File No. 70-9759
SECURITIES AND EXCHANGE COMMISSION
450 FIFTH STREET
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO FORM U-1 APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Cinergy Corp.
139 East Fourth Street
Cincinnati, Ohio 45202
(Name of company filing this statement
and address of principal executive offices)
Cinergy Corp.
(Name of top registered holding company)
Julia S. Janson/Senior Counsel & Corporate Secretary
George Dwight II/Senior Counsel
Cinergy Corp.
139 East Fourth Street, 25 Atrium Two
Cincinnati, Ohio 45202
(Name and address of agents for service)
<PAGE>
The application-declaration as previously filed is hereby amended and restated
in its entirety as follows:
Item 1. Description of Proposed Transactions
A. 1995 & 1996 Plan Orders; Requested Authorization
By orders dated December 1, 1995 (HCAR No. 26422, File No. 70-8705) ("1995
Order") and April 17, 1996 (HCAR No. 26505, File No. 70-8807) ("1996 Order"),
the Commission authorized Cinergy Corp. ("Cinergy"), a Delaware corporation and
registered holding company under the Public Utility Holding Company Act of 1935
("Act"), to issue and sell, from time to time through December 31, 2000, a total
of approximately 30 million shares of Cinergy's common stock, $0.01 par value
per share ("Common Stock"), under various stock-based employee and director
plans of Cinergy and its subsidiaries.
More specifically, the 1995 Order authorized Cinergy to issue and sell,
from time to time through December 31, 2000, up to 22,386,696 shares of Common
Stock under various benefit plans of Cinergy and its subsidiaries, namely, the
Cinergy Corp. Dividend Reinvestment and Stock Purchase Plan, the Cinergy Corp.
Employee Stock Purchase and Savings Plan, the Cinergy Corp. Performance Shares
Plan, the Cinergy Corp. Stock Option Plan, the Cinergy Corp. Directors' Deferred
Compensation Plan, the PSI Energy, Inc. ("PSI") Union Employees' 401(k) Savings
Plan, the PSI Energy, Inc. Employees' 401(k) Savings Plan, The Cincinnati Gas &
Electric Company ("CG&E") Deferred Compensation and Investment Plan and The
Cincinnati Gas & Electric Company Savings Incentive Plan. The 1996 Order
authorized Cinergy to issue and sell, from time to time through December 31,
2000, up to 7 million shares of Common Stock under the Cinergy Corp. Long-Term
Incentive Compensation Plan.1
Effective January 1, 1998, the PSI Energy, Inc. Union Employees' 401(k)
Savings Plan was amended, restated and renamed the Cinergy Corp. Union
Employees' 401(k) Plan, The Cincinnati Gas & Electric Company Savings Incentive
Plan was amended, restated and renamed the Cinergy Corp. Union Employees'
Savings Incentive Plan, and the PSI Energy, Inc. Employees' 401(k) Savings Plan
was amended, restated and renamed the Cinergy Corp. Non-Union Employees' 401(k)
Plan and The Cincinnati Gas & Electric Company Deferred Compensation and
Investment Plan was merged into the Cinergy Corp. Non-Union Employees' 401(k)
Plan. In addition, since the 1995 Order, the Cinergy Corp. Performance Shares
Plan has been terminated. And in 2000, Cinergy's Board of Directors adopted a
new plan -- the Cinergy Corp. Direct Stock Purchase and Dividend Reinvestment
Plan -- to replace the existing Cinergy Corp. Dividend Reinvestment and Stock
Purchase Plan.
As of August 31, 2000, Cinergy had 600,000,000 shares of Common Stock
authorized for issuance and 158,924,941 shares were outstanding. Since
registering under the Act, Cinergy has issued approximately 3.8 million shares
of Common Stock under the plans referred to above.
Cinergy now requests authorization to issue and sell up to 50 million
shares of Common Stock, from time to time over a 10-year period commencing with
the date of the Commission's order herein ("Authorization Period"), under the
following plans (collectively, "Plans"): the Cinergy Corp. Direct Stock Purchase
and Dividend Reinvestment Plan, the Cinergy Corp. Employee Stock Purchase and
Savings Plan, the Cinergy Corp. Stock Option Plan, the Cinergy Corp. Directors'
Deferred Compensation Plan, the Cinergy Corp. Long-Term Incentive Compensation
Plan, the Cinergy Corp. Union Employees' 401(k) Plan, the Cinergy Corp. Union
Employees' Savings Incentive Plan and the Cinergy Corp. Non-Union Employees'
401(k) Plan.
Shares of Common Stock issued under the Plans from time to time over the
Authorization Period may be authorized and previously unissued shares or
previously issued shares re-acquired by Cinergy in open market transactions. In
addition, under the Stock Option Plan and the Long-Term Incentive Compensation
Plan, plan participants may purchase shares of Common Stock under certain
circumstances by, among other means, exchanging shares of Common Stock, and
accordingly, Cinergy also requests authorization, to the extent required under
the Act, to acquire such shares of Common Stock from plan participants.
Cinergy proposes to apply proceeds of any shares sold for cash to general
corporate purposes, including repayment of outstanding indebtedness and
investments in subsidiaries, except that, without further authorization from the
Commission, Cinergy will not apply any such proceeds to acquire exempt wholesale
generators (as defined in section 32 of the Act, "EWGs") or foreign utility
companies (as defined in section 33 of the Act, "FUCOs").
The terms of the Plans are summarized below. Such summaries are qualified
in their entirety by the full text of the Plans (see Item 6 below).
B. Terms of the Plans
1. Direct Stock Purchase and Dividend Reinvestment Plan
All holders of record of Cinergy Common Stock, PSI cumulative preferred
stock or CG&E cumulative preferred stock ("Eligible Securities") may participate
in the Cinergy Corp. Direct Stock Purchase and Dividend Reinvestment Plan
("DSPP"), and prospective shareholders may enroll and participate in the DSPP by
making a minimum initial investment of $250. Holders of Cinergy Common Stock
currently participating in the Cinergy Corp. Dividend Reinvestment and Stock
Purchase Plan, which is being replaced by the DSPP, will automatically be
participants in the DSPP. Once a Participant has enrolled in the DSPP, the
Participant may make additional investments in Cinergy Common Stock by mailing a
payment to Cinergy's shareholder services department. A Participant may also
choose to make monthly investments by authorizing automatic deductions from the
Participant's bank account.
