<TABLE>
<CAPTION>
As filed with the Securities and Exchange Commission on January 20, 1995
Registration No. 33-______
====================================================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
SOUTHERN INDIANA GROUP, INC.
(Exact name of registrant specified in its charter)
Indiana 6719 35-1940620
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Organization) Classification Code Number) Identification No.)
20 N.W. Fourth Street
Evansville, Indiana 47741-0001
(812) 465-5300
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive
offices)
A.E. GOEBEL, Secretary and Treasurer
Southern Indiana Group, Inc.
20 N.W. Fourth Street
Evansville, Indiana 47741-0001
(812) 465-5300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
JOHN H. BYINGTON, JR.
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, NY 10004
(212) 858-1102
Approximate date of commencement of proposed sale to the public. As soon as practicable after this
Registration Statement becomes effective and all other conditions to the Share Exchange ("Exchange") between
Southern Indiana Group, Inc. and Southern Indiana Gas and Electric Company ("SIGECO") pursuant to the Agreement
and Plan of Exchange described in the enclosed Prospectus/Proxy Statement have been satisfied or waived.
If the securities being registered on this Form are being offered in connection with the formation of a
holding company and there is compliance with General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
====================================================================================================================
Title of Each Class Proposed Maximum Proposed Maximum
of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Unit* Price* Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, without par value...... 15,754,826 Shares $27.4375 $432,273,038 $149,060
====================================================================================================================
* Estimated pursuant to Rule 457(f)(1) of the Securities Act of 1933, based upon the market value of the shares
of SIGECO Common Stock to be converted in the Exchange ($27.4375 per share, which is the average of the high
and low sales prices of a share of SIGECO Common Stock on the New York Stock Exchange, Inc. Composite Tape on
January 16, 1995).
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its
effective date until the Registrant 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.
====================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOUTHERN INDIANA GROUP, INC.
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(b) OF REGULATION S-K
FORM S-4 ITEM NO. AND CAPTION PROSPECTUS/PROXY STATEMENT
----------------------------- --------------------------
<S> <C>
A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus....... Facing Page of Registration Statement; Cross Reference Sheet;
Outside Front Cover Page of Prospectus/Proxy Statement
2. Inside Front and Outside Back Cover Pages
of Prospectus................................ Available Information; Incorporation of Certain Documents by Reference;
Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information................ Summary of the Exchange; Outside Front Cover Page of Prospectus/Proxy
Statement; The Exchange--Certain Considerations
4. Terms of the Transaction..................... Summary of the Exchange; The Exchange
5. Pro Forma Financial Information.............. Not Applicable
6. Material Contacts with the Company Being
Acquired..................................... Not Applicable
7. Additional Information Required For
Reoffering by Persons and Parties Deemed
to be Underwriters........................... Not Applicable
8. Interests of Named Experts and Counsel....... Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................. Not Applicable
B. INFORMATION ABOUT THE REGISTRANT
10. Information With Respect to S-3.............. Not Applicable
11. Incorporation of Certain Information
by Reference................................. Not Applicable
12. Information With Respect to S-2 or S-3
Registrants.................................. Not Applicable
13. Incorporation of Certain Information by
Reference.................................... Not Applicable
14. Information With Respect to Registrants
Other Than S-2 or S-3 Registrants............ Not Applicable
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information With Respect to S-3
Companies.................................... Incorporation of Certain Documents by Reference
16. Information With Respect to S-2 or S-3
Companies.................................... Not Applicable
17. Information With Respect to Companies
Other than S-2 or S-3 Companies.............. Not Applicable
<PAGE>
FORM S-4 ITEM NO. AND CAPTION PROSPECTUS/PROXY STATEMENT
----------------------------- --------------------------
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents of
Authorizations Are to be Solicited........... Incorporation of Certain Documents by Reference;
The Annual Meeting; The Exchange--Rights of Dissenting Shareholders; The
Exchange--Management; Election of Directors; Shareholders Proposals
19. Information if Proxies, Consents or
Authorizations Are Not to be Solicited,
or in an Exchange Offer...................... Not Applicable
</TABLE>
<PAGE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
20 N.W. FOURTH STREET
EVANSVILLE, INDIANA 47741-0001
Dear Shareholder:
The directors and officers of Southern Indiana Gas and Electric Company
(the "Company" or "SIGECO") join me in inviting you to the Annual Meeting of
Shareholders on Tuesday, March 28, 1995, at 3:00 p.m., Central Standard Time.
This meeting will be held at the Company's Norman P. Wagner Center
Administration Building, One North Main Street, Evansville, Indiana 47741-0001.
In addition to the election of directors and other matters, one purpose of
this meeting is to vote on a proposed corporate reorganization. If approved, the
reorganization will establish a new holding company, Southern Indiana Group,
Inc. ("Holding Company"), as the parent of SIGECO. Upon completion of the
reorganization, which contemplates an exchange of the outstanding shares of
SIGECO common stock for the shares of Holding Company, SIGECO will become a
subsidiary of Holding Company and will be its principal business for the
foreseeable future. The proposal is summarized in this brochure and fully
explained in the enclosed prospectus/proxy statement.
In the proposed exchange, outstanding shares of SIGECO common stock would
be exchanged into shares of Holding Company common stock, on a share-for-share
basis. As a result, the common shareholders of SIGECO would become the owners of
Holding Company and Holding Company would become the owner of SIGECO common
stock. The preferred stock of SIGECO will remain the preferred stock of SIGECO
after the reorganization. The Board of Directors and Management expect that
after the reorganization, quarterly dividends on Holding Company common stock
will initially be paid at the same rate and on the same schedule as that of
SIGECO common stock. In addition, it is contemplated that following the
exchange, SIGECO will transfer ownership of its three non-utility subsidiaries
to Holding Company.
Your Board of Directors and Management believe the proposed reorganization
offers the best means of positioning the Company for changes and opportunities
to come and is in the best interest of shareholders. It will strengthen the
Company by enhancing our flexibility to respond to increasing competition in the
utility industry. It is essential that we be in a position to act in a timely
way to benefit from potential business opportunities, which is not always
possible within a regulated utility. The primary focus for the Holding Company
will be maintaining the strength of its core business--serving the electric and
gas needs of customers. The restructuring will facilitate financial flexibility
and administrative efficiency, and will enhance managerial accountability for
separate business activities. The holding company system structure will insulate
the SIGECO utility business from the risks of the non-utility businesses of its
affiliates, and should increase the energy-related expertise, knowledge and
skills of utility employees.
If the restructuring is effected, it will not be necessary for you to turn
in your SIGECO common stock certificates in exchange for Holding Company common
stock certificates. The certificates for SIGECO common stock you now hold will
automatically represent shares of Holding Company common stock. New certificates
bearing the name of Holding Company will be issued in the future as certificates
for presently outstanding shares of SIGECO common stock are presented for
transfer.
Even if you now expect to attend the annual meeting, please sign, date and
return the accompanying proxy in the enclosed addressed, postage-paid envelope.
(You may revoke your proxy at any time before it is exercised, provided that the
Secretary receives notice of the revocation from you in writing in advance).
WE RECOMMEND YOU VOTE "FOR" THIS PROPOSAL.
Please take a moment now to vote, sign and return your proxy card in the
enclosed postage-paid envelope. Your early response will be appreciated.
Dated: February 23, 1995 Sincerely,
R.G. Reherman
Chairman, President and
Chief Executive Officer
<PAGE>
1. WHY IS SIGECO PROPOSING TO REORGANIZE AS A HOLDING COMPANY?
The primary purpose of forming a holding company is to further strengthen the
organization by better positioning the Company in the increasingly competitive
environment of the utility industry. The holding company structure will enable
the organization to take advantage of emerging business opportunities to the
benefit of shareholders and customers, and it will enhance our long-term
earnings potential.
2. WHAT KIND OF COMPETITION DO UTILITIES EXPERIENCE?
Utilities today face increased competition to serve the energy needs of large
industrial customers, wholesale customers and municipalities. The traditional
relationships between utilities and their customers (typically located in a
well-defined geographical area) are being challenged by independent power
producers, co-generation producers and others. In certain cases, these
competitors may conduct business with little or no regulatory constraints. In
addition, utilities today must compete with other forms of energy for customers
in their own service areas.
3. WHAT WILL THE SIGECO HOLDING COMPANY BE CALLED?
The new holding company will be named Southern Indiana Group, Inc. ("Holding
Company"). The principal utility subsidiary will continue to be known as
Southern Indiana Gas and Electric Company (the "Company" or "SIGECO").
4. IN WHAT TYPES OF BUSINESSES WILL THE HOLDING COMPANY INVEST?
Although specific investment opportunities have not been determined, the primary
focus of Holding Company will be maintaining the strength of SIGECO's core
business--serving the electric and gas needs of SIGECO's customers.
Participation in other opportunities will likely be closely related to the
energy business or support the economic vitality of SIGECO's service area. In
addition, Holding Company will continue the operation of the three non-utility
companies currently owned by SIGECO--Southern Indiana Properties, Inc., Southern
Indiana Minerals, Inc. and Energy Systems Group, Inc.--each of which will become
separate wholly owned subsidiaries of Holding Company.
5. WHAT WILL THE NEW COMPANY'S STRUCTURE LOOK LIKE?
The current and proposed corporate organizations and percent ownership are shown
in the charts below.
6. WHO MUST APPROVE THE REORGANIZATION?
Approval of the proposed reorganization is required from the Securities and
Exchange Commission and the Federal Energy Regulatory Commission. Most
importantly, the reorganization requires a favorable vote from the Company's
shareholders.
7. WHAT WILL BE THE EFFECTIVE DATE OF THE REORGANIZATION?
The effective date will occur as soon as practicable after the required approval
by shareholders of the Company and the receipt of the necessary regulatory
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
STRUCTURE DECEMBER 31, 1994
Southern Indiana Gas
and
Electric Company
(SIGECO)
|
-------------------------------------------------------------------------------
| | | | |
Southern Indiana Lincoln Natural Energy Systems Southern Indiana Southern Indiana
Properties, Inc. Gas Group, Inc. Minerals, Inc. Group, Inc.
Company, Inc. (Future Holding Company)
</TABLE>
i
<PAGE>
approvals. The Company cannot predict when such approvals will be in place. The
Company is hopeful that the reorganization will be completed in 1995.
8. WILL HOLDERS OF SIGECO COMMON STOCK HAVE TO EXCHANGE THEIR STOCK
CERTIFICATES?
No. As part of the reorganization, certificates of SIGECO common stock will
automatically represent certificates of Holding Company common stock for a like
number of shares. It will not be necessary for holders of common stock of SIGECO
to exchange their stock certificates. New certificates bearing the name
"Southern Indiana Group, Inc." will be issued in the future as outstanding
certificates are presented for transfer and also upon request of any holder of
Company common stock.
9. WHAT FEDERAL INCOME TAX CONSEQUENCES WILL THE REORGANIZATION HAVE ON
HOLDERS OF SIGECO COMMON STOCK?
No gain or loss will be recognized by holders of SIGECO common stock as a result
of the conversion to shares of Holding Company common stock. In addition, the
cost basis of Holding Company shares will be the same as the cost basis of
SIGECO shares. In general, the holding period of Holding Company shares will be
the same as the holding period of SIGECO shares.
10. WHAT EFFECT WILL THERE BE ON HOLDERS OF SIGECO'S PREFERRED STOCK AND DEBT
SECURITIES?
The preferred stock and debt securities of SIGECO will not be changed in the
reorganization. They will remain as preferred stock and debt securities of
SIGECO.
11. WHERE WILL HOLDING COMPANY STOCK BE TRADED AND WHAT WILL BE THE TICKER
SYMBOL AND STOCK PRICE QUOTATION LISTING?
Holding Company common stock is expected to be traded on the New York Stock
Exchange under the ticker symbol "__". The stock price quotation listing is
expected to be "______".
12. HOW WILL THE DIVIDENDS BE AFFECTED?
It is expected that quarterly dividends on Holding Company common stock after
the reorganization will initially be made at the rate then most recently
declared on SIGECO common stock. Further, it is expected that Holding Company
common stock dividends will be paid on the same time schedule as was customary
for SIGECO. That schedule is the 20th of the month in March, June, September and
December.
13. WHO WILL MANAGE THE HOLDING COMPANY AFTER THE REORGANIZATION?
The Board of Directors and certain of the principal executive officers of SIGECO
will also serve as the Board of Directors and executive officers of Holding
Company upon completion of the reorganization.
14. WHAT WILL HAPPEN TO THE DIVIDEND REINVESTMENT PLAN?
The Automatic Dividend Reinvestment and Stock Purchase Plan of SIGECO will be
assumed by Holding Company. Participants in the SIGECO plan will automatically
become participants in the corresponding Holding Company plan.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PROPOSED STRUCTURE
Southern Indiana
Group, Inc.
(Holding Company)
|
-------------------------------------------------------------------------------
| | | |
Southern Indiana SIGECO Energy Systems Southern Indiana
Properties, Inc. Operating Company Group, Inc. Minerals, Inc.
|
|
Lincoln Natural
Gas Company, Inc.
</TABLE>
ii
<PAGE>
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
20 N.W. FOURTH STREET
EVANSVILLE, INDIANA 47741-0001
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on March 28, 1995
TO THE SHAREHOLDERS OF
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of SOUTHERN
INDIANA GAS AND ELECTRIC COMPANY ("SIGECO") is called and will be held on
Tuesday, the 28th day of March, 1995, at 3:00 P.M., Central Standard Time, at
SIGECO's Norman P. Wagner Center Administration Building, One North Main Street,
Evansville, Indiana 47741-0001, for the following purposes:
(1) To elect three directors of SIGECO to serve a term of three years
and until their respective successors shall have been duly elected and
qualified;
(2) To consider and vote upon the adoption and approval of an
Agreement and Plan of Exchange (the "Exchange Agreement"), a copy of which
is attached as Exhibit A to the accompanying prospectus/proxy statement,
pursuant to which each outstanding share of SIGECO common stock would be
exchanged (the "Exchange") for one share of common stock of Southern
Indiana Group, Inc. ("Holding Company"), a wholly owned subsidiary of
SIGECO which will be used for the purpose of accomplishing the Exchange,
with the result that SIGECO will become a subsidiary of Holding Company,
and the holders of SIGECO common stock will become the holders of Holding
Company common stock, as described in the accompanying prospectus/proxy
statement;
(3) To ratify the appointment of Arthur Andersen LLP as SIGECO's
independent public accountants; and
(4) To transact any and all business in connection with the foregoing
and such other business as may properly come before the meeting.
A vote in favor of the Exchange Agreement will constitute a vote in favor
of certain proposed amendments to SIGECO's 1994 Stock Option Plan designed to
recognize that options under the Plan will relate to Holding Company Common
Stock as described herein. Reference is made to the attached prospectus/proxy
statement for further information with respect to the foregoing.
Only holders of SIGECO common stock and preferred stock ($100 par value per
share) of record on its books at the close of business on February 10, 1995, are
entitled to vote at the meeting. All such shareholders of record are requested
to be at the meeting, either in person or by proxy.
As described under "The Exchange--Rights of Dissenting Shareholders" in the
accompanying prospectus/proxy statement, under applicable Indiana law only
holders of SIGECO preferred stock entitled to vote at the meeting are entitled
to assert dissenters' rights of appraisal in connection with the Exchange.
Holders of SIGECO common stock entitled to vote at the meeting are not entitled
to assert dissenters' rights of appraisal in connection with the Exchange.
By Order of the Board of Directors,
A. E. Goebel,
Secretary
Evansville, Indiana
February 23, 1995
It is important that your stock be represented at the meeting in order that
a quorum will be assured. Shareholders, whether or not they expect to be present
at the meeting, are requested to fill in, date and sign the enclosed proxy card
and return it promptly in the accompanying addressed envelope, which requires no
postage. If you attend the meeting and so request, the proxy will not be voted.
<PAGE>
Location of March 28, 1995
Shareholders' Annual Meeting
MAP
Norman P. Wagner Operations Center
Southern Indiana Gas and Electric Company
One N. Main Street 465-4153
Parking for shareholders will be provided in the Employee and Visitors'
parking lot on the corner of North Main and Division Streets. Please use the
entrance marked "Main Street Entrance" on the above map. Entry to the building
will be through the doors indicated by the arrow.
YOUR VOTE IS IMPORTANT
Please read the prospectus/proxy statement and sign, date and mail the
proxy in the prepaid envelope without delay, whether or not you plan to attend
the meeting. You may revoke your proxy prior to or at the meeting and vote in
person if you wish. If your shares are held by a broker, bank or nominee, it is
important that they receive your voting instructions.
A summary of the key elements of the reorganization is presented in the
prospectus/proxy statement. Please refer to the Table of Contents in the
prospectus/proxy statement to locate detailed discussion of specific topics. If
you have additional questions after reading the prospectus/proxy statement,
please contact Shareholder Relations, Southern Indiana Gas and Electric Company,
20 N.W. Fourth Street, Evansville, Indiana 47741-0001, telephone (800) 227-8625
or (812) 465-5300.
2
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION DATED JANUARY 20, 1995
PROXY STATEMENT
FOR
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
PROSPECTUS
FOR
SOUTHERN INDIANA GROUP, INC.
Common Stock
This Document is a Proxy Statement for the Annual Meeting of Shareholders of
Southern Indiana Gas and Electric Company and a
Prospectus for Southern Indiana Group, Inc. Common Stock
This Prospectus, including the Proxy Statement forming a part hereof, has
been prepared in connection with the issuance of up to 15,754,826 shares of
common stock, without par value ("Holding Company Common Stock"), of Southern
Indiana Group, Inc., an Indiana corporation ("Holding Company"), upon the
consummation of the proposed exchange (the "Exchange") of each outstanding share
of common stock, without par value ("SIGECO Common Stock"), of Southern Indiana
Gas and Electric Company, an Indiana corporation ("SIGECO"), for one share of
Holding Company Common Stock pursuant to an Agreement and Plan of Exchange,
dated as of January 13, 1995 (the "Exchange Agreement"), between Holding Company
and SIGECO, a copy of which is attached as Exhibit A to this Prospectus/Proxy
Statement. At the effective time of the Exchange, each share of SIGECO Common
Stock will automatically be converted into and, without action on the part of
the holder thereof, become one share of Holding Company Common Stock.
