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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June
8, 2010
CENTERPOINT ENERGY, INC.
(Exact name of registrant as specified in its charter)
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Texas
(State or other jurisdiction
of incorporation)
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1-31447
(Commission File Number)
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74-0694415
(IRS Employer
Identification No.) |
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1111 Louisiana
Houston, Texas
(Address of principal executive offices)
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77002
(Zip Code) |
Registrant’s telephone number, including area code: (713) 207-1111
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
The following description replaces the “Description of CenterPoint Energy Capital Stock” in
CenterPoint Energy Inc.’s Current Report on Form 8-K filed on October 3, 2008.
DESCRIPTION OF CENTERPOINT ENERGY, INC. CAPITAL STOCK
The following descriptions are summaries of material terms of the common stock, preferred
stock, articles of incorporation and bylaws of CenterPoint Energy, Inc. (CenterPoint Energy). This
summary is qualified by reference to CenterPoint Energy’s restated articles of incorporation and
amended and restated bylaws, each as amended to date, copies of which are incorporated as exhibits
to this report and are incorporated by reference herein, and by the provisions of applicable law.
As of May 31, 2010, CenterPoint Energy’s authorized capital stock consisted of:
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1,000,000,000 shares of common stock, par value $0.01 per share, of which
395,380,532 shares were outstanding, excluding 166 shares held as treasury stock,
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20,000,000 shares of preferred stock, par value $0.01 per share, of which no
shares were outstanding. |
A series of preferred stock, designated Series A Preferred Stock, has been reserved for
issuance upon exercise of the preferred stock purchase rights attached to each share of common
stock pursuant to the shareholder rights plan discussed below.
Common Stock
Voting Rights. Holders of CenterPoint Energy’s common stock are entitled to one vote for each
share on all matters submitted to a vote of shareholders, including the election of directors.
There are no cumulative voting rights. Subject to the voting rights expressly conferred under
prescribed conditions to the holders of preferred stock, the holders of common stock possess
exclusive full voting power for the election of directors and for all other purposes. CenterPoint
Energy’s bylaws provide that director nominees are elected by the vote of a majority of the votes
cast with respect to the director by shareholders entitled to vote at the meeting in an uncontested
election. An election is contested if, at a specified time before CenterPoint Energy files its
definitive proxy statement with the SEC, the number of nominees exceeds the number of directors to
be elected, in which case directors will be elected by the vote of a plurality of the votes cast by
shareholders entitled to vote at the meeting.
Dividends. Subject to preferences that may be applicable to any outstanding preferred stock,
the holders of common stock are entitled to dividends when, as and if declared by the board of
directors out of funds legally available for that purpose.
Liquidation Rights. If CenterPoint Energy is terminated, dissolved or wound up, the holders
of its common stock will be entitled to a pro rata share in any distribution to shareholders, but
only after satisfaction of all of CenterPoint Energy’s liabilities and of the prior rights of any
outstanding class of preferred stock, which may include the right to participate further with the
holders of common stock in the distribution of any of CenterPoint Energy’s remaining assets.
Preemptive Rights. Holders of common stock are not entitled to any preemptive or conversion
rights or other subscription rights.
Transfer Agent and Registrar. CenterPoint Energy’s shareholder services division serves as
transfer agent and registrar for its common stock.
Other Provisions. There are no redemption or sinking fund provisions applicable to
CenterPoint Energy’s common stock. No personal liability will attach to holders of such shares
under the laws of the State of Texas. Subject to the provisions of CenterPoint Energy’s articles
of incorporation and bylaws imposing certain supermajority voting provisions, the rights of the
holders of shares of common stock may not be modified except by a vote of at least a majority of
the shares outstanding, voting together as a single class.
Preferred Stock
The CenterPoint Energy board of directors may cause CenterPoint Energy to issue preferred
stock from time to time in one or more series and may fix the number of shares and the terms of
each series without the approval of CenterPoint Energy’s shareholders. CenterPoint Energy’s board
of directors may determine the terms of each series, including:
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the designation of the series, |
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dividend rates and payment dates, |
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whether dividends will be cumulative, non-cumulative or partially cumulative,
and related terms, |
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redemption rights, |
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liquidation rights, |
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sinking fund provisions, |
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conversion rights, |
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voting rights, and |
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any other terms. |
The issuance of preferred stock, while providing desired flexibility in connection with
possible acquisitions and other corporate purposes, could adversely affect the voting power of
holders of CenterPoint Energy’s common stock. It could also affect the likelihood that holders of
common stock will receive dividend payments and payments upon liquidation. The issuance of shares
of preferred stock, or the issuance of rights to purchase shares of preferred stock, could be used
to discourage an attempt to obtain control of CenterPoint Energy. For example, if, in the exercise
of its fiduciary obligations, CenterPoint Energy’s board were to determine that a takeover proposal
was not in CenterPoint Energy’s best interest, the board could authorize the issuance of a series
of preferred stock containing class voting rights that would enable the holder or holders of the
series to prevent or make the change of control transaction more difficult. Alternatively, a
change of control transaction deemed by the board to be in CenterPoint Energy’s best interest could
be facilitated by issuing a series of preferred stock having sufficient voting rights to provide a
required percentage vote of the shareholders.