Participants can elect to receive cash dividends on all of their shares in
their DSPP account, or may elect one of two options for reinvestment of
dividends in additional shares of Common Stock: (1) automatically invest in
Common Stock all of the Participant's cash dividends on all certificated shares
of that class, as well as all of the cash dividends on Common Stock credited to
the Participant's DSPP account ("Plan Shares"); or (2) automatically invest all
of the participant's cash dividends on only the number of certificated shares
and/or Plan Shares that the Participant specifies, and elect to receive cash
dividends on the remaining certificated shares and Plan Shares. A participant
may change the method of participation at any time by completing an account
change request and returning it to the plan administrator.
Once enrolled in the DSPP, Participants may make optional cash payments
from time to time of not less than $25 for any investment date and not more than
$100,000 in any calendar year. The investment date for optional cash payments is
the 15th day of each month. The investment date for reinvested dividends are the
dividend payment dates for Cinergy Corp. Common Stock, which are expected to be
February 15, May 15, August 15 and November 15.
New DSPP Participants will be charged a $5.00 one-time enrollment fee.
There are no brokerage or other fees on purchases. All participants will be
charged brokerage fees on sales requested through the DSPP, which are currently
expected to be approximately $.04 per share, but are subject to change. All
costs of administering the DSPP are paid by Cinergy.
When purchases of shares of Common Stock are made from authorized but
unissued shares, the purchase price will be the average of the high and low
prices of Common Stock as reported by the "New York Stock Exchange--Composite
Transactions" as published in The Wall Street Journal (the "NYSE-Composite
Transactions") for the appropriate investment date, or if no trading in Common
Stock occurs on the New York Stock Exchange ("NYSE") on that date, the next
preceding date on which such trading occurred. When the source of Common Stock
purchased for any investment date is the open market, the purchase price will be
the weighted average price per share paid for DSPP purchases for that investment
date.
If Cinergy elects to meet the requirements of participants by purchasing
shares of Common Stock on the open market, an independent agent or agents
appointed by Cinergy ("Independent Agent") will act on behalf of the
participants in purchasing such shares, and Cinergy will pay all administrative
costs associated therewith, including brokerage fees and commissions. The
Independent Agent will determine the exact volume, timing and price of such
purchases, based on the amount of reinvested dividends, optional cash payments
received, market conditions, and requirements of applicable federal securities
laws. The Independent Agent will also sell shares of Common Stock on behalf of
plan participants.
A participant may direct that all or a portion of his/her shares be sold or
withdrawn, or that his/her participation in the DSPP terminate, by submitting to
Cinergy an appropriately executed account change request form or other written
notification. Requests for withdrawal and/or termination will normally be
processed by Cinergy within five business days following receipt of a written
request signed by the participant. If a participant requests that shares be
sold, Cinergy will combine such shares with shares for which requests to sell
were received from other participants during that week, and will then place a
market order with the Independent Agent. Proceeds from any sale, less applicable
brokerage commissions, will be remitted to the participant following settlement
through a broker, in accordance with applicable settlement rules. The sale price
for shares sold through withdrawal or termination will be the weighted average
of the aggregated shares sold by the Independent Agent less the brokerage
commission.
A participant will be entitled to request in writing and receive a
certificate representing some or all of the whole shares of Common Stock
credited to his/her account. Any remaining whole and fractional Plan Shares in
the account of the Participant will continue to be held in the DSPP.
A Participant may terminate participation in the DSPP by written
instruction to Cinergy Shareholder Services and may elect to receive either a
certificate for the number of whole shares in the Plan account and a check for
the value of any fractional share, or to have all of the shares in the
Participant's Plan account sold.
Cinergy reserves the right to suspend, modify or terminate the DSPP. All
participants will receive notification of any material changes.
Any shares of Common Stock distributed by Cinergy as a stock dividend on
Plan shares, or as a split of these shares, will be credited to the
participant's account. A stock dividend or stock split on certficated shares
will be mailed to the Participant in the same manner as to stockholders not
participating in the DSPP. Each participant has a right to vote the certificated
and Plan shares credited to such participant's account. Proxy cards will be
distributed to participants and all Plan Shares will be voted in the manner
indicated in the proxy card. If a participant does not return a valid proxy
card, the shares of Common Stock held in such participant's account will not be
voted.
Existing shareholders are notified of the existence of the DSPP through
letters and inserts with financial reports and dividend checks. Eligible persons
expressing an interest in the DSPP will receive a prospectus and related
enrollment materials.
2. Employee Stock Purchase and Savings Plan
The Cinergy Corp. Employee Stock Purchase and Savings Plan ("Stock Purchase
Plan") is an employee stock purchase plan under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), in which eligible employees may
be granted the right to purchase shares of Common Stock. Under the Stock
Purchase Plan, only authorized but unissued shares Common Stock may be issued to
eligible employees. The Stock Purchase plan is administered by a committee
("Plan Committee") of the Cinergy Board of Directors ("Cinergy Board"), the
members of which are ineligible to participant therein.
Employees of Cinergy or any of its subsidiaries who meet the eligibility
requirements may participate in the Stock Purchase Plan. Generally, the
eligibility requirements are that an employee must be employed by Cinergy or any
of its subsidiaries (collectively, "Cinergy Companies" and individually a
"Cinergy Company") and must normally work at least 20 hours a week and five
months a year. Full officers of Cinergy, Cinergy Services, Inc., CG&E and PSI,
as well as employees who receive a grant of a stock option or stock appreciation
right under the Cinergy Corp. Stock Option Plan, are not eligible to participate
in the Stock Purchase Plan.
Each offering for sale of Common Stock under the Stock Purchase Plan will
have a term of 26 months ("Offering Period") commencing and ending on dates
determined by the Plan Committee. The initial offering of Common Stock under the
Stock Purchase Plan was a continuation of an offering period under a predecessor
plan, which was merged into the Stock Purchase Plan in October 1994. The initial
offering ended on December 31, 1996. Two more offerings have been made (January
1, 1997 through February 28, 1999 and March 1, 1999 through April 30, 2001).
The purchase price per share of Common Stock under the Stock Purchase Plan
is equal to the fair market value of a share of Common Stock on the first day of
the Offering period less 5 percent. For this purpose, the fair market value of a
share of Common Stock is equal to the average of the high and low sales prices
of a share of Common Stock as reported by the NYSE-Composite Transactions for
the first day of the Offering period or, if no trading in Common Stock occurs on
the NYSE on that day, the last day prior to the first day of the Offering Period
on which such trading in Common Stock does occur.
