1 *************************************************************************** * * * AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 22, 1994. * * * *************************************************************************** REGISTRATION NO. 33- =============================================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ THE CINCINNATI GAS & ELECTRIC COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) OHIO 31-0240030 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 139 EAST FOURTH STREET CINCINNATI, OHIO 45202 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-381-2000 ------------------------ DONALD R. BLUM, SECRETARY 139 EAST FOURTH STREET CINCINNATI, OHIO 45202 (NAME AND ADDRESS OF AGENT FOR SERVICE) AGENT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-287-2360 ------------------------ COPIES OF ALL COMMUNICATIONS TO: RONAL R. NEWBANKS TAFT, STETTINIUS & HOLLISTER STAR BANK CENTER CINCINNATI, OHIO 45202 (COUNSEL FOR THE REGISTRANT) ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of the 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. /X/ 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, PLEASE CHECK THE FOLLOWING BOX. / / ------------------------ CALCULATION OF REGISTRATION FEE =============================================================================================== PROPOSED PROPOSED TITLE OF EACH AMOUNT MAXIMUM MAXIMUM AMOUNT OF CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE - - ----------------------------------------------------------------------------------------------- Common Stock, $8.50 Par Value........ 1,000,000 shs. $22.4375 $22,437,500 $7,737.07 <FN> =============================================================================================== (1) Based on average high and low stock prices on July 15, 1994 and used solely for the purpose of calculating the registration fee. PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS CONSTITUTING A PART OF THIS REGISTRATION STATEMENT ALSO RELATES TO THE REMAINING 193,296 SHARES OF THE 2,000,0000 SHARES OF THE REGISTRANT'S COMMON STOCK, SUCH SHARES HAVING BEEN REGISTERED PURSUANT TO ITS DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN UNDER THE SECURITIES ACT OF 1933 BY REGISTRATION STATEMENT NO. 33-38396. =============================================================================================== 2 PROSPECTUS THE CINCINNATI GAS & ELECTRIC COMPANY DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN COMMON STOCK ($8.50 PAR VALUE) ------------------ The Dividend Reinvestment and Stock Purchase Plan (the Plan) of The Cincinnati Gas & Electric Company provides a simple and convenient method for the holders of shares of the Company's Common Stock and all series of Cumulative Preferred Stock to purchase shares of the Company's Common Stock without payment of a brokerage commission or service charge. Participants in the Plan may: --have dividends on their shares automatically reinvested; --have an amount less than their full dividends on certificated shares automatically reinvested and receive the remainder of their dividends in cash; --continue to receive dividends on certificated shares registered in their names and invest by making optional cash payments of not less than $25 for any dividend payment date and not more than $40,000 in any calendar year; --invest both cash dividends and optional cash payments; --deposit their certificates of Common Stock with the Plan; --direct the Company to transfer, at no cost to the participants, all or a portion of their whole shares of Common Stock to other persons. The purchase price of the shares of Common Stock will be the average of the high and low prices (New York Stock Exchange--Composite) on any dividend payment date (if no trading is reported for that date, on the preceding day on which there was trading). This Prospectus relates to 1,193,296 authorized and unissued shares of the Company's Common Stock registered for purchase under the Plan. It is suggested that this Prospectus be retained for future reference. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------ July 22, 1994 3 AVAILABLE INFORMATION THE CINCINNATI GAS & ELECTRIC COMPANY (CG&E) IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT) AND ACCORDINGLY FILES REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONCERNING DIRECTORS AND OFFICERS, THEIR REMUNERATION, AND ANY MATERIAL INTEREST OF SUCH PERSONS IN TRANSACTIONS WITH CG&E, AS OF PARTICULAR DATES, IS DISCLOSED IN PROXY STATEMENTS DISTRIBUTED TO CG&E'S SHAREHOLDERS AND FILED WITH THE COMMISSION. SUCH REPORTS, PROXY STATEMENTS, AND OTHER INFORMATION CAN BE INSPECTED AND COPIED AT THE PUBLIC REFERENCE FACILITIES MAINTAINED BY THE COMMISSION AT ROOM 1024, 450 FIFTH STREET, N.W., WASHINGTON, D.C.; SUITE 1400, CITICORP CENTER, 500 WEST MADISON STREET, CHICAGO, ILLINOIS; AND SEVEN WORLD TRADE CENTER, 13TH FLOOR, NEW YORK, N.Y. COPIES OF SUCH MATERIAL CAN ALSO BE OBTAINED AT PRESCRIBED RATES FROM THE PUBLIC REFERENCE SECTION OF THE COMMISSION AT ITS PRINCIPAL OFFICE AT 450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549. SUCH MATERIAL CAN ALSO BE INSPECTED AT THE OFFICES OF THE NEW YORK STOCK EXCHANGE, THE CHICAGO STOCK EXCHANGE, THE PACIFIC STOCK EXCHANGE, AND THE CINCINNATI STOCK EXCHANGE. CG&E'S PRINCIPAL EXECUTIVE AND BUSINESS OFFICE IS LOCATED AT 139 EAST FOURTH STREET, CINCINNATI, OHIO 45202-4003 (TELEPHONE 513-381-2000). ------------------ NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES OFFERED BY THIS PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CG&E SINCE THE DATE HEREOF, OR THAT THE INFORMATION HEREIN CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. ------------------ INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE There are hereby incorporated in this Prospectus by reference the following documents heretofore filed with the Securities and Exchange Commission: 1. CG&E's Annual Report on Form 10-K for the year ended December 31, 1993, filed pursuant to the Exchange Act. 2. CG&E's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, filed pursuant to the Exchange Act. 3. CG&E's Current Report on Form 8-K dated June 15, 1994, filed pursuant to the Exchange Act. All documents filed by CG&E pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the shares of Common Stock shall be deemed to be incorporated in this Prospectus by reference and to be a part hereof from the date of filing of such documents. 