Thereafter, SIGECO will continue to carry on its present utility business as a
subsidiary of Holding Company. Reference is made to "The Exchange--Holding
Company Capitalization" for further information concerning the securities
offered hereby. This Prospectus/Proxy Statement and the accompanying form of
proxy were first sent to security holders of SIGECO on February __, 1995.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus/Proxy Statement. If given or
made, such information or representation must not be relied upon as having been
authorized by either Holding Company or SIGECO. This Prospectus/Proxy Statement
does not constitute an offer to sell or a solicitation of an offer to buy shares
of Holding Company Common Stock by any person in any jurisdiction or in any
circumstance in which such offer would be unlawful.
The date of this Prospectus/Proxy Statement is February , 1995.
3
<PAGE>
AVAILABLE INFORMATION
Holding Company has filed with the Securities and Exchange Commission (the
"SEC") a Registration Statement under the Securities Act of 1933, as amended
(the "Securities Act"), covering the shares of Holding Company Common Stock to
be issued in the Exchange. This Prospectus/Proxy Statement does not contain all
of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the SEC. Such
Registration Statement and the exhibits thereto may be inspected and copied, at
prescribed rates, at the public reference facilities maintained by the SEC at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the SEC's
regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and 7 World Trade Center, Suite 1300, New York, New York 10048.
SIGECO is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the SEC. Information, as of particular dates,
concerning SIGECO's directors and officers, their remuneration, the principal
holders of SIGECO's securities and any material interest of such persons in
transactions with SIGECO is disclosed in proxy statements distributed to
shareholders of SIGECO and filed with the SEC. Such reports, proxy statements
and other information can be inspected and copied, at prescribed rates, at the
offices of the SEC specified above. SIGECO Common Stock is listed on the New
York Stock Exchange (the "NYSE"), 20 Broad Street, New York, New York 10005 and
reports, proxy statements and other information concerning SIGECO may be
inspected at the office of such exchange.
Holding Company will become subject to the same informational requirements
as SIGECO following the merger described in this Prospectus/Proxy Statement, and
will file reports, proxy statements and other information with the SEC in
accordance with the Exchange Act. Such reports will contain financial
information that has been examined and reported upon, with an opinion expressed
by an independent public or certified public accountant.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have heretofore been filed by SIGECO with
the SEC pursuant to the Exchange Act, are incorporated by reference in this
Prospectus/Proxy Statement and shall be deemed to be a part hereof:
(1) SIGECO's Annual Report on Form 10-K for the year ended December
31, 1993 (including portions of SIGECO's 1993 Annual Report to Shareholders
stated therein to be incorporated therein by reference).
(2) SIGECO's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994, June 30, 1994 and September 30, 1994.
(3) The description of SIGECO's preferred stock purchase rights
contained in SIGECO's Registration Statement on Form 8-A, dated October 27,
1986.
All documents subsequently filed by SIGECO with the SEC pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering covered by this Prospectus/Proxy Statement shall be incorporated herein
by reference 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"; provided, however, in each
year during which an offering is made by this Prospectus/Proxy Statement, all
documents filed by SIGECO pursuant to Section 13, 14 or 15 of the Exchange Act
prior to the filing with the SEC of SIGECO's Annual Report on Form 10-K covering
such year shall not be Incorporated Documents or be incorporated by reference in
this Prospectus/Proxy Statement or be a part hereof from and after such filing
of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Prospectus/Proxy Statement 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/Proxy Statement.
The financial statements incorporated in this Prospectus/Proxy Statement by
reference to SIGECO's Annual Report on Form 10-K for the year ended December 31,
1993 have been audited by Arthur Andersen LLP, independent accountants.
4
<PAGE>
SIGECO hereby undertakes to provide without charge to each person to whom a
copy of this Prospectus/Proxy Statement has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated by reference in this
Prospectus/Proxy Statement, other than exhibits to such documents. Requests for
such copies should be directed to Office of the Secretary, Southern Indiana Gas
and Electric Company, 20 N.W. Fourth Street, Evansville, Indiana 47741-0001,
telephone number: (812) 465-5300. The information relating to SIGECO contained
in this document does not purport to be comprehensive and should be read
together with the information contained in the Incorporated Documents.
As described above, this Prospectus/Proxy Statement incorporates documents
by reference which are not presented herein or delivered herewith. These
documents, other than exhibits thereto, are available upon written or telephone
request directed to SIGECO at the address or telephone number listed in the
preceding paragraph. In order to ensure timely delivery of the documents, any
request should be made by March 21, 1995.
5
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
----
<S> <C>
Available Information..................................................................................... 4
Incorporation Of Certain Documents By Reference........................................................... 4
Table of Contents......................................................................................... 6
Summary of the Exchange................................................................................... 7
The Annual Meeting........................................................................................ 11
Solicitation and Revocation of Proxies.............................................................. 11
Matters to be Voted Upon............................................................................ 11
Record Date......................................................................................... 11
Outstanding Voting Securities....................................................................... 12
Voting.............................................................................................. 12
Cost and Method of Solicitation..................................................................... 12
Security Ownership of Certain Beneficial Owners..................................................... 12
The Exchange.............................................................................................. 13
General............................................................................................. 13
SIGECO.............................................................................................. 13
Reasons for the Restructuring....................................................................... 14
Agreement and Plan of Exchange...................................................................... 14
Amendment or Termination............................................................................ 15
Certain Considerations.............................................................................. 15
Regulatory Approvals................................................................................ 16
Regulation of Holding Company....................................................................... 16
Business of Holding Company......................................................................... 16
Transfer of SIGECO Assets to Holding Company........................................................ 16
Rights of Dissenting Shareholders................................................................... 17
Effective Date of the Transactions.................................................................. 18
Exchange of Stock certificates Not Required......................................................... 18
Federal Income Tax Consequences..................................................................... 19
Treatment of Preferred Stock........................................................................ 19
Dividend Policy..................................................................................... 19
Listing of Holding Company Common Stock............................................................. 20
Holding Company Capitalization...................................................................... 21
Articles of Incorporation and By Laws of Holding Company........................................... 21
Rights Agreement.................................................................................... 22
Stock Plan.......................................................................................... 22
Automatic Dividend Reinvestment and Stock Purchase Plan............................................. 22
Transfer Agent and Registrar........................................................................ 23
Market Prices of and Dividends on SIGECO Common Stock............................................... 23
Directors and Management............................................................................ 23
Financial Statements................................................................................ 24
Experts............................................................................................. 24
Legal Opinions...................................................................................... 24
Election Of Directors..................................................................................... 24
Security Ownership of Directors and Executive Officers.............................................. 28
Executive Compensation.............................................................................. 29
Compensation Committee Report on Executive Compensation............................................. 31
Performance Comparisons............................................................................. 33
Compensation Committee Interlocks and Insider Participation......................................... 34
Ratification Of Appointment Of Auditors................................................................... 34
Exhibit A--Agreement and Plan of Exchange.................................................................. A-1
Exhibit B--Amended and Restated Articles of Incorporation of Holding Company............................... B-1
Exhibit C--Provisions of the Indiana Business Corporation Law Regarding Rights of
Dissenting Shareholders..................................................................... C-1
</TABLE>
6
<PAGE>
SUMMARY OF THE EXCHANGE
The following is a summary of certain information contained or incorporated
by reference in this Prospectus/Proxy Statement and is qualified in its entirety
by the more detailed information contained or incorporated by reference herein.
Purpose of Prospectus/
Proxy Statement: This Prospectus/Proxy Statement
provides information concerning the
1995 Annual Meeting of Shareholders
(the "Annual Meeting") of SIGECO and
also constitutes a Prospectus for the
offering of up to 15,754,826 shares of
Holding Company Common Stock in
connection with the proposed Exchange
and formation of a holding company
system structure as described herein.
SIGECO and
Holding Company: SIGECO is an operating public utility,
incorporated June 10, 1912 under the
laws of the State of Indiana. SIGECO is
engaged in the generation,
transmission, distribution and sale of
electricity and the purchase of natural
gas and its transportation,
distribution and sale in a service area
covering ten counties in southwestern
Indiana. Holding Company, currently an
inactive subsidiary of SIGECO, will
become the holding company parent of
SIGECO if the Exchange described herein
is approved and implemented. Holding
Company will have no material assets
other than the stock of its
subsidiaries, which initially will
consist of SIGECO and SIGECO's three
non-utility subsidiaries. The principal
executive offices of SIGECO and Holding
Company are located at 20 N.W. Fourth
Street, Evansville, Indiana 47741-0001.
The telephone number, including area
code, is (812) 465-5300.
The Exchange: Pursuant to the Exchange Agreement, a
copy of which is attached as Exhibit A
hereto, the formation of the holding
company structure will be achieved by
the Exchange of each outstanding share
of SIGECO Common Stock for one share of
Holding Company Common Stock. As a
result, SIGECO will become a wholly
owned subsidiary of Holding Company.
Adoption of the Exchange requires the
affirmative vote of the holders of a
majority of the outstanding shares of
SIGECO Common Stock entitled to vote
thereon, voting separately as a single
class, and a majority of the
outstanding shares of SIGECO Common
Stock and SIGECO's preferred stock,
$100 par value per share ("$100 Par
Preferred Stock") taken together. The
officers and directors of SIGECO, as a
group, beneficially own less than 0.6
percent of the outstanding SIGECO
capital stock entitled to vote at the
Annual Meeting. As soon as practicable
following the Exchange, SIGECO will
transfer the stock of its three non-
utility subsidiaries to Holding
Company. See "The Exchange--General"
and "The Exchange--Transfer of SIGECO
Assets to Holding Company." The
outstanding shares of $100 Par
Preferred Stock and SIGECO's Special
Preferred Stock, no par value ("Special
Preferred Stock"), will remain
outstanding after, and not be affected
by, the Exchange. See "The
Exchange--Treatment of Preferred
Stock".
As described under "The Exchange--Stock
Plan," SIGECO's 1994 Stock Option Plan
will be amended to accommodate the
Exchange. A vote in favor of the
Exchange will be considered a vote in
favor of such amendment.
7
<PAGE>
Reasons for the
Restructuring: The primary purpose of forming a
holding company is to further
strengthen the organization. Increased
flexibility as a result of the
reorganization will enhance long-term
earnings potential. Deregulation and
competition are reshaping the utility
marketplace and changing the nature of
the utility business. The holding
company structure offers the best means
of positioning the organization for the
changes and opportunities to come and
will enable the organization to take
advantage of emerging business
opportunities to the benefit of both
shareholders and customers. The primary
focus for Holding Company will be
maintaining the strength of its core
business--serving SIGECO's electric and
gas customers. The restructuring will
facilitate financial flexibility and
enhance managerial accountability for
separate business activities. The
holding company system structure is
designed to insulate the SIGECO utility
business from the risks of the
non-utility businesses of its
affiliates, and should increase the
energy-related expertise, and skills of
utility employees. See "The
Exchange--Reasons for the
Restructuring."
Vote Required: Only holders of record of shares of
SIGECO Common Stock and shares of $100
Par Preferred Stock on February 10,
1995 (the "Record Date") will be
entitled to notice of and to vote at
the Annual Meeting with respect to
approval of the Exchange and all other
matters to be voted upon at the Annual
Meeting. As of the Record Date, there
were 15,754,826 shares of SIGECO Common
Stock and 185,895 shares of $100 Par
Preferred Stock outstanding. The
affirmative vote of the holders of a
majority of the outstanding shares of
SIGECO Common Stock, voting separately
as a single class, and the holders of a
majority of the outstanding shares
entitled to vote at the meeting, taken
together, are required to approve the
Exchange Agreement. See "The Annual
Meeting--Voting." (Holders of
outstanding shares of Special Preferred
Stock are entitled to notice of the
Annual Meeting, but are not entitled to
vote at the Annual Meeting. In
addition, although outstanding shares
of Preferred Stock, no par value ("No
Par Preferred Stock"), of SIGECO would
be entitled to vote at the Annual
Meeting, no shares of such class were
issued and outstanding as of the Record
Date. SIGECO's authorized shares of
$100 Par Preferred Stock, Special
Preferred Stock and No Par Preferred
Stock, whether or not issued, are
hereinafter referred to collectively as
"SIGECO Preferred Stock").
Effectiveness: The Exchange will become effective as
soon as possible after the necessary
shareholder approval and receipt of all
required regulatory approvals. As soon
as practicable following the Exchange,
SIGECO will transfer the stock of its
three non-utility subsidiaries to
Holding Company.
Regulatory Approvals: Applications for approval of the
restructuring have been filed with the
SEC under the Holding Company Act of
1935, as amended (the "Holding Company
Act") and the Federal Energy Regulatory
Commission ("FERC") under the Federal
Power Act. See "The
Exchange--Regulatory Approvals."
8
<PAGE>
No Exchange of
Certificates: If the Exchange is approved and
completed, it will not be necessary to
surrender SIGECO Common Stock
certificates for certificates of
Holding Company Common Stock. The
certificates for SIGECO Common Stock
will automatically represent
certificates for a like number of
shares of Holding Company Common Stock.
New certificates bearing the name
"Southern Indiana Group, Inc." will be
issued in the future as outstanding
certificates are presented for transfer
and also upon request of any holder of
SIGECO Common Stock.
Stock Exchange Listings: Application is being made to list
Holding Company Common Stock on the
NYSE. It is expected that such listing
will become effective on the effective
date of the Exchange, subject to the
rules of the NYSE. The stock exchange
ticker symbol will [continue to] be
"_____". Quotation of Holding Company
Common Stock in newspapers will be
under the name "________"
Dividend Policy: The Board of Directors and Management
of SIGECO expect that, following the
Exchange, Holding Company initially
will make quarterly dividend payments
on Holding Company Common Stock at the
rate per share then most recently
declared on SIGECO Common Stock and on
the same schedule of dates as that now
followed by SIGECO. For the foreseeable
future, dividend payments will depend
primarily on the earnings, financial
condition, cash flow and capital
requirements of SIGECO. See "The
Exchange--Dividend Policy" and "The
Exchange--Market Prices of and
Dividends on SIGECO Common Stock."
Federal Income Tax
Consequences: It is intended that the conversion of
SIGECO Common Stock into Holding
Company Common Stock in the Exchange
will not be taxable under Federal
income tax laws, and it is a condition
for the Exchange to become effective
that SIGECO receive an opinion of
counsel satisfactory to the SIGECO
Board of Directors with respect to the
Federal income tax consequences of the
Exchange. See "The Exchange--Federal
Income Tax Consequences."
Rights of Dissenting
Shareholders: Dissenting holders of $100 Par
Preferred Stock (but not SIGECO Common
Stock) who comply with the procedural
requirements of the Indiana Business
Corporation Law (the "BCL") described
herein will be entitled to receive the
fair value of their shares if the
Exchange is effected. Any holder of
$100 Par Preferred Stock electing to
exercise such right of dissent must
file with SIGECO prior to the taking of
the vote on the Exchange at the Annual
Meeting a written notice of his or her
intent to demand payment for his or her
shares if the Exchange is effectuated,
and must not vote in favor of the
Exchange. Dissenting holders of SIGECO
Common Stock are not entitled to any
rights of appraisal under the BCL
since, as of the Record Date, SIGECO
Common Stock was registered on the
NYSE. See "The Exchange--Rights of
Dissenting Shareholders."
Holding Company's Articles of
Incorporation and By laws: Holding Company's Articles of
Incorporation and By-laws will be
substantially similar to those of
SIGECO except for the number and type
of authorized shares. See "The
Exchange--Articles of Incorporation and
By-laws of Holding Company."
9
<PAGE>
Election of Directors: Three persons have been nominated for
election as directors of SIGECO to
serve a term of three years and until
their respective successors shall have
been elected and qualified. If the
holding company proposal is adopted and
consummated, each of the persons then
serving as a director of SIGECO will
also be a director of Holding Company
for the same term. The Holding Company
Board of Directors will be divided into
three classes as is SIGECO's Board. See
"Election of Directors" and "The
Exchange--Directors and Management."
Selected Consolidated Financial Information of SIGECO
The following table sets forth consolidated financial information with
respect to SIGECO derived in part from, and qualified by reference to, the
financial statements contained in the documents incorporated by reference
herein.
Selected Consolidated Financial Information--Results of Operations
<TABLE>
<CAPTION>
Twelve Months
Ended
For Year Ended December 31, September 30,
--------------------------------------------- --------------
1990 1991 1992 1993 1994(1)
------- ------- ------- ------- -------
(Thousands of dollars, except per share amounts)
<S> <C> <C> <C> <C> <C>
Operating Revenues....................... $322,520 $322,582 $305,947 $328,921 $333,089
Net Operating Income..................... 51,934 53,156 50,919 51,642 50,148
Net Income............................... 37,691 38,513 36,767 39,653 39,718
Preferred Dividends...................... 1,282 1,281 1,267 1,105 1,105
Earnings Available for Common Stock...... 36,409 37,232 35,500 38,548 38,613
Earnings per Average Common Share........ 2.26 2.37 2.26 2.45 2.45
Dividends per Share of Common Stock...... 1.43 1.50 1.56 1.61 1.64
</TABLE>
Other Consolidated Financial Information
<TABLE>
<CAPTION>
As of
As of December 31, September 30,
--------------------------------------------- --------------
1990 1991 1992 1993 1994(1)
------- ------- ------- ------- -------
(Thousands of dollars, except per share amounts)
<S> <C> <C> <C> <C> <C>
Total Assets............................. $738,803 $747,445 $761,281 $860,023 $900,057
Long-Term Obligations.................... 255,539 235,691 212,019 273,981 280,862
Preferred Stock.......................... 19,700 19,690 19,605 19,605 19,605
Preferred Stock With Mandatory
Redemption............................. -- -- -- -- --
Common Stock Equity...................... 244,773 258,442 268,947 282,209 299,236
Total Capitalization..................... 520,012 513,823 500,571 575,795 599,703
Book Value Per Share of Common
Stock.................................. 15.59 16.46 17.12 17.97 18.99
</TABLE>
- --------
(1) Information for period ending in 1994 includes the results of Lincoln
Natural Gas Company, Inc. acquired June 30, 1994. Other periods have not
been restated to reflect the combined results of the acquisition due to
immateriality.