An eligible employee must accumulate funds to purchase Common Stock under
the Stock Purchase plan by authorizing the appropriate Cinergy Company to deduct
an amount from each paycheck and deposit that amount in an interest earning
account. On the purchase date (the last day of the Offering Period), the
employee may apply some or all of the total amount of deposits made to the
account plus accrued interest to the purchase of shares of Cinergy Common Stock
or may receive the balance of the account in cash or any combination thereof.
The maximum number of shares of Common Stock that an eligible employee may
purchase in an Offering Period is equal to: (1) the sum of (a) 10 percent of his
or her annual base compensation as of the first day of the second calendar month
preceding the first day of the relevant Offering Period multiplied by 26/12ths
plus (b) the amount of interest earned on the employee's account during the
relevant Offering Period divided by (2) the purchase price. No employee may
participate in the Stock Purchase Plan if (i) participation would permit the
employee's rights to purchase shares of Common Stock under all employee stock
purchase plans of Cinergy Companies to accrue at a rate exceeding $25,000 of
fair market value of such shares (determined at the time such right is granted)
for each calendar year during which such right is outstanding at any time; or
(ii) the employee owns, immediately after his or her participation commences,
stock possessing 5 percent or more of the total combined voting power or value
of all classes of stock of any Cinergy Company.
At any time by action of the Cinergy Board or the Plan Committee, Cinergy
may amend, suspend or terminate the Stock Purchase Plan, or modify the terms of
participation in any offering thereunder, subject to certain exceptions. No such
action may, without the approval of Cinergy's shareholders, (1) increase the
maximum number of shares of Common Stock that may be offered or the maximum
number of shares of Common Stock that each eligible employee may purchase, (2)
extend the maximum term of an Offering Period beyond 26 months, (3) decrease the
purchase price, (4) materially expand the eligibility requirements or (5)
materially increase benefits.
3. Stock Option Plan
The Cinergy Corp. Stock Option Plan ("Stock Option Plan") is a stock option
plan in which non-employee directors and eligible employees of the Cinergy
Companies may be granted incentive stock options, non-qualified stock options,
stock appreciation rights and/or cash awards granted in connection with
non-qualified stock options to reimburse an optionee for the income taxes
imposed upon the exercise of such an option. Shares of Common Stock issuable
under the Stock Option Plan consist, at Cinergy's discretion, of authorized but
unissued shares and/or shares purchased on behalf of plan participants on the
open market. The Stock Option Plan is administered by the Plan Committee, which
grants stock options, stock appreciation rights and cash awards to eligible
employees selected by it. In addition, the Cinergy Board may perform any
function of the Committee except where Committee action is required under
Section 162(m) of the Code.
Employees of Cinergy or any of its subsidiaries who are officers or are
employed in a significant executive, supervisory, administrative, operational or
professional capacity or who have the potential to contribute to the future
success of Cinergy or its subsidiaries are eligible to receive awards under the
Stock Option Plan. Non-employee directors are also eligible to receive awards
under the plan.
Concurrently with the granting of any stock option, the Plan Committee will
establish the exercise price per share of Common Stock subject to the stock
option, which in no event will be less than 100 percent of the fair market value
per share of Common Stock on the date of the grant. For this purpose, fair
market value will be determined based on the average of the high and low sales
prices of a share of Common Stock on the date of grant (or on the preceding
trading day if the date of grant is not a trading day) as reported by the
NYSE-Composite Transactions. Also at the time of grant, the Plan Committee will
establish the period of time (not to exceed ten years) during which the stock
option will be exercisable. Stock options granted to eligible employees may be
exercisable in full at any time, or in installments at specified times, during
the term of the stock option. The foregoing notwithstanding, except in
connection with a change in control, no stock option will be exercisable in
whole or in part for the first twelve months after the date of grant.
Each non-employee director was granted, at the consummation of the Cinergy
merger in October 1994, a non-qualified stock option to acquire 12,500 shares of
Common Stock at an exercise price per share equal to the average of the high and
low sales prices of a share of Common Stock on October 25, 1994 (the initial
trading date of the Common Stock) as reported by the NYSE-Composite
Transactions. Each person who is elected for the first time to be a non-employee
director (other than persons who were previously employees of CG&E or PSI) will
be granted, as of the first Board meeting held on or after the date he or she
becomes a non-employee director, a non-qualified stock option to acquire 12,500
shares of Common Stock at an exercise price per share equal to the average of
the high and low sales price of a share of Common Stock as reported on the
NYSE-Composite Transactions on the date he or she first becomes a non-employee
director. Effective December 1, 1999, the Plan was amended to allow non-employee
directors to be eligible for other awards under the Plan. On December 14, 1999,
each non-employee director was granted a non-qualified stock option to acquire
10,000 shares of Common Stock at an exercise price equal to the average of the
high and low sales price of a share of Cinergy Common Stock on December 14, 1999
as reported on the NYSE-Composite Transactions. Each non-qualified stock option
granted to a non-employee director will have a term of ten years and will become
exercisable with respect to 20 percent of the shares of Common Stock subject
thereto on each of the first five anniversaries of the grant date. Non-employee
directors are not eligible to receive any additional awards.
Shares of Common Stock acquired by non-employee directors and eligible
employees pursuant to the exercise of stock options may be purchased with (i)
cash, (ii) a stock exchange or swap using shares of Common Stock already owned
by the optionee or owned jointly by the optionee and his or her spouse (with the
spouse's permission), (iii) a broker-financed transaction, (iv) by withholding
from the shares of Common Stock issued on exercise, shares of Common Stock whose
value equals the purchase price, (v) any other legal consideration that the Plan
Committee deems appropriate, or (vi) any combination of these methods.
Any awardee (other than a non-employee director) who has been granted a
stock option may be granted a stock appreciation right, which entitles the
awardee to receive, upon surrender of all or a portion of the stock option, an
amount equal to the excess of the fair market value of a share of Common Stock
on the date of the exercise of the stock appreciation right over the exercise
price per share of the stock option, multiplied by the number of shares of
Common Stock with respect to which the s tock option has been surrendered. The
right to exercise a stock appreciation right terminates to the extent an awardee
exercises the stock option to which it is attached. Payment by the respective
Cinergy Company of the amount receivable by an awardee upon the exercise of a
stock appreciation right may be made, as determined by the Plan Committee, by
the delivery of whole shares of Common Stock, cash or any combination of shares
of Common Stock and cash. In no event may a stock appreciation right be
exercised more than ten years after the date of the grant of the tandem stock
option. To the extent a stock appreciation right is exercised, the tandem stock
option will be deemed to have been exercised.
