
person in which CMS Energy, directly or indirectly, owns at least a
majority equity interest), CMS Energy is required, subject to certain
exceptions and conditions, to exchange for each outstanding share of Class
G Common Stock a number of shares of CMS Energy Common Stock having
a fair market value equal to 110% of the fair market value of one share of Class
G Common Stock as of the date of the first public announcement by CMS
Energy of such Disposition (a "10% Premium"). CMS Energy also may, in the
sole discretion of the Board of Directors, at any time, exchange for each
outstanding share of Class G Common Stock a number of shares of CMS Energy
Common Stock having a fair market value equal to 115% of the fair market
value of one share of Class G Common Stock as of the date of the first
public announcement by CMS Energy of such exchange (a "15% Premium").
Under Section 303 of the MBCA, upon the prior approval of
shareholders, a board of directors may amend a corporation's articles of
incorporation to increase the number of authorized shares of any class or
series of stock to the number that will be sufficient, when added to the
previously authorized but unissued shares of such class or series, to
satisfy the conversion privileges of any convertible securities of the
corporation. The Articles of Incorporation deem the required exchange at
a 10% Premium after the Disposition, in one transaction or a series of
related transactions, of all or substantially all of the properties and
assets attributed to the Consumers Gas Group and the optional exchange at
a 15% Premium of Class G Common Stock by CMS Energy for CMS Energy
Common Stock, each as discussed above, as conversion privileges within the
meaning of Section 303 of the MBCA. Accordingly, in order to give effect
to any such exchange, the Board of Directors would have the authority to
amend the Articles of Incorporation to increase the authorized shares of
capital stock generally and of CMS Energy Common Stock specifically to the
number that would be sufficient, when added to the previously authorized
but unissued shares of capital stock and CMS Energy Common Stock, to give
effect to such exchange.
OTHER RIGHTS: The Articles of Incorporation provide that holders of
Common Stock will not have any preemptive rights to subscribe for or
purchase any additional shares of the capital stock of CMS Energy of any
class now or hereafter authorized, or Preferred Stock, bonds, debentures,
or other obligations or rights or options convertible into or exchangeable
for or entitling the holder or owner to subscribe for or purchase any
shares of capital stock, or any rights to exchange shares issued for
shares to be issued.
CMS ENERGY PREFERRED STOCK
The authorized Preferred Stock may be issued without the approval of
the holders of Common Stock in one or more series, from time to time, with
each such series to have such designation, powers, preferences and
relative, participating, optional or other special rights, voting rights,
if any, and qualifications, limitations or restrictions thereof, as shall
be stated in a resolution providing for the issue of any such series
adopted by CMS Energy's Board of Directors. The Articles of Incorporation
provide that holders of Preferred Stock will not have any preemptive
rights to subscribe for or purchase any additional shares of the capital
stock of CMS Energy of any class now or hereafter authorized, or any
Preferred Stock, bonds, debentures or other obligations or rights or
options convertible into or exchangeable for or entitling the holder or
owner to subscribe for or purchase any shares of capital stock. The
future issuance of Preferred Stock may have the effect of delaying,
deterring or preventing a change in control of CMS Energy.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this application for
registration to be signed on its behalf by the undersigned, thereunto duly
authorized.
CMS ENERGY CORPORATION
By: /s/ Alan M. Wright
________________________
Alan M. Wright
Senior Vice President,
Chief Financial Officer
and Treasurer
Dated: November 21, 1996
<PAGE>
