As filed with the Securities and Exchange Commission on August 21, 1997
Registration No. 333-
__________________________________________________________________________
__________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________
CMS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-2726431
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(313) 436-9200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
_______________________
Alan M. Wright
Senior Vice President, Chief Financial Officer and Treasurer
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
313-436-9560
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_______________________
It is respectfully requested that the Commission send copies
of all notices, orders and communications to:
Michael D. VanHemert, Esq. Catherine C. Hood, Esq.
CMS Energy Corporation Reid & Priest LLP
330 Town Center Drive 40 West 57th Street
Dearborn, MI 48126 New York, NY 10019
_______________________
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of the Registration Statement
as determined by market conditions and other factors.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check
the following box. __
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box.
_X_
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. __
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. __
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. __
CALCULATION OF REGISTRATION FEE
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
Proposed maximum Proposed maximum Amount of
Title of each class of Amount being offering price aggregate offering registration
securities to be registered registered per unit(1) price(1) fee
_______________________________________________________________________________________________________________________
General Term Notes $200,000,000 100% $200,000,000 $60,606.06
(Registered Trademark),
Series D
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
<FN>
(1) Estimated solely for the purpose of calculating the registration fee.
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
the registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
__________________________________________________________________________
__________________________________________________________________________
1
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 JURISDICTION IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
Preliminary Prospectus Dated August 21, 1997
(Subject to Completion)
$200,000,000
CMS ENERGY CORPORATION
GENERAL TERM NOTES (Registered Trademark), SERIES D
__________________
Due from 9 Months to 25 Years from date of issue
CMS Energy Corporation (the "Company" or "CMS Energy") may offer from
time to time up to $200,000,000 aggregate principal amount of its General
Term Notes (Registered Trademark), Series D (the "Notes"). Each Note will
bear interest at a fixed rate payable monthly, quarterly or semi-annually
and will mature on a date from 9 months to 25 years from the date of
issue. The interest rate, issue price, stated maturity, interest payment
dates and certain other terms (including a Survivor's Option, if
applicable) with respect to each Note will be established at the time of
issuance and set forth in a pricing supplement to this Prospectus (a
"Pricing Supplement"). If provided in the applicable Pricing Supplement
with respect to any Note, such Note will be subject to redemption prior to
its stated maturity by the Company, in whole or in part, at redemption
prices declining from a specified premium, if any, to par, together with
accrued interest to the date of redemption. Notes will be issued only in
denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000. The Notes will be unsecured debt securities
of the Company. See "Description of General Term Notes(Registered
Trademark)."
In the case of a Note that provides for monthly interest payments,
interest will be payable, in arrears, on the fifteenth day of each
calendar month; provided, however, that in the event such Note is issued
between the first and fifteenth day of a calendar month, interest
otherwise payable on the fifteenth day of such calendar month will be
payable on the fifteenth day of the next succeeding calendar month. In the
case of a Note that provides for quarterly or semi-annual interest
payments, interest will be payable, in arrears, commencing on the day that
is either three months or six months, as appropriate, from (i) the day on
which such Note is issued, if such Note is issued on the fifteenth day of
a calendar month, or (ii) the fifteenth day of the calendar month prior to
the calendar month in which such Note is issued, if such Note is issued
prior to the fifteenth day of a calendar month, or (iii) the fifteenth day
of the calendar month in which such Note is issued, if such Note is issued
after the fifteenth day of a calendar month.
Each Note initially will be issued in book-entry form and will be
represented only by a global certificate (a "Global Note") registered in
the name of the nominee of The Depository Trust Company (as Depository). A
beneficial interest in a Global Note will be shown on, and transfers
thereof will be effected only through, records maintained by the
Depository and its participants. A beneficial interest in a Global Note
will not be represented by Notes in definitive form except under the
limited circumstances described herein. See "Description of General Term
Notes (Registered Trademark) -- Book-Entry System" and "-- Certificated
Notes."
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.
__________________________________________________________________________
__________________________________________________________________________
[CAPTION]
Price to Agent's Discount Proceeds to
Public (1) or Commission (2) Company (2) (3)
__________________________________________________________________________
Per Note . . . 100% Not to exceed 4% Not less than 96%
Total . . . $200,000,000 Not to exceed Not less than
$8,000,000 $192,000,000
__________________________________________________________________________
__________________________________________________________________________
<FN>
(1) Unless otherwise specified in the applicable Pricing Supplement,
the price to the public for each Note will be equal to 100% of the
principal amount thereof. See "Plan of Distribution."
<FN>
(2) The Company will pay J. W. Korth & Company (the "Agent") and such
other agent(s) as the Company may select from time to time
(collectively, the "Agents") an underwriting discount or
commission, not to exceed 4% of the principal amount of any Note,
which discount or commission will be disclosed in the applicable
Pricing Supplement for the Note, depending upon the maturity of the
Note. The names of any additional Agents will be disclosed in a
supplement to this Prospectus. The Company has agreed to indemnify
the Agents against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or to contribute to
payments that the Agents may be required to make in respect
thereof. See "Plan of Distribution."
<FN>
(3) Before deducting expenses payable by the Company estimated at
$181,696.
____________
Offers to purchase the Notes are being solicited from time to time
by the Agent on behalf of the Company. The Agent has agreed to use its
reasonable best efforts to solicit purchases of the Notes. Following such
solicitation, Notes will be sold through the Agent, acting as principal.
The Notes are offered, subject to prior sale, when, as, and if issued to
and accepted by the Agent, and subject to the right of the Company and the
Agent to reject any order in whole or in part and to withdraw, cancel or
modify the offer made hereby without notice. The Notes will not be listed
on any securities exchange, and there can be no assurance that the Notes
offered by this Prospectus will be sold or that there will be a secondary
market for the Notes. See "Plan of Distribution."
____________
J. W. Korth & Company
The date of this Prospectus is August 21, 1997
______________
(Registered Trademark) Registered Servicemark of J. W. Korth & Company.
2
Certain person participating in this offering may engage in transactions
that stabilize, maintain, or otherwise affect the price if the Notes.
Specifically, any agent may overallot in connection with the offering and
may bid for, and purchase, the Notes in the open market. For a
Description of these activities, see "Plan Of Distribution."
____________
No person is authorized in connection with the offering made hereby
to give any information or to make any representation not contained or
incorporated by reference in this Prospectus or any Pricing Supplement,
and any information or representation not contained or incorporated herein
must not be relied upon as having been authorized by CMS Energy or any
underwriter, dealer or agent. This Prospectus and any Pricing Supplement
do not constitute an offer to sell or the solicitation of an offer to buy
any securities other than the securities to which they relate or an offer
to sell or the solicitation of an offer to buy such securities in any
circumstances in which such offer or solicitation is unlawful. Neither
the delivery of this Prospectus or any Pricing Supplement nor any sale
made hereunder or thereunder shall, under any circumstances, create any
implication that the information contained or incorporated herein or
therein is correct as of any time subsequent to the date of such
information.
____________
AVAILABLE INFORMATION
CMS Energy is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information may be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices located at 500 West Madison, 14th Floor,
Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor,
New York, New York 10048. Copies of such materials can be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
also maintains a web site (http://www.sec.gov) that contains reports,
proxy statements and other information regarding the Company. The
outstanding Common Stock of CMS Energy is listed on the New York Stock
Exchange and reports, proxy statements and other information concerning
CMS Energy may also be inspected and copied at the offices of such
exchange at 20 Broad Street, New York, New York 10005.
____________
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by CMS Energy with the Commission
(File No. 1-9513) pursuant to the Exchange Act are hereby incorporated by
reference in this Prospectus and shall be deemed to be a part hereof:
(1) CMS Energy's Annual Report on Form 10-K for the year ended
December 31, 1996;
(2) CMS Energy's Quarterly Reports on Form 10-Q for the
quarters ended March 31, and June 30, 1997; and
(3) CMS Energy's Current Reports on Forms 8-K
dated March 7, April 24, May 1, June 5, June
11, July 1 and August 21, 1997.
All documents subsequently filed by CMS Energy pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference herein and shall be deemed to be a part hereof
from the date of filing of such documents (such documents, and the
documents enumerated above, being hereinafter referred to as "Incorporated
Documents").
Any statement contained in an Incorporated Document shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
CMS Energy undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon 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 in this
Prospectus by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to CMS Energy
Corporation at its principal executive offices located at Fairlane Plaza
South, Suite 1100, 330 Town Center Drive, Dearborn, Michigan 48126,
Attention: Office of the Secretary, telephone: (313) 436-9200.
Certain information contained in this Prospectus summarizes, is
based upon, or refers to information and financial statements contained in
one or more Incorporated Documents; accordingly, such information
contained herein is qualified in its entirety by reference to such
documents and should be read in conjunction therewith.
_________________________
_________________________
5
PROSPECTUS SUMMARY
The following summary information is qualified in its entirety by,
and should be read in conjunction with, the information appearing
elsewhere in this Prospectus and the Incorporated Documents.
THE COMPANY
CMS Energy, incorporated in 1987, is the parent holding company of
Consumers Energy Company ("Consumers") and CMS Enterprises Company
("Enterprises"). Consumers, a combination electric and gas utility
company serving in all 68 counties of Michigan's Lower Peninsula, is the
largest subsidiary of CMS Energy. Consumers' customer base includes a mix
of residential, commercial and diversified industrial customers, the
largest of which is the automotive industry. Enterprises is engaged in
several domestic and international energy-related businesses including:
(i) oil and gas exploration and production; (ii) acquisition, development
and operation of independent power production facilities; (iii) energy
marketing, risk management and energy management to large customers;
(iv) transmission, storage and processing of natural gas; and (v)
international energy distribution.
CMS Energy conducts its principal operations through the following
seven business segments: (i) electric utility operations; (ii) gas
utility operations; (iii) oil and gas exploration and production
operations; (iv) independent power production; (v) energy marketing,
services and trading; (vi) natural gas storage, transmission and
processing; and (vii) international energy distribution. Consumers or
Consumers' subsidiaries are engaged in two segments: electric operations
and gas operations. Consumers' electric and gas businesses are
principally regulated utility operations. CMS Energy and its subsidiaries
routinely evaluate, invest in, acquire and divest energy-related assets
and/or companies both domestically and internationally. Consideration for
such transactions may involve the delivery of cash or securities.
THE OFFERING
Securities Offered. . . . . . $200,000,000 aggregate principal amount
of General Term Notes (Registered
Trademark), Series D (the "Notes").
Maturity Date . . . . . . . . The Notes will be offered at varying
maturities but in no event will any
Note mature earlier than 9 months from
its date of issue or later than 25
years from its date of issue. The
stated maturity of each Note will be
set forth in the applicable Pricing
Supplement.
Interest Rate . . . . . . . . The interest rate on each Note will be
a fixed rate established at the time of
issuance and set forth in the
applicable Pricing Supplement.
Issue Price . . . . . . . . . The Issue Price with respect to each
Note will be 100% of the principal
amount, unless otherwise set forth in
the applicable Pricing Supplement.