2 4 Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. CG&E HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE CINCINNATI GAS & ELECTRIC COMPANY, ATTENTION: DONALD R. BLUM, SECRETARY, 139 EAST FOURTH STREET, CINCINNATI, OHIO 45202-4003 (TELEPHONE 513-381-2000). --------------- THE COMPANY CG&E (incorporated in Ohio in 1837) and its subsidiaries are primarily engaged in providing electric and gas service in the southwestern portion of Ohio and adjacent areas in Kentucky and Indiana. The area served with electricity or gas, or both, covers approximately 3,000 square miles with an estimated population of 1.8 million and includes the cities of Cincinnati and Middletown in Ohio, Covington and Newport in Kentucky, and Lawrenceburg in Indiana. --------------- PROPOSED MERGER CG&E has entered into a merger agreement with PSI Resources, Inc. (PSI) and PSI Energy, Inc., PSI's principal subsidiary, an Indiana electric utility (PSI Energy) with a service area contiguous to that of CG&E. Under the merger agreement, CG&E and PSI will become subsidiaries of a newly formed corporation named CINergy Corp. (the Merger). CINergy Corp. will be a registered holding company under the Public Utility Holding Company Act of 1935 (PUHCA). In order to effect the Merger, each share of CG&E common stock will be converted into one share of CINergy common stock, and each share of PSI common stock will be converted into that number of shares of CINergy common stock obtained by dividing $30.69 by the average closing sale price of CG&E common stock for the 15 consecutive trading days preceding the fifth trading day prior to consummation of the Merger, provided that the number of shares of CINergy stock to be exchanged for each share of PSI will be no greater than 1.023 and no less than .909. At March 31, 1994, CG&E and PSI had 88.5 million and 57.2 million common shares outstanding, respectively. The Merger will be accounted for as a "pooling-of-interests", and will be tax-free for shareholders. The Merger is subject to approval by the Securities and Exchange Commission (SEC) and the Federal Energy Regulatory Commission (FERC). Shareholders of each company have already approved the Merger at special meetings held in November 1993. FERC issued conditional approval of the Merger in August 1993, but several intervenors, including The Public Utilities Commission of Ohio (PUCO) and the Kentucky Public Service Commission (KPSC), filed 3 5 for rehearing of that order. On January 12, 1994, FERC withdrew its conditional approval of the Merger and ordered the setting of FERC-sponsored settlement procedures to be held. On March 4, 1994, CG&E reached a settlement agreement with the PUCO and the Ohio Office of Consumers' Counsel (OCC) on merger issues identified by FERC. On March 2, PSI Energy and Indiana's consumer representatives had reached a similar agreement. Both settlement agreements have been filed with FERC. These documents address, among other things, the coordination of state and federal regulation and the commitment that neither CG&E nor PSI electric base rates, nor CG&E's gas base rates, will rise because of the Merger, except to reflect any effects that may result from the divestiture of CG&E's gas operations if ordered by the SEC in accordance with the requirements of PUHCA discussed below. CG&E also filed with FERC a unilateral offer of settlement addressing all issues raised in the KPSC's application for rehearing with FERC. The settlement offer commits CG&E's Kentucky subsidiary, the Union Light, Heat and Power Company (Union Light), among other things, to "hold harmless" its retail gas customers from the effects of the Merger on Union Light's retail gas base rates that become effective on or after the date of the Merger and prior to January 1, 2003. However, Union Light's offer will not apply to any effects that may result from the divestiture of Union Light's gas operations, discussed below. Although it is the belief of CG&E and PSI that no state utility commissions have jurisdiction over approval of the proposed Merger, an application was filed with the KPSC to comply with the Staff of the KPSC's position that the KPSC's authorization is required for the indirect acquisition of control of Union Light by CINergy. A hearing on the KPSC application was held on May 10, 1994. In testimony filed in the hearing, CG&E and Union Light made, in addition to other commitments, an offer to the KPSC that Union Light would also "hold harmless" retail electric customers and would agree to an electric rate moratorium commencing after Union Light's next retail rate case and extending to January 1, 2000. On May 13, 1994, the KPSC issued an order approving the Merger, subject to the condition that CG&E and Union Light must agree that, for 12 months from consummation of the Merger, no filings will be made to adjust CG&E's base purchase power rate and Union Light's base electric rates. On May 19, 1994, CINergy, CG&E and Union Light submitted letters to the KPSC accepting the commitments and condition set forth in its May 13, 1994 order approving the Merger. Also included in the filings with FERC were settlement agreements with the city of Hamilton, Ohio, and the Wabash Valley Power Association in Indiana. These agreements resolve issues related to the transmission of power in Ohio and Indiana. On April 7, 1994, CG&E and the City of Cincinnati reached settlement in support of the Merger and filed a Joint Stipulation and Agreement with FERC. CG&E has guaranteed, among other things, that its electric retail customer rates will not rise because of the Merger and the City has agreed to support the Merger and CG&E's efforts to retain its gas operations before the SEC. The 30-day period for commenting on settlements and agreements filed with FERC ended on April 21, 1994. During that period, the FERC trial staff filed comments with the commission recommending that FERC approve the settlements. However, the Merger is still being opposed by various other parties. If the settlement agreements are not acceptable, FERC could set issues for hearing. 4 6 CG&E and PSI also submitted to FERC the operating agreement among CINergy Services, Inc., a subsidiary of CINergy, and CG&E and PSI Energy that provides for the coordinated planning and operation of the electric generation and transmission and other facilities of CG&E and PSI as an integrated utility system. It also establishes a framework for the equitable sharing of the benefits and costs of such coordinated operations between CG&E and PSI. The parties to the Ohio and Indiana FERC settlements have agreed to support or not oppose the operating agreement, and the settlements are conditioned upon FERC approving the filed operating agreement without material changes. CG&E's filing with FERC also references a separate agreement among CG&E, the Staff of the PUCO, the OCC, and other parties settling issues raised by a November 1993 ruling of the Supreme Court of Ohio on the phased-in electric rate increase ordered by the PUCO in May 1992. The agreement includes a moratorium on increases in base electric rates prior to January 1, 1999 (except under certain circumstances), authorization for CG&E to retain all non-fuel merger savings until 1999, and a commitment by the PUCO that it will support CG&E's efforts to retain CG&E's gas operations in its PUHCA filing with the SEC (see below). The PUCO approved this separate agreement on April 14, 1994. Reference is made to "Rate Matters" for additional information. On May 23, 1994, CINergy filed an application seeking approval by the SEC under PUHCA of the acquisition by CINergy of the common stock of CG&E and PSI Energy. PUHCA imposes restrictions on the operations of registered holding company systems. Among these are requirements that securities issuances, sales and acquisitions of utility assets or of securities of utility companies and acquisitions of interests in any other business be approved by the SEC. PUHCA also limits the ability of registered holding companies to engage in non-utility ventures and regulates the rendering of services by holding company affiliates to the system's utilities. PUHCA has been interpreted to preclude the ownership of both electric and gas utility systems. As a result, the SEC may require divestiture of the Company's gas properties within a reasonable time after the Merger. CG&E believes good arguments exist to allow retention of its gas assets and will request that it be allowed to do so. Intervention papers and hearing requests were filed by a number of parties during the period allowed by the SEC, which ended on July 1, 1994. Three of the filings raise a number of objections to the Merger and request that the Merger be disapproved or that approval be subject to a number of conditions, including, among other things, divestiture of the gas assets. The Company intends to respond vigorously to the arguments raised in the intervention papers and believes that good arguments exist in support of CINergy's request for authorization to retain the gas assets; however, the outcome of the proceedings cannot be predicted. Originally, the merger agreement provided that CG&E and PSI would be merged into CINergy as an Ohio corporation. Under this structure CG&E and PSI would have become operating divisions of CINergy, ceasing to exist as separate corporations, and CINergy would not have been subject to the restrictions imposed by PUHCA. However, The Indiana Utility Regulatory Commission (IURC) dismissed PSI's application for approval of the transfer of its license or property to a non-Indiana corporation. The IURC's decision has been appealed and the original merger structure could be reinstated if the appeal is successful. 