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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 7, 1999
REGISTRATION NO. 333-68937
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333-68937-01
333-68937-02
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CMS ENERGY CORPORATION CMS ENERGY TRUST II CMS ENERGY TRUST III
(Exact name of registrant as specified in (Exact name of registrant as specified (Exact name of registrant as specified
its charter) in its charter) in its charter)
MICHIGAN DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization) incorporation or organization)
38-2726431 52-6913761 TO BE APPLIED FOR
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
FAIRLANE PLAZA SOUTH ALAN M. WRIGHT ALAN M. WRIGHT
330 TOWN CENTER DRIVE, SUITE 1100 SENIOR VICE PRESIDENT AND CHIEF SENIOR VICE PRESIDENT AND CHIEF
DEARBORN, MICHIGAN 48126 FINANCIAL OFFICER FINANCIAL OFFICER
(313) 436-9200 CMS ENERGY CORPORATION CMS ENERGY CORPORATION
(Address, including zip code, and telephone FAIRLANE PLAZA SOUTH FAIRLANE PLAZA SOUTH
number, including, area code, of registrant's 330 TOWN CENTER DRIVE, SUITE 1100 330 TOWN CENTER DRIVE, SUITE 1100
principal offices) DEARBORN, MICHIGAN 48126 DEARBORN, MICHIGAN 48126
(313) 436-9200 (313) 436-9200
(Name, address, including zip code, (Name, address, including zip code,
and telephone number, including area and telephone number, including area
code, of agent for service) code, of agent for service)
-------------------------
It is respectfully requested that the Commission send copies of all notices, orders and communications to:
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MICHAEL D. VAN HEMERT, ESQ.
ASSISTANT GENERAL COUNSEL
CMS ENERGY CORPORATION
FAIRLANE PLAZA SOUTH
330 TOWN CENTER DRIVE, SUITE 1100
DEARBORN, MICHIGAN 48126
(313) 436-9602
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 7, 1998
CMS ENERGY CORPORATION
CMS ENERGY COMMON STOCK
CLASS G COMMON STOCK
SENIOR DEBENTURES
SUBORDINATED DEBENTURES
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
GUARANTEES
AND
CMS ENERGY TRUST II
CMS ENERGY TRUST III
TRUST PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CMS ENERGY CORPORATION
OFFERING PRICE: $1,500,000,000
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We may offer, from time to time:
(i) shares of CMS Energy Common Stock,
(ii) shares of Class G Common Stock,
(iii) unsecured senior or subordinated debt securities consisting of
debentures, convertible debentures, notes and other unsecured evidence of
indebtedness,
(iv) stock purchase contracts to purchase CMS Energy Common Stock,
(v) stock purchase units, each representing ownership of a stock purchase
contract and unsecured senior or subordinated debt securities or trust preferred
securities or debt obligations of third parties, including U.S. Treasury
Securities, securing the holder's obligation to purchase the CMS Energy Common
Stock under the stock purchase contract, or any combination of the above, and
(vi) Guarantees of CMS Energy with respect to Trust Preferred Securities of
CMS Energy Trusts II and III.
For each type of securities listed above, the amount, price and terms will be
determined at or prior to the time of sale.
CMS Energy Trust II and CMS Energy Trust III, which are Delaware business
trusts, may offer trust preferred securities. The trust preferred securities
represent preferred undivided beneficial interests in the assets of CMS Energy
Trust II and CMS Energy Trust III in amounts, at prices and on terms to be
determined at or prior to the time of sale.
We will provide the specific terms of these securities in an accompanying
prospectus supplement or supplements. You should read this prospectus and the
accompanying prospectus supplement or supplements carefully before you invest.
CMS Energy Common Stock and Class G Common Stock are traded on the New York
Stock Exchange under the symbol "CMS". CMS Energy Common Stock and Class G
Common Stock sold pursuant to a prospectus supplement or supplements
accompanying this prospectus will also be listed for trading on the New York
Stock Exchange, subject to official notice of issuance.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
We intend to sell these securities through underwriters, dealers, agents or
directly to a limited number of purchasers. The names of, and any securities to
be purchased by or through, these parties, the compensation of these parties and
other special terms in connection with the offering and sale of these securities
will be provided in the related prospectus supplement or supplements.
This prospectus may not be used to consummate sales of any of these securities
unless accompanied by a prospectus supplement.
The date of this prospectus is May , 1998
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NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND ANY INFORMATION
OR REPRESENTATION NOT CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY CMS ENERGY OR ANY UNDERWRITER, DEALER OR AGENT.
THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
TO WHICH THEY RELATE OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
AVAILABLE INFORMATION
CMS Energy is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "COMMISSION"). Information, as of particular dates, concerning
CMS Energy's directors and officers, their remuneration, the principal holders
of CMS Energy's securities and any material interest of such persons in
transactions with CMS Energy is disclosed in proxy statements distributed to
shareholders of CMS Energy and filed with the Commission. Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at 500 West Madison Street, Chicago, Illinois 60661 and at Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such materials can
be obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
also maintains a Web site (http://www.sec.gov) that contains reports, proxy
statements and other information regarding CMS Energy. The outstanding shares of
CMS Energy Common Stock and Class G Common Stock are listed on the New York
Stock Exchange ("NYSE") and reports, proxy statements and other information
concerning CMS Energy may also be inspected and copied at the offices of such
exchange at 20 Broad Street, New York, New York 10005.
No separate financial statements of the Trusts have been included herein.
CMS Energy and the Trusts do not consider that such financial statements would
be material to holders of Trust Preferred Securities because each Trust is a
newly organized special purpose entity, has no operating history and no
independent operations and is not engaged in, and does not propose to engage in,
any activity other than as described under "CMS Energy Trusts". Further, CMS
Energy believes that financial statements of the Trusts are not material to the
holders of the Trust Preferred Securities since CMS Energy will guarantee the
Trust Preferred Securities such that the holders of the Trust Preferred
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Securities, with respect to the payment of distributions and amounts upon
liquidation, dissolution and winding-up, are at least in the same position
vis-a-vis the assets of CMS Energy as a preferred stockholder of CMS Energy. CMS
Energy beneficially owns directly or indirectly all of the undivided beneficial
interests in the assets of the Trusts (other than the beneficial interests
represented by the Trust Preferred Securities). See "CMS Energy Trusts,"
"Description of Securities -- Trust Preferred Securities" and "Description of
Securities -- The Guarantees." In future filings under the Exchange Act, an
audited footnote to CMS Energy's annual financial statements will state that the
Trusts are wholly-owned by CMS Energy, that the sole assets of the Trusts are
the Senior Debentures or the Subordinated Debentures of CMS Energy having a
specified aggregate principal amount, and, considered together, the back-up
undertakings, including the Guarantees, constitute a full and unconditional
guarantee by CMS Energy of the Trusts' obligations under the Trust Preferred
Securities issued by the Trusts.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by CMS Energy (File No. 1-9513) with the
Commission pursuant to the Exchange Act are hereby incorporated by reference in
this prospectus and shall be deemed to be a part hereof:
(1) CMS Energy's Registration Statement on Form 8-B/A dated November 21,
1996;
(2) CMS Energy's Annual Report on Form 10-K for the year ended December 31,
1998; and
(3) CMS Energy's Current Reports on Form 8-K filed January 20 and April 6,
1999.
All documents subsequently filed by CMS Energy pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and prior to the termination of the
offering made by this prospectus (the "OFFERING") shall be deemed to be
incorporated by reference herein and shall be deemed to be a part hereof from
the date of filing of such documents (such documents, and the documents
enumerated above, being hereinafter referred to as "INCORPORATED DOCUMENTS").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
CMS Energy undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this prospectus has been delivered, upon
the written or oral request of any such person, a copy of any and all of the
documents referred to above which have been or may be incorporated in this
prospectus by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to CMS Energy at its principal
executive offices located at Fairlane Plaza South, Suite 1100, 330 Town Center
Drive, Dearborn, Michigan 48126, Attention: Office of the Secretary, telephone:
(313) 436-9200.
Certain information contained in this prospectus summarizes, is based upon,
or refers to information and financial statements contained in one or more
Incorporated Documents;
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accordingly, such information contained herein is qualified in its entirety by
reference to such documents and should be read in conjunction therewith.
CMS ENERGY CORPORATION
CMS Energy Corporation, a Michigan corporation ("CMS ENERGY") incorporated
in 1987, is the parent holding company of Consumers Energy Company ("CONSUMERS")
and CMS Enterprises Company ("ENTERPRISES"). Consumers, a combination electric
and gas utility company serving all 68 counties of Michigan's Lower Peninsula,
is the largest subsidiary of CMS Energy. Consumers' customer base includes a mix
of residential, commercial and diversified industrial customers, the largest
segment of which is the automotive industry. Enterprises is engaged in several
domestic and international energy-related businesses including: (i) oil and gas
exploration and production; (ii) acquisition, development and operation of
independent power production facilities; (iii) energy marketing, services and
trading; (iv) storage, transmission and processing of natural gas; and (v)
international energy distribution.
CMS Energy conducts its principal operations through the following six
business segments: (i) electric utility operations; (ii) gas utility operations;
(iii) oil and gas exploration and production operations; (iv) independent power
production; (v) energy marketing, services and trading; and (vi) storage,
transmission and processing of natural gas. Consumers or Consumers' subsidiaries
are engaged in two segments: electric operations and gas operations. Consumers'
electric and gas businesses are principally regulated utility operations. CMS
Energy and its subsidiaries routinely evaluate, invest in, acquire and divest
energy-related assets and/or companies both domestically and internationally.
Consideration for such transactions may involve the delivery of cash or
securities.
CMS Energy's 1998 consolidated operating revenue was $5.1 billion. This
consolidated operating revenue was derived from its electric utility operations
(approximately 51%), its gas utility operations (approximately 21%), marketing,
services and trading (approximately 18%), independent power production and other
non-utility activities (approximately 6%), gas transmission, storage and
processing activities (approximately 3%), and oil and gas exploration and
production activities (approximately 1%). Consumers' consolidated operations in
the electric and gas utility businesses account for the majority of CMS Energy's
total assets, revenue and income. The unconsolidated share of non-utility
independent power production, gas transmission and storage, marketing services
and trading, and international energy distribution revenue for 1998 was $1.317
billion.
Consumers is a public utility serving gas or electricity to almost six
million of Michigan's nine and a half million residents in Michigan's Lower
Peninsula. Industries in Consumers' service area include automotive, metal,
chemical, food and wood products industries and a diversified group of other
industries. Consumers' 1998 consolidated operating revenue of $3.7 billion was
derived approximately 70% from its electric utility business, approximately 29%
from its gas utility business and approximately 1% from its non-utility
business. Consumers' rates and certain other aspects of its business are subject
to the jurisdiction of the Michigan Public Service Commission (the "MPSC") and
the Federal Energy Regulatory Commission. Consumers' nuclear operations are
subject to the jurisdiction of the Nuclear Regulatory Commission.
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CMS Energy and its subsidiaries routinely evaluate, invest in, acquire and
divest energy-related assets and/or businesses both domestically and
internationally. Consideration for such transactions may involve the delivery of
cash or securities.
The foregoing information concerning CMS Energy and it subsidiaries does
not purport to be comprehensive. For additional information concerning CMS
Energy and its subsidiaries' business and affairs, including their capital
requirements and external financing plans, pending legal and regulatory
proceedings and descriptions of certain laws and regulations to which those
companies are subject, prospective purchasers should refer to the Incorporated
Documents. See "Incorporation of Certain Documents by Reference" and "Available
Information" above.
The address of the principal executive offices of CMS Energy is Fairlane
Plaza South, 330 Town Center Drive, Suite 1100, Dearborn, Michigan 48126. Its
telephone number is (313) 436-9200.
RECENT DEVELOPMENTS
ACQUISITION OF THE PANHANDLE COMPANIES
On March 29, 1999 we acquired from Duke Energy Corporation all of the
outstanding common stock of Panhandle Eastern Pipe Line Company ("PANHANDLE")
and its principal subsidiaries, Trunkline Gas Company ("TRUNKLINE") and Pan Gas
Storage Company, as well as its affiliates, Panhandle Storage Company and
Trunkline LNG Company ("TRUNKLINE LNG" and, collectively, the "PANHANDLE
COMPANIES"). We paid $1.9 billion in cash to Duke Energy Corporation and assumed
approximately $300 million of existing Panhandle debt.
The Panhandle Companies are primarily engaged in the interstate
transmission and storage of natural gas. The Panhandle Companies operate one of
the nation's largest natural gas pipeline networks, providing customers in the
Midwest and Southwest with a comprehensive array of transportation services.
This interconnected 10,400 mile system accesses virtually all major natural gas
regions in the United States.
Panhandle's transmission system consists of four large-diameter parallel
pipelines and extends approximately 1,300 miles from producing areas in the
Anadarko Basin of Texas, Oklahoma and Kansas through the states of Missouri,
Illinois, Indiana and Ohio into Michigan. Panhandle's system connects with the
Trunkline system at Tuscola, Illinois.
Trunkline's transmission system consists principally of three
large-diameter parallel pipelines extending approximately 1,400 miles from the
Gulf Coast areas of Texas and Louisiana through the states of Arkansas,
Mississippi, Tennessee, Kentucky, Illinois and Indiana to a point on the
Indiana-Michigan border. Trunkline also owns and operates two offshore Louisiana
natural gas supply systems consisting of 337 miles of pipeline extending
approximately 81 miles into the Gulf of Mexico.