Interest Payment Dates. . . . The interest payment dates with respect
to each Note will be set forth in the
applicable Pricing Supplement. The
Pricing Supplement also will state
whether interest on the related Note
will be payable monthly, quarterly or
semi-annually. See "Description of
General Term Notes (Registered
Trademark) - Interest."
Repayment Upon Death. . . . . If the Pricing Supplement relating to
any Note provides that the holder of
such Note will have the option (the
"Survivor's Option") to elect repayment
of such Note prior to its stated
maturity in the event of the death of
the beneficial owner of such Note, the
Company will repay such Note (or
portion thereof) properly tendered for
repayment by or on behalf of the person
that has authority to act on behalf of
the deceased owner of the beneficial
interest in such Note at a price equal
to 100% of the principal amount of the
beneficial interest of the deceased
owner in such Note plus accrued
interest to the date of such repayment,
subject to an annual aggregate
limitation and an individual holder
limitation on the dollar amount of
Notes that will be repaid in any year
under the Survivor's Option as well as
a limitation on the ability of
surviving joint tenants and tenants by
the entirety to exercise the Survivor's
Option. See "Description of General
Term Notes (Registered Trademark) -
Repayment Upon Death."
Redemption at Company's
Option. . . . . . . . . . . . If it is so provided in the Pricing
Supplement, the Notes will be
redeemable, in whole or in part in
increments of $1,000, at the option of
the Company, at any time after a
specified initial redemption date, on
notice given by the Company not more
than 60 nor less than 30 days prior to
the date of redemption, at redemption
prices declining over a specified
period from a specified premium, if
any, to par, together with accrued
interest to the date of redemption.
See "Description of General Term Notes
(Registered Trademark) - Redemption."
Purchase at the Option of
Holder after a Change in
Control . . . . . . . . . . . On a date no earlier than 60 days nor
later than 90 days (the "Change in
Control Purchase Date") after the date
on which the Company mails written
notice to the Holders of the Notes of
the occurrence of a Change in Control
at any time while the Notes are
outstanding, the Company will purchase
any Note, at the option of its Holder,
for a Change in Control Purchase Price
equal to 101% of the aggregate
outstanding principal amount of the
Notes to be repurchased plus accrued
interest thereon to the Change in
Control Purchase Date. See
"Description of General Term Notes
(Registered Trademark) - Purchase of
Notes Upon Change in Control" for a
summary of these provisions and the
definition of "Change in Control."
Mandatory Sinking Fund. . . . None.
Ranking . . . . . . . . . . . The Notes will be unsecured debt
securities of the Company. The Notes
will rank on a parity in right of
payment with all other unsecured and
unsubordinated indebtedness of the
Company. As of June 30, 1997 the
Company had no secured indebtedness
outstanding. However, the Company has
retained the right to pledge assets to
secure indebtedness in the future,
subject to certain limitations. See
"Description of General Term Notes
(Registered Trademark) - Certain
Restrictive Covenants - Limitations on
Certain Liens."
Certain Covenants . . . . . . So long as any of the Notes are
outstanding the Company has agreed to:
(a) limitations on the creation of
liens or security interests upon the
stock of Consumers and certain other
Subsidiaries; (b) limitations on
transactions between the Company and
its affiliates; and (c) limitations on
certain mergers, consolidations and
sales of assets. Also, so long as the
Notes are outstanding and until the
Notes are rated BBB- or above (or an
equivalent rating) by Standard & Poor's
and one Other Rating Agency, at which
time the Company will be permanently
released from such limitations the
Company has agreed to: (a) limitations
on the issuance or incurrence of
indebtedness by the Company and certain
of its Subsidiaries (other than
Consumers); (b) limitations on the
declaration or payment of dividends on,
or the redemption, retirement or other
acquisition of, the capital stock of
the Company; and (c) additional
limitations on certain mergers,
consolidations and sales of assets. See
"Description of General Term Notes
(Registered Trademark) - Certain
Restrictive Covenants."
Use of Proceeds . . . . . . . Unless otherwise provided in a Pricing
Supplement, the net proceeds of the
sale of the Notes will be used by the
Company for its general corporate
purposes. See "Use of Proceeds."
Liquidity . . . . . . . . . . There is no active public trading
market for the Notes. Any Agent may
make a market in the Notes, but no
Agent is obligated to do so and any
such market making so undertaken may be
discontinued without notice at any
time. There can be no assurance as to
the liquidity of any market that may
develop for the Notes, the ability of
the Holders to sell their Notes, or the
price at which Holders would be able to
sell their Notes. If a trading market
is not developed or is not maintained,
Holders of the Notes may experience
difficulty in reselling them or may be
unable to sell them at all. If a
market for the Notes develops, they may
trade at a discount from their Issue
Price. Future trading prices of the
Notes will depend on many factors,
including prevailing interest rates,
the Company's operating results, and
the market for similar securities. The
Company does not intend to apply for
listing of the Notes on any securities
exchange. Historically, and
particularly in recent periods, the
market for non-investment grade debt
has been subject to disruptions that
have caused substantial volatility in
the prices of securities. There can be
no assurance that the market for the
Notes, if any, will not be subject to
similar disruptions.
9
THE COMPANY
CMS Energy, incorporated in 1987, is the parent holding
company of Consumers Energy Company ("Consumers") and CMS Enterprises
Company ("Enterprises"). Consumers, a combination electric and gas
utility company serving in all 68 counties of Michigan's Lower Peninsula,
is the largest subsidiary of CMS Energy. Consumers' customer base
includes a mix of residential, commercial and diversified industrial
customers, the largest of which is the automotive industry. Enterprises
is engaged in several domestic and international energy-related businesses
including: (i) oil and gas exploration and production; (ii) acquisition,
development and operation of independent power production facilities;
(iii) energy marketing, risk management and energy management to large
customers; (iv) transmission, storage and processing of natural gas; and
(v) international energy distribution.
CMS Energy conducts its principal operations through the following
seven business segments: (i) electric utility operations; (ii) gas
utility operations; (iii) oil and gas exploration and production
operations; (iv) independent power production; (v) energy marketing,
services and trading; (vi) natural gas storage, transmission and
processing; and (vii) international energy distribution. Consumers or
Consumers' subsidiaries are engaged in two segments: electric operations
and gas operations. Consumers' electric and gas businesses are
principally regulated utility operations. CMS Energy and its subsidiaries
routinely evaluate, invest in acquire and divest energy-related assets
and/or companies both domestically and internationally. Consideration for
such transactions may involve the delivery of cash or securities.
CMS Energy's 1996 consolidated operating revenue was $4,333
million. This consolidated operating revenue was derived from its electric
utility operations (approximately 57% or $2,446 million), its gas utility
operations (approximately 30% or $1,282 million), gas transmission,
storage and marketing (approximately 7% or $320 million), oil and gas
exploration and production activities (approximately 3% or $130 million)
and independent power production and other non-utility activities
(approximately 3% or $155 million). Consumers' consolidated operations in
the electric and gas utility businesses account for the major share of
CMS Energy's total assets, revenue and income. The unconsolidated share
of non-utility electric generation, gas transmission and storage and
international energy distribution revenue for 1996 was $557 million.
Consumers is a public utility serving gas or electricity to almost
six million of Michigan's nine and a half million residents in all of the
68 counties in Michigan's Lower Peninsula. Industries in Consumers'
service area include automotive, metal, chemical, food and wood products
and a diversified group of other industries. Consumers' 1996 consolidated
operating revenue of $3,770 million was derived approximately 65% ($2,446
million) from its electric utility business and approximately 34% ($1,282
million) from its gas utility business. Consumers' rates and certain other
aspects of its business are subject to the jurisdiction of the Michigan
Public Service Commission and the Federal Energy Regulatory Commission.
The foregoing information concerning CMS Energy and its
subsidiaries does not purport to be comprehensive. For additional
information concerning CMS Energy and its subsidiaries' business and
affairs, including their capital requirements and external financing
plans, pending legal and regulatory proceedings and descriptions of
certain laws and regulations to which those companies are subject,
prospective purchasers should refer to the Incorporated Documents. See
"Incorporation of Certain Documents by Reference" and "Available
Information" above.
The address of the principal executive officers of CMS Energy is
330 Town Center Drive, Suite 1100, Dearborn, Michigan 48126. Its
telephone number is (313) 436-9200.
USE OF PROCEEDS
Unless otherwise provided in a Pricing Supplement, the net proceeds
from the sale of the Notes will be used by the Company for its general
corporate purposes.
10
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for each of the years ended
December 31, 1992 through 1996, and for the six months ended June 30,
1997, are as follows:
Six Months
Ended
June 30, 1997 Year Ended December 31,
(unaudited) 1996 1995 1994 1993 1992
(1)
Ratio of earnings to fixed charges. . . . . . . . 2.13 2.01 1.94 2.07 1.88 -
(1) For the year ended December 31, 1992, fixed charges exceeded earnings
by $441 million. Earnings as defined include a $520 million pretax
loss on the settlement of MCV power purchases, $(15) million for
potential customer refunds and other reserves related to 1992 but
recorded in 1991, and $6 million relating to CMS Generation's
reduction in its investment in The Oxford Energy Company. The ratio
of earnings to fixed charges would have been 1.33 excluding these
amounts.
For the purpose of computing such ratios, earnings represent net
income before income taxes, net interest charges and the estimated
interest portion of lease rentals.
DESCRIPTION OF GENERAL TERM NOTES (Registered Trademark)
The Notes will be issued as a series of debt securities under an
Indenture, dated as of January 15, 1994 (such Indenture as amended or
supplemented from time to time by one or more supplemental indentures
thereto, including a supplemental indenture relating to the Notes, being
referred to herein as the "Indenture" and all debt securities hereafter
issued under such Indenture being collectively referred to herein as
"Securities"), between the Company and The Chase Manhattan Bank, a New
York banking corporation, as trustee (the "Trustee"). The Company is not
limited by the Indenture as to the aggregate principal amount of
Securities it may issue. The descriptions of the Notes and the Indenture
in this Prospectus are brief summaries of the provisions contained in such
documents and do not purport to be complete. The form of the Indenture is
filed as an exhibit to the Registration Statement of which this Prospectus
is a part, and reference is made thereto for the definitive provisions of
such Indenture. The descriptions herein are qualified in their entirety
by such reference. Certain capitalized terms used herein without
definition shall have the meanings respectively set forth in the
Indenture.
GENERAL
The Notes will be offered pursuant to this Prospectus on a continuing
basis. Each Note will mature from 9 months to 25 years from its date of
issue. The Notes will be issued without coupons in registered form only
and in denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000.
CMS Energy is a holding company and its assets consist primarily of
investment in its subsidiaries. The Securities (including the Notes) will
be obligations exclusively of the Company. The Company's ability to
service its indebtedness, including the Securities, is dependent primarily
upon the earnings of its subsidiaries and the distribution or other
payment of such earnings to the Company in the form of dividends, loans or
advances, and repayment of loans and advances from the Company. The
subsidiaries are separate and distinct legal entities and have no
obligation, contingent or otherwise, to pay any amounts due pursuant to
the Securities or to make any funds available therefor, whether by
dividends, loans or other payments.