10
<PAGE>
THE ANNUAL MEETING
Solicitation and Revocation of Proxies
The Proxy Statement forming a part of this Prospectus/Proxy Statement is
furnished in connection with the solicitation of proxies by the Board of
Directors of SIGECO for use at the Annual Meeting referred to above and at any
adjournment thereof. All duly executed proxies received prior to the Annual
Meeting will be voted in accordance with the terms of such proxies. Shares of
SIGECO Common Stock and $100 Par Preferred Stock represented by proxies that are
returned signed but without instructions for voting will be voted as recommended
by SIGECO's management. Shares of SIGECO Common Stock and $100 Par Preferred
Stock represented by proxies that are returned unsigned or improperly marked
will be treated as abstentions for voting purposes and, in the case of unsigned
proxies only, not counted for purposes of determining a quorum. Abstentions and
broker non-votes are not counted in the tally of shares voted at the meeting.
Any holder of SIGECO Common Stock or $100 Par Preferred Stock entitled to notice
of and to vote at the Annual Meeting (referred to hereinafter as a "SIGECO
shareholder entitled to vote") giving a proxy may revoke it at any time before
it is exercised by written notice to SIGECO, received prior to the time of the
Annual Meeting, or orally at the Annual Meeting. Dissenting SIGECO shareholders
entitled to vote do not have dissenters' rights of appraisal with respect to any
item presented at the Annual Meeting, except that with respect to approval of
the Exchange, holders of $100 Par Preferred Stock are entitled to assert rights
of appraisal in accordance with the BCL. See "The Exchange--Rights of Dissenting
Shareholders." The proxy and this Prospectus/Proxy Statement were first mailed
to SIGECO shareholders entitled to vote on or about February 23, 1995.
With respect to any participant in SIGECO's Automatic Dividend Reinvestment
and Stock Purchase Plan (the "Plan"), whole shares of SIGECO Common Stock
credited to such participant's account in the Plan will be voted by the plan
agent (the "Plan Agent") in accordance with a voting instruction form that will
be furnished to such participant by the Plan Agent, provided the form is
completed by such participant and returned to the Plan Agent. If the separate
voting instruction form is returned signed but without instructions, such
participant's Plan shares will be voted in accordance with the recommendations
of SIGECO's management. If the separate voting instruction form for the Plan
shares is not returned to the Plan Agent or if it is returned unsigned or
improperly marked, none of such participant's Plan shares will be voted unless
such participant votes in person. If any participant wishes to vote such
participant's Plan shares in person, a proxy may be obtained upon written
request received by the Plan Agent (Harris Trust & Savings Bank, Reinvestment
Services, P.O. Box A3309, Chicago, Illinois 60690) at least 15 days prior to the
meeting.
Matters to be Voted Upon
As of this date, the only known business to be presented at the Annual
Meeting of SIGECO shareholders entitled to vote is (1) the election of three
directors of SIGECO to serve for a term of three years and until their
successors are duly elected and qualified, (2) the consideration of a proposal
to approve and adopt an Exchange Agreement whereby each outstanding share of
SIGECO Common Stock will be exchanged for one share of Holding Company Common
Stock with the result that SIGECO will become a wholly owned subsidiary of
Holding Company, and (3) the ratification of the appointment of Arthur Andersen
LLP as SIGECO's auditors for 1995. However, the enclosed proxy authorizes the
proxy holders named therein to vote on all matters that may properly come before
the Annual Meeting and it is the intention of the proxy holders to take such
action in connection therewith as shall be in accordance with their best
judgment. Only shares of SIGECO Common Stock and $100 Par Preferred Stock held
by those present at the Annual Meeting or for which signed proxies are returned
will be considered to be represented at the Annual Meeting. For the purpose of
determining a quorum, all shares of SIGECO Common Stock and $100 Par Preferred
Stock represented at the Annual Meeting will be counted without regard to
abstentions or broker non-votes as to any particular item. With respect to any
matter to be voted upon at the Annual Meeting, a quorum consists of a majority
of all shares entitled to vote on such matter. Notwithstanding the foregoing,
with respect to approval of the Exchange for which holders of SIGECO Common
Stock will be voting as a separate class, a quorum for such class consists of a
majority of all shares of such class entitled to vote on such matter.
Record Date
The Board of Directors of SIGECO has fixed February 10, 1995 (the "Record
Date") as the date for the determination of SIGECO shareholders entitled to
notice of and to vote at the Annual Meeting. Only SIGECO shareholders of record
on the books of SIGECO at the close of business on the Record Date, will be
entitled to vote at the Annual Meeting or at any adjournments thereof, unless
the Board of Directors of SIGECO fixes a new record date for the adjourned
meeting which it must do if the adjourned meeting date is after July 26, 1995.
11
<PAGE>
Outstanding Voting Securities
SIGECO's voting securities outstanding on the record date consisted of
185,895 shares of $100 Par Preferred Stock (consisting of 85,895 shares of 4.8%
Preferred Stock, 25,000 shares of 4.75% Preferred Stock and 75,000 shares of
6.50% Preferred Stock) and 15,754,826 shares of SIGECO Common Stock. Each share
of SIGECO Common Stock and $100 Par Preferred Stock is entitled to one vote,
regardless of class or series, on each matter to be voted upon by SIGECO
shareholders entitled to vote at the Annual Meeting. However, unless the holder
personally appears at the Annual Meeting, shares for which no proxy is returned
(whether registered in the name of the actual holder thereof or in nominee or
street name) will not be voted. Outstanding shares of Special Preferred Stock
are entitled to notice of but not to vote at the Annual Meeting.
Voting
The affirmative vote of the holders of a majority of the outstanding shares
of SIGECO Common Stock, voting separately as a single class, and the holders of
a majority of the outstanding shares of SIGECO Common Stock and $100 Par
Preferred Stock, taken together, are required to approve the Exchange Agreement.
Approval of each of the matters to be voted upon at the Annual Meeting other
than the approval of the Exchange Agreement requires the affirmative vote of the
holders of a majority of the outstanding shares of SIGECO Common Stock and $100
Par Preferred Stock entitled to vote thereon. Proxies submitted by brokers for
shares beneficially owned by other persons may indicate that all or a portion of
the shares represented by such proxies are not being voted with respect to
approval of the Exchange Agreement. This is because the rules of the NYSE do not
permit a broker to vote shares held in street name with respect to such matters
in the absence of instructions from the beneficial owner of such shares. The
shares represented by broker proxies which are not voted with respect to any
such matter will not be counted in determining whether a quorum is present for
consideration of such matter and will not be considered represented at the
meeting and entitled to vote on approval of such matter.
Proxies marked to abstain from voting with respect to any matter to be
voted upon at the Annual Meeting will have the effect of voting against approval
of such matter.
Cost and Method of Solicitation
The cost of preparing, assembling, printing, and mailing this
Prospectus/Proxy Statement, the enclosed proxy and any other material which may
be furnished to SIGECO shareholders in connection with the solicitation of
proxies for the Annual Meeting will be paid by SIGECO. Proxies may be solicited
by officers and regular employees of SIGECO, personally, by telephone,
telegraph, fax, or mail, and if deemed advisable, SIGECO may also engage the
services of Continental Stock Transfer & Trust Co., 2 Broadway, New York, New
York 10004 and/or D. F. King & Co., Inc., 77 Water Street, New York, New York
10005. It is anticipated that the cost of such solicitations will not exceed
$15,000 plus reasonable out-of-pocket expenses. SIGECO may also reimburse
brokers, banks, nominees and other fiduciaries, for postage and reasonable
clerical expense of forwarding the proxy material to beneficial owners of SIGECO
Common Stock and $100 Par Preferred Stock.
Security Ownership of Certain Beneficial Owners
As of December 31, 1994, each of the following SIGECO shareholders was
known to the management of SIGECO to be the beneficial owner of more than five
percent of the outstanding shares of any class of voting securities as set forth
below.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percent
Title of Class Beneficial Owner Ownership of Class
------------------- ---------------- ---------- -------
<S> <C> <C> <C>
Preferred Stock HAMAC & Co. 18,000 Shares 9.7%
$100 Par Value c/o Crestar Bank Registered Owner
Box 26246
Richmond, VA 23261
IDS Certificate Company 75,000 Shares 40.3%
c/o IDS Financial Services, Inc. Registered Owner
3000 IDS Tower 10
Minneapolis, MN 55440
</TABLE>
12
<PAGE>
THE EXCHANGE
General
The Board of Directors and Management of SIGECO consider it to be in the
best interests of SIGECO, its shareholders and customers to change the corporate
organization of SIGECO into a holding company structure. The Exchange will
result in SIGECO becoming a wholly-owned subsidiary of Holding Company, with the
present holders of SIGECO Common Stock becoming the holders of the Holding
Company Common Stock.
To achieve this restructuring, SIGECO will use Holding Company, a presently
inactive subsidiary of SIGECO. SIGECO and Holding Company have approved the
Exchange Agreement under which, subject to shareholder approval as required by
the BCL, the Exchange will be effected and SIGECO will become a subsidiary of
Holding Company. In the Exchange, each share of SIGECO Common Stock will be
converted into one share of Holding Company Common Stock. A copy of the Exchange
Agreement is attached to this Prospectus/Proxy Statement as Exhibit A and
incorporated herein by reference. It is not expected that the Exchange will
affect the position of the present shareholders of SIGECO for Federal income tax
purposes. See "The Exchange--Federal Income Tax Consequences." Adoption of the
Exchange Agreement is subject to various approvals by regulatory authorities.
See "The Exchange--Regulatory Approvals."
The other securities of SIGECO, including its first mortgage bonds,
pollution control loan obligations and each series of SIGECO Preferred Stock,
will not be changed by the Exchange and each will continue to be outstanding
securities of SIGECO. See "The Exchange--Treatment of Preferred Stock."
The primary purpose of forming a holding company is to further strengthen
the organization. Increased flexibility as a result of the reorganization will
enhance long term earnings potential. Deregulation and competition are reshaping
the utility marketplace and changing the nature of the electric and gas utility
businesses. The holding company structure offers the best means of positioning
the organization for the changes and opportunities to come and will enable the
organization to take advantage of emerging business opportunities to the benefit
of both shareholders and customers. The primary focus for Holding Company will
be maintaining the strength of its core business--serving SIGECO's electric and
gas customers. Participation in other opportunities is expected to be closely
related to the energy business. The Board of Directors and Management
unanimously recommend a vote FOR the approval of the Exchange as proposed in the
accompanying Notice. See "The Exchange--Reasons for the Restructuring."
SIGECO
SIGECO is an operating public utility, incorporated on June 10, 1912 under
the laws of the State of Indiana. The principal executive offices of SIGECO are
located at 20 N.W. Fourth Street, Evansville, Indiana 47741-0001. Its telephone
number, including area code, is (812) 465-5300.
SIGECO is engaged in the generation, transmission, distribution and sale of
electricity and the purchase of natural gas and its transportation, distribution
and sale in a service area covering ten counties in southwestern Indiana. SIGECO
is subject to regulation by the Indiana Utility Regulatory Commission (the
"IURC") as to rates, service, accounts, issuance of securities and in other
respects as provided by Indiana law. FERC has jurisdiction under the Federal
Power Act over certain of the electric utility facilities and operations,
accounting practices and wholesale electric rates of SIGECO. SIGECO is presently
exempt from all the provisions of the Holding Company Act, except provisions
thereof relating to the acquisition of securities of other public utility
companies. After the Exchange, Holding Company will be entitled to a similar
exemption. In each case, the exemption is subject to termination if the SEC
finds that there is a question as to whether the exemption is appropriate or may
be detrimental to the public interest or the interest of investors or consumers.
SIGECO owns 33% of Community Natural Gas Company, an Indiana corporation
("CNG"). SIGECO also owns 100% of Lincoln Natural Gas Company, an Indiana
corporation ("LNG"). Following the Exchange, SIGECO will continue to own 33% of
CNG and 100% of LNG.
Southern Indiana Properties, Inc., an Indiana corporation ("SIPI"), a
wholly-owned subsidiary, was formed by SIGECO to conduct non-utility investment
activities while segregating such activities from SIGECO's regulated utility
business. Net income for the years 1994, 1993, and 1992 was $_________,
$2,525,000 and $2,321,000, respectively, and is included in "Other, net" in the
Consolidated Statements of Income of SIGECO incorporated herein. SIPI's
investment activities consist principally of investments in partnerships
(primarily in real estate), leveraged leases, and marketable securities.
13
<PAGE>
Energy Systems Group, Inc. ("ESGI"), was approved as a subsidiary of SIGECO
by the Board of Directors in March 1994. ESGI works with industrial and
commercial customers to install controls and equipment to help them use energy
more efficiently.
ESGI was recently awarded its first contract, valued at approximately
$1,000,000, with the Pike County School Corporation. They will be working at
eight different Indiana locations within the school corporation installing
equipment customized for each site. As project manager, ESGI will be utilizing
local engineering firms and contractors to perform the on site work. ESGI will
be compensated out of the energy savings to the school corporation.
Southern Indiana Minerals, Inc., an Indiana corporation ("SIMI"), was also
recently formed as a wholly-owned SIGECO subsidiary. SIMI was established to
process and market coal combustion by-products at SIGECO's power plants, which
includes flue gas desulfurization sludge and coal ash.
Reasons for the Restructuring
The primary purpose of forming a holding company is to further strengthen
the organization. Increased flexibility as a result of the reorganization will
enhance long term earnings potential.
Deregulation and competition are reshaping the utility marketplace and
changing the nature of the electric and gas utility businesses. The holding
company structure offers the best means of positioning the organization for
future changes and opportunities and will enable the organization to take
advantage of emerging business opportunities to the benefit of both shareholders
and customers.
The primary focus of Holding Company will be maintaining the strength of
its core business--serving SIGECO's electric and gas customers. Participation in
other opportunities is expected to be closely related to the energy business.
Through its non-regulated subsidiaries, Holding Company will be in a position to
quickly take advantage of increasing opportunities in non-utility activities.
The proposed restructuring will permit affiliates of SIGECO to take
advantage of competitive non-utility business activities. The holding company
system structure is designed to insulate SIGECO's utility business from the
risks of the non-utility affiliates, and should increase the energy-related
expertise, knowledge and skills of utility employees.
With the holding company structure, the shareholder funds which are not
currently required for investment in utility facilities may be redeployed by
Holding Company to non-regulated subsidiaries or investment portfolios providing
opportunities for increased earnings. Holding Company will be able to take
advantage of these investment opportunities more quickly than could the utility.
One area of such investment may include activities to stimulate a faster pace of
economic growth in the utility's service area. This should benefit shareholders
through earnings potential of the investment and increased utility earnings
resulting from greater sales brought on by economic growth.
The holding company structure will provide a clear separation of the
utility from non-regulated businesses and investments. Any non-regulated
investments will be organized as separate subsidiaries of Holding Company. Any
benefits or detriments that result from the business conducted through such
subsidiaries are expected to flow primarily to the common shareholders of
Holding Company.
The Board of Directors has unanimously approved the Exchange and believes
that it is in the best interests of SIGECO's shareholders. THE BOARD OF
DIRECTORS RECOMMENDS APPROVAL AND ADOPTION OF THE EXCHANGE AND URGES EACH
SHAREHOLDER TO VOTE "FOR" APPROVAL OF THE EXCHANGE.
Agreement and Plan of Exchange
The Exchange Agreement in the form attached hereto as Exhibit A has been
unanimously approved by the Boards of Directors of SIGECO and Holding Company
and by SIGECO as sole shareholder of Holding Company. In the Exchange, each
outstanding share of SIGECO Common Stock will be exchanged for one share of
Holding Company Common Stock. In addition, each outstanding share of each series
of SIGECO Preferred Stock will continue unchanged as an issued and outstanding
share of SIGECO Preferred Stock with the same preferences, designations,
relative rights, privileges and powers, and subject to the same restrictions,
limitations and qualifications as now provided in SIGECO's Amended and Restated
Articles of Incorporation ("SIGECO's Articles"). As a result of the Exchange,
14
<PAGE>
SIGECO will become a subsidiary of Holding Company, and all of the Holding
Company Common Stock outstanding immediately after the Exchange is effective
will be owned by the holders of SIGECO Common Stock outstanding immediately
before the Exchange is effective.
The SIGECO Preferred Stock and the outstanding first mortgage bonds and
pollution control loan obligations of SIGECO and the terms thereof will not be
altered as a result of the Exchange. SIGECO's Articles will not be changed in
any way as a result of the Exchange.
Except for transfers related to dividends or other distributions related to
common stock (see "Dividend Policy" below) and except for the transfer of
ownership in the three non-utility subsidiaries of SIGECO, it is not anticipated
that SIGECO will make transfers of assets without consideration to Holding
Company or to any other subsidiaries of Holding Company following the Exchange,
nor does SIGECO presently foresee any circumstances which would warrant such
transfers.
Amendment or Termination
SIGECO and Holding Company may amend, modify or supplement the Exchange
Agreement in such manner as may be agreed upon by them at any time before or
after approval of the Exchange Agreement by the shareholders of SIGECO;
provided, however, that no amendment, modification or supplement shall be made
which would, in the judgment of the Board of Directors of SIGECO, materially and
adversely affect the shareholders of SIGECO.