5 7 DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN FREQUENTLY USED TERMS AUTHORIZATION FORM: Application for Plan participation for shareholders holding certificated Shares. CERTIFICATE DEPOSIT FORM: Document available from the Company which authorizes deposit of Common Stock certificates into a Plan account. CERTIFICATE HOLDERS: Shareholders who own shares and hold certificates of CG&E stock in their names. CERTIFICATED SHARES: Shares for which participants hold certificates registered in their names. PLAN SHARES: Shares held in book entry form by the Company for Plan participants. RECORD DATE: Generally 15 to 18 days prior to the dividend payment date for Common Stock, and generally 30 days prior to the dividend payment date for Preferred Stock. STOCK POWER: Form of assignment of shares separate from the stock certificate. Document authorizing transfer of ownership. PURPOSE 1. WHAT IS THE PURPOSE OF THE PLAN? The purpose of the Plan is, among other things, to encourage long-term investment by providing holders of CG&E's Common and Preferred Stock with a simple and convenient method of investing cash dividends and optional cash payments in shares of Common Stock at a price equal to market value, without payment of any brokerage commission or service charge. ADVANTAGES 2. WHAT ARE THE ADVANTAGES OF THE PLAN? Participants in the Plan may: --have dividends on their shares automatically reinvested; --have an amount less than their full dividends on Certificated Shares automatically reinvested and receive the remainder of their dividends in cash; --continue to receive dividends on Certificated Shares and invest by making optional cash payments of not less than $25 for any dividend payment date and not more than $40,000 in any calendar year; --invest both cash dividends and optional cash payments; --deposit their certificates of Common Stock with the Plan; --direct the Company to transfer to other persons, at no cost to the participants, all or a portion of their whole shares of Common Stock held in the Plan. 6 8 No commission or service charge is paid by participants in connection with purchases under the Plan. Full investment of funds is possible under the Plan because fractional shares, as well as whole shares, will be credited to participants' accounts. Dividends on such fractional shares, as well as on whole shares, will also be credited to their accounts. CG&E assures safekeeping of shares in participants' accounts because certificates are not issued unless requested. This feature protects against loss, theft, and destruction of the certificates. Regular statements of accounts provide simplified recordkeeping. ADMINISTRATION 3. WHO ADMINISTERS THE PLAN? CG&E administers the Plan for participants, keeps records, sends statements of accounts to participants, and performs other duties relating to the Plan. PARTICIPATION 4. WHO IS ELIGIBLE TO PARTICIPATE? All holders of record of CG&E's Common and Preferred Stock are eligible to participate in the Plan provided that the requirements of participation as outlined in Question 5 are met. Upon compliance with CG&E's requirements, Brokers may participate on behalf of their customers, in which case please note: PARTICIPATION IN THE PLAN THROUGH BROKERS MAY BE ON TERMS AND CONDITIONS WHICH DIFFER FROM THOSE SET FORTH IN THIS PROSPECTUS, IN WHICH CASE THE TERMS AND CONDITIONS SET BY EACH BROKER SHALL GOVERN. 5. HOW DOES A CERTIFICATE HOLDER BECOME A PARTICIPANT? A Certificate Holder may join the Plan by signing an Authorization Form for each account and returning it to CG&E. An Authorization Form may be obtained from CG&E at the address or at the telephone number shown under Question 44. Unless otherwise directed in writing, dividends payable on any additional shares acquired by participants under the same registration will be automatically reinvested. 6. WHAT DOES THE AUTHORIZATION FORM PROVIDE? The Authorization Form allows Certificate Holders to decide the manner of their participation in the Plan. By checking the appropriate box on the Authorization Form, they may indicate a choice of: (1) reinvesting all dividends paid on Certificated Shares of Common and Preferred Stock, and/or making any optional cash payments; or (2) having an amount less than their full dividends automatically reinvested and receiving the remainder of their dividends in cash, and/or making any optional cash payments; or (3) participating in the Plan by making optional cash payments only. Dividends on Plan Shares will be automatically reinvested in additional shares of Common Stock. 7. MAY CERTIFICATE HOLDERS HAVE DIVIDENDS REINVESTED UNDER THE PLAN WITH RESPECT TO LESS THAN ALL OF THE SHARES REGISTERED IN THEIR ACCOUNTS? Yes. Certificate Holders may specify the number of shares to be reinvested and receive a cash dividend for the balance. If a shareholder's balance of Certificated Shares for reinvestment participation is less than the 7 9 number of shares indicated on the Authorization Form, all dividends on Certificated Shares will be reinvested. It should be remembered that dividends on all Plan Shares will be reinvested. 8. MAY A PARTICIPATING CERTIFICATE HOLDER CHANGE THE METHOD OF PARTICIPATION AFTER ENROLLMENT? Yes. A participating Certificate Holder may change the method of participation at any time by completing a new Authorization Form and returning it to CG&E as indicated under Question 5. In order to change the number of shares being reinvested through partial participation, as discussed under Question 7, a participant should notify CG&E in writing not later than 30 calendar days prior to the dividend payment date on which the change is to become effective. COSTS 9. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH PURCHASES UNDER THE PLAN? No. There are no brokerage or other fees. All costs of administration of the Plan are paid by CG&E; however, charges will be incurred by participants who direct CG&E to sell their shares on withdrawal. Persons participating through Brokers may be required by their Brokers to pay a fee. PURCHASES 10. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR A PARTICIPANT? The number of shares to be purchased will be based on the amount of the participant's dividends being reinvested and the price of the shares of Common Stock. Each participant's account will be credited with that number of shares, including fractions computed to four decimal places, equal to the total amount to be invested divided by the purchase price as determined under Question 12. The number of shares purchased with optional cash payments will be determined in the same manner. The manner in which the Plan operates does not permit CG&E to honor a request that a specific number of shares be purchased. 