AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 9, 2004
REGISTRATION NO. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
TEXAS 1111 LOUISIANA 74-0694415
(State or other jurisdiction of HOUSTON, TEXAS 77002 (I.R.S. Employer
incorporation or organization) (713) 207-1111 Identification No.)
(Address, including zip code, and
telephone number,
including area code, of registrant's
principal executive offices)
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RUFUS S. SCOTT
VICE PRESIDENT, DEPUTY GENERAL COUNSEL AND ASSISTANT CORPORATE SECRETARY
1111 LOUISIANA
HOUSTON, TEXAS 77002
(713) 207-1111
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
GERALD M. SPEDALE
BAKER BOTTS L.L.P.
910 LOUISIANA
3000 ONE SHELL PLAZA
HOUSTON, TEXAS 77002-4995
(713) 229-1234
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are to be 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, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
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Common Stock, par value $0.01 per share(2)... 3,000,000 $10.58 $31,740,000 $4,022
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based upon the average of the high and low sales
prices of the Common Stock of CenterPoint Energy, Inc. as reported on the
New York Stock Exchange Composite Tape on November 2, 2004.
(2) Each share of Common Stock includes one preferred share purchase right. No
separate consideration is payable for the preferred share purchase rights.
The registration fee for these securities is included in the fee for the
Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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 NOVEMBER 9, 2004
PROSPECTUS
CENTERPOINT ENERGY, INC.
INVESTOR'S CHOICE PLAN
3,000,000 SHARES OF COMMON STOCK
We are offering our shareholders and other interested investors an
opportunity to purchase shares of our common stock directly from us through
participation in our Investor's Choice Plan, which we refer to in this
prospectus as the "plan." The plan offers a number of convenient options for
investing in shares of our common stock. Once enrolled in the plan, participants
may:
- purchase their first shares of our common stock by making an initial cash
investment of at least $250 for first-time investors in CenterPoint
Energy or $50 for current holders of our eligible securities,
- purchase additional shares of our common stock by making optional cash
payments at any time of at least $50 each and up to a maximum of $120,000
per calendar year,
- elect to reinvest any cash dividend and interest payments that we may pay
in the future on eligible securities in additional shares of our common
stock, and
- sell shares of common stock that they hold in the plan directly through
the plan.
Shares of common stock will be purchased under the plan, at our option,
from newly issued shares, shares held in our treasury or shares purchased on the
open market. Any open market purchases will be made through an independent agent
that we will select. In some jurisdictions, we are offering shares of common
stock under the plan only through a registered broker/dealer to persons who are
not presently record holders of our common stock.
Our common stock is listed on the New York and the Chicago Stock Exchanges
under the symbol "CNP." Our principal executive offices are located at 1111
Louisiana Street, Houston, Texas 77002, and our telephone number at that address
is (713) 207-1111.
This prospectus contains a summary of the material provisions of the plan.
You should retain this prospectus for future reference.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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This prospectus is dated , 2004.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement we have filed with the
SEC using a "shelf" registration process. Using this process, we may offer up to
3,000,000 shares of our common stock under our Investor's Choice Plan. This
prospectus provides you with a description of the material provisions of the
plan. You should carefully read this prospectus and the information contained in
the documents we refer to under the heading "Where You Can Find More
Information."
References in this prospectus to the terms "we," "us," "CenterPoint Energy"
or other similar terms mean CenterPoint Energy, Inc., unless the context clearly
indicates otherwise.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file with the
SEC at the SEC's Public Reference Room located at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain further information regarding the
operation of the SEC's Public Reference Room by calling the SEC at
1-800-SEC-0330. Our filings are also available to the public on the SEC's
website located at http://www.sec.gov. You can obtain information about us at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
This prospectus is part of a registration statement we have filed with the
SEC relating to our common stock. As permitted by SEC rules, this prospectus
does not contain all of the information included in the registration statement
and the accompanying exhibits and schedules we file with the SEC. You may refer
to the registration statement, the exhibits and the schedules for more
information about us and our common stock. The registration statement, exhibits
and schedules are also available at the SEC's Public Reference Room or through
its website.
We are "incorporating by reference" into this prospectus information we
file with the SEC. This means we are disclosing important information to you by
referring you to the documents containing the information. The information we
incorporate by reference is considered to be part of this prospectus.
Information that we file later with the SEC that is deemed incorporated by
reference into this prospectus (but not information deemed to be furnished to
and not filed with the SEC) will automatically update and supersede information
previously included.
We are incorporating by reference into this prospectus the documents listed
below and any subsequent filings we make with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (excluding
information deemed to be furnished and not filed with the SEC) until all the
common stock is sold or after the date on which the registration statement that
includes this prospectus was initially filed with the SEC and before the
effectiveness of such registration statement:
- our Annual Report on Form 10-K for the year ended December 31, 2003 (our
"2003 Form 10-K"),
- our Quarterly Report on Form 10-Q for the period ended March 31, 2004,
- our Quarterly Report on Form 10-Q for the period ended June 30, 2004,
- our Current Report on Form 8-K filed January 29, 2004,
- Item 5 of our Current Report on Form 8-K filed February 12, 2004,
- our Current Report on Form 8-K filed March 10, 2004,
- our Current Report on Form 8-K filed April 1, 2004 which reports that our
subsidiary, CenterPoint Energy Resources Corp., entered into a new credit
agreement,
- Item 5 of our Current Report on Form 8-K filed April 1, 2004 which
reports the filing of our final true-up application,
- Item 5 of our Current Report on Form 8-K filed April 22, 2004,
- our Current Report on Form 8-K filed June 2, 2004,
- our Current Report on Form 8-K filed July 22, 2004,
- our Current Report on Form 8-K filed September 21, 2004,
- our Current Report on Form 8-K filed November 3, 2004,
- our Current Report on Form 8-K filed November 9, 2004, and
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- the description of our common stock (including the related preferred
share purchase rights) contained in our Current Report on Form 8-K filed
September 5, 2002, as we may update that description from time to time.
You may also obtain a copy of our filings with the SEC at no cost, by
writing to or telephoning us at the following address:
CenterPoint Energy, Inc.
Attn: Investor Relations
P.O. Box 4567
Houston, Texas 77210-4567
(713) 207-6500
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
In this prospectus, including the information we incorporate by reference,
we make statements concerning our expectations, beliefs, plans, objectives,
goals, strategies, future events or performance and underlying assumptions and
other statements that are not historical facts. These statements are "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those expressed or
implied by these statements. You can generally identify our forward-looking
statements by the words "anticipate," "believe," "continue," "could,"
"estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan,"
"potential," "predict," "projection," "should," "will" or other similar words.
We have based our forward-looking statements on our management's beliefs
and assumptions based on information available to our management at the time the
statements are made. We caution you that assumptions, beliefs, expectations,
intentions and projections about future events may and often do vary materially
from actual results. Therefore, we cannot assure you that actual results will
not differ materially from those expressed or implied by our forward-looking
statements.
The following are some of the factors that could cause actual results to
differ materially from those expressed or implied in forward-looking statements:
- the timing and outcome of the regulatory process related to the 1999
Texas Electric Choice Law leading to the determination and recovery of
the true-up components and the securitization of these amounts, and any
legal proceeding related thereto,
- the successful consummation and the timing of the sale of our interest in
Texas Genco Holdings, Inc. ("Texas Genco"),
- nonperformance by the counterparty to the master power purchase and sale
agreement that Texas Genco, LP, a subsidiary of Texas Genco, entered into
in connection with the sale of our interest in Texas Genco,
- state and federal legislative and regulatory actions or developments,
including deregulation, re-regulation and restructuring of the electric
utility industry, constraints placed on our activities or business by the
Public Utility Holding Company Act of 1935, as amended ("1935 Act"),
changes in or application of laws or regulations applicable to other
aspects of our business and actions with respect to:
- allowed rates of return,
- rate structures,
- recovery of investments, and
- operation and construction of facilities,
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- industrial, commercial and residential growth in our service territory
and changes in market demand and demographic patterns,
- the timing and extent of changes in commodity prices, particularly
natural gas,
- changes in interest rates or rates of inflation,
- weather variations and other natural phenomena,
- the timing and extent of changes in the supply of natural gas,
- commercial bank and financial market conditions, our access to capital,
the cost of such capital, receipt of certain approvals under the 1935
Act, and the results of our financing and refinancing efforts, including
availability of funds in the debt capital markets,
- actions by rating agencies,
- inability of various counterparties to meet their obligations to us,
- non-payment for our services due to financial distress of our customers,
including Reliant Energy, Inc. (formerly named Reliant Resources, Inc.)
("RRI"),
- the outcome of the pending lawsuits against us, Reliant Energy,
Incorporated and RRI,
- the ability of RRI to satisfy its obligations to us, including indemnity
obligations and obligations to pay the "price to beat" clawback, and
- other factors we discuss in "Risk Factors" beginning on page 26 of our
2003 Form 10-K.
Additional risk factors are described in other documents we file with the
SEC and incorporate by reference in this prospectus.
You should not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the particular
statement.
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ABOUT CENTERPOINT ENERGY, INC.
We are a public utility holding company. Our indirect wholly owned
subsidiaries include (i) CenterPoint Energy Houston Electric, LLC ("CenterPoint
Houston"), which provides electric transmission and distribution services in a
5,000-square-mile area of the Texas Gulf Coast that includes Houston, and (ii)
CenterPoint Energy Resources Corp. ("CERC"), which owns gas distribution systems
serving approximately three million customers in Arkansas, Louisiana, Minnesota,
Mississippi, Oklahoma, and Texas. Through wholly owned subsidiaries, CERC also
owns two interstate natural gas pipelines and gas gathering systems and provides
various ancillary services. We also have an approximately 81% indirect ownership
interest in Texas Genco Holdings, Inc. ("Texas Genco"), which owns and operates
electric generating plants in Texas. We distributed approximately 19% of the
outstanding common stock of Texas Genco to our shareholders in January 2003. On
July 21, 2004, we announced a definitive agreement for the sale of our interest
in Texas Genco.
We are a registered public utility holding company under the Public Utility
Holding Company Act of 1935, as amended ("1935 Act"). The 1935 Act and related
rules and regulations impose a number of restrictions on our activities and
those of our subsidiaries. The 1935 Act, among other things, limits our ability
and the ability of our regulated subsidiaries to issue debt and equity
securities without prior authorization, restricts the source of dividend
payments to current and retained earnings without prior authorization, regulates
sales and acquisitions of certain assets and businesses, and governs affiliate
transactions.
Our executive offices are located at 1111 Louisiana, Houston, Texas 77002,
and our main telephone number at that address is 713-207-1111.
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USE OF PROCEEDS
We may satisfy purchases of common stock under the plan by:
- issuing authorized but unissued shares of our common stock,
- issuing shares of common stock held in our treasury, or
- purchasing shares of common stock in the open market.
Accordingly, the number of newly issued or treasury shares, if any, that we
will ultimately sell under the plan is not currently known. We anticipate using
any net proceeds from newly issued or treasury shares purchased by participants
under the plan for general corporate purposes. These purposes may include, but
are not limited to:
- working capital,
- capital expenditures,
- acquisitions,
- the repayment or refinancing of debt or trust preferred securities, and
- loans or advances to subsidiaries.
We will not receive any proceeds when shares of common stock are purchased
under the plan in the open market.
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OUR INVESTOR'S CHOICE PLAN
PURPOSE
The purpose of the plan is to provide our existing and potential investors
a convenient way to purchase shares of our common stock and to reinvest all or a
portion of cash dividends and interest payments on our eligible securities into
additional shares of our common stock.
KEY FEATURES
- Participation by First-Time Investors in CenterPoint Energy: First-time
investors in CenterPoint Energy (i.e., investors who do not currently
hold any of our eligible securities) may become participants by making a
minimum initial cash investment of $250 to purchase common stock through
the plan.
- Participation by Holders of Eligible Securities: Current holders of our
eligible securities may become participants by:
- electing to have all or a portion of the cash dividend and interest
payments on their eligible securities reinvested in common stock,
- depositing certificates representing common stock into the plan for
safekeeping, or
- making a minimum cash investment of $50 to purchase common stock through
the plan.
- Additional Cash Investments: Participants may purchase common stock at
any time, occasionally or at regular intervals, through the plan by
making cash investments of at least $50 for any single investment up to
an aggregate of cash investments of $120,000 per calendar year.
- Investment Through Automatic Deductions: Participants may make cash
investments through automatic deductions from predesignated bank or
savings accounts on a regular monthly or quarterly basis.
- Reinvestment: Participants may reinvest all or a portion of the cash
dividend and interest payments on their eligible securities.
- Purchases in Whole Dollar Amounts: Participants can buy shares in whole
dollar amounts, and their accounts are credited with appropriate whole
and fractional shares.
- Sales: Participants may sell shares of common stock held in the plan
directly through the plan.
- Frequent Purchases and Sales: Purchase and sale orders will be processed
at least once every five business days, and as often as every business
day, when practicable.
- Automatic Deposit of Dividends: Participants may receive common stock
cash dividends not reinvested through the plan either by check or through
automatic deposit to their bank account.
- Safekeeping Service: Participants may deposit their common stock
certificates into their plan accounts and receive regular statements
showing cumulative account activity.
- Transfers of Common Stock: Participants may transfer shares of common
stock credited to their plan accounts to the account of another
participant or transfer shares to any designated person or entity,
without charge. We will provide holiday and other occasion gift cards
without charge to accompany gifts.