A substantial portion of the consolidated liabilities of the Company
have been incurred by its subsidiaries. Therefore, the Company's rights
and the rights of its creditors, including holders of Securities, to
participate in the distribution of assets of any subsidiary upon the
latter's liquidation or reorganization will be subject to prior claims of
the subsidiary's creditors, including trade creditors, except to the
extent that the Company may itself be a creditor with recognized claims
against the subsidiary (in which case the claims of the Company would
still be subject to the prior claims of any secured creditor of such
subsidiary and of any holder of indebtedness of such subsidiary that is
senior to that held by CMS Energy). As of June 30, 1997, the Company's
subsidiaries had total indebtedness for borrowed money (excluding
intercompany indebtedness) of approximately $ 2,670 million.
The Notes rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company. As of June 30, 1997 the
Company had no secured indebtedness outstanding. However, the Company has
retained the right to secure indebtedness, subject to certain limitations.
See "Certain Restrictive Covenants -- Limitations on Certain Liens."
Notes will be represented by a Global Note registered in the name of
the nominee of the Depository, except under the limited circumstances
described below under "Certificated Notes." A single Global Note will
represent all Notes issued on the same day and having the same terms,
including, but not limited to, the same Interest Payment Dates, rate of
interest, stated maturity and repurchase and redemption provisions (if
any). A beneficial interest in a Global Note will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository (with respect to interests of its participants) and its
participants (with respect to interests of persons other than its
participants).
Unless the applicable Pricing Supplement provides otherwise, the
price at which each Note will be issued (the "Issue Price") will be 100%
of the principal amount of the Note. Notes will not be issued as
discounted securities, at prices below stated principal amounts, or having
an original issue discount for U.S. federal income tax purposes, unless
the applicable Pricing Supplement so provides and, if applicable,
describes potential U.S. federal income tax consequences.
The Pricing Supplement relating to a Note will set forth, among other
things, the following terms: (i) the date on which such Note will be
issued; (ii) the Issue Price; (iii) the stated maturity date of such Note;
(iv) the rate per annum at which such Note will bear interest; (v) the
Interest Payment Dates for such Note; (vi) whether the holder of such Note
will have the Survivor's Option; (vii) whether and the terms on which such
Note will be subject to redemption by the Company prior to its stated
maturity; and (viii) any other terms not inconsistent with the provisions
of the Indenture.
INTEREST
Each Note will bear interest from the date of issue at the fixed rate
per annum specified therein and in the applicable Pricing Supplement until
the principal thereof is paid or made available for payment. Interest
will be payable either monthly, quarterly or semi-annually on each
Interest Payment Date and at Maturity. Interest will be payable to the
person in whose name a Note is registered at the close of business on the
Regular Record Date next preceding each Interest Payment Date; provided,
however, interest payable at Maturity will be payable to the person to
whom principal shall be payable. Unless otherwise indicated in the
applicable Pricing Supplement, interest will be paid in arrears and shall
be the amount of interest accrued to, but excluding, the Interest Payment
Date. Interest on the Notes will be computed on the basis of a 360-day
year of twelve 30-day months.
The Interest Payment Dates for a Note that provides for monthly
interest payments shall be the fifteenth day of each calendar month;
provided, however, that in the case of a Note issued between the first and
fifteenth day of a calendar month, interest otherwise payable on the
fifteenth day of such calendar month will be payable on the fifteenth day
of the next succeeding calendar month. In the case of a Note that
provides for quarterly interest payments, the Interest Payment Dates shall
be the fifteenth day of each of the months specified in the Pricing
Supplement, commencing on the day that is three months from (i) the day on
which such Note is issued, if such Note is issued on the fifteenth day of
a calendar month, or (ii) the fifteenth day of the calendar month
immediately preceding the calendar month in which such Note is issued, if
such Note is issued prior to the fifteenth day of a calendar month, or
(iii) the fifteenth day of the calendar month in which such Note is
issued, if such Note is issued after the fifteenth day of a calendar
month. In the case of a Note that provides for semi-annual interest
payments, the Interest Payment Dates shall be the fifteenth day of each of
the months specified in the Pricing Supplement, commencing on the day that
is six months from (i) the day on which such Note is issued, if such Note
is issued on the fifteenth day of a calendar month, (ii) the fifteenth day
of the calendar month immediately preceding the calendar month in which
such Note is issued, if such Note is issued prior to the fifteenth day of
a calendar month, or (iii) the fifteenth day of the calendar month in
which such Note is issued, if such Note is issued after the fifteenth day
of a calendar month. The Regular Record Date with respect to any Interest
Payment Date (other than at Maturity) shall be the first day (whether or
not a Business Day) of the calendar month in which such Interest Payment
Date occurs, and, in the case of interest payable at Maturity, the Regular
Record Date shall be the date of Maturity.
Interest on the Notes that is not punctually paid or duly provided
for on any Interest Payment Date ("defaulted interest") shall cease to be
payable to the Holder thereof on the relevant Regular Record Date and may
be paid by the Company to Holders of Notes (i) at the close of business on
a Special Record Date for the payment of such defaulted interest fixed by
the Trustee and not more than 15 nor less than 10 days prior to the date
of the proposed payment, provided that the Company shall have notified the
Trustee in writing of the amount of such defaulted interest, deposited
with the Trustee funds equal to the amount of the proposed payment or made
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, or (ii) in such other lawful manner which is
not inconsistent with the requirements of any securities exchange on which
the Notes are listed for trading.
REDEMPTION
A Note is not subject to redemption at the option of the Company
prior to the date, if any, fixed at the time of sale and designated as the
"Initial Redemption Date" on the face of such Note and in the applicable
Pricing Supplement hereto. If no Initial Redemption Date is indicated
with respect to a Note, such Note is not subject to redemption at the
option of the Company prior to Stated Maturity. If so specified in the
applicable Pricing Supplement, on and after the Initial Redemption Date,
the related Note will be redeemable in whole or in part in increments of
$1,000, at the option of the Company, at redemption prices declining from
a specified premium, if any, to par, together with accrued interest to the
date of redemption, on notice given by the Company not more than 60 nor
less than 30 days prior to the date of redemption. If less than all of
the Notes of like tenor and terms are to be redeemed, the Notes to be
redeemed will be selected by the Trustee by such method as the Trustee
shall deem fair and appropriate. Notwithstanding the foregoing however,
the Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may, at the discretion of
the Company, be held or resold or surrendered to the Trustee for
cancellation. The Notes will not have a sinking fund. See "Purchase of
Notes Upon Change in Control" and "Repayment Upon Death."
With respect to Notes redeemable at the option of the Company, the
applicable Pricing Supplement will specify if the Company would be
prohibited from redeeming such Note as a part of, or in anticipation of,
any refunding operation by the application, directly or indirectly, of
moneys borrowed having an effective interest cost to the Company of less
than the effective interest cost to the Company of such Note.
PURCHASE OF NOTES UPON CHANGE IN CONTROL
In the event of any Change in Control (as defined below) each Holder
of a Note will have the right, at such Holder's option, subject to the
terms and conditions of the Indenture, to require the Company to
repurchase all or any part of such Holder's Note on a date selected by the
Company that is no earlier than 60 days nor later than 90 days (the
"Change in Control Purchase Date") after the mailing of written notice by
the Company of the occurrence of such Change in Control at a repurchase
price payable in cash equal to 101% of the principal amount of such Notes
plus accrued interest to the Change in Control Purchase Date (the "Change
in Control Purchase Price").
Within 30 days after the Change in Control, the Company is obligated
to mail to each Holder of a Note a notice regarding the Change in Control,
which notice shall state, among other things: (i) that a Change in
Control has occurred and that each such Holder has the right to require
the Company to repurchase all or any part of such Holder's Notes at the
Change in Control Purchase Price; (ii) the Change in Control Purchase
Price; (iii) the Change in Control Purchase Date, (iv) the name and
address of the Paying Agent and (v) the procedures that Holders must
follow to cause the Notes to be repurchased.
To exercise this right, a Holder must deliver a Change in Control
Purchase Notice to the Paying Agent at its office in The City of New York,
or any other office of the Paying Agent maintained for such purposes, not
later than 30 days prior to the Change in Control Purchase Date. The
Change in Control Purchase Notice shall state (i) the portion of the
principal amount of any Notes to be repurchased, which must be $1,000 or
an integral multiple thereof, (ii) that such Notes are to be repurchased
by the Company pursuant to the applicable change-in-control provisions of
the Indenture, and (iii) unless the Notes are represented by one or more
Global Notes, the certificate numbers of the Notes to be repurchased.
Any Change in Control Purchase Notice may be withdrawn by the Holder
by a written notice of withdrawal delivered to the Paying Agent not later
than three Business Days prior to the Change in Control Purchase Date.
The notice of withdrawal shall state the principal amount and, if
applicable, the certificate numbers of the Notes as to which the
withdrawal notice relates and the principal amount, if any, which remains
subject to a Change in Control Purchase Notice.
If a Note is represented by a Global Note, the Depository or its
nominee will be the holder of such Note and therefore will be the only
entity that can require the Company to repurchase Notes upon a Change in
Control. To obtain repayment with respect to such Note upon a Change in
Control, the beneficial owner of such Note must provide to the broker or
other entity through which it holds the beneficial interest in such Note
(i) a Change in Control Purchase Notice signed by such beneficial owner,
and such signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. ("NASD") or a commercial bank or trust company having an
office or correspondent in the United States and (ii) instructions to such
broker or other entity to notify the Depository of such beneficial owner's
desire to cause the Company to repurchase such Notes. Such broker or
other entity will provide to the Paying Agent (i) a Change in Control
Purchase Notice received from such beneficial owner and (ii) a certificate
satisfactory to the Paying Agent from such broker or other entity that it
represents such beneficial owner. Such broker or other entity will be
responsible for disbursing any payments it receives upon the repurchase of
such Notes by the Company.
Payment of the Change in Control Purchase Price for a Note in
certificated form (a "Certificated Note") for which a Change in Control
Purchase Notice has been delivered and not withdrawn is conditioned upon
delivery of such Note (together with necessary endorsements) to the Paying
Agent at its office in The City of New York, or any other office of the
Paying Agent maintained for such purpose, at any time (whether prior to,
on or after the Change in Control Purchase Date) after the delivery of
such Change in Control Purchase Notice. Payment of the Change in Control
Purchase Price for such Note will be made promptly following the later of
the Change in Control Purchase Date or the time of delivery of such Note.
If the Paying Agent holds, in accordance with the terms of the
Indenture, money sufficient to pay the Change in Control Purchase Price of
a Note on the Business Day following the Change in Control Purchase Date
for such Note, then, on and after such date, interest on such Note will
cease to accrue, whether or not such Note is delivered to the Paying
Agent, and all other rights of the Holder shall terminate (other than the
right to receive the Change in Control Purchase Price upon delivery of the
Note).