The Exchange Agreement may be terminated, at any time before or after its
approval by the shareholders of SIGECO, by action of the Board of Directors of
SIGECO if the Board determines, in its sole discretion, that consummation of the
Exchange would be inadvisable or not in the best interests of SIGECO or its
shareholders. In making such determination, the Board of Directors would
consider, among other things, the nature of the SEC approval under the Holding
Company Act, the nature of FERC approval under the Federal Power Act, or the
nature of any further regulatory approval requirements not now anticipated.
SIGECO is unable to predict under what other circumstances the Exchange might be
terminated and abandoned.
Certain Considerations
The three non-utility companies currently subsidiaries of SIGECO will
become Holding Company subsidiaries on, or as soon as practicable after, the
effective date of the Exchange. See "The Exchange--Transfer of SIGECO Assets to
Holding Company." Holding Company may form or acquire other unregulated
subsidiaries in the future to help certain large commercial and industrial
electrical customers of SIGECO to build and maintain on-site generation or
co-generation plants or to provide other energy related services. The three
current non-utility subsidiaries of SIGECO and any future non-utility
subsidiaries of Holding Company are hereinafter referred to as "Non-Utility
Subsidiaries."
It is the current intention of Holding Company for Non-Utility Subsidiaries
to engage only in energy related businesses which will not be regulated by state
or Federal agencies which regulate public utilities. Such businesses may involve
competitive and other factors not previously experienced by SIGECO, and may have
different, and perhaps greater, investment risks than those involved in the
regulated utility business of SIGECO. There can be no assurance that such
businesses will be successful or, if unsuccessful, that they will not have a
direct or indirect adverse effect on Holding Company. Any losses incurred by
such businesses will not be recoverable in utility rates of SIGECO.
The unregulated businesses of Non-Utility Subsidiaries are expected for the
foreseeable future to comprise an immaterial amount of the consolidated assets,
and to provide an immaterial amount of the consolidated revenues, of Holding
Company because SIGECO currently has more than $840 million of assets and more
than $325 million of annual revenues.
Holding Company will obtain funds to invest in Non-Utility Subsidiaries
from dividends Holding Company receives on its SIGECO Common Stock, borrowings
or the issuance of additional securities by Holding Company and any dividends it
may in the future receive from any earnings of Non-Utility Subsidiaries,
although there can be no assurance that Non-Utility Subsidiaries will have any
earnings, or pay any dividends to Holding Company, in the foreseeable future.
15
<PAGE>
Regulatory Approvals
An application is pending with FERC for approval under the Federal Power
Act of the Exchange.
Holding Company has also applied to the SEC under the Holding Company Act
for approval of the Exchange under Sections 9(a)(2) and 10 of the Holding
Company Act and for an exemption under Section 3(a)(1) of the Holding Company
Act. That exemption would exempt Holding Company and its subsidiaries, upon
completion of the Exchange, from all the provisions of the Holding Company Act
except Section 9(a)(2) thereof, which relates to the acquisition of securities
of other public utility companies. The basis for the exemption would be that
Holding Company and all of its "material" utility subsidiaries are predominantly
intrastate (i.e., incorporated and located in Indiana). See "The
Exchange--Regulation of Holding Company".
Receipt of orders from the FERC under the Federal Power Act and the SEC
under the Holding Company Act, and any other required regulatory approvals, in
forms satisfactory to SIGECO, is a condition precedent to consummation of the
Exchange.
Regulation of Holding Company
Upon consummation of the Exchange, Holding Company, as the owner of all the
outstanding SIGECO Common Stock, will thereby become a "holding company" under
the Holding Company Act. As described above, it is anticipated that Holding
Company will be granted an exemption under the Holding Company Act and, as such,
will be an exempt holding company. As is the case for SIGECO presently, prior
approval of the SEC under the Holding Company Act would be required if Holding
Company were to acquire 5% of more of the voting securities of any other
electric or gas utility company.
Under the Holding Company Act and current policies of the SEC there are
limitations on the extent to which exempt holding companies (such as Holding
Company) may diversify into businesses not functionally related to the electric
and gas utility businesses. It is not anticipated that these limitations will
have any significant impact on Holding Company in the foreseeable future.
Under the Holding Company Act and current SEC policies, there are
limitations on the extent to which Holding Company could expand the utility
business of SIGECO or any other material utility subsidiary outside of Indiana.
If any limitations regarding diversification or location of businesses were
exceeded, Holding Company's exempt status under the Holding Company Act could be
jeopardized. Holding Company has no present intention to engage in any activity
which would require it to register as a holding company and thereby subject it
to regulation under the Holding Company Act.
SIGECO and Holding Company have been advised by counsel that so long as
Holding Company is not a public utility, it will not be subject under present
Federal law to regulation by FERC other than in instances which, directly or
indirectly, involve an affiliation with a public utility.
Business of Holding Company
Upon completion of the Exchange, Holding Company will be a holding company
owning all of the outstanding shares of SIGECO Common Stock and may engage,
directly or through subsidiaries, in other businesses. For the forseeable
future, the primary focus for Holding Company will be maintaining the strength
of its core business--serving SIGECO's electric and gas customers.
Transfer of SIGECO Assets to Holding Company
On or as soon as practicable after the effective date of the Exchange,
SIGECO will transfer to Holding Company the stock of its three non-utility
subsidiaries (SIPI, ESGI and SIMI) as a dividend on the SIGECO Common Stock held
by Holding Company.
Except for dividends or other distributions with respect to SIGECO Common
Stock held by Holding Company, it is not expected that SIGECO will transfer any
of its assets to Holding Company or any Holding Company subsidiaries without
adequate consideration.
16
<PAGE>
Rights of Dissenting Shareholders
Holders of SIGECO Common Stock who object to the Exchange will not be
entitled to assert dissenters' rights of appraisal under Sections 23-1-44-1
through 23-1-44-20 of the BCL with respect to the shares of SIGECO Common Stock
held by them since, as of the Record Date, SIGECO Common Stock was listed on the
NYSE.
The BCL provides dissenters' rights of appraisal for the holders of $100
Par Preferred Stock who object to the Exchange and meet the requisite statutory
requirements contained in Sections 23-1-44-1 through 23-1-44-20 of the BCL.
Under the BCL, if the Exchange Agreement is approved by SIGECO shareholders
entitled to vote and the Exchange is consummated, any holder of $100 Par
Preferred Stock who wishes to assert dissenters' rights must do all of the
following: (a) deliver to SIGECO before the vote is taken, written notice of his
intent to demand payment for his shares of $100 Par Preferred Stock, (b) not
vote such shares in favor of the Exchange, and (c) upon receipt of the required
dissenters' notice from SIGECO, demand payment, certify whether he acquired
beneficial ownership of the shares before the date set forth in the dissenters'
notice and deposit the certificate or certificates representing the shares in
accordance with the terms of the notice. At the effective time of the Exchange,
SIGECO will pay to such shareholder the amount SIGECO estimates to be the "fair
value" of such shares of $100 Par Preferred Stock as of the time immediately
prior to the consummation of the Exchange.
A $100 Par Preferred Stock shareholder who does not satisfy each of the
aforementioned requirements is not entitled to payment for such shareholder's
shares of $100 Par Preferred Stock under the dissenters' rights provisions of
the BCL and will be bound by the terms of the Exchange. Notwithstanding the
foregoing, a $100 Par Preferred Stock shareholder who satisfies requirements (a)
and (b) above, but acquired beneficial ownership of his shares on or after the
date set forth in the dissenters' notice from SIGECO will be entitled to
payment; however, SIGECO can elect to withhold such payment unless such
shareholder agrees to accept, in full satisfaction of such shareholder's demand,
the amount offered by SIGECO.
A $100 Par Preferred Stock shareholder may dissent as to less than all of
the shares of $100 Par Preferred Stock registered in his name only if such
shareholder dissents with respect to all shares beneficially owned by any one
person and notifies SIGECO in writing of the name and address of each person on
whose behalf such shareholder asserts dissenters' rights. The rights of a
partial dissenter are determined as if the shares of $100 Par Preferred Stock as
to which the shareholder dissents and his other shares of $100 Par Preferred
Stock were registered in the names of different shareholders. A beneficial
shareholder may assert dissenters' rights as to shares held on such
shareholder's behalf only if such shareholder (a) submits to SIGECO the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights and (b) asserts dissenters'
rights with respect to all shares of $100 Par Preferred Stock of which the
shareholder is the beneficial shareholder or over which such beneficial
shareholder has the power to direct the vote.
Set forth below is a summary of the procedures relating to the exercise of
dissenters' rights under the BCL. The following summary does not purport to be a
complete statement of, and is qualified in its entirety by reference to, the
provisions of Sections 23-1-44-1 through 23-1-44-20 of the BCL, a copy of which
is attached as Exhibit C hereto and to any amendments to such sections as may be
adopted after the date of this Prospectus/Proxy Statement.
Written Notice. The BCL requires that a holder of $100 Par Preferred Stock
who wishes to assert dissenters' rights (a) deliver to SIGECO before the vote is
taken, written notice of such shareholder's intent to demand payment for shares
of $100 Par Preferred Stock if the Exchange is consummated and (b) not vote such
shares of $100 Par Preferred Stock in favor of the Exchange. Each $100 Par
Preferred Stock shareholder who complies with the foregoing requirements is
hereinafter referred to as a "Dissenting Shareholder." Any notice by a
Dissenting Shareholder must be received by SIGECO at 20 N.W. Fourth Street,
Evansville, Indiana 47741, Attention: A.E. Goebel, Secretary, prior to the vote
to be taken at the Annual Meeting.
Notice and Demand. Within ten days after the date on which the Exchange is
approved by SIGECO shareholders, SIGECO must deliver a written dissenters'
notice to each Dissenting Shareholder. The dissenters' notice will (a) state
where the payment demand must be sent and where and when certificates for shares
of $100 Par Preferred Stock must be deposited, (b) supply a form for demanding
payment that includes the date of the first announcement to the news media or to
SIGECO shareholders of the terms of the proposed Exchange and which requires
that the Dissenting Shareholder certify whether or not he acquired beneficial
ownership of $100 Par Preferred Stock before such date, (c) set a date by which
SIGECO must receive the payment demand, which date will be not less than 30 nor
more than 60 days from the date such dissenters' notice is delivered, and (d) be
accompanied by the relevant sections of the BCL. A Dissenting Shareholder who
17
<PAGE>
wishes to assert dissenters' rights must demand payment, certify whether he
acquired beneficial ownership of the shares of $100 Par Preferred Stock before
the date set forth in the dissenters' notice and deposit the $100 Par Preferred
Stock in accordance with the terms of the dissenters' notice.
At the effective time of the Exchange, SIGECO must pay each Dissenting
Shareholder that has complied with the provisions of the BCL the amount
estimated to be the fair value of such dissenter's shares of $100 Par Preferred
Stock and provide to each such Dissenting Shareholder certain financial data
relating to SIGECO and other specified information as required by the BCL. If
the proposed Exchange is not effected within 60 days after the date set for
demanding payment and depositing share certificates, SIGECO will return the
deposited certificates and, if the Exchange is subsequently effected, SIGECO
will deliver a new dissenters' notice and repeat the payment demand procedure.
SIGECO may elect to withhold payment from a Dissenting Shareholder who acquired
beneficial ownership of $100 Par Preferred Stock after the date set forth in the
dissenters' notice as the date of the first announcement of the terms of the
proposed Exchange. If SIGECO so elects to withhold payment, it must, after the
effective time of the Exchange, estimate the fair value of the shares of $100
Par Preferred Stock and pay such amount and provide certain other specified
information, as set forth in the BCL, to each such Dissenting Shareholder who
agrees to accept it in full satisfaction of such shareholder's demand.
Court Proceedings. If (a) a Dissenting Shareholder believes that the amount
offered or paid is less than the fair value of such Dissenting Shareholder's
shares of $100 Par Preferred Stock, (b) SIGECO fails to make payment within 60
days after the date set forth for demanding payment, or (c) SIGECO having failed
to effect the Exchange, does not return the deposited certificates within 60
days after the date set for demanding payment, a Dissenting Shareholder may,
within 30 days after the payment was made or offered, notify SIGECO in writing
of such Dissenting Shareholder's own estimate of the fair value of the shares of
$100 Par Preferred Stock, and demand payment of such fair value (less any
payments previously received by such Dissenting Shareholder). A Dissenting
Shareholder waives the right to demand payment as described in this paragraph
unless such Dissenting Shareholder notifies SIGECO thereof within 30 days after
SIGECO made or offered payment for such Dissenting Shareholder's shares of $100
Par Preferred Stock. If a Dissenting Shareholder's demand for payment remains
unsettled, SIGECO must (a) commence a proceeding in the circuit or superior
court within 60 days after receiving the payment demand to determine the fair
value of the shares of $100 Par Preferred Stock or (b) pay to each Dissenting
Shareholder the amount demanded. The costs of a proceeding, including the
reasonable compensation and expenses of appraisers appointed by the court, will
generally be assessed against SIGECO. The court may, however, assess such court
costs, including the fees and expenses of counsel and experts, against any party
thereto, including SIGECO or any Dissenting Shareholder, if such party is found
by the court to have acted arbitrarily, vexatiously or not in good faith with
respect to the exercise of dissenters' rights under the BCL.
Effective Date of the Transactions
The Exchange will become effective as of the date to be selected by SIGECO
as provided in the Exchange Agreement. It is expected that the effective date
will occur as soon as practicable after the required approval by shareholders of
SIGECO and the receipt of necessary regulatory approvals under applicable law.
SIGECO cannot predict when such approvals will be in place. See "The
Exchange--Regulatory Approvals." SIGECO is hopeful that the Exchange will occur
in 1995. Contemporaneously with, or as soon as practicable following, the
Exchange, SIGECO will transfer ownership of its three non-utility subsidiaries
to Holding Company.
Exchange of Stock Certificates Not Required
If the Exchange takes place, it will not be necessary for holders of
SIGECO's common stock to physically exchange their existing stock certificates
for stock certificates of Holding Company. The holders of SIGECO Common Stock
will become the owners of shares of Holding Company Common Stock on a
share-for-share basis, and the present stock certificates of SIGECO will
automatically represent shares of Holding Company Common Stock. After the
Exchange, as presently outstanding certificates of SIGECO Common Stock are
presented for transfer, new certificates bearing the name "Southern Indiana
Group, Inc." will be issued. New certificates for Holding Company Common Stock
will also be issued in exchange for certificates of SIGECO upon the request of
any holder thereof.
18
<PAGE>
Federal Income Tax Consequences
The Exchange Agreement provides that the Exchange proposed restructuring
will not occur unless SIGECO receives an opinion of counsel, satisfactory to
SIGECO's Board of Directors, with respect to certain of the Federal income tax
consequences of the Exchange to the effect that:
(1) Holders of SIGECO Common Stock will recognize no gain or loss upon
the exchange of their SIGECO Common Stock for Holding Company Common Stock
under Section 351(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
(2) Non-dissenting holders of SIGECO Preferred Stock will recognize no
gain or loss in connection with the Exchange.
(3) The basis in Holding Company Common Stock received by holders of
SIGECO Common Stock will be the same as their basis in SIGECO Common Stock
exchanged therefor under Section 358(a)(1) of the Code.
(4) The holding period of Holding Company Common Stock received by the
holders of SIGECO Common Stock will include the period during which they
held SIGECO Common Stock exchanged therefor, provided SIGECO Common Stock
is held as a capital asset in the hands of such holders of SIGECO Common
Stock on the date of the Exchange under Section 1223(1) of the Code.
(5) Holding Company will recognize no gain or loss upon its receipt of
SIGECO Common Stock from holders of SIGECO Common Stock in exchange for
Holding Company Common Stock.
The foregoing discussion is for general information only and does not cover
the tax consequences of the Exchange under state, local or other tax laws. Each
shareholder of SIGECO is urged to consult with his or her own tax advisor with
respect to the specific tax consequences to him or her, including the effects of
such laws.
Treatment of Preferred Stock
The Exchange, as proposed, will not result in any change in any of the
outstanding series of $100 Preferred Stock or Special Preferred Stock. There are
presently no shares of No Par Preferred Stock issued and outstanding.
Management's decision to have SIGECO Preferred Stock continue as securities of
SIGECO is based upon, among other things, a desire not to alter, or potentially
alter, the nature of the investment represented by such stock, as well as the
need of SIGECO not to foreclose future issuances of SIGECO Preferred Stock to
help meet its capital requirements. The electric and gas utility operations of
SIGECO presently constitute, and are expected to continue to constitute for the
foreseeable future, the predominant part of Holding Company's consolidated
assets and earning power. Accordingly, it is believed that by remaining
securities of SIGECO, SIGECO Preferred Stock will retain its investment rating,
as well as its qualification for legal investment. SIGECO Preferred Stock will
continue to rank senior to SIGECO Common Stock as to dividends and as to assets
of SIGECO upon any liquidation.
Although the restructuring, if consummated, is not expected to adversely
affect the SIGECO Preferred Stock outstanding, any growth of assets and earnings
of Holding Company other than such growth of assets and earnings attributable to
SIGECO, will be of no direct benefit of the holders of such stock. As more fully
discussed under "The Exchange--Rights of Dissenting Shareholders" above, holders
of SIGECO Preferred Stock have no dissenters' rights in connection with the
matters to be voted upon at the Annual Meeting other than the approval of the
Exchange for which holders of $100 Par Preferred Stock are entitled to
dissenters' rights of appraisal.
After the Exchange is consummated, SIGECO will continue to be a reporting
company under the Exchange Act.
Dividend Policy
Dividends on the Holding Company Common Stock will depend in the
foreseeable future primarily upon the earnings, financial condition, cash flow
and capital requirements of SIGECO. It is contemplated that Holding Company
initially will make quarterly dividend payments on its Common Stock at the rate
per share then applicable to the SIGECO Common Stock. In addition, it is
expected that such quarterly dividends on Holding Company Common Stock will be
declared and paid on the same schedule of dates as that now followed by SIGECO
with respect to common stock dividends. The quarterly dividend most recently
declared by the Board of Directors of SIGECO was $.4225 per common share payable
March 20, 1995 to holders of record of SIGECO Common Stock on February 10, 1995.