A cash award is a right granted to an awardee who has been granted a
non-qualified stock option to receive a cash payment, at the times and in the
amounts determined by the Plan Committee, that is intended to reimburse the
awardee for all or a portion of the federal, state and local income taxes
imposed upon the awardee as a consequence of the exercise of the non-qualified
stock option.
In general, the Cinergy Board may at any time alter, amend, suspend or
terminate the Stock Option Plan, except that, without the approval of Cinergy's
shareholders, no such action may (1) increase the maximum number of shares of
Common Stock that may be issued in respect of awards, (2) change the class of
employees eligible to participate, or (3) cause the plan non longer to comply
with applicable rules under the Securities and Exchange Act of 1934, as amended,
or other applicable requirements. Without the consent of the awardee, no
amendment or termination of the Stock Option Plan may adversely affect any stock
option, stock appreciation right or cash award previously granted.
4. Directors' Deferred Compensation Plan
Cinergy's Directors' Deferred Compensation Plan ("Directors' Plan") allows
each non-employee director to defer fees for serving as a non-employee director,
and to have such fees accrued as cash or theoretical units of shares of Common
Stock. Shares of Common Stock offered under the Directors' Plan consist, at
Cinergy's discretion, of authorized but unissued shares and/or shares purchased
on behalf of plan participants on the open market. The Directors' Plan is
administered by the Plan Committee.
All non-employee directors may participate in the Directors' Plan. On an
annual basis, on or before July 1, a non-employee director may elect to defer
the receipt of all or a specified portion of his or her fees payable for
succeeding years.
Cinergy's Secretary will establish and maintain a separate recordkeeping
account for each participant to which all deferred fees for that participant
will be credited. At the time a deferral election is made, a participant may
elect to have all or a portion of the deferred fees credited to his or her
account as units, each representing a share of Common Stock, or as cash.
Deferred fees that are credited to a participant's account as units will be
deemed to be invested in that number of hypothetical shares of Common Stock
obtained by dividing the dollar amount of the deferred fees by the closing price
per share of Common Stock as reported by the NYSE-Composite Transactions for the
date the fees would have been otherwise paid to the participant. From time to
time thereafter, additional units will be credited to the participant's account
to reflect any dividend or other distribution the participant would have
received if the participant had been the record owner of that number of shares
of Common Stock equal to the number of unites credited to his or her account as
of the dividend record date or as of the relevant date for any other
distribution. Deferred fees that are credited to a participant's account
hypothetically as cash will be credited with interest at a rate, adjusted
quarterly, equal to the per annum rate equivalent to the quoted interest rate,
in effect on the first business day of any calendar quarter, for a one-year
certificate of deposit of a principal amount of $100,000 as quoted in The Wall
Street Journal. Interest credited to a participant's account will accrue,
compounded quarterly, at the same rate as that described in the preceding
sentence.
At the time a participant first makes an election to defer the receipt of
fees under the Directors' Plan, the participant may elect that the deferred
fees, together with associated earnings, be distributed in a single payment or
in equal annual installments over a period of two to ten years. At the
participant's election, a distribution will be made, or in the case of
installment payments distributions will begin, on the firs business day of the
year immediately following the year during which the participant (1) ceases to
be a member of the board of directors of Cinergy or any of its subsidiaries, or
(2) attains the social security retirement age. Subsequent installments, if any,
will be distributed on the first business day of each following year.
To the extent deferred fees have been treated as if invested in Common
Stock, distributions from the Directors' Plan will be made, as determined by
Cinergy, in the form of newly issued whole shares of Common Stock purchased on
the open market, and cash in lieu of fractional shares. If the participant has
elected a single payment distribution, the number of shares of Common Stock to
be distributed will equal the number of whole units credited to the
participant's account as of the last business day of the year immediately
preceding the year during which the distribution is to be made. The participant
will also receive a cash payment equal to the fair market value, as of such day,
of a fractional number of shares of Common Stock equal to any fraction of a unit
credited to the participant's account. If the participant has elected
installment payments, the number of shares of Common Stock to be distributed
will equal the number of units credited to the participant's account on the day
preceding the date of payment of an installment, divided by the number of
installments remaining to be paid. No fractional shares of Common Stock will be
distributed; the participant will receive a cash payment, computed by Cinergy's
Treasurer, equal to the fair market value, as of the day preceding the date of
payment of the installment, of a fractional number of shares of Common Stock
equal to any fraction of a unit to which the participant is entitled on the
installment date. To the extent deferred fees have been credited as cash to a
participant's account, distributions will be made in the form of cash. If the
participant has elected a single payment distribution, the amount of the
distribution will equal the amount of cash credited to the participant's account
as of the last business day of the year immediately preceding the year of the
distribution. If the participant has elected installment payments, the amount of
each installment payment will equal the amount of cash credited to the
participant's account as of the day preceding the date the installment is to be
made, divided by the number of installments remaining to be paid. Amounts held
in the participant's account pending distribution will continue to accrue
interest at the applicable rate.
In general, the Cinergy Board may at any time alter, amend, modify, revoke
or terminate the Directors' Plan, or suspend payment of benefits thereunder.
5. Long-Term Incentive Compensation Plan
The Cinergy Corp. Long-Term Incentive Compensation Plan ("LTIP") provides
for the grant from time to time to selected eligible employees of stock-related
awards of six general types: (1) option to purchase shares of Common Stock
("Options")2; (2) rights to receive, upon exercise, the appreciation in fair
market value of shares of Common Stock ("Stock Appreciation Rights" or "SARs")3;
(3) outright grants of shares of Common Stock, subject to transfer restrictions
and risk of forfeiture for a specified restriction period ("Restricted Stock")
and which may, but need not, be conditioned upon the attainment of specified
Performance Measures (defined below); (4) rights to receive (a) shares of Common
Stock, or in lieu of all or any portion of those shares, their fair market value
("Performance Shares") or (b) a specified dollar amount or, in lieu of all or
any portion of that amount, shares of Common Stock having the same fair market
value ("Performance Awards"), both conditional upon the attainment during a
specified performance period of specified Performance Measures; (5) rights to
receive shares of Common Stock or cash or other property equal in value to
dividends paid with respect to a specified number of shares of Common Stock, and
which may, but need not, be conditioned upon the attainment of specified
Performance Measures ("Dividend Equivalents"); and (6) other stock-based awards
which are denominated or payable in, valued in whole or in part by reference to,
or otherwise based on or related to, shares of Common Stock ("Other Stock-Based
Awards"). Shares used for awards under the Plan may be authorized but unissued
shares of Common Stock or shares of Cinergy commons tock purchased on the open
market, in private transactions or otherwise.