For purposes of the rights plan described below, CenterPoint Energy’s board of directors has
designated a series of preferred stock to constitute the Series A Preferred Stock. For a
description of the rights plan, see “Shareholder Rights Plan.”
Anti-Takeover Effects of Texas Laws and CenterPoint Energy’s Charter and Bylaw Provisions
Some provisions of Texas law and CenterPoint Energy’s articles of incorporation and bylaws
could make the following actions more difficult:
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acquisition of CenterPoint Energy by means of a tender offer, |
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acquisition of control of CenterPoint Energy by means of a proxy contest or
otherwise, or |
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removal of CenterPoint Energy’s incumbent officers and directors. |
These provisions, as well as CenterPoint Energy’s shareholder rights plan, are designed to
discourage coercive takeover practices and inadequate takeover bids. These provisions are also
designed to encourage persons seeking to acquire control of CenterPoint Energy to first negotiate
with its board of directors. CenterPoint Energy believes that the benefits of this increased
protection gives it the potential ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to acquire or restructure CenterPoint Energy, and that the benefits of this
increased protection outweigh the disadvantages of discouraging those proposals, because
negotiation of those proposals could result in an improvement of their terms.
Charter and Bylaw Provisions
Election and Removal of Directors. The number of members of CenterPoint Energy’s board of
directors will be fixed from time to time by resolution of the board of directors. Members of
CenterPoint Energy’s board of directors who were elected at or prior to the 2008 annual meeting of
shareholders are assigned to one of three classes, with directors in each class serving for
staggered three-year terms. However, this classified structure is being phased out. Beginning at
CenterPoint Energy’s 2009 annual meeting of shareholders, all directors are elected to one-year
terms. Any director elected for a longer term before the 2009 annual meeting of shareholders,
including the directors elected at CenterPoint Energy’s 2008 annual meeting to serve for terms
expiring at its 2011 annual meeting, will hold office for his or her entire term. Accordingly, all
of CenterPoint Energy’s directors will be elected annually beginning at its 2011 annual meeting of
shareholders.
No director may be removed except for cause, and, subject to the voting rights expressly
conferred under prescribed conditions to the holders of preferred stock, directors may be removed
for cause only by the holders of a majority of the shares of capital stock entitled to vote at an
election of directors. Subject to the voting rights expressly conferred under prescribed
conditions to the holders of preferred stock, any vacancy occurring on the board of directors and
any newly created directorship may be filled by a majority of the remaining directors in office or
by election by the shareholders.
Shareholder Meetings. CenterPoint Energy’s articles of incorporation and bylaws provide that
special meetings of holders of common stock may be called only by the chairman of its board of
directors, its chief executive officer, the president, the secretary, a majority of its board of
directors or the holders of at least 50% of the shares outstanding and entitled to vote.
Modification of Articles of Incorporation. In general, amendments to CenterPoint Energy’s
articles of incorporation that are recommended by the board of directors require the affirmative
vote of holders of at least a majority of the voting power of all outstanding shares of capital
stock entitled to vote in the election of directors. The provisions described above under “—
Election and Removal of Directors” and “— Shareholder Meetings” may be amended only by the
affirmative vote of holders of at least 66-2/3% of the voting power of all outstanding shares of
capital stock entitled to vote in the election of directors. The provisions described below under
“— Modification of Bylaws” may be amended only by the affirmative vote of holders of at least 80%
of the voting power of all outstanding shares of capital stock entitled to vote in the election of
directors.
Modification of Bylaws. CenterPoint Energy’s board of directors has the power to alter, amend
or repeal the bylaws or adopt new bylaws by the affirmative vote of at least 80% of all directors
then in office at any regular or special meeting of the board of directors called for that purpose.
The shareholders also have the power to alter, amend or repeal the bylaws or adopt new bylaws by
the affirmative vote of holders of at least 80% of the voting power of all outstanding shares of
capital stock entitled to vote in the election of directors, voting together as a single class.