19
<PAGE>
The ability of Holding Company to pay dividends on its Common Stock in the
future may be limited by any covenants which may limit the right of SIGECO to
pay dividends on or to acquire its Common Stock. Existing covenants will not be
altered by the proposed restructuring. Dividends are payable on SIGECO Common
Stock as and when declared by its Board of Directors out of funds legally
available therefor after full cumulative dividends upon outstanding $100 Par
Preferred Stock, No Par Preferred Stock and shares of Special Preferred Stock,
if any, ranking prior to the Common Stock shall have been paid or a sum
sufficient therefor shall have been set apart for such payment. The rights and
preferences of each series of Special Preferred Stock must be established by the
Board of Directors in the resolutions providing for the issuance thereof. The
shares of Special Preferred Stock currently outstanding are entitled to the same
rights and preferences (other than voting rights) as the No Par Preferred Stock.
SIGECO's Articles in effect restrict the payment of cash dividends on
SIGECO Common Stock to accumulated surplus available for distribution to the
SIGECO Common Stock earned subsequent to December 31, 1943, and require that,
immediately after such dividends, there shall remain to the credit of earned
surplus an amount at least equal to two times the annual dividend requirements
on all then outstanding $100 Par Preferred Stock, No Par Preferred Stock and, to
the extent applicable, Special Preferred Stock. The amount restricted against
cash dividends on SIGECO Common Stock at December 31, 1994 under this
restriction was $2,209,642, leaving $215,823,713 unrestricted for the payment of
dividends. In addition, SIGECO Articles provide that surplus otherwise available
for the payment of dividends on SIGECO Common Stock shall be restricted to the
extent that surplus is included in a calculation required to permit SIGECO to
issue, sell or dispose of stock senior to SIGECO Common Stock.
An order of the SEC dated October 12, 1944 under the Holding Company Act,
in effect restricts the payment of cash dividends on SIGECO Common Stock to 75%
of net income available for distribution to the SIGECO Common Stock, earned
subsequent to December 31, 1943, if the percentage of SIGECO Common Stock equity
to total capitalization and surplus, as defined, is less than 25%. At December
31, 1994, the ratio of SIGECO Common Stock equity to total capitalization and
surplus amounted to approximately 48.4%.
Payment of dividends on SIGECO Common Stock is also restricted by certain
provisions of SIGECO's Mortgage and Deed of Trust, dated as of April 1, 1932,
with Bankers Trust Company, New York, N.Y., as trustee, as supplemented by
indentures supplemental thereto (together with such supplemental indentures, the
"Mortgage"), under which SIGECO's first mortgage bonds are outstanding. The
Mortgage in effect restricts the payment of cash dividends on SIGECO Common
Stock to the accumulated surplus available for distribution to SIGECO Common
Stock earned subsequent to December 31, 1947, subject to reduction if amounts
deducted from earnings for current repairs and maintenance and provision for
renewals, replacements and depreciation of all the property of SIGECO are less
than amounts specified in the Mortgage. No amount was restricted against cash
dividends on SIGECO Common Stock at December 31, 1994 under this provision.
Dividends on SIGECO Preferred Stock will continue to be paid at the times
and at the rates provided for in the various series of such stock, depending
upon the financial condition and other factors affecting SIGECO and subject to
declaration by the Board of Directors of SIGECO.
After the Exchange, SIGECO may, from time to time, also pay special
dividends to Holding Company or make other distributions on SIGECO Common Stock
to provide funds to Holding Company for its corporate purposes and to adjust the
capital structure of SIGECO.
Listing of Holding Company Common Stock
Holding Company will apply to list its Common Stock on the NYSE. It is
expected that such listing will become effective on the effective date of the
Exchange, subject to the rules of such exchange. After the effective date of the
Exchange, SIGECO Common Stock will no longer meet the requirements for listing
on the NYSE because all of SIGECO Common Stock will be held by one shareholder,
Holding Company. The NYSE ticker symbol for Holding Company Common Stock will
continue to be "____" and quotation of Holding Company Common Stock in
newspapers will be under the name "__________________".
20
<PAGE>
Holding Company Capitalization
The authorized capital stock of Holding Company consists of 75,000,000
shares of Common Stock, without par value, and 10,000,000 shares of preferred
stock, without par value ("Holding Company Preferred Stock"). The relative
rights of Holding Company Common Stock and Holding Company Preferred Stock are
substantially the same as the relative rights of SIGECO Common Stock and
SIGECO's Special Preferred Stock, respectively.
Holding Company Common Stock has no preemptive rights. The shares of
Holding Company Common Stock for which SIGECO's Common Stock will be exchanged
upon consummation of the Exchange and which will constitute all outstanding
shares of Holding Company Common Stock at that time, will be validly issued,
fully paid and nonassessable. After the Exchange, the number of shares of
Holding Company Common Stock outstanding will be equal to the number of shares
of SIGECO Common Stock outstanding prior to the Exchange. Each share of Holding
Company Common Stock will be equal to every other share in every respect. The
shares of Holding Company Common Stock will entitle the holders thereof to one
vote per share upon all matters upon which shareholders of Holding Company have
the right to vote. Shareholders of Holding Company Common Stock will not have
the right to cumulate their votes in electing directors. Subject to the prior
rights, if any, of holders of Holding Company Preferred Stock that may be issued
in the future (described below), holders of Holding Company Common Stock are
entitled to receive such dividends as and when declared from time to time by the
Board of Directors of Holding Company out of funds legally available therefore
and to share pro rata in any distribution to shareholders. Holding Company
Common Stock is not subject to redemption and does not have any conversion or
sinking fund provisions. In the event of any liquidation, dissolution or winding
up of Holding Company, the holders of Holding Company Common Stock are entitled
to receive pro rata all assets of Holding Company, if any, remaining after
payment of all debts and payment of the full preferential amounts fixed for
Holding Company Preferred Stock.
The Holding Company Preferred Stock may be issued in series. The Board of
Directors of Holding Company will determine, for each series of Holding Company
Preferred Stock, the designations, preferences, limitations and relative rights
thereof to the full extent permitted by law. Unlike holders of SIGECO Preferred
Stock (other than Special Preferred Stock) holders of Holding Company Preferred
Stock will only have the right to vote (other than as may be required by law)
if, and to the extent, the Board of Directors so specifies when establishing the
rights and preferences of a particular series.
Articles of Incorporation and By-laws of Holding Company
SIGECO and Holding Company are both Indiana corporations. Holding Company's
Articles of Incorporation ("Holding Company's Articles") have been prepared in
accordance with the BCL and give Holding Company broad corporate powers to
engage in any lawful activity for which a corporation may be formed under the
laws of the State of Indiana. When the Exchange becomes effective, holders of
SIGECO Common Stock will become holders of Holding Company Common Stock, and
their rights will be governed by Holding Company's Articles instead of SIGECO's
Amended Articles of Incorporation ("SIGECO's Articles"). The references to
SIGECO's Articles below are qualified in their entirety by reference to the
information included in the material incorporated by reference herein.
Articles. SIGECO's Articles have been filed with the SEC as an exhibit to
its Annual Report on Form 10-K which is incorporated by reference in this
Prospectus/Proxy Statement. SIGECO's Articles include provisions that set
staggered terms for the Board of Directors, specify that a director can only be
removed for cause and then only with the approval of the holders of not less
than 70% of the voting stock of SIGECO, require a request from the holders of
not less than 70% of the voting stock of SIGECO for shareholders to require a
special meeting of shareholders and require the affirmative vote of at least 70%
of the voting stock of SIGECO to approve a merger or consolidation (or certain
other corporate transactions) not approved by a majority of disinterested
directors or in connection with which certain criteria for fair pricing have not
been satisfied. These provisions, singly or in the aggregate, could have the
effect of delaying, deferring or preventing a change in control of SIGECO.
Holding Company's Articles contain similar provisions.
By-laws: The By-laws of Holding Company are substantially similar to the
By-laws of SIGECO.
Authorized Shares: Holding Company will have 75,000,000 authorized shares
of common stock compared with 50,000,000 for SIGECO. SIGECO has 800,000
authorized shares of $100 Par Preferred Stock; 5,000,000 authorized shares of No
Par Preferred Stock; and 5,000,000 authorized shares of Special Preferred Stock.
Holding Company will have 10,000,000 authorized shares of preferred stock, no
par value, which will be equivalent to SIGECO's Special Preferred Stock.
21
<PAGE>
If at any time that SIGECO fails to pay four full quarterly dividends on
outstanding $100 Par Preferred Stock or No Par Preferred Stock, the holders of
$100 Par Preferred Stock and No Par Preferred Stock have the right to elect,
voting separately as one class, the smallest number of directors which will
constitute a majority of the Board of Directors of SIGECO (in such vote, each
$100 Par Preferred Stock holder shall be entitled to one vote per share and each
holder of No Par Preferred Stock shall be entitled to a fractional vote per
share equal to the ratio of the involuntary liquidation value of such share to
the par value per share of the $100 Par Preferred Stock). Such voting rights
with respect to the election of directors continues until all arrears and
dividends have been paid in full. If this situation were to arise, Holding
Company would cease to control the affairs of SIGECO prior to such full payment.
The effect of the existence of unissued common or preferred stock may be to
enable Holding Company's Board of Directors to render more difficult or to
discourage a merger, tender offer, proxy contest or other transaction to obtain
control of Holding Company. Such shares might be issued by the Board of
Directors without shareholder approval in transactions that might prevent or
render more difficult or costly the completion of a takeover transaction, as by
diluting voting or other rights of the proposed acquirer. In this regard,
Holding Company's Articles (as well as the SIGECO's in the case of Special
Preferred Stock) grant the Board of Directors broad power to establish rights
and preferences of authorized and unissued preferred stock, one or more series
of which could be issued entitling holders to vote separately as a class on any
proposed merger or consolidation, to cast a proportionately larger vote together
with the common stock on any such transaction or for all purposes, to convert
preferred stock into a large number of shares of common stock or other
securities, to demand redemption at a specified price under prescribed
circumstances related to a change of control, or to exercise other rights
designed to impede a takeover. It is not the intention of the Board of Directors
of Holding Company to discourage legitimate offers to enhance shareholder value.
Rights Agreement
Pursuant to a Rights Agreement dated as of October 1, 1986 between SIGECO
and Continental Stock Transfer & Trust Company ("Continental"), as Rights Agent,
each outstanding share of SIGECO Common Stock, evidences a right (a "Right")
which entitles the registered holder thereof to purchase from SIGECO one
one-hundredth of a share of a new series of No Par Preferred Stock of SIGECO
designated as Series 1986 Preferred Stock, at a specified price ("Purchase
Price"). The Rights will not be exercisable until a third party acquires
beneficial ownership of 20% of SIGECO Common Stock or makes a tender offer for
at least 30% of SIGECO Common Stock. The Rights expire October 15, 1996. If not
exercisable, the Rights in whole may be redeemed by SIGECO at a price of $.01
per right at any time prior to their expiration. If the Rights are exercisable
and SIGECO is involved in a merger or other business combination transaction,
each Right entitles the holder to receive, upon exercise thereof at the Purchase
Price, common stock of the acquiring company (or of SIGECO if it is the
surviving company), or in certain circumstances cash and/or property, having a
value of two times such Purchase Price. A more complete description of the
Rights is set forth in SIGECO's Registration Statement on Form 8 A, and the
exhibits thereto, which description has been incorporated by reference herein.
See "Incorporation of Certain Documents by Reference." The Rights are not
triggered by the Exchange. It is anticipated that Holding Company will enter
into a rights agreement similar to the one described above.
Stock Plan
It the Exchange is consummated, the 1994 Stock Option Plan will be amended
to provide that Holding Company Common Stock (or stock units) will be delivered
instead of SIGECO Common Stock (or stock units) pursuant to such Plan. By
approving the Exchange Agreement, SIGECO shareholders will be considered also to
have ratified the amendment of such Plan to provide for the delivery of Holding
Company Common Stock (or stock units) thereunder.
Automatic Dividend Reinvestment and Stock Purchase Plan
If the Exchange is consummated, no shares of SIGECO Common Stock will
thereafter be available under SIGECO's Automatic Dividend Reinvestment and Stock
Purchase Plan (the "DRP") and Holding Company will adopt a substantially similar
plan to provide for the purchase of Holding Company Common Stock. All
participants in the DRP will automatically become participants in Holding
Company's plan. Shares held in the DRP will automatically be converted to
Holding Company Common Stock if the Exchange takes place.
22
<PAGE>
Transfer Agent and Registrar
The National City Bank of Evansville ("National City") and Continental
Stock Transfer & Trust Company ("Continental") act as Registrars and SIGECO and
Continental act as Transfer Agents for SIGECO Common Stock. National City and
Continental are expected to act as Registrars and Holding Company and
Continental are expected to act as Transfer Agents for Holding Company Common
Stock.
Market Prices of and Dividends on SIGECO Common Stock
SIGECO Common Stock is listed on the NYSE under the symbol "SIG". The
following table sets forth the high and low closing prices per share of SIGECO
Common Stock for the periods indicated, as reported by the NYSE. The table also
shows dividends paid per share on SIGECO Common Stock for the periods indicated.
<TABLE>
<CAPTION>
Closing Prices Dividends
---------------------- ------------
High Low Paid
---- ---- ----
<C> <C> <C> <C>
1992: First Quarter........................................ $ 33.56 $30.75 $0.39
Second Quarter.................................. 32 30 5/8 0.39
Third Quarter................................... 32 3/4 31 1/4 0.39
Fourth Quarter.................................. 34 1/8 31 1/8 0.39
1993: First Quarter........................................ 34 3/4 32 3/4 0.4025
Second Quarter.................................. 33 3/4 32 3/4 0.4025
Third Quarter................................... 34 7/8 33 1/4 0.4025
Fourth Quarter.................................. 35 1/2 32 1/8 0.4025
1994: First Quarter........................................ 33 7/8 28 5/8 0.4125
Second Quarter.................................. 30 26 1/2 0.4125
Third Quarter................................... 28 1/2 26 1/2 0.4125
Fourth Quarter.................................. 27 24 1/4 0.4125
1995: First Quarter (through February __, 1995)............
</TABLE>
On February___, 1995, the last sale price for SIGECO Common Stock, as
reported by the NYSE, was $ ___per share. On December 19, 1994 (the trading day
next preceding the public announcement by SIGECO of its intention to proceed
with the formation of a holding company), the last sale price for SIGECO Common
Stock, as reported by the NYSE, was $26 per share. On ___, 1995 (the trading day
next preceding the announcement of the Board of Directors' recommendation that
the Exchange be submitted to shareholders), the last sale price for SIGECO
Common Stock, as reported by the NYSE, was $_____ per share. As of February 10,
1995, there were __________ holders of record of SIGECO Common Stock.
SIGECO has paid cash dividends since 1949. The indicated annual dividend
rate is currently $1.69 per share. For the foreseeable future, dividend payments
will depend upon SIGECO's earnings, financial condition, capital requirements
and other factors. See "The Exchange--Dividend Policy."
Directors and Management
The directors of SIGECO will also be the directors of Holding Company at
the effective time of the Exchange, and they will thereafter serve as the
directors of both companies. If the SIGECO Shareholders approve the Exchange
Agreement, they will be considered also to have ratified the election of such
persons as the directors of Holding Company. The current directors of SIGECO are
presently the directors of Holding Company.
The current executive officers of Holding Company are also executive
officers of SIGECO. The Holding Company executive officers are:
R.G. Reherman Chairman, President and Chief Executive Officer
A.E. Goebel Secretary and Treasurer
Information concerning SIGECO executive officers and SIGECO directors is
incorporated by reference in the SIGECO Annual Report on Form 10-K for the year
ended December 31, 1993, which is incorporated herein by reference.
23
<PAGE>
Financial Statements
SIGECO will file a report on Form 8-K at a later date containing, with
respect to SIGECO, the following: consolidated balance sheets and statements of
capitalization of SIGECO as of December 31, 1994 and 1993, and the related
consolidated statements of income and retained earnings, and cash flows for each
of the three years in the period ended December 31, 1994, the related report of
Arthur Andersen LLP, independent public accountants, and Management's Discussion
and Analysis of Financial Condition and Results of Operations. Such information
will be incorporated in this Prospectus/Proxy Statement by reference. Such
financial information will be included in SIGECO's 1994 Annual Report to
Shareholders. Copies of such Annual Report were mailed on or before February __,
1995 to shareholders of record as of the close of business on February 10, 1995.
Additional copies of said report may be obtained without charge upon request as
provided under "Incorporation of Certain Documents by Reference."
Financial statements of Holding Company are not presented in this proxy
statement because Holding Company is an inactive company without material assets
or liabilities or operating history. Pro forma financial effects of the Exchange
are not set forth herein since no change will result from the Exchange.
Experts
Unless otherwise indicated, the financial statements and schedules
incorporated by reference in this Prospectus/Proxy Statement and elsewhere in
the registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
Legal Opinions
Certain legal matters respecting the Common Stock of Holding Company to be
issued pursuant to the Exchange and the Exchange Agreement will be passed upon
for SIGECO and Holding Company by Bamberger, Foreman, Oswald & Hahn, Evansville,
Indiana and certain other matters (including Federal income tax matters)
relating to the Exchange and the Exchange Agreement will be passed upon for
SIGECO and Holding Company by Winthrop, Stimson, Putnam & Roberts, New York, New
York.
ELECTION OF DIRECTORS
SIGECO's Board of Directors consists of 10 members of whom approximately
one-third are elected each year to serve terms of three years or until the
director's earlier retirement pursuant to the Board of Director's Retirement
Policy. It is intended that the enclosed form of proxy will be voted for the
election of Messrs. Donald A. Rausch, Richard W. Shymanski and Norman P. Wagner,
all of whom are now members of the Board, for three year terms or until the
director's earlier retirement. In any election of directors, the persons
receiving a plurality of the votes cast are elected to the vacancies to be
filled.
