AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 7, 2004
REGISTRATION NO. 333-51932
333-51932-01
333-51932-02
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
CMS ENERGY CORPORATION CMS ENERGY TRUST IV CMS ENERGY TRUST V
(EXACT NAME OF REGISTRANT (EXACT NAME OF REGISTRANT (EXACT NAME OF REGISTRANT
AS SPECIFIED IN ITS CHARTER) AS SPECIFIED IN ITS CHARTER) AS SPECIFIED IN ITS CHARTER)
MICHIGAN DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
38-2726431 TO BE APPLIED FOR TO BE APPLIED FOR
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO. 38-6776930)
ONE ENERGY PLAZA ONE ENERGY SOUTH ONE ENERGY PLAZA
JACKSON, MICHIGAN 49201 JACKSON, MICHIGAN 49201 JACKSON, MICHIGAN 49201
(517) 788-0351 (517) 788-0351 (517) 788-0351
(ADDRESS, INCLUDING ZIP CODE, AND (ADDRESS, INCLUDING ZIP CODE, AND (ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER, INCLUDING AREA CODE, TELEPHONE NUMBER, INCLUDING AREA CODE, TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL OFFICES) OF REGISTRANT'S PRINCIPAL OFFICES) OF REGISTRANT'S PRINCIPAL OFFICES)
THOMAS J. WEBB THOMAS J. WEBB THOMAS J. WEBB
EXECUTIVE VICE PRESIDENT, EXECUTIVE VICE PRESIDENT, EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER CHIEF FINANCIAL OFFICER CHIEF FINANCIAL OFFICER
CMS ENERGY CORPORATION CMS ENERGY CORPORATION CMS ENERGY CORPORATION
ONE ENERGY PLAZA ONE ENERGY PLAZA ONE ENERGY PLAZA
JACKSON, MICHIGAN 49201 JACKSON, MICHIGAN 49201 JACKSON, MICHIGAN 49201
(517) 788-0351 (517) 788-0351 (517) 788-0351
(NAME, ADDRESS, INCLUDING ZIP CODE, (NAME, ADDRESS, INCLUDING ZIP CODE, (NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA AND TELEPHONE NUMBER, INCLUDING AREA AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE) CODE, OF AGENT FOR SERVICE) CODE, OF AGENT FOR SERVICE)
-------------------------
It is respectfully requested that the Commission send copies of all
notices, orders and communications to:
ROBERT C. SHROSBREE, ESQ.
ASSISTANT GENERAL COUNSEL
CMS ENERGY CORPORATION
ONE ENERGY PLAZA
JACKSON, MICHIGAN 49201
(517) 788-0351
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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. |_|
THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(C) OF THE SECURITIES ACT OF 1933 OR ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(C), MAY
DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion, dated September 7, 2004
CMS ENERGY CORPORATION
CMS ENERGY COMMON STOCK
SENIOR DEBENTURES
SUBORDINATED DEBENTURES
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
GUARANTEES
AND
CMS ENERGY TRUST IV
CMS ENERGY TRUST V
TRUST PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CMS ENERGY CORPORATION
OFFERING PRICE: $2,000,000,000
--------------------------
We may offer, from time to time:
- shares of CMS Energy Common Stock,
- unsecured senior or subordinated debt securities consisting of
debentures, convertible debentures, notes and other unsecured evidence
of indebtedness,
- stock purchase contracts to purchase CMS Energy Common Stock,
- stock purchase units, each representing ownership of a stock purchase
contract and unsecured senior or subordinated debt securities or trust
preferred securities or debt obligations of third parties, including
U.S. Treasury Securities, securing the holder's obligation to purchase
the CMS Energy Common Stock under the stock purchase contract, or any
combination of the above, and
- guarantees of CMS Energy with respect to Trust Preferred Securities of
CMS Energy Trusts IV and V.
For each type of security listed above, the amount, price and terms will be
determined at or prior to the time of sale.
CMS Energy Trust IV and CMS Energy Trust V, which are Delaware business trusts,
may offer trust preferred securities. The trust preferred securities represent
preferred undivided beneficial interests in the assets of CMS Energy Trust IV
and CMS Energy Trust V in amounts, at prices and on terms to be determined at or
prior to the time of sale.
We will provide the specific terms of these securities in an accompanying
prospectus supplement or supplements. You should read this prospectus and the
accompanying prospectus supplement or supplements carefully before you invest.
THESE SECURITIES INVOLVE RISK. SEE "RISK FACTORS" ON PAGE 5.
CMS Energy Common Stock is traded on the New York Stock Exchange under the
symbol "CMS". CMS Energy Common Stock sold pursuant to a prospectus supplement
or supplements accompanying this prospectus will also be listed for trading on
the New York Stock Exchange, subject to official notice of issuance.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
We intend to sell these securities through underwriters, dealers, agents or
directly to a limited number of purchasers. The names of, and any securities to
be purchased by or through, these parties, the compensation of these parties and
other special terms in connection with the offering and sale of these securities
will be provided in the related prospectus supplement or supplements.
This prospectus may not be used to consummate sales of any of these securities
unless accompanied by a prospectus supplement.
The date of this prospectus is September 7, 2004.
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND ANY INFORMATION
OR REPRESENTATION NOT CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY CMS ENERGY OR ANY UNDERWRITER, DEALER OR AGENT.
THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
TO WHICH THEY RELATE OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
TABLE OF CONTENTS
PAGE
----
Summary ...................................................................................................2
Where to Find Information .................................................................................2
CMS Energy Corporation ....................................................................................4
CMS Energy Trusts .........................................................................................4
Risk Factors ..............................................................................................5
Use of Proceeds ...........................................................................................5
Ratio of Earnings to Fixed Changes and Ratio of Earnings to Fixed Changes
and Preferred Stock Dividends .........................................................................6
Description of Securities .................................................................................7
Effect of Obligations Under the Debt Securities and Guarantees............................................23
Plan of Distribution .....................................................................................26
Legal Opinions ...........................................................................................29
Experts ..................................................................................................29
SUMMARY
This prospectus is part of a registration statement on Form S-3 that we
filed with the Securities and Exchange Commission utilizing a "shelf"
registration process. Under this shelf process, we may sell any combination of
securities described in this prospectus in one or more offerings, up to a total
dollar amount of $2,000,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell securities, we
will provide a prospectus supplement containing specific information about the
terms of that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
below under the heading "Where To Find More Information."
WHERE TO FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC under
File No. 1-9513. Our SEC filings are also available over the Internet at the
SEC's web site at http://www.sec.gov. You may also read and copy any document we
file at the SEC's public reference room at 450 Fifth Street N.W., Room 1024,
Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more
information on the public reference rooms and their copy charges. You may also
inspect our SEC reports and other information at the New York Stock Exchange, 20
Broad Street, New York, New York 10005. You can find additional information
about us, including our Annual Report on Form 10-K/A for the year ended December
31, 2003 and our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2004 and June 30, 2004, on our Web site at http://www.cmsenergy.com. The
information on this Web site is not a part of this prospectus.
2
We have securities listed on the New York Stock Exchange. You can inspect
and copy reports and other information about us at the NYSE's offices at 20
Broad Street, New York, New York 10005.
We have not included separate financial statements of the Trusts. We and the
Trusts do not consider that such financial statements would be material to
holders of Trust Preferred Securities because each Trust is a newly organized
special purpose entity, has no operating history and no independent operations.
The Trusts are not currently involved in and don't anticipate being involved in
any activity other than as described under "CMS Energy Trusts". Further, we
believe that financial statements of the Trusts are not material to the holders
of the Trust Preferred Securities since we will guarantee the Trust Preferred
Securities. Holders of the Trust Preferred Securities, with respect to the
payment of distributions and amounts upon liquidation, dissolution and
winding-up, are at least in the same position vis-a-vis the assets of CMS Energy
Corporation ("CMS Energy") as a preferred stockholder of CMS Energy. We
beneficially own all of the undivided beneficial interests in the assets of the
Trusts (other than the beneficial interests represented by the Trust Preferred
Securities). See "CMS Energy Trusts," "Description of Securities -- Trust
Preferred Securities" and "Description of Securities -- The Guarantees." In
future filings under the Exchange Act, there will be an audited footnote to our
annual financial statements stating that the Trusts are wholly-owned by CMS
Energy, that the sole assets of the Trusts are the Senior Debentures or the
Subordinated Debentures of CMS Energy having a specified aggregate principal
amount, and, considered together, the back-up undertakings, including the
Guarantees, constitute a full and unconditional guarantee by CMS Energy of the
Trusts' obligations under the Trust Preferred Securities issued by the Trusts.
We are "incorporating by reference" information into this registration
statement. This means that we are disclosing important information to you when
we refer you to another document that we filed separately with the SEC.
Information incorporated by reference is considered to be part of this
prospectus, unless the information is updated by information in this prospectus.
This prospectus incorporates by reference the documents listed below. We
encourage you to read these additional documents because these documents contain
important information about us and our finances.
SEC FILINGS
(FILE NO. 1-9513) PERIOD/DATE
----------------- -----------
- Annual Report on Form 10-K/A Year ended December 31, 2003
- Quarterly Reports on Form 10-Q Quarters ended March 31, 2004 and June 30, 2004
- Current Reports on Form 8-K Filed January 22, 2004, March 8, 2004,
April 14, 2004, June 3, 2004, August
20, 2004, August 31, 2004 and September 1,
2004
The documents we have filed with the SEC after the date of this prospectus
and prior to the termination of the offering made by this prospectus are also
incorporated by reference into this prospectus. Any statement contained in such
document will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus or any
other subsequently filed document modifies or supersedes such statement.
This prospectus, which is part of the offering registration statement, does
not contain all of the information found in the offering registration statement
including various exhibits and schedules. We are incorporating by reference the
offering registration statement.
We will provide, upon your oral or written request, a copy of any or all of
the information that has been incorporated by reference into the prospectus but
not delivered with the prospectus.
You may request copies of these filings, including the registration
statement, at no cost, by writing or telephoning CMS Energy at the following
address:
CMS Energy Corporation
Attn: Office of the Secretary
One Energy Plaza
Jackson, Michigan 49201
Telephone: (517) 788-0531
3
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information that is different from this information.
CMS ENERGY CORPORATION
We are an integrated energy company with a business strategy focused
primarily in Michigan. We are the parent holding company of Consumers Energy
Company ("Consumers") and CMS Enterprises Company ("Enterprises"). Consumers is
a combination electric and gas utility company serving Michigan's Lower
Peninsula. Enterprises, through various subsidiaries and equity investments, is
engaged in domestic and international diversified energy businesses including:
independent power production and natural gas transmission, storage and
processing. We manage our businesses by the nature of services each provides and
operate principally in three business segments: electric utility, gas utility,
and enterprises.
CMS ENERGY TRUSTS
CMS Energy Trust IV and CMS Energy Trust V are statutory business trusts
formed under the Delaware Business Trust Act (the "Trust Act") (each, a "Trust"
and collectively, the "Trusts") pursuant to: (i) a trust agreement executed by
CMS Energy, as sponsor, and the trustees of the Trusts (the "CMS Trustees"); and
(ii) the filing of a certificate of trust with the Secretary of State of the
State of Delaware. At the time of public issuance of Trust Preferred Securities,
each trust agreement will be amended and restated in its entirety (as so amended
and restated, the "Trust Agreement") and will be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). CMS
Energy will directly or indirectly acquire common securities of each Trust (the
"Common Securities" and, together with the Trust Preferred Securities, the
"Trust Securities") in an aggregate liquidation amount equal to approximately 3%
for the total capital of the Trust. Each Trust exists for the exclusive purposes
of:
- issuing the Trust Preferred Securities and Common Securities
representing undivided beneficial interests in the assets of the
Trust;
- investing the gross proceeds of the Trust Securities in the Senior
Debentures or Subordinated Debentures; and
- engaging in only those other activities necessary or incidental
thereto. Each Trust has a term of approximately 30 years, but may
terminate earlier as provided in the Trust Agreement.
The undivided common beneficial interests in the Trust will be owned by CMS
Energy. The proceeds from the offering of the Trust Preferred Securities and the
sale of the Common Securities may be contributed by the Trust to purchase from
CMS Energy Senior Debentures or Subordinated Debentures in an aggregate
principal amount equal to the aggregate liquidation preference of the Trust
Securities, bearing interest at an annual rate equal to the annual distribution
rate of such Trust Securities and having certain redemption terms which
correspond to the redemption terms for the Trust Securities. The Senior
Debentures will rank on an equal basis with all other unsecured debt of CMS
Energy except subordinated debt. The Subordinated Debentures will rank
subordinate in right of payment to all of CMS Energy's Senior Indebtedness (as
defined herein). Distributions on the Trust Securities may not be made unless
the Trust receives corresponding interest payments on the Senior Debentures or
the Subordinated Debentures from CMS Energy. CMS Energy will irrevocably
guarantee, on a senior or subordinated basis, as applicable, and to the extent
set forth therein, with respect to each of the Trust Securities, the payment of
distributions, the redemption price, including all accrued or deferred and
unpaid distributions, and payment on liquidation, but only to the extent of
funds on hand. Each Guarantee will be unsecured and will be either equal to or
subordinate to, as applicable, all Senior Indebtedness, of CMS Energy. Upon the
occurrence of certain events (subject to the conditions to be described in an
accompanying prospectus
4
supplement) the Trust may be liquidated and the holders of the Trust Securities
could receive Senior Debentures or Subordinated Debentures in lieu of any
liquidating cash distribution.
Pursuant to the Trust Agreement, the number of CMS Trustees will initially
be three. Two of the CMS Trustees (the "Administrative Trustees") will be
persons who are employees or officers of or who are affiliated with CMS Energy.
The third trustee will be a financial institution that is unaffiliated with CMS
Energy, which trustee will serve as property trustee under the Trust Agreement
and as indenture trustee for the purposes of compliance with the provisions of
the Trust Indenture Act (the "Property Trustee"). Initially, either The Bank of
New York, a New York banking corporation, or J.P. Morgan Trust Company, N.A, a
national banking association, will be the Property Trustee until removed or
replaced by the holder of the Common Securities. For the purpose of compliance
with the provisions of the Trust Indenture Act, The Bank of New York or J.P.
Morgan Trust Company, N.A. will also act as trustee (each a "Guarantee Trustee"
and collectively the "Guarantee Trustees"). The Bank of New York (Delaware) will
act as the Delaware Trustee for the purposes of the Trust Act, until removed or
replaced by the holder of the Common Securities. See "Description of Securities
- -- The Guarantees."
Each Property Trustee will hold title to the applicable Debt Securities for
the benefit of the holders of the Trust Securities and each Property Trustee
will have the power to exercise all rights, powers and privileges under the
applicable indentures (as defined herein) as the holder of the Debt Securities.
In addition, each Property Trustee will maintain exclusive control of a
segregated non-interest bearing bank account (the "Property Account") to hold
all payments made in respect of the Debt Securities for the benefit of the
holders of the Trust Securities. Each Property Trustee will make payments of
distributions and payments on liquidation, redemption and otherwise to the
holders of the Trust Securities out of funds from the Property Account. The
Guarantee Trustees will hold the Guarantees for the benefit of the holders of
the Trust Securities. CMS Energy, as the direct or indirect holder of all the
Common Securities, will have the right to appoint, remove or replace any CMS
Trustee and to increase or decrease the number of CMS Trustees; provided, that
the number of CMS Trustees shall be at least three, a majority of which shall be
Administrative Trustees. CMS Energy will pay all fees and expenses related to
the Trusts and the offering of the Trust Securities.