Panhandle's major customers include approximately 20 utilities located in
the Midwest market area that encompasses large portions of Michigan, Ohio,
Indiana, Illinois and Missouri. Trunkline's major customers include six
utilities located in portions of Illinois, Indiana, Michigan, Ohio and
Tennessee. Transportation service for Consumers accounted for approximately 10%
of the combined revenue of the Panhandle Companies.
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The Panhandle Companies own and operate five underground gas storage fields
located in Illinois, Michigan, Kansas, Oklahoma and Louisiana with a combined
maximum working gas storage capacity of 70 billion cubic feet.
Trunkline LNG owns a liquified natural gas ("LNG") regasification plant and
related LNG tanker port, unloading facilities and LNG and gas storage facilities
located at Lake Charles, Louisiana. The LNG plant has the capacity to deliver
700 million cubic feet per day but has been operated on a limited basis for a
number of years.
The rates and operations of the Panhandle Companies are subject to
regulation by the Federal Energy Regulatory Commission.
We used approximately $600 million in bridge financing, $500 million in
revolving credit loans and $800 million of senior unsecured notes issued by CMS
Panhandle Holding Company to fund the cash portion of the purchase price for the
acquisition of the Panhandle Companies. We expect to complete permanent
financing of the acquisition with existing arrangements and the sale of
approximately $600 million of our common stock and/or other securities.
Please refer to our Forms 8-K filed January 20 and April 6, 1999 for
further information concerning this transaction.
CMS ENERGY TRUSTS
CMS Energy Trust II and CMS Energy Trust III are statutory business trusts
formed under the Delaware Business Trust Act (the "TRUST ACT") (each, a "TRUST"
and collectively, the "TRUSTS") pursuant to: (i) a trust agreement executed by
CMS Energy, as sponsor, and the trustees of the Trusts (the "CMS TRUSTEES"); and
(ii) the filing of a certificate of trust with the Secretary of State of the
State of Delaware. At the time of public issuance of Trust Preferred Securities,
each trust agreement will be amended and restated in its entirety (as so amended
and restated, the "TRUST AGREEMENT") and will be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"). CMS
Energy will directly or indirectly acquire common securities of each Trust (the
"COMMON SECURITIES" and, together with the Trust Preferred Securities, the
"TRUST SECURITIES") in an aggregate liquidation amount equal to approximately 3%
of the total capital of the Trust. Each Trust exists for the exclusive purposes
of: (i) issuing the Trust Preferred Securities and Common Securities
representing undivided beneficial interests in the assets of the Trust; (ii)
investing the gross proceeds of the Trust Securities in the Senior Debentures or
Subordinated Debentures; and (iii) engaging in only those other activities
necessary or incidental thereto. Each Trust has a term of approximately 30
years, but may terminate earlier as provided in the Trust Agreement.
The undivided common beneficial interests in the Trust will be owned by CMS
Energy. The proceeds from the offering of the Trust Preferred Securities and the
sale of the Common Securities may be contributed by the Trust to purchase from
CMS Energy Senior Debentures or Subordinated Debentures in an aggregate
principal amount equal to the aggregate liquidation preference of the Trust
Securities, bearing interest at an annual rate equal to the annual distribution
rate of such Trust Securities and having certain redemption terms which
correspond to the redemption terms for the Trust Securities. The Senior
Debentures will rank on an equal basis with all other unsecured debt of CMS
Energy except subordinated debt. The Subordinated Debentures will rank
subordinate in right of payment to all of CMS Energy's Senior Indebtedness (as
defined herein).
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Distributions on the Trust Securities may not be made unless the Trust receives
corresponding interest payments on the Senior Debentures or the Subordinated
Debentures from CMS Energy. CMS Energy will irrevocably guarantee, on a senior
or subordinated basis, as applicable, and to the extent set forth therein, with
respect to each of the Trust Securities, the payment of distributions, the
redemption price, including all accrued or deferred and unpaid distributions,
and payment on liquidation, but only to the extent of funds on hand. Each
Guarantee will be unsecured and will be either equal to or subordinate to, as
applicable, all Senior Indebtedness, of CMS Energy. Upon the occurrence of
certain events (subject to the conditions to be described in an accompanying
prospectus supplement) the Trust may be liquidated and the holders of the Trust
Securities could receive Senior Debentures or Subordinated Debentures in lieu of
any liquidating cash distribution.
Pursuant to the Trust Agreement, the number of CMS Trustees will initially
be three. Two of the CMS Trustees (the "ADMINISTRATIVE TRUSTEES") will be
persons who are employees or officers of or who are affiliated with CMS Energy.
The third trustee will be a financial institution that is unaffiliated with CMS
Energy, which trustee will serve as property trustee under the Trust Agreement
and as indenture trustee for the purposes of compliance with the provisions of
the Trust Indenture Act (the "PROPERTY TRUSTEE"). Initially, either The Bank of
New York, a New York banking corporation, or NBD Bank, a Michigan banking
corporation, will be the Property Trustee until removed or replaced by the
holder of the Common Securities. For the purpose of compliance with the
provisions of the Trust Indenture Act, The Bank of New York or NBD Bank will
also act as trustee (each a "GUARANTEE TRUSTEE" and collectively the "GUARANTEE
TRUSTEES"). The Bank of New York (Delaware) will act as the Delaware Trustee for
the purposes of the Trust Act, until removed or replaced by the holder of the
Common Securities. See "Description of Securities -- The Guarantees."
Each Property Trustee will hold title to the applicable Debt Securities for
the benefit of the holders of the Trust Securities and each Property Trustee
will have the power to exercise all rights, powers and privileges under the
applicable indentures (as defined herein) as the holder of the Debt Securities.
In addition, each Property Trustee will maintain exclusive control of a
segregated non-interest bearing bank account (the "PROPERTY ACCOUNT") to hold
all payments made in respect of the Debt Securities for the benefit of the
holders of the Trust Securities. Each Property Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Guarantee Trustees will hold the Guarantees for the benefit of the holders of
the Trust Securities. CMS Energy, as the direct or indirect holder of all the
Common Securities, will have the right to appoint, remove or replace any CMS
Trustee and to increase or decrease the number of CMS Trustees; provided, that
the number of CMS Trustees shall be at least three, a majority of which shall be
Administrative Trustees. CMS Energy will pay all fees and expenses related to
the Trusts and the offering of the Trust Securities.
The rights of the holders of the Trust Preferred Securities, including
economic rights, rights to information and voting rights, are set forth in the
Trust Agreement, the Trust Act and the Trust Indenture Act.
The trustee in the State of Delaware is The Bank of New York (Delaware),
White Clay Center, Route 273, Newark, Delaware 19711.
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The principal place of business of each Trust shall be c/o CMS Energy
Corporation, Fairlane Plaza South, 330 Town Center Drive, Suite 1100, Dearborn,
Michigan 48126-2712.
USE OF PROCEEDS
The proceeds received by each of the Trusts from the sale of its Trust
Preferred Securities or the Common Securities will be invested in the Senior
Debentures or the Subordinated Debentures. As will be more specifically set
forth in the applicable prospectus supplement, CMS Energy will use such borrowed
amounts and the net proceeds from the sale of CMS Energy Common Stock, Class G
Common Stock, Stock Purchase Contracts, Stock Purchase Units and any Senior
Debentures or Subordinated Debentures offered hereby for its general corporate
purposes, including capital expenditures, investment in subsidiaries, working
capital and repayment of debt.
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratios of earnings to fixed charges and the ratios of earnings to fixed
charges and preferred stock dividends for each of the years ended December 31,
1993 through 1998, are as follows:
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YEAR ENDED DECEMBER 31,
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1998 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.......... 1.59 1.78 1.96 1.90 2.07 1.75
Ratio of earnings to fixed charges and
preferred stock dividends................. 1.43 1.59 1.75 1.74 1.88 1.68
</TABLE>
For the purpose of computing such ratios, earnings represent net income
before income taxes, net interest charges and the estimated interest portion of
lease rentals.
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DESCRIPTION OF SECURITIES
INTRODUCTION
Specific terms of the shares of Common Stock, par value $.01 per share
("CMS ENERGY COMMON STOCK"), shares of Class G Common Stock, no par value
("CLASS G COMMON STOCK"), unsecured senior debt securities (the "SENIOR
DEBENTURES") and unsecured subordinated debt securities (the "SUBORDINATED
DEBENTURES") (individually a "DEBT SECURITY" and collectively the "DEBT
SECURITIES") consisting of debentures, convertible debentures, notes and other
unsecured evidence of indebtedness, Stock Purchase Contracts (the "STOCK
PURCHASE CONTRACTS") to purchase CMS Energy Common Stock, Stock Purchase Units
(the "STOCK PURCHASE UNITS"), each representing ownership of a Stock Purchase
Contract and Debt Securities, or Trust Preferred Securities or debt obligations
of third parties, including U.S. Treasury Securities, securing the holder's
obligation to purchase the CMS Energy Common Stock under the Stock Purchase
Contract, or any combination of the foregoing, irrevocable guarantees
(individually a "GUARANTEE" and collectively "GUARANTEES") of CMS Energy, on a
senior or subordinated basis as applicable, and to the extent set forth therein,
with respect to each of the Trust Securities, the payment of distributions, the
redemption price, including all accrued or deferred and unpaid distributions,
and payment on liquidation, but only to the extent of fund on hand, and trust
preferred securities (the "TRUST PREFERRED SECURITIES") representing preferred
undivided beneficial interests in the assets of the Trust, in respect of which
this prospectus is being delivered (collectively, the "OFFERED SECURITIES"),
will be set forth in an accompanying prospectus supplement or supplements,
together with the terms of the offering of the Offered Securities, the initial
price thereof and the net proceeds from the sale thereof. The prospectus
supplement will set forth with regard to the particular Offered Securities,
without limitation, the following: (i) in the case of Debt Securities, the
designation, aggregate principal amount, denomination, maturity, premium, if
any, any exchange, conversion, redemption or sinking fund provisions, interest
rate (which may be fixed or variable), the time or method of calculating
interest payments, the right of CMS Energy, if any, to defer payment or interest
on the Debt Securities and the maximum length of such deferral, put options, if
any, public offering price, ranking, any listing on a securities exchange and
other specific terms of the offering; (ii) in the case of CMS Energy Common
Stock or Class G Common Stock, the designation, number of shares, public
offering price and other specific terms of the Offering, from the sale thereof;
(iii) in the case of Trust Preferred Securities, the designation, number of
shares, liquidation preference per security, initial public offering price, any
listing on a securities exchange, dividend rate (or method of calculation
thereof), dates on which dividends shall be payable and dates from which
dividends shall accrue, any voting rights, any redemption, exchange, conversion
or sinking fund provisions and any other rights, preferences, privileges,
limitations or restrictions relating to a specific series of the Trust Preferred
Securities including a description of the Guarantee (as defined herein), as the
case may be; and (iv) in the case of Stock Purchase Units, the specific terms of
the Stock Purchase Contracts and any Debt Securities, Trust Preferred
Securities, or debt obligations of third parties securing the holders obligation
to purchase CMS Energy Common Stock and Class G Common Stock under the Stock
Purchase Contracts, and the terms of the offering and sale thereof.
CAPITAL STOCK
The following summary of certain rights of the holders of CMS Energy
capital stock does not purport to be complete and is qualified in its entirety
by express reference to the
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Restated Articles of Incorporation of CMS Energy (the "ARTICLES OF
INCORPORATION") and the By-Laws of CMS Energy, copies of which are filed as
exhibits to the Registration Statement of which this prospectus is a part, and
by express reference to the Registration Statement on Form 8-B/A, which is
incorporated into this prospectus by reference. See "Incorporation of Certain
Documents by Reference" herein.
The authorized capital stock of CMS Energy consists of 250 million shares
of CMS Energy Common Stock, 60 million shares of Class G Common, and 10 million
shares of CMS Energy Preferred Stock, $.01 par value ("PREFERRED STOCK"). The
CMS Energy Common Stock and the Class G Common Stock are sometimes together
referred to herein as the "Common Stock."
COMMON STOCK
The Class G Common Stock is intended to reflect the separate performance of
the gas distribution, storage and transportation businesses conducted by
Consumers and Michigan Gas Storage, a subsidiary of Consumers (such businesses,
collectively, have been attributed to the "CONSUMERS GAS GROUP"). The CMS Energy
Common Stock is intended to reflect the performance of all businesses of CMS
Energy and its subsidiaries, including the businesses of the Consumers Gas
Group, except for the interest in the Consumers Gas Group attributable to the
outstanding shares of Class G Common Stock.
DIVIDEND RIGHTS AND POLICY; RESTRICTIONS ON DIVIDENDS
Dividends on the CMS Energy Common Stock are paid at the discretion of the
Board of Directors based primarily upon the earnings and financial condition of
CMS Energy, including the Consumers Gas Group, except for the interest in the
Consumers Gas Group attributable to the outstanding shares of the Class G Common
Stock, and other factors. Dividends are payable out of the assets of CMS Energy
legally available therefore, including the Available Class G Dividend Amount (as
defined in the Articles of Incorporation).
Dividends on the Class G Common Stock are paid at the discretion of the
Board of Directors based primarily upon the earnings and financial condition of
the Consumers Gas Group, and, to a lesser extent, CMS Energy as a whole.