- Account Statements: We will mail quarterly statements to each
participant showing all transactions completed during the year to date,
the total number of shares of common stock credited to the participant's
account and other relevant account information.
- Stock Certificates: A participant may receive a stock certificate
representing all or a portion of the shares of common stock in the
participant's account at any time upon request.
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PLAN SUMMARY
The following is a summary of the material provisions of the plan. This
summary is not a complete description of all terms of the plan and is qualified
in its entirety by reference to the plan. You should carefully review the
summary below and the provisions of the plan that may be important to you before
participating in the plan.
ADMINISTRATION
The plan is administered by the individual (who may be an employee of
ours), bank, trust company or other entity, including us, whom we appoint from
time to time to act as the administrator of the plan. As of the date of this
prospectus, we are the administrator. The administrator administers the plan,
receives cash from participants, holds participants' shares of common stock
acquired under the plan, keeps records, sends statements of account activity to
participants and performs other duties related to the plan. The administrator
will forward funds that are to be used to purchase shares, and orders to sell
shares, in the open market to an independent agent that we select and which is
an "agent independent of the issuer," as that term is defined under the
Securities Exchange Act of 1934. We reserve the right to continue serving as the
administrator or to appoint another qualified person or entity to serve in that
capacity.
Participants may contact the administrator by writing, telephoning, or
sending facsimiles to:
CenterPoint Energy, Inc.
Investor Services Department
P. O. Box 4505
Houston, TX 77210
Telephone toll-free (business days from 8:00 a.m. to 5:00 p.m., Central
Time):
(800) 231-6406 nationally
(713) 207-3060 in Houston
Facsimile: (713) 207-3169
ELIGIBILITY
Any person or entity, whether or not a record holder of common stock, is
eligible to participate in the plan, provided that:
- the person or entity fulfills the requirements of participation described
below under "Enrollment Procedures," and
- in the case of citizens or residents of a country other than the United
States, its territories and possessions, participation would not violate
local laws applicable to us, the plan and the participant.
ENROLLMENT PROCEDURES
After being furnished with a copy of this prospectus, eligible applicants
may join the plan by returning a completed and signed enrollment form to the
administrator and choosing one of the following options:
- making an initial cash investment in the plan to purchase common stock of
at least $250 for applicants who are not registered holders of eligible
securities or $50 for applicants who are registered holders of eligible
securities,
- electing to have all or a part of cash dividends or interest payments on
eligible securities reinvested into common stock, or
- depositing certificates representing shares of common stock into the plan
for safekeeping.
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Applicants may obtain enrollment forms from the administrator upon written,
facsimile or telephone request. Current registered holders of eligible
securities should sign their name(s) on the enrollment form exactly as they
appear on the certificates or instruments representing their eligible
securities.
A beneficial owner of eligible securities registered in street name (i.e.,
the name of a bank, broker or trustee) may participate in the plan by:
- directing the financial intermediary to transfer eligible securities into
the participant's name, and
- depositing transferred shares of common stock into the plan for
safekeeping and/or electing to reinvest cash dividends or interest
payments on transferred eligible securities in common stock through the
plan.
Alternatively, the beneficial owner may make arrangements with the financial
intermediary who is the registered holder to participate in the plan on behalf
of the beneficial owner.
To the extent required by applicable law in specified jurisdictions,
including Alabama, Arizona, Arkansas, Delaware, Florida, Hawaii, Indiana, Iowa,
Maine, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New
Jersey, North Dakota, Puerto Rico, Rhode Island, South Carolina, Utah, Vermont,
Virginia, Washington, West Virginia and Wyoming, we are offering shares of
common stock under the plan to persons who are not presently record holders of
our common stock only through a registered broker/dealer in those jurisdictions.
An eligible applicant will become a participant as soon as practicable
after the administrator has received and accepted a properly completed
enrollment form.
ELIGIBLE SECURITIES
The equity and debt securities of CenterPoint Energy and our subsidiaries
listed below are "eligible securities" for participation in the plan:
- our common stock, and
- CenterPoint Houston's First Mortgage Bonds, 9.15% Series due 2021.
In addition, from time to time we may designate other equity or debt
securities issued by us or our subsidiaries as eligible securities.
INITIAL CASH INVESTMENTS AND ADDITIONAL CASH INVESTMENTS
Interested investors, whether or not registered holders of eligible
securities, may become participants by making an investment through the plan as
described in this prospectus. To become a participant through a cash investment,
an applicant who is not a registered holder of eligible securities must include
a minimum initial cash investment of $250 with a completed enrollment form,
while an applicant who is a registered holder of eligible securities must
include a minimum initial cash investment of $50 with a completed enrollment
form. Additional cash investments, which participants may make at their
discretion, must be at least $50 for any single investment. However, cash
investments in the aggregate, including both initial and additional cash
investments, may not exceed $120,000 per account per calendar year. Participants
may make cash investments by check or through automatic investing as described
below under "Cash Investment Procedures."
The administrator will make cash investments in our common stock beginning
on the next investment date that is at least one business day after the
administrator receives the funds and instructions. Cash investment funds,
pending investment, will be credited to a participant's account and held in a
trust account that is separated from our other funds. Cash investments not
invested for a participant within 30 days of receipt will be promptly returned
to the participant. NO INTEREST WILL BE PAID ON AMOUNTS HELD BY THE
ADMINISTRATOR PENDING INVESTMENT.
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A registered holder of eligible securities may invest cash payable to the
registered holder as a result of the redemption, tender or maturity, including
accrued interest and premium, if any, of eligible securities in common stock by
delivering to the administrator an executed enrollment form designating such
funds for investment. These funds will be treated as additional cash investments
for purposes of determining whether the maximum annual limit of $120,000 per
year has been reached.
The administrator will return to a participant any cash investment that has
not already been invested if it receives the participant's request to stop
investment at least two business days prior to the applicable investment date.
However, no refund of a check or money order will be made until the
administrator has collected funds. Accordingly, refunds may take three weeks or
more to be remitted.
CASH INVESTMENT PROCEDURES
Cash investments may be made by check or automatic deduction from
predesignated bank accounts, as described below. Participants should NEVER SEND
CASH for an investment.
Investment by Check. Cash investments may be made by personal check or
money order payable in U.S. dollars to CenterPoint Energy, Inc. Investor's
Choice Plan and mailed to the administrator. Initial cash investments should be
accompanied by enrollment forms while additional cash investments should be
accompanied by the stub attached to each statement of account or transaction
advice sent to participants.
Automatic Investing. Participants may make automatic monthly or quarterly
investments of a specified amount, not less than $50 per purchase nor more than
$120,000 per calendar year, by electronic automatic transfer of funds from a
predesignated bank account.
To initiate automatic deductions, a participant must execute an automatic
investing form that is available from the administrator and return it to the
administrator, along with a voided check or deposit slip on the bank account
from which funds are to be drawn. If the monthly investment option is chosen,
automatic investing will begin on or about the 10th day of each month
approximately 30 days after receipt of the authorization form. If the quarterly
investment option is chosen, investments will begin on or about the 10th day of
each March, June, September and December. In either case, automatic investing
deductions will be made two business days before the investment date. A
PARTICIPANT'S BANK MAY CHARGE THE PARTICIPANT A RETURNED CHECK FEE IF THE
DESIGNATED BANK OR SAVINGS ACCOUNT DOES NOT HAVE SUFFICIENT FUNDS TO COVER THE
AUTHORIZED DEDUCTION.
Participants may change the amount of their automatic investment by
notifying the administrator in writing or by facsimile of the new amount, and
the change will take place approximately two weeks after the notice is received.
Similarly, a participant may cancel automatic investing by instructing the
administrator in writing or by facsimile. Cancellation will be effective
approximately two weeks after the notice is received. To change a designated
bank account, a participant must notify the administrator in writing at least 30
days before the change is to take effect and supply a voided check or deposit
slip for the new account.
All cash investments are subject to collection by the administrator for
full face value in U.S. funds. The method of delivery of any cash investment is
at the election and risk of the investor and will be deemed received when
actually received by the administrator. If the delivery is by mail, we recommend
that the participant use properly insured, registered mail with return receipt
requested, and that the mailing be made sufficiently in advance of the
appropriate investment date.
INVESTMENT DATES
The plan's "investment dates" occur at least once every five business days.
However, purchases will be made every business day when deemed practicable by
the administrator. A participant's cash investment will generally be invested
within five business days of receipt. For exceptions under specified
circumstances involving open market purchases, see "Source and Price of Shares"
below.
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DIVIDEND AND INTEREST PAYMENT OPTIONS
The plan offers participants the option of reinvesting cash dividends and
interest payments paid on their eligible securities in common stock. With
respect to cash dividends on common stock for which reinvestment is not elected,
the plan offers the option of direct deposit or check payment, as described
below.
Reinvestment of Cash Dividends and Interest Payments. Participants may
elect to reinvest all or part of the cash dividends and interest payments on
eligible securities registered in their names by making the election on their
initial enrollment forms or by delivering written or facsimile instructions to
the administrator. Participants electing partial reinvestment of cash dividends
and interest payments must designate the specific security or securities for
which partial reinvestment is desired and the number of whole shares or the
whole dollar amount they want to be reinvested. The amount reinvested will be
reduced by any amount required to be withheld under any applicable tax or other
statutes. Cash dividends and interest payments not being reinvested will be sent
to the participant by direct deposit or check, as appropriate.
A participant may change reinvestment amounts and the eligible securities
on which cash dividend or interest payments are reinvested from time to time by
delivering a new enrollment form or written or facsimile instructions to the
administrator. To be effective for a particular payment, the administrator must
receive instructions of such change on or before the record date of the dividend
or interest payment. Record dates are usually the 16th day of the month
preceding a payment date. The record date for common stock dividends is usually
the 16th day of each February, May, August and November.
Dividends and interest payments will be invested beginning either on the
date of payment, if the payment date is an investment date, or on the first
investment date following payment. Dividend and interest payments not invested
within 30 days of receipt will be returned promptly to the participant. Funds
pending investment will be credited to a participant's account and held in a
trust account that will be separated from any of our other funds or monies. NO
INTEREST WILL BE PAID ON FUNDS HELD BY THE ADMINISTRATOR PENDING INVESTMENT.
Direct Deposit of Dividends on Common Stock. Through the plan's direct
deposit feature, a participant may elect to have any cash dividends on common
stock automatically deposited into a designated bank or savings account. The
cash dividends will be deposited on the dividend payment date. Participants who
wish to have dividends automatically deposited must execute a direct deposit
authorization form that is available from the administrator and send it to the
administrator, along with a voided check or deposit slip for the designated bank
account.
The administrator must receive direct deposit authorization at least 30
days before an applicable common stock dividend payment date to be effective for
that payment date. Participants can cancel direct deposit of dividends by
notifying the administrator in writing or by facsimile. In order to be effective
for an applicable dividend payment date, the administrator must receive the
cancellation notice at least 30 days before that dividend payment date. To
change a designated bank account for direct deposit of dividends, the
administrator must receive written notice, accompanied by a voided check or
deposit slip for the new bank account, at least 30 days before an applicable
dividend payment date.
Check Payments of Dividends and Interest Payments. Cash dividends and
interest payments on eligible securities not designated for reinvestment or
direct deposit will be paid by check to the participant. A check for the amount
of funds payable will be sent through the mail so that it will reach the
participant as close as possible to the dividend or interest payment date.
SOURCE AND PRICE OF SHARES
To fulfill plan requirements, shares of common stock will be, at our
discretion, purchased either directly from us or on the open market by an
independent agent. Shares purchased from us will be either authorized but
unissued shares or shares held in our treasury. Purchases of common stock under
the plan are subject to such terms and conditions, including price and delivery,
as the administrator may accept.
7
Purchases from CenterPoint Energy. The price of common stock purchased
from us will be the average of the high and low sales price of the common stock
reported on the New York Stock Exchange Composite Tape as published in The Wall
Street Journal for the trading day immediately preceding the relevant investment
date, and the purchase will be made on the investment date. In the event no
trading is reported for the relevant trading day, we may determine the purchase
price on the basis of market quotations we deem appropriate. No brokerage fee
will be charged on shares acquired directly from us.
Open Market Purchases and Sales. The price of common stock purchased or
sold on the open market will be the weighted average price of all shares
purchased or sold, as the case may be, through the plan for the investment date.
The weighted average price will be increased for brokerage fees and commissions,
any related service charges and applicable taxes. As of the date of this
prospectus, we do not expect the brokerage fees and commissions and related
service charges to exceed $0.10 per share.
An independent agent will make purchases and sales of common stock on the
open market beginning on the relevant investment date. These purchases and sales
will be completed not later than five days from that date, except where
completion at a later date is necessary or advisable under any applicable laws
or regulations. Funds not invested within 30 days of receipt will be returned
promptly to participants. The independent agent will make purchases and sales on
any securities exchange where shares of common stock are traded, in the
over-the-counter market, or by negotiated transactions. These purchases and
sales may be subject to such terms and conditions regarding price, delivery and
other terms as agreed to by the administrator. The independent agent will have
sole authority to direct the time or price at which shares may be purchased or
sold, the markets on which the shares are to be purchased or sold, and the
selection of the broker or dealer, other than the independent agent, through or
from whom purchases or sales are to be made.
The independent agent may commingle each participant's funds with those of
other participants for the purchases and sales of common stock but will hold the
funds at all times in a separate trust account apart from our funds.
The number of shares, including any fraction of a share rounded to three
decimal places, of common stock credited to a participant's account for a
particular investment date will be determined by dividing the total amount of
cash dividends, interest payments and/or cash investments to be invested for the
participant on the investment date by the relevant purchase price per share.