The rights of the holders of the Trust Preferred Securities, including
economic rights, rights to information and voting rights, are set forth in the
Trust Agreement, the Trust Act and the Trust Indenture Act.
The trustee in the State of Delaware is The Bank of New York (Delaware),
White Clay Center, Route 273, Newark, Delaware 19711.
The principal place of business of each Trust shall be c/o CMS Energy
Corporation, One Energy Plaza, Jackson, Michigan 49201.
RISK FACTORS
Before acquiring any of the securities that may be offered hereby, you
should carefully consider the risks discussed in the section of our Form 10-Q,
filed August 6, 2004, for the quarter year ended June 30, 2004, entitled
"Forward-Looking Statements and Risk Factors," which is incorporated in this
document by reference. You should also consider the risk factors listed in the
accompanying prospectus supplement or supplements and you should read this
prospectus and the accompanying prospectus supplement or supplements carefully
before you invest.
USE OF PROCEEDS
The proceeds received by each of the Trusts from the sale of its Trust
Preferred Securities or the Common Securities will be invested in the Senior
Debentures or the Subordinated Debentures. As will be more specifically set
forth in the applicable prospectus supplement, we will use such borrowed amounts
and the net proceeds from the sale of CMS Energy Common Stock, Stock Purchase
Contracts, Stock Purchase Units and any Senior Debentures or Subordinated
Debentures offered hereby for our general corporate purposes, including capital
expenditures, investment in subsidiaries, working capital and repayment of debt.
5
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges and the ratio of earnings to combined
fixed charges and preferred stock dividends for the six months ended June 30,
2004 and each of the years ended December 31, 1999 through 2003 is as follows:
YEAR ENDED DECEMBER 31,
----------------------
SIX MONTHS ENDED
JUNE 30, 2004 2003 2002 2001 2000 1999
---------------- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges.......... --(1) --(2) --(3) --(4) --(5) 1.33
Ratio of earnings to combined fixed charges
and preferred stock dividends............. --(1) --(2) --(6) --(7) --(8) 1.28
- ----------
(1) For the six months ended June 30, 2004, fixed charges exceeded earnings by
$47 million. Earnings as defined include $125 million of asset impairment
charges.
(2) For the year ended December 31, 2003, fixed charges exceeded earnings by
$59 million. Earnings as defined include $95 million of asset impairment
charges.
(3) For the year ended December 31, 2002, fixed charges exceeded earnings by
$475 million. Earnings as defined include $602 million of asset impairment
charges.
(4) For the year ended December 31, 2001, fixed charges exceeded earnings by
$393 million. Earnings as defined include $323 million of asset impairment
charges.
(5) For the year ended December 31, 2000, fixed charges exceeded earnings by
$225 million. Earnings as defined include a $329 million pretax impairment
loss on the Loy Yang investment.
(6) For the year ended December 31, 2002, fixed charges exceeded earnings by
$472 million. Earnings as defined include $602 million of asset impairment
charges.
(7) For the year ended December 31, 2001, fixed charges exceeded earnings by
$392 million. Earnings as defined include $323 million of asset impairment
charges.
(8) For the year ended December 31, 2000, fixed charges exceeded earnings by
$224 million. Earnings as defined include a $329 million pretax impairment
loss on the Loy Yang investment.
For the purpose of computing these ratios, earnings represent net income before
income taxes, net interest charges and the estimated interest portion of lease
rentals and distributed income of equity method investees.
6
DESCRIPTION OF SECURITIES
INTRODUCTION
Specific terms of the shares of Common Stock, par value $.01 per share ("CMS
Energy Common Stock"), unsecured senior debt securities (the "Senior
Debentures") and unsecured subordinated debt securities (the "Subordinated
Debentures") (individually a "Debt Security" and collectively the "Debt
Securities") consisting of debentures, convertible debentures, notes and other
unsecured evidence of indebtedness, Stock Purchase Contracts (the "Stock
Purchase Contracts") to purchase CMS Energy Common Stock, Stock Purchase Units
(the "Stock Purchase Units"), each representing ownership of a Stock Purchase
Contract and Debt Securities, or Trust Preferred Securities or debt obligations
of third parties, including U.S. Treasury Securities, securing the holder's
obligation to purchase the CMS Energy Common Stock under the Stock Purchase
Contract, or any combination of the foregoing, irrevocable guarantees
(individually a "Guarantee" and collectively "Guarantees") of CMS Energy, on a
senior or subordinated basis as applicable, and to the extent set forth therein,
with respect to each of the Trust Securities, the payment of distributions, the
redemption price, including all accrued or deferred and unpaid distributions,
and payment on liquidation, but only to the extent of fund on hand, and trust
preferred securities (the "Trust Preferred Securities") representing preferred
undivided beneficial interests in the assets of the Trust, in respect of which
this prospectus is being delivered (collectively, the "Offered Securities"),
will be set forth in an accompanying prospectus supplement or supplements,
together with the terms of the offering of the Offered Securities, the initial
price thereof and the net proceeds from the sale thereof. The prospectus
supplement will set forth with regard to the particular Offered Securities,
without limitation, the following: (i) in the case of Debt Securities, the
designation, aggregate principal amount, denomination, maturity, premium, if
any, any exchange, conversion, redemption or sinking fund provisions, interest
rate (which may be fixed or variable), the time or method of calculating
interest payments, the right of CMS Energy, if any, to defer payment or interest
on the Debt Securities and the maximum length of such deferral, put options, if
any, public offering price, ranking, any listing on a securities exchange and
other specific terms of the offering; (ii) in the case of CMS Energy Common
Stock, the designation, number of shares, public offering price and other
specific terms of the Offering, from the sale thereof; (iii) in the case of
Trust Preferred Securities, the designation, number of shares, liquidation
preference per security, initial public offering price, any listing on a
securities exchange, dividend rate (or method of calculation thereof), dates on
which dividends shall be payable and dates from which dividends shall accrue,
any voting rights, any redemption, exchange, conversion or sinking fund
provisions and any other rights, preferences, privileges, limitations or
restrictions relating to a specific series of the Trust Preferred Securities
including a description of the Guarantee (as defined herein), as the case may
be; and (iv) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any Debt Securities, Trust Preferred Securities, or
debt obligations of third parties securing the holders obligation to purchase
CMS Energy Common Stock under the Stock Purchase Contracts, and the terms of the
offering and sale thereof.
CAPITAL STOCK
The following summary of certain rights of the holders of CMS Energy capital
stock does not purport to be complete and is qualified in its entirety by
express reference to the Restated Articles of Incorporation of CMS Energy (the
"Articles of Incorporation") and the By-Laws of CMS Energy, which are
incorporated into this prospectus by reference. See "Where You Can Find More
Information." A copy of the By-laws has been previously filed with the SEC. The
Articles of Incorporation are available on our website at
http://www.cmsenergy.com.
The authorized capital stock of CMS Energy consists of:
- 350 million shares of CMS Energy Common Stock; and
- 10 million shares of CMS Energy Preferred Stock, par value $0.01 per
share ("Preferred Stock").
As of August 31, 2004, we had 5,000,000 shares of 4.50% Cumulative
Convertible Preferred Stock and 161,819,124 shares of CMS Energy Common Stock
issued and outstanding.
7
COMMON STOCK
DIVIDEND RIGHTS AND POLICY; RESTRICTIONS ON DIVIDENDS
Dividends on the common stock are paid at the discretion of the Board of
Directors based primarily upon the earnings and financial condition of CMS
Energy. Dividends are payable out of the assets of CMS Energy legally available
therefore.
In January 2003, the Board of Directors suspended the payment of CMS Energy
Common Stock dividends.
CMS Energy is a holding company and its assets consist primarily of
investments in its subsidiaries. As a holding company with no significant
operations of its own, the principal sources of its funds are dependent
primarily upon the earnings of its subsidiaries (in particular, Consumers),
borrowings and sales of equity. CMS Energy's ability to pay dividends on CMS
Energy Common Stock, is dependent primarily upon the earnings and cash flows of
its subsidiaries and the distribution or other payment of such earnings to CMS
Energy in the form of dividends, loans or advances and repayment of loans and
advances from CMS Energy. Accordingly, the ability of CMS Energy to pay
dividends on its capital stock will depend on the earnings, financial
requirements, contractual restrictions of the subsidiaries of CMS Energy (in
particular, Consumers) and other factors. CMS Energy's subsidiaries are separate
and distinct legal entities and have no obligation, contingent or otherwise, to
pay any amounts on the capital stock of CMS Energy or to make any funds
available therefor, whether by dividends, loans or other payments.
Dividends on capital stock of CMS Energy are limited by Michigan law to
legally available assets of CMS Energy. Distributions on CMS Energy Common Stock
may be subject to the rights of the holders, if any, of the Preferred Stock,
including the currently issued and outstanding 4.50% Cumulative Convertible
Preferred Stock. As long as the 4.50% Cumulative Convertible Preferred Stock is
outstanding, CMS Energy may not pay dividends on the CMS Energy Common Stock
unless certain conditions are met including, but not limited to, that dividends
on the 4.50% Cumulative Convertible Preferred Stock have been paid. See
"Preferred Stock -- Dividends".
CMS Energy is subject to the following contractual restrictions on its
ability to pay dividends:
CMS Energy's Senior Secured Credit Facility
Under the terms of our Fifth Amended and Restated Senior Credit Agreement we
have agreed that we will not, and will not permit certain of our subsidiaries,
directly or indirectly, to:
- declare or pay any dividend, payment or other distribution of assets,
properties, cash, rights, obligations or securities on account of any
shares of any class of CMS Energy Common Stock or the capital stock or
other ownership interests of certain subsidiaries (other than stock
splits and dividends payable solely in our non-convertible equity
securities (other than Redeemable Stock or Exchangeable Stock (as such
terms are defined in the senior debt indenture on August 3, 2004)) and
dividends and distributions made to us or certain of our
subsidiaries); or
- purchase, redeem, retire or otherwise acquire for value any such
capital stock or other ownership interests;
unless other than (i) pursuant to the terms of any class of our capital stock
issued and outstanding (and as in effect on August 3, 2004), any purchase or
redemption of our capital stock made by exchange for, or out of the proceeds of
the substantially concurrent sale of, our capital stock (other than Redeemable
Stock or Exchangeable Stock (as such terms are defined in the senior debt
indenture on August 3, 2004)) and (ii) payments made by us or certain
subsidiaries pursuant to our tax sharing agreement and (iii) after January 1,
2005 payments not to exceed certain amounts for any twelve-month period so long
as a certain amount of liquidity is held by CMS Energy.
SENIOR DEBT INDENTURE
Under the terms of the senior debt indenture we have the following issued
and outstanding securities: 7 5/8% Senior Unsecured Notes Due 2004, X-TRAS(SM)
Pass-Through Trust I Certificates Due 2005, 9.875% Senior
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Notes Due 2007, 7.5% Senior Notes Due 2009, 8.9% Senior Notes Due 2008, 8.5%
Senior Notes Due 2011, 3.375% Convertible Senior Notes Due 2023 and 7.75% Senior
Notes Due 2010. So long as any of such notes issued thereunder are outstanding
and until those notes are rated BBB- or above (or an equivalent rating) by S&P
and one other rating agency, at which time we will be permanently released from
the provisions of this limitation, we have agreed that we will not, and will not
permit any of our restricted subsidiaries, directly or indirectly, to:
- declare or pay any dividend or make any distribution on our capital
stock to the direct or indirect holders of our capital stock (except
dividends or distributions payable solely in our non-convertible
capital stock (as defined in the senior debt indenture) or in options,
warrants or other rights to purchase such non-convertible capital
stock and except dividends or other distributions payable to us or one
of our subsidiaries);
- purchase, redeem or otherwise acquire or retire for value any of our
capital stock; or
- purchase, repurchase, redeem, defease or otherwise acquire or retire
for value, prior to the schedule maturity or scheduled repayment
thereof, any of our subordinated indebtedness (each, for purposes of
the senior debt indenture, a "restricted payment"),
if at the time of any restricted payment described above (1) an event of default
under the senior debt indenture (or event that with the lapse of time or giving
of notice would constitute an event of default) has occurred and is continuing,
or would occur as a result of the restricted payment, or (2) after giving effect
to any restricted payment described above, the aggregate amount of all
restricted payments made since May 6, 1997 would exceed the sum of:
- $100 million;
- 100% of our consolidated net income from May 6, 1997 to the end of the
most recent fiscal quarter ending at least 45 days prior to the date
of the restricted payment (or, in the case of a deficit, minus 100% of
the deficit); and
- the aggregate net proceeds we have received for any issuance or sale
of, or contribution with respect to, our capital stock subsequent to
May 6, 1997.
General Term Note Indenture
Similarly, the indenture, dated as of January 15, 1994, as amended and
supplemented, between us and JPMorgan Chase Bank, as trustee, pursuant to which
we have issued our General Term Notes, Series D, Series E and Series F, provides
that so long as any general term notes issued thereunder are outstanding and
until the notes are rated BBB- or above (or an equivalent rating) by S&P and one
other rating agency, at which time we will be permanently released from the
provisions of this limitation, we have agreed that we will not, and will not
permit any of our restricted subsidiaries, directly or indirectly, to:
- declare or pay any dividend or make any distribution on our capital
stock to the direct or indirect holders of our capital stock (except
dividends or distributions payable solely in our non-convertible
capital stock (as defined in such indenture) or in options, warrants
or other rights to purchase such non-convertible capital stock and
except dividends or other distributions payable to us or one of our
subsidiaries); or
- purchase, redeem or otherwise acquire or retire for value any of our
capital stock (each, a "restricted payment");
if at the time of any restricted payment described above (1) an event of default
under such indenture (or event that with the lapse of time or giving of notice
would constitute an event of default) has occurred and is continuing, or would
occur as a result of the restricted payment, or (2) after giving effect to any
restricted payment described above, the aggregate amount of all restricted
payments made since September 30, 1993 would exceed the sum of:
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- $120 million;
- 100% of our 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 the restricted payment (or, in the case of a deficit, minus
100% of the deficit); and
- the aggregate net proceeds we have received for any issuance or sale
of, or contribution with respect to, our capital stock subsequent to
September 30, 1993.
The provisions described above do not prohibit (1) dividends or other
distributions in respect of capital stock issued in connection with the
acquisition of any business or assets by us where the payment of such dividends
or distributions are payable solely from the net earnings of such business or
assets, (2) any purchase or redemption of capital stock made by exchange for, or
out of the proceeds of the substantially concurrent sale of, our capital stock
(other than certain redeemable stock or exchangeable stock), (3) dividends paid
within 60 days after the date of declaration thereof if at the date of
declaration such dividends would have complied with the limitations described
above or (4) payments pursuant to the tax sharing agreement among us and our
subsidiaries.