Other Limitations on Shareholder Actions. CenterPoint Energy’s bylaws also impose some
procedural requirements on shareholders who wish to:
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make nominations in the election of directors, |
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propose that a director be removed, |
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propose any repeal or change in the bylaws, or |
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propose any other business to be brought before an annual or special meeting of
shareholders. |
Under these procedural requirements, a shareholder must deliver timely notice to CenterPoint
Energy’s corporate secretary of the nomination or proposal along with evidence of:
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the shareholder’s status as a shareholder, |
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the number of shares beneficially owned by the shareholder, |
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a list of the persons with whom the shareholder is acting in concert, and |
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the number of shares such persons beneficially own. |
To be timely, a shareholder must deliver notice:
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in connection with an annual meeting of shareholders, not less than 90 nor more
than 180 days prior to the first anniversary of the date on which the immediately
preceding year’s annual meeting of shareholders was held; provided that if the date
of the annual meeting is advanced by more than 30 days prior to or delayed by more
than 60 days after first anniversary of the preceding year’s annual meeting of
shareholders, not earlier than 180 days prior to the annual meeting and not later
than the last to occur of (i) the 90th day prior to the annual meeting or (ii) the
10th day following the day on which CenterPoint Energy first makes public
announcement of the date of the annual meeting, or |
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in connection with the nomination of director candidates at a special meeting of
shareholders, generally not less than 40 nor more than 60 days prior to the date of
the special meeting. |
In order to submit a nomination for the board of directors, a shareholder must also submit
information with respect to the nominee that CenterPoint Energy would be required to include in a
proxy statement, as well as some other information. If a shareholder fails to follow the required
procedures, the shareholder’s nominee or proposal will be ineligible and will not be voted on by
CenterPoint Energy’s shareholders.
In connection with a special meeting of shareholders, the only business that will be conducted
is that stated in the notice of special meeting, or otherwise properly brought before the meeting
by or at the direction of the Chairman of the Meeting or the board of directors. Shareholders
requesting a special meeting are permitted to make proposals for matters to be brought before the
meeting in their request.
Limitation on Liability of Directors. CenterPoint Energy’s articles of incorporation provide
that no director will be personally liable to CenterPoint Energy or its shareholders for monetary
damages for breach of fiduciary duty as a director, except as required by law as in effect from
time to time. Currently, Texas law requires that liability be imposed for the following actions:
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any breach of the director’s duty of loyalty to CenterPoint Energy or its
shareholders, |
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any act or omission not in good faith that constitutes a breach of duty of the
director to the corporation or that involves intentional misconduct or a knowing
violation of law, |
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a transaction from which the director received an improper benefit, regardless
of whether or not the benefit resulted from an action taken within the scope of a
director’s duties, and |
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an act or omission for which the liability of a director is expressly provided
for by statute. |
CenterPoint Energy’s bylaws provide that it will indemnify its officers and directors and
advance expenses to them in connection with proceedings and claims, to the fullest extent permitted
by the Texas Business Organizations Code (“TBOC”). The bylaws authorize CenterPoint Energy’s board
of directors to indemnify and advance expenses to people other than its officers and directors in
certain circumstances.
Texas Anti-Takeover Law
CenterPoint Energy is subject to Section 21.606 of the TBOC. That section prohibits Texas
corporations from engaging in a wide range of specified transactions with any affiliated
shareholder during the three-year period immediately following the affiliated shareholder’s
acquisition of shares in the absence of certain board of director or shareholder approvals. An
affiliated shareholder of a corporation is any person, other than the corporation and any of its
wholly owned subsidiaries, that is or was within the preceding three-year period the beneficial
owner of 20% or more of the outstanding shares of stock entitled to vote generally in the election
of directors. Section 21.606 may
deter any potential unfriendly offers or other efforts to obtain control of CenterPoint Energy
that are not approved by its board. This may deprive CenterPoint Energy’s shareholders of
opportunities to sell shares of its common stock at a premium to the prevailing market price.
Shareholder Rights Plan
Each share of common stock includes one right to purchase from CenterPoint Energy a unit
consisting of one one-thousandth of a share of its Series A Preferred Stock at a purchase price of
$42.50 per unit, subject to adjustment. The rights are issued pursuant the Rights Agreement dated
as of January 1, 2002 between CenterPoint Energy and JPMorgan Chase Bank (the “Rights Agreement”).
Selected portions of the Rights Agreement and the rights are summarized below. This summary is
qualified by reference to the Rights Agreement, a copy of which is incorporated as an exhibit to
this report and is incorporated by reference herein.