The LTIP is administered by the Compensation Committee, all of whose
members will be non-employee members of the Cinergy Board who are disinterested
persons within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934.
The group of employees of Cinergy and its subsidiaries eligible to receive
awards under the LTIP consists of officers, employees who are employed in a
significant executive, supervisory, administrative, operational or professional
capacity, and employees who have the potential to contribute to the future
success of the Cinergy holding company system. Either the Compensation Committee
or the Cinergy Board may determine those eligible employees to whom awards may
be granted at any time, as well as the type, size and other terms and conditions
of each granted award subject only to the parameters in the LTIP. In that
regard, no employee may be granted Options for more than 500,000 shares of
Common Stock or SARs during any calendar year. In addition, no employee may
receive awards of Restricted Stock, Dividend Equivalents, Performance Shares,
Performance Awards and Other Stock-Based Awards having an aggregate value as of
their respective dates of grants in excess of $3 million in any calendar year.
The Compensation Committee may make grants to employees under any or a
combination of all of the various categories of awards that are authorized under
the LTIP. In addition, the Compensation Committee has delegated to Cinergy's
Chief Executive Officer authority to grant stock options, performance shares,
and restricted stock awards to employees under the LTIP, subject to certain
restrictions. The CEO may make grants up to 75,000 shares in stock options per
individual grant, performance shares awards valued up to $500,000 per individual
grant, and restricted stock awards valued up to $500,000 per individual grant.
The value of the performance shares awards and restricted stock awards are
determined as of the date of grant.
"Performance Measures" are criteria and objectives determined by the
Compensation Committee which (1) in the case of Performance Shares, Performance
Awards or Dividend Equivalents, the attainment of which during the applicable
performance period would be a precondition to settlement of the award, and (2)
in the case of Restricted Stock, the failure to obtain which would cause
forfeiture of the award and/or which if met during the otherwise applicable
restriction period would cause an early termination of the restriction period.
Performance Measures applicable to any award to an employee who is, or is
determined by the Compensation Committee as likely to become, a "covered
employee" within the meaning of Code Section 162(m) will be established in
writing within the period prescribed by that section and shall be limited to
criteria and objectives related to (1) Cinergy's or one of its subsidiary's
performance, efficiency or profitability, including stock price, total
shareholder return, market share, sales, earnings per share, costs, net
operating income, cash flow, fuel cost per million BTU, costs per kilowatt hour,
retained earnings or return on equity; and/or (2) a covered employee's
performance, which criteria shall be based on objective or, with respect to
separate awards under the LTIP, subjective performance criteria pertaining to a
covered employee's individual effort as to enhancement of either individual
performance or achievement or attainment of the performance, efficiency of
profitability of Cinergy and its subsidiaries. In addition, the Compensation
Committee may impose any other subjective or objective criteria it may approve
from time to time for the purpose of reducing the amount otherwise payable upon
settlement of Dividend Equivalents, Performance Shares of Performance Awards or
for the purpose of increasing the number of shares of Restricted Stock that
would otherwise be forfeited during the applicable restriction period. Except in
the case of such a covered employee, if the Compensation Committee determines
that a change in the business, operations, corporate or capital structure of
Cinergy or any of its subsidiaries, or the manner in which it conducts its
business, or other events or circumstances render the Performance Measures
unsuitable, the Compensation Committee may modify such Performance Measures in
whole or in part as the Compensation Committee deems appropriate and equitable.
Under the LTIP, the Compensation Committee may grant Options that entitle
the optionee to purchase shares of Cinergy Common Stock at a price equal to the
fair market value on the date of grant - i.e., the average of the high and low
sales prices of a common share on the d ate of grant (or on the preceding
trading day if that date was not a trading date) as reported by the
NYSE-Composite Transactions. Any Options granted must be evidenced by a written
agreement. The option price is payable at the time of exercise (1) in cash or
cash equivalents, (2) via a stock exchange or stock swap using shares of Common
Stock already owned by the optionee or owned jointly by the optionee and his or
her spouse (with the spouse's permission), (3) by a broker-financed transaction
(for any employee, officer or director), (4) by withholding from the shares of
Common Stock issued on exercise, shares of Common Stock whose value equals the
purchase price, (5) with any other legal consideration that the Compensation
Committee deems appropriate, or (6) by any combination of these methods.
Payment of the exercise price of any Nonqualified Stock Option may also be
made in whole or in part in the form of shares of Restricted Stock or other
shares of Common Stock that are subject to risk of forfeiture or restriction on
transfer. When paid with such consideration, unless otherwise determined by the
Compensation Committee on or after the date of the grant, shares of Common Stock
received by the optionee upon the exercise of the NSO are subject to the same
risks of forfeiture or restrictions on transfer applied to the consideration
surrendered by the optionee. However, such risks of forfeiture and restrictions
on transfer shall apply only to the same number of shares of Common Stock
surrendered by the optionee. The Compensation Committee has the authority to
specify at the time the Options are granted that shares of Common Stock will not
be accepted in payment of the option price until they have been owned by the
optionee for a specified period; however, the LTIP does not require any such
holding period and would permit immediate sequential exchanges of shares of
Common Stock at the time of exercise of the Options.
No Option may be exercised more than ten years from the date of grant.
Successive grants may be made to the same optionee regardless of whether Options
previously granted to him or her remain unexercised.
Any SARs granted under the LTIP must be evidenced by a written agreement.
In the case of Freestanding SARs, the written agreement would specify the number
of SARs granted, the term of the SARs (which may not exceed ten years from the
date of grant), and the time or times at which the SARs will first become
exercisable. In the case of Tandem SARs, the written agreement would specify the
Option and the number of shares to which the SAR relates and the term of the SAR
(which may not exceed that of the related Option). Freestanding SARs may (but
need not) be made immediately exercisable. A Tandem SAR generally will be
exercisable during its term only when and to the extent the related Option is
exercisable. During the lifetime of the grantee of either type of SAR, the SAR
would be exercisable only by the grantee or the grantee's legal representative.