TRUST PREFERRED SECURITIES
In June 1997, a CMS Energy affiliated trust issued $172.5 million of 7 3/4%
Convertible Quarterly Income Preferred Securities. The preferred securities are
convertible at the option of the holder into shares of CMS Energy Common Stock
at an initial conversion rate of 1.2255 shares of CMS Energy Common Stock for
each preferred security (equivalent to a purchase price of $40.80 per share of
CMS Energy Common Stock), subject to certain adjustments. We may, at our option,
cause the conversion rights of the holders of the preferred securities to expire
upon certain conditions.
Under the terms of the indenture, dated June 1, 1997, between us and The
Bank of New York, as trustee, as amended and supplemented, and the guarantee
agreement dated June 20, 1997 between us and The Bank of New York relating to
the preferred securities of CMS Energy Trust I pursuant to which the preferred
securities and the related 7 3/4% Convertible Subordinated Debentures due 2027
were issued, we have agreed that we will not, and will not cause any of our
subsidiaries to, declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of our
capital stock, if at such time:
- an event has occurred, of which we have actual knowledge, that with
the giving of notice or the lapse of time, or both, would constitute
an event of default and in respect of which we have not taken
reasonable steps to cure;
- we are in default with respect to the payment of any obligations under
the relevant guarantee agreement; or
- we have given notice of our selection of an extension period as
provided in such indenture with respect to the subordinated debentures
and have not rescinded such notice, or such extension period (or any
extension thereof) is continuing.
DIVIDEND RESTRICTIONS UNDER MICHIGAN LAW
Michigan law prohibits payment of a dividend or a repurchase of capital
stock if, after giving it effect, a corporation would not be able to pay its
debts as they become due in the usual course of business, or its total assets
would be less than the sum of its total liabilities plus, unless the Articles of
Incorporation provide otherwise, the amount that would be needed, if the
corporation were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the distribution (including the rights of
holders of preferred stock, if any).
VOTING RIGHTS
Each holder of CMS Energy Common Stock is entitled to one vote for each
share of CMS Energy Common Stock held by such holder on each matter voted upon
by the shareholders. Such right to vote is not cumulative. A
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majority of the votes cast by the holders of shares entitled to vote thereon is
sufficient for the adoption of any question presented, except that certain
provisions of the Articles of Incorporation relating to special shareholder
meetings, the removal, indemnification and liability of the Board of Directors
and the requirements for amending these provisions may not be amended, altered,
changed or repealed unless such amendment, alteration, change or repeal is
approved by the affirmative vote of at least 75% of the outstanding shares
entitled to vote thereon.
Under Michigan law, the approval of the holders of a majority of the
outstanding shares of CMS Energy Common Stock would be necessary for
authorizing, effecting or validating the merger or consolidation of CMS Energy
into or with any other corporation if such merger or consolidation would
adversely affect the powers or special rights of such CMS Energy Common Stock,
and to authorize any amendment to the Articles of Incorporation that would
increase or decrease the aggregate number of authorized shares of CMS Energy
Common Stock or alter or change the powers, preferences or special rights of the
shares of CMS Energy Common Stock so as to affect them adversely. The Articles
of Incorporation also provide that unless the vote or consent of a greater
number of shares shall then be required by law, the vote or consent of the
holders of a majority of the shares of CMS Energy Common Stock then outstanding
will be necessary for authorizing, effecting or validating the merger or
consolidation of CMS Energy into or with any other entity if such merger or
consolidation would adversely affect the powers or special rights of the CMS
Energy Common Stock, either directly by amendment to the Articles of
Incorporation or indirectly by requiring the holders of the CMS Energy Common
Stock to accept or retain, in such merger or consolidation, anything other than
(i) shares of such class or (ii) shares of the surviving or resulting
corporation, having, in either case, powers and special rights identical to
those of such commons stock prior to such merger or consolidation. The effect of
these provisions may be to permit the holders of a majority of the outstanding
shares of CMS Energy Common Stock to block any such merger or amendment which
would adversely affect the powers or special rights of holders of such shares of
CMS Energy Common Stock.
PREEMPTIVE RIGHTS
The Articles of Incorporation provide that holders of CMS Energy Common
Stock will have no preemptive rights to subscribe for or purchase any additional
shares of the capital stock of CMS Energy of any class now or hereafter
authorized, or Preferred Stock, bonds, debentures, or other obligations or
rights or options convertible into or exchangeable for or entitling the holder
or owner to subscribe for or purchase any shares of capital stock, or any rights
to exchange shares issued for shares to be issued.
LIQUIDATION RIGHTS
In the event of the dissolution, liquidation or winding up of CMS Energy,
whether voluntary or involuntary, after payment or provision for payment of the
debts and other liabilities of CMS Energy and after there shall have been paid
or set apart for the holders of Preferred Stock the full preferential amounts
(including any accumulated and unpaid dividends) to which they are entitled, the
holders of CMS Energy Common Stock will be entitled to receive, on a per share
basis, the assets of CMS Energy remaining for distribution to the holders of CMS
Energy Common Stock. Neither the merger or consolidation of CMS Energy into or
with any other corporation, nor the merger or consolidation of any other
corporation into or with CMS Energy nor any sale, transfer or lease of all or
any part of the assets of CMS Energy, shall be deemed to be a dissolution,
liquidation or winding up for the purposes of this provision.
Because CMS Energy has subsidiaries which have debt obligations and other
liabilities of their own, CMS Energy's rights and the rights of its creditors
and its stockholders to participate in the distribution of assets of any
subsidiary upon the latter's liquidation or recapitalization will be subject to
prior claims of the subsidiary's creditors, except to the extent that CMS Energy
may itself be a creditor with recognized claims against the subsidiary.
SUBDIVISION OR COMBINATION
If CMS Energy subdivides (by stock split, stock dividend or otherwise) or
combines (by reverse stock split or otherwise), the voting and liquidation
rights of shares of CMS Energy Common Stock will be appropriately adjusted so as
to avoid any dilution in aggregate voting or liquidation rights.
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EXCHANGES
The Articles of Incorporation do not provide for either the mandatory or
optional exchange or redemption of CMS Energy Common Stock.
TRANSFER AGENT AND REGISTRAR
CMS Energy Common Stock is transferable at Consumers Energy Company, One
Energy Plaza, Jackson, Michigan 49201. CMS Energy is the registrar and transfer
agent for CMS Energy Common Stock.
PREFERRED STOCK
The authorized Preferred Stock may be issued without the approval of the
holders of CMS Energy Common Stock in one or more series, from time to time,
with each such series to have such designation, powers, preferences and
relative, participating, optional or other special rights, voting rights, if
any, and qualifications, limitations or restrictions thereof, as shall be stated
in a resolution providing for the issue of any such series adopted by CMS
Energy's Board of Directors. The Articles of Incorporation provide that holders
of Preferred Stock will not have any preemptive rights to subscribe for or
purchase any additional shares of the capital stock of CMS Energy of any class
now or hereafter authorized, or any Preferred Stock, bonds, debentures or other
obligations or rights or options convertible into or exchangeable for or
entitling the holder or owner to subscribe for or purchase any shares of capital
stock. The future issuance of Preferred Stock may have the effect of delaying,
deterring or preventing a change in control of CMS Energy.
4.50% CUMULATIVE CONVERTIBLE PREFERRED STOCK
The Articles of Incorporation establish one series of preferred stock
designated as "4.50% Cumulative Convertible Preferred Stock" consisting of
5,000,000 shares with a liquidation preference of $50.00 per share (the
"Cumulative Convertible Preferred Stock"). The Cumulative Convertible Preferred
Stock ranks prior to any series of our CMS Energy Common Stock as to the payment
of dividends and distribution of assets upon dissolution, liquidation or winding
up of CMS Energy, and is convertible into shares of CMS Energy Common Stock. The
holders of the Cumulative Convertible Preferred Stock have no preemptive rights.
DIVIDENDS
Holders of shares of Cumulative Convertible Preferred Stock will be entitled
to receive, when, as and if declared by our board of directors out of funds
legally available for payment, cumulative cash dividends at the rate per annum
of 4.50% per share on the liquidation preference thereof of $50.00 per share
(equivalent to $2.25 per annum per share). Dividends on the Cumulative
Convertible Preferred Stock will be payable quarterly on March 1, June 1,
September 1 and December 1 of each year at such annual rate, and shall
accumulate from the most recent date as to which dividends shall have been paid
or, if no dividends have been paid, from the issue date of the Cumulative
Convertible Preferred Stock, whether or not in any dividend period or periods
there have been funds legally available for the payment of such dividends.
Accumulated unpaid dividends accrue and cumulate dividends at the annual rate of
4.50%.
As long as any Cumulative Convertible Preferred Stock is outstanding, we may
not pay dividends or distributions on, or purchase, redeem or otherwise acquire,
subject to certain exceptions, shares of the CMS Energy Common Stock unless all
accumulated and unpaid dividends on the Cumulative Convertible Preferred Stock
have been paid or set aside for payment.
LIQUIDATION PREFERENCE
In the event of our voluntary or involuntary liquidation, winding-up or
dissolution, holders of Cumulative Convertible Preferred Stock will be entitled
to receive and to be paid out of our assets available for distribution to our
stockholders, before any payment or distribution is made to holders of junior
stock (including CMS Energy Common Stock), a liquidation preference in the
amount of $50.00 per share of Cumulative Convertible Preferred Stock, plus
accumulated and unpaid dividends on the shares to the date fixed for
liquidation, winding-up or dissolution. If, upon our voluntary or involuntary
liquidation, winding-up or dissolution, the amounts payable with
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respect to the liquidation preference of the Cumulative Convertible Preferred
Stock and all parity stock are not paid in full, the holders of the Cumulative
Convertible Preferred Stock and the parity stock will share equally and ratably
in any distribution of our assets in proportion to the full liquidation
preference and accumulated and unpaid dividends to which they are entitled.
VOTING RIGHTS
Except as required by Michigan law and our Articles of Incorporation, the
holders of Cumulative Convertible Preferred Stock have no voting rights unless
dividends payable on the Cumulative Convertible Preferred Stock are in arrears
for six or more quarterly periods (whether or not consecutive). In that event,
the holders of the Cumulative Convertible Preferred Stock, voting as a single
class with the shares of any other preferred stock or preference securities
having similar voting rights that are exercisable, will be entitled at the next
regular or special meeting of our stockholders to elect two additional directors
(or one director if fewer than six directors comprise our board prior to
appointment) and the number of directors that comprise our board will be
increased by the number of directors so elected. These voting rights and the
terms of the directors so elected will continue until such time as the dividend
arrearage on the Cumulative Convertible Preferred Stock has been paid in full.
REDEMPTION
We cannot redeem shares of the Cumulative Convertible Preferred Stock.
MANDATORY CONVERSION
On or after December 5, 2008, we may, at our option, cause the Cumulative
Convertible Preferred Stock to be automatically converted into that number of
shares of CMS Energy Common Stock for each share of Cumulative Convertible
Preferred Stock equal to $50.00 (the liquidation preference) divided by the
applicable conversion rate. We may exercise our conversion right only if, for 20
trading days within any period of 30 consecutive trading days (including the
last trading day of such 30-day period), the closing price of the CMS Energy
Common Stock exceeds 130% of the then prevailing conversion price of the
Cumulative Convertible Preferred Stock.
CONVERSION RIGHTS
A holder of record of Cumulative Convertible Preferred Stock may convert its
shares of Cumulative Convertible Preferred Stock at any time into shares of CMS
Energy Common Stock under any of the following circumstances:
- during any calendar quarter (and only during such calendar quarter) if
the last reported sale price of CMS Energy Common Stock for at least
20 trading days during the period of 30 consecutive trading days
ending on the last trading day of the previous calendar quarter is
greater than or equal to 120% of the conversion price per share of CMS
Energy Common Stock on such last trading day;
- upon the occurrence of specified corporate transactions; and
- subject to certain exceptions, during the five business day period
immediately following any ten consecutive trading-day period in which
the trading price per share of Cumulative Convertible Preferred Stock
for each day of that period was less than 95% of the product of the
closing sale price of CMS Energy Common Stock and the applicable
conversion rate of such share of Cumulative Convertible Preferred
Stock; provided, however, a holder may not convert its shares of
Cumulative Convertible Preferred Stock if the average closing sale
price of CMS Energy Common Stock for such ten consecutive trading-day
period was between the then current conversion price on the Cumulative
Convertible Preferred Stock and 120% of the then applicable conversion
price on the Cumulative Convertible Preferred Stock.
For each share of Cumulative Convertible Preferred Stock surrendered for
conversion, holders will receive 5.0541 shares of CMS Energy Common Stock. This
represents an initial conversion price of $9.893 per share of CMS Energy Common
Stock. The conversion rate may be adjusted for certain reasons, but it will not
be adjusted for accumulated and unpaid dividends on the Preferred Stock.
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PRIMARY SOURCE OF FUNDS OF CMS ENERGY; RESTRICTIONS ON SOURCES OF DIVIDENDS
The ability of CMS Energy to pay (i) dividends on its capital stock and (ii)
its indebtedness, including the Debt Securities, depends and will depend
substantially upon timely receipt of sufficient dividends or other distributions
from its subsidiaries, in particular Consumers and Enterprises. Each of
Consumers' and Enterprises' ability to pay dividends on its common stock depends
upon its revenues, earnings and other factors. Consumers' revenues and earnings
will depend substantially upon rates authorized by the MPSC.
Consumers' Restated Articles of Incorporation ("Articles") provide two
restrictions on its payment of dividends on its common stock. First, prior to
the payment of any common stock dividend, Consumers must reserve retained
earnings after giving effect to such dividend payment of at least (i) $7.50 per
share on all then outstanding shares of its preferred stock, (ii) in respect to
its Class A Preferred Stock, 7.5% of the aggregate amount established by its
Board of Directors to be payable on the shares of each series thereof in the
event of involuntary liquidation of Consumers and (iii) $7.50 per share on all
then outstanding shares of all other stock over which its preferred stock and
Class A Preferred Stock do not have preference as to the payment of dividends
and as to assets. Second, dividend payments during the 12 month period ending
with the month the proposed payment is to be paid are limited to: (i) 50% of net
income available for the payment of dividends during the base period, if the
ratio of common stock and surplus to total capitalization and surplus for 12
consecutive calendar months within the 14 calendar months immediately preceding
the proposed dividend payment (the "base period"), adjusted to reflect the
proposed dividend, is less than 20%; and (ii) 75% of net income available for
the payment of dividends during the base period if the ratio of common stock and
surplus to total capitalization and surplus for the base period, adjusted to
reflect the proposed dividend, is at least 20% but less than 25%.
In addition, Consumers' indenture dated as of January 1, 1996, between
Consumers and The Bank of New York, as trustee (the "Preferred Securities
Indenture"), and certain preferred securities guarantees by Consumers dated
January 23, 1996, September 11, 1997 and October 25, 1999 (collectively, the
"Consumers Preferred Securities Guarantees"), in connection with which the 8.36%
Trust Originated Preferred Securities of Consumers Power Company Financing I,
the 8.20% Trust Originated Preferred Securities of Consumers Energy Company
Financing II, the 9 1/4% Trust Originated Preferred Securities of Consumers
Energy Company Financing III and the 9.00% Trust Preferred Securities of
Consumers Energy Company Financing IV (collectively, the "Consumers Trust
Preferred Securities") were issued, provide that Consumers shall not declare or
pay any dividend on, make any distributions with respect to, or redeem, purchase
or make a liquidation payment with respect to, any of its capital stock if (i)
there shall have occurred any event that would constitute an event of default
under the Preferred Securities Indenture or the trust agreements pursuant to
which the Consumers Trust Preferred Securities were issued, (ii) a default has
occurred with respect to its payment of any obligations under the Consumers
Preferred Securities Guarantees or certain Consumers common stock guarantees or
(iii) it gives notice of its election to extend the interest payment period on
the subordinated notes issued under the Preferred Securities Indenture, at any
time for up to 20 consecutive quarters, provided, however, Consumers may declare
and pay stock dividends where the dividend stock is the same stock as that on
which the dividend is being paid.