Dividends are payable out of the lesser of (i) the assets of CMS Energy legally
available therefore and (ii) the Available Class G Dividend Amount. Although the
Available Class G Dividend Amount is intended to reflect the amount available
for dividends to holders of outstanding Class G Common Stock, it is also legally
available for dividends to holders of CMS Energy Common Stock.
CMS Energy, in the sole discretion of its Board of Directors could pay
dividends exclusively to the holders of CMS Energy Common Stock, exclusively to
the holders of Class G Common Stock, or to the holders of both of such classes
in equal or unequal amounts.
CMS Energy is a holding company and its assets consist primarily of
investments in its subsidiaries. As a holding company with no significant
operations of its own, the principal sources of its funds are dependent
primarily upon the earnings of its subsidiaries (in particular, Consumers),
borrowings and sales of equity. CMS Energy's ability to pay dividends, including
dividends on CMS Energy Common Stock and Class G Common Stock, is dependent
primarily upon the earnings and cash flows of its subsidiaries and the
distribution or other payment of such earnings to CMS Energy in the form of
dividends,
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loans or advances and repayment of loans and advances from CMS Energy.
Accordingly, the ability of CMS Energy to pay dividends on its capital stock
will depend on the earnings, financial requirements, contractual restrictions of
the subsidiaries of CMS Energy, in particular, Consumers, and other factors. CMS
Energy's subsidiaries are separate and distinct legal entities and have no
obligation, contingent or otherwise, to pay any amounts on the capital stock of
CMS Energy or to make any funds available therefor, whether by dividends, loans
or other payments.
Dividends on capital stock of CMS Energy are limited by Michigan law to
legally available assets of CMS Energy. Distributions on Common Stock may be
subject to the rights of the holders, if any, of the CMS Energy Preferred Stock.
There are restrictions on CMS Energy's ability to pay dividends contained
in certain revolving credit and term loan agreements, the indenture dated as of
September 15, 1992, as amended and supplemented, between CMS Energy and NBD
Bank, as Trustee, and the indenture dated as of January 15, 1994, as amended and
supplemented, between CMS Energy and The Chase Manhattan Bank, as Trustee. A
discussion of specific restrictions on CMS Energy's ability to pay dividends
will be set forth in an accompanying prospectus supplement pursuant to which
convertible Senior Debentures, Subordinated Debentures, convertible Trust
Preferred Securities, Stock Purchase Contracts, Stock Purchase Units, CMS Energy
Common Stock or Class G Common Stock are offered.
VOTING RIGHTS
The holders of CMS Energy Common Stock vote with the holders of Class G
Common Stock as a single class, except on matters which would be required by law
or the Articles of Incorporation to be voted on by class. Each holder of Common
Stock is entitled to one vote for each share of Common Stock held by such holder
on each matter voted upon by the shareholders. Such right to vote is not
cumulative. A majority of the votes cast by the holders of shares entitled to
vote thereon is sufficient for the adoption of any question presented, except
that certain provisions of the Articles of Incorporation relating to special
shareholder meetings, the removal, indemnification and liability of the Board of
Directors and the requirements for amending these provisions may not be amended,
altered, changed or repealed unless such amendment, alteration, change or repeal
is approved by the affirmative vote of at least 75% of the outstanding shares
entitled to vote thereon.
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 (except pursuant to Section 303 of the Michigan Business Corporation Act,
which, under certain circumstances, would enable the Board of Directors to
increase the number of authorized shares to satisfy the exchange features of the
Common Stock described below) 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 vote or consent of
the holders of a majority of all the shares of either class of Common Stock then
outstanding, 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
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entity 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.
PREEMPTIVE RIGHTS
The Articles of Incorporation provide that holders of Common Stock will
have no 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.
LIQUIDATION RIGHTS
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 CMS
Energy 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, nor 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 stockholders 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 OR 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 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
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holders of CMS Energy Common Stock and each post-split share of Class G Common
Stock would have one-half of a vote on matters voted upon by the Shareholders.
EXCHANGES
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
in the Registration Statement on Form 8-B/A incorporated by reference herein.
CMS Energy cannot predict the impact of the potential for such exchanges on the
market prices of CMS Energy Common Stock.
CMS Energy may exchange the Class G Common Stock for a proportionate number
of shares of a subsidiary that holds all the assets and liabilities attributed
to the Consumers Gas Group, and no other assets and liabilities. If CMS Energy
transfers all or substantially all of the properties and assets attributed to
the Consumers Gas Group, CMS Energy is required, subject to certain exceptions
and conditions, to exchange each outstanding share of Class G Common Stock for a
number of shares of CMS Energy Common Stock having a Fair Market Value (defined
in the Articles of Incorporation) equal to 110% of the Fair Market Value of one
share of Class G Common Stock.
CMS Energy may, in the sole discretion of the Board of Directors, at any
time, exchange each outstanding share of Class G Common Stock for 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.
CMS Energy cannot predict the impact of the potential for such exchanges on
the market prices of the CMS Energy Common Stock.
TRANSFER AGENT AND REGISTRAR
CMS Energy Common Stock and Class G Common Stock are transferable at
Consumers Energy Company, 212 W. Michigan Avenue, Jackson, MI 49201. CMS Energy
is the registrar and transfer agent for CMS Energy Common Stock and Class G
Common Stock.
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.
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PRIMARY SOURCE OF FUNDS OF CMS ENERGY; RESTRICTIONS ON SOURCES OF DIVIDENDS
The ability of CMS Energy to pay (i) dividends on its capital stock and
(ii) its indebtedness, including the Debt Securities, depends and will depend
substantially upon timely receipt of sufficient dividends or other distributions
from its subsidiaries, in particular Consumers. Consumers' ability to pay
dividends on its common stock depends upon its revenues, earnings and other
factors. Consumers' revenues and earnings will depend substantially upon rates
authorized by the MPSC.
Consumers' ability to pay dividends is restricted by its First Mortgage
Bond Indenture (the "MORTGAGE INDENTURE") and its Articles of Incorporation
("ARTICLES"). The Mortgage Indenture provides that Consumers can only pay
dividends on its common stock out of retained earnings accumulated subsequent to
September 30, 1945, provided that upon such payment, there shall remain of such
retained earnings an amount equivalent to any deficiency in maintenance and
replacement expenditures as compared with maintenance and replacement
requirements since December 31, 1945. Because of restrictions in its Articles
and Mortgage Indenture, Consumers was prohibited from paying dividends on its
common stock from June 1991 to December 31, 1992. However, as of December 31,
1992, Consumers effected a quasi-reorganization in which Consumers' accumulated
deficit of $574 million was eliminated against other paid-in capital. With the
accumulated deficit eliminated, Consumers satisfied the requirements under its
Mortgage Indenture and resumed paying dividends on its common stock in May 1993.
Consumers' Articles also provide two restrictions on its payment of
dividends on its common stock. First, prior to the payment of any common stock
dividend, Consumers must reserve retained earnings after giving effect to such
dividend payment of at least (i) $7.50 per share on all then outstanding shares
of its preferred stock, (ii) in respect to its Class A Preferred Stock, 7.5% of
the aggregate amount established by its Board of Directors to be payable on the
shares of each series thereof in the event of involuntary liquidation of
Consumers, and (iii) $7.50 per share on all then outstanding shares of all other
stock over which its preferred stock and Class A Preferred Stock do not have
preference as to the payment of dividends and as to assets. Second, dividend
payments during the 12 month period ending with the month the proposed payment
is to be paid are limited to: (i) 50% of net income available for the payment of
dividends during the base period (hereinafter defined) if the ratio of common
stock and surplus to total capitalization and surplus for 12 consecutive
calendar months within the 14 calendar months immediately preceding the proposed
dividend payment (the "BASE PERIOD"), adjusted to reflect the proposed dividend,
is less than 20%; and (ii) 75% of net income available for the payment of
dividends during the base period if the ratio of common stock and surplus to
total capitalization and surplus for the base period, adjusted to reflect the
proposed dividend, is at least 20% but less than 25%.
In addition, Consumers' Indenture dated January 1, 1996, between Consumers
and Bank of New York as Trustee ("INDENTURE"), and certain Preferred Securities
Guarantees by Consumers dated January 23, 1996 and September 11, 1997
(collectively the "CONSUMERS PREFERRED SECURITIES GUARANTEES"), in connection
with which the 8.36% Trust Preferred Securities of Consumers Power Company
Financing 1 and the 8.20% Trust Securities of Consumers Energy Financing II
(collectively the "CONSUMERS TRUST PREFERRED SECURITIES") were issued, provide
that Consumers shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase or make a liquidation payment with respect
to, any of its capital stock if: (i) there shall have occurred any event that
would constitute an event of default under the Indenture or the
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trust agreements pursuant to which the Consumers Trust Preferred Securities were
issued, (ii) a default with respect to its payment of any obligations under the
Consumers Preferred Securities Guarantees or certain Consumers common stock
guarantees, or (iii) it gives notice of its election to extend the interest
payment period on the subordinated notes issued under the Indenture, at any time
for up to 20 consecutive quarters provided, however, Consumers may declare and
pay stock dividends where the dividend stock is the same stock as that on which
the dividend is being paid.
Consumers' Articles also prohibit the payment of cash dividends on its
common stock if Consumers is in arrears on preferred stock dividend payments.
In addition, Michigan law prohibits payment of a dividend if, after giving
it effect, Consumers would not be able to pay its debts as they become due in
the usual course of business, or its total assets would be less than the sum of
its total liabilities plus, unless the articles permit otherwise, the amount
that would be needed, if Consumers were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those receiving the
distribution. Currently, it is Consumers' policy to pay annual dividends equal
to 80% of its annual consolidated net income. Consumers' Board of Directors
reserves the right to change this policy at any time.
DEBT SECURITIES
The Debt Securities offered by this prospectus will be unsecured
obligations of CMS Energy and will be either senior or subordinated debt. Senior
Debentures will be issued under a senior debt indenture and Subordinated
Debentures will be issued under a subordinated debt indenture. The senior debt
indenture and the subordinated debt indenture are sometimes referred to in this
prospectus individually as an "INDENTURE" and collectively as the "INDENTURES."
The following briefly summarizes the material provisions of the indentures
and the Debt Securities. You should read the more detailed provisions of the
applicable indenture, including the defined terms, for provisions that may be
important to you. You should also read the particular terms of a series of Debt
Securities, which will be described in more detail in the applicable prospectus
supplement. Copies of the indentures may be obtained from CMS Energy or the
applicable trustee.
Unless otherwise provided in the applicable prospectus supplement, the
trustee under the senior debt indenture will be NBD Bank and the trustee under
the subordinated debt indenture will be The Bank of New York.
GENERAL
The indentures provide that Debt Securities of CMS Energy may be issued in
one or more series, with different terms, in each case as authorized from time
to time by CMS Energy.
Federal income tax consequences and other special considerations applicable
to any Debt Securities issued by CMS Energy at a discount will be described in
the applicable prospectus supplement.
Because CMS Energy is a holding company, the claims of creditors of CMS
Energy's subsidiaries will have a priority over CMS Energy's equity rights and
the rights of CMS
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Energy's creditors, including the holders of Debt Securities, to participate in
the assets of the subsidiary upon the subsidiary's liquidation.
The applicable prospectus supplement relating to any series of Debt
Securities will describe the following terms, where applicable:
- the title of the Debt Securities;
- whether the Debt Securities will be senior or subordinated debt;
- the total principal amount of the Debt Securities;
- the percentage of the principal amount at which the Debt Securities will
be sold and, if applicable, the method of determining the price;
- the maturity date or dates;
- the interest rate or the method of computing the interest rate;
- the date or dates from which any interest will accrue, or how such date
or dates will be determined, and the interest payment date or dates and
any related record dates;
- the location where payments on the Debt Securities will be made;
- the terms and conditions on which the Debt Securities may be redeemed at
the option of CMS Energy;
- any obligation of CMS Energy to redeem, purchase or repay the Debt
Securities at the option of a holder upon the happening of any event and
the terms and conditions of redemption, purchase or repayment;
- any provisions for the discharge of CMS Energy's obligations relating to
the Debt Securities by deposit of funds or United States government
obligations;
- whether the Debt Securities are to trade in book-entry form and the terms
and any conditions for exchanging the global security in whole or in part
for paper certificates;
- any material provisions of the applicable indenture described in this
prospectus that do not apply to the Debt Securities;
- any additional amounts with respect to the Debt Securities that CMS
Energy will pay to a non-United States person because of any tax,
assessment or governmental charge withheld or deducted and, if so, any
option of CMS Energy to redeem the Debt Securities rather than paying
these additional amounts; and
- any other specific terms of the Debt Securities.
CONCERNING THE TRUSTEES
Each of NBD Bank, the trustee under the senior debt indenture, and The Bank
of New York, the trustee under the subordinated debt indenture, is one of a
number of banks with which CMS Energy and its subsidiaries maintain ordinary
banking relationships, including credit facilities.
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EXCHANGE AND TRANSFER
Debt Securities may be presented for exchange and registered Debt
Securities may be presented for registration of transfer at the offices and
subject to the restrictions set forth therein and in the applicable prospectus
supplement without service charge, but upon payment of any taxes or other
governmental charges due in connection therewith, subject to any limitations
contained in the applicable indenture. Debt Securities in bearer form and the
coupons appertaining thereto, if any, will be transferable by delivery.