Dividend and voting rights will commence upon settlement, whether shares are
purchased from us or on the open market.
SAFEKEEPING SERVICE
Participants may use the plan's free safekeeping service at any time.
Participants may deposit common stock into the plan by delivering the stock
certificates without endorsement to the administrator. Shares deposited in the
plan for safekeeping will be transferred into the name of the administrator or
its 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. Because shares deposited for safekeeping are treated in the
same manner as shares purchased through the plan, they may be efficiently and
economically transferred or sold if the participant desires.
SALE OF COMMON STOCK
Participants may request the administrator to sell any number of whole
shares held in their accounts at any time by written, telephone or facsimile
instructions. As soon as practicable after receipt of the request, but within
five business days, the administrator will instruct the independent agent to
sell the shares. The independent agent will sell the shares as soon as
practicable thereafter. Proceeds of the sale, less applicable brokerage fees and
commissions and service charges and any applicable taxes, will be sent to the
participant within five business days after the independent agent has completed
the sale. The sales price will be determined in the same way as the price for
shares of common stock purchased for participants on the open market. See
"Source and Price of Shares" above. If the administrator receives a request
between the record date and the dividend payment date to sell shares on which
dividends are not
8
being reinvested, the sale will be made within five days after receipt of the
request and the proceeds from the sale will be sent to the participant. Cash
dividends will be paid in the usual manner on the dividend payment date.
If the administrator receives a request between the record date and the
dividend payment date to sell shares on which all or a portion of the dividends
are being reinvested, the dividends on those shares will be reinvested on the
investment date and newly purchased shares will be credited to the participant's
account. If the request for sale does not include all shares in the
participant's account, the number of shares requested will be sold within five
days after receipt of the request and the proceeds from the sale will be sent to
the participant. Newly purchased shares will be retained in the participant's
account after the investment date. If the request for sale covers all shares in
the participant's account, the sale will be delayed until after the dividend
payment date and all shares, including newly purchased shares, will be sold
within five days after the investment date and the proceeds from the sale will
be sent to the participant.
If a participant wishes to sell shares held in the participant's account
through a broker, the participant may request the administrator to issue a
certificate for a specific number of whole shares by written, telephone or
facsimile instruction. A certificate will be sent to the participant within two
business days after receipt of the request.
WITHDRAWAL, TRANSFERS, AND GIFTS OF COMMON STOCK
Withdrawals and Transfers Outside the Plan. A participant may withdraw
shares of common stock credited to the participant's plan account if the
participant will continue to be the record holder after withdrawal. A
participant may do so by instructing the administrator in writing, by telephone
or by facsimile or, if the participant will not be the record holder after
withdrawal, by delivering written instructions, specifying the recipient's name,
address, Social Security number and telephone number and a stock assignment or
stock power, with the participant's signature guaranteed by a member of the
Medallion Signature Guarantee program (a participating broker, bank, savings and
loan association, etc.). If shares are to be sent to a broker, the participant
must provide in writing the number of whole shares to be withdrawn, the broker's
name, business name, address, telephone number, and the brokerage account
number, if applicable. Certificates representing whole shares withdrawn from the
plan will be mailed to the participant or designated recipient within two
business days of receipt of a properly documented request. Withdrawal of shares
of common stock does not affect reinvestment of cash dividends on the shares
withdrawn unless:
- the participant is no longer the record holder of the shares,
- the participant specifically discontinues the reinvestment, or
- the participant terminates participation in the plan.
If the administrator receives a request between the record date and the
dividend payment date to withdraw shares on which dividends are not reinvested,
the withdrawal will be made within five days after receipt of the request and
dividends will be deposited in the account of the participant holding the shares
prior to the withdrawal, in the usual manner, on the dividend payment date.
If the administrator receives a request between the record date and the
dividend payment date to withdraw shares on which all or a portion of the
dividends are reinvested, the dividends on those shares will be reinvested on
the investment date and newly purchased shares will be credited to the
participant's account. If the request for withdrawal does not include all shares
in the participant's account, the number of shares requested will be withdrawn
within two business days after receipt of the request and sent to the designated
recipient. Newly purchased shares will be retained in the account of the
participant making the request. If the request for withdrawal covers all shares
in the participant's account, the withdrawal will be delayed until after the
dividend payment date and all shares, including newly purchased shares, will be
withdrawn within two business days after the investment date. All shares in the
participant's account will be sent to the designated recipient.
9
Gifts and Transfers of Common Stock Within the Plan. If a participant
wishes to transfer all or a part of the participant's shares to a plan account
for another person, whether by gift, private sale or otherwise, the participant
may effect the transfer by giving transfer instructions, in writing, to the
administrator. Transfers of less than all of the shares in the participant's
account must be made in whole share amounts. Requests for such transfers are
subject to the same requirements applicable to transfers of common stock
generally, including the requirement of a stock power with a Medallion Signature
Guarantee. The transfer will be effected as soon as practicable following the
administrator's receipt of the required documentation. Gifts and transfers
within the plan are subject to the same provisions as described above under
"Withdrawals and Transfers Outside the Plan."
The administrator will continue to hold under the plan shares that are
transferred within the plan. If the transferee is not already a participant, a
plan account will be opened in the name of the transferee, and the transferee
will automatically receive an enrollment form to elect any applicable services
offered through the plan. Until the transferee elects otherwise or the
transferor specifically requests that the new account be enrolled in one or more
of the plan's options, such as dividend reinvestment, the transferee account
will be treated as having elected only to have shares held in safekeeping under
the plan. If the transferee is already a participant, the shares transferred
will be treated as other shares already in the account of the transferee with
respect to plan options.
As a result of the transfer, the transferor and the transferee will receive
a statement confirming the transaction. The transferor may request that a
holiday or all occasion gift certificate be provided, either to the transferor
for personal delivery to the transferee or directly to the transferee, in
connection with a transfer.
REINVESTMENT OF DIVIDENDS ON REMAINING SHARES
When a participant sells, withdraws or transfers a portion of the shares
credited to the participant's account, the number of shares credited to the
account is reduced. For a participant who is reinvesting cash dividends paid on
only a portion of the shares credited to the participant's account, unless the
participant gives specific instructions to the contrary, the reduction will
first be made to the number of shares for which reinvestment has not been
elected before it is made to the number of shares for which reinvestment has
been elected. Accordingly, after the sale, withdrawal or transfer, reinvestment
of cash dividends will continue on the remaining shares credited to the
participant's account up to the number of shares designated for reinvestment
prior to the sale, withdrawal or transfer. For example, if a participant who had
elected to have cash dividends reinvested on 50 shares of a total of 100 shares
credited to the participant's account elected to sell, withdraw or transfer 25
shares, cash dividends on 50 shares of the remaining 75 shares credited to the
account would be reinvested through the plan. If instead the participant elected
to sell, withdraw or transfer 75 shares, cash dividends on the remaining 25
shares credited to the participant's account would be reinvested through the
plan.
REPORTS TO PARTICIPANTS
The administrator will send each participant a quarterly statement of
year-to-date activity showing the amount invested, purchase price, the number of
shares purchased, deposited, sold, transferred and withdrawn, total shares
accumulated and other information. The administrator will also send each
participant a confirmation promptly after each cash investment, deposit, sale,
withdrawal or transfer. Dividend and interest reinvestments will not be
individually confirmed, but rather will appear on the quarterly statement.
Participants should retain statements and confirmations in their permanent
records to establish the cost basis of shares purchased under the plan for
income tax and other purposes.
The administrator will send each participant copies of all communications
sent to holders of common stock, including our annual report to shareholders,
notice of our annual meeting, proxy statement and form of proxy, as well as
federal tax reporting statements, if applicable, for reporting taxable income
received from us.
10
The administrator will send all payments, notices, statements and reports
to the participant's address on the administrator's records. It is therefore
imperative that participants promptly notify the administrator of any change of
address.
CERTIFICATES FOR SHARES
The administrator will hold shares of common stock purchased under, or
deposited for safekeeping into, the plan and credited to participants' accounts
in an automated electronic record keeping system in the administrator's name or
the name of its nominee, as custodian. The number of shares, including
fractional shares, held for each participant will be shown on each statement of
account.
A participant may obtain a certificate for all or part of the whole shares
held in the participant's account at any time upon a written, telephone or
facsimile request to the administrator. Requested certificates will be mailed,
free of charge, to the participant within two business days after the
administrator receives the request. The administrator will continue to hold any
remaining whole or fractional shares in the participant's account.
Shares held in a participant's account cannot be pledged or assigned. A
participant who wishes to pledge or assign any shares must request that they be
withdrawn and issued to the participant in certificate form.
Certificates for fractional shares of common stock will not be issued under
any circumstances.
TERMINATION OF PARTICIPATION
A participant may terminate participation in the plan at any time by
notifying the administrator in writing, by telephone or by facsimile. As soon as
practicable after receipt of notification, the administrator will mail the
participant:
- a certificate for all of the whole shares credited to the participant's
account,
- any dividends, interest payments and cash investments credited to the
participant's account, and
- a check for the cash value of any fraction of a share of common stock
credited to the participant's account.
A fraction of a share will be valued at the average of the high and low sales
prices of the common stock reported on the New York Stock Exchange Composite
Tape as published in The Wall Street Journal for the trading day preceding the
date of termination.
COSTS
We will pay all administrative costs and expenses of the plan. PARTICIPANTS
WILL BEAR THE COST OF BROKERAGE FEES AND COMMISSIONS, RELATED SERVICE CHARGES
AND ANY APPLICABLE TAXES INCURRED ON ALL PURCHASES AND SALES OF COMMON STOCK ON
THE OPEN MARKET. These costs will be included as adjustments to the purchase and
sale prices. As of the date of this prospectus, shares of stock are being
purchased directly from us. There are no brokerage fees and commissions or
related service charges for shares of common stock purchased directly from us.
FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A SUMMARY OF THE FEDERAL INCOME TAX CONSEQUENCES OF
PARTICIPATING IN THE PLAN. TAX CONSEQUENCES WILL VARY AMONG PARTICIPANTS
DEPENDING UPON INDIVIDUAL CIRCUMSTANCES AND STATE, LOCAL AND FOREIGN LAWS. EACH
PARTICIPANT SHOULD CONSULT THE PARTICIPANT'S OWN TAX ADVISOR REGARDING THE TAX
CONSEQUENCES FOR THE PARTICIPANT AS A RESULT OF PARTICIPATING IN THE PLAN.
A participant will be required to include as income for federal income tax
purposes the gross amount of all dividends and interest payments, including any
original issue discount, on eligible securities reinvested in common stock as
though the participant received the dividends and interest payments in
11
cash. In addition, a participant will be taxed on any brokerage commissions,
fees or service charges that we pay for in connection with a purchase of our
common stock for the participant under the plan.
To the extent distributions by us to our participants are treated as made
from our current or accumulated earnings and profits, the distributions will be
dividends taxable as ordinary income. The amount of any dividends in excess of
earnings and profits will reduce a participant's tax basis in the common stock
with respect to which the dividend was received, and, to the extent in excess of
basis, result in capital gain.
As a general rule, a participant's tax basis for shares of common stock (or
any fraction of a share) acquired under the plan, will be equal to the cash
value of dividends and interest payments attributable to the purchase of the
shares on the applicable purchase date, as adjusted for brokerage commissions
and fees, services charges and applicable taxes, if any. A participant's tax
basis in shares purchased with cash investments will be the cost of the shares
plus any allocable brokerage commissions or fees, service charges and applicable
taxes on the applicable purchase date.
Shares of common stock purchased under the plan will have a holding period
beginning on the day after the applicable purchase date. A participant will not
realize any taxable income when the participant receives certificates for whole
shares credited to an account under the plan. The participant will recognize
gain or loss upon the sale of whole shares and upon the sale of any fractional
shares credited to the participant's account under the plan. The gain or loss
will be equal to the difference between the amount received for shares (or a
fractional share) and the participant's tax basis in such shares.
Under Internal Revenue Service backup withholding regulations, dividends
and interest payments reinvested under the plan may be subject to the
withholding tax generally applicable to dividends and interest payments unless
the participant provides the administrator with the participant's taxpayer
identification number (in the case of individual taxpayers the taxpayer
identification number is their Social Security number). Any amount so withheld
will be treated as taxable income received by the participant and will be
reflected on Forms 1099-DIV and 1099-INT mailed annually to all our investors,
including plan participants.
STOCK SPLITS, STOCK DIVIDENDS, AND RIGHTS OFFERINGS
Any shares or other noncash distributions, including stock splits, stock
dividends, combinations, recapitalizations and similar events affecting our
common stock, will be credited to a participant's account on a pro-rata basis.
In the event of a rights offering, a participant will receive rights based upon
the total number of whole shares of common stock credited to the participant's
account.
VOTING OF PROXIES
Participants have the exclusive right to vote all whole shares credited to
their plan accounts, either in person or by proxy, at any annual or special
meeting of our shareholders. Fractions of shares cannot be voted. The
administrator will forward to each participant all shareholder materials
relating to shares credited to that participant's account.
LIMITATION OF LIABILITY
Neither we nor the administrator nor any independent agent will be liable
for any act done in good faith or for any good faith omission to act, including,
without limitation, any claim of liability arising from failure to terminate a
participant's account upon the participant's death prior to receipt of notice in
writing of such death, or with respect to the prices or times at which shares of
common stock are purchased or sold for participants, or fluctuations in the
market value of common stock.