Under the Indenture, a "Change in Control" means an event or series
of events by which (i) CMS Energy ceases to beneficially own, directly or
indirectly, at least 80% of the total voting power of all classes of
Capital Stock then outstanding of Consumers (whether arising from issuance
of securities of the Company or Consumers, any direct or indirect transfer
of securities by CMS Energy or Consumers, any merger, consolidation,
liquidation or dissolution of CMS Energy or Consumers or otherwise); or
(ii) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act) becomes the "beneficial owner" (as such term is
used in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
or group shall be deemed to have "beneficial ownership" of all shares that
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 30% of the Voting Stock of CMS Energy; or
(iii) CMS Energy consolidates with or merges into another corporation or
directly or indirectly conveys, transfers or leases all or substantially
all of its assets to any person, or any corporation consolidates with or
merges into CMS Energy, in either event pursuant to a transaction in which
the outstanding Voting Stock of CMS Energy is changed into or exchanged
for cash, securities, or other property, other than any such transaction
where (A) the outstanding Voting Stock of CMS Energy is changed into or
exchanged for Voting Stock of the surviving corporation and (B) the
holders of the Voting Stock of CMS Energy immediately prior to such
transaction retain, directly or indirectly, substantially proportionate
ownership of the Voting Stock of the surviving corporation immediately
after such transaction.
The Indenture requires CMS Energy to comply with the provisions of
Rule 13e-4 and any other tender offer rules under the Exchange Act which
may then be applicable and file Schedule 13E-4 or any other schedule
required thereunder in connection with any offer by CMS Energy to purchase
Notes at the option of Holders upon a Change in Control. The Change in
Control purchase feature of the Notes may in certain circumstances make
more difficult or discourage a takeover of CMS Energy and, thus, the
removal of incumbent management. The Change in Control purchase feature,
however, is not the result of management's knowledge of any specific
effort to accumulate shares of its common stock or to obtain control of
the Company by means of a merger, tender offer, solicitation or otherwise,
or part of a plan by management to adopt a series of anti-takeover
provisions. Instead, the Change in Control purchase feature is a
customary term contained in similar debt offerings and the terms of such
feature result from negotiations between CMS Energy and the Agents.
Management has no present intention to propose any anti-takeover measures
although it is possible that CMS Energy could decide to do so in the
future.
No Note may be repurchased by the Company as a result of a Change of
Control if there has occurred and is continuing an Event of Default
described under "Events of Default" below (other than a default in the
payment of the Change in Control Purchase Price with respect to the
Notes). In addition, the Company's ability to purchase Notes may be
limited by its financial resources and its inability to raise the required
funds because of restrictions on issuance of securities contained in other
contractual arrangements.
REPAYMENT UPON DEATH
The Pricing Supplement relating to any Note will indicate whether the
holder of such Note will have the Survivor's Option. SEE THE PRICING
SUPPLEMENT TO DETERMINE WHETHER THE SURVIVOR'S OPTION APPLIES TO ANY
PARTICULAR NOTE.
Pursuant to exercise of the Survivor's Option, if applicable, the
Company will repay any Note (or portion thereof) properly tendered for
repayment by or on behalf of the person (the "Representative") that has
authority to act on behalf of the deceased owner of the beneficial
interest in such Note under the laws of the appropriate jurisdiction
(including, without limitation, the personal representative or executor of
such deceased beneficial owner) at a price equal to 100% of the principal
amount of the beneficial interest of the deceased owner in such Note plus
accrued interest to the date of such repayment, subject to the following
limitations. Notwithstanding the foregoing, the Survivor's Option will
not be available to persons who are surviving joint tenants or surviving
tenants by the entirety. The Company may, in its sole discretion, limit
the aggregate principal amount of Notes as to which exercises of the
Survivor's Option will be accepted in any calendar year (the "Annual Put
Limitation") to one percent (1%) of the outstanding principal amount of
the Notes as of the end of the most recent fiscal year, but not less than
$500,000 in any such calendar year, or such greater amount as the Company
in its sole discretion may determine for any calendar year, and may limit
to $100,000, or such greater amount as the Company in its sole discretion
may determine for any calendar year, the aggregate principal amount of
Notes (or portions thereof) as to which exercise of the Survivor's Option
will be accepted in such calendar year with respect to any individual
deceased owner of beneficial interests in such Notes (the "Individual Put
Limitation"). Moreover, the Company will not make principal repayments
pursuant to exercise of the Survivor's Option in amounts that are less
than $1,000, and, in the event that the limitations described in the
preceding sentence would result in the partial repayment of any Note, the
principal amount of such Note remaining outstanding after repayment must
be at least $1,000 (the minimum authorized denomination of the Notes).
Any Note (or portion thereof) tendered pursuant to exercise of the
Survivor's Option may be withdrawn by a written request by the
Representative of the deceased owner received by the Trustee prior to its
repayment.
Each Note (or portion thereof) that is tendered pursuant to valid
exercise of the Survivor's Option will be accepted promptly in the order
all such Notes are tendered, except for any Note (or portion thereof) the
acceptance of which would contravene (i) the Annual Put Limitation, if
applied, or (ii) the Individual Put Limitation, if applied, with respect
to the relevant individual deceased owner of beneficial interests therein.
If, as of the end of any calendar year, the aggregate principal amount of
Notes (or portions thereof) that have been accepted pursuant to exercise
of the Survivor's Option for such year, has not exceeded the Annual Put
Limitation, if applied, for such year, any exercise(s) of the Survivor's
Option with respect to Notes (or portions thereof) not accepted during
such calendar year because such acceptance would have contravened the
Individual Put Limitation, if applied, with respect to an individual
deceased owner of beneficial interests therein will be accepted in the
order all such Notes (or portions thereof) were tendered, to the extent
that any such exercise would not exceed the Annual Put Limitation for such
calendar year. Any Note (or portion thereof) accepted for repayment
pursuant to exercise of the Survivor's Option will be repaid no later than
the first Interest Payment Date that occurs 20 or more calendar days after
the date of such acceptance. Each Note (or any portion thereof) tendered
for repayment that is not accepted in any calendar year due to the
application of the Annual Put Limitation will be deemed to be tendered in
the following calendar year in the order in which all such Notes (or
portions thereof) were originally tendered, unless any such Note (or
portion thereof) is withdrawn by the Representative for the deceased owner
prior to its repayment. In the event that a Note (or any portion thereof)
tendered for repayment pursuant to valid exercise of the Survivor's Option
is not accepted, the Trustee will deliver a notice by first-class mail to
the registered Holder thereof at its last known address as indicated in
the Security Register that states the reasons such Note (or portion
thereof) has not been accepted for repayment.
Subject to the foregoing, in order for a Survivor's Option to be
validly exercised with respect to any Note (or portion thereof), the
Trustee must receive from the Representative of the deceased owner (i) a
written request for repayment signed by the Representative, and such
signature must be guaranteed by a member firm of a registered national
securities exchange or of the NASD or a commercial bank or trust company
having an office or correspondent in the United States, (ii) if such Note
is not represented by a Global Note as described below, tender of the Note
(or portion thereof) to be repaid, (iii) appropriate evidence satisfactory
to the Company and the Trustee that (A) the Representative has authority
to act on behalf of the deceased beneficial owner, (B) the death of such
beneficial owner has occurred and (C) the deceased was the owner of a
beneficial interest in such Note at the time of death, (iv) if applicable,
a properly executed assignment or endorsement, and (v) if the beneficial
interest in such Note is held by a nominee of the deceased beneficial
owner, a certificate satisfactory to the Trustee from such nominee
attesting to the deceased's ownership of a beneficial interest in such
Note. All questions as to the eligibility or validity of any exercise of
the Survivor's Option will be determined by the Company, in its sole
discretion, which determinations will be final and binding on all parties.
If a Note is represented by a Global Note, the Depository or its
nominee will be the Holder of such Note and therefore will be the only
entity that can exercise the Survivor's Option for such Note. To obtain
repayment pursuant to exercise of the Survivor's Option with respect to
such Note, the Representative must provide to the broker or other entity
through which the beneficial interest in such Note is held by the deceased
owner (i) the documents described in clauses (i) and (iii) of the
preceding paragraph and (ii) instructions to such broker or other entity
to notify the Depository of such Representative's desire to obtain
repayment pursuant to exercise of the Survivor's Option. Such broker or
other entity will provide to the Trustee (i) the documents received from
the Representative referred to in clause (i) of the preceding sentence and
(ii) a certificate satisfactory to the Trustee from such broker or other
entity stating that it represents the deceased beneficial owner. Such
broker or other entity will be responsible for disbursing any payments it
receives pursuant to exercise of the Survivor's Option to the appropriate
Representative. See "Book-Entry System."
A REPRESENTATIVE MAY OBTAIN THE FORMS USED TO EXERCISE THE SURVIVOR'S
OPTION FROM THE CHASE MANHATTAN BANK, THE TRUSTEE, AT 450 WEST 33RD
STREET, 15TH FLOOR, NEW YORK, NEW YORK 10001-2697, ATTENTION: GLOBAL
TRUST SERVICES, DURING NORMAL BUSINESS HOURS.
PAYMENT AND PAYING AGENTS
Payments of principal, premium, if any, and interest on Notes
represented by a Global Note will be made to the Depository through such
Paying Agent or Paying Agents in The City of New York as the Company may
designate from time to time or by wire transfer to the Depository. See
"Book-Entry System." Payments of principal, premium, if any, and interest
on Certificated Notes will be made upon surrender of such Notes at the
office of such Paying Agent or Paying Agents in The City of New York as
the Company may designate from time to time, except that at the option of
the Company, payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
The principal corporate trust office of The Chase Manhattan Bank,
located at 450 West 33rd Street, 15th Floor, New York, New York 10001-
2697, has been designated as the Company's sole Paying Agent for payments
with respect to the Notes. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except
that the Company will be required to maintain a Paying Agent in each Place
of Payment for the Notes.
BOOK-ENTRY SYSTEM
The Notes will be issued initially in the form of one or more Global
Notes that will be deposited with, or on behalf of, The Depository Trust
Company, New York, New York ("DTC"), which will act as securities
depository for the Notes. The Notes will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's partnership
nominee). DTC and any other depository which may replace DTC as
depository for the Notes are sometimes referred to herein as the
"Depository."
Upon issuance, all Notes having the same issue date, interest rate,
redemption provisions, provisions for repurchase at the option of the
Holder, stated maturity and other provisions will be represented by one or
more Global Notes. Except under the limited circumstances described
below, Notes represented by Global Notes will not be exchangeable for
Certificated Notes.
So long as the Depository, or its nominee, is the registered owner of
a Global Note, such Depository or such nominee, as the case may be, will
be considered the sole registered holder of the individual Notes
represented by such Global Note for all purposes under the Indenture.
Payments of principal of and premium, if any, and any interest on
individual Notes represented by a Global Note will be made to the
Depository or its nominee, as the case may be, as the registered holder of
such Global Note. Except as set forth below, owners of beneficial
interests in a Global Note will not be entitled to have any of the
individual Notes represented by such Global Note registered in their
names, will not receive or be entitled to receive physical delivery of any
such Note and will not be considered the registered holder thereof under
the Indenture, including, without limitation, for purposes of consenting
to any amendment thereof or supplement thereto as described in this
Prospectus.