Each of the three nominees has signified his willingness to serve if
elected. If, however, any situation should arise under which any such person
should be unable to serve, the authority granted in the enclosed proxy card may
be exercised by the proxy holders for the purpose of voting for a substitute
nominee. Set forth below is information with respect to the nominees and the
other members of the Board of Directors. If not otherwise indicated, the
principal occupation listed for any individual has been the same for at least
five years.
The Board of Directors recommends a vote "FOR" all of the nominees listed below.
Nominees for Election for Terms to Expire in 1998
Donald A. Rausch, 64, Chairman of
the Board, President, and Chief
Executive Officer, since 1990,
of UF Bancorp, Inc.,
Evansville, Indiana; Chairman
of the Board and President,
since 1985, of Union Federal
Savings Bank, Evansville,
Indiana. He has been a director
of SIGECO since 1982.
[PICTURE]
Donald A. Rausch
24
<PAGE>
Richard W. Shymanski, 58,
President, since 1983, of
Harding, Shymanski & Company,
Professional Corporation,
Certified Public Accountants,
Evansville, Indiana. He has
been a director of SIGECO since
1989.
[PICTURE]
Richard W. Shymanski
Norman P. Wagner, 70, Chairman of
the Board of SIGECO 1990-1991;
Chairman and Chief Executive
Officer of SIGECO 1988-1990;
Chairman, President, and Chief
Executive Officer 1986-1988. He
has been a director of SIGECO
since 1978. He currently serves
as an officer of Southern
Indiana Properties, Inc. and
Southern Indiana Minerals,
Inc., both of which are
wholly-owned subsidiaries of
the Company.
[PICTURE]
Norman P. Wagner
Current Directors whose Terms Expire in 1996.
Melvin H. Dodson, 73, President,
since 1958, and director of
Dodson Engineering, Inc.,
Evansville, Indiana,
consultants to the petroleum
and natural gas industries. He
has been a director of SIGECO
since 1970.
[PICTURE]
Melvin H. Dodson
Walter R. Emge, 72, President and
director of Porca Company, of
Fort Branch, Indiana, formerly
Emge Packing Co., Inc. He has
been a director of SIGECO since
1972.
[PICTURE]
Walter R. Emge
Robert L. Koch II, 56, President
and Chief Executive Officer of
George Koch Sons, Inc.,
Evansville, Indiana,
manufacturers of industrial
painting systems and
distributors of heating and air
conditioning equipment. He is a
director of CNB Bancshares,
Inc. of Evansville and Bindley
Western Industries, Inc. of
Indianapolis, Indiana. He has
been a director of SIGECO since
1986.
[PICTURE]
Robert L. Koch II
25
<PAGE>
Jerry A. Lamb, 60, Chairman of the
Board of American Sheet
Extrusion Corporation,
Evansville, Indiana,
manufacturers of plastic molded
products. He is also a director
of CNB Bancshares, Inc., of
Evansville. He has been a
director of SIGECO since
January 1, 1993.
[PICTURE]
Jerry A. Lamb
Current Directors whose Terms Expire in 1997.
Ronald G. Reherman, 59, Chairman,
President and Chief Executive
Officer of SIGECO since April
1991; President and Chief
Executive Officer of SIGECO
1990-1991; President and Chief
Operating officer of SIGECO
1988 -1990; Executive Vice
President and General Manager
of SIGECO 1985-1988. He is also
a director of Ohio Valley
Electric Corp.,
Indiana-Kentucky Electric
Corp., National City Bancshares
and the National City Bank of
Evansville. He has been a
director of SIGECO since 1985.
[PICTURE]
Ronald G. Reherman
Donald E. Smith, 68, Chairman,
President, and Chief Executive
Officer of First Financial
Corporation, Terre Haute,
Indiana; Chairman, President,
Chief Executive Officer, and
director of Terre Haute First
National Bank, Terre Haute,
Indiana; President and director
of Terre Haute Oil Corp.,
President and director of
Princeton Mining Co. Inc.,
President and director of Deep
Vein Coal Company; and
President and director of R.J.
Oil Co., all of Terre Haute,
Indiana; and a director of
Blackhawk Coal Corporation. He
has been a director of SIGECO
since 1964.
[PICTURE]
Donald E. Smith
James S. Vinson, 53, President and
Professor of Physics at the
University of Evansville in
Evansville, Indiana since 1987.
Vice President of Academic
Affairs and Professor of
Physics at Trinity University
at San Antonio, Texas
1983-1987. He has been a
director of SIGECO since 1989.
[PICTURE]
James S. Vinson
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Melvin H. Dodson is sole
owner of Dodson Engineering, Inc. which firm in 1994 performed certain
consulting and operational services relative to gas storage fields and oil
producing properties for SIGECO, and is expected to perform such services in
1995. During 1994, the cost of such services was $222,428, which SIGECO believes
to be a fair and reasonable price for the services rendered.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS. The Board of Directors
conducts its business through meetings of the Board and through its committees.
The Board of Directors has established three standing committees, the Executive
Committee, the Audit Committee, and the Compensation Committee. There are no
nominating or other committees of the Board of Directors.
26
<PAGE>
The Executive Committee acts on behalf of the Board of Directors when the
Board is not in session, except on those matters which require action of the
full Board. The committee, which met 12 times in 1994, meets as required. The
members of the committee are Ronald G. Reherman (Chairman), Robert L. Koch II,
Donald A. Rausch, Donald E. Smith, and Norman P. Wagner.
The Audit Committee, which met two times in 1994, meets at least twice a
year with the independent auditors of SIGECO and the internal auditing staff to
review audit procedures and recommendations for improvements in internal
controls. The members of this committee are Donald A. Rausch (Chairman), Melvin
H. Dodson, Walter R. Emge, Richard W. Shymanski, and Norman P. Wagner.
The Compensation Committee, which met two times in 1994, advises and
recommends to the Board of Directors the salaries to be paid to the Chairman of
the Board (when also serving as an employee of SIGECO), the Chief Executive
Officer, the President, the Chief Operating Officer, and the Chief Financial
Officer. The committee also administers SIGECO's Corporate Performance Plan and
Stock Option Plan. The members of this committee are Robert L. Koch II
(Chairman), Jerry A. Lamb, Donald E. Smith, and James S. Vinson.
The Board of Directors had 15 meetings during 1994. No director attended
fewer than 75 percent of the Board of Directors meetings or the aggregate of
such meetings and meetings of the committees of the Board of which he is a
member.
Compensation of Directors. Each non-employee member of the Board of
Directors is paid an annual fee of $12,000 plus $600 for each meeting attended.
Each non-employee director is paid $600 for each meeting of the Executive, Audit
or Compensation committees attended. Directors are reimbursed for ordinary
expenses incurred in performance of their duties.
Each non-employee director who is also a director of a subsidiary is paid
$300 for each subsidiary Board of Directors meeting attended. The Boards of SIPI
and SIMI met four times in 1994 and the Board of ESGI met five times during that
period. No non-employee member of the Board of Directors is a director of more
than two subsidiaries.
27
<PAGE>
Security Ownership of Directors and Executive Officers
The following table shows the beneficial ownership, reported to the
Corporation as of December 31, 1994, of SIGECO Common Stock, by each director,
the Chief Executive Officer, and each of the other executive officers named in
the Compensation Table found under "Executive Compensation" below. Also shown is
the total ownership for such persons and other executive officers of SIGECO as a
group. No member of the group is the beneficial owner of any of SIGECO's
Preferred Stock.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership(2)
--------------------------------------------------------
Name of Beneficial Owner(1) Direct Indirect Total Percent of Class
- ----------------------- ----- ------- ----- --------------
<S> <C> <C> <C> <C>
Melvin H. Dodson....................................... 32,000 2,066 34,066 0.22%
Walter R. Emge......................................... 4,533 -- 4,533 0.03
Robert L. Koch II...................................... 1,777 -- 1,777 0.01
Jerry A. Lamb.......................................... 500 -- 500 --
Donald A. Rausch....................................... 5,400 -- 5,400 0.03
Ronald G. Reherman..................................... 6,236 373 6,609 0.04
Richard W. Shymanski................................... 989 1,779 2,768 0.02
Donald E. Smith(3) .................................... 11,605 930 12,535 0.08
James S. Vinson........................................ 146 -- 146 --
Norman P. Wagner....................................... 3,742 14,271 18,013 0.11
Andrew E. Goebel....................................... 3,652 -- 3,652 0.02
J. Gordon Hurst........................................ 1,296 -- 1,296 0.01
Ronald G. Jochum....................................... 171 -- 171 --
Jay W. Picking......................................... -- 200 200 --
All of the above and other executive
officers as a group (15)............................. 92,483 0.59
- ---------
<FN>
(1) Beneficial ownership includes those shares over which an individual has
sole or shared voting, or investment powers, such as shares in which the
spouse, minor children or other relatives living in the home of the named
person have a beneficial interest and shares held in SIGECO's Automatic
Dividend Reinvestment and Stock Purchase Plan and other trust accounts.
(2) Includes shares held jointly or in other capacities, as to which in some
cases beneficial ownership is disclaimed.
(3) Donald E. Smith is a director and President of Princeton Mining Company,
which owns 240,124 shares of SIGECO Common Stock; director and President of
R.J. Oil and Refining Co., Inc., which owns 86,221 shares of SIGECO Common
Stock; director of Blackhawk Coal Corporation, which owns 125,733 shares of
SIGECO Common Stock; Chairman, CEO, President and director of Terre Haute
First National Bank, which holds 29,231 shares of SIGECO Common Stock as
trustee; and President and director of Terre Haute Oil Corporation, which
owns 2,133 shares of SIGECO Common Stock. The aggregate number of such
shares represents 3.07 percent of SIGECO Common Stock outstanding.
</FN>
</TABLE>
28
<PAGE>
Executive Compensation
General. The following three tables set forth compensation paid by SIGECO
to each of the executive officers of SIGECO during the past three years whose
total cash compensation for the calendar year 1994 exceeded $100,000. The tables
include a Summary Compensation Table (Table 1), a table showing Option Grants in
Last Fiscal Year (Table 2), and a table showing Aggregate Option Exercises in
Last Fiscal Year and Fiscal Year-End Option Values (Table 3).
<TABLE>
<CAPTION>
TABLE 1
Summary Compensation Table
(a) (b) (c) (d) (e) (f)
Annual Compensation
--------------------------------------
Long Term
Compensation
Awards:
Shares
Underlying
Options(2) All Other
Name and Principal Position Year Salary Bonus(1) (#) Compensation
- ------------------------- ----- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Ronald G. Reherman 1994 $295,833 $42,000 65,157 $ None
Chairman of the Board, 1993 275,250 25,720 None 1,700(3)
President and Chief 1992 252,575 23,500 None 11,300(3)
Executive Officer
Andrew E. Goebel 1994 158,333 30,400 26,064 None
Senior Vice President, 1993 150,542 21,750 None None
Chief Financial Officer, 1992 143,646 13,850 None None
Secretary and Treasurer
J. Gordon Hurst 1994 143,917 27,200 23,784 None
Senior Vice President and 1993 133,708 18,750 None None
General Manager of Operations 1992 122,292 11,200 None None
Ronald G. Jochum (4) 1994 104,583 4,376 3,982 None
Vice President and Director 1993 26,154 -- None None
of Power Production 1992 -- -- None None
Jay W. Picking 1994 88,771 12,900 3,240 None
Vice President and Director 1993 85,000 8,120 None None
of Gas Operations 1992 81,054 7,770 None None
- ---------
<FN>
(1) These amounts are cash awards under the Corporate Performance Plan based on
performance for the prior plan year as described in the report of the
Compensation Committee below.
(2) See "Compensation Committee Report on Executive Compensation", beginning on
page 31, and the information provided in Tables 2 and 3, for a discussion
of a Stock Option Plan applicable to certain officers, staff and managers
of SIGECO.
(3) Amounts listed represent directors fees. Pursuant to a Board of Directors
policy adopted in 1991, directors fees to employee directors have been
phased out over a three year period ending February 28, 1993.
(4) Mr. Jochum was first employed by SIGECO in September 1993.
</FN>
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
TABLE 2
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
---------------------------------------------------------------------------------------------------------------
Number of % of Total Potential Realizable
Shares Underlying Options Exercise Value at Assumed
Options Granted to or Base Annual Rates of Stock
Granted(1) Employees in Price(2) Expiration Price Appreciation
Name (#) Fiscal Year (Per Share) Date for Option Term
----- -------------- ------------ --------- ----------- --------------------------
5%(3) 10%(3)
----------- -----------
<S> <C> <C> <C> <C> <C> <C>
R.G. Reherman 65,157 42.4% $27.625 7/13/2004 $1,131,987 $2,868,676
A.E. Goebel 26,064 17.0% $27.625 7/13/2004 $452,815 $1,147,523
J.G. Hurst 23,784 15.5% $27.625 7/13/2004 $413,205 $1,047,141
R.G. Jochum 3,982 2.6% $27.625 7/13/2004 $69,180 $175,316
J.W. Picking 3,240 2.1% $27.625 7/13/2004 $56,289 $142,648
- ---------
<FN>
(1) For Messrs. Reherman, Goebel, and Hurst, options vest one-third of the
total each year after the date of grant (July 13, 1994) with total vesting
occurring at the 3-year anniversary. For Messrs. Jochum and Picking,
options vest one year after the date of grant.
(2) Equal to market price on grant date.
(3) These values are not a prediction of what SIGECO believes the market value
of its common stock will be in the next 10 years. They are merely assumed
values required to be calculated in accordance with Securities and Exchange
Commission Rules.
</FN>
</TABLE>
<TABLE>
<CAPTION>
TABLE 3
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of
Securities
Shares Underlying Value of
Acquired Unexercised Unexercised
on Value Options at In-the-Money
Exercise Realized(1) Year-End Options at Year-End(2)
Year Name (#) ($) (#) ($)
----- ----- ------------ ------------ ----------- --------------------
Exercisable/Unexercisable Exercisable/Unexercisable
<S> <C> <C> <C> <C> <C>
1994 R.G. Reherman -0- -0- 0/65,157 0/0
1994 A.E. Goebel -0- -0- 0/26,064 0/0
1994 J.G. Hurst -0- -0- 0/23,784 0/0
1994 R.G. Jochum -0- -0- 0/3,982 0/0
1994 J.W. Picking -0- -0- 0/3,240 0/0
- ---------
<FN>
(1) Market value of underlying securities at time of exercise minus the
exercise price.
(2) Market value of underlying securities at Fiscal Year-End (December 31,
1994) market price of $26.50 per share minus the exercise price.
</FN>
</TABLE>
CHANGE OF CONTROL AGREEMENTS. In order to insure SIGECO of continuity of
management and operations in the event of a change of control of SIGECO,
agreements have been entered into between SIGECO and Messrs. Reherman, Goebel
and Hurst. The agreements provide that in the event of a change of control of
SIGECO, the salary of the named officers will continue for the lesser of a
period of three years, or until retirement age, at their existing compensation
levels (unless a lesser amount is the maximum amount deductible by SIGECO for
Federal income tax purposes, in which case the continued salary would be at such
lesser amount).
RETIREMENT PLANS. All officers participate in SIGECO's trusteed,
non-contributory tax qualified Pension Plan for Salaried Employees (the "Pension
Plan"). Retirement income, as defined in the Pension Plan, is based on an
employee's average monthly earnings during the highest paid five consecutive
years in the Pension Plan of the employee's final 10 years of continuous service
prior to retirement or other termination of employment and is calculated in two
increments: 1.33 percent of such average monthly earnings for each year of
accredited service or part thereof up to a maximum of 30 years; plus .67 percent
of such average monthly earnings for each year of accredited service or part
thereof in excess of 30 years to a maximum of 10 years. Amounts payable under
the Pension Plan are not subject to social security or other offset.
30
<PAGE>
The years of service in the Pension Plan credited to officers named in the
compensation table above are R.G. Reherman--31 years, 6 months; A.E. Goebel--22
years, 1 month; J.G. Hurst--24 years; R.G. Jochum--3 months; and J.W. Picking--8
years, 11 months.
The following table illustrates the estimated retirement income payable
under the Pension Plan, based on the specific remuneration levels and years of
service classification shown.
<TABLE>
<CAPTION>
Pension Plan Table
Years of Service
---------------------------------------------------------------------
Covered
Remuneration 15 20 25 30 35
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$100,000.................... $19,950 $26,600 $33,250 $39,900 $43,260
125,000.................... 24,940 33,250 41,560 49,875 54,060
150,000* and above......... 29,925 39,900 49,875 59,850 64,870
- ---------
<FN>
* As of January 1, 1995, the OMNIBUS Budget Reconciliation Act of 1993 (OBRA
'93) limited annual compensation to $150,000 for purposes of pension
calculations under tax qualified pension plans.
</FN>
</TABLE>
SIGECO has a non-qualified Supplemental Retirement Plan (the "Supplemental
Plan") covering certain senior officers of SIGECO who qualify under the
applicable length of service and other eligibility provisions. It is presently
anticipated that Mr. Goebel and Mr. Hurst will qualify for benefits under the
Supplemental Plan. The Supplemental Plan provides for supplemental retirement
income to be paid such that, when combined with benefits receivable under
SIGECO's Pension Plan, total retirement benefits paid will be equal to 50
percent of the average of the senior officer's final three years base salary
excluding bonuses. In the case of death, survivor benefits are payable to
surviving spouses, if any, at an actuarially adjusted level. SIGECO has entered
into an agreement with Mr. Reherman that is similar to the Supplemental Plan
except that the retirement income paid is equal to 70 percent of his highest
annualized salary as Chief Executive Officer of SIGECO. SIGECO has purchased
life insurance on the participants sufficient in amount to fund actuarially all
of SIGECO's future liabilities under the Supplemental Plan and the Agreement.