WRITTEN PROVISIONS OF THE PLAN CONTROLLING
With respect to any matter relating to the plan, including, without
limitation, the timing and pricing of purchases and sales of common stock for
participants, the written provisions of the plan are controlling.
12
Participants should not rely on any oral representations inconsistent with the
written provisions of the plan. Neither we nor the administrator nor any
independent agent will be liable for a participant's reliance on oral statements
inconsistent with the written provisions of the plan.
INTERPRETATION AND REGULATION OF THE PLAN
Our officers are authorized to take actions to carry out the plan
consistent with the plan's terms and conditions. We reserve the right to
interpret and regulate the plan as we deem desirable or necessary in connection
with the plan's operations.
CHANGE OR TERMINATION OF THE PLAN
We may suspend, modify or terminate the plan at any time, in whole, in part
or in respect of participants in one or more jurisdictions, without the approval
of participants. Notice of suspension, modification or termination will be sent
to all affected participants. Upon any whole or partial termination of the plan
by us, each affected participant will receive:
- a certificate for all of the whole shares credited to the participant's
account,
- any dividends, interest payments and cash investments credited to the
participant's account, and
- a check for the cash value of any fraction of a share of common stock
credited to the participant's account.
A fraction of a share will be valued at the average of the high and low sales
prices of the common stock reported on the New York Stock Exchange Composite
Tape as published in The Wall Street Journal for the trading day preceding the
date of termination.
TERMINATION OF PARTICIPATION BY CENTERPOINT ENERGY
If a participant does not have at least one whole share of common stock
registered in the participant's name or credited to the participant's account,
or does not own any eligible securities for which cash dividends or interest
payments are designated for reinvestment under the plan, we may terminate the
participant's participation in the plan upon written notice. Additionally, we
may terminate any participant's participation in the plan after written notice
mailed in advance to the participant's address appearing on the records of the
administrator. A participant whose participation has been terminated will
receive:
- a certificate for all of the whole shares credited to the participant's
account,
- any dividends, interest payments and cash investments credited to the
participant's account, and
- a check for the cash value of any fraction of a share of common stock
credited to the participant's account.
A fraction of a share will be valued at the average of the high and low sales
prices of the common stock reported on the New York Stock Exchange Composite
Tape as published in The Wall Street Journal for the trading day preceding the
date of termination.
13
PLAN OF DISTRIBUTION
We are offering common stock by this prospectus pursuant to the plan. The
terms of the plan provide for the purchase of shares of our common stock
directly from us or, at our option, by an independent agent on the open market.
As of the date of this prospectus, shares of common stock purchased for
participants under the plan are being purchased directly from us. The plan
provides that we may not change our determination regarding the source of
purchases of shares more than once in any three-month period. We expect our
primary consideration in determining the source of shares to be used for
purchases under the plan will be our need to increase equity capital. If we do
not need to raise funds externally or if financing needs are satisfied using
non-equity sources of funds to maintain our targeted capital structure, shares
of common stock purchased for participants will be purchased in the open market,
subject to the limitation on changing the source of shares of common stock.
We will pay all administrative costs and expenses associated with the plan.
Participants will bear the cost of brokerage commissions and fees, related
service charges and any applicable taxes incurred on all purchases and sales
made in the open market. These costs will be included as adjustments to purchase
and sales prices. There are no brokerage fees and commissions or related service
charges for shares of common stock purchased directly from us.
DESCRIPTION OF OUR CAPITAL STOCK
As of November 1, 2004, our authorized capital stock consisted of:
- 1,000,000,000 shares of common stock, par value $0.01 per share, of which
approximately 307,821,461 shares were outstanding, excluding 166 shares
held as treasury stock, and
- 20,000,000 shares of preferred stock, par value $0.01 per share, of which
1,000,000 shares are classified as Series A preferred stock, none of
which was outstanding.
Each share of our common stock offered by means of this prospectus includes
an associated preferred stock purchase right. The shares of Series A preferred
stock have been initially reserved for issuance upon exercise of the rights.
We have incorporated by reference the descriptions of our common stock and
associated rights into this prospectus. Please read "Where You Can Find More
Information."
14
EXPERTS
The consolidated financial statements of CenterPoint Energy and its
subsidiaries as of December 31, 2002 and 2003, and for each of the three years
in the period ended December 31, 2003, incorporated by reference in this
prospectus have been audited by Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their reports (which reports express an
unqualified opinion and include explanatory paragraphs referring to the
distribution of Reliant Energy, Inc. (formerly named Reliant Resources, Inc.),
the change in method of accounting for goodwill and certain intangible assets
and the recording of asset retirement obligations), and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the common stock offered hereby
have been passed upon for us by Baker Botts L.L.P., Houston, Texas. Scott E.
Rozzell, Esq., our Executive Vice President, General Counsel and Corporate
Secretary, or Rufus S. Scott, our Vice President, Deputy General Counsel and
Assistant Corporate Secretary, may pass upon other legal matters for us.
15
================================================================================
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU
WITH ANY DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE NOT MAKING AN OFFER
TO SELL SHARES OF OUR COMMON STOCK IN ANY JURISDICTION WHERE THE OFFER OR SALE
IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CURRENT ONLY
AS OF THE DATE OF THIS PROSPECTUS.
---------------------
TABLE OF CONTENTS
PAGE
----
About This Prospectus................. i
Where You Can Find More Information... ii
Cautionary Statement Regarding
Forward-Looking Information......... iii
About CenterPoint Energy, Inc. ....... 1
Use of Proceeds....................... 2
Our Investor's Choice Plan............ 3
Plan of Distribution.................. 14
Description of Our Capital Stock...... 14
Experts............................... 15
Legal Matters......................... 15
================================================================================
================================================================================
CENTERPOINT ENERGY, INC.
3,000,000 SHARES
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
INVESTOR'S CHOICE PLAN
, 2004
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
CenterPoint Energy, Inc. (the "Company") estimates that expenses in
connection with the offering described in this Registration Statement will be as
follows
Securities and Exchange Commission filing fee............... $ 4,022
Legal fees and expenses..................................... 25,000
Accounting fees and expenses................................ 23,000
Printing expenses........................................... 50,000
Miscellaneous expenses...................................... 978
--------
Total expenses............................................ $103,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02.A.(16) and Article 2.02-1 of the Texas Business Corporation
Act and Article V of the Company's Amended and Restated Bylaws provide the
Company with broad powers and authority to indemnify its directors and officers
and to purchase and maintain insurance for such purposes. Pursuant to such
statutory and Bylaw provisions, the Company has purchased insurance against
certain costs of indemnification that may be incurred by it and by its officers
and directors.
Additionally, Article IX of the Company's Amended and Restated Articles of
Incorporation provides that a director of the Company is not liable to the
Company for monetary damages for any act or omission in the director's capacity
as director, except that Article IX does not eliminate or limit the liability of
a director for (i) any breach of such director's duty of loyalty to the Company
or its shareholders, (ii) any act or omission not in good faith that constitutes
a breach of duty of such director to the Company or an act or omission that
involves intentional misconduct or a knowing violation of law, (iii) a
transaction from which such director received an improper benefit, whether or
not the benefit resulted from an action taken within the scope of the director's
office or (iv) an act or omission for which the liability of a director is
expressly provided for by statute.
Article IX also provides that any subsequent amendments to Texas statutes
that further limit the liability of directors will inure to the benefit of the
directors, without any further action by shareholders. Any repeal or
modification of Article IX shall not adversely affect any right of protection of
a director of the Company existing at the time of the repeal or modification.
See "Item 17. Undertakings" for a description of the SEC's position
regarding such indemnification provisions.
II-1
ITEM 16. EXHIBITS.
The following documents are filed as part of this Registration Statement or
incorporated by reference herein:
SEC FILE OR
EXHIBIT REGISTRATION EXHIBIT
NUMBER DOCUMENT DESCRIPTION REPORT OR REGISTRATION STATEMENT NUMBER REFERENCE
- ------- -------------------- -------------------------------- ------------ ---------
4.1* Amended and Restated Articles Registration Statement on Form 333-69502 3.1
of Incorporation of S-4 of CenterPoint Energy, Inc.
CenterPoint Energy, Inc.
4.1.1* Articles of Amendment to the Form 10-K of CenterPoint Energy, 1-31447 3.1.1
Amended and Restated Articles Inc. for the year ended December
of Incorporation of 31, 2001
CenterPoint Energy, Inc.
4.2* Amended and Restated Bylaws Form 10-K of CenterPoint Energy, 1-31447 3.2
of CenterPoint Energy, Inc. Inc. for the year ended December
31, 2001
4.3* Statement of Resolution Form 10-K of CenterPoint Energy, 1-31447 3.3
Establishing Series of Shares Inc. for the year ended December
Designated Series A Preferred 31, 2001
Stock and Form of Rights
Certificate
4.4* Rights Agreement dated as of Form 10-K of CenterPoint Energy, 1-31447 4.2
January 1, 2002 between Inc. for the year ended December
CenterPoint Energy, Inc. and 31, 2001
JPMorgan Chase Bank, as
Rights Agent
4.5* Form of CenterPoint Energy, Registration Statement on Form 333-69502 4.1
Inc. Stock Certificate S-4 of CenterPoint Energy, Inc.
4.6 CenterPoint Energy, Inc.
Second Amended and Restated
Investor's Choice Plan
5.1** Opinion of Baker Botts L.L.P.
23.1 Consent of Deloitte & Touche
LLP
23.2 Consent of Baker Botts L.L.P.
(included in Exhibit 5.1)
24.1 Powers of Attorney (included
on the signature page of this
registration statement)
- ---------------
* Incorporated herein by reference as indicated.
** To be filed by amendment.
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
II-2
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) of the Securities Act of
1933 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 paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3 or Form S-8 and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of 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.
(c) 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 foregoing provisions, 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
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
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 Houston, the State of Texas, on November 8, 2004.
CENTERPOINT ENERGY, INC.
(Registrant)
By: /s/ DAVID M. MCCLANAHAN
------------------------------------
David M. McClanahan
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Gary L. Whitlock, David M. McClanahan and Rufus
S. Scott, and each of them severally, his or her true and lawful attorney or
attorneys-in-fact and agents, with full power to act with or without the others
and with full power of substitution and resubstitution, to execute in his name,
place and stead, in any and all capacities, (i) any or all amendments (including
pre-effective and post-effective amendments) to this Registration Statement and
(ii) any Registration Statement of the type contemplated by Rule 462(b) under
the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each of
them full power and authority, to do and perform in the name and on behalf of
the undersigned, in any and all capacities, each and every act and thing
necessary or desirable to be done in and about the premises, to all intents and
purposes and as fully as they might or could do in person, hereby ratifying,
approving and confirming all that said attorneys-in-fact and agents or their
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DAVID M. MCCLANAHAN President, Chief Executive November 8, 2004
- -------------------------------------- Officer and Director
David M. McClanahan (Principal Executive Officer)
/s/ GARY L. WHITLOCK Executive Vice President November 8, 2004
- -------------------------------------- and Chief Financial Officer
Gary L. Whitlock (Principal Financial Officer)
/s/ JAMES S. BRIAN Senior Vice President November 8, 2004
- -------------------------------------- and Chief Accounting Officer
James S. Brian (Principal Accounting Officer)
/s/ MILTON CARROLL Director November 8, 2004
- --------------------------------------
Milton Carroll
II-4
SIGNATURE TITLE DATE
--------- ----- ----
/s/ DERRILL CODY Director November 8, 2004
- --------------------------------------
Derrill Cody
/s/ JOHN T. CATER Director November 8, 2004
- --------------------------------------
John T. Cater
/s/ O. HOLCOMBE CROSSWELL Director November 8, 2004
- --------------------------------------
O. Holcombe Crosswell
/s/ THOMAS F. MADISON Director November 8, 2004
- --------------------------------------
Thomas F. Madison
/s/ ROBERT T. O'CONNELL Director November 8, 2004
- --------------------------------------
Robert T. O'Connell
/s/ MICHAEL E. SHANNON Director November 8, 2004
- --------------------------------------
Michael E. Shannon
II-5
EXHIBIT INDEX
SEC FILE OR
EXHIBIT REGISTRATION EXHIBIT
NUMBER DOCUMENT DESCRIPTION REPORT OR REGISTRATION STATEMENT NUMBER REFERENCE
- ------- -------------------- -------------------------------- ------------ ---------
4.1* Amended and Restated Articles Registration Statement on Form 333-69502 3.1
of Incorporation of S-4 of CenterPoint Energy, Inc.
CenterPoint Energy, Inc.
4.1.1* Articles of Amendment to the Form 10-K of CenterPoint Energy, 1-31447 3.1.1
Amended and Restated Articles Inc. for the year ended December
of Incorporation of 31, 2001
CenterPoint Energy, Inc.
4.2* Amended and Restated Bylaws Form 10-K of CenterPoint Energy, 1-31447 3.2
of CenterPoint Energy, Inc. Inc. for the year ended December
31, 2001
4.3* Statement of Resolution Form 10-K of CenterPoint Energy, 1-31447 3.3
Establishing Series of Shares Inc. for the year ended December
Designated Series A Preferred 31, 2001
Stock and Form of Rights
Certificate
4.4* Rights Agreement dated as of Form 10-K of CenterPoint Energy, 1-31447 4.2
January 1, 2002 between Inc. for the year ended December
CenterPoint Energy, Inc. and 31, 2001
JPMorgan Chase Bank, as
Rights Agent
4.5* Form of CenterPoint Energy, Registration Statement on Form 333-69502 4.1
Inc. Stock Certificate S-4 of CenterPoint Energy, Inc.