11. WHEN WILL DIVIDENDS BE REINVESTED AND OPTIONAL CASH PAYMENTS INVESTED UNDER THE PLAN FOR THE PURCHASE OF COMMON STOCK? (a) A participant's initial dividend will be reinvested on the next dividend payment date after CG&E receives the Authorization Form, provided the Form is received not later than five calendar days prior to a Record Date. Otherwise, reinvestment will begin on the next dividend payment date. Subsequent dividends will be reinvested on dividend payment dates. (b) Optional cash payments will be invested on the next dividend payment date for Common or Preferred Stock (generally every 45 calendar days, i.e., January 1, February 15, April 1, May 15, July 1, August 15, October 1, and November 15). The dividend payment dates for Common Stock are ordinarily the 15th day of February, May, August, and November. The dividend payment dates for Preferred Stock are ordinarily the 1st day of January, April, July, and October. 8 10 12. WHAT WILL BE THE PRICE OF SHARES OF COMMON STOCK PURCHASED UNDER THE PLAN? The price of shares of Common Stock purchased for participants in the Plan will be the average of the high and low prices (New York Stock Exchange--Composite) for such shares on the dividend payment date (if no trading is reported for that date, on the preceding day on which there was trading). CG&E will not issue shares to the Plan at less than the par value of such shares. If the price of shares to be purchased on any dividend payment date is less than the par value of the shares, all dividends and optional cash payments which would have been invested on that date will be sent to the participants. OPTIONAL CASH PAYMENTS 13. HOW DOES THE OPTIONAL CASH PAYMENT FEATURE WORK? Optional cash payments received by CG&E on or before a dividend payment date for Common or Preferred Stock will be applied to the purchase of shares of Common Stock as of that dividend payment date. NO INTEREST WILL BE PAID ON CASH PAYMENTS. THEREFORE, IT IS SUGGESTED THAT ANY CASH PAYMENTS BE SENT TO CG&E NOT MORE THAN 30 DAYS BEFORE A DIVIDEND PAYMENT DATE (see Question 11 for dividend payment dates). Optional cash payments cannot be less than $25 for any dividend payment date or more than $40,000 in any calendar year. The amount of optional cash payments may vary. 14. HOW ARE OPTIONAL CASH PAYMENTS MADE? An optional cash payment may be made by enclosing a check (made payable to CG&E) with the Authorization Form when enrolling or at any other time by forwarding a check with a statement of account stub, which is furnished to participants by CG&E. 15. MAY AN OPTIONAL CASH PAYMENT BE RETURNED? A participant may, without withdrawing from the Plan, request the return of an optional cash payment upon written notice received by CG&E not later than three business days prior to the dividend payment date on which the investment would have been made. For purposes of the Plan, a "business day" is a day on which the New York Stock Exchange is open. 16. CAN A PARTICIPANT ORDER THE PURCHASE OF A SPECIFIC NUMBER OF SHARES WHEN SUBMITTING AN OPTIONAL CASH PAYMENT? No. All optional cash payments received on or before a dividend payment date are used to purchase whole and fractional shares on the dividend payment date at a price determined on the dividend payment date. The amount of cash necessary to purchase a specific number of shares cannot be determined because the optional cash payment must be received before the purchase price is known. 17. MAY THE COMPANY RESTRICT PARTICIPATION IN THE PLAN? Yes. The Company reserves the right to restrict participation in the Plan if it determines, in its sole discretion, that the person is investing, or intends to invest, in the Plan in a manner contrary to applicable law or the general purpose of the Plan. 9 11 REPORTS TO PARTICIPANTS 18. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN? Participants in the Plan will receive statements of accounts as soon as practicable after each dividend payment date on which investments are made for their accounts. These statements are a participant's record of the cost of purchases and should be retained for income tax purposes. The last statement for the year will indicate the number of shares of Common Stock reinvested during the calendar year, the date of each reinvestment, and the fair market value of the stock on the date reinvested. In addition, each participant will receive copies of the same communications sent to all holders of shares of Common Stock, including CG&E's quarterly reports to shareholders, the Annual Report, the Notice of Annual Meeting and Proxy Statement, and information to use for Internal Revenue Service reporting. DIVIDENDS 19. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON FRACTIONAL SHARES? Yes. Such dividends will be computed to four decimal places. 20. WILL DIVIDENDS ON PLAN SHARES BE REINVESTED? Yes. Dividends on all Plan Shares will automatically be reinvested in additional Common Stock, even if the participant checked the "Optional Cash Payments Only" box on the Authorization Form. If participants desire to receive a dividend check, shares must be withdrawn from the Plan in certificate form and the method of participation may need to be changed. CERTIFICATES FOR SHARES 21. WILL CERTIFICATES FOR SHARES OF COMMON STOCK PURCHASED UNDER THE PLAN BE ISSUED TO PARTICIPANTS WHO WISH TO REMAIN IN THE PLAN? Certificated Shares will not be issued to participants unless requested. Shares of Common Stock purchased under the Plan will be registered in the name of CG&E (or its nominee). The number of Plan Shares will be shown on the statement of account mailed to each participant. Certificates for any number of whole shares credited to an account under the Plan will be issued upon the written request of a participant who wishes to remain in the Plan. This request should be mailed to CG&E at the address shown under Question 44. Any remaining whole and fractional shares held by CG&E for the account of the participant will continue to participate in the Plan. No certificates can be issued for fractional shares. Plan Shares may not be pledged. 22. IN WHOSE NAME WILL ACCOUNTS BE MAINTAINED AND CERTIFICATES REGISTERED WHEN ISSUED? Accounts under the Plan will be maintained in the names in which certificates of the participants were registered at the time they entered the Plan. Certificates for whole shares, when issued, will be similarly registered. 10 12 WITHDRAWAL AND TERMINATION 23. MAY A PARTICIPANT, WITHOUT WITHDRAWING FROM THE PLAN, DISCONTINUE REINVESTMENT OF DIVIDENDS? Yes. Without withdrawing from the Plan, a participant may discontinue reinvestment of dividends on Certificated Shares by giving CG&E written notice not later than four business days prior to a Record Date. A form is provided on the reverse of the statement of account. 24. WHAT HAPPENS WHEN A PARTICIPANT WITHDRAWS SHARES FROM THE PLAN? A participant may withdraw shares by submitting to CG&E the Account Change Request located on the reverse of the statement of account or by notifying CG&E in writing, requesting CG&E to: (a) Issue stock certificate for all whole Plan Shares (fractional shares will remain in the Plan); or (b) Issue stock certificate for a specific number of whole Plan Shares; or (c) Sell a specific number of whole Plan Shares. 