For each Freestanding SAR subsequently exercised, the holder would become
entitled to receive the excess of fair market value of a share of Common Stock
on the date of exercise over its value on the date the SAR was granted. Exercise
of a Tandem SAR would entitle the holder to receive the excess of the aggregate
fair market value on the exercise date of the number of optioned shares of
Common Stock with respect to which the SAR is being exercised over their
aggregate fair market value on the date the related Option was granted. Exercise
of a Tandem SAR would have the effect of reducing the number of shares covered
by the related Option by the number with respect to which the SAR is exercised,
and exercise of the related Option would have the equivalent effect upon a
Tandem SAR. Exercised SARs may be settled in cash or whole shares of Common
Stock (valued at the date of exercise), unless the applicable SAR agreement
further limits the form of settlement. If the form of settlement is not
specified in the SAR agreement, the holder, at the time of exercise, may request
the form he or she wishes to receive, but the Compensation Committee will have
the ultimate authority, in its discretion, to approve or disapprove any such
request. In the absence of such a request, the Compensation Committee also would
determine the form of settlement.
A grant of Restricted Stock involves the immediate transfer by Cinergy to
an employee of ownership of a specific number of shares of Common Stock subject
to a risk of forfeiture for a specified restriction period and which may further
be conditioned upon the attainment of specified Performance Measures. During the
applicable restriction period, the awardee of Restricted Stock would have all
the voting, dividend and other rights of a record holder of a share of Common
Stock, except that the shares would be nontransferable and any noncash dividends
or other distributions paid upon the shares would be held by Cinergy and would
be subject to transfer restrictions and risk of forfeiture to the same extent as
the shares themselves. Upon the expiration of the applicable restriction period
and (if applicable) the attainment of the relevant Performance Measures, full
legal title to the shares of Common Stock covered by the grant of Restricted
Stock will thereupon vest in the employee without additional consideration or in
consideration of a payment by the employee equal to or less than the fair market
value of such.
Restricted Stock must be subject to a "substantial risk of forfeiture"
within the meaning of Code Section 83 for a period of time to be determined by
the Compensation Committee. An example would be a provision that the Restricted
Stock would be forfeited if the employee ceased to serve Cinergy as an officer
or other key employee during a specified period of years. In order to enforce
these forfeiture provisions, the transferability of Restricted Stock will be
prohibited or restricted in a manner and to the extent prescribed by the
Compensation Committee for the period during which the forfeiture provisions are
to continue.
Any grant of a Performance Share or a Performance Award will be evidenced
by a written agreement. An employee will be given one or more Performance
Measures to meet within a specified performance period. If by the end of the
performance period the employee has achieved the specified Performance Measures,
the employee will be deemed to have fully earned the Performance Shares or
Performance Awards. To the extent earned, the Performance Shares or Performance
Awards will be paid to the employee at the time and in the manner determined by
the Compensation Committee in cash and/or shares of Common Stock.
Any award of Dividend Equivalents will be evidenced by a written agreement.
The agreement shall set forth the circumstances (including any applicable
Performance Measures) under which, and specify the number if any of, shares of
Common Stock or the amount of cash that shall then become payable to the
awardee. The Compensation Committee shall determine the timing of the award.
The Compensation Committee may grant Other Stock-Based Awards (awards other
than Dividend Equivalents, Options, Performance Shares, Performance Awards,
Restricted Stock or SARs). Other Stock-Based Awards shall be evidenced by a
written agreement or by other methods determined by the Compensation Committee.
The agreement shall set forth the circumstances (including any applicable
Performance Measures) under which, and specify the number of shares of Common
Stock if any or the amount of cash that shall then become payable to the
awardee. The Compensation Committee shall determine the timing of the award.
The LTIP is intended to be of indefinite duration. However, the provisions
of the Code currently applicable to ISOs would not permit the grant of ISOs
under the LTIP after the tenth anniversary of its effective date.
At any time by action of the Cinergy Board, Cinergy may amend or terminate
the LTIP in whole or in part, except that certain provisions thereof relating to
the effects of a "change in control" of Cinergy may not be amended for three
years following a change in control. In addition, without the approval of
Cinergy's shareholders, no such action may, inter alia, (1) increase the maximum
number of shares of Cinergy Common Stock that may be issued in respect of awards
under the LTIP, or (2) change the class of employees eligible to participate in
the LTIP.
6. 401(k) Plans
Cinergy sponsors three 401(k) plans, which involve the issuance of shares
of Common Stock to participating employees. Although the plans differ as to the
group of eligible employees, the fundamental, substantive terms of the plans are
identical. The group of employees eligible to participate in the Cinergy Union
Employees' 401(k) Plan consists of those employees of Cinergy and its
subsidiaries whose employment positions are covered by a collective bargaining
agreement between their employer and Local No. 1393 of the International
Brotherhood of Electrical Workers that provides for participation in the plan.
The group of employees eligible to participate in the Cinergy Union Employees'
Savings Incentive Plan consists of those employees of Cinergy and its
subsidiaries whose employment positions are covered by collective bargaining
agreements between their employer and Local No. 1347 of the International
Brotherhood of Electrical Workers, Local Nos. 12049 and 14214 of the United
Steelworkers of America, and the Independent Utilities Union that provide for
participation in the plan. The group of employees eligible to participate in the
Cinergy Non-Union Employees' 401(k) Plan consists of all exempt and non-exempt,
non-union employees of Cinergy and its subsidiaries.
The three plans are mirror 401(k) plans, which use a passive enrollment
feature. All new employees are automatically enrolled in the applicable plan on
their first day of work, subject to an opt-out provision. The initial
contribution is 1% of pay on a before-tax basis. Employees may increase the
contribution percentage, invest in different funds, or cancel participation.
Each plan accepts before-tax and after-tax contributions. Subject to the
initial automatic enrollment, employee contributions are invested according to
employee instructions. An employee may contribute up to 15% of the employee's
pay. One of 15 investment options is a Cinergy Common Stock fund. Contributions
invested in the Cinergy Common Stock fund are used to purchase authorized and
unissued shares of Common Stock or shares of Common Stock on the open market, as
determined by Cinergy. Cinergy also matches, in Common Stock, employee's
before-tax contribution in two components: (1) a base match equal to $.60 for
every dollar an eligible employee contributes, up to the first 5% of
compensation, and (2) a potential incentive match equal to $.20 to $.40 for each
dollar contributed, up to the first 5% of compensation. The amount of the
incentive match depends on the level of annual corporate goals achieved. Shares
of Common Stock acquired under the plans are priced at the average of the high
and low prices as reported by the NYSE-Composite Transactions on the trading day
immediately preceding their acquisition.