Consumers' ability to pay dividends is also restricted by several existing
loan agreements. The loan agreements are:
- The Amended and Restated Credit Agreement dated as of August 3, 2004
among Consumers, Bank One, N.A., as agent, and the financial
institutions named therein; and
- Term Loan Agreement dated as of November 7, 2003 among Consumers, Bank
One, N.A., as agent, and the financial institutions named therein.
Pursuant to these loan agreements, so long as there exists no event of
default under these agreements, Consumers may pay dividends in an aggregate
amount not to exceed $300 million during any calendar year.
On June 2, 2003, the MPSC issued a financing order authorizing the issuance
of $554 million of securitization bonds. The order would prohibit Consumers from
paying any extraordinary dividends to us until further order of the MPSC.
Pursuant to the order, extraordinary dividends are considered any amount over
and above Consumers'
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earnings. The order also directed that the securitization charges be designed
such that retail open access customers would pay a significantly smaller charge
than would full service customers. On July 1, 2003, Consumers filed a petition
for rehearing and clarification of certain portions of the order with the MPSC,
including the portion dealing with the design of the securitization charges. In
December 2003, the MPSC issued its order on rehearing which rejected our
requests for rehearing and clarification and remanded the proceeding to the
administrative law judge for additional proceedings.
In December 2003, the MPSC issued an order granting interim gas rate relief
in the amount of $19.34 million annually. In connection with this rate relief,
Consumers agreed to limit its dividends to CMS Energy to a maximum of $190
million annually during the period in which Consumers receives the interim
relief. The MPSC stated in its order that it was not determining at that time
whether dividend restrictions should continue after the issuance of a final
order.
Consumers' Articles also prohibit the payment of cash dividends on its
common stock if Consumers is in arrears on preferred stock dividend payments.
In addition, Michigan law prohibits payment of a dividend if, after giving
it effect, Consumers or Enterprises would not be able to pay its debts as they
become due in the usual course of business, or its total assets would be less
than the sum of its total liabilities plus, unless the Articles permit
otherwise, the amount that would be needed, if Consumers or Enterprises were to
be dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution. Currently, it is Consumers' policy to pay annual
dividends equal to 80% of its annual consolidated net income. Consumers' Board
of Directors reserves the right to change this policy at any time.
DEBT SECURITIES
The Debt Securities offered by this prospectus will be unsecured obligations
of CMS Energy and will be either senior or subordinated debt. Senior Debentures
will be issued under a senior debt indenture and Subordinated Debentures will be
issued under a subordinated debt indenture. The senior debt indenture and the
subordinated debt indenture are sometimes referred to in this prospectus
individually as an "indenture" and collectively as the "indentures."
The following briefly summarizes the material provisions of the indentures
and the Debt Securities. You should read the more detailed provisions of the
applicable indenture, including the defined terms, for provisions that may be
important to you. You should also read the particular terms of a series of Debt
Securities, which will be described in more detail in the applicable prospectus
supplement. Copies of the indentures may be obtained from CMS Energy or the
applicable trustee.
Unless otherwise provided in the applicable prospectus supplement, the
trustee under the senior debt indenture will be J.P. Morgan Trust Company, N.A
and the trustee under the subordinated debt indenture will be The Bank of New
York.
GENERAL
The indentures provide that Debt Securities of CMS Energy may be issued in
one or more series, with different terms, in each case as authorized from time
to time by CMS Energy.
Federal income tax consequences and other special considerations applicable
to any Debt Securities issued by CMS Energy at a discount will be described in
the applicable prospectus supplement.
Because CMS Energy is a holding company, the claims of creditors of CMS
Energy's subsidiaries will have a priority over CMS Energy's equity rights and
the rights of CMS Energy's creditors, including the holders of Debt Securities,
to participate in the assets of the subsidiary upon the subsidiary's
liquidation.
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The applicable prospectus supplement relating to any series of Debt
Securities will describe the following terms, where applicable:
- the title of the Debt Securities;
- whether the Debt Securities will be senior or subordinated debt;
- the total principal amount of the Debt Securities;
- the percentage of the principal amount at which the Debt Securities
will be sold and, if applicable, the method of determining the price;
- the maturity date or dates;
- the interest rate or the method of computing the interest rate;
- the date or dates from which any interest will accrue, or how such date
or dates will be determined, and the interest payment date or dates and
any related record dates;
- the location where payments on the Debt Securities will be made;
- the terms and conditions on which the Debt Securities may be redeemed
at the option of CMS Energy;
- any obligation of CMS Energy to redeem, purchase or repay the Debt
Securities at the option of a holder upon the happening of any event
and the terms and conditions of redemption, purchase or repayment;
- any provisions for the discharge of CMS Energy's obligations relating
to the Debt Securities by deposit of funds or United States government
obligations;
- whether the Debt Securities are to trade in book-entry form and the
terms and any conditions for exchanging the global security in whole or
in part for paper certificates;
- any material provisions of the applicable indenture described in this
prospectus that do not apply to the Debt Securities;
- any additional amounts with respect to the Debt Securities that CMS
Energy will pay to a non-United States person because of any tax,
assessment or governmental charge withheld or deducted and, if so, any
option of CMS Energy to redeem the Debt Securities rather than paying
these additional amounts; and
- any other specific terms of the Debt Securities.
CONCERNING THE TRUSTEES
Each of J.P. Morgan Trust Company, N.A, the trustee under the senior debt
indenture, and The Bank of New York, the trustee under the subordinated debt
indenture, is one of a number of banks with which CMS Energy and its
subsidiaries maintain ordinary banking relationships, including credit
facilities.
EXCHANGE AND TRANSFER
Debt Securities may be presented for exchange and registered Debt Securities
may be presented for registration of transfer at the offices and subject to the
restrictions set forth therein and in the applicable prospectus supplement
without service charge, but upon payment of any taxes or other governmental
charges due in connection therewith, subject to any limitations contained in the
applicable indenture. Debt Securities in bearer form and the coupons
appertaining thereto, if any, will be transferable by delivery.
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PAYMENT
Distributions on the Debt Securities in registered form will be made at the
office or agency of the applicable trustee in the Borough of Manhattan, the City
of New York or its other designated office. However, at the option of CMS
Energy, payment of any interest may be made by check or by wire transfer.
Payment of any interest due on Debt Securities in registered form will be made
to the persons in whose name the Debt Securities are registered at the close of
business on the record date for such interest payments. Payments made in any
other manner will be specified in the prospectus supplement.
EVENTS OF DEFAULT
Each indenture provides that events of default regarding any series of Debt
Securities will be:
- failure to pay required interest on any Debt Security of such series
for 30 days;
- failure to pay principal other than a scheduled installment payment or
premium, if any, on any Debt Security of such series when due;
- failure to make any required scheduled installment payment for 30 days
on Debt Securities of such series;
- failure to perform for 90 days after notice any other covenant in the
relevant indenture other than a covenant included in the relevant
indenture solely for the benefit of a series of Debt Securities other
than such series;
- certain events of bankruptcy or insolvency, whether voluntary or not;
or
- entry of final judgments against CMS Energy or Consumers for more than
$25,000,000 which remain undischarged or unbonded for 60 days or a
default resulting in the acceleration of indebtedness of CMS Energy or
Consumers of more than $25,000,000, and the acceleration has not been
rescinded or annulled within 10 days after written notice of such
default as provided in the applicable indenture.
Additional events of default may be prescribed for the benefit of the
holders of a particular series of Debt Securities and will be described in the
prospectus supplement relating to those Debt Securities.
If an event of default regarding Debt Securities of any series issued under
the indentures should occur and be continuing, either the trustee or the holders
of 25% in the principal amount of outstanding Debt Securities of such series may
declare each Debt Security of that series due and payable.
Holders of a majority in principal amount of the outstanding Debt Securities
of any series will be entitled to control certain actions of the trustee under
the indentures and to waive past defaults regarding such series. The trustee
generally will not be requested, ordered or directed by any of the holders of
Debt Securities, unless one or more of such holders shall have offered to the
trustee reasonable security or indemnity.
Before any holder of any series of Debt Securities may institute action for
any remedy, except payment on such holder's Debt Security when due, the holders
of not less than 25% in principal amount of the Debt Securities of that series
outstanding must request the trustee to take action. Holders must also offer and
give the satisfactory security and indemnity against liabilities incurred by the
trustee for taking such action.
CMS Energy is required to annually furnish the relevant trustee a statement
as to CMS Energy's compliance with all conditions and covenants under the
applicable indenture. Each indenture provides that the relevant trustee may
withhold notice to the holders of the Debt Securities of any series of any
default affecting such series, except payment on holders'
17
Debt Securities when due, if it considers withholding notice to be in the
interests of the holders of the Debt Securities of such series.
CONSOLIDATION, MERGER OR SALE OF ASSETS
Each indenture provides that CMS Energy may consolidate with or merge into,
or sell, lease or convey its property as an entirety or substantially as an
entirety to, any other corporation if the new corporation assumes the
obligations of CMS Energy under the Debt Securities and the indentures and is
organized and existing under the laws of the United States of America, any U.S.
state or the District of Columbia.
MODIFICATION OF THE INDENTURE
Each indenture permits CMS Energy and the relevant trustee to enter into
supplemental indentures without the consent of the holders of the Debt
Securities to establish the form and terms of any series of securities under the
indentures.
Each indenture also permits CMS Energy and the relevant trustee, with the
consent of the holders of at least a majority in total principal amount of the
Debt Securities of all series then outstanding and affected (voting as one
class), to change in any manner the provisions of the applicable indenture or
modify in any manner the rights of the holders of the Debt Securities of each
such affected series. CMS Energy and the relevant trustee may not, without the
consent of the holder of each Debt Security affected, enter into any
supplemental indenture to:
- change the time of payment of the principal;
- reduce the principal amount of such Debt Security;
- reduce the rate or change the time of payment of interest on such Debt
Security;
- reduce the amount payable on any securities issued originally at a
discount upon acceleration or provable in bankruptcy; or
- impair the right to institute suit for the enforcement of any payment
on any Debt Security when due.
In addition, no such modification may reduce the percentage in principal
amount of the Debt Securities of the affected series, the consent of whose
holders is required for any such modification or for any waiver provided for in
the applicable indenture.
Prior to the acceleration of the maturity of any Debt Security, the holders,
voting as one class, of a majority in total principal amount of the Debt
Securities with respect to which a default or event of default shall have
occurred and be continuing may on behalf of the holders of all such affected
Debt Securities waive any past default or event of default and its consequences,
except a default or an event of default in respect of a covenant or provision of
the applicable indenture or of any Debt Security which cannot be modified or
amended without the consent of the holder of each Debt Security affected.
DEFEASANCE, COVENANT DEFEASANCE AND DISCHARGE
Each indenture provides that, at the option of CMS Energy:
- CMS Energy will be discharged from all obligations in respect of the
Debt Securities of a particular series then outstanding (except for
certain obligations to register the transfer of or exchange the Debt
Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, to maintain paying agencies and to maintain
the trust described below); or
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- CMS Energy need not comply with certain restrictive covenants of the
relevant indenture (including those described under "Consolidation,
Merger or Sale of Assets").
If CMS Energy in each case irrevocably deposits in trust with the relevant
trustee money, and/or securities backed by the full faith and credit of the
United States which, through the payment of the principal thereof and the
interest thereon in accordance with their terms, will provide money in an amount
sufficient to pay all the principal and interest on the Debt Securities of such
series on the stated maturities of such Debt Securities in accordance with the
terms thereof.
To exercise this option, CMS Energy is required to deliver to the relevant
trustee an opinion of independent counsel to the effect that:
- the exercise of such option would not cause the holders of the Debt
Securities of such series to recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance, and
such holders will be subject to United States federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred; and
- in the case of a discharge as described above, such opinion is to be
accompanied by a private letter ruling to the same effect received from
the Internal Revenue Service, a revenue ruling to such effect
pertaining to a comparable form of transaction published by the
Internal Revenue Service or appropriate evidence that since the date of
the applicable indenture there has been a change in the applicable
federal income tax law.
In the event:
- CMS Energy exercises its option to effect a covenant defeasance with
respect to the Debt Securities of any series as described above,
- the Debt Securities of such series are thereafter declared due and
payable because of the occurrence of any event of default other than an
event of default caused by failing to comply with the covenants which
are defeased,
- the amount of money and securities on deposit with the relevant trustee
would be insufficient to pay amounts due on the Debt Securities of such
series at the time of the acceleration resulting from such event of
default,
CMS Energy would remain liable for such amounts.
GOVERNING LAW
Each indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of Michigan unless the laws of another
jurisdiction shall mandatorily apply.
SENIOR DEBENTURES
The Senior Debentures will be issued under the senior debt indenture and
will rank on an equal basis with all other unsecured debt of CMS Energy except
subordinated debt.
SUBORDINATED DEBENTURES
The Subordinated Debentures will be issued under the subordinated debt
indenture and will rank subordinated and junior in right of payment, to the
extent set forth in the subordinated debt indenture, to all "Senior
Indebtedness" (as defined below) of CMS Energy.
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If CMS Energy defaults in the payment of any distributions on any Senior
Indebtedness when it becomes due and payable after any applicable grace period,
then, unless and until the default is cured or waived or ceases to exist, CMS
Energy cannot make a payment on account of or redeem or otherwise acquire the
Subordinated Debentures. The subordinated debt indenture provisions described in
this paragraph, however, do not prevent CMS Energy from making sinking fund
payments in Subordinated Debentures acquired prior to the maturity of Senior
Indebtedness or, in the case of default, prior to such default and notice
thereof. If there is any insolvency, bankruptcy, liquidation or other similar
proceeding relating to CMS Energy, its creditors or its property, then all
Senior Indebtedness must be paid in full before any payment may be made to any
holders of Subordinated Debentures. Holders of Subordinated Debentures must
return and deliver any payments received by them, other than in a plan of
reorganization or through a defeasance trust as described above, directly to the
holders of Senior Indebtedness until all Senior Indebtedness is paid in full.
"Senior Indebtedness" means distributions on the following, whether
outstanding on the date of execution of the subordinated debt indenture or
thereafter incurred, created or assumed:
- indebtedness of CMS Energy for money borrowed by CMS Energy or
evidenced by debentures (other than the Subordinated Debentures),
notes, bankers' acceptances or other corporate debt securities or
similar instruments issued by CMS Energy;
- obligations of CMS Energy with respect to letters of credit;
- all indebtedness of others of the type referred to in the two preceding
clauses assumed by or guaranteed in any manner by CMS Energy or in
effect guaranteed by CMS Energy; or
- renewals, extensions or refundings of any of the indebtedness referred
to in the preceding three clauses unless, in the case of any particular
indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same or the
assumption or guarantee of the same, or pursuant to which the same is
outstanding, such indebtedness or such renewal, extension or refunding
thereof is not superior in right of payment to the subordinated debt
securities.