The following is based upon information furnished by DTC:
DTC is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC holds securities
that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants ("Direct Participants")
include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the NASD.
Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Commission.
Purchases of Notes under the DTC system must be made by or
through Direct Participants, which will receive a credit for the
Notes on DTC's records. The ownership interest of each actual
purchaser of each Note ("Beneficial Owner") is in turn to be recorded
on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements
of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers
of ownership interests in the Notes are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Notes, except in the event that use of
the book-entry system for one or more Notes is discontinued.
To facilitate subsequent transfers, all Global Notes
deposited by Participants with DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of Global Notes
with DTC and their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Notes; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Notes are
credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect Participants,
and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to
time.
Redemption notices shall be sent to Cede & Co. If less than
all of the Notes are being redeemed, DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such
issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect
to Notes. Under its usual procedures, DTC mails an Omnibus Proxy to
the Company as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Notes are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Notes will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on
the payable date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it will not
receive payment on the payable date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in "street name"
and will be the responsibility of such Participant and not of DTC,
any Agents, or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of the Company,
disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities
depository with respect to the Notes at any time by giving 90 days'
notice to the Company or the Trustee. Under such circumstances, in
the event that a successor securities depository is not obtained,
Certificated Notes are required to be printed and delivered in
exchange for the Notes represented by the Global Notes held by the
DTC. See "Certificated Notes."
In addition, the Company may decide to discontinue use of
the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Certificated Notes will be
printed and delivered in exchange for the Notes represented by the
Global Notes held by DTC. See "Certificated Notes."
The information in this section concerning DTC and DTC's book-entry
system has been obtained from DTC. The Company believes such information
to be reliable, but the Company takes no responsibility for the accuracy
thereof.
None of the Company, any Agents, the Trustee, any paying agent or the
registrar for the Notes will have any responsibility or liability for any
aspect of the records relating to or payments made on account of
beneficial ownership interests in a Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
CERTIFICATED NOTES
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by the Company by
the earlier of (i) 90 days from the date the Company receives notice to
the effect that the Depository is unwilling or unable to act, or the
Company determines that the Depository is unable to act or (ii) the
effectiveness of the Depository's resignation or failure to fulfill its
duties as Depository, the Company will issue Certificated Notes in
exchange for the Notes represented by the Global Notes held by the
Depository. In addition, the Company may at any time and in its sole
discretion determine not to have Notes represented by a Global Note and,
in such event, will issue individual Certificated Notes in exchange for
the Notes represented by the Global Note. In either instance, the owner
of a beneficial interest in a Note represented by a Global Note will be
entitled to have such Note registered in its name and will be entitled to
physical delivery of such Note in certificated form. Individual
Certificated Notes so issued will be issued in fully registered form,
without coupons, in one or more authorized denominations as described
above under "General."
Certificated Notes will be exchangeable for other Certificated Notes
of any authorized denominations and of a like aggregate principal amount
and tenor.
Certificated Notes may be presented for exchange as provided above,
and may be presented for registration of transfer (duly endorsed, or
accompanied by a duly executed written instrument of transfer), at the
office of The Chase Manhattan Bank, the Trustee, in The City of New York,
(the "Security Registrar") or at the office of any other transfer agent
designated by the Company for such purpose with respect to the Notes and
referred to in the applicable Pricing Supplement, without service charge
and upon payment of any taxes and other governmental charges as described
in the Indenture. Such transfer or exchange will be effected upon the
Security Registrar or such other transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making
the request. If a Pricing Supplement refers to any transfer agents (in
addition to the Security Registrar) designated by the Company with respect
to the Notes, the Company may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any
such transfer agent acts, except that the Company will be required to
maintain a transfer agent in each Place of Payment for the Notes. The
Company may at any time designate additional transfer agents with respect
to the Notes.
The Company will not be required to (i) issue, register the transfer
of or exchange Certificated Notes during a period beginning at the opening
of business 15 days before the selection of Notes to be redeemed and
ending at the close of business on the day of mailing of the relevant
notice of redemption; or (ii) register the transfer of or exchange any
Certificated Note, or portion thereof, called for redemption, except the
unredeemed portion of any Certificated Note being redeemed in part.
If a Certificated Note is mutilated, destroyed, lost or stolen, it
may be replaced at the corporate trust office or agency of the Trustee in
The City of New York upon payment by the Holder of such expenses as may be
incurred by the Company and the Trustee in connection therewith and the
furnishing of such evidence and indemnity as the Company and the Trustee
may require. Mutilated Notes must be surrendered before new Notes will be
issued.
CERTAIN RESTRICTIVE COVENANTS
The Indenture contains, among others, the covenants described below.
Certain capitalized terms used below are defined herein under the heading
"Certain Definitions."
LIMITATION ON CONSOLIDATED INDEBTEDNESS. The Indenture provides that
so long as any of the Notes are Outstanding and until the Notes are rated
BBB- or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency, at which time the Company will be permanently released from
the provisions of this "Limitation on Consolidated Indebtedness", the
Company shall not, and shall not permit any Restricted Subsidiary to,
issue, create, assume, guarantee, incur or otherwise become liable for
(collectively, "issue"), directly or indirectly, any Indebtedness unless
(a) the Consolidated Coverage Ratio of the Company and its Consolidated
Subsidiaries for the four consecutive fiscal quarters immediately
preceding the issuance of such Indebtedness (as shown by a pro forma
consolidated income statement of the Company and its Consolidated
Subsidiaries for the four most recent fiscal quarters ending at least 30
days prior to the issuance of such Indebtedness after giving effect to
(i) the issuance of such Indebtedness and (if applicable) the application
of the net proceeds thereof to refinance other Indebtedness as if such
Indebtedness was issued at the beginning of the period, (ii) the issuance
and retirement of any other Indebtedness since the first day of the period
as if such Indebtedness was issued or retired at the beginning of the
period and (iii) the acquisition of any company or business acquired by
the Company or any Subsidiary of the Company since the first day of the
period (including giving effect to the pro forma historical earnings of
such company or business), including any acquisition which will be
consummated contemporaneously with the issuance of such Indebtedness, as
if in each case such acquisition occurred at the beginning of the period)
exceeds a ratio of 1.6 to 1.0 and (b) immediately after giving effect to
the issuance of such Indebtedness and (if applicable) the application of
the net proceeds thereof to refinance other Indebtedness, the Consolidated
Leverage Ratio shall not exceed a ratio of 0.75 to 1.0.
The foregoing limitation is subject to exceptions for certain
revolving Indebtedness to banks provided that the aggregate outstanding
principal amount of such revolving Indebtedness shall not exceed
$1,000,000,000, Indebtedness outstanding on the date of the original
Indenture, certain refinancings and Indebtedness of the Company to a
Subsidiary or by a Subsidiary to the Company.
LIMITATION UPON RESTRICTED PAYMENTS. The Indenture provides that, so
long as any of the Notes are Outstanding and until the Notes are rated
BBB- or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency, at which time the Company will be permanently released from
the provisions of this "Limitation upon Restricted Payments", the Company
will not, and will not permit any of its Restricted Subsidiaries, directly
or indirectly, to, (i) declare or pay any dividend or make any
distribution on the Capital Stock of the Company to the direct or indirect
holders of the Company's Capital Stock (except dividends or distributions
payable solely in Non-Convertible Capital Stock of the Company or in
options, warrants or other rights to purchase such Non-Convertible Capital
Stock and except dividends or distributions payable to the Company or a
Subsidiary) or (ii) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company (any such dividend, distribution,
purchase, redemption, repurchase, other acquisition or retirement, being
hereinafter referred to as a "Restricted Payment") if at any time the
Company or such Subsidiary makes such Restricted Payment: (1) an Event of
Default, or an event that with the lapse of time or the giving of notice
or both would constitute an Event of Default, shall have occurred and be
continuing (or would result therefrom); or (2) the aggregate amount of
such Restricted Payment and all other Restricted Payments made since
September 30, 1993, would exceed the sum of: (a) $120,000,000 plus 100%
of Consolidated Net Income from September 30, 1993 to the end of the most
recent fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such sum shall be a deficit, minus 100% of
the deficit) and (b) the aggregate Net Proceeds received by the Company
from the issue or sale of or contribution with respect to its Capital
Stock after September 30, 1993.
The foregoing provisions will not prohibit: (i) dividends or other
distributions paid in respect of any class of Capital Stock issued by the
Company in connection with the acquisition of any business or assets by
the Company or a Restricted Subsidiary where the dividends or other
distributions with respect to such Capital Stock are payable solely from
the net earnings of such business or assets; (ii) any purchase or
redemption of Capital Stock of the Company made by exchange for, or out of
the proceeds of the substantially concurrent sale of, Capital Stock of the
Company (other than Redeemable Stock or Exchangeable Stock);
(iii) dividends paid within 60 days after the date of declaration thereof
if at such date of declaration such dividends would have complied with
this covenant; or (iv) payments pursuant to the Tax Sharing Agreement.
LIMITATIONS ON CERTAIN LIENS. The Indenture provides that so long as
any of the Notes are outstanding, the Company shall not create, incur,
assume or suffer to exist any Lien intended to or having the effect of
conferring upon a creditor of the Company or any Subsidiary of the Company
a preferential interest upon or with respect to the Capital Stock of
Consumers, Enterprises or CMS NOMECO Oil & Gas Co. ("NOMECO") without
making effective provision whereby the Notes shall be (so long as such
creditor shall be so secured) equally and ratably secured. The foregoing
does not apply to (a) Liens securing Indebtedness of the Company, provided
that on the date such Liens are created, and after giving effect to such
Indebtedness, the aggregate principal amount at maturity of all of the
secured Indebtedness of the Company shall not exceed 10% of Consolidated
Assets on such date or (b) certain liens for taxes, pledges to secure
workman's compensation, other statutory obligations and certain support
obligations not to exceed $30 million at any one time outstanding, certain
materialmen's, mechanic's and similar liens and certain purchase money
liens.
The foregoing limitations regarding Consolidated Indebtedness,
Restricted Payments and Liens do not apply to Consumers, the Company's
largest Subsidiary. In addition, they do not currently limit transactions
by any of the Company's other Subsidiaries because none of such
Subsidiaries would currently fall under the definition of Restricted
Subsidiaries.
LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Indenture provides
that so long as any of the Notes are Outstanding, the Company may not,
directly or indirectly, conduct any business or enter into any transaction
or series of related transactions (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with an
Affiliate unless the terms of such business, transaction or series of
transactions are as favorable to the Company as terms that could be
obtainable at the time for a comparable transaction or series of related
transactions in arm's-length dealings with an unrelated third person.
This covenant shall not apply to (i) any compensation paid to officers and
directors of the Company which has been approved by the Board of Directors
of the Company or (ii) loans to the Company or an Affiliate pursuant to a
global cash management program, which loans mature within one year from
the date thereof.