4.6 CenterPoint Energy, Inc.
Second Amended and Restated
Investor's Choice Plan
5.1** Opinion of Baker Botts L.L.P.
23.1 Consent of Deloitte & Touche
LLP
23.2 Consent of Baker Botts L.L.P.
(included in Exhibit 5.1)
24.1 Powers of Attorney (included
on the signature page of this
registration statement)
- ---------------
* Incorporated herein by reference as indicated.
** To be filed by amendment.
EXHIBIT 4.6
CENTERPOINT ENERGY, INC.
SECOND AMENDED AND RESTATED
INVESTOR'S CHOICE PLAN
CenterPoint Energy, Inc. (successor to Reliant Energy,
Incorporated, formerly Houston Industries Incorporated), a Texas corporation
(the "Company"), hereby amends and restates its Amended and Restated Investor's
Choice Plan (the "ICP") in its entirety to establish the following CenterPoint
Energy, Inc. Second Amended and Restated Investor's Choice Plan (the "Plan"):
RECITAL:
WHEREAS, the purpose of the Plan is to provide interested
investors and holders of certain debt and equity securities of the Company and
its subsidiaries a convenient, economical means of increasing their investment
in the Company through (i) regular investment of cash dividends paid and
interest payments made on such securities, (ii) optional cash investments and/or
(iii) initial cash investments in shares of the Company's common stock, par
value $0.01 per share, including associated preferred stock purchase rights (the
"Common Stock"); and
WHEREAS, the Company desires to amend and restate the ICP to
(i) change the name of the ICP, (ii) revise the list of Eligible Securities (as
defined herein), (iii) reflect the removal of the option to reinvest Dividends
(as defined herein) on Common Stock in self-directed Individual Retirement
Accounts through a Company-selected IRA trustee, and (iv) provide certain other
clarifications.
NOW, THEREFORE:
ARTICLE I
Definitions
The terms defined in this Article I shall, for all purposes of
this Plan, have the following respective meanings:
Account
The term "Account" shall mean, as to any Participant, the
account maintained by the Administrator evidencing (i) the shares (and/or
fraction of a share) of Common Stock (a) purchased through the Plan and/or (b)
deposited by such Participant into the Plan pursuant to Section 4.1 hereof, and
credited to such Participant and (ii) cash held in the Plan pending investment
in Common Stock for such Participant.
Account Shares
The term "Account Shares" shall mean all shares (and/or
fraction of a share) of Common Stock credited to the Account of a Participant by
the Administrator, which shall include shares deposited into the Plan pursuant
to Section 4.1 hereof.
Administrator
The term "Administrator" shall mean the individual (who may be
an employee of the Company), bank, trust company or other entity (including the
Company) appointed from time to time by the Company to act as Administrator
hereunder.
Automatic Investing Authorization Form
The term "Automatic Investing Authorization Form" shall mean
the documentation, including a voided check or deposit slip on the bank, savings
or credit union account from which funds are to be drawn, that the Administrator
shall require to be completed and received for a Participant to authorize the
Administrator to make automatic deductions from an account designated by the
Participant for investment in Common Stock through the Plan.
Common Stock
As defined in the Recitals.
Company
As defined in the introduction to the Recitals.
Company Share Purchase Price
The term "Company Share Purchase Price," when used with
respect to Fractional Account Shares, newly issued shares of Common Stock or
shares of Common Stock held in the Company's treasury, shall mean the average of
the high and low sales prices of Common Stock on a given trading day as reported
on the New York Stock Exchange Composite Tape as published in The Wall Street
Journal. In the absence of knowledge of inaccuracy, the Administrator may rely
upon such prices as published in The Wall Street Journal. In the event no
trading is so reported for a trading day, the Company Share Purchase Price for
such shares may be determined by the Company on the basis of such market
quotations as it deems appropriate.
Direct Deposit Authorization Form
The term "Direct Deposit Authorization Form" shall mean the
documentation, including a voided check or deposit slip for the designated bank,
savings or credit union account, that the Administrator shall require to be
completed and received prior to a Participant having any Dividends on Account
Shares not being reinvested in Common Stock paid by electronic direct deposit to
the Participant's predesignated bank, savings or credit union account pursuant
to Section 7.7 hereof.
Dividend
The term "Dividend" shall mean cash dividends paid on
Reinvestment Eligible Securities.
Dividend Payment Date
The term "Dividend Payment Date" shall mean a date on which a
cash dividend on shares of Common Stock is paid.
Eligible Securities
The term "Eligible Securities" shall mean those equity and
debt securities of the Company and its subsidiaries, whether issued prior to, on
or after the date hereof, set forth in
2
Section 6.1 hereof, and such other equity and debt securities of the Company and
its subsidiaries as the Company may designate, in its sole discretion, pursuant
to Section 6.2 hereof.
Enrollment Form
The term "Enrollment Form" shall mean the documentation that
(i) the Administrator shall require to be completed and received prior to an
investor's enrollment in the Plan pursuant to Section 2.2, 2.3, 2.4 or 4.1
hereof and (ii) a Participant may submit to the Administrator to change his
options under the Plan pursuant to Section 7.1 hereof.
Exchange Act
The term "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
Foreign Person
The term "Foreign Person" shall mean a Person that is a
citizen or resident of, or is organized or incorporated under, or has its
principal place of business in, a country other than the United States, its
territories and possessions.
Fractional Account Shares
The term "Fractional Account Shares" shall mean the shares
(and fractions of shares) of Common Stock held in the Fractional Share Account.
Fractional Share Account
The term "Fractional Share Account" shall mean an account
under the Plan, owned by the Company, consisting of Fractional Account Shares,
which is held by the Administrator and administered pursuant to Section 8.3
hereof.
ICP
As defined in the introduction to the Recitals.
Independent Agent
The term "Independent Agent" shall mean an agent independent
of the Company who satisfies applicable legal requirements (including without
limitation the requirements of Regulation M and Rule 10b-18 promulgated under
the Exchange Act) and who has been selected by the Company, pursuant to Section
10.6 hereof, to serve as an Independent Agent for purposes of making open market
purchases and sales of Common Stock under the Plan.
Interest
The term "Interest" shall mean interest payments made on
Reinvestment Eligible Securities.
Investment Date
The term "Investment Date" shall mean each date on which the
Administrator or Independent Agent shall begin to purchase or sell shares of
Common Stock pursuant to the Plan. An Investment Date shall occur at least every
fifth business day, and may occur as often as every business date, if
practicable, as determined in the sole discretion of the Administrator.
3
Market Share Purchase Price
The term "Market Share Purchase Price," when used with respect
to shares of Common Stock purchased in the open market, shall mean the weighted
average purchase price per share (including brokerage commissions, any related
service charges and applicable taxes) of the aggregate number of shares
purchased in the open market for an Investment Date.
Market Share Sales Price
The term "Market Share Sales Price," when used with respect to
shares of Common Stock sold under the Plan, shall mean the weighted average
sales price per share (less brokerage commissions, any related service charges
and applicable taxes) of the aggregate number of shares sold in the open market
for the relevant period.
Maximum Amount
As defined in Section 2.5 hereof.
Participant
As defined in Section 2.1 hereof.
Person
The term "Person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, estate or unincorporated organization.
Plan
As defined in the introduction to the Recitals.
Reinvestment Eligible Securities
The term "Reinvestment Eligible Securities" shall mean (i)
those Eligible Securities of which a Participant is the record or registered
holder and on which the Participant has elected to have all or a portion of the
Dividends or Interest paid reinvested in Common Stock and (ii) those Account
Shares on which the Participant has elected to have all or a portion of the
Dividends paid reinvested in Common Stock, which election under (i) or (ii) has
been made by delivering a completed optional cash investment stub or a completed
Enrollment Form, as the case may be, to the Administrator.
Statement of Account
The term "Statement of Account" shall mean a written statement
prepared by the Administrator and sent to each Participant which reflects (i)
all transactions to date completed under the Plan during the current calendar
year, (ii) the number of Account Shares credited to such Participant's Account
at the date of such statement, (iii) the amount of cash, if any, credited to
such Participant's Account pending investment at the date of such statement and
(iv) such additional information regarding such Participant's Account as the
Administrator may determine to be pertinent to the Participant.
Trust Account
As defined in Section 11.1 hereof.
Trustee
As defined in Section 11.7 hereof.
4
A pronoun or adjective in the masculine gender includes the feminine gender, and
the singular includes the plural, unless the context clearly indicates
otherwise.
ARTICLE II
Participation
Section 2.1. Participation. Any Person, whether or not a
record holder of Common Stock, may elect to participate in the Plan; provided,
however, that if such Person is a Foreign Person, he must provide evidence
satisfactory to the Administrator that his participation in the Plan would not
violate local laws applicable to the Company, the Plan or such Foreign Person.
An election by a Person to participate in the Plan shall be
made by completing and returning to the Administrator an Enrollment Form and (i)
electing to have Dividends on Eligible Securities of which such Person is the
record holder invested in Common Stock pursuant to Section 2.2 hereof, (ii)
electing to have Interest on Eligible Securities of which such Person is the
registered owner invested in Common Stock pursuant to Section 2.3 hereof, (iii)
depositing certificates representing Common Stock of which such person is the
record holder into the Plan pursuant to Section 4.1 hereof or (iv) making an
initial cash investment pursuant to Section 2.4 hereof.
Any Person who has met such requirements and has made and not
revoked such election is herein referred to as a "Participant." Notwithstanding
the foregoing, each participant in the ICP or the Plan on the date hereof is
automatically a Participant without submitting a new Enrollment Form; provided,
however, that any such Participant who wishes to change his current
participation in any way must submit written or facsimile instructions or a new
Enrollment Form to the Administrator. A Participant (or a Person completing an
Enrollment Form in order to become a Participant) may elect to participate in
any or all forms of investment provided in Sections 2.2 through 2.5 hereof and
to utilize the Plan's safekeeping services provided in Section 4.1 hereof by
submitting an Enrollment Form designating such election to the Administrator;
provided, however, that in lieu of an Enrollment Form, a Participant may submit
to the Administrator (i) written or facsimile instructions in order to elect
Dividend and/or Interest reinvestment pursuant to Sections 2.2 and/or 2.3
hereof, (ii) a completed optional cash investment stub attached to a quarterly
Statement of Account in order to elect to make optional cash investments
pursuant to Section 2.5 hereof and (iii) the stock certificates representing the
Common Stock to be deposited into the Plan in order to elect to utilize the
safekeeping services provided by the Plan.
Section 2.2. Dividend Reinvestment. A Participant may elect to
have all or a portion of any Dividend on his Reinvestment Eligible Securities
invested in shares (and/or a fraction of a share) of Common Stock to be credited
to his Account in lieu of receiving such Dividend directly. If a Participant
elects to reinvest only a portion of the Dividends received on his Reinvestment
Eligible Securities, the portion of Dividends not reinvested will be sent to the
Participant by check in the manner otherwise associated with payment of such
Dividends or, if such Reinvestment Eligible Securities are also Account Shares,
by electronic direct deposit if the Participant has elected the direct deposit
option provided in Section 7.7 hereof.
5
Section 2.3. Interest Reinvestment. A Participant may elect to
have all or a portion of any Interest on his Reinvestment Eligible Securities
invested in shares (and/or a fraction of a share) of Common Stock to be credited
to his Account in lieu of receiving such Interest directly. If a Participant
elects to reinvest only a portion of the Interest on his Reinvestment Eligible
Securities, that portion of Interest not reinvested in Common Stock will be sent
to the Participant by check in the manner otherwise associated with payment of
Interest.
Section 2.4. Initial Cash Investment. A Person not already a
Participant may become a Participant by (i) making an initial cash payment of at
least $250, or (ii) in the case of a Person who is already a record or
registered holder of Eligible Securities, of at least $50, by personal check,
money order or wire transfer payable to CenterPoint Energy, Inc. Investor's
Choice Plan, to be invested in Common Stock pursuant to Section 3.4 hereof;
provided, however, that such initial cash payment may not exceed $120,000 and
payment for such initial cash investment must be accompanied by a completed
Enrollment Form.
Section 2.5. Optional Cash Investments. A Participant may
elect to make cash payments at any time or from time to time to the Plan, by
personal check, money order or wire transfer payable to CenterPoint Energy, Inc.
Investor's Choice Plan, or by automatic deductions from a predesignated bank,
savings or credit union account pursuant to Section 7.8 hereof, for investment
in Common Stock pursuant to Section 3.4 hereof; provided, however, that any
Participant who elects to make optional cash investments pursuant to this
Section 2.5 must invest at least $50 for any single investment and may not
invest more than $120,000 in aggregate amount in any calendar year (the "Maximum
Amount"). For purposes of determining whether the Maximum Amount has been
reached, initial cash investments shall be counted as optional cash investments.
ARTICLE III
Dividend and Interest Reinvestment and Stock Purchase
Section 3.1. Dividend and Interest Reinvestment. Dividends and
Interest as to which reinvestment has been elected by a Participant shall be
paid to the Administrator or its nominee on behalf of such Participant.
Dividends and Interest shall be reinvested, at the Company's election, in either
(i) newly issued shares of Common Stock or shares of Common Stock held in the
Company's treasury purchased from the Company or (ii) shares of Common Stock
purchased in the open market. Any reinvestment of Dividends or Interest in, or
other purchases of, Common Stock pursuant to this Article III shall be subject
to Section 3.5 hereof.