PAYMENT
Distributions on the Debt Securities in registered form will be made at the
office or agency of the applicable trustee in the Borough of Manhattan, the City
of New York or its other designated office. However, at the option of CMS
Energy, payment of any interest may be made by check or by wire transfer.
Payment of any interest due on Debt Securities in registered form will be made
to the persons in whose name the Debt Securities are registered at the close of
business on the record date for such interest payments. Payments made in any
other manner will be specified in the prospectus supplement.
EVENTS OF DEFAULT
Each indenture provides that events of default regarding any series of Debt
Securities will be:
- failure to pay required interest on any Debt Security of such series for
30 days;
- failure to pay principal other than a scheduled installment payment or
premium, if any, on any Debt Security of such series when due;
- failure to make any required scheduled installment payment for 30 days on
Debt Securities of such series;
- failure to perform for 90 days after notice any other covenant in the
relevant indenture other than a covenant included in the relevant
indenture solely for the benefit of a series of Debt Securities other
than such series;
- certain events of bankruptcy or insolvency, whether voluntary or not; or
- entry of final judgments against CMS Energy or Consumers for more than
$25,000,000 which remain undischarged or unbonded for 60 days or a
default resulting in the acceleration of indebtedness of CMS Energy or
Consumers more than $25,000,000, and the acceleration has not been
rescinded or annulled within 10 days after written notice of such default
as provided in the applicable indenture; and
Additional events of default may be prescribed for the benefit of the
holders of a particular series of Debt Securities and will be described in the
prospectus supplement relating to those Debt Securities.
If an event of default regarding Debt Securities of any series issued under
the indentures should occur and be continuing, either the trustee or the holders
of 25% in the principal amount of outstanding Debt Securities of such series may
declare each Debt Security of that series due and payable.
Holders of a majority in principal amount of the outstanding Debt
Securities of any series will be entitled to control certain actions of the
trustee under the indentures and to
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waive past defaults regarding such series. The trustee generally will not be
requested, ordered or directed by any of the holders of Debt Securities, unless
one or more of such holders shall have offered to the trustee reasonable
security or indemnity.
Before any holder of any series of Debt Securities may institute action for
any remedy, except payment on such holder's Debt Security when due, the holders
of not less than 25% in principal amount of the Debt Securities of that series
outstanding must request the trustee to take action. Holders must also offer and
give the satisfactory security and indemnity against liabilities incurred by the
trustee for taking such action.
CMS Energy is required to annually furnish the relevant trustee a statement
as to CMS Energy's compliance with all conditions and covenants under the
applicable indenture. Each indenture provides that the relevant trustee may
withhold notice to the holders of the Debt Securities of any series of any
default affecting such series, except payment on holders' Debt Securities when
due, if it considers withholding notice to be in the interests of the holders of
the Debt Securities of such series.
CONSOLIDATION, MERGER OR SALE OF ASSETS
Each indenture provides that CMS Energy may consolidate with or merge into,
or sell, lease or convey its property as an entirety or substantially as an
entirety to, any other corporation if the new corporation assumes the
obligations of CMS Energy under the Debt Securities and the indentures and is
organized and existing under the laws of the United States of America, any U.S.
state or the District of Columbia.
MODIFICATION OF THE INDENTURE
Each indenture permits CMS Energy and the relevant trustee to enter into
supplemental indentures without the consent of the holders of the Debt
Securities to establish the form and terms of any series of securities under the
indentures.
Each indenture also permits CMS Energy and the relevant trustee, with the
consent of the holders of at least a majority in total principal amount of the
Debt Securities of all series then outstanding and affected (voting as one
class), to change in any manner the provisions of the applicable indenture or
modify in any manner the rights of the holders of the Debt Securities of each
such affected series. CMS Energy and the relevant trustee may not, without the
consent of the holder of each Debt Security affected, enter into any
supplemental indenture to:
- change the time of payment of the principal;
- reduce the principal amount of such Debt Security;
- reduce the rate or change the time of payment of interest on such Debt
Security;
- reduce the amount payable on any securities issued originally at a
discount upon acceleration or provable in bankruptcy; or
- impair the right to institute suit for the enforcement of any payment on
any Debt Security when due.
In addition, no such modification may reduce the percentage in principal
amount of the Debt Securities of the affected series, the consent of whose
holders is required for any such modification or for any waiver provided for in
the applicable indenture.
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Prior to the acceleration of the maturity of any Debt Security, the
holders, voting as one class, of a majority in total principal amount of the
Debt Securities with respect to which a default or event of default shall have
occurred and be continuing may on behalf of the holders of all such affected
Debt Securities waive any past default or event of default and its consequences,
except a default or an event of default in respect of a covenant or provision of
the applicable indenture or of any Debt Security which cannot be modified or
amended without the consent of the holder of each Debt Security affected.
DEFEASANCE, COVENANT DEFEASANCE AND DISCHARGE
Each indenture provides that, at the option of CMS Energy:
- CMS Energy will be discharged from all obligations in respect of the Debt
Securities of a particular series then outstanding (except for certain
obligations to register the transfer of or exchange the Debt Securities
of such series, to replace stolen, lost or mutilated Debt Securities of
such series, to maintain paying agencies and to maintain the trust
described below); or
- CMS Energy need not comply with certain restrictive covenants of the
relevant indenture (including those described under "Consolidation,
Merger or Sale of Assets").
If CMS Energy in each case irrevocably deposits in trust with the relevant
trustee money, and/or securities backed by the full faith and credit of the
United States which, through the payment of the principal thereof and the
interest thereon in accordance with their terms, will provide money in an amount
sufficient to pay all the principal and interest on the Debt Securities of such
series on the stated maturities of such Debt Securities in accordance with the
terms thereof.
To exercise this option, CMS Energy is required to deliver to the relevant
trustee an opinion of independent counsel to the effect that:
- the exercise of such option would not cause the holders of the Debt
Securities of such series to recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance, and
such holders will be subject to United States federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred; and
- in the case of a discharge as described above, such opinion is to be
accompanied by a private letter ruling to the same effect received from
the Internal Revenue Service, a revenue ruling to such effect pertaining
to a comparable form of transaction published by the Internal Revenue
Service or appropriate evidence that since the date of the applicable
indenture there has been a change in the applicable federal income tax
law.
In the event:
- CMS Energy exercises its option to effect a covenant defeasance with
respect to the Debt Securities of any series as described above,
- the Debt Securities of such series are thereafter declared due and
payable because of the occurrence of any event of default other than an
event of default caused by failing to comply with the covenants which are
defeased,
- the amount of money and securities on deposit with the relevant trustee
would be insufficient to pay amounts due on the Debt Securities of such
series at the time of the acceleration resulting from such event of
default,
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CMS Energy would remain liable for such amounts.
GOVERNING LAW
Each indenture and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of Michigan unless the laws of another
jurisdiction shall mandatorily apply.
SENIOR DEBENTURES
The Senior Debentures will be issued under the senior debt indenture and
will rank on an equal basis with all other unsecured debt of CMS Energy except
subordinated debt.
SUBORDINATED DEBENTURES
The Subordinated Debentures will be issued under the subordinated debt
indenture and will rank subordinated and junior in right of payment, to the
extent set forth in the subordinated debt indenture, to all "SENIOR
INDEBTEDNESS" (as defined below) of CMS Energy.
If CMS Energy defaults in the payment of any distributions on any Senior
Indebtedness when it becomes due and payable after any applicable grace period,
then, unless and until the default is cured or waived or ceases to exist, CMS
Energy cannot make a payment on account of or redeem or otherwise acquire the
Subordinated Debentures. The subordinated debt indenture provisions described in
this paragraph, however, do not prevent CMS Energy from making sinking fund
payments in Subordinated Debentures acquired prior to the maturity of Senior
Indebtedness or, in the case of default, prior to such default and notice
thereof. If there is any insolvency, bankruptcy, liquidation or other similar
proceeding relating to CMS Energy, its creditors or its property, then all
Senior Indebtedness must be paid in full before any payment may be made to any
holders of Subordinated Debentures. Holders of Subordinated Debentures must
return and deliver any payments received by them, other than in a plan of
reorganization or through a defeasance trust as described above, directly to the
holders of Senior Indebtedness until all Senior Indebtedness is paid in full.
"SENIOR INDEBTEDNESS" means distributions on the following, whether
outstanding on the date of execution of the subordinated debt indenture or
thereafter incurred, created or assumed:
- indebtedness of CMS Energy for money borrowed by CMS Energy or evidenced
by debentures (other than the Subordinated Debentures), notes, bankers'
acceptances or other corporate debt securities or similar instruments
issued by CMS Energy;
- obligations of CMS Energy with respect to letters of credit;
- all indebtedness of others of the type referred to in the two preceding
clauses assumed by or guaranteed in any manner by CMS Energy or in effect
guaranteed by CMS Energy; or
- renewals, extensions or refundings of any of the indebtedness referred to
in the preceding three clauses unless, in the case of any particular
indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same or the
assumption or guarantee of the same, or pursuant to which the same is
outstanding, such indebtedness or such renewal, extension or
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refunding thereof is not superior in right of payment to the subordinated
debt securities.
The subordinated debt indenture does not limit the total amount of Senior
Indebtedness that may be issued. As of December 31, 1998, Senior Indebtedness of
CMS Energy totaled approximately $2.766 billion.
CERTAIN COVENANTS
If Debt Securities are issued to a Trust or a trustee of such Trust in
connection with the issuance of Trust Preferred Securities by such Trust, CMS
Energy will covenant that it will not, and it will not cause any of its
subsidiaries to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
CMS Energy's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of CMS Energy that
rank pari passu (in the case of Subordinated Debentures) with or junior (in the
case of Senior and Subordinated Debentures) to that Debt Security (other than
(a) any dividend, redemption, liquidation, interest, principal or guarantee
payment by CMS Energy where the payment is made by way of securities (including
capital stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, interest, principal or guarantee payment is being
made, (b) payments under the Guarantees, (c) purchases of CMS Energy Common
Stock related to the issuance of CMS Energy Common Stock under any of CMS
Energy's benefit plans for its directors, officers or employees, (d) as a result
of a reclassification of CMS Energy's capital stock or the exchange or
conversion of one series or class of CMS Energy's capital stock for another
series or class of CMS Energy's capital stock and (e) the purchase of fractional
interests in shares of CMS Energy's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged) if at such time (i) there shall have occurred any event of which CMS
Energy has actual knowledge that (a) with the giving of notice or the lapse of
time, or both, would constitute an event of default under the indentures and (b)
in respect of which CMS Energy shall not have taken reasonable steps to cure,
(ii) CMS Energy shall be in default with respect to its payment of any
obligations under the Guarantees or (iii) CMS Energy shall have given notice of
its selection of an Extension Period as provided in the indentures with respect
to the Debt Securities and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing. CMS Energy will
also covenant (i) for so long as Trust Preferred Securities are outstanding, not
to convert the Debt Securities except pursuant to a notice of conversion
delivered to the Conversion Agent (as defined in the indentures) by a holder of
Trust Preferred Securities, (ii) to maintain directly or indirectly 100%
ownership of the Common Securities, provided that certain successor which are
permitted pursuant to the indentures may succeed to CMS Energy's ownership of
the Common Securities, (iii) not to voluntarily terminate, wind-up or liquidate
such Trust, except (a) in connection with a distribution of the Debt Securities
to the holders of the Trust Preferred Securities in liquidation of such Trust or
(b) in connection with certain mergers, consolidations or amalgamations
permitted by the Trust Agreement, (iv) to maintain the reservation for issuance
of the number of shares of CMS Energy Common Stock that would be required from
time to time upon the conversion of all the Debt Securities then outstanding,
(v) to use its reasonable efforts, consistent with the terms and provisions of
the Trust Agreement, to cause such Trust to remain classified as a grantor trust
and not as an association taxable as a corporation for United States federal
income tax purposes and (vi) to deliver shares
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of CMS Energy Common Stock upon an election by the holders of the Trust
Preferred Securities to convert such Trust Preferred Securities into CMS Energy
Common Stock.
As part of the Guarantees, CMS Energy will agree that it will honor all
obligations described therein relating to the conversion or exchange of the
Trust Preferred Securities into or for CMS Energy Common Stock, Senior
Debentures or Subordinated Debentures.
CONVERSION RIGHTS
If the prospectus supplement provides, the Holders of Debt Securities may
convert such Debt Securities into CMS Energy Common Stock, as defined herein
(see "Description of Securities -- Common Stock"), at the option of the Holders
at the principal amount thereof, or of such portion thereof, at any time during
the period specified in the prospectus supplement, at the conversion price or
conversion rate specified in the prospectus supplement; except that, with
respect to any Debt Securities (or portion thereof) called for redemption, such
conversion right shall terminate at the close of business on the fifteenth day
prior to the date fixed for redemption of such Debt Security, unless CMS Energy
shall default in payment of the amount due upon redemption thereof.