DEATH BENEFIT PLAN. SIGECO has a Supplemental Post-Retirement Death
Benefits Plan for officers and other senior executives to provide retired
participants with the equivalent of 25-35 percent of the pre-retirement group
life insurance benefit under SIGECO's group insurance plan for salaried
employees. SIGECO has purchased insurance on the lives of the participants,
which is projected to allow SIGECO to recover the entire cost of this plan.
STOCK OPTION PLAN. The Southern Indiana Gas and Electric Company 1994 Stock
Option Plan (the "Option Plan") was adopted by the Board of Directors at its
meeting held December 21, 1993, and by SIGECO's shareholders at their meeting on
March 22, 1994. The Stock Option Plan authorizes the granting of options to
officers and key employees of SIGECO and its subsidiaries to purchase up to
500,000 shares of SIGECO Common Stock. Options granted under the Stock Option
Plan may constitute incentive stock options (within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code") or nonqualified
stock options (collectively, "Options"). See Tables 2 and 3 for details of
action taken during 1994 pursuant to the Option Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
SIGECO's Executive Compensation Program is administered and monitored by
the Compensation Committee of the Board of Directors. The Compensation Committee
is composed entirely of independent, non-employee directors. The main objectives
of the program are to:
o attract and retain an outstanding management team,
o motivate and reward outstanding performance results, and
o focus attention on plans, goals, and initiatives which enhance value
to the shareholders and customers of SIGECO.
With the implementation of the Option Plan during 1994, the executive
compensation program consists of three elements: a base salary plan, an annual
corporate performance incentive plan, and a long-term stock option plan. The key
elements of the compensation package for executive officers are addressed in
greater detail below.
31
<PAGE>
BASE SALARY PLAN. The Compensation Committee determines the annual base
salaries for SIGECO's mandatory officers and the salary ranges for all officer
positions. The determination of officer salaries and salary ranges is based upon
competitive norms (averages) for similar positions in reasonably comparable
electric and combination utility companies. SIGECO retains an independent
consultant to provide such information to the Compensation Committee.
Adjustments to actual base salaries take into consideration two key
variables: 1) the performance of the officer, and 2) the level of actual salary
compared with the midpoint of the applicable salary range, where midpoint is
defined as the competitive salary norm for the position. In general, individuals
whose performance is deemed fully competent over several years would be expected
to achieve a base salary at the midpoint level.
CORPORATE PERFORMANCE INCENTIVE PLAN. The annual Corporate Performance
Incentive Plan (the "Performance Plan") provides for the payment of additional
compensation contingent upon the achievement of certain specific shareholder and
customer related goals. Approximately 25 officers and senior management
personnel participate in the Performance Plan. Goal achievement is primarily
judged on a comparison with the results of ten similar companies in five
critical results areas as set forth in the table on page 33. In addition, plan
participants are also judged on their achievement of specific individual goals
which are developed in support of corporate objectives. These individual goals
are often, but not exclusively, related to the implementation of initiatives
contained in SIGECO's long term strategic plan.
As disclosed and discussed last year, the Performance Plan design was
revised for 1994 and subsequent plan years. The revised plan, which is more in
line with competitive norms, provides the following award opportunities: 20-30%
of base salary for the Chief Executive Officer; 10-30% of the base salary for
the senior vice presidents; 5-25% for all other participants.
SIGECO retains an independent consultant to assist in the process of goal
formulation and to provide an independent assessment of goal achievement to the
Compensation Committee at the end of each Performance Plan year. The annual
awards under the Performance Plan for years 1992, 1993, and 1994 are shown in
column (d) of the Summary Compensation Table (Table 1).
LONG-TERM STOCK OPTION PLAN. As indicated above, the Option Plan was
approved by the Company's stockholders during 1994. Approximately 25 officers
and senior management personnel of the Company are eligible to participate in
the plan. On July 13, 1994, the Compensation Committee granted stock options to
plan participants. None of the options granted are exercisable prior to July 13,
1995.
The stock option awards for executive officers along with additional
details are included in Tables 2 and 3.
DISCUSSION OF CEO PAY. Consistent with overall executive compensation
program philosophy, the Compensation Committee structured the CEO's total
compensation during 1994 based on the overall performance of SIGECO, competitive
pay levels for CEO's in the utility industry, and a multi-year plan for the CEO
to achieve a base salary level at or about the established midpoint for the
position.
During 1994, the Compensation Committee took the following actions
regarding the CEO:
1. Increased base salary to $300,000 per year. This represented an
increase of 7.1%, but is still below the midpoint of the salary range.
Assuming continued favorable corporate performance, it is anticipated that
midpoint salary level will be achieved during 1995.
2. Provided a cash incentive of $42,000 based on results achieved
under the Corporate Performance Incentive Plan.
32
<PAGE>
During the Performance Plan year, SIGECO's performance as measured against
its ten company comparison group resulted in the following:
- --------------------------------------------------------------------------------
Key Performance Index Objective SIGECO Rating
- --------------------------------------------------------------------------------
Market to Book Ratio Highest 4th best (highest)
- --------------------------------------------------------------------------------
3 Year Average Annual Net Income Growth Highest 6th best (highest)
- --------------------------------------------------------------------------------
Electric Revenue per Kwh Lowest 3rd best (lowest)
- --------------------------------------------------------------------------------
Gas Revenue per Mcf Lowest 3rd best (lowest)
- --------------------------------------------------------------------------------
3 Year Average Annual Growth of Net
Operating Expense per Customer Lowest Best (lowest)
- --------------------------------------------------------------------------------
Under the Performance Plan formula, these performance ratings earned an
incentive award of approximately 15% of base salary for the CEO.
Compensation Committee
R.L. Koch II, Chairman D.E. Smith
J.A. Lamb J.S. Vinson
Performance Comparisons
As required by the SEC, set forth below is a line graph comparing the
yearly change in the cumulative total shareholder return on SIGECO Common Stock,
assuming reinvestment of all dividends, against the cumulative total return of
the S&P Composite 500 Stock Index and the S&P Utilities Index, over the past
five years.
Comparison of Five Year Cumulative Total Return
[THE FOLLOWING TABLE IS REPRESENTED AS A LINE GRAPH IN THE PRINTED BOOK]
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
SIGECO ................... 100 112 161 169 177 147
S&P 500 .................. 100 97 126 136 150 152
S&P Utilities ............ 100 97 112 121 138 127
33
<PAGE>
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee were employees or
officers of SIGECO at the time of their committee action.
Mr. Goebel, an executive officer of SIGECO, is a member of the Board of
Directors of UF Bancorp, Inc., of which Mr. Rausch is Chairman, President and
Chief Executive Officer.
RATIFICATION OF APPOINTMENT OF AUDITORS
It is intended that, unless otherwise specified by the SIGECO shareholders
entitled to vote, votes will be cast pursuant to the proxies hereby solicited in
favor of the ratification of the appointment by SIGECO's Board of Directors of
Arthur Andersen LLP as independent auditors of SIGECO for the year 1995. The
Arthur Andersen firm has acted for SIGECO in this capacity since 1918. SIGECO is
advised that neither the firm nor any of its partners has any financial interest
in or any connection with SIGECO except in the capacity of SIGECO's auditors. A
representative of Arthur Andersen LLP will attend the Annual Meeting and will be
available to answer any questions and may make a statement if he so desires.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF AUDITORS.
SHAREHOLDERS PROPOSALS
Proposals by shareholders to be presented at the next annual meeting of
shareholders currently scheduled to be held on March 26, 1996 must be received
by SIGECO (or if the Exchange is consummated, by Holding Company) on or before
October 27, 1995 for inclusion in the Proxy Statement relating to that meeting.
Other Business. The Annual Meeting is being held for the purposes set forth
in the Notice which accompanies this Prospectus/Proxy Statement. The Board of
Directors of SIGECO knows of no business to be transacted at the meeting other
than the election of three directors, the adoption of the Exchange Agreement and
the ratification of the appointment of auditors. However, if any other business
should properly be presented to the Annual Meeting, the proxies will be voted in
respect thereof in accordance with the judgment of the person or persons voting
the proxies.
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
By Order of the Board of Directors,
A.E. Goebel, Secretary
Evansville, Indiana
Date: February 23, 1995
34
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF EXCHANGE
THIS AGREEMENT AND PLAN OF EXCHANGE (this "Agreement"), dated as of , 1994,
is between SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, an Indiana corporation
(the "Company"), the company whose shares will be acquired pursuant to the
Exchange described herein, and SOUTHERN INDIANA GROUP, INC., an Indiana
corporation ("Group"), the acquiring company. The Company and Group are
hereinafter referred to, collectively, as the "Companies."
W I T N E S S E T H:
WHEREAS, the authorized capital stock of the Company consists of (a)
50,000,000 shares of Common Stock without par value ("Company Common Stock"), of
which 15,754,826 shares are issued and outstanding, (b) 800,000 shares of
Preferred Stock, $100 par value, of which 185,895 shares are issued and
outstanding, (c) 5,000,000 shares of Preferred Stock, without par value, of
which no shares are issued and outstanding and (d) 5,000,000 shares of Special
Preferred Stock, without par value, of which 10,150 shares are issued and
outstanding;
WHEREAS, Group is a wholly-owned subsidiary of the Company with authorized
capital stock consisting of (a) 75,000,000 shares of Common Stock, without par
value ("Group Common Stock"), of which 100 shares are issued and outstanding and
owned of record by the Company and (b) 10,000,000 shares of Preferred Stock,
without par value ("Group Preferred Stock"), of which no shares are issued and
outstanding;
WHEREAS, the Boards of Directors of the respective Companies deem it
desirable and in the best interests of the Companies and their shareholders that
Group acquire each share of issued and outstanding Company Common Stock and that
each such share of Company Common Stock be exchanged for a share of Group Common
Stock with the result that Group becomes the owner of all outstanding Company
Common Stock and that each holder of Company Common Stock becomes the owner of
an equal number of shares of Group Common Stock, all on the terms and conditions
hereinafter set forth;
WHEREAS, the consummation of the Exchange (as hereinafter defined) requires
the approval of the Federal Energy Regulatory Commission under the Federal Power
Act and the Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935; and
WHEREAS, the Board of Directors of the Company and of Group have
recommended that their respective shareholders approve the Exchange pursuant to
the Indiana Business Corporation Law (the "Act").
NOW, THEREFORE, in consideration of the premises, and of the agreements,
covenants and conditions here-inafter contained, the parties hereto agree with
respect to the acquisition and exchange provided for herein (the "Exchange")
that at the Effective Time (as hereinafter defined) each share of Company Common
Stock issued and outstanding immediately prior to the Effective Time will be
exchanged for one share of Group Common Stock, and that the terms and conditions
of the Exchange and the method of carrying the same into effect are as follows:
ARTICLE I
Subject to the satisfaction of the conditions set forth in Article III and
to the provisions of Article IV, the Companies agree to file with the Secretary
of State of Indiana (the "Secretary of State") Articles of Share Exchange
("Articles") with respect to the Exchange and the Exchange shall take effect
upon such filing or at such later time as may be stated in the Articles (the
time at which the Exchange takes effect being referred to herein as the
"Effective Time").
ARTICLE II
At the Effective Time:
(1) each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be acquired by Group and
shall be exchanged for one share of Group Common Stock, which shall
thereupon be fully paid and non-assessable;
A-1
<PAGE>
(2) Group shall become the owner and holder of each issued and
outstanding share of Company Common Stock so exchanged;
(3) each share of Group Common Stock issued and outstanding
immediately prior to the Effective Time shall be cancelled and shall
thereupon constitute an authorized and unissued share of Group Common
Stock; and
(4) the former owners of Company Common Stock shall be entitled only
to receive shares of Group Common Stock as provided herein.
Shares of the Company's Preferred Stock, $100 par value, Preferred Stock,
without par value, and Special Preferred Stock, without par value, shall not be
exchanged or otherwise affected in connection with the Exchange and, to the
extent issued and outstanding immediately prior to the Effective Time, shall
continue to be issued and outstanding following the Exchange as shares of the
applicable series designation.
ARTICLE III
The consummation of the Exchange is subject to the following conditions
precedent:
(1) the approval by the shareholders of the Companies, to the extent
required by the Act, of this Agreement and the Exchange;
(2) the approval for listing, upon official notice of issuance, by the
New York Stock Exchange, of Group Common Stock to be issued in accordance
with the Exchange;
(3) the receipt of such orders, authorizations, approvals or waivers
from regulatory bodies, boards or agencies as are required in connection
with the Exchange; and
(4) the receipt by the Company of a favorable tax opinion to the
effect that (a) non-dissenting shareholders of the Company (i) will
recognize no gain or loss in connection with the Exchange, (ii) will have
the same basis in their Group Common Stock after the Exchange as they had
in their Company Common Stock before the Exchange and (iii) will be
entitled to include any period that they held Company Common Stock before
the Exchange when determining any holding period with respect to Group
Common Stock received in the Exchange and (b) Group will recognize no gain
or loss upon its receipt of Company Common Stock in the Exchange.
ARTICLE IV
This Agreement may be amended, modified or supplemented, or compliance with
any provision or condition hereof may be waived, at any time, by the mutual
consent of the Boards of Directors of the Company and of Group; provided,
however, that no such amendment, modification, supplement or waiver shall be
made or effected, if such amendment, modification, supplement or waiver would,
in the judgment of the Board of Directors of the Company, materially and
adversely affect the shareholders of the Company.
This Agreement may be terminated and the Exchange and related transactions
abandoned at any time prior to the time the Articles are filed with the
Secretary of State, if the Board of Directors of the Company determines, in its
sole discretion, that consummation of the Exchange would be inadvisable or not
in the best interests of the Company or its shareholders.
ARTICLE V
This Agreement will be submitted to the shareholders of the Company
entitled to vote with respect to the Exchange and to the shareholder of Group
for approval as provided by the Act.
ARTICLE VI
Following the Effective Time, each holder of an outstanding certificate or
certificates theretofore representing shares of Company Common Stock may, but
shall not be required to, surrender the same to Group for cancellation and
reissuance of a new certificate or certificates in such holder's name or for
cancellation and transfer, and each such holder or transferee will be entitled
to receive a certificate or certificates representing the same number of shares
A-2
<PAGE>
of Group Common Stock as the shares of Company Common Stock previously
represented by the certificate or certificates surrendered. Until so surrendered
or presented for transfer, each outstanding certificate which, immediately prior
to the Effective Time, represented Company Common Stock shall be deemed and
treated for all corporate purposes to represent the ownership of the same number
of shares of Group Common Stock as though such surrender or transfer and
exchange had taken place. The holders of Company Common Stock at the Effective
Time shall have no right to have their shares of Company Common Stock
transferred on the stock transfer books of the Company, and such stock transfer
books shall be deemed to be closed for this purpose at the Effective Time.
IN WITNESS WHEREOF, each of the Company and Group, pursuant to
authorization and approval given by its Board of Directors, has caused this
Agreement to be executed by its Chairman, President and Chief Executive Officer
and its corporate seal to be affixed hereto and attested by its Secretary as of
the date first above written.
SOUTHERN INDIANA GAS AND
ELECTRIC COMPANY
By:
----------------------------
Chairman, President and
Chief Executive Officer
ATTEST:
- ----------------------------
Secretary
(SEAL)
SOUTHERN INDIANA GROUP, INC.
By:
----------------------------
Chairman, President and
Chief Executive Officer
ATTEST:
- ----------------------------
Secretary
(SEAL)
A-3
<PAGE>
EXHIBIT B
Amended and Restated Articles
of Incorporation of
Southern Indiana Group, Inc.
[To be filed by amendment.]
B-1
Exhibit C
INDIANA BUSINESS CORPORATION LAW
CHAPTER 44
DISSENTERS' RIGHTS
23-1-44-1. "Corporation" defined.--As used in this chapter, "corporation"
means the issuer of the shares held by a dissenter before the corporate action,
or the surviving or acquiring corporation by merger or share exchange of that
issuer.
23-1-44-2. "Dissenter" defined.--As used in this chapter, "dissenter" means
a shareholder who is entitled to dissent from corporate action under section 8
[IC 23-1-44-8] of this chapter and who exercises that right when and in the
manner required by sections 10 through 18 [IC 23-1-44-10--23-1-44-18] of this
chapter.
23-1-44-3. "Fair value" defined.--As used in this chapter, "fair value,"
with respect to a dissenter's shares, means the value of the shares immediately
before the effectuation of the corporate action to which the dissenter objects,
excluding any appreciation or depreciation in anticipation of the corporate
action unless exclusion would be inequitable.
23-1-44-4. "Interest" defined.--As used in this chapter, "interest" means
interest from the effective date of the corporate action until the date of
payment, at the average rate currently paid by the corporation on its principal
bank loans or, if none, at a rate that is fair and equitable under all the
circumstances.
23-1-44-5. "Record shareholder" defined.--As used in this chapter, "record
shareholder" means the person in whose name shares are registered in the records
of a corporation or the beneficial owner of shares to the extent that treatment
as a record shareholder is provided under a recognition procedure or a
disclosure procedure established under IC 23-1-30-4.
23-1-44-6. "Beneficial shareholder" defined.--As used in this chapter,
"beneficial shareholder" means the person who is a beneficial owner of shares
held by a nominee as the record shareholder.
23-1-44-7. "Shareholder" defined.--As used in this chapter, "shareholder"
means the record shareholder or the beneficial shareholder.
23-1-44-8. Shareholder dissent.--(a) A shareholder is entitled to dissent
from, and obtain payment of the fair market value of the shareholder's shares in
the event of, any of the following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a
party if:
(A) Shareholder approval is required for the merger by IC
23-1-40-3 or the articles of incorporation; and
(B) The shareholder is entitled to vote on the merger.
(2) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if
the shareholder is entitled to vote on the plan.
(3) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation other than in the usual and
regular course of business, if the shareholder is entitled to
vote on the sale or exchange, including a sale in dissolution,
but not including a sale pursuant to court order or a sale for
cash pursuant to a plan by which all or substantially all of the
net proceeds of the sale will be distributed to the shareholders
within one (1) year after the date of sale.