Section 3.2. Dividend and Interest Reinvestment in Newly
Issued or Treasury Shares. Dividend and Interest reinvestment in newly issued
shares of Common Stock or shares of Common Stock held in the Company's treasury
shall be governed by this Section 3.2. On an Investment Date with respect to
which the Company elects to issue new shares or sell shares of Common Stock held
in the Company's treasury to the Plan in order to effect the reinvestment of
Dividends and/or Interest, the Company shall issue to the Administrator upon the
Company's receipt of the funds described in (a) below, for crediting by the
Administrator to the Account of a Participant, a number of shares (and/or
fraction of a share rounded to three decimal places) of Common Stock equal to
(a) the amount of any Dividends and/or Interest paid to the Administrator on
behalf of such Participant since the preceding Investment Date plus the amount
of any Dividends paid to the
6
Administrator on behalf of such Participant on such Investment Date divided by
(b) the Company Share Purchase Price on the trading day immediately preceding
such Investment Date. Such shares shall be issued or sold to, and registered in
the name of, the Administrator or its nominee as custodian for such
Participants. No interest shall be paid on Dividends or Interest held pending
reinvestment pursuant to this Section 3.2.
Section 3.3. Dividend and Interest Reinvestment in Shares
Purchased in the Open Market. Dividend and Interest reinvestment in shares of
Common Stock purchased in the open market shall be governed by this Section 3.3.
On an Investment Date with respect to which the Company elects to effect
reinvestment of Dividends and/or Interest in shares of Common Stock purchased in
the open market, the Administrator shall (if it is an Independent Agent), or
shall cause an Independent Agent to, apply the amount of any Dividends and/or
Interest paid to the Administrator on behalf of the Participants since the
preceding Investment Date plus the amount of any Dividends paid to the
Administrator on behalf of the Participants on such Investment Date to the
purchase of shares of Common Stock in the open market. Purchases in the open
market pursuant to this Section 3.3 and Subsection 3.4.2 hereof may begin on the
applicable Investment Date and shall be completed no later than five days from
such date unless completion at a later date is necessary or advisable under
applicable law, including without limitation any federal securities laws. Any
Dividends, Interest, optional cash investments and initial cash investments to
be reinvested in shares of Common Stock purchased in the open market pursuant to
this Section 3.3 and Subsection 3.4.2 hereof not reinvested in shares of Common
Stock within 30 days of receipt by the Administrator, or if the Company is not
the Administrator by the Company, shall be promptly returned to the Participant
at his address of record by First Class Mail. Open market purchases pursuant to
this Section 3.3 and Subsection 3.4.2 hereof may be made on any securities
exchange on which the Common Stock is traded, in the over-the-counter market or
by negotiated transactions, and may be upon such terms and subject to such
conditions with respect to price and delivery to which the Independent Agent
(including the Administrator if it is also an Independent Agent) may agree. With
regard to open market purchases of shares of Common Stock pursuant to this
Section 3.3 and Subsection 3.4.2 hereof, none of the Company, the Administrator
(if it is not also serving as the Independent Agent) or any Participant shall
have any authority or power to direct the time or price at which shares of
Common Stock may be purchased, the markets on which such shares are to be
purchased (including on any securities exchange, in the over-the-counter market
or in negotiated transactions) or the selection of the broker or dealer (other
than the Independent Agent) through or from whom purchases may be made. For the
purpose of making, or causing to be made, purchases of shares of Common Stock
pursuant to this Section 3.3 and Subsection 3.4.2 hereof, and sales of Account
Shares pursuant to Section 5.1 hereof, the Independent Agent shall be entitled
to commingle each Participant's funds with those of all other Participants and
to offset purchases of shares of Common Stock against sales of shares of Common
Stock to be made for Participants, resulting in a net purchase or a net sale of
shares. The number of shares (and/or fraction of a share rounded to three
decimal places) of Common Stock that shall be credited to a Participant's
Account with respect to an Investment Date to which this Section 3.3 applies
shall be equal to (a)(i) the amount of any Dividends and/or Interest paid to the
Administrator on behalf of such Participant since the preceding Investment Date
plus (ii) the amount of any Dividends paid to the Administrator on behalf of
such Participant on such Investment Date less (iii) any Dividends and/or
Interest to be returned to such Participant pursuant to this Section 3.3 divided
7
by (b) the Market Share Purchase Price with respect to such Investment Date.
Such shares shall be registered in the name of the Administrator or its nominee
as custodian for the Participants. No interest shall be paid on Dividends or
Interest held pending reinvestment pursuant to this Section 3.3.
Section 3.4. Investment of Optional Cash Payments and Initial
Cash Payments. Any optional cash investments and initial cash investments
received by the Administrator from a Participant at least one business day prior
to an Investment Date shall be invested, beginning on such Investment Date, in
either (i) newly issued shares or shares of Common Stock held in the Company's
treasury in the manner provided in Subsection 3.4.1 hereof, or (ii) Common Stock
purchased in the open market in the manner provided in Subsection 3.4.2 hereof.
Optional cash investments and initial cash investments not received by the
Administrator at least one business day prior to an Investment Date need not be
invested on such Investment Date; provided, however, that any such optional cash
investments and initial cash investments not invested on such Investment Date
shall be invested beginning on the next succeeding Investment Date. No interest
shall be paid on optional cash investments and initial cash investments held
pending investment pursuant to this Section 3.4.
Subsection 3.4.1 Newly Issued or Treasury Shares. On an
Investment Date with respect to which the Company elects to issue new shares or
sell shares of Common Stock held in the Company's treasury to the Plan in order
to effect the investment of optional cash investments and initial cash
investments, the Company shall issue to the Administrator upon the Company's
receipt of the funds described in (a) below, for crediting by the Administrator
to the Account of a Participant, a number of shares (and/or fraction of a share
rounded to three decimal places) of Common Stock equal to (a) the amount of any
optional cash investments and/or initial cash investment received by the
Administrator from such Participant since the preceding Investment Date
(excluding any amounts received from such Participant within one business day of
such Investment Date but including any amounts received from such Participant
within one business day prior to the preceding Investment Date that were not
invested on the preceding Investment Date as set forth in Section 3.4 hereof)
divided by (b) the Company Share Purchase Price on the trading day immediately
preceding such Investment Date. Such shares shall be issued or sold to, and
registered in the name of, the Administrator or its nominee as custodian for the
Participants.
Subsection 3.4.2 Shares Purchased in the Open Market. On an
Investment Date with respect to which the Company elects to effect the
investment of optional cash investments and initial cash investments in shares
of Common Stock purchased in the open market, the Administrator shall (if it is
an Independent Agent), or shall cause an Independent Agent to, purchase for
crediting by the Administrator to the Account of a Participant a number of
shares (and/or fraction of a share rounded to three decimal places) of Common
Stock in the open market equal to (a)(i) the amount of any optional cash
investments and/or initial cash investment received by the Administrator from
such Participant since the preceding Investment Date (excluding any amounts
received from such Participant within one business day of such Investment Date
but including any amounts received from such Participant within one business day
prior to the preceding Investment Date as set forth in Section 3.4 hereof) less
(ii) any optional cash investments and/or initial cash investments to be
returned to such Participant pursuant to Section 3.3 hereof divided by (b) the
Market Share Purchase Price with respect to
8
such Investment Date. Such purchases shall be made in the manner set forth in
Section 3.3 hereof. Such shares shall be registered in the name of the
Administrator or its nominee as custodian for the Participants.
Subsection 3.4.3 Request to Stop Investment. If a written
request to stop investment of optional cash investments or an initial cash
investment is received by the Administrator from a Participant at least two
business days before the next Investment Date, any optional cash investments or
initial cash investment from such Participant then held by the Administrator
shall not be invested in Common Stock and shall be returned to such Participant.
If such a request is not received by the Administrator at least two business
days prior to an Investment Date, any such optional cash investments or initial
cash investment shall be invested in shares of Common Stock for such
Participant's Account.
Section 3.5. Exhaustion of Fractional Share Account. Prior to
any purchase of Common Stock by the Administrator or an Independent Agent
pursuant to this Article III, the Administrator shall first purchase, at the
Company Share Purchase Price on the trading day immediately preceding the
Investment Date, the Fractional Account Shares from the Fractional Share
Account. To the extent made, such purchases from the Fractional Share Account
shall substitute for purchases required by this Article III.
ARTICLE IV
Safekeeping Services for Deposited Common Stock
Section 4.1. Deposited Common Stock. A Participant who has
already delivered an Enrollment Form to the Administrator may elect to have
certificates representing shares of Common Stock of which the Participant is the
record holder deposited into the Plan by delivering such certificates to the
Administrator, while a Person meeting the requirements set forth in Section 2.1
hereof who is not yet a Participant may elect to have his certificates
representing shares of Common Stock of which he is the record holder deposited
into the Plan by completing an Enrollment Form and delivering such certificates
and Enrollment Form to the Administrator. Shares of Common Stock so deposited
shall be transferred into the name of the Administrator or its nominee and
credited to the depositing Participant's Account. Dividends paid on shares of
Common Stock deposited into the Plan pursuant to this Section 4.1 shall be
reinvested in Common Stock pursuant to Article III hereof in accordance with the
depositing Participant's reinvestment election designated on a completed
Enrollment Form.
Section 4.2. Withdrawal of Common Stock Deposited Pursuant to
Section 4.1. Shares of Common Stock deposited pursuant to Section 4.1 hereof may
be withdrawn from the Plan pursuant to Section 7.2 hereof.
ARTICLE V
Sale of Account Shares; Gift or Transfer of Account Shares
Section 5.1. Sale of Account Shares. At any time, a
Participant may request, by written, telephone or facsimile instructions, that
the Administrator sell all or a portion of his
9
whole Account Shares. The Administrator (if it is not also an Independent Agent)
shall forward such sale instructions to the Independent Agent as soon as
practicable, but within five business days, after receipt thereof (except in the
case of instructions to sell all whole Account Shares of a Participant described
below in the immediately following paragraph). The Independent Agent shall make
such sales as soon as practicable (in accordance with stock transfer
requirements and federal and state securities laws) after processing such sale
instructions. Within five business days after the sale has been completed by the
Independent Agent, the Administrator shall mail by First Class Mail to such
Participant at his address of record a check in an amount equal to (a) the
Market Share Sales Price multiplied by (b) the number of his Account Shares
sold.
If instructions for the sale of Account Shares which are not
Reinvestment Eligible Securities are received by the Administrator on or after
the record date relating to a Dividend Payment Date but before the Dividend
Payment Date, the sale shall be processed as described above, and the
Administrator shall, as soon as practicable following the receipt of Dividends
paid on such Account Shares, mail a check for such Dividends by First Class Mail
to the Participant at his address of record or directly deposit such Dividends
in the Participant's designated direct deposit account, if such Participant has
elected the direct deposit option pursuant to Section 7.7 hereof. If
instructions for the sale of Account Shares which are also Reinvestment Eligible
Securities are received by the Administrator on or after the record date
relating to a Dividend Payment Date but before the Dividend Payment Date, the
shares of Common Stock purchased from the reinvestment of such Dividends shall
be credited to the Participant's Account, and (i) if the Participant's sale
instructions cover less than all of his whole Account Shares, the sale shall be
processed as described above in the immediately preceding paragraph or (ii) if
the Participant's sale instructions cover all of his whole Account Shares, the
sale instructions shall not be processed until after such Dividends have been
reinvested pursuant to the Plan and the shares of Common Stock purchased
therewith have been credited to his Account. In the case of clause (ii) of the
immediately preceding sentence, the Administrator shall forward such sale
instructions to the Independent Agent promptly (within at least five business
days) after such Dividend Payment Date.
With regard to open market sales of Account Shares pursuant to
this Section 5.1, none of the Company, the Administrator (if it is not also
serving as the Independent Agent) or any Participant shall have any authority or
power to direct the time or price at which shares of Common Stock may be sold,
the markets on which such shares are to be sold (including on any securities
exchange, in the over-the-counter market or in negotiated transactions) or the
selection of the broker or dealer (other than the Independent Agent) through or
from whom sales may be made, except that the timing of such sales must be made
in accordance with the terms and conditions of the Plan.
Section 5.2. Gift or Transfer of Account Shares. A Participant
may elect to transfer (whether by gift, private sale or otherwise) ownership of
all or a portion of his Account Shares to the Account of another Participant or
establish an Account for a Person not already a Participant by delivering to the
Administrator written, telephone or facsimile instructions to that effect and a
stock assignment (stock power), acceptable to the Administrator. No fraction of
a share of Common Stock credited to the transferor's Account shall be
transferred unless the transferor's entire Account is transferred.
10
Account Shares transferred in accordance with the preceding
paragraph shall continue to be registered in the name of the Administrator as
custodian and shall be credited to the transferee's Account. If the transferee
is not already a Participant, an Account shall be opened in the name of the
transferee and the Administrator shall send the transferee an Enrollment Form as
soon as practicable after such transfer. Until the transferee elects otherwise
or the transferor specifically requests that the new Account be enrolled in one
or more of the Plan's options, the new Account will be treated as having elected
only to have shares held in safekeeping under the Plan. The transferor may
request that the Administrator deliver a Statement of Account to the transferor
for personal delivery to the transferee and/or the transferor may request that
the Administrator deliver to such transferee a gift certificate. The transferor
may request that the Administrator send the gift certificate directly to such
transferee with the first Statement of Account following such transfer or
request that the Administrator deliver such gift certificate to the transferor
for personal delivery to the transferee. The Administrator shall comply with any
such request of a transferor relating to Statements of Account and/or gift
certificates as soon as practicable following receipt of such request.