The conversion privilege and conversion price or conversion rate will be
adjusted in certain events, including if CMS Energy:
- pays a dividend or makes a distribution in shares of CMS Energy Common
Stock;
- subdivides its outstanding shares of CMS Energy Common Stock into a
greater number of shares;
- combines its outstanding shares of CMS Energy Common Stock into a smaller
number of shares;
- pays a dividend or makes a distribution on its CMS Energy Common Stock
other than in shares of its CMS Energy Common Stock;
- issues by reclassification of its shares of CMS Energy Common Stock any
shares of its capital stock;
- issues any rights or warrants to all holders of shares of its CMS Energy
Common Stock entitling them (for a period expiring within 45 days, or
such other period as may be specified in the prospectus supplement) to
purchase shares of CMS Energy Common Stock (or Convertible Securities as
defined in the indentures) at a price per share less than the Average
Market Price (as defined in the indentures) per share for such CMS Energy
Common Stock; and
- distributes to all holders of shares of its CMS Energy Common Stock any
assets or Debt Securities or any rights or warrants to purchase
securities, provided that no adjustment shall be made under (vi) or (vii)
above if the adjusted conversion price would be higher than, or the
adjusted conversion rate would be less than, the conversion price or
conversion rate, as the case may be, in effect prior to such adjustment.
CMS Energy may reduce the conversion price or increase the conversion rate,
temporarily or otherwise, by any amount but in no event shall such adjusted
conversion price or conversion rate result in shares of CMS Energy Common Stock
being issuable upon conversion of the Debt Securities if converted at the time
of such adjustment at an
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effective conversion price per share less than the par value of the CMS Energy
Common Stock at the time such adjustment is made. No adjustments in the
conversion price or conversion rate need be made unless the adjustment would
require an increase or decrease of at least one percent (1%) in the initial
conversion price or conversion rate. Any adjustment which is not made shall be
carried forward and taken into account in any subsequent adjustment. The
foregoing conversion provisions may be modified to the extent set forth in the
prospectus supplement.
TRUST PREFERRED SECURITIES
GENERAL
Each Trust may issue, from time to time, Trust Preferred Securities having
terms described in the prospectus supplement relating thereto. The Trust
Agreement of each Trust will authorize the establishment of no more than one
series of Trust Preferred Securities, having such terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such rights or restrictions as shall be set
forth therein or otherwise established by the Trust Trustees pursuant thereto.
Reference is made to the prospectus supplement relating to the Trust Preferred
Securities for specific terms, including: (i) the distinctive designation and
the number of Trust Preferred Securities to be offered which will represent
undivided beneficial interests in the assets of the Trust; (ii) the annual
distribution rate and the dates or date upon which such distributions will be
paid, provided, however distributions on the Trust Preferred Securities will be
paid quarterly in arrears to holders of Trust Preferred Securities as of a
record date on which the Trust Preferred Securities are outstanding; (iii)
whether holders' can convert the Trust Preferred Securities into shares of CMS
Energy Common Stock; (iv) whether distributions on Trust Preferred Securities
would be deferred during any deferral of interest payments on the Debt
Securities, provided, however that no such deferral, including extensions, if
any, may exceed 20 consecutive quarters nor extend beyond the stated maturity
date of the Debt Securities, and at the end of any such deferrals, CMS Energy
shall make all interest payments then accrued or deferred and unpaid (including
any compounded interest); (v) the amount of any liquidation preference; (vi) the
obligation, if any, of the Trust to redeem Trust Preferred Securities through
the exercise of CMS Energy of an option on the corresponding Debt Securities and
the price or prices at which, the period or periods within which and the terms
and conditions upon which Trust Preferred Securities shall be purchased or
redeemed, in whole or in part, pursuant to such obligation; (vii) the period or
periods within which and the terms and conditions, if any, including the price
or prices or the rate or rates of conversion or exchange and the terms and
conditions of any adjustments thereof, upon which the Trust Preferred Securities
shall be convertible or exchangeable at the option of the holder of the Trust
Preferred Securities or other property or cash; (viii) the voting rights, if
any, of the Trust Preferred Securities in addition to those required by law and
in the Trust Agreement, or set forth under a Guarantee (as defined below); (ix)
the additional payments, if any, which the Trust will pay as a distribution as
necessary so that the net amounts reserved by the Trust and distributable to the
holders of the Trust Preferred Securities, after all taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes) have
been paid will not be less than the amount that would have been reserved and
distributed by the Trust, and the amount the holders of the Trust Preferred
Securities would have reserved, had no such taxes, duties, assessments or
governmental charges been imposed; (x) the terms and conditions, if any, upon
which the Debt Securities may be distributed to holders of Trust Preferred
Securities; and (xi) any other relative rights,
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powers, preferences, privileges, limitations or restrictions of the Trust
Preferred Securities not inconsistent with the Trust Agreement or applicable
law. All Trust Preferred Securities offered hereby will be irrevocably
guaranteed by CMS Energy, on a senior or subordinated basis, as applicable, and
to the extent set forth below under "The Guarantees." Any applicable federal
income tax considerations applicable to any offering of the Trust Preferred
Securities will be described in the prospectus supplement relating thereto. The
aggregate number of Trust Preferred Securities which the Trust shall have
authority to issue will be pursuant to the terms of the Trust Agreement.
EFFECT OF OBLIGATIONS UNDER THE DEBT SECURITIES
AND THE GUARANTEES
As set forth in the Trust Agreement, the sole purpose of the Trust is to
issue the Trust Securities evidencing undivided beneficial interests in the
assets of each of the Trust, and to invest the proceeds from such issuance and
sale to acquire directly the Debt Securities from CMS Energy.
As long as payments of interest and other payments are made when due on the
Debt Securities, such payments will be sufficient to cover distributions and
payments due on the Trust Securities because of the following factors:
- the aggregate principal amount of Debt Securities will be equal to the
sums of the aggregate stated liquidation amount of the Trust Securities;
- the interest rate and the interest and other payment dates on the Debt
Securities will match the distribution rate and distribution and other
payment dates for the Trust Securities;
- CMS Energy shall pay all, and the Trust shall not be obligated to pay,
directly or indirectly, all costs, expenses, debt and obligations of the
Trust (other than with respect to the Trust Securities); and
- the Trust Agreement further provides that CMS Energy Trustees shall not
take or cause or permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefore are available) and
other payments due on the Trust Preferred Securities (to the extent funds
therefor are available) are guaranteed by CMS Energy as and to the extent set
forth under "The Guarantees" below. If CMS Energy does not make interest
payments on the Debt Securities purchased by the Trust, it is expected that the
Trust will not have sufficient funds to pay distributions on the Trust Preferred
Securities. The Guarantees do not apply to any payment of distributions unless
and until the Trust has sufficient funds for the payment of distributions and
other payments on the Trust Preferred Securities only if and to the extent that
CMS Energy has made a payment of interest or principal on the Debt Securities
held by the Trust as its sole asset. The Guarantees, when taken together with
CMS Energy's obligations under the Debt Securities and the Indenture and its
obligations under the Trust Agreement, including its obligations to pay costs,
expenses, debts and liabilities of the Trust (other than with respect to the
Trust securities), provide a full and unconditional guarantee of amounts on the
Trust Preferred Securities.
If CMS Energy fails to make interest or other payments on the Debt
Securities when due (taking account of any extension period), the Trust
Agreement provides a mechanism
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whereby the holders of the Trust Preferred Securities may direct a Property
Trustee to enforce its rights under the Debt Securities. If a Property Trustee
fails to enforce its rights under the Debt Securities, a holder of Trust
Preferred Securities may institute a legal proceeding against CMS Energy to
enforce a Property Trustee's rights under the Debt Securities without first
instituting any legal proceeding against a Property Trustee or any other person
or entity. Notwithstanding the foregoing, if an event of default has occurred
and is continuing under the Trust Agreement, and such event is attributable to
the failure of CMS Energy to pay interest or principal on the Debt Securities on
the date such interest or principal is otherwise payable (or in the case of
redemption on the redemption date), then a holder of Trust Preferred Securities
may institute legal proceedings directly against CMS Energy to obtain payment.
If CMS Energy fails to make payments under the Guarantees, the Guarantees
provide a mechanism whereby the holders of the Trust Preferred Securities may
direct a Guarantee Trustee to enforce its rights thereunder. Any holder of Trust
Preferred Securities may institute a legal proceeding directly against CMS
Energy to enforce a Guarantee Trustee's rights under a Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee, or any
other person or entity.
THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees which
will be executed and delivered by CMS Energy for the benefit of the holders,
from time to time, of the Trust Preferred Securities. Each Guarantee will be
qualified as an indenture under the Trust Indenture Act of 1939. Either The Bank
of New York, or NBD Bank, each an independent trustee, will act as indenture
trustee under the Guarantees for the purpose of compliance with the provisions
of the Trust Indenture Act of 1939. This summary does not purport to be complete
and is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the Guarantees, which is filed as an exhibit to the
Registration Statement of which this prospectus forms a part.
GENERAL
CMS Energy will irrevocably agree to pay in full, on a senior or
subordinated basis, as applicable, to the extent set forth herein, the Guarantee
Payments (as defined below) to the holders of the Trust Preferred Securities, as
and when due, regardless of any defense, right of set-off or counterclaim that
the Trust may have or assert other than the defense of payment. The following
payments with respect to the Trust Preferred Securities, to the extent not paid
by or on behalf of the Trust (the "GUARANTEE PAYMENTS"), will be subject to a
Guarantee: (i) any accumulated and unpaid distributions required to be paid on
the Trust Preferred Securities, to the extent that the Trust has funds on hand
available therefor at such time; (ii) the redemption price with respect to any
Trust Preferred Securities called for redemption to the extent that the Trust
has funds on hand available therefor at such time; or (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Trust (unless the Debt
Securities are distributed to holders of the Trust Preferred Securities), the
lesser of (a) the liquidation distribution, to the extent that the Trust has
funds on hand available therefor at such time, and (b) the amount of assets of
the Trust remaining available for distribution to holders of Trust Preferred
Securities. CMS Energy's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts of CMS Energy to the holders of the
Trust Preferred Securities or by causing the Trust to pay such amount to such
holders.
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Such Guarantees will be irrevocable guarantees, on a senior or subordinated
basis, as applicable, of the Trust's obligations under the Trust Preferred
Securities, but will apply only to the extent that the Trust has funds
sufficient to make such payments, and are not guarantees of collection. If CMS
Energy does not make interest payments on the Debt Securities held by the Trust,
the Trust will not be able to pay distributions on the Trust Preferred
Securities and will not have funds legally available therefor.
CMS Energy has, through the Guarantees, the Trust Agreements, the Senior
Debentures, the Subordinated Debentures, the indentures and the Expense
Agreement, taken together, fully, irrevocably and unconditionally guaranteed all
of the Trust's obligations under the Trust Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the Trust Preferred
Securities.
CMS Energy has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to the Common Securities to
the same extent as the Guarantees, except that upon the occurrence and during
the continuation of a Trust Agreement Event of Default, holders of Trust
Preferred Securities shall have priority over holders of Common Securities with
respect to distributions and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF CMS ENERGY
CMS Energy will covenant in each Guarantee that if and so long as (i) the
Trust is the holder of all the Debt Securities, (ii) a Tax Event (as defined in
the Guarantee) in respect of the Trust has occurred and is continuing and (iii)
CMS Energy has elected, and has not revoked such election, to pay Additional
Sums (as defined in the Guarantee) in respect of the Trust Preferred Securities
and Common Securities, CMS Energy will pay to the Trust such Additional Sums.
CMS Energy will also covenant that it will not, and it will not cause any of its
subsidiaries to (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of CMS
Energy's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of CMS Energy that
rank pari passu (in the case of Subordinated Debentures with or junior in the
case of the Senior and Subordinated Debentures) to the Debt Securities (other
than (a) any dividend, redemption, liquidation, interest, principal or guarantee
payment by CMS Energy where the payment is made by way of securities (including
capital stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, interest, principal or guarantee payment is being
made, (b) payments under the Guarantees, (c) purchases of CMS Energy Common
Stock related to the issuance of CMS Energy Common Stock under any of CMS
Energy's benefit plans for its directors, officers or employees, (d) as a result
of a reclassification of CMS Energy's capital stock or the exchange or
conversion of one series or class of CMS Energy's capital stock for another
series or class of CMS Energy's capital stock and (e) the purchase of fractional
interests in shares of CMS Energy's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged) if at such time (i) there shall have occurred any event of which CMS
Energy has actual knowledge that (a) with the giving of notice or the lapse of
time, or both, would constitute a event of default and (b) in respect of which
CMS Energy shall
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not have taken reasonable steps to cure, (ii) CMS Energy shall be in default
with respect to its payment of any obligations under the Guarantee or (iii) CMS
Energy shall have given notice of its selection of an Extension Period as
provided in the indentures with respect to the Debt Securities and shall not
have rescinded such notice, or such Extension Period, or any extension thereof,
shall be continuing. CMS Energy also will covenant to (i) for so long as Trust
Preferred Securities are outstanding, not convert Debt Securities except
pursuant to a notice of conversion delivered to the Conversion Agent by a holder
of Trust Preferred Securities, (ii) maintain directly or indirectly 100%
ownership of the Common Securities, provided that certain successors which are
permitted pursuant to the indentures may succeed to CMS Energy's ownership of
the Common Securities, (iii) not voluntarily terminate, wind-up or liquidate the
Trust, except (a) in connection with a distribution of the Debt Securities to
the holders of the Trust Preferred Securities in liquidation of the Trust or (b)
in connection with certain mergers, consolidations or amalgamations permitted by
the Trust Agreement, (iv) maintain the reservation for issuance of the number of
shares of CMS Energy Common Stock that would be required from time to time upon
the conversion of all the Debt Securities then outstanding, (v) use its
reasonable efforts, consistent with the terms and provisions of the Trust
Agreement, to cause the Trust to remain classified as a grantor trust and not as
an association taxable as a corporation for United States federal income tax
purposes and (vi) deliver shares of CMS Energy Common Stock upon an election by
the holders of the Trust Preferred Securities to convert such Trust Preferred
Securities into CMS Energy Common Stock.