LIMITATION ON CONSOLIDATION, MERGER, SALE OR CONVEYANCE. The
Indenture provides that so long as any of the Notes are Outstanding the
Company shall not consolidate with or merge into any other person or sell,
lease or convey its property as an entirety or substantially as an
entirety unless, upon any such consolidation, merger, sale, lease or
conveyance, and after giving effect thereto, (i) the person formed by such
consolidation or into which the Company shall have been merged or which
shall have acquired such property (the "Continuing Entity") shall be a
corporation and shall have expressly assumed all of the Company's
obligations under the Notes and the Indenture, and (ii) no Event of
Default, or an event that, with the lapse of time or the giving of notice
or both, would become an Event of Default under the Indenture shall have
happened and be continuing, The Indenture also provides that so long as
any of the Notes are Outstanding and until the Notes are rated BBB- or
above (or an equivalent rating) by Standard & Poor's and one Other Rating
Agency, at which time the Company will be permanently released from such
provisions, the Company shall not consolidate with or merge into any other
person or sell, lease or convey its property as an entirety or
substantially as an entirety unless, upon any such consolidation, merger,
sale, lease or conveyance, and after giving effect thereto, (i) the
Consolidated Net Worth of the Continuing Entity shall be at least equal to
the Consolidated Net Worth of the Company immediately prior to the
transaction and (ii) the Continuing Entity would be entitled to incur at
least $1 of additional Indebtedness (other than revolving Indebtedness to
banks) without violating the restriction set forth in "-- Limitations on
Consolidated Indebtedness" above.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in
the Indenture. Reference is made thereto for the full definition of all
such terms, as well as any other terms used herein for which no definition
is provided.
"AFFILIATE" of any specified person means any other person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this
definition, "control" when used with respect to any specified person means
the power to direct or cause the direction of the management and policies
of such person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"AMORTIZATION EXPENSE" means, for any period, amounts recognized
during such period as amortization of capital leases, depletion, nuclear
fuel, goodwill and assets classified as intangible assets in accordance
with generally accepted accounting principles.
"CAPITAL LEASE OBLIGATIONS" of a person means any obligation that is
required to be classified and accounted for as a capital lease on the face
of a balance sheet of such person prepared in accordance with generally
accepted accounting principles; the amount of such obligation shall be the
capitalized amount thereof, determined in accordance with generally
accepted accounting principles; the stated maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty; and such obligation shall be deemed
secured by a Lien on any property or assets to which such lease relates.
"CAPITAL STOCK" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interest in (however designated) corporate stock, including any Preferred
Stock or Letter Stock.
"CONSOLIDATED ASSETS" means, at any date of determination, the
aggregate assets of the Company and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"CONSOLIDATED CAPITAL" means, at any date of determination, the sum
of (a) Consolidated Indebtedness, (b) consolidated equity of the common
stockholders of the Company and the Consolidated Subsidiaries,
(c) consolidated equity of the preference stockholders of the Company and
the Consolidated Subsidiaries and (d) consolidated equity of the preferred
stockholders of the Company and the Consolidated Subsidiaries, in each
case, determined at such date in accordance with generally accepted
accounting principles.
"CONSOLIDATED COVERAGE RATIO" with respect to any period means the
ratio of (i) the aggregate amount of Operating Cash Flow for such period
to (ii) the aggregate amount of Consolidated Interest Expense for such
period.
"CONSOLIDATED INDEBTEDNESS" means, without duplication, at any date
of determination, the sum of the aggregate Indebtedness of the Company
plus the aggregate debt (as such term is construed in accordance with
generally accepted accounting principles) of the Consolidated
Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total
interest expense in respect of Indebtedness of the Company and its
Consolidated Subsidiaries, including, without duplication, (i) interest
expense attributable to capital leases, (ii) amortization of debt
discount, (iii) capitalized interest, (iv) cash and noncash interest
payments, (v) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (vi) net
costs under Interest Rate Protection Agreements (including amortization of
discount) and (vii) interest expense in respect of obligations of other
persons deemed to be Indebtedness of the Company or any Consolidated
Subsidiaries under clause (v) or (vi) of the definition of Indebtedness,
provided, however, that Consolidated Interest Expense shall exclude any
costs otherwise included in interest expense recognized on early
retirement of debt.
"CONSOLIDATED LEVERAGE RATIO" means, at any date of determination,
the ratio of Consolidated Indebtedness to Consolidated Capital.
"CONSOLIDATED NET INCOME" means, for any period, the net income of
the Company and its Consolidated Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting principles;
provided, however, that there shall not be included in such Consolidated
Net Income: (i) any net income of any person if such person is not a
Subsidiary, except that (A) the Company's equity in the net income of any
such person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
person during such period to the Company or a Consolidated Subsidiary as a
dividend or other distribution and (B) the Company's equity in a net loss
of any such person for such period shall be included in determining such
Consolidated Net Income; (ii) any net income of any person acquired by the
Company or a Subsidiary in a pooling of interests transaction for any
period prior to the date of such acquisition; and (iii) any gain or loss
realized upon the sale or other disposition of any property, plant or
equipment of the Company or its Consolidated Subsidiaries which is not
sold or otherwise disposed of in the ordinary course of business and any
gain or loss realized upon the sale or other disposition of any Capital
Stock of any person.
"CONSOLIDATED NET WORTH" of any person means the total of the amounts
shown on the consolidated balance sheet of such person and its
consolidated subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles, as of any date
selected by such person not more than 90 days prior to the taking of any
action for the purpose of which the determination is being made (and
adjusted for any material events since such date), as (i) the par or state
value of all outstanding Capital Stock plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus (iii) any retained
earnings or earned surplus less (A) any accumulated deficit, (B) any
amounts attributable to Redeemable Stock and (C) any amounts attributable
to Exchangeable Stock.
"CONSOLIDATED SUBSIDIARY" means, any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Company in
accordance with generally accepted accounting principles.
"EXCHANGEABLE STOCK" means any Capital Stock of a corporation that is
exchangeable or convertible into another security (other than Capital
Stock of such corporation that is neither Exchangeable Stock nor
Redeemable Stock).
"INDEBTEDNESS" of any person means, without duplication, (i) the
principal of and premium (if any) in respect of (A) indebtedness of such
person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such person is responsible or liable; (ii) all Capital Lease Obligations
of such person; (iii) all obligations of such person issued or assumed as
the deferred purchase price of property, all conditional sale obligations
and all obligations under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business);
(iv) all obligations of such person for the reimbursement of any obligor
or any letter of credit, banker's acceptance or similar credit transaction
(other than obligations with respect to letters of credit securing
obligations (other than obligations described in (i) through (iii) above)
entered into in the ordinary course of business of such person to the
extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third Business
Day following receipt by such person of a demand for reimbursement
following payment on the letter of credit); (v) all obligations of the
type referred to in clauses (i) through (iv) of other persons and all
dividends of other persons for the payment of which, in either case, such
person is responsible or liable as obligor, guarantor or otherwise; and
(vi) all obligations of the type referred to in clauses (i) through (v) of
the other persons secured by any Lien on any property or asset of such
person (whether or not such obligation is assumed by such person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Subsidiary against
fluctuations in interest rates.
"LETTER STOCK,", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
intended to reflect the separate performance of certain of the businesses
or operations conducted by such corporation or any of its subsidiaries.
"LIEN" means any lien, mortgage, pledge, security interest,
conditional sale, title retention agreement or other charge or encumbrance
of any kind.
"NET PROCEEDS" means, with respect to any issuance or sale or
contribution in respect of Capital Stock, the aggregate proceeds of such
issuance, sale or contribution, including the fair market value (as
determined by the Board of Directors and net of any associated debt and of
any consideration other than Capital Stock received in return) of property
other than cash received by the Company, net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as
a result thereof, provided, however, that if such fair market value as
determined by the Board of Directors of property other than cash is
greater than $25 million, the value thereof shall be based upon an opinion
from an independent nationally recognized firm experienced in the
appraisal or similar review of similar types of transactions.
"NON-CONVERTIBLE CAPITAL STOCK" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible
Capital Stock other than Preferred Stock of such corporation; provided,
however, that Non-Convertible Capital Stock shall not include any
Redeemable Stock or Exchangeable Stock.
"OPERATING CASH FLOW" means for any period, with respect to the
Company and its Consolidated Subsidiaries, the aggregate amount of
Consolidated Net Income after adding thereto Consolidated Interest Expense
(adjusted to include costs recognized on early retirement of debt), income
taxes, depreciation expense, Amortization Expense, any noncash
amortization of debt issuance costs, any nonrecurring, noncash charges to
earnings and any negative accretion recognition.
"OTHER RATING AGENCY" means any one of Duff & Phelps Credit Rating
Co., Fitch Investors Service, L.P. or Moody's Investors Service, Inc., and
any successor to any of these organizations which is a nationally
recognized statistical rating organization.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PREFERRED STOCK," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) that is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation.
"REDEEMABLE STOCK" means any Capital Stock that by its terms or
otherwise is required to be redeemed prior to the first anniversary of the
Maturity of any Outstanding Notes or is redeemable at the option of the
holder thereof at any time prior to the first anniversary of the Maturity
of any Outstanding Notes.
"RESTRICTED SUBSIDIARY" means any Subsidiary (other than Consumers
and its subsidiaries) of the Company which at the time of determination
had assets which, as of the date of the Company's most recent quarterly
consolidated balance sheet, constituted at least 10% of the total
Consolidated Assets of the Company and its Consolidated Subsidiaries and
any other Subsidiary which from time to time is designated a Restricted
Subsidiary by the Board of Directors of the Company, provided that no
Subsidiary may be designated a Restricted Subsidiary if, immediately after
giving effect thereto, an Event of Default, or an event that, with the
lapse of time or the giving of notice or both, would constitute an Event
of Default, would exist or the Company and its Restricted Subsidiaries
could not incur at least $1 of additional Indebtedness under the
restriction set forth under "-- Limitations on Consolidated Indebtedness"
above and (i) any such Subsidiary so designated as a Restricted Subsidiary
must be organized under the laws of the United States or any state
thereof; (ii) more than 80% of the Voting Stock of such Subsidiary must be
owned of record and beneficially by the Company or a Restricted
Subsidiary; (iii) such Restricted Subsidiary must be a Consolidated
Subsidiary; and (iv) such Subsidiary must not therefore have been
designated as a Restricted Subsidiary.
"STANDARD & POOR'S" shall mean Standard & Poor's Rating Group, a
division of McGraw Hill Inc., and any successor thereto which is a
nationally recognized statistical rating organization, or if such entity
shall cease to rate the Notes or shall cease to exist and there shall be
no such successor thereto, any other nationally recognized statistical
rating organization selected by the Company which is acceptable to the
Trustee.
"SUBSIDIARY" means any corporation of which more than 50% of the
outstanding Voting Stock is at the time directly or indirectly owned by
the parent company and/or one or more companies which are themselves
subsidiaries of such parent company. "Subsidiary" means a subsidiary of
the Company.