25. WHAT HAPPENS WHEN A PARTICIPANT CHOOSES TO TERMINATE PLAN PARTICIPATION? A participant may terminate by submitting to CG&E the Account Change Request located on the reverse of the statement of account or by notifying CG&E in writing, requesting CG&E to: (a) Close the Plan account and issue a stock certificate for all whole Plan Shares, sell fractional share; or (b) Close the Plan account and sell all whole and fractional Plan Shares. 26. HOW DOES CG&E PROCESS REQUESTS FOR WITHDRAWALS AND TERMINATIONS? Withdrawals and terminations will normally be processed within five business days following CG&E's receipt of a request. Proceeds from any sale, less applicable brokerage commissions, will be remitted to a participant following settlement through a broker, normally five business days after the sale. Any request for termination from the Plan or sale of Plan Shares received after an ex-dividend date (four business days prior to a Record Date), pertaining to dividends on Common Stock, will not be processed until after the dividends declared as of that Record Date have been reinvested. 27. HOW DOES CG&E DETERMINE THE SALE PRICE FOR WITHDRAWALS AND TERMINATIONS? The sale price for shares sold through withdrawal or termination is the market price of CG&E's Common Stock at the time of sale. 28. WHEN MAY A PERSON REJOIN THE PLAN? Generally, a person may rejoin at any time. However, CG&E reserves the right to reject any Authorization Form from a previous participant on grounds of excessive termination and rejoining. Such reservation is intended to minimize administrative expense and to encourage use of the Plan as a long-term investment service. 11 13 SAFEKEEPING SERVICE FOR COMMON STOCK CERTIFICATES 29. WHAT IS THE PURPOSE OF THE PLAN'S SAFEKEEPING SERVICE FOR CERTIFICATES AND HOW DOES IT WORK? The purpose of the Plan's Safekeeping Service is to permit participants in the Plan to deposit Common Stock certificates with the Plan. Shares deposited for safekeeping will be transferred into the name of the Plan's nominee and credited to the participant's account under the Plan. Thereafter, the shares will be treated in the same manner as shares purchased through the Plan. 30. WHAT ARE THE ADVANTAGES OF THE PLAN'S SAFEKEEPING SERVICE? The Plan's Safekeeping Service offers two significant advantages to participants. First, the risk associated with loss of a participant's Common Stock certificates is eliminated. Second, because shares deposited with the Plan for safekeeping are treated in the same manner as shares purchased through the Plan, they may be sold through the Plan in a convenient and efficient manner, provided they have been deposited for at least 60 days. 31. HOW MAY COMMON STOCK CERTIFICATES BE DEPOSITED WITH THE PLAN? Participants who wish to deposit their certificates of Common Stock with the Plan must complete and return to the Company a Certificate Deposit Form together with Common Stock certificates registered in their names. Certificates for Preferred Stock will not be accepted for safekeeping. 32. WHAT HAPPENS TO DIVIDENDS PAID ON SHARES OF COMMON STOCK DEPOSITED WITH THE PLAN? Dividends paid on shares of Common Stock deposited with the Plan will automatically be reinvested in additional shares of Common Stock. TRANSFER OF SHARES 33. MAY PARTICIPANTS ASSIGN OR TRANSFER ALL OR A PART OF THEIR PLAN SHARES? Yes. If participants wish to change the ownership of all or part of their Plan Shares through gift, private sale, or otherwise, they may effect transfer by mailing a properly executed Stock Power, along with a letter of instruction, to CG&E at the address shown under Question 44. Transfer of less than all of a participant's shares must be made in whole share amounts. A request for transfer is subject to the same requirements applicable to the transfer of Common Stock certificates, including but not limited to the requirement of a signature guarantee on the Stock Power. The Company will provide the participant with a form of Stock Power upon request. 34. IF PLAN SHARES ARE TRANSFERRED TO ANOTHER PERSON, WILL THE COMPANY ISSUE A STOCK CERTIFICATE TO THE TRANSFEREE? Not unless requested. A shareholder account will be opened in the name of the person to whom the shares are transferred. An Authorization Form and prospectus will be mailed to the new shareholder. 35. HOW WILL THE NEW SHAREHOLDER BE ADVISED OF THE TRANSFER? The Company will provide a confirmation of transfer to the participant who requested the transfer. After reinvestment of the first dividend, the new shareholder will receive a statement showing the number of shares transferred. 12 14 OTHER INFORMATION 36. IF CG&E HAS A RIGHTS OFFERING, HOW WILL THE RIGHTS ON PLAN SHARES BE HANDLED? Warrants representing rights on any shares of Common Stock, both full and fractional, credited to the account of a participant will be mailed directly to the participant in the same manner as to shareholders not participating in the Plan. 37. WHAT HAPPENS IF CG&E ISSUES A STOCK DIVIDEND OR DECLARES A STOCK SPLIT? Any shares of Common Stock distributed as a result of a stock dividend or stock split on Plan Shares will be added to the participant's account. Stock dividends or split shares distributed on any Certificated Shares registered in the name of the participant will be mailed to the participant in the same manner as to shareholders not participating in the Plan. 38. HOW WILL A PARTICIPANT'S SHARES BE VOTED AT MEETINGS OF SHAREHOLDERS? Each participant will be sent a proxy card which will include the number of Plan Shares. Such proxy will be voted in accordance with the instructions of the participant. If the proxy card is not returned prior to the meeting date or is returned unsigned, none of the shares will be voted. 39. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN? A participant will be treated for Federal income tax purposes as having received, on the dividend payment date, dividends equal to the full amount of the cash dividends payable on both Certificated and Plan Shares. Participants will not realize any taxable income at the time whole shares are withdrawn from their accounts under the Plan. However, participants who receive, on withdrawal from or termination of the Plan, a cash payment for Plan Shares (as used in this paragraph includes whole and/or fractional shares) may realize a gain or loss. Gains or losses may also be realized by participants when whole shares are sold by them after withdrawal from the Plan. The amount of such gains or losses, if any, will be the difference between the amounts which participants receive for their shares and their tax basis. Except in the case of participants who excluded reinvested dividends from taxable income during the years 1982 through 1985 (see below), the tax basis of shares purchased with reinvestment dividends will equal the fair market value of such shares on the dividend payment dates as of which the shares were credited to the participants' accounts. The tax basis of shares purchased with optional cash payments will be the amount of such optional cash payments. During the years 1982 through 1985, participants were eligible to elect to exclude from taxable income up to $750 of reinvested dividends per year ($1,500 for a joint return). The tax basis of shares purchased with such excluded dividends is zero for the purpose of determining taxable gain when the shares are sold. The gain from the sale of those shares qualifies for long-term capital gain treatment if the shares are held for more than one year from the dividend payment date on which they were purchased. However, if other shares of CG&E's Common Stock (regardless of how acquired) are sold between the Record Date of a dividend which is reinvested and a date 12 months after the payment date of that dividend, participants shall be treated as having disposed of shares which were purchased with such dividend (up to the number of shares so purchased) and the net proceeds from the sale of such shares shall be treated as ordinary income. For further information as to the tax consequences of participation in the Plan, participants are advised to consult their tax advisors. The statements of accounts sent to participants should be retained for this purpose. 