<PAGE> 1
As filed with the Securities and Exchange Commission on November 14, 1997
Registration No. 333-
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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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WISCONSIN ELECTRIC POWER COMPANY
(Exact name of registrant as specified in its charter)
Wisconsin 39-0476280
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
(414) 221-2590
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
C. H. Baker, Vice President-Finance and Chief Financial Officer
Wisconsin Electric Power Company
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
(414) 221-2590
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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Copies To:
BRUCE C. DAVIDSON, ESQ. GARY W. WOLF, ESQ.
Quarles & Brady Cahill Gordon & Reindel
411 East Wisconsin Avenue 80 Pine Street
Milwaukee, WI 53202 New York, New York 10005
(414) 277-5000 (212) 701-3600
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Approximate date of commencement of proposed sale to the public: At such time
or from time to time after the effective date of this registration statement
as the registrant shall determine in light of market conditions and other
factors.
<PAGE> 2
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of 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. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
===================================================================================================
Proposed Proposed
Amount maximum maximum Amount of
Title of each class of to be offering price aggregate registration
securities to be registered registered per unit offering price fee
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Mortgage Bonds and (1)(2) (1) $300,000,000 (1) $90,909.00 (3)
Debt Securities
===================================================================================================
</TABLE>
(1) Not applicable pursuant to the Note following the Calculation of
Registration Fee Table and General Instruction II.D. to Form S-3, which
provide that only the maximum aggregate offering price for all classes of
securities to be registered need be specified.
(2) Pursuant to Rule 429, in addition to the $300,000,000 aggregate
principal amount of securities being registered by this registration
statement, the combined prospectus contained herein will also relate to
$500,000 aggregate principal amount of securities that were
registered by Registration Statement No. 33-64343, for which a
registration fee of $172.42 was paid, and $99,500,000
aggregate principal amount of remaining unsold securities that were
registered by Registration Statement No. 33-51749, for which a pro rata
registration fee of $34,310.58 was paid.
(3) Calculated pursuant to Rule 457(o) at the statutory rate of 1/33rd of
1 percent in effect at the time of filing.
------------
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
<PAGE> 3
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
------------
The prospectus contained herein is a combined prospectus relating also to
Registration Statement Nos. 33-64343 and 33-51749 pursuant to Rule 429 under
the Securities Act of 1933.
==============================================================================
<PAGE> 4
******************************************************************************
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed with *
* the Securities and Exchange Commission. These securities may not be sold *
* nor may offers to buy be accepted prior to the time the registration *
* statement becomes effective. This prospectus shall not constitute an *
* offer to sell or the solicitation of an offer to buy nor shall there be *
* any sale of these securities in any State in which such offer, solicita- *
* tion or sale would be unlawful prior to registration or qualification *
* under the securities laws of any such State. *
******************************************************************************
**************************************************
* SUBJECT TO COMPLETION, DATED NOVEMBER 14, 1997 *
**************************************************
PROSPECTUS
WISCONSIN ELECTRIC POWER COMPANY
First Mortgage Bonds
Debt Securities
------------
Wisconsin Electric Power Company (the "Company") may offer from time to time
up to $400,000,000 aggregate principal amount of its First Mortgage Bonds (the
"New Bonds") or its unsecured debt securities (the "Debt Securities") in one
or more series in amounts, at prices and upon terms to be determined at the
time or times of sale. The title, aggregate principal amount, maturity,
interest rate, payment dates, redemption provisions, sinking fund, if any, and
other terms of each series of the New Bonds or the Debt Securities will be set
forth in a supplement to this Prospectus (a "Prospectus Supplement").
The Company may sell New Bonds or Debt Securities to or through underwriters
or dealers and also may sell New Bonds or Debt Securities directly to other
purchasers or through agents. The Prospectus Supplement relating to each
series of New Bonds or Debt Securities will set forth the terms of the
offering of the New Bonds or Debt Securities, including, to the extent
applicable, the initial offering price, the proceeds to the Company, the
underwriting discounts or commissions, and any other discounts or concessions
to be allowed or re-allowed to dealers. The principal underwriters with
respect to each series sold to or through underwriters will be named in the
Prospectus Supplement relating to such series.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------
The date of this Prospectus is _______________, 1997.