The subordinated debt indenture does not limit the total amount of Senior
Indebtedness that may be issued.
CERTAIN COVENANTS
If Debt Securities are issued to a Trust or a trustee of such Trust in
connection with the issuance of Trust Preferred Securities by such Trust, CMS
Energy will covenant that it will not, and it will not cause any of its
subsidiaries to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
CMS Energy's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of CMS Energy that
rank pari passu (in the case of Subordinated Debentures) with or junior (in the
case of Senior and Subordinated Debentures) to that Debt Security (other than
(a) any dividend, redemption, liquidation, interest, principal or guarantee
payment by CMS Energy where the payment is made by way of securities (including
capital stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, interest, principal or guarantee payment is being
made, (b) payments under the Guarantees, (c) purchases of CMS Energy Common
Stock related to the issuance of CMS Energy Common Stock under any of CMS
Energy's benefit plans for its directors, officers or employees, (d) as a result
of a reclassification of CMS Energy's capital stock or the exchange or
conversion of one series or class of CMS Energy's capital stock for another
series or class of CMS Energy's capital stock and (e) the purchase of fractional
interests in shares of CMS Energy's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged) if at such time (i) there shall have occurred any event of which CMS
Energy has actual knowledge that (a) with the giving of notice or the lapse of
time, or both, would constitute an event of default under the indentures and (b)
in respect of which CMS Energy shall not have taken reasonable steps to cure,
(ii) CMS Energy shall be in default with respect to its payment of any
obligations under the Guarantees or (iii) CMS Energy shall have given notice of
its selection of an Extension Period as provided in the indentures with respect
to the Debt Securities and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing. CMS Energy will
also covenant (i) for so long as Trust Preferred Securities are outstanding, not
to convert the Debt Securities except pursuant to a notice of conversion
delivered to the Conversion Agent (as defined in the
20
indentures) by a holder of Trust Preferred Securities, (ii) to maintain directly
or indirectly 100% ownership of the Common Securities, provided that certain
successor which are permitted pursuant to the indentures may succeed to CMS
Energy's ownership of the Common Securities, (iii) not to voluntarily terminate,
wind-up or liquidate such Trust, except (a) in connection with a distribution of
the Debt Securities to the holders of the Trust Preferred Securities in
liquidation of such Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement, (iv) to
maintain the reservation for issuance of the number of shares of CMS Energy
Common Stock that would be required from time to time upon the conversion of all
the Debt Securities then outstanding, (v) to use its reasonable efforts,
consistent with the terms and provisions of the Trust Agreement, to cause such
Trust to remain classified as a grantor trust and not as an association taxable
as a corporation for United States federal income tax purposes and (vi) to
deliver shares of CMS Energy Common Stock upon an election by the holders of the
Trust Preferred Securities to convert such Trust Preferred Securities into CMS
Energy Common Stock.
As part of the Guarantees, CMS Energy will agree that it will honor all
obligations described therein relating to the conversion or exchange of the
Trust Preferred Securities into or for CMS Energy Common Stock, Senior
Debentures or Subordinated Debentures.
CONVERSION RIGHTS
If the prospectus supplement provides, the Holders of Debt Securities may
convert such Debt Securities into CMS Energy Common Stock, as defined herein
(see "Description of Securities -- Common Stock"), at the option of the Holders
at the principal amount thereof, or of such portion thereof, at any time during
the period specified in the prospectus supplement, at the conversion price or
conversion rate specified in the prospectus supplement; except that, with
respect to any Debt Securities (or portion thereof) called for redemption, such
conversion right shall terminate at the close of business on the fifteenth day
prior to the date fixed for redemption of such Debt Security, unless CMS Energy
shall default in payment of the amount due upon redemption thereof.
The conversion privilege and conversion price or conversion rate will be
adjusted in certain events, including if CMS Energy:
- pays a dividend or makes a distribution in shares of CMS Energy Common
Stock;
- subdivides its outstanding shares of CMS Energy Common Stock into a
greater number of shares;
- combines its outstanding shares of CMS Energy Common Stock into a
smaller number of shares;
- pays a dividend or makes a distribution on its CMS Energy Common Stock
other than in shares of its CMS Energy Common Stock;
- issues by reclassification of its shares of CMS Energy Common Stock any
shares of its capital stock;
- issues any rights or warrants to all holders of shares of its CMS
Energy Common Stock entitling them (for a period expiring within 45
days, or such other period as may be specified in the prospectus
supplement) to purchase shares of CMS Energy Common Stock (or
Convertible Securities as defined in the indentures) at a price per
share less than the Average Market Price (as defined in the indentures)
per share for such CMS Energy Common Stock; or
- distributes to all holders of shares of its CMS Energy Common Stock any
assets or Debt Securities or any rights or warrants to purchase
securities, provided that no adjustment shall be made under the last
two bullet points above if the adjusted conversion price would be
higher than, or the adjusted conversion rate would be less than, the
conversion price or conversion rate, as the case may be, in effect
prior to such adjustment.
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CMS Energy may reduce the conversion price or increase the conversion rate,
temporarily or otherwise, by any amount but in no event shall such adjusted
conversion price or conversion rate result in shares of CMS Energy Common Stock
being issuable upon conversion of the Debt Securities if converted at the time
of such adjustment at an effective conversion price per share less than the par
value of the CMS Energy Common Stock at the time such adjustment is made. No
adjustments in the conversion price or conversion rate need be made unless the
adjustment would require an increase or decrease of at least one percent (1%) in
the initial conversion price or conversion rate. Any adjustment which is not
made shall be carried forward and taken into account in any subsequent
adjustment. The foregoing conversion provisions may be modified to the extent
set forth in the prospectus supplement.
TRUST PREFERRED SECURITIES
GENERAL
Each Trust may issue, from time to time, Trust Preferred Securities having
terms described in the applicable prospectus supplement. The Trust Agreement of
each Trust will authorize the establishment of no more than one series of Trust
Preferred Securities, having such terms, including distributions, redemption,
voting, liquidation rights and such other preferred, deferred or other special
rights or such rights or restrictions as shall be set forth therein or otherwise
established by the relevant Trust Trustees. Reference is made to the prospectus
supplement relating to the Trust Preferred Securities for specific terms,
including:
- the distinctive designation and the number of Trust Preferred
Securities to be offered which will represent undivided beneficial
interests in the assets of the Trust;
- the annual distribution rate and the dates or date upon which such
distributions will be paid, provided, however distributions on the
Trust Preferred Securities will be paid quarterly in arrears to holders
of Trust Preferred Securities as of a record date on which the Trust
Preferred Securities are outstanding;
- whether holders' can convert the Trust Preferred Securities into shares
of CMS Energy Common Stock;
- whether distributions on Trust Preferred Securities would be deferred
during any deferral of interest payments on the Debt Securities,
provided, however that no such deferral, including extensions, if any,
may exceed 20 consecutive quarters nor extend beyond the stated
maturity date of the Debt Securities, and at the end of any such
deferrals, CMS Energy shall make all interest payments then accrued or
deferred and unpaid (including any compounded interest);
- the amount of any liquidation preference;
- the obligation, if any, of the Trust to redeem Trust Preferred
Securities through the exercise of CMS Energy of an option on the
corresponding Debt Securities and the price or prices at which, the
period or periods within which and the terms and conditions upon which
Trust Preferred Securities shall be purchased or redeemed, in whole or
in part, pursuant to such obligation;
- the period or periods within which and the terms and conditions, if
any, including the price or prices or the rate or rates of conversion
or exchange and the terms and conditions of any adjustments thereof,
upon which the Trust Preferred Securities shall be convertible or
exchangeable at the option of the holder of the Trust Preferred
Securities or other property or cash;
- the voting rights, if any, of the Trust Preferred Securities in
addition to those required by law and in the Trust Agreement, or set
forth under a Guarantee (as defined below);
- the additional payments, if any, which the Trust will pay as a
distribution as necessary so that the net amounts reserved by the Trust
and distributable to the holders of the Trust Preferred Securities,
after all taxes, duties, assessments or governmental charges of
whatever nature
22
(other than withholding taxes) have been paid will not be less than the
amount that would have been reserved and distributed by the Trust, and
the amount the holders of the Trust Preferred Securities would have
reserved, had no such taxes, duties, assessments or governmental
charges been imposed;
- the terms and conditions, if any, upon which the Debt Securities may be
distributed to holders of Trust Preferred Securities; and
- any other relative rights, powers, preferences, privileges, limitations
or restrictions of the Trust Preferred Securities not inconsistent with
the Trust Agreement or applicable law. All Trust Preferred Securities
offered hereby will be irrevocably guaranteed by CMS Energy, on a
senior or subordinated basis, as applicable, and to the extent set
forth below under "The Guarantees." Any applicable federal income tax
considerations applicable to any offering of the Trust Preferred
Securities will be described in the prospectus supplement relating
thereto. The aggregate number of Trust Preferred Securities which the
Trust shall have authority to issue will be pursuant to the terms of
the Trust Agreement.
EFFECT OF OBLIGATIONS UNDER THE DEBT SECURITIES
AND THE GUARANTEES
As set forth in the Trust Agreement, the sole purpose of the Trust is to
issue the Trust Securities evidencing undivided beneficial interests in the
assets of each of the Trusts, and to invest the proceeds from such issuance and
sale to acquire directly the Debt Securities from CMS Energy.
As long as payments of interest and other payments are made when due on the
Debt Securities, such payments will be sufficient to cover distributions and
payments due on the Trust Securities because of the following factors:
- the aggregate principal amount of Debt Securities will be equal to the
sums of the aggregate stated liquidation amount of the Trust
Securities;
- the interest rate and the interest and other payment dates on the Debt
Securities will match the distribution rate and distribution and other
payment dates for the Trust Securities;
- CMS Energy shall pay all, and the Trust shall not be obligated to pay,
directly or indirectly, all costs, expenses, debt and obligations of
the Trust (other than with respect to the Trust Securities); and
- the Trust Agreement further provides that CMS Energy Trustees shall not
take or cause or permit the Trust to, among other things, engage in any
activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefore are available) and
other payments due on the Trust Preferred Securities (to the extent funds
therefor are available) are guaranteed by CMS Energy as and to the extent set
forth under "The Guarantees" below. If CMS Energy does not make interest
payments on the Debt Securities purchased by the Trust, it is expected that the
Trust will not have sufficient funds to pay distributions on the Trust Preferred
Securities. The Guarantees do not apply to any payment of distributions unless
and until the Trust has sufficient funds for the payment of distributions and
other payments on the Trust Preferred Securities only if and to the extent that
CMS Energy has made a payment of interest or principal on the Debt Securities
held by the Trust as its sole asset. The Guarantees, when taken together with
CMS Energy's obligations under the Debt Securities and the Indenture and its
obligations under the Trust Agreement, including its obligations to pay costs,
expenses, debts and liabilities of the Trust (other than with respect to the
Trust securities), provide a full and unconditional guarantee of amounts on the
Trust Preferred Securities.
If CMS Energy fails to make interest or other payments on the Debt
Securities when due (taking account of any extension period), the Trust
Agreement provides a mechanism whereby the holders of the Trust Preferred
Securities may direct a Property Trustee to enforce its rights under the Debt
Securities. If a Property Trustee fails to enforce its rights under the Debt
Securities, a holder of Trust Preferred Securities may institute a legal
proceeding against CMS Energy to
23
enforce a Property Trustee's rights under the Debt Securities without first
instituting any legal proceeding against a Property Trustee or any other person
or entity. Notwithstanding the foregoing, if an event of default has occurred
and is continuing under the Trust Agreement, and such event is attributable to
the failure of CMS Energy to pay interest or principal on the Debt Securities on
the date such interest or principal is otherwise payable (or in the case of
redemption on the redemption date), then a holder of Trust Preferred Securities
may institute legal proceedings directly against CMS Energy to obtain payment.
If CMS Energy fails to make payments under the Guarantees, the Guarantees
provide a mechanism whereby the holders of the Trust Preferred Securities may
direct a Guarantee Trustee to enforce its rights thereunder. Any holder of Trust
Preferred Securities may institute a legal proceeding directly against CMS
Energy to enforce a Guarantee Trustee's rights under a Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee, or any
other person or entity.
THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees which
will be executed and delivered by CMS Energy for the benefit of the holders,
from time to time, of the Trust Preferred Securities. Each Guarantee will be
qualified as an indenture under the Trust Indenture Act of 1939. Either The Bank
of New York, or J.P. Morgan Trust Company, N.A, each an independent trustee,
will act as indenture trustee under the Guarantees for the purpose of compliance
with the provisions of the Trust Indenture Act of 1939. This summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Guarantees, which is filed as
an exhibit to the Registration Statement of which this prospectus forms a part.
GENERAL
CMS Energy will irrevocably agree to pay in full, on a senior or
subordinated basis, as applicable, to the extent set forth herein, the Guarantee
Payments (as defined below) to the holders of the Trust Preferred Securities, as
and when due, regardless of any defense, right of set-off or counterclaim that
the Trust may have or assert other than the defense of payment. The following
payments with respect to the Trust Preferred Securities, to the extent not paid
by or on behalf of the Trust (the "Guarantee Payments"), will be subject to a
Guarantee: (i) any accumulated and unpaid distributions required to be paid on
the Trust Preferred Securities, to the extent that the Trust has funds on hand
available therefor at such time; (ii) the redemption price with respect to any
Trust Preferred Securities called for redemption to the extent that the Trust
has funds on hand available therefor at such time; or (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Trust (unless the Debt
Securities are distributed to holders of the Trust Preferred Securities), the
lesser of (a) the liquidation distribution, to the extent that the Trust has
funds on hand available therefor at such time, and (b) the amount of assets of
the Trust remaining available for distribution to holders of Trust Preferred
Securities. CMS Energy's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts of CMS Energy to the holders of the
Trust Preferred Securities or by causing the Trust to pay such amount to such
holders.
Such Guarantees will be irrevocable guarantees, on a senior or subordinated
basis, as applicable, of the Trust's obligations under the Trust Preferred
Securities, but will apply only to the extent that the Trust has funds
sufficient to make such payments, and are not guarantees of collection. If CMS
Energy does not make interest payments on the Debt Securities held by the Trust,
the Trust will not be able to pay distributions on the Trust Preferred
Securities and will not have funds legally available therefor.
CMS Energy has, through the Guarantees, the Trust Agreements, the Senior
Debentures, the Subordinated Debentures, the indentures and the Expense
Agreement, taken together, fully, irrevocably and unconditionally guaranteed all
of the Trust's obligations under the Trust Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under the Trust Preferred
Securities.
CMS Energy has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Trust with respect to the Common Securities to
the same extent as the Guarantees, except that upon the occurrence and during
the continuation of a Trust Agreement Event of Default, holders of Trust
Preferred Securities shall have priority over holders of Common Securities with
respect to distributions and payments on liquidation, redemption or otherwise.