13 15 40. WHAT PROVISION IS MADE FOR FOREIGN SHAREHOLDERS SUBJECT TO INCOME TAX WITHHOLDING? In the case of foreign shareholders who elect to have their dividends reinvested and whose dividends are subject to United States income tax withholding, the amount of the tax to be withheld will be deducted from the amount of dividends to be reinvested. The statements confirming purchases made for foreign participants will indicate the net dividend payment reinvested. Optional cash payments received from them must be in United States dollars. 41. MAY THE PLAN BE CHANGED OR DISCONTINUED? CG&E reserves the right to suspend, modify, or terminate the Plan. All participants will receive notice of any such suspension, modification, or termination. 42. WHAT HAPPENS UPON CONSUMMATION OF THE MERGER? Upon consummation of the Merger, as discussed elsewhere in the prospectus, each participant in this Plan will automatically and without any further action by them, become a participant in the CINeregy Dividend Reinvestment and Stock Purchase Plan under substantially the same terms of participation as under this Plan unless the participant affirmatively communicates, in writing, his or her desire to be terminated from the Plan, as described in Question 25. 43. WHAT IS THE RESPONSIBILITY OF CG&E UNDER THE PLAN? CG&E, except to the extent otherwise required under applicable state and federal securities laws, will not be liable for any action taken or omitted to be taken in good faith in administering the Plan. Participants should recognize that CG&E cannot assure them a profit or protect them against a loss on shares purchased by them under the Plan or otherwise. 44. WHERE SHOULD CORRESPONDENCE REGARDING THE PLAN BE DIRECTED? All correspondence regarding the Plan should be addressed to: The Cincinnati Gas & Electric Company Shareholder Services P. O. Box 900 Cincinnati, OH 45201-0900 Telephone inquiries may also be made to CG&E toll free from anywhere in the United States between 8:00 a.m. and 5:00 p.m. Eastern Time. The numbers are as follows: Greater Cincinnati 1-513-287-1940 Toll free 1-800-325-2945 --------------- USE OF PROCEEDS The net proceeds from the sale of shares of Common Stock, $8.50 Par Value (the Shares) offered hereby will be used for general corporate purposes, including additional construction. --------------- 14 16 DESCRIPTION OF CG&E COMMON STOCK DIVIDEND RIGHTS After payment or setting aside for payment of full cumulative dividends on all outstanding Preferred Stock, Common shareholders are entitled to dividends at such rate as may be determined by the Board of Directors, subject to the provisions of the Amended Articles of Incorporation, as amended. VOTING RIGHTS Common shareholders are entitled to one vote for each share on all matters voted upon by shareholders, except that whenever dividends on the Preferred Stock are in default in an aggregate amount equal to four full quarterly dividends on all outstanding shares of such Stock, the Preferred shareholders are entitled, as a class, to elect a majority of the Board of Directors, and the right continues until all dividends in arrears have been paid or declared and set apart for payment. On compliance with statutory procedures, Common shareholders have cumulative voting rights in the election of directors. LIQUIDATION RIGHTS Subject to the prior rights of creditors and of Preferred shareholders, Common shareholders are entitled to receive all assets of CG&E pro rata in the event of liquidation or dissolution. PREEMPTIVE RIGHTS Common and Preferred shareholders have no preemptive rights. MISCELLANEOUS The Shares offered hereby upon issuance will be validly issued, fully paid, and nonassessable. LISTING CG&E's Common Stock is listed on the New York, Cincinnati, Chicago, and Pacific Stock Exchanges. TRANSFER AGENT AND REGISTRAR CG&E is transfer agent for its Common Stock, mailing address: Shareholder Services, P. O. Box 900, Cincinnati, OH 45201-0900. The Registrar is The Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, OH 45263, Attention: Corporate Trust Services. DESCRIPTION OF CINERGY COMMON STOCK GENERAL Upon consummation of the Merger, the authorized capital stock of CINergy will consist of 600,000,000 shares of CINergy Common Stock. The description of the CINergy Common Stock set forth herein does not purport to be complete and is qualified in its entirety by reference to the Certificate of Incorporation and By-Laws of CINergy. 15 17 VOTING RIGHTS The holders of CINergy Common Stock will be entitled to one vote per share on all matters to be voted upon by shareholders, including elections of directors. Following the Merger, the Board of Directors of CINergy will consist of 19 members divided into three classes. The directors of a class will hold office for a term of three years. CINergy Common Stock shareholders do not have cumulative voting rights in the election of directors. DIVIDEND AND LIQUIDATION RIGHTS The holders of CINergy Common Stock will be entitled to receive dividends as and when delcared by the Board of Directors of CINergy out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of the affairs of CINergy, the holders of CINergy Common Stock will be entitled to share ratably in any assets remaining after payment in full of all liabilities of CINergy. Because CINergy will conduct its operations through subsidiaries, CG&E and PSI Energy among others, the ability of CINergy to pay dividends to holders of CINergy Common Stock will depend on the ability of CG&E and PSI Energy, among others, to pay common dividends to CINergy. - No common dividends can be paid by CG&E if there are dividends in arrears on CG&E Preferred Stock. The Amended Articles of Incorporation of CG&E also impose restrictions on the payment of common dividends, except dividends payable in shares of CG&E Common Stock, so long as any Cumulative Preferred Stock 4% Series is outstanding, if the common shareholders' equity is less than 25% of CG&E's total capitalization. CG&E's Mortgage Indenture provides that CG&E will not, so long as any series of First Mortgage Bonds issued prior to 1971 is outstanding, declare any common dividends, except dividends payable in shares of CG&E Common Stock, or purchase any shares of CG&E Common Stock, or make any distribution of cash or property to holders of CG&E Common Stock, by reduction of its capital stock or otherwise, unless, after giving effect to such dividend, purchase or distribution, the aggregate of all such dividends and all amounts applied to such purchases or so distributed subsequent to June 30, 1948, shall not exceed the net income available for dividends on its Common Stock subsequent to June 30, 1948, plus $4,000,000. The ability of CG&E to pay common dividends has not heretofore been impaired by any such prohibition, restriction or limitation, nor is it anticipated that any such prohibition, restriction or limitation will impair the ability of CG&E to pay common dividends to CINergy after consummation of the Merger. - No common dividends can be paid by PSI Energy if there are dividends in arrears on PSI Energy Preferred Stock. PSI Energy's Mortgage Indenture (Indenture) provides that, so long as any bonds are outstanding under the Indenture, PSI Energy shall not declare or pay cash dividends on shares of its capital stock (other than on PSI Energy Preferred Stock) except out of its earned surplus or net profits. In addition, PSI Energy's Amended Articles of Incorporation limit dividends on common stock to 75% of net income available for common stock if the ratio of common stock equity to total capitalization is less than 25%, or to 50% of such net income available if such ratio is less than 20%. The ability of PSI Energy to pay common dividends has not heretofore been impaired by any such prohibition, restriction or limitation, nor is it anticipated that any such prohibition, restriction or limitation will impair the ability of PSI Energy to pay common dividends to CINergy after consummation of the Merger. 