As part of the Guarantees, CMS Energy will agree that it will honor all
obligations described therein relating to the conversion or exchange of the
Trust Preferred Securities into or for CMS Energy Common Stock, Senior
Debentures or Subordinated Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Trust Preferred Securities (in which case no vote
will be required), the Guarantees may not be amended without the prior approval
of the holders of not less than a majority in aggregate liquidation amount of
such outstanding Trust Preferred Securities. All guarantees and agreements
contained in the Guarantees shall bind the successors, assigns, receivers,
trustees and representatives of CMS Energy and shall inure to the benefit of the
holders of the Trust Preferred Securities then outstanding.
TERMINATION OF THE GUARANTEES
The Guarantees will terminate and be of no further force and effect upon
full payment of the redemption price of the Trust Preferred Securities, upon
full payment of the amounts payable upon liquidation of the Trust, upon the
distribution, if any, of CMS Energy Common Stock to the holders of Trust
Preferred Securities in respect of the conversion of all such holders' Trust
Preferred Securities into CMS Energy Common Stock or upon distribution of the
Debt Securities to the holders of the Trust Preferred Securities in exchange for
all of the Trust Preferred Securities. The Guarantees will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Trust Preferred Securities must restore payment of any sums paid under such
Trust Preferred Securities or the Guarantees.
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EVENTS OF DEFAULT
An event of default under a Guarantee will occur upon the failure of CMS
Energy to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate liquidation amount of the Trust Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to a Guarantee Trustee in respect of a
Guarantee or to direct the exercise of any trust or power conferred upon a
Guarantee Trustee under the Guarantees.
If a Guarantee Trustee fails to enforce a Guarantee, any holder of the
Trust Preferred Securities may institute a legal proceeding directly against CMS
Energy to enforce its rights under such Guarantee without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person or
entity. In addition, any record holder of Trust Preferred Securities shall have
the right, which is absolute and unconditional, to proceed directly against CMS
Energy to obtain Guarantee Payments, without first waiting to determine if the
Guarantee Trustee has enforced a Guarantee or instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity. CMS
Energy has waived any right or remedy to require that any action be brought just
against the Trust, or any other person or entity before proceeding directly
against CMS Energy.
CMS Energy, as guarantor, is required to file annually with each Guarantee
Trustee a certificate as to whether or not CMS Energy is in compliance with all
the conditions and covenants applicable to it under the Guarantees.
STATUS OF THE GUARANTEES
The Guarantees will constitute unsecured obligations of CMS Energy and will
rank equal to or subordinate and junior in right of payment to all other
liabilities of CMS Energy, as applicable. The Guarantees will rank pari passu
with or senior to, as applicable, any guarantee now or hereafter entered into by
CMS Energy in respect of any preferred or preference stock of any affiliate of
CMS Energy.
The Guarantees will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantees will be held for the benefit of the holders of the Trust Preferred
Securities. The Guarantees will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Trust or upon
distribution of the Debt Securities to the holders of the Trust Preferred
Securities. The Guarantees do not place a limitation on the amount of additional
indebtedness that may be incurred by CMS Energy or any of its subsidiaries.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
CMS Energy may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from CMS Energy, and CMS Energy to sell to the
holders, a specified number of shares of CMS Energy Common Stock at a future
date or dates. The price per share of CMS Energy Common Stock may be fixed at
the time the Stock Purchase Contracts are issued or may be determined by
reference to a specific formula set forth in the Stock Purchase Contracts. The
Stock Purchase Contracts may be issued separately or as part of Stock Purchase
Units consisting of a Stock Purchase Contract and Senior Debentures,
Subordinated Debentures, Trust Preferred Securities or debt obligations of
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third parties, including U.S. Treasury securities, securing the holders'
obligations to purchase the Common Stock under the Stock Purchase Contracts. The
Stock Purchase Contracts may require CMS Energy to make periodic payments to the
holders of the Stock Purchase Units or visa versa, and such payments may be
unsecured or refunded on some basis. The Stock Purchase Contracts may require
holders to secure their obligations thereunder in a specified manner.
The applicable prospectus supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the prospectus
supplement will not purport to be complete and will be qualified in its entirety
by reference to the Stock Purchase Contracts, and, if applicable, collateral
arrangements and depositary arrangements, relating to such Stock Purchase
Contracts or Stock Purchase Units.
LEGAL OPINIONS
Opinions as to the legality of certain of the Offered Securities will be
rendered for CMS Energy by Michael D. Van Hemert, Esq., Assistant General
Counsel for CMS Energy. Certain matters of Delaware law relating to the validity
of the Trust Preferred Securities will be passed upon on behalf of the Trusts by
Skadden, Arps, Slate, Meagher & Flom LLP, special Delaware counsel to the
Trusts. Certain United States Federal income taxation matters may be passed upon
for CMS Energy and the Trust by either Theodore J. Vogel, tax counsel for CMS
Energy, or by special tax counsel to CMS Energy and of the Trust, who will be
named in the prospectus supplement. Certain legal matters with respect to
Offered Securities will be passed upon by counsel for any underwriters, dealers
or agents, each of whom will be named in the related prospectus supplement.
EXPERTS
The consolidated financial statements and schedule of CMS Energy as of
December 31, 1998 and 1997, and for each of the three years in the period ended
December 31, 1998 incorporated by reference in this prospectus, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
Future consolidated financial statements of CMS Energy and the reports
thereon of Arthur Andersen LLP also will be incorporated by reference in this
prospectus in reliance upon the authority of that firm as experts in giving
those reports to the extent that said firm has audited said consolidated
financial statements and consented to the use of their reports thereon.
PLAN OF DISTRIBUTION
CMS Energy and/or the Trusts may sell the Offered Securities: (i) through
the solicitation of proposals of underwriters or dealers to purchase the Offered
Securities; (ii) through underwriters or dealers on a negotiated basis; (iii)
directly to a limited number of purchasers or to a single purchaser; or (iv)
through agents. The prospectus supplement with respect to any Offered Securities
will set forth the terms of such offering, including the name or names of any
underwriters, dealers or agents; the purchase price of
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the Offered Securities and the proceeds to CMS Energy and/or the Trust from such
sale; any underwriting discounts and commissions and other items constituting
underwriters' compensation; any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers and any securities
exchange on which such Offered Securities may be listed. Any initial public
offering price, discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the prospectus supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such prospectus supplement. Unless otherwise set forth
in the prospectus supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
If dealers are utilized in the sale of Offered Securities, CMS Energy
and/or the Trusts will sell such Offered Securities to the dealers as
principals. The dealers may then resell such Offered Securities to the public at
varying prices to be determined by such dealers at the time of resale. The names
of the dealers and the terms of the transaction will be set forth in the
prospectus supplement relating thereto.
The Offered Securities may be sold directly by CMS Energy and/or the Trusts
or through agents designated by CMS Energy and/or the Trusts from time to time.
Any agent involved in the offer or sale of the Offered Securities in respect to
which this prospectus is delivered will be named, and any commissions payable by
CMS Energy and/or the Trusts to such agent will be set forth, in the prospectus
supplement relating thereto. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
The Offered Securities may be sold directly by CMS Energy and/or the Trust
to institutional investors or others, who may be deemed to be underwriters
within the meaning of the Securities Act with respect to any resale thereof. The
terms of any such sales will be described in the prospectus supplement relating
thereto.
The CMS Energy Common Stock and the Class G Common Stock may be offered
other than through the facilities of a national securities exchange and other
than to or through a market marker other than on an exchange.
Agents, dealers and underwriters may be entitled under agreements with CMS
Energy and/or the Trust to indemnification by CMS Energy and/or the Trust
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments which such agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for CMS Energy and/or the Trust in the ordinary course of business.
The Offered Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in
30
<PAGE> 32
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("REMARKETING FIRMS"), acting as principals for their own
accounts or as agents for CMS Energy and/or the Trusts. Any remarketing firm
will be identified and the terms of its agreement, if any, with its compensation
will be described in the applicable prospectus supplement. Remarketing firms may
be deemed to be underwriters, as such term is defined in the Securities Act, in
connection with the Offered Securities remarketed thereby. Remarketing firms may
be entitled under agreements which may be entered into with CMS Energy and/or
the Trusts to indemnification or contribution by CMS Energy and/or the Trusts
against certain civil liabilities, including liabilities under the Securities
Act, and may be customers of, engage in transactions or perform services for CMS
Energy and its subsidiaries in the ordinary course of business.
The Offered Securities may or may not be listed on a national securities
exchange. Reference is made to the prospectus supplement with regard to such
matter. No assurance can be given that there will be a market for any of the
Offered Securities.
31
<PAGE> 33
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
AMOUNT
------
<S> <C>
Filing fee-- Securities and Exchange Commission......... $417,000
*Listing on New York Stock Exchange..................... 75,000
*Trustees expenses...................................... 18,000
*Printing and Engraving................................. 200,000
*Services of counsel.................................... 50,000
*Services of independent public accountants, Arthur
Andersen LLP........................................... 25,000
*Rating Agency Fees, Collateral Agent's and Purchase.... 100,000
Contract Agent's Fees ..................................
*Blue Sky fees and expenses............................. 20,000
*Miscellaneous.......................................... 18,000
-------
Total.............................................. $910,000
========
</TABLE>
- ----------
*Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following resolution was adopted by the Board of Directors of CMS Energy on
May 6, 1987:
RESOLVED: That effective March 1, 1987 the Corporation shall indemnify to the
full extent permitted by law every person (including the estate, heirs and legal
representatives of such person in the event of the decease, incompetency,
insolvency or bankruptcy of such person) who is or was a director, officer,
partner, trustee, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all liability, costs, expenses, including attorneys'
fees, judgments, penalties, fines and amounts paid in settlement, incurred by or
imposed upon the person in connection with or resulting from any claim or any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative, investigative or of whatever nature, arising from the
person's service or capacity as, or by reason of the fact that the person is or
was, a director, officer, partner, trustee, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. Such right of indemnification shall not be
deemed exclusive of any other rights to which the person may be entitled under
statute, bylaw, agreement, vote of shareholders or otherwise.
CMS Energy's Bylaws provide:
The Corporation may purchase and maintain liability insurance, to the full
extent permitted by law, on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity.
Article VIII of CMS Energy's Articles of Incorporation provides:
A director shall not be personally liable to the Corporation or its shareholders
for monetary damages for breach of duty as a director except (I) for a breach of
the director's duty of loyalty to the Corporation or its shareholders, (ii) for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) for a violation of Section 551 (I) of the
Michigan Business Corporation Act, and (iv) any action from which the director
derived an improper personal benefit. No amendment to or repeal of this Article
VIII, and no modification to its provisions by law, shall apply to, or have any
effect upon, the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment, repeal or modification.
Article IX of CMS Energy's Articles of Incorporation provides:
<PAGE> 34
Each director and each officer of the Corporation shall be indemnified by the
Corporation to the fullest extent permitted by law against expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with the defense of
any proceeding in which he or she was or is a party or is threatened to be made
a party by reason of being or having been a director or an officer of the
Corporation. Such right of indemnification is not exclusive of any other rights
to which such director or officer may be entitled under any now or thereafter
existing statute, any other provision of these Articles, bylaw, agreement, vote
of shareholders or otherwise. If the Business Corporation Act of the State of
Michigan is amended after approval by the shareholders of this Article IX to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Business
Corporation Act of the State of Michigan, as so amended. Any repeal or
modification of this Article IX by the shareholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
Sections 561 through 571 of the Michigan Business Corporation Act provides CMS
Energy with the power to indemnify directors, officers, employees and agents
against certain expenses and payments, and to purchase and maintain insurance on
behalf of directors, officers, employees and agents.
Officers and directors and Administrative Trustees of the Trust are covered
within specified monetary limits by insurance against certain losses arising
from claims made by reason of their being directors or officers of CMS Energy or
of CMS Energy's subsidiaries and CMS Energy's officers and directors are
indemnified against such losses by reason of their being or having been
directors of officers or another corporation, partnership, joint venture, trust
or other enterprise at CMS Energy's request. In addition, CMS Energy has
indemnified each of its present directors by contracts that contain affirmative
provisions essentially similar to those in sections 561 through 571 of the
Michigan Business Corporation Act cited above.
The Trust Agreement of the Trust provides that to the fullest extent permitted
by applicable law, the Trust shall indemnify and hold harmless each of the
Trustees, any Affiliate of the Trustees, any officer, director, shareholder,
employee, representative or agent of any Trustee and any employee or agent of
the Trust or its Affiliates (each a "Indemnified Person"), from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason the creation, operation
or termination of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by the Trust Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
II-2
<PAGE> 35
ITEM 16. EXHIBITS.
EXHIBIT NO. DESCRIPTION
----------- -----------
*(1)(a) -- Form of Underwriting Agreement with respect
to the Offered Securities (other than the
Trust Preferred Securities).
*(1)(b) -- Form of Underwriting Agreement with respect
to the Trust Preferred Securities.