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CERTAIN COVENANTS OF CMS ENERGY
CMS Energy will covenant in each Guarantee that if and so long as (i) the
Trust is the holder of all the Debt Securities, (ii) a Tax Event (as defined in
the Guarantee) in respect of the Trust has occurred and is continuing and (iii)
CMS Energy has elected, and has not revoked such election, to pay Additional
Sums (as defined in the Guarantee) in respect of the Trust Preferred Securities
and Common Securities, CMS Energy will pay to the Trust such Additional Sums.
CMS Energy will also covenant that it will not, and it will not cause any of its
subsidiaries to (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of CMS
Energy's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of CMS Energy that
rank pari passu (in the case of Subordinated Debentures with or junior in the
case of the Senior and Subordinated Debentures) to the Debt Securities (other
than (a) any dividend, redemption, liquidation, interest, principal or guarantee
payment by CMS Energy where the payment is made by way of securities (including
capital stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, interest, principal or guarantee payment is being
made, (b) payments under the Guarantees, (c) purchases of CMS Energy Common
Stock related to the issuance of CMS Energy Common Stock under any of CMS
Energy's benefit plans for its directors, officers or employees, (d) as a result
of a reclassification of CMS Energy's capital stock or the exchange or
conversion of one series or class of CMS Energy's capital stock for another
series or class of CMS Energy's capital stock and (e) the purchase of fractional
interests in shares of CMS Energy's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged) if at such time (i) there shall have occurred any event of which CMS
Energy has actual knowledge that (a) with the giving of notice or the lapse of
time, or both, would constitute an event of default and (b) in respect of which
CMS Energy shall not have taken reasonable steps to cure, (ii) CMS Energy shall
be in default with respect to its payment of any obligations under the Guarantee
or (iii) CMS Energy shall have given notice of its selection of an Extension
Period as provided in the indentures with respect to the Debt Securities and
shall not have rescinded such notice, or such Extension Period, or any extension
thereof, shall be continuing. CMS Energy also will covenant to (i) for so long
as Trust Preferred Securities are outstanding, not convert Debt Securities
except pursuant to a notice of conversion delivered to the Conversion Agent by a
holder of Trust Preferred Securities, (ii) maintain directly or indirectly 100%
ownership of the Common Securities, provided that certain successors which are
permitted pursuant to the indentures may succeed to CMS Energy's ownership of
the Common Securities, (iii) not voluntarily terminate, wind-up or liquidate the
Trust, except (a) in connection with a distribution of the Debt Securities to
the holders of the Trust Preferred Securities in liquidation of the Trust or (b)
in connection with certain mergers, consolidations or amalgamations permitted by
the Trust Agreement, (iv) maintain the reservation for issuance of the number of
shares of CMS Energy Common Stock that would be required from time to time upon
the conversion of all the Debt Securities then outstanding, (v) use its
reasonable efforts, consistent with the terms and provisions of the Trust
Agreement, to cause the Trust to remain classified as a grantor trust and not as
an association taxable as a corporation for United States federal income tax
purposes and (vi) deliver shares of CMS Energy Common Stock upon an election by
the holders of the Trust Preferred Securities to convert such Trust Preferred
Securities into CMS Energy Common Stock.
As part of the Guarantees, CMS Energy will agree that it will honor all
obligations described therein relating to the conversion or exchange of the
Trust Preferred Securities into or for CMS Energy Common Stock, Senior
Debentures or Subordinated Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Trust Preferred Securities (in which case no vote
will be required), the Guarantees may not be amended without the prior approval
of the holders of not less than a majority in aggregate liquidation amount of
such outstanding Trust Preferred Securities. All guarantees and agreements
contained in the Guarantees shall bind the successors, assigns, receivers,
trustees and representatives of CMS Energy and shall inure to the benefit of the
holders of the Trust Preferred Securities then outstanding.
TERMINATION OF THE GUARANTEES
The Guarantees will terminate and be of no further force and effect upon
full payment of the redemption price of the Trust Preferred Securities, upon
full payment of the amounts payable upon liquidation of the Trust, upon the
distribution, if any, of CMS Energy Common Stock to the holders of Trust
Preferred Securities in respect of the conversion of all such holders' Trust
Preferred Securities into CMS Energy Common Stock or upon distribution of the
25
Debt Securities to the holders of the Trust Preferred Securities in exchange for
all of the Trust Preferred Securities. The Guarantees will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Trust Preferred Securities must restore payment of any sums paid under such
Trust Preferred Securities or the Guarantees.
EVENTS OF DEFAULT
An event of default under a Guarantee will occur upon the failure of CMS
Energy to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate liquidation amount of the Trust Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to a Guarantee Trustee in respect of a
Guarantee or to direct the exercise of any trust or power conferred upon a
Guarantee Trustee under the Guarantees.
If a Guarantee Trustee fails to enforce a Guarantee, any holder of the Trust
Preferred Securities may institute a legal proceeding directly against CMS
Energy to enforce its rights under such Guarantee without first instituting a
legal proceeding against the Trust, the Guarantee Trustee or any other person or
entity. In addition, any record holder of Trust Preferred Securities shall have
the right, which is absolute and unconditional, to proceed directly against CMS
Energy to obtain Guarantee Payments, without first waiting to determine if the
Guarantee Trustee has enforced a Guarantee or instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity. CMS
Energy has waived any right or remedy to require that any action be brought just
against the Trust, or any other person or entity before proceeding directly
against CMS Energy.
CMS Energy, as guarantor, is required to file annually with each Guarantee
Trustee a certificate as to whether or not CMS Energy is in compliance with all
the conditions and covenants applicable to it under the Guarantees.
STATUS OF THE GUARANTEES
The Guarantees will constitute unsecured obligations of CMS Energy and will
rank equal to or subordinate and junior in right of payment to all other
liabilities of CMS Energy, as applicable. The Guarantees will rank pari passu
with or senior to, as applicable, any guarantee now or hereafter entered into by
CMS Energy in respect of any preferred or preference stock of any affiliate of
CMS Energy.
The Guarantees will constitute a guarantee of payment and not of collection
which means that the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity. The
Guarantees will be held for the benefit of the holders of the Trust Preferred
Securities. The Guarantees will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Trust or upon
distribution of the Debt Securities to the holders of the Trust Preferred
Securities. The Guarantees do not place a limitation on the amount of additional
indebtedness that may be incurred by CMS Energy or any of its subsidiaries.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
CMS Energy may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from CMS Energy, and CMS Energy to sell to the
holders, a specified number of shares of CMS Energy Common Stock at a future
date or dates. The price per share of CMS Energy Common Stock may be fixed at
the time the Stock Purchase Contracts are issued or may be determined by
reference to a specific formula set forth in the Stock Purchase Contracts. The
Stock Purchase Contracts may be issued separately or as part of Stock Purchase
Units consisting of a Stock Purchase Contract and Senior Debentures,
Subordinated Debentures, Trust Preferred Securities or debt obligations of third
parties, including U.S. Treasury securities, securing the holders' obligations
to purchase the Common Stock under the Stock Purchase Contracts. The Stock
Purchase Contracts may require CMS Energy to make periodic payments to the
holders of the Stock Purchase Units or visa versa, and such payments may be
unsecured or refunded on some basis. The Stock Purchase Contracts may require
holders to secure their obligations thereunder in a specified manner.
The applicable prospectus supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the prospectus
supplement will not purport to be complete and will be qualified in its entirety
by reference to the Stock Purchase Contracts, and, if applicable, collateral
arrangements and depositary arrangements, relating to such Stock Purchase
Contracts or Stock Purchase Units.
26
PLAN OF DISTRIBUTION
CMS Energy and/or the Trusts may sell the Offered Securities: (i) through
the solicitation of proposals of underwriters or dealers to purchase the Offered
Securities; (ii) through underwriters or dealers on a negotiated basis; (iii)
directly to a limited number of purchasers or to a single purchaser; or (iv)
through agents. The prospectus supplement with respect to any Offered Securities
will set forth the terms of such offering, including the name or names of any
underwriters, dealers or agents; the purchase price of the Offered Securities
and the proceeds to CMS Energy and/or the Trust from such sale; any underwriting
discounts and commissions and other items constituting underwriters'
compensation; any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchange on which
such Offered Securities may be listed. Any initial public offering price,
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the prospectus supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such prospectus supplement. Unless otherwise set forth
in the prospectus supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
CMS Energy and/or the Trusts may sell Offered Securities to dealers as
principals. The dealers may then resell such Offered Securities to the public at
varying prices to be determined by such dealers at the time of resale. The names
of the dealers and the terms of the transaction will be set forth in the
prospectus supplement relating thereto.
The Offered Securities may be sold directly by CMS Energy and/or the Trusts
to institutional investors or others, who may be deemed to be underwriters
within the meaning of the Securities Act with respect to any resale thereof. The
terms of any such sales will be described in the prospectus supplement relating
thereto.
The CMS Energy Common Stock may be offered other than through the facilities
of a national securities exchange and other than to or through a market maker
other than on an exchange.
Agents, dealers and underwriters may be entitled under agreements with CMS
Energy and/or the Trusts to indemnification by CMS Energy and/or the Trusts
against certain civil liabilities, including liabilities under the Securities
Act, or to contribution with respect to payments which such agents, dealers or
underwriters may be required to make in respect thereof. Agents, dealers and
underwriters may be customers of, engage in transactions with, or perform
services for CMS Energy and/or the Trusts in the ordinary course of business.
The Offered Securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for CMS Energy and/or the Trusts. Any
remarketing firm will be identified and the terms of its agreement, if any, with
its compensation will be described in the applicable prospectus supplement.
Remarketing firms may be deemed to be underwriters, as such term is defined in
the Securities Act, in connection with the Offered Securities remarketed
thereby. Remarketing firms may be entitled under agreements which may be entered
into with CMS Energy and/or the Trusts to indemnification or contribution by CMS
Energy and/or the Trusts against certain civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions or perform services for CMS Energy and its subsidiaries in the
ordinary course of business.
The Offered Securities may or may not be listed on a national securities
exchange. Reference is made to the prospectus supplement with regard to such
matter. No assurance can be given that there will be a market for any of the
Offered Securities.
27
We may engage J.P. Morgan Securities Inc. ("JPMS") or Brinson Patrick
Securities Corporation ("Brinson") (JPMS and Brinson collectively, the "Agents")
to act as agent or principal for offerings from time to time of shares of CMS
Energy Common Stock in one or more placements pursuant to the terms of a
distribution agreement between us and either JPMS or Brinson. The terms of sales
to or through the Agents pursuant to a distribution agreement will be set out in
more detail in a prospectus supplement to this prospectus. When acting as agent,
the Agents will use commercially reasonable efforts to sell the shares pursuant
to the terms agreed to with us, including the number of shares to be offered in
the placement and any minimum price below which sales may not be made. The
Agents, in their capacity as agent or principal, could arrange for or make sales
in privately negotiated transactions, at the market in the existing trading
market for CMS Energy Common Stock, including sales made to or through a market
maker or through an electronic communications network, or in any other manner
that may be deemed to be an "at-the-market offering" as defined in Rule 415
promulgated under the Securities Act and/or any other method permitted by law.
CMS Energy Common Stock sold through the Agents in any at-the-market
offerings will be sold at prices related to the prevailing market price for such
securities, and therefore exact figures regarding proceeds which will be raised
or commissions to be paid are impossible to determine. We will report at least
quarterly the number of shares of CMS Energy Common Stock sold to or through the
Agents in at-the-market offerings, the net proceeds to us and the compensation
paid by us to the Agents in connection with such sales of CMS Energy Common
Stock. Pursuant to the terms of a distribution agreement with the Agents or any
other distribution agreement we may enter into, we also may agree to sell, and
the relevant underwriters or agents may agree to solicit offers to purchase,
blocks of CMS Energy Common Stock or other securities. The total number of
shares that we may sell in at-the-market offerings will be disclosed in a
prospectus supplement to this prospectus.
In connection with the offering of the securities, certain underwriters and
selling group members and their respective affiliates, may engage in
transactions that stabilize, maintain or otherwise affect the market price of
the applicable securities. These transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M promulgated by
the SEC pursuant to which these persons may bid for or purchase securities for
the purpose of stabilizing their market price.
If indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers by institutional investors to
purchase securities from us pursuant to contracts providing for payment and
delivery at a future date. In all cases, these purchasers must be approved by
us. Unless otherwise set forth in the applicable prospectus supplement, the
obligations of any purchaser under any of these contracts will not be subject to
any conditions, except that the purchase of the securities must not at the time
of delivery be prohibited under the laws of any jurisdiction to which that
purchaser is subject and if securities also are being sold to underwriters, we
must have sold to these underwriters the securities not subject to delayed
delivery. Underwriters and other agents will not have any responsibility in
respect of the validity or performance of these contracts.
Under the securities laws of some states, the securities registered by the
registration statement that includes this prospectus may be sold in those states
only through registered or licensed brokers or dealers. Any person participating
in the distribution of the securities registered under the registration
statement that includes this prospectus will be subject to applicable provisions
of the Securities Exchange Act of 1934, and the applicable rules and regulations
of the SEC, including, among others, Regulation M noted above, which may limit
the timing of purchases and sales of any of the securities by any such person.
Furthermore, Regulation M may restrict the ability of any person engaged in the
distribution of the securities to engage in market-making activities with
respect to the securities. These restrictions may affect the marketability of
the securities and the ability of any person or entity to engage in
market-making activities with respect to the securities.
We may enter into derivative transactions with third parties, or sell
securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in
connection with those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement, including in short
sale transactions. If so, the third parties may use securities pledged by us or
borrowed from us or others to settle those sales or to close out any related
open borrowings of stock, and may use securities received from us in settlement
of those derivatives to close out any related open borrowings of stock. The
third parties in such sale transactions will be underwriters and, if not
identified in this prospectus, will be identified in the applicable prospectus
supplement (or a post-effective amendment).
28
We or one of our affiliates may loan or pledge securities to a financial
institution or other third party that in turn may sell the securities using this
prospectus. Such financial institution or third party may transfer its short
position to investors in our securities or in connection with a simultaneous
offering of other securities offered by this prospectus or otherwise.
29
LEGAL OPINIONS
Opinions as to the legality of certain of the Offered Securities will be
rendered for CMS Energy by Robert C. Shrosbree, Esq., Assistant General Counsel
for CMS Energy. Certain matters of Delaware law relating to the validity of the
Trust Preferred Securities will be passed upon on behalf of the Trusts by
Skadden, Arps, Slate, Meagher & Flom LLP, special Delaware counsel to the
Trusts. Certain United States Federal income taxation matters may be passed upon
for CMS Energy and the Trust by either Theodore Vogel, tax counsel for CMS
Energy, or by special tax counsel to CMS Energy and of the Trust, who will be
named in the prospectus supplement. Certain legal matters with respect to
Offered Securities will be passed upon by counsel for any underwriters, dealers
or agents, each of whom will be named in the related prospectus supplement.