<PAGE> 5
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this Prospectus or
a Prospectus Supplement and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Company or any underwriters. Neither this Prospectus nor any Prospectus
Supplement constitutes an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any person to whom
it is unlawful to make such offer or solicitation in such jurisdiction. The
delivery of this Prospectus or any Prospectus Supplement at any time does not
imply that the information herein or therein is correct as of any time
subsequent to their respective dates.
------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports,
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission, 450 Fifth Street, N.W.,
Washington D.C. 20549, and at the Commission's Regional Offices located at
CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621
and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such material may also be obtained by mail from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington D.C. 20549, at
prescribed rates. The SEC maintains an Internet site on the World Wide Web at
<http://www.sec.gov> that contains reports, statements and other information.
This Prospectus omits certain information contained in the Registration
Statement on Form S-3 (the "Registration Statement") which the Company has
filed with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), and to which reference is hereby made for further
information with respect to the Company, the New Bonds and the Debt
Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act (File No. 1-1245) are incorporated in this Prospectus by
reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1996.
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997.
(c) Current Report on Form 8-K dated as of September 22, 1997.
All documents filed by the Company pursuant to sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be a part of this
Prospectus from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained in this Prospectus
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this Prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
<PAGE> 6
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents which are
incorporated herein by reference (other than exhibits not specifically
incorporated by reference into the text of such documents). Requests should
be directed to Wisconsin Electric Power Company, at its principal executive
office, 231 West Michigan Street, P.O. Box 2046, Milwaukee, Wisconsin 53201,
Attention: Mr. Thomas H. Fehring, Secretary (telephone (800) 881-5882).
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS
This Prospectus and any Prospectus Supplement (including the documents
incorporated herein or therein by reference) contains statements that
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements to
differ materially from the future results, performance or achievements
expressed or implied in such forward-looking statements. The words
"anticipate", "believe", "estimate", "expect", "project", "objective" and
similar expressions are intended to identify forward-looking statements. In
addition to the assumptions and other factors referred to specifically in
connection with such statements, factors that could cause the Company's actual
results to differ materially from those contemplated in the forward-looking
statements include factors described under the caption "Cautionary Factors" in
the documents incorporated herein by reference.
THE COMPANY
The Company is an operating public utility organized as a corporation under
the laws of the State of Wisconsin. The Company is a subsidiary of Wisconsin
Energy Corporation ("Wisconsin Energy"). Effective January 1, 1996, Wisconsin
Energy merged its wholly-owned natural gas utility subsidiary, Wisconsin
Natural Gas Company ("Wisconsin Natural"), into the Company to form a single
combined utility subsidiary. The Company generates, transmits, distributes
and sells electric energy in a territory of approximately 12,000 square miles
with a population estimated at 2,300,000 in southeastern (including the
Milwaukee metropolitan area), east central and northern Wisconsin and in the
Upper Peninsula of Michigan. The Company purchases, distributes and sells
natural gas to retail customers and transports customer-owned gas in three
distinct service areas totalling about 2,800 square miles in Wisconsin: west
and south of the City of Milwaukee, the Appleton area and the Prairie du Chien
area. The gas service territory, which has an estimated population of over
1,100,000, is largely within the Company's electric service area. The Company
also has received approval recently to provide gas service to a service
territory in northern Wisconsin. The Company distributes and sells steam
supplied by its power plants to certain customers in the metropolitan
Milwaukee area. Wisconsin Energy is an exempt holding company by order of the
Commission under Section 3(a)(1) of the Public Utility Holding Company Act of
1935, as amended, and accordingly is exempt from the provisions of that Act,
other than with respect to certain acquisitions of securities of a public
utility. The Company's principal executive offices are located at 231 West
Michigan Street, P.O. Box 2046, Milwaukee, Wisconsin 53201 (telephone (414)
221-2345). See "Recent Developments--Wisconsin Energy's Merger Agreement With
ESELCO" for discussion of a pending business combination.