*(4)(a) -- Indenture dated as of September 15, 1992
between CMS Energy Corporation and NBD Bank,
as Trustee. (Designated in CMS Energy's Form
S-3 Registration Statement filed May 1,
1992, File No. 33-47629, as Exhibit (4)(a).)
First Supplemental Indenture dated as of
October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 8-K dated
October 1, 1992, File No. 1-9513, as Exhibit
(4).)
Second Supplemental Indenture dated as of
October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 8-K dated
October 1, 1992, File No. 1-9513, as Exhibit
4(a).)
Third Supplemental Indenture dated as of May
6, 1997 between CMS Energy Corporation and
NBD Bank, as Trustee. (Designated in CMS
Energy's Form 10-Q for the quarter ended
March 31, 1997, File No. 1-9513, as Exhibit
(4).)
Fourth Supplemental Indenture dated as of
September 26, 1997 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form S-3
Registration Statement filed October 6,
1997, File No. 333-37241, as Exhibit
(4)(a).)
Fifth Supplemental Indenture dated as of
November 4, 1997 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 10-Q for
the quarter ended September 30, 1997, File
No. 1-9513, as Exhibit (4)(b).)
Sixth Supplemental Indenture dated as of
January 13, 1998 between CMS Energy
Corporation and NBD Bank, as Trustee
(Designated in CMS Energy's Form 10-K for
the year ended December 31, 1997, File No.
1-9513, as Exhibit (4)(a)).)
Seventh Supplemental Indenture dated January
25, 1999 between CMS Energy Corporation and
NBD Bank, as Trustee (Designated in CMS
Energy's Form 10-K for the year ended
December 31,1998, File No.1-9513, as Exhibit
4(d)(i).)
Eighth Supplemental Indenture dated February
3, 1999 between CMS Energy Corporation and
NBD, ad Trustee (Designated in CMS Energy's
Form 10-K for the year ended December 31,
1998, File No.1-9513, Exhibit 4(d)(ii).)
*(4)(b) -- Indenture dated as of January 15, 1994
between CMS Energy and The Chase Manhattan
Bank, as Trustee. (Designated in CMS
Energy's Form 8-K dated March 29, 1994, File
No. 1-9513, as Exhibit (4)(a).)
First Supplemental Indenture dated as of
January 20, 1994 between CMS Energy and the
Chase Manhattan Bank, as Trustee.
(Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as Exhibit
(4)(b).)
Second Supplemental Indenture dated as of
March 19, 1996 between CMS Energy
Corporation and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form
10-Q for the quarter ended March 31, 1996,
File No. 1-9513, as Exhibit (4).)
Third Supplemental Indenture dated as of
March 17, 1997 between CMS Energy
Corporation and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form
8-K dated May 1, 1997, File No. 1-9513, as
Exhibit (4).)
Fourth Supplemental Indenture dated as of
September 17, 1997 between CMS Energy
Corporation and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form
S-3 Registration Statement filed September
22, 1997, File No. 333-36115, as Exhibit
(4)(d).)
II-3
<PAGE> 36
*(4)(c) -- Credit Agreement dated as of November 21,
1995, among CMS Energy Corporation, the
Banks, the Co-Agents, the Documentation
Agent, the Operational Agent and the
Co-Managers, all as defined therein, and the
Exhibits thereto. (Designated in CMS
Energy's Form S-4 Registration Statement
filed January 12, 1996, File No. 33-60007,
as Exhibit 4(ii).)
*(4)(d) -- Term Loan Agreement dated as of November 21,
1995, among CMS Energy Corporation, the
Banks, the Co-Agents, the Documentation
Agent, the Operational Agent and the
Co-Managers, all as defined therein, and the
Exhibits thereto. (Designated in CMS
Energy's Form S-4 Registration Statement
filed January 12, 1996, File No. 33-60007,
as Exhibit 4(ii)(A).)
*(4)(e) -- Subordinated Debt Indenture between CMS
Energy and The Bank of New York, as Trustee.
(Designated in CMS Energy's Form 8-K dated
June 1, 1997, File No.
1-9513, as Exhibit (4)(a).)
First Supplemental Indenture between CMS
Energy and the Bank of New York, as Trustee.
(Designated in CMS Energy's Form 8-K dated
July 1, 1997, File No.
1-9513, as Exhibit (4)(b).)
*(4)(f) -- Form of Supplemental Indenture to be used
with the Subordinated Debentures issued in
connection with the Trust Preferred
Securities. (Designated in CMS Energy's
Amendment No. 1 to Form S-3 Registration
Statement filed June 13, 1997, File No.
333-27849, as Exhibit (4)(f).)
*(4)(g) -- Certificate of Trust of CMS Energy Trust II.
(Designated in CMS Energy's Amendment No. 1
to Form S-3 Registration Statement filed
June 13, 1997, File No. 333-27849, as
Exhibit (4)(h).)
*(4)(h) -- Form of Amended and Restated Trust Agreement
of CMS Energy Trust II. (Designated in CMS
Energy's Amendment No. 1 to Form S-3
Registration Statement filed June 13, 1997,
File No. 333-27849, as Exhibit (4)(i).)
*(4)(i) -- Certificate of Trust of CMS Energy Trust
III.
*(4)(j) -- Form of Amended and Restated Trust Agreement
of CMS Energy Trust III.
*(4)(k) -- Restated Articles of Incorporation of CMS
Energy. (Designated in CMS Energy's Form S-4
dated June 6, 1995, File No. 33-60007, as
Exhibit 3(c).)
*(4)(l) -- By-Laws of CMS Energy. (Designated in CMS
Energy's Form 10-K for the year ended
December 31, 1994, File No. 1-9513, as
Exhibit 3(c).)
*(4)(m) -- Form of Subordinated Debenture (included in
(4)(f).)
*(4)(n) -- Form of Trust Preferred Security (included
in (4)(h).)
*(4)(o) -- Form of Trust Preferred Securities
Guarantee Agreement of CMS Energy Trust II.
(Designated in CMS Energy's Amendment No. 1
to Form S-3 Registration Statement filed
June 13, 1997, File No. 333-27849, as
Exhibit (4)(n).)
*(4)(p) -- Form of Trust Preferred Securities Guarantee
Agreement of CMS Energy Trust III.
*(4)(q) -- Form of Purchase Contract Agreement between
CMS Energy and the Purchase Contract Agent
(including as Exhibit A the form of the
Security Certificate).
*(4)(r) -- Form of Senior Debenture (included in (4)
(a))
**(4)(s) -- Form of Supplemental Indenture to be used
with the Senior Debentures issued in
connection with the Trust Preferred
Securities
*(5)(a) -- Opinion of Michael D. Van Hemert, Assistant
General Counsel for CMS Energy.
*(5)(b) -- Opinion of Skadden, Arps, Slate, Meagher &
Flom LLP regarding the legality of the Trust
Preferred Securities.
(12) -- Statement re computation of ratios of
earnings to fixed charges and ratios of
(Designated in CMS Energy's Form 10-K for
the year ended December 31, 1998,
File No. 1-9513, as Exhibit 12)
II-4
<PAGE> 37
earnings to fixed charges and preferred
stock dividends.
*(23)(a) -- Consent of Michael D. Van Hemert, Assistant
General for CMS Energy (included in Exhibit
(5)(a) above).
*(23)(b) -- Consent of Skadden, Arps, Slate, Meagher &
Flom LLP (included in Exhibit (5)(b) above).
(23)(c) -- Consent of Arthur Andersen LLP.
*(24) -- Powers of Attorney.
*(25)(a) -- Statement of Eligibility and Qualification
of The Bank of New York (Trustee under the
Subordinated Debt Indenture).
*(25)(b) -- Statement of Eligibility of Property Trustee
of CMS Energy Trust II.
*(25)(c) -- Statement of Eligibility of the Trust
Preferred Security Guarantee Trustee of CMS
Energy Trust II.
*(25)(d) -- Statement of Eligibility of Property Trustee
of CMS Energy Trust III.
*(25)(e) -- Statement of Eligibility of the Trust
Preferred Security Guarantee Trustee of CMS
Energy Trust III.
(25)(f) -- Statement of Eligibility and Qualification
of NBD Bank (Trustee under the Senior Debt
Indenture)
- ----------
*Previously filed
**To be filed
Exhibits listed above which have been filed with the Securities and Exchange
Commission are incorporated herein by reference with the same effect as if filed
with this Registration Statement.
II-5
<PAGE> 38
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) To include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; (iii) To include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; provided, however, that (i) and (ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by
the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this registration statement shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that as claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
be governed by the final adjudication of such issue.
(6) That (1) for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE> 39
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dearborn, and State of Michigan, on
the 5th day of May, 1999.
CMS ENERGY CORPORATION
By:/s/ Alan M. Wright
-----------------------------------
Alan M. Wright
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the 5th day of May, 1999.
<TABLE>
<CAPTION>
Name Title
---- -----
<S> <C>
(i) Principal executive officer
/s/ William T. McCormick, Jr.
----------------------------------- Chairman of the Board, Chief
William T. McCormick, Jr. Executive Officer and Director
(ii) Principal financial officer:
/s/ Alan M. Wright
----------------------------------- Senior Vice President and
Alan M. Wright Chief Financial Officer
(iii) Controller or principal accounting officer
/s/ Preston D. Hopper
----------------------------------- Senior Vice President, Controller and
Preston D. Hopper Chief Accounting Officer
* Director
-----------------------------------
(John M. Deutch)
*
-----------------------------------
(James J. Duderstadt) Director
*
-----------------------------------
(Kathleen R. Flaherty) Director
*
-----------------------------------
(Victor J. Fryling) Director
</TABLE>
II-7
<PAGE> 40
<TABLE>
<S> <C>
*
-----------------------------------
(Earl D. Holton) Director
*
-----------------------------------
(William U. Parfet) Director
*
-----------------------------------
(Percy A. Pierre) Director
*
-----------------------------------
(Kenneth L. Way) Director
*
-----------------------------------
(Kenneth Whipple) Director
*
-----------------------------------
(John B. Yasinsky) Director
*By: Alan M. Wright
-------------------------------------
Alan M. Wright
Attorney in-fact
</TABLE>
II-8
<PAGE> 41
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CMS Energy Trust
II certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dearborn, State of Michigan, on the
5th day of May, 1999.
CMS ENERGY TRUST II
By: /s/ Alan M. Wright
------------------------------------
Alan M. Wright, Trustee
By: /s/ Thomas A. Mc Nish
------------------------------------
Thomas A. Mc Nish, Trustee
II-9
<PAGE> 42
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CMS Energy Trust
III certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dearborn, State of Michigan, on the
5th day of May, 1999.
CMS ENERGY TRUST III
By: /s/ Alan M. Wright
------------------------------------
Alan M. Wright, Trustee
By: /s/ Thomas A. Mc Nish
------------------------------------
Thomas A. Mc Nish, Trustee
II-10
<PAGE> 43
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
*(1)(a) -- Form of Underwriting Agreement with respect
to the Offered Securities (other than the
Trust Preferred Securities).
*(1)(b) -- Form of Underwriting Agreement with respect
to the Trust Preferred Securities.
*(4)(a) -- Indenture dated as of September 15, 1992
between CMS Energy Corporation and NBD Bank,
as Trustee. (Designated in CMS Energy's Form
S-3 Registration Statement filed May 1,
1992, File No. 33-47629, as Exhibit (4)(a).)
First Supplemental Indenture dated as of
October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 8-K dated
October 1, 1992, File No. 1-9513, as Exhibit
(4).)
Second Supplemental Indenture dated as of
October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 8-K dated
October 1, 1992, File No. 1-9513, as Exhibit
4(a).)
Third Supplemental Indenture dated as of May
6, 1997 between CMS Energy Corporation and
NBD Bank, as Trustee. (Designated in CMS
Energy's Form 10-Q for the quarter ended
March 31, 1997, File No. 1-9513, as Exhibit
(4).)
Fourth Supplemental Indenture dated as of
September 26, 1997 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form S-3
Registration Statement filed October 6,
1997, File No. 333-37241, as Exhibit
(4)(a).)
Fifth Supplemental Indenture dated as of
November 4, 1997 between CMS Energy
Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 10-Q for
the quarter ended September 30, 1997, File
No. 1-9513, as Exhibit (4)(b).)
Sixth Supplemental Indenture dated as of
January 13, 1998 between CMS Energy
Corporation and NBD Bank, as Trustee
(Designated in CMS Energy's Form 10-K for
the year ended December 31, 1997, File No.
1-9513, as Exhibit (4)(a)).)
Seventh Supplemental Indenture dated January
25, 1999 between CMS Energy Corporation and
NBD Bank, as Trustee (Designated in CMS
Energy's Form 10-K for the year ended
December 31,1998, File No.1-9513, as Exhibit
4(d)(i).)
Eighth Supplemental Indenture dated February
3, 1999 between CMS Energy Corporation and
NBD, ad Trustee (Designated in CMS Energy's
Form 10-K for the year ended December 31,
1998, File No.1-9513, Exhibit 4(d)(ii).)
*(4)(b) -- Indenture dated as of January 15, 1994
between CMS Energy and The Chase Manhattan
Bank, as Trustee. (Designated in CMS
Energy's Form 8-K dated March 29, 1994, File
No. 1-9513, as Exhibit (4)(a).)
First Supplemental Indenture dated as of
January 20, 1994 between CMS Energy and the
Chase Manhattan Bank, as Trustee.
(Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as Exhibit
(4)(b).)