EXPERTS
The consolidated financial statements and schedule of CMS Energy appearing
in its Annual Report (Form 10-K/A) for the year ended December 31, 2003, have
been audited by Ernst & Young LLP, independent registered public accounting
firm, as set forth in their report thereon included therein and incorporated
herein by reference which are based in part on the reports of Price Waterhouse,
independent accountants, for Jorf Lasfar and the reports of
PricewaterhouseCoopers LLP, independent registered public accounting firm, for
2003 and 2002 and Arthur Andersen LLP, independent accountants, (who have ceased
operations) for 2001 for the MCV Partnership. Such consolidated financial
statements and schedule are incorporated herein by reference in reliance upon
such reports given on the authority of such firms as experts in accounting and
auditing.
The financial statements of Emirates CMS Power Company PJSC appearing in
CMS's Annual Report (Form 10-K/A) for the year ended December 31, 2003, have
been audited by Ernst & Young, independent registered public accounting firm, as
set forth in their report thereon included therein and incorporated herein by
reference. Such financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The financial statements of Jorf Lasfar as of December 31, 2003 and 2002 and
for each of the three years in the period ended December 31, 2003 incorporated
by reference in this prospectus and registration statement have been so included
in reliance on the report of Price Waterhouse, independent accountants for Jorf
Lasfar, given on the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of the MCV Partnership as of and for
the years ended December 31, 2003 and 2002 incorporated by reference in this
prospectus and registration statement have been so included in reliance on the
report of PricewaterhouseCoopers LLP, independent registered public accounting
firm, given on the authority of said firm as experts in auditing and accounting.
The audited consolidated financial statements of the MCV Partnership for the
year ended December 31, 2001, incorporated by reference in this prospectus and
registration statement, have been audited by Arthur Andersen LLP, independent
accountants. Arthur Andersen LLP has not consented to the inclusion of their
report on the financial statements of the MCV Partnership for the year ended
December 31, 2001 in this prospectus, and we have dispensed with the requirement
to file their consent in reliance upon Rule 437a of the Securities Act of 1933.
Because Arthur Andersen LLP has not consented to the incorporation by reference
of their report in this prospectus, you will not be able to recover against
Arthur Andersen LLP under Section 11 of the Securities Act of 1933 for any
untrue statements of a material fact contained in the financial statements
audited by Arthur Andersen LLP or any omissions to state a material fact
required to be stated therein.
30
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred by CMS Energy in
connection with the issuance of and distribution of the securities being
registered.
AMOUNT
Filing fee-- Securities and Exchange Commission..................................... $ 528,000
*Listing on New York Stock Exchange................................................. 75,000
*Trustees expenses.................................................................. 25,000
*Printing and Engraving............................................................. 200,000
*Services of counsel................................................................ 50,000
*Services of independent registered public accounting firms......................... 50,000
*Rating Agency Fees, Collateral Agent's and Purchase................................ 150,000
*Blue Sky fees and expenses......................................................... 20,000
*Miscellaneous...................................................................... 18,000
------------
Total $ 1,116,000
============
- -------------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following resolution was adopted by the Board of Directors of CMS Energy
on May 6, 1987:
RESOLVED: That effective March 1, 1987 the Corporation shall indemnify to
the full extent permitted by law every person (including the estate, heirs and
legal representatives of such person in the event of the decease, incompetency,
insolvency or bankruptcy of such person) who is or was a director, officer,
partner, trustee, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all liability, costs, expenses, including attorneys'
fees, judgments, penalties, fines and amounts paid in settlement, incurred by or
imposed upon the person in connection with or resulting from any claim or any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative, investigative or of whatever nature, arising from the
person's service or capacity as, or by reason of the fact that the person is or
was, a director, officer, partner, trustee, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. Such right of indemnification shall not be
deemed exclusive of any other rights to which the person may be entitled under
statute, bylaw, agreement, vote of shareholders or otherwise.
CMS Energy's Bylaws provide:
The Corporation may purchase and maintain liability insurance, to the full
extent permitted by law, on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity.
Article VIII of CMS Energy's Articles of Incorporation provides:
A director shall not be personally liable to the Corporation or its
shareholders for monetary damages for breach of duty as a director except (i)
for a breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for a violation of
Section 551 (I) of the Michigan Business Corporation Act, and (iv) for any
transaction from which the
II-1
director derived an improper personal benefit. No amendment to or repeal of this
Article VIII, and no modification to its provisions by law, shall apply to, or
have any effect upon, the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment, repeal or modification.
Article IX of CMS Energy's Articles of Incorporation provides:
Each director and each officer of the Corporation shall be indemnified by
the Corporation to the fullest extent permitted by law against expenses
(including attorneys' fees), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with the
defense of any proceeding in which he or she was or is a party or is threatened
to be made a party by reason of being or having been a director or an officer of
the Corporation. Such right of indemnification is not exclusive of any other
rights to which such director or officer may be entitled under any now or
thereafter existing statute, any other provision of these Articles, bylaw,
agreement, vote of shareholders or otherwise. If the Business Corporation Act of
the State of Michigan is amended after approval by the shareholders of this
Article IX to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Business Corporation Act of the State of Michigan, as so amended. Any repeal
or modification of this Article IX by the shareholders of the Corporation shall
not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
Sections 561 through 571 of the Michigan Business Corporation Act 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 and Administrative Trustees of the Trust are covered
within specified monetary limits by insurance against certain losses arising
from claims made by reason of their being directors or officers of CMS Energy or
of CMS Energy's subsidiaries and CMS Energy's officers and directors are
indemnified against such losses by reason of their being or having been
directors of officers or another corporation, partnership, joint venture, trust
or other enterprise at CMS Energy's request. In addition, CMS Energy has
indemnified each of its present directors by contracts that contain affirmative
provisions essentially similar to those in sections 561 through 571 of the
Michigan Business Corporation Act cited above.
The Trust Agreement of the Trust provides that to the fullest extent
permitted by applicable law, the Trust shall indemnify and hold harmless each of
the Trustees, any Affiliate of the Trustees, any officer, director, shareholder,
employee, representative or agent of any Trustee and any employee or agent of
the Trust or its Affiliates (each a "Indemnified Person"), from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason the creation, operation
or termination of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by the Trust Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
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ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(1)(a) -- Form of Underwriting Agreement with respect to the
Offered Securities (other than the Trust Preferred
Securities).
*(1)(b) -- Form of Underwriting Agreement with respect to the
Trust Preferred Securities.
*(1)(c) -- Form of Sales Agreement between RCG Equity Finance, a
division of Ramius Securities, LLC and CMS Energy
Corporation.
*(4)(a) -- Indenture dated as of September 15, 1992 between CMS
Energy Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form S-3 Registration
Statement filed May 1, 1992, File No. 33-47629, as
Exhibit (4)(a).)
* Fourth Supplemental Indenture dated as of September
26, 1997 between CMS Energy Corporation and NBD Bank,
as Trustee. (Designated in CMS Energy's Form S-3
Registration Statement filed October 6, 1997, File
No. 333-37241, as Exhibit (4)(a).)
* Sixth Supplemental Indenture dated as of January 13,
1998 between CMS Energy Corporation and NBD Bank, as
Trustee (Designated in CMS Energy's Form 10-K for the
year ended December 31, 1997, File No. 1-9513, as
Exhibit (4)(a)).)
* Seventh Supplemental Indenture dated January 25, 1999
between CMS Energy Corporation and NBD Bank, as
Trustee (Designated in CMS Energy's Form 10-K for the
year ended December 31,1998, File No. 1-9513, as
Exhibit 4(d)(i).)
* Tenth Supplemental Indenture dated as of October 12,
2000 between CMS Energy Corporation and Bank One
Trust Company, National Association as Trustee
(Designated in CMS Energy's Form S-3MEF, filed
October 19, 2000, File No. 333-48276, as Exhibit
(4).)
* Eleventh Supplemental Indenture dated as of March 29,
2001 between CMS Energy Corporation and Bank One
Trust Company National Association as Trustee.
(Designated in CMS Energy's Form S-8, filed April 11,
2001, File No. 333-58686 as Exhibit (4)(a).) Twelfth
Supplemental Indenture dated as of July 2, 2001
between CMS Energy Corporation and Bank One Trust
Company, N.A. as Trustee.
* Twelfth Supplemental Indenture dated as of July 2,
2001 between CMS Energy Corporation and Bank One
Trust Company, N.A. (Designated in Form POS AM filed
August 8, 2001, File No.1-9513, Exhibit 4(a).)
* Thirteenth Supplemental Indenture dated as of July
16, 2003 between CMS Energy Corporation and Bank One
Trust Company, N.A. (Designated in CMS Energy's Form
10-K for the fiscal year ended December 31, 2003,
File No.1-9513, Exhibit 4(e)(i).)
* Fourteenth Supplemental Indenture dated as of July
17, 2003 between CMS Energy Corporation and Bank One
Trust Company, N.A. (Designated in CMS Energy's Form
10-K for the fiscal year ended December 31, 2003,
File No.1-9513, Exhibit 4(e)(ii).)
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EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(4)(b) -- Indenture dated as of January 15, 1994 between CMS
Energy and JPMorgan Chase Bank (formerly known as
"The Chase Manhattan Bank"), as Trustee. (Designated
in CMS Energy's Form 8-K dated March 29, 1994, File
No. 1-9513, as Exhibit (4)(a).)
* First Supplemental Indenture dated as of January 20,
1994 between CMS Energy and JPMorgan Chase Bank
(formerly known as "The Chase Manhattan Bank"), as
Trustee. (Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as Exhibit (4)(b).)
* Second Supplemental Indenture dated as of March 19,
1996 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
10-Q for the quarter ended March 31, 1996, File No.
1-9513, as Exhibit (4).)
* Third Supplemental Indenture dated as of March 17,
1997 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
8-K dated May 1, 1997, File No. 1-9513, as Exhibit
(4).)
* Fourth Supplemental Indenture dated as of September
17, 1997 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
S-3 Registration Statement filed September 22, 1997,
File No. 333-36115, as Exhibit (4)(d).)
* Fifth Supplemental Indenture dated as of August 26,
1998 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
S-4 Registration Statement filed September 10, 1998,
File No. 333-63229, as Exhibit (4)(c).)
* Sixth Supplemental Indenture dated as of November 9,
2000 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
10-Q for the quarter ended September 30, 2000, File
No. 1-9513, as Exhibit (4).)
* Form of Seventh Supplemental Indenture (Designated in
CMS Energy's Form S-3, filed December 12, 2001, File
No. 333-749058, as Exhibit 1).
*(4)(c) -- Not applicable.
*(4)(d) -- Subordinated Debt Indenture between CMS Energy and
The Bank of New York, as Trustee. (Designated in CMS
Energy's Form 8-K dated June 1, 1997, File No.
1-9513, as Exhibit (4)(a).)
* First Supplemental Indenture between CMS Energy and
the Bank of New York, as Trustee. (Designated in CMS
Energy's Form 8-K dated July 1, 1997, File No.
1-9513, as Exhibit (4)(b).)
* Fourth Supplemental Indenture between CMS Energy and
the Bank of New York, as Trustee. (Designated in CMS
Energy's Form S-3 Registration Statement filed
September 11, 2000, File No. 333-45556 as Exhibit
(4)(e).)
*(4)(e) -- Form of Supplemental Indenture to be used With the
Subordinated Debentures issued in connection with the
Trust Preferred Securities. (Designated in CMS
Energy's Amendment No. 1 to Form S-3 Registration
Statement filed June 13, 1997, File No. 333-27849, as
Exhibit (4)(f).)
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EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(4)(f) -- Certificate of Trust of CMS Energy Trust IV.
*(4)(g) -- Form of Amended and Restated Trust Agreement of CMS
Energy Trust IV.
*(4)(h) -- Certificate of Trust of Energy Trust V.
*(4)(i) -- Form of Amended and Restated Trust Agreement of CMS
Energy Trust V.
*(4)(j) -- Form of Subordinated Debenture (included in (4)(d).)
*(4)(k) -- Form of Trust Preferred Security (included in
(4)(g).)
*(4)(l) -- Form of Trust Preferred Securities Guarantee
Agreement of CMS Energy Trust IV.
*(4)(m) -- Form of Trust Preferred Securities Guarantee
Agreement of CMS Trust V.
*(4)(n) -- Form of Purchase Contract Agreement between CMS
Energy and the Purchase Contract Agent (including as
Exhibit A the form of the Security Certificate
)(Designated in CMS Energy's Form S-3A Registration
Statement, filed June 13, 1997, File No. 333-27849,
as Exhibit 4(o).)
*(4)(o) -- Form of Senior Debenture (included in (4) (a)).
**(4)(p) -- Form of Supplemental Indenture to be used With the
Senior Debentures issued in Connection with the Trust
Preferred Securities.
*(4)(q) -- Form of Purchase Agreement with respect sells
directly to purchasers or institutional investors.
*(4)(r) -- Certificate of Designation of 4.50% Cumulative
Convertible Preferred Stock dated as of December 2,
2003 (Designated in CMS Energy's Form 10-K for the
fiscal year ended December 31, 2003, File No. 1-9513,
as Exhibit 4(i)).
*(4)(s) -- Registration Rights Agreement dated as of July 16,
2003 between CMS Energy and the Initial Purchasers,
all as defined therein. (Designated in CMS Energy's
Form 10-K for the fiscal year December 31, 2003, File
No. 1-9513, as Exhibit 4(j)).
*(4)(t) -- Registration Rights Agreement dated as of July 17,
2003 between CMS Energy and the Initial Purchasers,
all as defined therein. (Designated in CMS Energy's
Form 10-K for the fiscal year ended December 31,
2003, File No. 1-9513, as Exhibit 4(k)).
*(4)(u) -- Registration Rights Agreement dated as of December
5, 2003 between CMS Energy and the Initial
Purchasers, all as defined therein. (Designated in
CMS Energy's Form 10-K for the fiscal year ended
December 31, 2003, File No. 1-9513, as Exhibit 4(l)).
*(4)(v) -- $300 million Fifth Amended and Restated Credit
Agreement dated as of August 3, 2004 among CMS
Energy, CMS Enterprises, the Banks, and the
Administrative Agent and Collection Agent, all
defined therein. (Designated in CMS Energy's
Pre-Effective Amendment No. 1 to Form S-4 File No.
333-13356, as Exhibit 4(m)).
II-5
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(4)(w) -- Pledge and Security Agreement dated as of July 12,
2002 among CMS Energy, Grantors and the Collateral
Agent, all as defined therein (Form 8-K filed July
30, 2002). (Designated in CMS Energy's Form 10-K for
the fiscal year ended December 31, 2003, File No.
1-9513, as Exhibit 4(n)).
*(4)(x) -- Third Amended and Restated Pledge and Security
Agreement dated as of December 8, 2003 among CMS
Energy and the Collateral Agent, as defined therein.
(Designated in CMS Energy's Form 10-K for the fiscal
year ended December 31, 2003, File No. 1-9513, As
Exhibit 4(o)).
*(4)(y) -- Amended and Restated Guaranty dated as of December
8, 2003 by the Guarantor in favor of the Lenders, all
as defined therein. (Designated in CMS Energy's Form
10-K for the fiscal year ended December 31, 2003,
File No. 1-9513, as Exhibit 4(p)).
*(5)(a) -- Opinion of Michael D. Van Hemert, Assistant General
Counsel for CMS Energy.
*(5)(b) -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding the legality of the Trust Preferred
Securities.
(12) -- Statement re computation of ratios of earnings to
fixed charges and Ratio of Earnings to Fixed Charges
and Preferred Securities Dividends and Distributions.