If transfer instructions with regard to Account Shares which
are not Reinvestment Eligible Securities are received by the Administrator on or
after the record date relating to a Dividend Payment Date but before the
Dividend Payment Date, the transfer shall be processed as described above, and
the Administrator shall, as soon as practicable following the receipt of
Dividends paid on such designated Account Shares, mail a check for such
Dividends by First Class Mail to the transferor at his address of record or
directly deposit such Dividends in the transferor's direct deposit account, if
he has elected the direct deposit option pursuant to Section 7.7 hereof. If
transfer instructions with regard to Account Shares that are also Reinvestment
Eligible Securities are received by the Administrator on or after the record
date relating to a Dividend Payment Date but before the Dividend Payment Date,
the shares of Common Stock purchased from the reinvestment of such Dividends
shall be credited to the Participant's Account, and (i) if the Participant's
transfer instructions cover less than all of his whole Account Shares, the
transfer shall be processed as described above in the immediately preceding
paragraph or (ii) if the Participant's transfer instructions cover all of his
whole Account Shares, the transfer shall not be processed until after such
Dividends have been reinvested pursuant to the Plan and the shares of Common
Stock purchased therewith have been credited to his Account. In the case of
clause (ii) of the immediately preceding sentence, the Administrator shall
effect such transfer as soon as practicable after such Dividend Payment Date.
Section 5.3. Reinvestment of Dividends on Remaining Account
Shares. If only a portion of a Participant's Account Shares are Reinvestment
Eligible Securities and the Participant elects to (i) sell a portion of his
Account Shares pursuant to Section 5.1 hereof, (ii) transfer a portion of his
Account Shares pursuant to Section 5.2 hereof or (iii) withdraw a portion of his
Account Shares pursuant to Section 7.2 hereof, all of the Account Shares which
are not Reinvestment Eligible Securities shall be sold, transferred or
withdrawn, as the case may be, before any Account Shares which are Reinvestment
Eligible Securities are sold, transferred or withdrawn unless the Participant
gives specific instructions to the contrary in connection with such sale,
transfer or withdrawal of Account Shares.
11
ARTICLE VI
Eligible Securities
Section 6.1. Eligible Securities. The following debt and
equity securities of the Company and its subsidiaries shall be Eligible
Securities:
(i) Common Stock; and
(ii) First Mortgage Bonds, 9.15% Series due 2021.
Section 6.2. Additional Eligible Securities. The Company may
from time to time or at any time designate other debt or equity securities of
the Company and its subsidiaries as Eligible Securities by notifying the
Administrator in writing of the designation of such securities as Eligible
Securities.
ARTICLE VII
Treatment of Accounts
Section 7.1. Changing Plan Options. A Participant may elect to
change his Plan options, including (i) changing the reinvestment levels (i.e.,
full, partial or none) of Dividends and Interest on Reinvestment Eligible
Securities and (ii) changing the designation of Reinvestment Eligible
Securities, by delivering to the Administrator written or facsimile instructions
or a new Enrollment Form to that effect. To be effective with respect to any
Dividend or Interest payment, the instructions or Enrollment Form with respect
to such Reinvestment Eligible Securities must be received by the Administrator
on or before the record date relating to such Dividend and/or Interest. If the
instructions or Enrollment Form are not received by the Administrator on or
before the record date relating to such Dividend and/or Interest, such
instructions shall not become effective until after the payment of such Dividend
and/or Interest. The shares of Common Stock purchased from the reinvestment of
such Dividend and/or Interest shall be credited to the Participant's Account.
After the Administrator's receipt of effective option changing instructions,
Dividends and Interest on Reinvestment Eligible Securities as to which the
reinvestment election has been revoked will be paid in cash or with regard to
Dividends on Common Stock, by direct deposit to the Participant's designated
direct deposit account, if such Participant has elected the direct deposit
option pursuant to Section 7.7 hereof.
Section 7.2. Right of Withdrawal. A Participant may, at any
time or from time to time, withdraw from the Plan all or any part (other than
fractions) of his Account Shares by delivering to the Administrator (i)
appropriate withdrawal instructions to that effect, if such Participant will be
the record holder of such Account Shares after withdrawal or (ii) written
instructions specifying the recipient's name, address, Social Security number
and telephone number (or such items as required by the Administrator) and a
stock assignment (stock power) to that effect, if the Participant will not be
the record holder of such Account Shares after withdrawal. Subject to the
limitations described in the immediately following paragraph, within two
business days of the Administrator's receipt of (i) appropriate withdrawal
instructions or (ii) appropriate written transfer instructions and a stock
assignment (stock power), as the case
12
may be, which indicates the Participant's desire to withdraw certain of his
whole Account Shares, the Administrator shall mail by First Class Mail to the
Participant at his address of record, or to the address of any Person that the
Participant designated, certificates representing such designated Account
Shares.
If withdrawal instructions with regard to Account Shares which
are not Reinvestment Eligible Securities are received by the Administrator on or
after the record date relating to a Dividend Payment Date but before the
Dividend Payment Date, the withdrawal shall be processed as described above, and
the Administrator shall, as soon as practicable following the receipt of
Dividends paid on the withdrawn Account Shares, mail a check for such Dividends
by First Class Mail to the Participant at his address of record or directly
deposit such Dividends in the Participant's designated direct deposit account,
if such Participant has elected the direct deposit option pursuant to Section
7.7 hereof. If withdrawal instructions with regard to Account Shares which are
also Reinvestment Eligible Securities are received by the Administrator on or
after the record date relating to a Dividend Payment Date but before the
Dividend Payment Date, the shares of Common Stock purchased from the
reinvestment of such Dividends shall be credited to the Participant's Account,
and (i) if the Participant's withdrawal instructions cover less than all of his
Account Shares, the withdrawal shall be processed as described above in the
immediately preceding paragraph or (ii) if the Participant's withdrawal
instructions cover all of his whole Account Shares, the withdrawal instructions
shall not be processed until after such Dividends have been reinvested pursuant
to the Plan and the shares of Common Stock purchased therewith have been
credited to his Account. In the case of clause (ii) of the immediately preceding
sentence, the Administrator shall mail by First Class Mail to the Participant at
his address of record, or to the address of any Person that the Participant
designated, certificates representing the withdrawn Account Shares as soon as
practicable following such Dividend Payment Date.
Withdrawal of Account Shares shall not affect reinvestment of
Dividends on the Account Shares withdrawn unless (i) the Participant is no
longer the record holder of such Account Shares, (ii) such reinvestment is
changed by the Participant by delivering to the Administrator written or
facsimile instructions or an Enrollment Form to that effect pursuant to Section
7.1 hereof or (iii) the Participant has terminated his participation in the
Plan.
Section 7.3. Right of Termination of Participation. If a
Participant's written, telephone or facsimile instructions to the Administrator
indicate the Participant's desire to terminate his participation in the Plan,
the Administrator shall treat such request as a withdrawal of all of such
Participant's whole Account Shares pursuant to Section 7.2 hereof. As soon as
practicable after receipt of termination instructions, the Administrator, in
addition to mailing certificates representing all whole Account Shares, if any,
pursuant to Section 7.2 hereof, shall mail by First Class Mail to the
Participant at his address of record a check for an amount equal to the sum of
(i) the amount of cash credited to such Participant's Account pending investment
in Common Stock and (ii) the cash value of any fraction of a share of Common
Stock credited to his Account. Such fraction of a share shall be valued at the
Company Share Purchase Price for the trading day immediately preceding the date
of termination.
Section 7.4. Stock Splits, Stock Dividends and Rights
Offerings. Any shares or other securities representing stock splits or other
noncash distributions on Account Shares shall
13
be credited to such Participant's Account. Stock splits, combinations,
recapitalizations and similar events affecting the Common Stock shall, as to
shares credited to Accounts of Participants, be credited to such Accounts on a
pro rata basis. In the event of a rights offering, a Participant shall receive
rights based upon the total number of whole shares of Common Stock credited to
his Account.
Section 7.5. Shareholder Materials; Voting Rights. The
Administrator shall send or forward to each Participant all applicable proxy
solicitation materials, other shareholder materials or consent solicitation
materials. Participants shall have the exclusive right to exercise all voting
rights respecting Account Shares credited to their respective Accounts. A
Participant may vote any of his whole Account Shares in person or by proxy. A
Participant's proxy card shall include his whole Account Shares and shares of
Common Stock of which he is the record holder. Account Shares shall not be voted
unless a Participant or his proxy votes them. Fractions of shares of Common
Stock shall not be voted.
Solicitation of the exercise of Participants' voting rights by
the management of the Company and others under a proxy or consent provision
applicable to all holders of Common Stock shall be permitted. Solicitation of
the exercise of Participants' tender or exchange offer rights by management of
the Company and others shall also be permitted. The Administrator shall notify
the Participants of each occasion for the exercise of their voting rights or
rights with respect to a tender offer or exchange offer within a reasonable time
before such rights are to be exercised. Such notification shall include all
information distributed to the shareholders of the Company by the Company
regarding the exercise of such rights.
Section 7.6. Statements of Account. As soon as practicable
after each calendar quarter, the Administrator shall send to each Participant a
quarterly Statement of Account. Additionally, the Administrator shall send a
confirmation to each Participant promptly after each cash investment, deposit of
Common Stock into the Plan pursuant to Section 4.1 hereof or sale, transfer or
withdrawal of Account Shares by such Participant. The Administrator need not
confirm Dividend and Interest reinvestments individually but shall confirm any
such reinvestments on quarterly Statements of Account.
Section 7.7. Direct Deposit Option. A Participant may elect to
have any Dividends on Account Shares not being reinvested in Common Stock
pursuant to the Plan paid by electronic direct deposit to the Participant's
predesignated bank, savings or credit union account. To receive such direct
deposit of funds, a Participant must complete and return a Direct Deposit
Authorization Form to the Administrator. Direct deposit authorization must be
received by the Administrator at least 30 days before an applicable Dividend
Payment Date to be effective for that Dividend Payment Date. Participants can
cancel direct deposit of Dividends by notifying the Administrator in writing or
by facsimile. In order to be effective for an applicable Dividend Payment Date,
the Administrator must receive the cancellation notice at least 30 days before
that Dividend Payment Date. To change a designated bank, savings or credit union
account for direct deposit of Dividends, the Administrator must receive written
notice, accompanied by a voided check or deposit slip for the new bank account,
at least 30 days before an applicable Dividend Payment Date.
14
Section 7.8. Automatic Investing Option. A Participant may
elect to make automatic monthly or quarterly investments of a specified amount
(not less than $50 per purchase nor more than $120,000 per calendar year) by
electronic automatic transfer of funds from a predesignated bank, savings or
credit union account. A Participant must complete an Automatic Investing
Authorization Form and return it to the Administrator at least 30 days before
initiating automatic investing. Automatic investing deductions shall be made two
business days before the Investment Date. A Participant shall be charged a
returned check fee by his bank if the designated bank, savings or credit union
account does not have sufficient funds to cover the authorized deduction.
A Participant may change the amount of his automatic
investment by notifying the Administrator in writing or by facsimile of the new
amount, and the change shall be effective approximately two weeks after the
notice is received. A Participant may cancel automatic investing by instructing
the Administrator in writing or by facsimile to cancel the automatic investing,
and the cancellation shall be effective approximately two weeks after the notice
is received. To change a designated bank, savings or credit union account, a
Participant must notify the Administrator in writing, by telephone or by
facsimile at least 30 days before the change is to take effect and supply a
voided check or deposit slip for the new account.
ARTICLE VIII
Certificates and Fractions of Shares
Section 8.1. Certificates. Shares of Common Stock purchased
for a Participant will be held in an automated, electronic record keeping system
by the Administrator in its name or the name of its nominee. The number of
shares, including fractional shares, held for each Participant will be shown on
each Statement of Account. A Participant, at any time or from time to time, may
request in writing, by telephone or by facsimile to receive a certificate for
all or a portion of his whole Account Shares. The Administrator shall mail such
certificate(s) within two business days after the receipt of such request to
such Participant at his address of record; provided, however, that upon the
mailing of such certificate(s) the shares of Common Stock represented by such
certificate shall no longer be Account Shares but shall remain Reinvestment
Eligible Securities (to the extent such Participant has elected to have
Dividends on such Account Shares reinvested in Common Stock).
Section 8.2. Fractional Shares. Fractions of shares of Common
Stock shall be credited to Accounts as provided in Article III hereof; provided,
however, that no certificate for a fraction of a share shall be distributed to
any Participant at any time; and provided, further, that the Company shall issue
and sell only whole shares of Common Stock to the Administrator in respect of
Dividends and Interest reinvested in, and purchases made by the Administrator
hereunder of, newly issued shares or shares of Common Stock held in the
Company's treasury.
Section 8.3. Fractional Share Account. In the event that, upon
a Participant's termination of participation in the Plan, the Account of such
Participant is credited with a fraction of a share of Common Stock, such
fraction of a share shall be purchased by the Administrator for the Fractional
Share Account at the Company Share Purchase Price determined as of the trading
date specified in Section 7.3, 9.1 or 9.4 hereof, as the case may be, and the
15
proceeds thereof shall be remitted to such Participant as set forth in Section
7.3, 9.1 or 9.4 hereof, respectively. The Company shall from time to time credit
the Fractional Share Account with such amounts of money as may be necessary to
fund such purchases for the Fractional Share Account; provided, however, that
the Company may, at any time or from time to time, direct the Administrator to
repay, and thereupon the Administrator shall repay to the Company such portion
of the cash as the Company may, in its discretion, deem to be in excess of the
amount needed to fund the operations of the Fractional Share Account.