"TAX SHARING AGREEMENT" means the Amended and Restated Agreement for
the Allocation of Income Tax Liabilities and Benefits, dated as of
January 1, 1994, as amended or supplemented from time to time, by and
among the Company, each of the members of the Consolidated Group (as
defined therein), and each of the corporations that become members of the
Consolidated Group.
"VOTING STOCK" means securities of any class or classes the holders
of which are ordinarily, in the absence of contingencies, entitled to vote
for corporate directors (or persons performing similar functions).
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with
respect to the Notes: (a) default in the payment of interest upon any
Note when such interest becomes due and payable and continuance of such
default for 30 days; (b) default in the payment of all or any part of the
principal of (or premium, if any, on) any Note when it becomes due and
payable at its Maturity; (c) default in the performance of any covenants
of the Company in the Indenture, continued for 60 days after written
notice as provided in the Indenture; (d) a default or event of default in
respect of any Indebtedness of the Company shall occur which results in
the acceleration of $25,000,000 or more of the principal amount of such
Indebtedness or Indebtedness of the Company in excess of $25,000,000 shall
not be paid at maturity thereof, which default shall not have been waived
by the holder or holders of such Indebtedness within 30 days of such
default; (e) entry of final judgments against the Company aggregating in
excess of $25,000,000 which remain undischarged or unbonded for a period
(during which execution shall not be effectively stayed) of 60 days;
(f) certain events in bankruptcy, insolvency or reorganization involving
the Company. Subject to the provisions of the Indenture relating to the
duties of the Trustee in case an Event of Default shall occur and be
continuing, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any of
the Holders of Notes, unless such Holders shall have offered to the
Trustee reasonable indemnity.
If an Event of Default with respect to the Notes shall occur and be
continuing, (i) either the Trustee or the Holders of at least a majority
in aggregate principal amount of the Outstanding Notes may accelerate the
maturity of the Outstanding Notes and (ii) the Holders of not less than a
majority of the aggregate outstanding principal amount of the Outstanding
Notes, may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided, however, that after any such
acceleration, but before a judgment or decree for payment of the money due
has been obtained, the Holders of not less than a majority in aggregate
principal amount of Outstanding Notes may, under certain circumstances,
rescind and annul such acceleration and its consequences if all Events of
Default, other than the non-payment of accelerated principal, have been
cured or waived as provided in the Indenture. For information as to
waiver of defaults, see "Modification of the Indenture."
No Holder of any Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such
Holder shall have previously given to the Trustee written notice of a
continuing Event of Default and unless also the holders of at least 25% in
aggregate principal amount of the Outstanding Notes shall have made
written request, and offered satisfactory indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in aggregate principal amount of
the Outstanding Notes a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. However, such
limitations do not apply to a suit instituted by a Holder of a Note for
the enforcement of payment of the principal of or interest on such Note on
or after the respective due dates expressed in such Note.
The Company will be required to furnish to the Trustee annually a
statement as to the performance by the Company of certain of its
obligations under the Indenture and as to any default in such performance.
MODIFICATION OF THE INDENTURE
Modification and amendment of the Indenture may be made by the
Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities
affected thereby, provided that no such modification or amendment may,
without the consent of the Holder of each Outstanding Security affected
thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal or interest on, any Outstanding Security, or
reduce the principal amount thereof or rate of interest thereon, or change
the Redemption Price applicable to any Security; (b) change the place or
currency of payment of principal of or premium, if any, or interest on any
Security; (c) impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity (or in the case of
redemption or repayment at the option of the Holder, on or after the
Redemption Date or Repayment Date) thereof; (d) reduce the above-stated
percentage of Outstanding Securities necessary to modify or amend the
Indenture or the consent of whose Holders is required for any waiver or
reduce the percentage required for quorum or voting; or (e) modify the
foregoing requirements. The Holders of at least a majority in aggregate
principal amount of the Outstanding Securities of a series may waive past
defaults with respect to such series except payment defaults and the
Holders of at least a majority in aggregate principal amount of all
Outstanding Securities may waive compliance by the Company with certain
covenants.
Modification and amendment of the Indenture may be made by the
Company and the Trustee without the consent of any Holder, for any of the
following purposes: (a) to evidence the succession of another corporation
to the Company; (b) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Securities; (c) to add additional
Events of Default for the benefit of the Holders of all or any series of
Securities; (d) to change any provision of the Indenture to facilitate the
issuance of Securities in bearer form; (e) to change or eliminate any
provision of the Indenture, provided no Security Outstanding of any series
is entitled to the benefit of such provision; (f) to secure the
Securities; (g) to establish the form or terms of Securities; (h) to
provide for the acceptance of appointment by a successor Trustee; (i) to
cure any ambiguity, defect or inconsistency in the Indenture provided such
action does not materially adversely affect the interests of Holders of
Securities or (j) to supplement provisions of the Indenture to permit or
facilitate the defeasance or discharge of a series of Securities provided
that such action shall not materially adversely affect the interests of
Holders of Securities of such Series.
DEFEASANCE, COVENANT DEFEASANCE AND DISCHARGE
The Indenture provides that the Company may elect (A) to defease and
be discharged from all of its obligations with respect to the Securities
or any series thereof (except for the obligations to register the transfer
or exchange of such Securities, to replace temporary or mutilated,
destroyed, lost or stolen Securities, to maintain an office or agency in
respect of such Securities, to hold monies for repayment in trust and
certain other obligations), and that the provisions of the Indenture will
no longer be in effect with respect to such Securities (except as
aforesaid) ("defeasance") or (B) to be released from its covenants set
forth in the Indenture with respect to, among other things, limitation on
Consolidated Indebtedness, limitation on Restricted Payments, limitation
on transactions with Affiliates, limitation on Liens, limitation on
consolidation, merger, sale or conveyance, repurchase obligations on
Change in Control, ("covenant defeasance") with respect to such
Securities, upon in the case of (A) or (B) the deposit with the Trustee
(or other qualifying trustee), in trust for such purpose, of money and/or
U.S. Government Obligations which, without any reinvestment, but through
the scheduled payment of principal and interest in accordance with their
terms, will provide money in an amount sufficient to pay the principal of
(and premium, if any) and interest on the Notes on the scheduled due dates
therefor. Such a trust may only be established, if, among other things,
(x) such defeasance or covenant defeasance will not result (whether
immediately or with notice or lapse of time or both) in a breach or
violation of, or constitute a default under, any material agreement to
which the Company is party or by which it is bound and (y) the Company has
delivered to the Trustee an Opinion of Counsel (as specified in the
Indenture) to the effect that the Holders of such Securities will not
recognize income, gain or loss for federal income tax purposes as a result
of such defeasance or covenant defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance or covenant defeasance had
not occurred. Such Opinion of Counsel, in the case of defeasance under
clause (A) above, must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable federal income tax law occurring
after the date of the Indenture.
In the event the Company exercises its option to effect a covenant
defeasance with respect to the Securities of any series as described in
the preceding paragraph and such Securities of such series are declared
due and payable because of the occurrence of any Event of Default (other
than an Event of Default caused by failure to comply with the covenants
that are defeased), and the amount of money and U.S. Government
Obligations on deposit with the Trustee would be insufficient to pay
amounts due on the Securities of such series at the time of the
acceleration resulting from such Event of Default, the Company will remain
liable for such payments.
The Company may obtain a discharge of the Indenture with respect to
all Securities then Outstanding (except for certain obligations to
register the transfer or exchange of such Securities, to replace temporary
or mutilated, destroyed, lost or stolen Securities, to maintain an office
or agency in respect of such Securities, to hold monies for repayment in
trust and certain other obligations) when all Securities theretofore
authenticated and delivered have, with certain exceptions, been delivered
to the Trustee for cancellation or by irrevocably depositing in trust with
the Trustee money, and/or U.S. Government Obligations which, without any
reinvestment but through the scheduled payment of principal and interest
in accordance with their terms, will provide money in an amount sufficient
to pay all the principal of (and premium, if any) and interest on the
Securities on the Stated Maturities or redemption dates thereof, provided
that such Securities are by their terms due and payable, or are to be
called for redemption, within one year and the Company has delivered to
the Trustee an Opinion of Counsel to the effect that the Holders of such
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such discharge and will be subject to federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such discharge had not occurred.
THE TRUSTEE UNDER THE INDENTURE
The Chase Manhattan Bank is the Trustee under the Indenture. The
Company maintains banking and borrowing relations with The Chase Manhattan
Bank.
PLAN OF DISTRIBUTION
The Agents will be J. W. Korth & Company and such other agents as the
Company may designate from time to time. The names of any additional
Agents will be disclosed in a supplement to this Prospectus. Subject to
the terms and conditions set forth in a distribution agreement (the
"Distribution Agreement") among the Company and the Agents, offers to
purchase the Notes will be solicited from time to time by the Agents on
behalf of the Company, and the Notes may be offered on a continuous basis
by the Company through the Agents. Each Agent will agree to use its
reasonable best efforts to solicit purchases of the Notes. Following such
solicitation, the Agents, severally and not jointly, may purchase Notes
from the Company, for their own account, from time to time. Notes
acquired by any Agent will be offered either directly to the public or to
certain dealers that will then reoffer the Notes to the public. Sales by
an Agent to any dealer will be made pursuant to an agreement between such
Agent and dealer (each a "Dealer Agreement").
A Pricing Supplement with respect to each offering of Notes by the
Company will set forth, among other things, the name of each Agent
participating in the distribution of such Notes, the price to public of
such Notes and the proceeds to the Company from such sale, any
underwriting discounts or commissions and other items constituting Agent's
compensation, and any discounts or concessions allowed, reallowed or paid
to dealers. After any initial public offering of Notes pursuant to a
Pricing Supplement, the price to the public of such Notes, and the related
underwriting discount and selling concession, may be changed.
The Agent has advised the Company that all initial offers by any
Agents and by any dealers, unless otherwise set forth in the applicable
Pricing Supplement, are proposed to be made at prices equal to 100% of the
principal amount of the Notes being sold, less, in the case of an offer by
an Agent to a dealer, a price concession not in excess of the amount set
forth in the applicable Pricing Supplement. Offers and sales by Agents or
dealers subsequent to the initial offering may be at varying prices
determined at the time of sale.
The Notes will not be listed on any securities exchange and will not
be traded, when issued, on any other established trading market. Any
Agent may make a market in the Notes, but no Agent is obligated to do so.
Any market-making so undertaken may be discontinued at any time without
notice. There can thus be no assurance that a secondary market for the
Notes will exist or as to the liquidity or continuation of any such
market. Moreover, the Company reserves the right to withdraw, cancel or
modify the offer made hereby at any time without notice, and any such
withdrawal, cancellation or modification also may adversely affect the
liquidity of the Notes.
In order to facilitate the offering of the Notes, any Agent may
engage in transactions that stabilize, maintain or otherwise affect the
price of the Notes. Specifically, any Agent may overallot in connection
with the offering, creating a short position in the Notes for its own
account. In addition, to cover overallotments or to stabilize the price
of the Notes, any Agent may bid for, and purchase, the Notes in the open
market. Any of these activities may stabilize or maintain the market
price of the Notes above independent market levels. The Agents are not
required to engage in these activities, and may end any of these
activities at any time.