Item 2. Fees, Commissions and Expenses
The fees, commissions, and expenses paid or to be paid or incurred by
Applicant or any associate company thereof in connection with the proposed
transactions are estimated as follows:
Registration fees $ 250,000
Brokerage commissions 1,500,000
Miscellaneous 200,000
TOTAL $1,950,000
Item 3. Applicable Statutory Provisions
Sections 6(a), 7, 9(a), 10 and 12(c) of the Act and Rules 42 and 54
thereunder are or may be applicable to the proposed transactions.
A. Rule 42
With reference specifically to Rule 42, as noted in Item 1.A (see sixth
paragraph thereunder):
Shares of Common Stock issued under the Plans from time to
time over the Authorization Period may be authorized and previously
unissued shares or previously issued shares re-acquired by Cinergy in
open market transactions. In addition, under the Stock Option Plan and
the Long-Term Incentive Compensation Plan, plan participants may
purchase shares of Common Stock under certain circumstances by, among
other means, exchanging shares of Common Stock, and accordingly,
Cinergy also requests authorization, to the extent required under the
Act, to acquire such shares of Common Stock from plan participants.
(emphasis added)
This ability of plan participants to exercise options by, among other
means, exchanging an equivalent number of shares of Cinergy common stock is
discussed in greater detail in the respective plan summaries set forth in Item
1. Thus, with respect to the Stock Option Plan, Item 1.B.3 provides (see fifth
paragraph thereunder) as follows:
Shares of Common Stock acquired by non-employee directors and
eligible employees pursuant to the exercise of stock options may be
purchased with (i) cash, (ii) a stock exchange or swap using shares of
Common Stock already owned by the optionee or owned jointly by the
optionee and his or her spouse (with the spouse's permission), (iii) a
broker-financed transaction, (iv) by withholding from the shares of
Common Stock issued on exercise, shares of Common Stock whose value
equals the purchase price, (v) any other legal consideration that the
Plan Committee deems appropriate, or (vi) any combination of these
methods.
(emphasis added)
Likewise, Item 1.B.5, concerning the Long-Term Incentive Compensation Plan,
provides as follows:
The option price is payable at the time of exercise (1) in
cash or cash equivalents, (2) via a stock exchange or stock swap using
shares of Common Stock already owned by the optionee or owned jointly
by the optionee and his or her spouse (with the spouse's permission),
(3) by a broker-financed transaction (for any employee, officer or
director), (4) by withholding from the shares of Common Stock issued on
exercise, shares of Common Stock whose value equals the purchase price,
(5) with any other legal consideration that the Compensation Committee
deems appropriate, or (6) by any combination of these methods.
(emphasis added)
Rule 42 provides in relevant part as follows (emphasis added)--
A registered holding company ... may acquire, retire or redeem
any security of which it is the issuer ... without the need for prior
Commission approval under sections 9(a), 10 and 12(c) of the Act,
Provided, This section shall not apply to a transaction by a registered
holding company ... with ... an affiliate ... (emphasis added)
The term "affiliate" is defined in section 2(a)(11) to include--
(C) any individual who is an officer or director of such
specified company, or of any company which is an affiliate thereof
under clause (A) of this paragraph; ...
Therefore, given that under the Stock Option Plan and the Long-Term
Incentive Compensation Plan, Cinergy may acquire shares of its Common Stock from
"affiliates" (i.e., officers and directors), Rule 42 would not apply to that
extent and Cinergy requests authority under sections 9(a) and 10 for such
acquisitions.
B. Rule 54
Rule 54 provides that in determining whether to approve the issue or sale
of a security by a registered holding company for purposes other than the
acquisition of an EWG or a FUCO, or other transactions by such registered
holding company or its subsidiaries other than with respect to EWGs or FUCOs,
the Commission shall not consider the effect of the capitalization or earnings
of any subsidiary which is an EWG or a FUCO upon the registered holding company
if paragraphs (a), (b) and (c) of Rule 53 are satisfied.
Cinergy currently does not meet the conditions of Rule 53(a). As of June
30, 2000, Cinergy's "aggregate investment," as defined in Rule 53(a)(1), in EWGs
and FUCOs was approximately $721.9 million. This amount is equal to
approximately 66% of Cinergy's average "consolidated retained earnings," also as
defined in Rule 53(a)(1), for the four quarters ended June 30, 2000, of
approximately $1092.6 million, which exceeds the 50% "safe harbor" limitation
contained in the rule.
By order dated March 23, 1998 (HCAR No. 26848) ("1998 Order"), the
Commission authorized Cinergy to increase its aggregate investment in EWGs and
FUCOs to an amount equal to 100% of Cinergy's average "consolidated retained
earnings." By order dated June 23, 2000 (HCAR No. 27190) ("2000 Order"), the
Commission granted Cinergy additional authorization to invest in EWGs and FUCOs
beyond that granted in the 1998 Order -- specifically, $1 billion in addition to
Cinergy's aggregate investment at the date of such order. Although Cinergy's
aggregate investment at June 30, 2000 exceeds the 50% "safe harbor" limitation,
this investment is below the limitation authorized by the 1998 and 2000 Orders.
With respect to capitalization, there has been no material adverse impact
on Cinergy's consolidated capitalization resulting from Cinergy's investments in
EWGs and FUCOs. As of September 30, 1997, the most recent period for which
financial statement information was evaluated in the 1998 Order, Cinergy's
consolidated capitalization consisted of 44.1% equity and 55.9% debt. As of June
30, 2000, Cinergy's consolidated capitalization consisted of 42.4 % equity and
57.6% debt. These ratios are within acceptable ranges, as further reflected by
the fact that at June 30, 2000 Cinergy's senior unsecured debt was rated
"investment grade" by all the major rating agencies. The impact of the proposed
transactions upon Cinergy's consolidated capitalization would be to increase the
relative proportion comprised of equity.
With respect to earnings, Cinergy's interests in EWGs and FUCOs have made
consistent and significant contributions to Cinergy's consolidated retained
earnings, as reflected in the quarterly certificates filed by Cinergy in Docket
No. 70-9011. Although Cinergy's consolidated earnings for the year ended
December 31, 1997 were negatively affected by Cinergy's 50% ownership interest
in Midlands Electricity plc ("Midlands"), a FUCO, this was solely as a result of
the imposition by the United Kingdom of a one-time, non-recurring windfall tax.
Significantly, this tax did not affect earnings from ongoing operations, and
therefore would not have any negative impact on earnings in future periods. In
July 1999, Cinergy sold all of its ownership in Midlands, realizing a
substantial profit.