Detachment of Rights; Exercisability. The rights will attach to all certificates representing
common stock issued prior to the “release date.” That date will occur, except in some cases, on the
earlier of:
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ten days following a public announcement that a person or group of affiliated or
associated persons, an “acquiring person,” has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding shares of
CenterPoint Energy’s common stock, or |
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ten business days following the start of a tender offer or exchange offer that
would result in a person’s becoming an acquiring person. |
CenterPoint Energy’s board of directors may defer the release date in some circumstances.
Also, some inadvertent acquisitions of CenterPoint Energy’s common stock will not result in a
person’s becoming an acquiring person if the person promptly divests itself of sufficient common
stock.
Until the release date:
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common stock certificates will evidence the rights, |
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the rights will be transferable only with those certificates, |
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new common stock certificates will contain a notation incorporating the Rights
Agreement by reference, and |
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the surrender for transfer of any common stock certificate will also constitute
the transfer of the rights associated with the common stock represented by the
certificate. |
The rights are not exercisable until the release date and will expire at the close of business
on December 31, 2011, unless CenterPoint Energy redeems or exchanges them at an earlier date as
described below.
As soon as practicable after the release date, the rights agent will mail certificates
representing the rights to holders of record of common stock as of the close of business on the
release date. From that date on, only separate rights certificates will represent the rights.
CenterPoint Energy will also issue rights with all shares of common stock issued prior to the
release date. CenterPoint Energy will also issue rights with shares of common stock issued after
the release date in connection with some employee benefit plans or upon conversion of some
securities. Except as otherwise determined by its board of directors, CenterPoint Energy will not
issue rights with any other shares of common stock issued after the release date.
Flip-in Event. A “flip-in event” will occur under the Rights Agreement when a person becomes
an acquiring person other than pursuant to a “permitted offer” or a flip-over event (as defined
below). The Rights Agreement defines “permitted offer” as a tender or exchange offer for all
outstanding shares of CenterPoint Energy’s common stock at a price and on terms that a majority of
the independent directors of its board of directors determines to be fair to and otherwise in the
best interests of CenterPoint Energy and the best interests of its shareholders.
If a flip-in event occurs, each right, other than any right that has become null and void as
described below, will become exercisable to receive (in lieu of the shares of Series A Preferred
Stock otherwise purchasable) the
number of shares of common stock, or in certain circumstances, cash, property or other
securities, which has a “current market price” equal to two times the exercise price of the right.
Please refer to the Rights Agreement for the definition of “current market price.”
Flip-Over Event. A “flip-over event” will occur under the Rights Agreement when, at any time
from and after the time a person becomes an acquiring person:
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CenterPoint Energy is acquired or it acquires any person in a merger or other
business combination transaction, other than specified mergers that follow a
permitted offer, or |
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50% or more of CenterPoint Energy’s assets, cash flow or earning power is sold
or transferred. |
If a flip-over event occurs, each holder of a right, except rights that are voided as
described below, will thereafter have the right to receive, on exercise of the right, a number of
shares of common stock of the acquiring company that has a current market price equal to two times
the exercise price of the right.
When a flip-in event or a flip-over event occurs, all rights that then are, or under the
circumstances the Rights Agreement specifies previously were, beneficially owned by an acquiring
person or specified related parties will become null and void in the circumstances the Rights
Agreement specifies.
Series A Preferred Stock. After the release date, each right will entitle the holder to
purchase a one one-thousandth share of CenterPoint Energy’s Series A Preferred Stock, which
fraction will be essentially the economic equivalent of one share of common stock.
Anti-Dilution. The number of outstanding rights associated with a share of common stock, the
number of fractional shares of Series A Preferred Stock issuable upon exercise of a right and the
exercise price of the right are subject to adjustment in the event of certain stock dividends on,
or a subdivision, combination or reclassification of, CenterPoint Energy’s common stock occurring
prior to the release date. The exercise price of the rights and the number of fractional shares of
Series A Preferred Stock or other securities or property issuable on exercise of the rights are
subject to adjustment from time to time to prevent dilution in the event of certain transactions
affecting the Series A Preferred Stock.
With some exceptions, CenterPoint Energy will not be required to adjust the exercise price of
the rights until cumulative adjustments amount to at least 1% of the exercise price. The Rights
Agreement also will not require CenterPoint Energy to issue fractional shares of Series A Preferred
Stock that are not integral multiples of the specified fractional share and, in lieu thereof, it
will make a cash adjustment based on the market price of the Series A Preferred Stock on the last
trading date prior to the date of exercise. Pursuant to the Rights Agreement, CenterPoint Energy
reserves the right to require prior to the occurrence of any flip-in event or flip-over event that,
on any exercise of rights, a number of rights must be exercised so that it will issue only whole
shares of Series A Preferred Stock.