<PAGE> 7
USE OF PROCEEDS
Unless as otherwise specified in a Prospectus Supplement, the net proceeds
from the sale of New Bonds and Debt Securities will be added to the general
funds of the Company and applied to the Company's continuing construction
program and other capital requirements or, depending on market conditions,
possible refunding of existing indebtedness. Short-term indebtedness
outstanding when net proceeds from the New Bonds and Debt Securities are
received may be reduced through application of such proceeds. Proceeds from
the New Bonds and Debt Securities may be temporarily invested pending
disposition. Further information concerning the use of proceeds from the sale
of each series of the New Bonds and Debt Securities will be set forth in the
Prospectus Supplement relating to such series.
CERTAIN SUMMARY FINANCIAL INFORMATION
The following summary financial information is qualified in its entirety by
the financial statements and other information included in the documents
incorporated by reference in this Prospectus.
Condensed Income and Related Information
of the Company for Certain Periods
Twelve Months
Year Ended December 31, Ended
------------------------------------------------------ September 30,
1992 1993 1994 (A) 1995 1996 1997 (B)(C)
---------- ---------- ---------- ---------- ---------- ------------
(In thousands except ratios)
Operating
Revenues $1,595,515 $1,693,235 $1,742,192 $1,770,484 $1,773,820 $1,792,087
Operating
Income $ 241,706 $ 265,436 $ 263,273 $ 329,021 $ 305,844 $ 219,418
Net
Income $ 175,950 $ 192,080 $ 181,754 $ 240,668 $ 211,315 $ 111,668
Ratio of
Earnings
to Fixed
Charges (D) 3.8x 3.7x 3.5x 4.4x 4.1x 2.5x
<PAGE> 7A
Capitalization of the Company at September 30, 1997 and
as of that date as adjusted for the New Bonds and Debt Securities
As Adjusted
---------------------
Amount Amount Percentage
---------- ---------- ----------
(In thousands)
Long-Term Debt - due after one year (E).. $1,451,646 $1,851,646 52.7%
Preferred Stock - redemption not required 30,450 30,450 0.9
Common Stock Equity ..................... 1,628,772 1,628,772 46.4
---------- ---------- -----
Total Capitalization ............... $3,110,868 $3,510,868 100.0%
========== ========== ======
Short-Term Debt (E)(F)................... $ 163,006 $ 50,000 ----
========== ========== ======
- ----------
(A) Operating Income, Net Income and Ratio of Earnings to Fixed Charges
reflect a nonrecurring $73.9 million charge in 1994 ($45
million net of tax) related to the Company's Revitalization Program.
(B) Operating Income, Net Income and Ratio of Earnings to Fixed Charges
reflect a nonrecurring $21.9 million charge in June 1997 ($13.2
million net of tax) related to the write-off of Primergy Corporation
("Primergy") merger expenses. See "--Recent Developments--Wisconsin
Energy--Termination of Merger Agreement with Northern States Power
Company" and "--Recent Developments--Financial Results from Operations
for the Twelve Months Ended September 30, 1997."
(C) See "Recent Developments--Financial Results from Operations for the
Twelve Months Ended September 30, 1997."
(D) For the purpose of computing this ratio, earnings consist of net income
(including total Allowances for Funds Used During Construction) plus
current and deferred income taxes, deferred investment tax credits and
fixed charges. Fixed charges consist of interest charges, amortization
of debt expenses, and amounts representing the interest factor of nuclear
fuel rental expense.
(E) Does not include $208.0 million of long-term debt due currently.
(F) The "as adjusted" amount includes the $50 million loan under the Short
Term Borrowing Agreement described in "Description of New Bonds--
Regarding the Trustee."