The Distribution Agreement provides, and the terms of each Dealer
Agreement will provide, that the obligations of any Agent or dealer to
purchase Notes will be subject to certain conditions precedent. The
nature of the Agent's obligations under the Distribution Agreement is such
that an Agent will be obligated to purchase all of the Notes offered by
any Pricing Supplement naming such Agent if any of such Notes are
purchased. The Company, or any Agent with respect to itself, may
terminate the Distribution Agreement at any time upon written notice.
The Company has agreed to indemnify the Agents against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"), or to contribute to payments that the
Agents may be required to make in respect thereof.
LEGAL OPINIONS
Opinions as to the legality of the Notes will be rendered for
CMS Energy by Michael D. VanHemert, Assistant General Counsel for
CMS Energy. Certain legal matters with respect to the Notes will be
passed upon by Reid & Priest LLP, New York, N.Y., counsel for the Agents.
Reid & Priest LLP provides legal services to an affiliate of CMS Energy
and has, from time to time, provided legal services to CMS Energy.
EXPERTS
The consolidated financial statements and schedules of CMS Energy as
of December 31, 1996 and 1995, and for each of the three years in the
period ended December 31, 1996 incorporated by reference in this
Prospectus, have been audited by Arthur Andersen LLP (formerly Arthur
Andersen & Co.), independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving
said reports.
With respect to the unaudited interim consolidated financial
information for the periods ended March 31 and June 30, 1997, Arthur
Andersen LLP has applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate reports thereon state that they did not audit and they did not
express an opinion on that interim consolidated financial information.
Accordingly, the degree of reliance on their reports on that information
should be restricted in light of the limited nature of the review
procedures applied. In addition, the accountants are not subject to the
liability provisions of Section 11 of the Securities Act, for their
reports on the unaudited interim consolidated financial information
because those reports are not a "report" or "part" of the registration
statement prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Securities Act.
Future consolidated financial statements of CMS Energy and the
reports thereon of Arthur Andersen LLP also will be incorporated by
reference in this Prospectus in reliance upon the authority of that firm
as experts in giving those reports to the extent that said firm has
audited said consolidated financial statements and consented to the use of
their reports thereon.
______________________________________ ________________________________
______________________________________ ________________________________
No dealer, salesperson or other
individual has been authorized to
give any information or to make any
representations other than those
contained in this Prospectus or any
Pricing Supplement in connection with
the offerings covered by this
Prospectus and any Pricing Supplement
and, if given or made, such information $200,000,000
or representations must not be relied
upon as having been authorized by the
Company or any Agent. Neither this
Prospectus nor any Pricing Supplement CORPORATION
constitutes an offer to sell, or a CMS ENERGY
solicitation of an offer to buy, the
securities to which this Prospectus and
any Pricing Supplement relate in any
jurisdiction where or to any person to GENERAL TERM NOTES
whom it is unlawful to make such offer (Registered Trademark),
or solicitation. Neither the delivery SERIES D
of this Prospectus or any Pricing
Supplement nor any sale made hereunder
shall under any circumstances create an
implication that there has not been any
change in the facts set forth in this
Prospectus or in the affairs of the
Company since the date hereof.
_______________________ _______________________
PROSPECTUS
TABLE OF CONTENTS
__________________, 1997
Page
_______________________
Available Information . . . . . . . 2
Incorporation of
Certain Documents
by Reference . . . . . . . . . . 2
Prospectus Summary . . . . . . . . 4
The Company . . . . . . . . . . . . 8
Use of Proceeds . . . . . . . . . . 8 J.W. Korth & Company
Ratio of Earnings to
Fixed Charges . . . . . . . . . . 9
Description of General
Term Notes (Registered
Trademark). . . . . . . . . . . . 9
Plan of Distribution. . . . . . . . 27
Legal Opinions. . . . . . . . . . . 28
Experts . . . . . . . . . . . . . . 28
_______________________________________ ______________________________
_______________________________________ ______________________________
II-1
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
ESTIMATED
AMOUNT
Filing fee - Securities and Exchange Commission . . . . . $ 60,606
Services of Trustee (including counsel). . . . . . . . . . . 15,000
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Rating Agency fee . . . . . . . . . . . . . . . . . . . . . 40,000
Services of counsel . . . . . . . . . . . . . . . . . . . . 20,000
Services of independent public accountants,
Arthur Andersen LLP. . . . . . . . . . . . . . . . . . . . 11,000
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . 4,500
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 15,500
________
Total: $181,606
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following resolution was adopted by the Board of Directors of
CMS Energy on May 6, 1987:
RESOLVED: That effective March 1, 1987 the Corporation shall
indemnify to the full extent permitted by law every person (including the
estate, heirs and legal representatives of such person in the event of the
decease, incompetency, insolvency or bankruptcy of such person) who is or
was a director, officer, partner, trustee, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against all liability, costs, expenses, including attorneys' fees,
judgments, penalties, fines and amounts paid in settlement, incurred by or
imposed upon the person in connection with or resulting from any claim or
any threatened, pending or completed action, suit or proceeding whether
civil, criminal, administrative, investigative or of whatever nature,
arising from the person's service or capacity as, or by reason of the fact
that the person is or was, a director, officer, partner, trustee, employee
or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise. Such right of indemnification shall not be deemed exclusive
of any other rights to which the person may be entitled under statute,
bylaw, agreement, vote of shareholders or otherwise.
CMS ENERGY'S BYLAWS PROVIDE:
The Corporation may purchase and maintain liability insurance, to the
full extent permitted by law, on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against such person and
incurred by such person in any such capacity.
Article VIII of the Articles of Incorporation reads:
A director shall not be personally liable to the Corporation or its
shareholders for monetary damages for breach of duty as a director except
(i) for a breach of the director's duty of loyalty to the Corporation or
its shareholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) for a
violation of Section 551(l) of the Michigan Business Corporation Act, and
(iv) any transaction from which the director derived an improper personal
benefit. No amendment to or repeal of this Article VIII, and no
modification to its provisions by law, shall apply to, or have any effect
upon, the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment, repeal or modification.
Article IX of the Articles of Incorporation reads:
Each director and each officer of the Corporation shall be
indemnified by the Corporation to the fullest extent permitted by law
against expenses (including attorneys' fees), judgments, penalties, fines
and amounts paid in settlement actually and reasonably incurred by him or
her in connection with the defense of any proceeding in which he or she
was or is a party or is threatened to be made a party by reason of being
or having been a director or an officer of the Corporation. Such right of
indemnification is not exclusive of any other rights to which such
director or officer may be entitled under any now or hereafter existing
statute, any other provision of these Articles, bylaw, agreement, vote of
shareholders or otherwise. If the Business Corporation Act of the State
of Michigan is amended after approval by the shareholders of this Article
IX to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted
by the Business Corporation Act of the State of Michigan, as so amended.
Any repeal or modification of this Article IX by the shareholders of the
Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification.
Sections 561 through 571 of the Michigan Business Corporation Act
provide CMS Energy with the power to indemnify directors, officers,
employees and agents against certain expenses and payments, and to
purchase and maintain insurance on behalf of directors, officers,
employees and agents.
Officers and directors are covered within specified monetary limits
by insurance against certain losses arising from claims made by reason of
their being directors or officers of CMS Energy or of CMS Energy's
subsidiaries and CMS Energy's officers and directors are indemnified
against such losses by reason of their being or having been directors or
officers of another corporation, partnership, joint venture, trust or
other enterprise at CMS Energy's request. In addition, CMS Energy has
indemnified each of its present directors by contracts that contain
affirmative provisions essentially similar to those in sections 561
through 571 of the Michigan Business Corporation Act summarized above.
ITEM 16. EXHIBITS.
Exhibit No.
(1) - Form of Distribution Agreement.
(4)(a)(i) - Indenture dated as of January 15, 1994 between
CMS Energy and The Chase Manhattan Bank, as Trustee,
relating to the Notes. (Designated in CMS Energy's
Form 8-K dated March 29, 1994, File No. 1-9513, as
Exhibit (4)(a).)
(4)(a)(ii) - First Supplemental Indenture dated as of January 20,
1994 between CMS Energy and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as Exhibit (4)(b).)
(4)(a)(iii) - Second Supplemental Indenture dated as of March 19, 1996
between CMS Energy and The Chase Manhattan Bank, as
Trustee. (Designated in CMS Energy's Form 10-Q for the
quarter ended March 31, 1996, File No. 9-9513, as
Exhibit (4).)
(4)(a)(iv) - Third Supplemental Indenture dated as of March 17, 1997
between CMS Energy and The Chase Manhattan Bank, as
Trustee (Designated in CMS Energy's Form 8-K dated May
1, 1997, File No. 9-9513, as Exhibit (4)(a)(iv).)
(4)(a)(v) - Form of Fourth Supplemental Indenture
(5) - Opinion of Counsel.
(12) - Statement regarding computation of ratio of earnings to
fixed charges.
(15) - Letter regarding unaudited interim financial
information.
(23)(a) - Consent of Counsel is contained in Exhibit 5 hereto.
(23)(b) - Consent of Arthur Andersen LLP.
(24) - Powers of Attorney.
(25) - Form T-1, Statement of Eligibility of Trustee.
Exhibits listed above which have been filed with the
Securities and Exchange Commission are incorporated herein by reference
with the same effect as if filed with this registration statement.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; (iii) To include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; provided, however, that (i) and
(ii) do not apply if the registration statement is on Form S-3 or Form S-
8, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that 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.
_____________________
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dearborn, and State of Michigan,
on the 21st day of August, 1997.
CMS ENERGY CORPORATION
By /s/ A. M. Wright
____________________
Alan M. Wright
Senior Vice President,
Chief Financial Officer
and Treasurer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons
in the capacities on the 21st day of August, 1997.
Name
____
(i) Principal executive officer:
Chairman of the Board,
Chief Executive Officer
/s/ William T. McCormick, Jr. and Director
________________________________
(William T. McCormick, Jr.)
(ii) Principal financial officer:
Senior Vice President,
/s/ A. M. Wright Chief Financial Officer
________________________________ and Treasurer
(Alan M. Wright)
(iii) Controller or principal accounting officer:
/s/ P. D. Hopper Senior Vice President,
_______________________________ Controller and Chief
(Preston D. Hopper) Accounting Officer
* Director
_______________________________
(John M. Deutch)
* Director
_______________________________
(James J. Duderstadt)
* Director
_______________________________
(Kathleen R. Flaherty)
* Director
_______________________________
(Victor J. Fryling)
* Director
_______________________________
(Earl D. Holton)
* Director
_______________________________
(William U. Parfet)
* Director
_______________________________
(Percy A. Pierre)
* Director
______________________________
(Kenneth Whipple)
* Director
______________________________
(John B. Yasinsky)
*By /s/ A. M. Wright
__________________________
Alan M. Wright
Attorney-in-fact