Redemption of Rights. At any time until the time a person becomes an acquiring person,
CenterPoint Energy may redeem the rights in whole, but not in part,
at a price of $0.005 per right,
subject to adjustment, payable, at its option, in cash, shares of common stock or such other
consideration as its board of directors may determine. Upon such redemption, the rights will
terminate and the only right of the holders of rights will be to receive the $0.005 redemption
price.
Exchange of Rights. At any time after the occurrence of a flip-in event, and prior to a
person’s becoming the beneficial owner of 50% or more of CenterPoint Energy’s outstanding common
stock or the occurrence of a flip-over event, it may exchange the rights (other than rights owned
by an acquiring person or an affiliate or an associate of an acquiring person, which will have
become void, in whole or in part), at an exchange ratio of one share of common stock, and/or other
equity securities deemed to have the same value as one share of common stock, per right, subject to
adjustment.
Substitution. If CenterPoint Energy has an insufficient number of authorized but unissued
shares of common stock available to permit an exercise or exchange of rights upon the occurrence of
a flip-in event, it may substitute certain other types of property for common stock so long as the
total value received by the holder of the rights is equivalent to the value of the common stock
that the shareholder would otherwise have received. CenterPoint Energy may substitute cash,
property, equity securities or debt, reduce the exercise price of the rights or use any combination
of the foregoing.
No Rights as a Shareholder. Until a right is exercised, a holder of rights will have no
rights to vote or receive dividends or any other rights as a holder of CenterPoint Energy’s
preferred or common stock.
Amendment of Terms of Rights. CenterPoint Energy’s board of directors may amend any of the
provisions of the Rights Agreement, other than the redemption price, at any time prior to the time
a person becomes an acquiring person. Thereafter, the board of directors may only amend the Rights
Agreement in order to cure any ambiguity, defect or inconsistency or to make changes that do not
materially and adversely affect the interests of holders of the rights, excluding the interests of
any acquiring person.
Rights Agent. JPMorgan Chase Bank will serve as rights agent with regard to the rights.
Anti-Takeover Effects. The rights will have anti-takeover effects. They will cause substantial
dilution to any person or group that attempts to acquire CenterPoint Energy without the approval of
its board of directors. As a result, the overall effect of the rights may be to make more
difficult or discourage any attempt to acquire CenterPoint Energy even if such acquisition may be
favorable to the interests of its shareholders. Because CenterPoint Energy’s board of directors
can redeem the rights or approve a permitted offer, the rights should not interfere with a merger
or other business combination approved by the board of directors.
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Financial Statements and Exhibits. |
The exhibits listed below are filed herewith.
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Exhibits. |
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99.1 |
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Restated Articles of Incorporation of CenterPoint Energy
(incorporated by reference to Exhibit 3.2 to CenterPoint Energy’s Current
Report on Form 8-K dated July 24, 2008). |
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99.2 |
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Amended and Restated Bylaws of CenterPoint Energy (incorporated
by reference to Exhibit 3.1 to CenterPoint Energy’s Current Report on Form 8-K
dated January 20, 2010). |
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99.3 |
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Rights Agreement dated as of January 1, 2002 between
CenterPoint Energy and JPMorgan Chase Bank, as Rights Agent (incorporated by
reference to Exhibit 4.2 to CenterPoint Energy’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2001). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CENTERPOINT ENERGY, INC.
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| Date: June 8, 2010 |
By: |
/s/ Walter L. Fitzgerald |
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Walter L. Fitzgerald |
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Senior Vice President and Chief
Accounting Officer |
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EXHIBIT INDEX
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| EXHIBIT |
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| NUMBER |
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EXHIBIT DESCRIPTION |
99.1
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Restated Articles of Incorporation of CenterPoint Energy
(incorporated by reference to Exhibit 3.2 to CenterPoint
Energy’s Current Report on Form 8-K dated July 24, 2008). |
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99.2
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Amended and Restated Bylaws of CenterPoint Energy
(incorporated by reference to Exhibit 3.1 to CenterPoint
Energy’s Current Report on Form 8-K dated January 20, 2010). |
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99.3
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Rights Agreement dated as of January 1, 2002 between
CenterPoint Energy and JPMorgan Chase Bank, as Rights Agent
(incorporated by reference to Exhibit 4.2 to CenterPoint
Energy’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2001). |