Cinergy satisfies all of the other conditions of paragraphs (a) and (b) of
Rule 53. With reference to Rule 53(a)(2), Cinergy maintains books and records in
conformity with, and otherwise adheres to, the requirements thereof. With
reference to Rule 53(a)(3), no more than 2% of the employees of Cinergy's
domestic public utility companies render services, at any one time, directly or
indirectly, to EWGs or FUCOs in which Cinergy directly or indirectly holds an
interest. With reference to Rule 53(a)(4), Cinergy will concurrently provide a
copy of this application to each regulator referred to therein, and will
otherwise comply with the requirements thereof concerning the furnishing of
information. With reference to Rule 53(b), none of the circumstances enumerated
in subparagraphs (1), (2) and (3) thereunder have occurred. Finally, Rule 53(c)
by its terms is inapplicable since the proposed transactions do not involve the
issue or sale of a security to finance the acquisition of an EWG or FUCO.
Item 4. Regulatory Approval
The proposed transactions are not subject to the jurisdiction of any state
or federal commission other than this Commission.
Item 5. Procedure
Applicant requests that the Commission issue an order as soon as
practicable after the expiration of the applicable public notice period granting
and permitting this Application-Declaration to become effective. As noted in
Item 1.A, the existing Commission authorization to issue shares of Common Stock
under the Plans expires at January 1, 2001, and therefore Cinergy respectfully
requests that the Commission issue its order prior to such date.
Applicant waives a recommended decision by a hearing officer or other
responsible officer of the Commission; consents that the Staff of the Division
of Investment Management may assist in the preparation of the Commission's
order; and requests that there be no waiting period between the issuance of the
Commission's order and its effectiveness.
Item 6. Exhibits and Financial Statements
(a) Exhibits
A-1 Certificate of incorporation of Cinergy (filed as an exhibit to
and hereby incorporated by reference from Cinergy's 1993 Form 10-K)
A-2 By-laws of Cinergy as amended on April 27, 2000 (filed as an
exhibit to and hereby incorporated by reference from Cinergy's March 31,
2000 Form 10-Q)
B-1 Cinergy Corp. Direct Stock Purchase and Dividend Reinvestment Plan
(filed as an exhibit to and hereby incorporated by reference from
Registration Statement No. 333-51484)
B-2 Cinergy Corp. Employee Stock Purchase and Savings Plan (filed as
an exhibit to and hereby incorporated by reference from Registration
Statement No. 33-56091)
B-3 Amendment to Cinergy Corp. Employee Stock Purchase and Savings
Plan, adopted April 26, 1996, effective June 1, 1996 (filed as an exhibit
to and hereby incorporated by reference from Cinergy's June 30, 1996 Form
10-Q)
B-4 Amendment to Cinergy Corp. Employee Stock Purchase and Savings
Plan, adopted October 22, 1996, effective November 1, 1996 (filed as an
exhibit to and hereby incorporated by reference from Cinergy's September
30, 1996 Form 10-Q)
B-5 Cinergy Corp. Stock Option Plan (filed as an exhibit to and hereby
incorporated by reference from Registration Statement No. 33-56093)
B-6 Amendment to Cinergy Corp. Stock Option Plan, amended October 22,
1996, effective November 1, 1996 (filed as an exhibit to and hereby
incorporated by reference from Cinergy's September 30, 1996 Form 10-Q)
B-7 Cinergy Corp. Directors' Deferred Compensation Plan (filed as an
exhibit to and hereby incorporated by reference from Registration Statement
No. 33-56089)
B-8 Cinergy Corp. Long-Term Incentive Compensation Plan (filed as an
exhibit to and hereby incorporated by reference from Declaration on Form
U-1 filed in File No. 70-8807)
B-9 Cinergy Corp. Union Employees' 401(k) Plan (filed as an exhibit to
and hereby incorporated by reference from Cinergy's 1999 Form 10-K)
B-10 Amendment to Cinergy Corp. Union Employees' 401(k) Plan, adopted
December 10, 1999, effective December 1, 1999 (filed as an exhibit to and
hereby incorporated by reference from Cinergy's 1999 Form 10-K)
B-11 Cinergy Corp. Union Employees' Savings Incentive Plan (filed as
an exhibit to and hereby incorporated by reference from Cinergy's 1999 Form
10-K)
B-12 Amendment to Cinergy Corp. Union Employees' Savings Incentive
Plan, adopted December 10, 1999, effective December 1, 1999 (filed as an
exhibit to and hereby incorporated by reference from Cinergy's 1999 Form
10-K)
B-13 Cinergy Corp. Non-Union Employees' 401(k) Plan (filed as an
exhibit to and hereby incorporated by reference from Cinergy's 1999 Form
10-K)
B-14 Amendment to Cinergy Corp. Non-Union Employees' 401(k) Plan,
adopted December 10, 1999, effective December 1, 1999 (filed as an exhibit
to and hereby incorporated by reference from Cinergy's 1999 Form 10-K)
C [see registration statements referenced in "B" above]
D Not applicable
E Not applicable
F-1 Preliminary Opinion of Counsel (previously filed)
G Form of Federal Register Notice (previously filed)
(b) Financial Statements
FS-1 Cinergy Corp. Consolidated Financial Statements dated June 30,
2000 (previously filed)
FS-2 Cinergy Corp. Financial Statements dated June 30, 2000
(previously filed)
FS-3 Cinergy Corp. Financial Data Schedules (previously filed as part
of electronic submission)
Item 7. Information as to Environmental Effects
(a) The Commission's action in this matter will not constitute any
major federal action significantly affecting the quality of the human
environment.
(b) No other federal agency has prepared or is preparing an
environmental impact statement with regard to the proposed transactions.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Form U-1 to be signed on
its behalf by the officer indicated below.
Dated: December 7, 2000
Cinergy Corp.
By: /s/Wendy L. Aumiller
Assistant Treasurer
ENDNOTES
1 Cinergy also has been authorized by the Commission to issue shares of Common
Stock, from time to time through December 31, 2004, under certain other plans
pursuant to two orders issued in 1999 (HCAR No. 27001, April 8, 1999, & HCAR No.
27028, May 19, 1999). Cinergy proposes no changes to the terms of these orders.
2 Options meeting the requirements of Section 422 of the Code and intended to be
afforded the federal tax treatment of Code Section 422 options ("Incentive Stock
Options" or "ISOs"), as well as other Options ("Nonqualified Stock Options" or
"NSOs"), may be awarded under the LTIP.
3 SARs granted under the LTIP may be awarded either in tandem with Options
("Tandem SARs") or on a stand-alone basis ("Freestanding SARs")