*(23)(a) -- Consent of Michael D. Van Hemert, Assistant General
for CMS Energy (included in Exhibit (5)(a) above).
*(23)(b) -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit (5)(b) above).
(23)(c) -- Consent of Ernst & Young LLP
(23)(d) -- Consent of PriceWaterhouseCoopers LLP
(23)(e) -- Consent of Price Waterhouse
(23)(f) -- Consent of Ernst & Young
(24) -- Powers of Attorney.
(25)(a) -- Statement of Eligibility and Qualification of The
Bank of New York (Trustee under the Subordinated Debt
Indenture).
(25)(b) -- Statement of Eligibility of Property Trustee of CMS
Energy Trust IV.
(25)(c) -- Statement of Eligibility of the Trust Preferred
Security Guarantee Trustee of CMS Energy Trust IV.
(25)(d) -- Statement of Eligibility of Property Trustee of CMS
Energy Trust V.
(25)(e) -- Statement of Eligibility of the Trust Preferred
Security Guarantee Trustee of CMS Energy Trust V.
(25)(f) -- Statement of Eligibility and Qualification of J.P.
Morgan Trust Company, N.A (Trustee under the Senior
Debt Indenture).
- ----------------
II-6
* Previously filed
** To be filed
Exhibits listed above which have been filed with the Securities and
Exchange Commission are incorporated herein by reference with the same effect as
if filed with this Registration Statement.
II-7
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement; (iii) to
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration statement; provided, however,
that (i) and (ii) do not apply if the registration statement is on Form S-3,
Form S-8, or Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in this registration statement shall
be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that as claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
be governed by the final adjudication of such issue.
(6) That (1) for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-8
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 Jackson, and State of Michigan, on the 7th day of
September, 2004.
CMS ENERGY CORPORATION
By: /s/ Thomas J. Webb
--------------------------
Thomas J. Webb
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the 7th day of September 2004.
NAME TITLE
- ---- -----
(i) PRINCIPAL EXECUTIVE OFFICER:
/s/ Kenneth Whipple Chairman of the Board
- ------------------------------------
Kenneth Whipple and Chief Executive Officer
(ii) PRINCIPAL FINANCIAL OFFICER:
/s/ Thomas J. Webb Executive Vice President and
- ---------------------------------
Thomas J. Webb Chief Financial Officer
(iii) CONTROLLER OR PRINCIPAL ACCOUNTING OFFICER
/s/ Glenn P. Barba Vice President, Controller and Chief
- ------------------------------------
Glenn P. Barba Accounting Officer
*
- -----------------------------------------------------
(Merribel S. Ayers) Director
*
- -----------------------------------------------------
(Earl D. Holton) Director
*
- -----------------------------------------------------
(David W. Joos) Director
*
- -----------------------------------------------------
(Michael T. Monahan) Director
II-9
*
- -----------------------------------------------------
(Joseph F. Paquette, Jr.) Director
*
- -----------------------------------------------------
(William U. Parfet) Director
*
- -----------------------------------------------------
(Percy A. Pierre) Director
*
- -----------------------------------------------------
(S. Kinnie Smith, Jr.) Director
*
- -----------------------------------------------------
(Kenneth L. Way) Director
*
- -----------------------------------------------------
(Kenneth Whipple) Director
*
- -----------------------------------------------------
(John B. Yasinsky) Director
*By: /s/ Thomas J. Webb
--------------------------------
Thomas J. Webb
Attorney in-fact
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CMS Energy
Trust IV certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dearborn, State of Michigan, on the 7th day of
September, 2004.
CMS ENERGY TRUST IV
By: /s/ MICHAEL D. VANHEMERT
-----------------------------------------
Michael D. VanHemert, Trustee
By: /s/ LAURA M. MOUNTCASTLE
-----------------------------------------
Laura M. Mountcastle, Trustee
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, CMS Energy
Trust V certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dearborn, State of Michigan, on the 7th day of
September, 2004.
CMS ENERGY TRUST V
By: /s/ MICHAEL D. VANHEMERT
-----------------------------------------
Michael D. VanHemert, Trustee
By: /s/ LAURA M. MOUNTCASTLE
-----------------------------------------
Laura M. Mountcastle, Trustee
II-12
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(1)(a) -- Form of Underwriting Agreement with respect to the
Offered Securities (other than the Trust Preferred
Securities).
*(1)(b) -- Form of Underwriting Agreement with respect to the
Trust Preferred Securities.
*(1)(c) Form of Sales Agreement between RCG Equity Finance, a
division of Ramius Securities, LLC and CMS Energy
Corporation.
*(4)(a) -- Indenture dated as of September 15, 1992 between CMS
Energy Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form S-3 Registration
Statement filed May 1, 1992, File No. 33-47629, as
Exhibit (4)(a).)
* Fourth Supplemental Indenture dated as of September
26, 1997 between CMS Energy Corporation and NBD Bank,
as Trustee. (Designated in CMS Energy's Form S-3
Registration Statement filed October 6, 1997, File
No. 33-37241, as Exhibit (4)(a).)
* Sixth Supplemental Indenture dated as of January 13,
1998 between CMS Energy Corporation and NBD Bank, as
Trustee (Designated in CMS Energy's Form 10-K for the
year ended December 31, 1997, File No. 1-9513, as
Exhibit (4)(a)).)
* Seventh Supplemental Indenture dated January 25, 1999
between CMS Energy Corporation and NBD Bank, as
Trustee (Designated in CMS Energy's Form 10-K for the
year ended December 31,1998, File No. 1-9513, as
Exhibit 4(d)(i).)
* Tenth Supplemental Indenture dated as of October 12,
2000 between CMS Energy Corporation and Bank One
Trust Company, National Association as Trustee
(Designated in CMS Energy's Form S-3MEF, filed
October 19, 2000, File No. 333-48276, as Exhibit
(4).)
* Eleventh Supplemental Indenture dated as of March 29,
2001 between CMS Energy Corporation and Bank One
Trust Company National Association as Trustee.
(Designated in CMS Energy's Form S-8, filed April 11,
2001, File No. 333-58686 as Exhibit (4)(a).) Twelfth
Supplemental Indenture dated as of July 2, 2001
between CMS Energy Corporation and Bank One Trust
Company, N.A. as Trustee.
* Twelfth Supplemental Indenture dated as of July 2,
2001 between CMS Energy Corporation and Bank One
Trust Company, N.A. (Designated in Form POS AM filed
August 8, 2001, File No.1-9513, Exhibit 4(a).)
* Thirteenth Supplemental Indenture dated as of July
16, 2003 between CMS Energy Corporation and Bank One
Trust Company, N.A. (Designated in CMS Energy's Form
10-K for the fiscal year ended December 31, 2003,
File No.1-9513, Exhibit 4(e)(i).)
* Fourteenth Supplemental Indenture dated as of July
17, 2003 between CMS Energy Corporation and Bank One
Trust Company, N.A. (Designated in CMS Energy's Form
10-K for the fiscal year ended December 31, 2003,
File No.1-9513, Exhibit 4(e)(ii).)
II-13
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(4)(b) -- Indenture dated as of January 15, 1994 between CMS
Energy and JPMorgan Chase Bank (formerly known as
"The Chase Manhattan Bank"), as Trustee. (Designated
in CMS Energy's Form 8-K dated March 29, 1994, File
No. 1-9513, as Exhibit (4)(a).)
* First Supplemental Indenture dated as of January 20,
1994 between CMS Energy and JPMorgan Chase Bank
(formerly known as "The Chase Manhattan Bank"), as
Trustee. (Designated in CMS Energy's Form 8-K dated
March 29, 1994, File No. 1-9513, as Exhibit (4)(b).)
* Second Supplemental Indenture dated as of March 19,
1996 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
10-Q for the quarter ended March 31, 1996, File No.
1-9513, as Exhibit (4).)
* Third Supplemental Indenture dated as of March 17,
1997 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
8-K dated May 1, 1997, File No. 1-9513, as Exhibit
(4).)
* Fourth Supplemental Indenture dated as of September
17, 1997 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
S-3 Registration Statement filed September 22, 1997,
File No. 333-36115, as Exhibit (4)(d).)
* Fifth Supplemental Indenture dated as of August 26,
1998 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
S-4 Registration Statement filed September 10, 1998,
File No. 333-63229, as Exhibit (4)(c).)
* Sixth Supplemental Indenture dated as of November 9,
2000 between CMS Energy Corporation and JPMorgan
Chase Bank (formerly known as "The Chase Manhattan
Bank"), as Trustee. (Designated in CMS Energy's Form
10-Q for the quarter ended September 30, 2000, File
No. 1-9513, as Exhibit (4).)
* Form of Seventh Supplemental Indenture (Designated in
CMS Energy's Form S-3, filed December 12, 2001, File
No. 333-749058, as Exhibit 1).
*(4)(c) -- Not applicable.
*(4)(d) -- Subordinated Debt Indenture between CMS Energy and
The Bank of New York, as Trustee. (Designated in CMS
Energy's Form 8-K dated June 1, 1997, File No.
1-9513, as Exhibit (4)(a).)
* First Supplemental Indenture between CMS Energy and
the Bank of New York, as Trustee. (Designated in CMS
Energy's Form 8-K dated July 1, 1997, File No.
1-9513, as Exhibit (4)(b).)
* Fourth Supplemental Indenture between CMS Energy and
the Bank of New York, as Trustee. (Designated in CMS
Energy's Form S-3 Registration Statement filed
September 11, 2000, File No. 333-45556 as Exhibit
(4)(e).)
*(4)(e) -- Form of Supplemental Indenture to be used With the
Subordinated Debentures issued in connection with the
Trust Preferred Securities. (Designated in CMS
Energy's Amendment No. 1 to Form S-3 Registration
Statement filed June 13, 1997, File No. 333-27849, as
Exhibit (4)(f).)
II-14
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(4)(f) -- Certificate of Trust of CMS Energy Trust IV.
*(4)(g) -- Form of Amended and Restated Trust Agreement of CMS
Energy Trust IV.
*(4)(h) -- Certificate of Trust of Energy Trust V.
*(4)(i) -- Form of Amended and Restated Trust Agreement of CMS
Energy Trust V.
*(4)(j) -- Form of Subordinated Debenture (included in (4)(d).)
*(4)(k) -- Form of Trust Preferred Security (included in
(4)(g).)
*(4)(l) -- Form of Trust Preferred Securities Guarantee
Agreement of CMS Energy Trust IV.
*(4)(m) -- Form of Trust Preferred Securities Guarantee
Agreement of CMS Trust V.
*(4)(n) -- Form of Purchase Contract Agreement between CMS
Energy and the Purchase Contract Agent (including as
Exhibit A the form of the Security Certificate
)(Designated in CMS Energy's Form S-3A Registration
Statement, filed June 13, 1997, File No. 333-27849,
as Exhibit 4(o).)
*(4)(o) -- Form of Senior Debenture (included in (4) (a)).
**(4)(p) -- Form of Supplemental Indenture to be used With the
Senior Debentures issued in Connection with the Trust
Preferred Securities.
*(4)(q) -- Form of Purchase Agreement with respect sells
directly to purchasers or institutional investors.
*(4)(r) -- Certificate of Designation of 4.50% Cumulative
Convertible Preferred Stock dated as of December 2,
2003 (Designated in CMS Energy's Form 10-K for the
fiscal year ended December 31, 2003, File No. 1-9513,
as Exhibit 4(i)).
*(4)(s) -- Registration Rights Agreement dated as of July 16,
2003 between CMS Energy and the Initial Purchasers,
all as defined therein. (Designated in CMS Energy's
Form 10-K for the fiscal year December 31, 2003, File
No. 1-9513, as Exhibit 4(j)).
*(4)(t) -- Registration Rights Agreement dated as of July 17,
2003 between CMS Energy and the Initial Purchasers,
all as defined therein. (Designated in CMS Energy's
Form 10-K for the fiscal year ended December 31,
2003, File No. 1-9513, as Exhibit 4(k)).
*(4)(u) -- Registration Rights Agreement dated as of December
5, 2003 between CMS Energy and the Initial
Purchasers, all as defined therein. (Designated in
CMS Energy's Form 10-K for the fiscal year ended
December 31, 2003, File No. 1-9513, as Exhibit 4(l)).
*(4)(v) -- $300 million Fifth Amended and Restated Credit
Agreement dated as of August 3, 2004 among CMS
Energy, CMS Enterprises, the Banks, and the
Administrative Agent and Collection Agent, all
defined therein. (Designated in CMS Energy's
Pre-Effective Amendment No. 1 to Form S-4 File No.
333-13356, as Exhibit 4(m)).
II-15
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*(4)(w) -- Pledge and Security Agreement dated as of July 12,
2002 among CMS Energy, Grantors and the Collateral
Agent, all as defined therein (Form 8-K filed July
30, 2002). (Designated in CMS Energy's Form 10-K for
the fiscal year ended December 31, 2003, File No.
1-9513, as Exhibit 4(n)).
*(4)(x) -- Third Amended and Restated Pledge and Security
Agreement dated as of December 8, 2003 among CMS
Energy and the Collateral Agent, as defined therein.
(Designated in CMS Energy's Form 10-K for the fiscal
year ended December 31, 2003, File No. 1-9513, As
Exhibit 4(o)).
*(4)(y) -- Amended and Restated Guaranty dated as of December
8, 2003 by the Guarantor in favor of the Lenders, all
as defined therein. (Designated in CMS Energy's Form
10-K for the fiscal year ended December 31, 2003,
File No. 1-9513, as Exhibit 4(p)).
*(5)(a) -- Opinion of Michael D. Van Hemert, Assistant General
Counsel for CMS Energy.
*(5)(b) -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
regarding the legality of the Trust Preferred
Securities.
(12) -- Statement re computation of ratios of earnings to
fixed charges and Ratio of Earnings to Fixed Charges
and Preferred Securities Dividends and Distributions.
*(23)(a) -- Consent of Michael D. Van Hemert, Assistant General
for CMS Energy (included in Exhibit (5)(a) above).
*(23)(b) -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit (5)(b) above).
(23)(c) -- Consent of Ernst & Young LLP
(23)(d) -- Consent of PriceWaterhouseCoopers LLP
(23)(e) -- Consent of Price Waterhouse
(23)(f) -- Consent of Ernst & Young
(24) -- Powers of Attorney.
(25)(a) -- Statement of Eligibility and Qualification of The
Bank of New York (Trustee under the Subordinated Debt
Indenture).
(25)(b) -- Statement of Eligibility of Property Trustee of CMS
Energy Trust IV.
(25)(c) -- Statement of Eligibility of the Trust Preferred
Security Guarantee Trustee of CMS Energy Trust IV.
(25)(d) -- Statement of Eligibility of Property Trustee of CMS
Energy Trust V.
(25)(e) -- Statement of Eligibility of the Trust Preferred
Security Guarantee Trustee of CMS Energy Trust V.
(25)(f) -- Statement of Eligibility and Qualification of J.P.
Morgan Trust Company, N.A (Trustee under the Senior
Debt Indenture).
- ----------------
II-16
* Previously filed
** To be filed
Exhibits listed above which have been filed with the Securities and
Exchange Commission are incorporated herein by reference with the same effect as
if filed with this Registration Statement.
II-17