Second Supplemental Indenture dated as of
March 19, 1996 between CMS Energy
Corporation and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form
10-Q for the quarter ended March 31, 1996,
File No. 1-9513, as Exhibit (4).)
Third Supplemental Indenture dated as of
March 17, 1997 between CMS Energy
Corporation and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form
8-K dated May 1, 1997, File No. 1-9513, as
Exhibit (4).)
Fourth Supplemental Indenture dated as of
September 17, 1997 between CMS Energy
Corporation and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form
S-3 Registration Statement filed September
22, 1997, File No. 333-36115, as Exhibit
(4)(d).)
II-11
<PAGE> 44
*(4)(c) -- Credit Agreement dated as of November 21,
1995, among CMS Energy Corporation, the
Banks, the Co-Agents, the Documentation
Agent, the Operational Agent and the
Co-Managers, all as defined therein, and the
Exhibits thereto. (Designated in CMS
Energy's Form S-4 Registration Statement
filed January 12, 1996, File No. 33-60007,
as Exhibit 4(ii).)
*(4)(d) -- Term Loan Agreement dated as of November 21,
1995, among CMS Energy Corporation, the
Banks, the Co-Agents, the Documentation
Agent, the Operational Agent and the
Co-Managers, all as defined therein, and the
Exhibits thereto. (Designated in CMS
Energy's Form S-4 Registration Statement
filed January 12, 1996, File No. 33-60007,
as Exhibit 4(ii)(A).)
*(4)(e) -- Subordinated Debt Indenture between CMS
Energy and The Bank of New York, as Trustee.
(Designated in CMS Energy's Form 8-K dated
June 1, 1997, File No.
1-9513, as Exhibit (4)(a).)
First Supplemental Indenture between CMS
Energy and the Bank of New York, as Trustee.
(Designated in CMS Energy's Form 8-K dated
July 1, 1997, File No.
1-9513, as Exhibit (4)(b).)
*(4)(f) -- Form of Supplemental Indenture to be used
with the Subordinated Debentures issued in
connection with the Trust Preferred
Securities. (Designated in CMS Energy's
Amendment No. 1 to Form S-3 Registration
Statement filed June 13, 1997, File No.
333-27849, as Exhibit (4)(f).)
*(4)(g) -- Certificate of Trust of CMS Energy Trust II.
(Designated in CMS Energy's Amendment No. 1
to Form S-3 Registration Statement filed
June 13, 1997, File No. 333-27849, as
Exhibit (4)(h).)
*(4)(h) -- Form of Amended and Restated Trust Agreement
of CMS Energy Trust II. (Designated in CMS
Energy's Amendment No. 1 to Form S-3
Registration Statement filed June 13, 1997,
File No. 333-27849, as Exhibit (4)(i).)
*(4)(i) -- Certificate of Trust of CMS Energy Trust
III.
*(4)(j) -- Form of Amended and Restated Trust Agreement
of CMS Energy Trust III.
*(4)(k) -- Restated Articles of Incorporation of CMS
Energy. (Designated in CMS Energy's Form S-4
dated June 6, 1995, File No. 33-60007, as
Exhibit 3(c).)
*(4)(l) -- By-Laws of CMS Energy. (Designated in CMS
Energy's Form 10-K for the year ended
December 31, 1994, File No. 1-9513, as
Exhibit 3(c).)
*(4)(m) -- Form of Subordinated Debenture (included in
(4)(f).)
*(4)(n) -- Form of Trust Preferred Security (included
in (4)(h).)
*(4)(o) -- Form of Trust Preferred Securities Guarantee
Agreement of CMS Energy Trust II.
(Designated in CMS Energy's Amendment No. 1
to Form S-3 Registration Statement filed
June 13, 1997, File No. 333-27849, as
Exhibit (4)(n).)
*(4)(p) -- Form of Trust Preferred Securities Guarantee
Agreement of CMS Energy Trust III
*(4)(q) -- Form of Purchase Contract Agreement between
CMS Energy and the Purchase Contract Agent
(including as Exhibit A the form of the
Security Certificate).
*4(r) -- Form of Senior Debenture (included in (4)
(a))
**4(s) -- Form of Supplemental Indenture to be used
with the Senior Debentures issued in
connection with the Trust Preferred
Securities
*(5)(a) -- Opinion of Michael D. Van Hemert, Assistant
General Counsel for CMS Energy.
*(5)(b) -- Opinion of Skadden, Arps, Slate, Meagher &
Flom LLP regarding the legality of the Trust
Preferred Securities.
* (12) -- Statement re computation of ratios of
earnings to fixed charges and ratios of
(Designated in CMS Energy's Form 10-K for
the year ended December 31, 1998, File No.
1-9513, as Exhibit 12)
II-12
<PAGE> 45
earnings to fixed charges and preferred
stock dividends.
*(23)(a) -- Consent of Michael D. Van Hemert, Assistant
General for CMS Energy (included in Exhibit
(5)(a) above).
*(23)(b) -- Consent of Skadden, Arps, Slate, Meagher &
Flom LLP (included in Exhibit (5)(b) above).
(23)(c) -- Consent of Arthur Andersen LLP.
*(24) -- Powers of Attorney.
*(25)(a) -- Statement of Eligibility and Qualification
of The Bank of New York (Trustee under the
Subordinated Debt Indenture).
*(25)(b) -- Statement of Eligibility of Property Trustee
of CMS Energy Trust II.
*(25)(c) -- Statement of Eligibility of the Trust
Preferred Security Guarantee Trustee of CMS
Energy Trust II.
*(25)(d) -- Statement of Eligibility of Property Trustee
of CMS Energy Trust III.
*(25)(e) -- Statement of Eligibility of the Trust
Preferred Security Guarantee Trustee of CMS
Energy Trust III.
(25)(f) -- Statement of Eligibility and Qualification
of NBD Bank (Trustee under the Senior Debt
Indenture)
- ----------
*Previously filed
**To be filed
Exhibits listed above which have been filed with the Securities and Exchange
Commission are incorporated herein by reference with the same effect as if filed
with this Registration Statement.
II-13
<PAGE> 1
Exhibit (23)(c)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
January 26, 1999 (except with respect to the matters disclosed in Note 3,
"Consumers' Electric Utility Rate Matters", and Note 19 as to which the date is
March 29, 1999) included or incorporated by reference in CMS Energy
Corporation's Form 10-K for the year ended December 31, 1998 and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Detroit, Michigan,
May 6, 1999.
<PAGE> 1
EXHIBIT 25(f)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
-----------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
--------------------------------------------
NBD BANK
(Exact name of Trustee as specified in its charter)
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226 38-0864715
(Address of principal (Zip Code) (I.R.S. Employer
executive offices) Identification No.)
NBD BANK
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
CORPORATE TRUST ADMINISTRATION
ATTN: ERNEST J. PECK, VICE PRESIDENT
TELEPHONE: (313) 225-2025
(Name, Address and Telephone number of agent for service)
CMS ENERGY CORPORATION
(Exact name of obligor as specified in its charter)
MICHIGAN 38-2726431
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
FAIRLANE PLAZA SOUTH, SUITE 1100
330 TOWN CENTER DRIVE
DEARBORN, MICHIGAN 48126
(Address of principal executive offices) (Zip Code)
SENIOR DEBT SECURITIES
(Title of Indenture Securities)
1
<PAGE> 2
ITEM 1 GENERAL INFORMATION. Furnish the following information as
to the Trustee:
(A) NAME AND ADDRESS OF EACH EXAMINING
OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT:
State of Michigan Financial Institutions Bureau,
Lansing, MI Federal Reserve Bank of Chicago,
Chicago, Illinois Federal Deposit Insurance
Corporation, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS. The Trustee is
authorized to exercise corporate trust
powers.
ITEM 2 AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE,
DESCRIBE EACH SUCH AFFILIATION. The obligor is not an
affiliate of the Trustee.
ITEM 3 VOTING SECURITIES OF THE TRUSTEE.
The following information is furnished as to each class of
voting securities of the Trustee:
<TABLE>
<S><C>
As of December 9, 1998
-------------------------------------------------------------------------------------
Column A Column B
-------------------------------------------------------------------------------------
Title of Class Amount Outstanding
-------------------------------------------------------------------------------------
Common Stock, par value $12.50 per share 8,948,648 shares
</TABLE>
ITEM 4 TRUSTEESHIPS UNDER OTHER INDENTURES
None.
ITEM 5 THROUGH ITEM 15 Not applicable
ITEM 16 LIST OF EXHIBITS:
EXHIBIT (1) A COPY OF THE ARTICLES OF INCORPORATION OF THE
TRUSTEE NOW IN EFFECT
Incorporated by reference to Exhibit (1) to Item 16 of
Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration
No. 33-51775.*
EXHIBIT (2) CERTIFICATE OF AUTHORITY OF THE TRUSTEE
TO COMMENCE BUSINESS
Incorporated by reference to Exhibit (2) to Item
16 of Form T-1 filed with Amendment No. 1, Securities and
Exchange Commission, Registration No. 22-4501.*
EXHIBIT (3) AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS Incorporated by reference to Exhibit
(3) to Item 16 of Form T-1 filed with Amendment No. 1,
Securities and Exchange Commission,
2
<PAGE> 3
Registration No. 22-4501.*
EXHIBIT (4) BY-LAWS OF THE TRUSTEE, AS PRESENTLY IN
EFFECT
Incorporated by reference to Exhibit (4) to Item 16
of Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration No.
33-51775.*
EXHIBIT (5) Not Applicable.
EXHIBIT (6) CONSENT BY THE TRUSTEE REQUIRED BY SECTION
321 (B) OF THE ACT.
Incorporated by reference to Exhibit (6) to Item 16
of Form T-1, filed with Amendment No. 1, Securities and
Exchange Commission, Registration No. 22-4501.*
EXHIBIT (7) A COPY OF THE LATEST REPORT OF CONDITION
OF THE TRUSTEE PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS
OF ITS SUPERVISING OR EXAMINING AUTHORITY.
EXHIBIT (8) Not applicable.
EXHIBIT (9) Not applicable.
* Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, NBD Bank, a Michigan banking corporation organized and existing under
the laws of the State of Michigan, has duly caused this Statement of Eligibility
and Qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Detroit, State of Michigan on the 5th day of
May, 1999.
NBD BANK, Trustee
By: /s/ Ernest J. Peck
---------------------------
Ernest J. Peck
Vice President
3
<PAGE> 4
Charter No. 13671 Comptroller of the Currency District
REPORT OF CONDITION CONSOLIDATING
DOMESTIC AND FOREIGN SUBSIDIARIES OF THE
NBD BANK
in the State of Michigan, at the close of business on December 31,
1999 published in response to call made by Comptroller of the
Currency, under title 12, United States Code, Section 161.
<TABLE>
<CAPTION>
ASSETS
Thousands
of dollars
<S> <C>
Cash and balances due from depository institutions
Noninterest-bearing balances and currency
and coin............................................. 2,346,187
Interest-bearing balances............................ 2,094
Securities:
Held-to-maturity securities.......................... -
Available-for-sale securities........................ 1,537,804
Federal funds sold and securities purchased
under agreements to resell........................... 112,720
Loans and lease financing receivables:
Loans and leases, net of unearned income.. 18,010,826
LESS: Allowance for loan and lease losses. 282,638
Loans and leases, net of unearned income and
allowance............................................ 17,728,188
Assets held in trading accounts.......................... 117,472
Premises and fixed assets (including
capitalized leases).................................. 327,994
Other real estate owned.................................. 6,011
Investments in unconsolidated subsidiaries and
associated companies................................. -
Customers' liability to this bank on acceptances
outstanding.......................................... 7,559
Intangible assets........................................ 131,815
Other assets............................................. 636,938
-----------
Total assets............................................. 22,954,782
===========
LIABILITIES
Deposits:
In domestic offices.................................. 17,890,219
Noninterest-bearing............... 5,202,278
Interest-bearing.................. 12,687,941
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 154,692
Noninterest-bearing.................. -
Interest-bearing..................... 154,692
Federal funds purchased and securities sold
under agreements to repurchase.................... 1,556,060
Demand notes issued to the U.S. Treasury.............. 225,528
Trading liabilities................................... 94,960
Other borrowed money:
With remaining maturity of one year or less... 337,378
With remaining maturity of more than
one year through three year 2,626
With remaining maturity of more than
three years................................. 2,993
Bank's liability on acceptances executed and
outstanding....................................... 7,559
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
Notes and debentures subordinated to
deposits.......................................... 610,000
Other liabilities..................................... 464,789
-----------
Total liabilities..................................... 21,346,804
-----------
EQUITY CAPITAL
Common stock.......................................... 111,858
Surplus............................................... 687,356
Undivided profits and capital reserves................ 795,579
Net unrealized holding gains (losses) on
available-for-sale securities..................... 13,185
Cumulative foreign currency translation
adjustments....................................... -
-----------
Total equity capital.................................. 1,607,978
-----------
Total liabilities and equity capital.................. 22,954,782
===========
</TABLE>
I, Jason N. Hansen, Vice President of the above-named bank do
hereby declare that this Report of Condition is true and correct
to the best of my knowledge and belief.
JASON N. HANSEN
April 9, 1999
We, the undersigned directors, attest to the correctness of
this statement of resources and liabilities. We declare that it
has been examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the instructions and
is true and correct.
DANIEL T. LIS
WALTER C. WATKINS
VERNE G. ISTOCK
Directors