16 18 NO OTHER RIGHTS The holders of CINergy Common Stock do not have preemptive rights with respect to the issuance of additional shares of capital stock by CINergy. The CINergy Common Stock does not contain any redemption provisions or conversion rights. CERTAIN ANTI-TAKEOVER PROVISIONS CINergy's Certificate of Incorporation and By-Laws will, upon consummation of the Merger, contain certain provisions that may delay or deter a change in control of CINergy. Such provisions require, among other things, (i) a classified Board of Directors, with each class containing as nearly as possible one-third of the whole number of members of the Board and the members of each class serving for three-year terms, (ii) a vote of at least 80% of CINergy's voting power to amend certain provisions of CINergy's By-Laws, and (iii) advance notice procedures with respect to nominations of directors other than by or at the direction of the CINergy Board. STATEMENT CONCERNING EXPERTS The statements made in CG&E's Annual Report on Form 10-K for the year ended December 31, 1993 under "Regulation", "Rate Matters" and "Environmental Matters", under "Rate Matters" in CG&E's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994 (which documents are incorporated in this Prospectus by reference), and under "Dividend Reinvestment and Stock Purchase Plan", and "Description of CG&E Common Stock" in this Prospectus, have been reviewed by Taft, Stettinius & Hollister, counsel for CG&E. The statements therein as to matters of law and legal conclusions are made on the authority of that firm as experts. The members and associates of the firm and their immediate families own directly or indirectly an aggregate of 6,926 shares of CG&E's Common Stock and 1,940 shares of CG&E's Preferred Stock. The consolidated balance sheet and schedules of common shareholders' equity and cumulative preferred shares and long-term debt of CG&E and subsidiaries as of December 31, 1993 and 1992 and the related consolidated statements of income, changes in common shareholders' equity, and cash flows and schedule of taxes for each of the three years in the period ended December 31, 1993, included in CG&E's Annual Report on Form 10-K for the year ended December 31, 1993, have been audited by Arthur Andersen & Co., independent public accountants, as indicated in their report with respect thereto, and are incorporated herein by reference in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. Reference is made to said report dated January 24, 1994, which includes an explanatory paragraph with respect to the changes in the methods of accounting for income taxes, postretirement health care benefits and postemployment benefits effective January 1, 1993. The consolidated financial statements and schedules of PSI Resources, Inc. included in CG&E's Current Report on Form 8-K dated June 15, 1994, have been audited by Arthur Andersen & Co., independent public accountants, as indicated in their report with respect thereto, and are incorporated herein by reference in reliance upon the authority of said firm as experts in accounting and auditing in giving said report. Reference is made to said report dated February 22, 1994, which includes explanatory paragraphs with respect to changes in the methods of accounting for income taxes and postretirement benefits effective January 1, 1993, and to the litigation described in Note 2 to the consolidated financial statements therein. 17 19 LEGAL OPINIONS The legality of the Shares has been passed upon for CG&E by Taft, Stettinius & Hollister, Star Bank Center, Cincinnati, Ohio 45202. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 1701.13(E) of the Ohio Revised Code provides that a corporation may indemnify or agree to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation, or is or was serving at its request as a director, trustee, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit, or proceeding if the person is determined under the procedure described in the Section to have (a) acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and (b) had no reasonable cause to believe the conduct was unlawful in the case of any criminal action or proceeding. However, with respect to expenses actually and reasonably incurred in connection with the defense or settlement of any action or suit by or in the right of the corporation to procure a judgment in its favor, no indemnification is to be made (i) in respect of any claim, issue, or matter as to which such person is adjudged liable for negligence or misconduct in the performance of such person's duty to the corporation unless, and only to the extent it is determined by the court upon application that, despite the adjudication of liability, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper, or (ii) in respect of any action or suit in which the only liability asserted against a director is in connection with the alleged making of an unlawful loan, dividend, or distribution of corporate assets. The Section also provides that such person shall be indemnified against expenses actually and reasonably incurred by the person to the extent successful in defense of the actions referred to above, or in defense of any claim, issue, or matter therein. CG&E's Regulations contain substantially the same provisions except that permissive indemnity under the statute is made mandatory as to directors and officers by the Regulations. CG&E maintains an insurance policy covering its directors and officers against certain civil liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed 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. 18 20 TABLE OF CONTENTS PAGE ---------- Available Information........................................... 2 Incorporation of Certain Documents by Reference................. 2 The Company..................................................... 3 Proposed Merger................................................. 3 Dividend Reinvestment and Stock Purchase Plan Frequently Used Terms...................................... 6 Purpose.................................................... 6 Advantages................................................. 6 Administration............................................. 7 Participation.............................................. 7 Costs...................................................... 8 Purchases.................................................. 8 Optional Cash Payments..................................... 9 Reports to Participants.................................... 10 Dividends.................................................. 