As set forth in Section 3.5 hereof, on each Investment Date,
the Administrator shall first apply the aggregate amount of optional cash
investments, initial cash investments, Dividends and Interest to the purchase of
all currently existing Fractional Account Shares. If the remaining aggregate
amount of optional cash investments, initial cash investments, Dividends and
Interest is not sufficient to purchase a whole number of shares of Common Stock,
the Company shall provide to the Administrator, as agent for the Company, such
additional amount of money as may be necessary to enable the Administrator (or
the Independent Agent, as the case may be) to purchase an additional share of
Common Stock. The fraction of a share that has been purchased with funds
provided by the Company shall be credited to the Fractional Share Account, and
the remaining fraction of a share shall be allocated among the Participants'
Accounts as necessary.
ARTICLE IX
Concerning the Plan
Section 9.1. Suspension, Modification and Termination. The
Company may at any time and from time to time, at its sole option, suspend,
modify, amend or terminate the Plan, in whole, in part or in respect of
Participants in one or more jurisdictions; provided, however, no such amendment
shall decrease the Account of any Participant or result in a distribution to the
Company of any amount credited to the Account of any Participant. Upon complete
termination of the Plan, the Accounts of all Participants (or in the case of
partial termination of the Plan, the Accounts of all affected Participants)
shall be treated as if each such Participant had elected to terminate his
participation in the Plan pursuant to Section 7.3 hereof, except that any
fraction of a share of Common Stock shall be valued as of the trading date
immediately preceding the date on which the Plan is terminated. The
Administrator shall promptly send each affected Participant notice of such
suspension, modification or termination.
Section 9.2. Rules and Regulations. The Company may from time
to time adopt such administrative rules and regulations concerning the Plan as
it deems necessary or desirable for the administration of the Plan. The Company
shall have the power and authority to interpret the terms and the provisions of
the Plan and shall interpret and construe the Plan and reconcile any
inconsistency or supply any omitted detail in a manner consistent with the
general terms of the Plan and applicable law.
Section 9.3. Costs. All costs of administration of the Plan
shall be paid by the Company; provided, however, that any brokerage commissions,
service charges or applicable taxes incurred in connection with open market
purchases and sales of shares of Common Stock made under the Plan shall be borne
by the Participants.
16
Section 9.4. Termination of a Participant. If a Participant
does not have at least one whole Account Share or own or hold any other
Reinvestment Eligible Securities, the Participant's participation in the Plan
may be terminated by the Company, in its sole discretion, after written notice
is mailed to such Participant at his address of record. Additionally, the
Company, in its sole discretion, may terminate any Participant's participation
in the Plan after written notice mailed in advance to such Participant at his
address of record. Upon such termination, the Account of such Participant shall
be treated as if he had elected to terminate his participation in the Plan
pursuant to Section 7.3 hereof, except that any fraction of a share of Common
Stock shall be valued as of the trading date immediately preceding the date on
which such Participant's participation is terminated.
Section 9.5. Interpretation of Plan. With respect to any
matter relating to the Plan, including, without limitation, the timing and
pricing of purchases and sales of Common Stock for Participants, the written
provisions of the Plan as set forth herein shall be controlling. None of the
Company, the Administrator or any Independent Agent shall be liable for a
Participant's reliance on any oral statement that is inconsistent with the
written provisions of the Plan as set forth herein.
ARTICLE X
Administration of the Plan
Section 10.1. Selection of an Administrator. The Administrator
shall be appointed by the Company. The Administrator's appointment to serve as
such may be revoked by the Company at any time. The Administrator may resign at
any time upon reasonable notice to the Company. In the event that no
Administrator is appointed, the Company shall be deemed to be the Administrator
for purposes of the Plan. The Company shall be the initial Administrator.
Section 10.2. Compensation. The officers of the Company shall
make such arrangements regarding compensation, reimbursement of expenses and
indemnification of the Administrator and any Independent Agent as they from time
to time deem reasonable and appropriate.
Section 10.3. Authority and Duties of Administrator. The
Administrator shall have the authority to undertake any act necessary to fulfill
its duties as set forth in the various provisions of the Plan. Upon receipt, the
Administrator shall deposit all Dividends, Interest, optional cash investments
and initial cash investments in the Trust Account. The Administrator shall
maintain appropriate records of the Accounts of Participants and the Fractional
Share Account.
Section 10.4. Liability of the Company, the Administrator and
Any Independent Agent. The Company, the Administrator and any Independent Agent
shall not be liable for any act done in good faith, or for the good faith
omission to act in administering or performing their duties with respect to the
Plan, including, without limitation, any claim of liability arising out of
failure to terminate a Participant's Account upon such Participant's death prior
to receipt of notice in writing of such death, or with respect to the prices at
which shares are purchased or sold
17
for a Participant's Account and the times when such purchases and sales are
made, or with respect to any loss or fluctuation in the market value after the
purchase or sale of such shares.
Section 10.5. Records and Reports. The Administrator shall
keep appropriate records concerning the Plan, Accounts of Participants,
purchases and sales of Common Stock made under the Plan and Participants'
addresses of record and shall send Statements of Account and confirmations to
each Participant in accordance with the provisions of Section 7.6 hereof.
Section 10.6. Selection of Independent Agent. Any Independent
Agent serving in such capacity pursuant to the Plan shall be selected by the
Company, and the Administrator and the Company, or either of them, shall,
subject to the provisions of Section 3.3 hereof, make such arrangements and
enter into such agreements with the Independent Agent in connection with the
activities contemplated by the Plan as the Administrator and the Company, or
either of them, deem reasonable and appropriate.
Section 10.7. Source of Shares of Common Stock. The Company
shall not change the source of shares of Common Stock purchased by Participants
in the Plan (i.e., either (i) newly issued shares of Common Stock or shares of
Common Stock held in the Company's treasury purchased from the Company or (ii)
shares of Common Stock purchased in the open market) more than once in any
three-month period. At any time that the source of shares of Common Stock
purchased in the Plan are shares purchased in the open market, the Company shall
not exercise its right to change the source of shares absent a determination by
the Company's Board of Directors or Finance Committee of the Board of Directors
that the Company has a need to raise additional capital or there is another
compelling reason for a change.
ARTICLE XI
Trust Agreement
Section 11.1. Continuation of Trust Account. The Company has
previously created with the Trustee a trust consisting of all Dividends,
Interest, optional cash investments and initial cash investments deposited by
the Administrator in that certain non-interest bearing trust account (together
with all Dividends, Interest, optional cash investments and initial cash
investments deposited therein from time to time, the "Trust Account")
established by the Company at JPMorgan Chase Bank Texas, account no.
0010-091-2428, or such other non-interest bearing accounts as the Company may
establish from time to time hereunder with any commercial bank organized under
the laws of the United States or any state, which commercial bank must have
assets in excess of $500,000,000. The Trust Account is hereby continued.
Section 11.2. Acceptance of Trust. This provision is no longer
applicable.
Section 11.3. Successor Trustees. The person serving at any
particular time as the Chief Financial Officer of the Company shall be the
trustee of the trust hereunder. Therefore, if any person who is serving as
trustee for any reason ceases to serve as Chief Financial Officer of the
Company, that person shall also be deemed to have ceased to serve as trustee
hereunder, and the successor Chief Financial Officer of the Company shall be the
trustee hereunder. If the
18
situation arises, under the preceding part of this Section 11.3 or otherwise, in
which no trustee is either serving or designated to serve hereunder, a trustee
of the trust shall be appointed by the Company in accordance with Section 11.4
or, if the Company fails to appoint a successor within sixty (60) days of
receiving notification that a vacancy has occurred, a trustee for the trust
shall be appointed in accordance with applicable law.
Section 11.4. Method of Appointment by Company. The
appointment of a successor trustee hereunder by the Company shall be
accomplished by (i) an instrument in writing appointing such successor trustee,
executed by the Company, together with a certified copy of resolutions of the
Board of Directors of the Company to such effect and (ii) an acceptance in
writing of the office of successor trustee hereunder executed by the successor
so appointed. The Company shall send notice of such appointment to the
Administrator. Any successor trustee hereunder may be either a corporation
authorized and empowered to exercise trust powers or one or more individuals.
Section 11.5. Removal of Trustee. Any person or entity serving
as trustee may be removed as such by the Company at any time, with or without
cause, effective sixty (60) days after delivery of written notice to the
trustee, but such notice may be waived by the trustee. Such removal shall be
effected by delivering to the trustee a written notice of removal executed by
the Company and by giving notice to the trustee of the appointment of a
successor trustee in the manner set forth in Section 11.4.
Section 11.6. Resignation of Trustee. Any person or entity
serving as trustee may resign as such, effective sixty (60) days after delivery
of notice thereof in writing to the Company.
Section 11.7. Trustee Defined. As used or applied below in
this Article XI, the term "Trustee" refers collectively to the one or ones at
any particular time serving as the trustee or trustees of the trust. The neuter
gender is used in referring to that term.
Section 11.8. General Duties of the Company. The Company shall
provide the Trustee with a true and correct copy of the Plan and true and
correct copies of any amendments to the Plan promptly upon their adoption and
shall certify to the Trustee the names and specimen signatures of any person who
shall have authority to control and manage the operation and administration of
the Plan on behalf of the Administrator.
Section 11.9. General Duties and Powers of the Trustee. No
bond or other security shall ever be required of the Trustee.
The Trustee shall keep accurate and detailed records of
receipts and disbursements and other transactions affecting the Trust Account,
and shall make disbursements from the Trust Account at such times, to such
persons (including the Administrator) and in such amounts as the Administrator
shall direct in writing. All such disbursements shall comply with the provisions
of the Plan and no disbursement shall be made which would cause any property in
the Trust Account to be used or diverted for purposes not consistent with the
provisions of the Plan.
19
The Trustee shall, in the Trustee's sole and absolute
discretion, perform such other acts as the Trustee may deem necessary or proper
for the protection of the Trust Account and, except to the extent inconsistent
with the provisions of the Plan, may exercise all such further rights and powers
as may be granted to trustees generally under the Texas Trust Code.
Section 11.10. Liability of Trustee. The Trustee shall use
ordinary care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character and
with like aims. The Trustee shall not be liable or responsible for any loss
sustained by the Trust Account by reason of the insolvency of the financial
institution holding such account or for acting without question on the direction
of, or failing to act in the absence of any direction from, the Administrator or
any person with authority to act on behalf of the Administrator, unless the
Trustee knows that by such action or failure to act he or she will be in breach
of his or her fiduciary duty. The Trustee shall not be responsible in any
respect for the administration of the Plan.
The duties and obligations of the Trustee hereunder shall be
governed solely by the terms of this Article XI, and no implied covenants or
obligations shall be read into this Article XI against the Trustee.
Section 11.11. Transfer of Trust Account to Successor. Upon
resignation or removal, the Trustee shall transfer and deliver control over the
Trust Account and all records relating to the Trust Account to the successor
trustee of the trust. All of the provisions set forth herein with respect to the
Trustee shall relate to each successor trustee hereunder with the same force and
effect as if such successor trustee had been originally named herein as the
Trustee hereunder.
Section 11.12. Trustee's Compensation. The officers of the
Company shall make such arrangements regarding compensation, reimbursement of
expenses and indemnification of the Trustee as they from time to time deem
reasonable and appropriate.
ARTICLE XII
Miscellaneous Provisions
Section 12.1. Controlling Law. This Plan shall be construed,
regulated and administered under the laws of the State of Texas.
Section 12.2. Acceptance of Terms and Conditions of Plan by
Participants. Each Participant, by completing an Enrollment Form and as a
condition of participation herein, for himself, his heirs, executors,
administrators, legal representatives and assigns, approves and agrees to be
bound by the provisions of this Plan and any subsequent amendments hereto, and
all actions of the Company and the Administrator hereunder.
20
IN WITNESS WHEREOF, CENTERPOINT ENERGY, INC. has amended and
restated the ICP in the form of this CenterPoint Energy, Inc. Second Amended and
Restated Investor's Choice Plan and has executed this Plan and continued the
trust contemplated herein as evidenced by the signature affixed hereto of its
Executive Vice President and Chief Financial Officer, Gary L. Whitlock, and Gary
L. Whitlock, individually as Trustee, has evidenced his acceptance of the trust
contemplated herein and has agreed to the terms of the trust as evidenced by his
signature affixed hereto, effective as of September 1, 2004.
CENTERPOINT ENERGY, INC.
By: /s/ Gary L. Whitlock
----------------------------------
Name: Gary L. Whitlock
Title: Executive Vice President
and Chief Financial Officer
TRUSTEE:
/s/ Gary L. Whitlock
-------------------------------------
Gary L. Whitlock, Trustee
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EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement of
CenterPoint Energy, Inc. (the "Company") on Form S-3 of our reports dated March
12, 2004 (which reports express an unqualified opinion and include explanatory
paragraphs relating to the distribution of Reliant Energy, Inc. (formerly
Reliant Resources, Inc.), the change in the Company's method of accounting for
goodwill and certain intangible assets pursuant to the adoption of Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
and the recording of asset retirement obligations), appearing in the Company's
Current Report on Form 10-K filed March 12, 2004, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
Houston, Texas
November 8, 2004