(4) The approval of a control share acquisition under IC 23-1-42.
(5) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of
the board of directors provides that voting or nonvoting
shareholders are entitled to dissent and obtain payment for their
shares.
(b) This section does not apply to the holders of shares of any class or
series if, on the date fixed to determine the shareholders entitled to receive
notice of and vote at the meeting of shareholders at which the merger, plan of
share exchange, or sale or exchange of property is to be acted on, the shares of
that class or series were:
(1) Registered on a United States securities exchange registered
under the Exchange Act (as defined in IC 23-1-43-9); or
(2) Traded on the National Association of Securities Dealers, Inc.
Automated Quotations System Over-the-Counter
Markets--National Market Issues or a similar market.
C-1
<PAGE>
(c) A shareholder:
(1) Who is entitled to dissent and obtain payment for the
shareholder's shares under this chapter: or
(2) Who would be so entitled to dissent and obtain payment but for
the provisions of subsection (b):
may not challenge the corporate action creating (or that, but for the
provisions of subsection (b), would have created) the shareholder's entitlement.
23-1-44-9. Beneficial shareholder dissent.--(a) A record shareholder may
assert dissenters' rights as to fewer than all the shares registered in the
shareholder's name only if the shareholder dissents with respect to all shares
beneficially owned by any one (1) person and notifies the corporation in writing
of the name and address of each person on whose behalf the shareholder asserts
dissenter's rights. The rights of a partial dissenter under this subsection are
determined as if the shares as to which the shareholder dissents and the
shareholder's other shares were registered in the names of different
shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares
held on the shareholder's behalf only if:
(1) The beneficial shareholder submits to the corporation the record
shareholder's written consent to the dissent not later than the
time the beneficial shareholder asserts dissenters' rights; and
(2) The beneficial shareholder does so with respect to all the
beneficial shareholder's shares or those shares over which the
beneficial shareholder has power to direct the vote.
23-1-44-10. Notice of dissenters' rights preceding shareholder vote.--(a)
If proposed corporate action creating dissenters' rights under section 8 [IC
23-1-44-8] of this chapter is submitted to a vote at a shareholders' meeting,
the meeting notice must state that shareholders are or may be entitled to assert
dissenters' rights under this chapter.
(b) If corporate action creating dissenters' rights under section 8 of this
chapter is taken without a vote of shareholders, the corporation shall notify in
writing all shareholders entitled to assert dissenters' rights that the action
was taken and send them the dissenters' notice described in section 12 [IC
23-1-44-12] of this chapter.
23-1-44-11. Notice of intent to dissent.--(a) If proposed corporate action
creating dissenters' rights under section 8 [IC 23-1-44-8] of this chapter is
submitted to a vote at a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken written
notice of the shareholder's intent to demand payment for the
shareholder's shares if the proposed action is effectuated; and
(2) Must not vote the shareholder's shares in favor of the proposed
action.
(b) A shareholder who does not satisfy the requirements of subsection (a)
is not entitled to payment for the shareholder's shares under this chapter.
23-1-44-12. Notice of dissenters' rights following action creating
rights.--(a) If proposed corporate action creating dissenters' rights under
section 8 [IC 23-1-44-8] of this chapter is authorized at a shareholders'
meeting, the corporation shall deliver a written dissenters' notice to all
shareholders who satisfied the requirements of section 11 [IC 23-1-44-11] of
this chapter.
(b) The dissenters' notice must be sent no later than ten (10) days after
approval by the shareholders, or if corporate action is taken without approval
by the shareholders, then ten (10) days after the corporate action was taken.
The dissenters' notice must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer
of the shares will be restricted after the payment demand is
received;
(3) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms
of the proposed corporate action and requires that the person
asserting dissenters' rights certify whether or not the person
acquired beneficial ownership of the shares before that date:
(4) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than thirty (30) nor more
than sixty (60) days after the date the subsection (a) notice is
delivered; and
(5) Be accompanied by a copy of this chapter.
23-1-44-13. Demand for payment by dissenter.--(a) A shareholder sent a
dissenters' notice described in IC 23-1-42-11 or in section 12 [IC 23-1-44-12]
of this chapter must demand payment, certify whether the shareholder acquired
beneficial ownership of the shares before the date required to be set forth in
the dissenter's notice under section 12(b)(3) [IC 23-1-44-12(b)(3)] of this
chapter, and deposit the shareholder's certificates in accordance with the terms
of the notice.
C-2
<PAGE>
(b) The shareholder who demands payment and deposits the shareholder's
shares under subsection (a) retains all other rights of a shareholder until
these rights are canceled or modified by the taking of the proposed corporate
action.
(c) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter and is considered, for purposes of this article, to have voted the
shareholder's shares in favor of the proposed corporate action.
23-1-44-14. Transfer of shares restricted after demand for payment.--(a)
The corporation may restrict the transfer of uncertificated shares from the date
the demand for their payment is received until the proposed corporate action is
taken or the restrictions released under section 16 [IC 23-1-44-16] of this
chapter.
(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.
23-1-44-15. Payment to dissenter.--(a) Except as provided in section 17 [IC
23-1-44-17] of this chapter, as soon as the proposed corporate action is taken,
or, if the transaction did not need shareholder approval and has been completed,
upon receipt of a payment demand, the corporation shall pay each dissenter who
complied with section 13 [IC 23-1-44-13] of this chapter the amount the
corporation estimates to be the fair value of the dissenter's shares.
(b) The payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of
payment, an income statement for that year, a statement of
changes in shareholders' equity for that year, and the latest
available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of
the shares; and
(3) A statement of the dissenter's right to demand payment under
section 18 [IC 23-1-44-18] of this chapter.
23-1-44-16. Return of shares and release of restrictions.--(a) If the
corporation does not take the proposed action within sixty (60) days after the
date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(b) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 12 [IC 23-1-44-12] of this chapter and repeat
the payment demand procedure.
23-1-44-17. Offer of fair value for shares obtained after first
announcement.--(a) A corporation may elect to withhold payment required by
section 15 [IC 23-1-44-15] of this chapter from a dissenter unless the dissenter
was the beneficial owner of the shares before the date set forth in the
dissenters' notice as the date of the first announcement to news media or to
shareholders of the terms of the proposed corporate action.
(b) To the extent the corporation elects to withhold payment under
subsection (a), after taking the proposed corporate action, it shall estimate
the fair value of the shares and shall pay this amount to each dissenter who
agrees to accept it in full satisfaction of the dissenter's demand. The
corporation shall send with its offer a statement of its estimate of the fair
value of the shares and a statement of the dissenter's right to demand payment
under section 18 [IC 23-1-44-18] of this chapter.
23-1-44-18. Dissenter demand for fair value under certain conditions.--(a)
A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and demand payment of the
dissenter's estimate (less any payment under section 15 [IC 23-1-44-15] of this
chapter), or reject the corporation's offer under section 17 [IC 23-1-44-17] of
this chapter and demand payment of the fair value of the dissenter's shares, if:
(1) The dissenter believes that the amount paid under section 15 of
this chapter or offered under section 17 of this chapter is less
than the fair value of the dissenter's shares:
(2) The corporation fails to make payment under section 15 of this
chapter within sixty (60) days after the date set for demanding
payment: or
(3) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within sixty (60)
days after the date set for demanding payment.
(b) A dissenter waives the right to demand payment under this section
unless the dissenter notifies the corporation of the dissenter's demand in
writing under subsection (a) within thirty (30) days after the corporation made
or offered payment for the dissenter's shares.
C-3
<PAGE>
23-1-44-19. Effect of failure to pay demand--Commencement of judicial
appraisal proceeding.--(a) If a demand for payment under IC 23-1-42-11 or under
section 18 [IC 23-1-44-18] of this chapter remains unsettled, the corporation
shall commence a proceeding within sixty (60) days after receiving the payment
demand and petition the court to determine the fair value of the shares. If the
corporation does not commence the proceeding within the sixty (60) day period,
it shall pay each dissenter whose demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the circuit or
superior court of the county where a corporation's principal office (or, if none
in Indiana, its registered office) is located. If the corporation is a foreign
corporation without a registered office in Indiana, it shall commence the
proceeding in the county in Indiana where the registered office of the domestic
corporation merged with or whose shares were acquired by the foreign corporation
was located.
(c) The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) is plenary and exclusive. The court may appoint one (1) or
more persons as appraisers to receive evidence and recommend decision on the
question of fair value. The appraisers have the powers described in the order
appointing them or in any amendment to it. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
(e) Each dissenter made a party to the proceeding is entitled to judgment.
(1) For the amount, if any, by which the court finds the fair value
of the dissenter's shares, plus interest, exceeds the amount paid
by the corporation: or
(2) For the fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to
withhold payment under section 17 [IC 23-1-44-17] of this
chapter.
23-1-44-20. Judicial determination and assessment of costs.--(a) The court
in an appraisal proceeding commenced under section 19 [IC 23-1-44-19] of this
chapter shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court. The court shall
assess the costs against such parties and in such amounts as the court finds
equitable.
(b) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with
the requirements of sections 10 through 18 [IC
23-1-44-10--23-1-44-18] of this chapter: or
(2) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the
fees and expenses are assessed acted arbitrarily, vexatiously, or
not in good faith with respect to the rights provided by this
chapter.
(c) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefitted.
C-4
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
It is expected that a resolution in substantially the following form will
be adopted by the Board of Directors of the Registrant prior to the effective
date of this Registration Statement:
RESOLVED: that with respect to the preparation and filing of the
Registration Statement on Form S-4 (File No. 33-________), including the
Prospectus/Proxy Statement contained therein, with the Securities and
Exchange Commission in connection with the proposed exchange of each
outstanding share of common stock, without par value, of Southern Indiana
Gas and Electric Company for one share of common stock, without par value,
of this Company, each such share to be issued in connection with a
reorganization whereby Southern Indiana Gas and Electric Company will
become a wholly owned subsidiary of this Company, this Company shall
indemnify and save harmless each and every officer and employee of the
Company executing and preparing the Registration Statement and
Prospectus/Proxy Statement in its original or amended or supplemented form,
and every director of the Company who was a director thereof at the time of
the filing of the Registration Statement and Prospectus/Proxy Statement in
their original or amended or supplemented form, against any and all expense
reasonably incurred by them or any of them in connection with any action,
suit or proceeding arising out of the preparation, filing or use of the
said Registration Statement or Prospectus relating to such offering whether
brought under the Securities Act of 1933, as amended, or under any other
applicable law, where such action, suit or proceeding is finally
adjudicated in favor of such director, officer or employee and the time to
appeal has expired.
The Indiana Business Corporation Law ("BCL") provides that the Registrant
may, and in some circumstances must, indemnify its directors and officers
against liabilities and expenses incurred by such person by reason of the fact
that such person was serving in such capacity, subject to certain limitations
and conditions set forth in the BCL. In addition, the Registrant's By-Laws, as
they are proposed to be amended prior to the effective date of this Registration
Statement, will provide that the Registrant will indemnify its directors and
officers, the directors and officers of any subsidiary of the Registrant and any
person serving in any position or capacity in any business entity at the
Registrant's request, against liabilities and reasonable expenses incurred by
such person by reason of the fact that such person was serving in such capacity,
subject to certain limitations and conditions set forth therein and subject to
the BCL.
The Registrant's parent company, Southern Indiana Gas and Electric Company,
has an insurance policy covering its liabilities and expenses which might arise
in connection with its lawful indemnification of its directors and officers and
officers and directors of SIGECO's subsidiaries, including the Registrant, for
certain of their liabilities and expenses. Officers and directors of SIGECO and
the Registrant are covered under this policy for certain other liabilities and
expenses. It is anticipated that the Registrant will procure comparable
insurance coverage as soon as practicable upon completion of the Exchange
contemplated by this Registration Statement.
Item 21. Exhibits.
The following exhibits are filed herewith:
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
--------- ----------------------------
2(a) Agreement and Plan of Exchange (attached as Exhibit A).
3(a) Articles of Incorporation of Southern Indiana Group,
Inc. (attached as Exhibit B). (To be filed by
amendment.)
3(b) By-Laws of Southern Indiana Group, Inc. (To be filed by
amendment.)
5 Opinion re Legality of Messers. Bamberger, Foreman,
Oswald and Hahn. (To be filed by amendment.)
23(a) Consent of Messers. Bamberger, Foreman, Oswald and Hahn
(included in (5)).
23(b) Consent of Arthur Andersen LLP.
II-1
<PAGE>
*99(a) Amended Articles of Incorporation of Southern Indiana
Gas and Electric Company, as amended March 26, 1985.
(Physically filed and designated in Form 10-K for the
fiscal year 1985, File No. 1-3553, as Exhibit 3-A.)
Articles of Amendment of the Amended Articles of
Incorporation of Southern Indiana Gas and Electric
Company, dated March 24, 1987. (Physically filed and
designated in Form 10-K for the fiscal year 1987, File
No. 1-3553, as Exhibit 3-A.) Articles of Amendment of
the Amended Articles of Incorporation of Southern
Indiana Gas and Electric Company, dated November 27,
1992. (Physically filed and designated in Form 10-K for
the fiscal year 1992, File No. 1-3553, as Exhibit 3-A).
*99(b) By-laws of Southern Indiana Gas and Electric Company,
as amended through September 22, 1993. (Physically
filed and designated in Form 10-K for the fiscal year
1993, File No. 1-3553, as Exhibit 3-B.)
99(c) Form of Proxy.
- ---------
* Incorporated by reference.
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Securities
Act of 1933 (the "Act"), 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 the registration statement 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.
(2) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(3) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other Items of the applicable form.
(5) That every prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements of section
10(a)(3) of the Act, and is used in connection with an offering of securities
subject to Rule 415, will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Act, 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.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 20, 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 a 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 will be governed by the final adjudication of
such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, State of
Indiana, on January 20, 1995.
SOUTHERN INDIANA GROUP, INC.
By: /s/ Ronald G. Reherman
-------------------------
Name: Ronald G. Reherman
Title: Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/S/ RONALD G. REHERMAN Chairman, President, January 20, 1995
- ------------------------------------ Chief Executive Officer
Ronald G. Reherman and Director
/S/ ANDREW E. GOEBEL Secretary, Treasurer January 20, 1995
- ------------------------------------
Andrew E. Goebel
/S/ MELVIN H. DODSON Director January 20, 1995
- ------------------------------------
Melvin H. Dodson
/S/ WALTER R. EMGE Director January 20, 1995
- ------------------------------------
Walter R. Emge
/S/ ROBERT L. KOCH II Director January 20, 1995
- ------------------------------------
Robert L. Koch II
/S/ JERRY A. LAMB Director January 20, 1995
- ------------------------------------
Jerry A. Lamb
/S/ DONALD A. RAUSCH Director January 20, 1995
- ------------------------------------
Donald A. Rausch
/S/ RICHARD W. SHYMANSKI Director January 20, 1995
- ------------------------------------
Richard W. Shymanski
/S/ DONALD E. SMITH Director January 20, 1995
- ------------------------------------
Donald E. Smith
/S/ JAMES S. VINSON Director January 20, 1995
- ------------------------------------
James S. Vinson
/S/ NORMAN P. WAGNER Director January 20, 1995
- ------------------------------------
Norman P. Wagner
</TABLE>
II-3
<PAGE>
EXHIBIT 23 (B)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-4 of our report dated January
24, 1994, included in Southern Indiana Gas and Electric Company's Annual Report
on Form 10-K for the year ended December 31, 1993, and to all references to our
Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
January 20, 1995
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
(PROXY - Solicited on Behalf of the Management)
The undersigned hereby appoints R.G. REHERMAN, or in the event of his absence,
A.E. GOEBEL, his attorney and proxy, in the order herein named, each with power
of substitution, to vote at the annual meeting of stockholders of SOUTHERN
INDIANA GAS AND ELECTRIC COMPANY to be held at Evansville, Indiana on March 28,
1995 or any adjournment thereof, according to the number of votes that the
undersigned would be entitled to vote if personally present, as follows:
(Management recommends a vote "FOR" each of the items below)
(1) ELECTION OF DIRECTORS (three-year term):
FOR all nominees listed below or any /_/ WITHHOLD AUTHORITY to /_/
substitute therefor if unable to serve vote for all nominees
(except as written to the contrary listed below
below)
Nominees - Donald A. Rausch, Richard W. Shymanski, and Norman P. Wagner
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write the nominees name below:
-------------------------------------------------------------------------
(2) APPROVE CORPORATE REORGANIZATION AND
FORMATION OF HOLDING COMPANY AS DESCRIBED
IN PROXY STATEMENT. FOR /_/ AGAINST /_/ ABSTAIN /_/
(3) RATIFICATION OF APPOINTMENT OF AUDITORS: FOR /_/ AGAINST /_/ ABSTAIN /_/
all as more fully set forth in the proxy statement received by the undersigned
and on all other matters that may legally come before the meeting.
(Continued, and to be signed, on reverse side)
<PAGE>
The signature should correspond with the name as it appears hereon. Where stock
is registered in the names of two or more persons, all should sign. Persons
signing as executors, administrators, trustees, etc., should so indicate. A
proxy executed by a corporation should be signed in its name by an executive
officer.
IF NOT OTHERWISE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS, FOR THE APPROVAL OF CORPORATE REORGANIZATION AND FORMATION OF HOLDING
COMPANY, AND FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS.
Please sign here exactly|> ___________________________ Dated: ___________, 1995
as name appears below ___________________________
/_/ I PLAN TO ATTEND THE MEETING
Proxy For
Annual Meeting
of Stockholders
To Be Held
March 28, 1995
The management requests that you sign, date, and return this proxy in the
enclosed envelope which requires no postage. If you attend the meeting and so
request, the proxy will not be voted.
"':111111111'" ':1111111111"' "'1111111111'"
(Continued from reverse side)