10 Certificates for Shares.................................... 10 Withdrawal and Termination................................. 11 Safekeeping Service for Common Stock Certificates.......... 12 Transfer of Shares......................................... 12 Other Information.......................................... 13 Use of Proceeds................................................. 14 Description of CG&E Common Stock................................ 15 Description of CINergy Common Stock............................. 15 Statement Concerning Experts.................................... 17 Legal Opinions.................................................. 18 Indemnification of Directors and Officers....................... 18 21 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. CG&E estimates that expenses to be incurred and borne by it in connection with the proposed sale of the Common Stock are as follows: ITEM AMOUNT - - ------------------------------------------------------------- ------- Registration Fee............................................. $ 7,737 Listing Fees on Stock Exchanges.............................. 11,000 Printing..................................................... 9,300 Postage...................................................... 5,700 Legal Fees................................................... 5,000 Accounting Fees.............................................. 7,000 Other........................................................ 1,000 ------- Total................................................... $46,737 ======= ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Reference is made to "Indemnification of Directors and Officers" contained in the Prospectus. ITEM 16. EXHIBITS. The following exhibits are filed as part of the Registration Statement: EXHIBIT NO. ---------- *2 --Amended and Restated Agreement and Plan of Reorganization by and among CG&E, PSI Resources, Inc., PSI Energy, Inc., CINergy Corp. and CINergy Sub, Inc., dated as of December 11, 1992, as amended on July 2, 1993, and as of September 10, 1993 (filed as Annex A to Amendment No. 3 to Registration Statement No. 33-59964 on Form S-4) 4-A --Dividend Reinvestment and Stock Purchase Plan as set forth in full in the prospectus to which reference is hereby made *4-B --Copy of Amended Articles of Incorporation of CG&E effective January 24, 1994 (filed as Exhibit 3-A-1 to Form 10-K for the year ended December 31, 1993) *4-C --Copy of Regulations of CG&E as amended, adopted by shareholders April 16, 1987 (filed as Exhibit 3-B to Form 10-Q for the quarter ended March 31, 1987) *4-D --Certificate of Incorporation of CINergy Corp. (filed as Annex H to Amendment No. 3 to Registration Statement No. 33-59964 on Form S-4) *4-E --By-Laws of CINergy Corp. (filed as Annex I to Amendment No. 3 to Registration Statement No. 33-59964 on Form S-4) 5 --Opinion of Taft, Stettinius & Hollister as to legality of Common Stock 23-A --Consent of Taft, Stettinius & Hollister (included in their opinion filed as Exhibit 5) 23-B-1 --Consent of Arthur Andersen & Co., Cincinnati, Ohio (see page II-5) 23-B-2 --Consent of Arthur Andersen & Co., Indianapolis, Indiana (see page II-6) 24-A --Power of Attorney (set forth on page II-3) - - --------------- *The exhibits with an asterisk have been filed with the SEC and are incorporated herein by reference. II-1 22 ITEM 17. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (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 paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed 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 a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes 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 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 23 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON SIGNING BELOW CONSTITUTES DONALD R. BLUM, JAMES J. MAYER AND C. ROBERT EVERMAN, AND EACH OF THEM, WITH FULL POWER TO ACT WITHOUT THE OTHERS, HIS LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM AND IN HIS NAME, IN ANY CAPACITY, TO SIGN ANY AMENDMENT TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION GRANTING UNTO THE ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM, FULL AUTHORITY TO DO EACH ACT NECESSARY TO BE DONE, AS FULLY TO ALL PURPOSES AS HE MIGHT DO IN PERSON, HEREBY RATIFYING ALL THAT THE ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM, OR THEIR OR HIS SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF. ------------------ SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT, THE CINCINNATI GAS & ELECTRIC COMPANY, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF OHIO, 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, ALL IN THE CITY OF CINCINNATI AND STATE OF OHIO ON THE 20TH DAY OF JULY, 1994. THE CINCINNATI GAS & ELECTRIC COMPANY By /s/ JACKSON H. RANDOLPH ------------------------------------- (JACKSON H. RANDOLPH, CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE 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 DATES INDICATED. (I) PRINCIPAL EXECUTIVE OFFICER: /s/ JACKSON H. RANDOLPH Chairman of the Board, July 20, 1994 - - ------------------------------------------ President and Chief Executive (JACKSON H. RANDOLPH) Officer (II) PRINCIPAL FINANCIAL OFFICER: /s/ C. R. EVERMAN Senior Vice-President -- July 20, 1994 - - ------------------------------------------ Finance and Director (C. R. EVERMAN) (III) PRINCIPAL ACCOUNTING OFFICER: /s/ DANIEL R. HERCHE Controller July 20, 1994 - - ------------------------------------------ (DANIEL R. HERCHE) II-3 24 (IV) A MAJORITY OF THE BOARD OF DIRECTORS: /s/ NEIL A. ARMSTRONG Director July 20, 1994 - - ------------------------------------------------- (NEIL A. ARMSTRONG) /s/ OLIVER W. BIRCKHEAD Director July 20, 1994 - - ------------------------------------------------- (OLIVER W. BIRCKHEAD) /s/ CLEMENT L. BUENGER Director July 20, 1994 - - ------------------------------------------------- (CLEMENT L. BUENGER) /s/ PHILLIP R. COX Director July 20, 1994 - - ------------------------------------------------- (PHILLIP R. COX) /s/ GEORGE C. JUILFS Director July 20, 1994 - - ------------------------------------------------- (GEORGE C. JUILFS) /s/ THOMAS E. PETRY Director July 20, 1994 - - ------------------------------------------------- (THOMAS E. PETRY) Director July 20, 1994 - - ------------------------------------------------- (JANE L. REES) /s/ JOHN J. SCHIFF, JR. Director July 20, 1994 - - ------------------------------------------------- (JOHN J. SCHIFF, JR.) Director July 20, 1994 - - ------------------------------------------------- (DUDLEY S. TAFT) /s/ OLIVER W. WADDELL Director July 20, 1994 - - ------------------------------------------------- (OLIVER W. WADDELL) II-4 25 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement of our report dated January 24, 1994, included in the Annual Report on Form 10-K for the year ended December 31, 1993 of The Cincinnati Gas & Electric Company, and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN & CO. Cincinnati, Ohio, July 20, 1994. II-5 26 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement of our report dated February 22, 1994, on the consolidated financial statements of PSI Resources, Inc. included in The Cincinnati Gas & Electric Company's Current Report on Form 8-K dated June 15, 1994, and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN & CO. Indianapolis, Indiana, July 20, 1994. ------------------------------ The consent of Counsel named as experts is included in their opinion being filed as an Exhibit to the Registration Statement. II-6