RECENT DEVELOPMENTS
FINANCIAL RESULTS FROM OPERATIONS FOR THE TWELVE MONTHS ENDED SEPTEMBER 30,
1997: Net income for the twelve months ended September 30, 1997 decreased
$99.6 million or 47% compared to the calendar year 1996. The decrease
reflects the $13.2 million net of tax nonrecurring write-off in the second
quarter of 1997 of Primergy merger related expenses and higher purchased
<PAGE> 8
power, fuel and maintenance expenses due to the unscheduled outages at the
Company's Point Beach Nuclear Plant ("Point Beach") and the Oak Creek Power
Plant ("Oak Creek"). The table below provides the Company's unaudited net
income for the three and nine months ended September 30, 1997 and September
30, 1996:
Three Months Ended Nine Months Ended
------------------ -----------------
September 30 September 30 September 30 September 30
1997 1996 1997(A) 1996
------------ ------------ ------------ ------------
(Unaudited)
(In thousands)
Net Income ........... $22,622 $52,693 $60,256 $159,903
- ---------------------
(A) Includes nonrecurring $21.9 million charge in June 1997 ($13.2 million net
of tax) related to the write-off of Primergy merger expenses.
Ongoing extended outages at Point Beach, an extended maintenance outage at Oak
Creek that was concluded in June 1997 and higher than projected purchased
power costs due to regional generation outages, have resulted in increased
fuel and purchased power costs. WE estimates that such costs will be $112
million higher than those reflected in 1997 base electric rates. In March and
September 1997, WE submitted separate fuel filings with the Public Service
Commission of Wisconsin ("PSCW") requesting recovery of the portion of these
increased fuel costs attributable to retail electric service in Wisconsin. If
the PSCW approves the fuel surcharges included in the filings, WE would
recover approximately $59 million during the 1997-1998 biennial period.
Currently, WE does not expect to recover approximately $52 million of
increased 1997 fuel costs from customers. WE anticipates that the PSCW will
issue final orders on the two 1997 fuel filings in late December 1997.
Effective May 24, 1997, the PSCW approved a $0.00109 per kilowatt-hour interim
fuel surcharge, subject to refund, in response to WE's first fuel filing.
During the three months ended September 30, 1997, WE collected approximately
$6.3 million, in additional revenues through the interim surcharge. For
further information concerning WE's two 1997 fuel filings, see Item 2
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Wisconsin Electric's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, which is incorporated by reference herein.
The results of operations for the twelve months ended September 30, 1997 are
not necessarily indicative of the results which may be expected for the fiscal
year ending December 31, 1997 because of seasonal and other factors.
WISCONSIN ENERGY TERMINATION OF MERGER AGREEMENT WITH NORTHERN STATES POWER
COMPANY: On May 16, 1997, the Boards of Directors of Wisconsin Energy and
Northern States Power Company ("NSP") agreed to terminate the Amended and
Restated Agreement and Plan of Merger, dated as of April 28, 1995, as amended
and restated as of July 26, 1995 (the "Merger Agreement"), by and among NSP,
Wisconsin Energy and their respective subsidiaries, Northern Power Wisconsin
Corp. and WEC Sub Corp., which provided for a business combination of
Wisconsin Energy and NSP to form Primergy Corporation (the "Transaction").
Accordingly, the parties to the Merger Agreement entered into a Termination
Agreement, dated as of May 16, 1997, which terminated the Merger Agreement by
mutual written consent. The Termination Agreement also terminated the mutual
Stock Option Agreements, dated as of April 28, 1995, entered into between
Wisconsin Energy and NSP in connection with the Merger Agreement.
<PAGE> 9
On May 14, 1997, the Federal Energy Regulatory Commission ("FERC") issued an
Opinion and Order in which it concluded that it could not approve the
Transaction at that time and reversed the earlier decision of its own
administrative law judge who had found that the proposed Transaction, as
conditioned, was consistent with the public interest. The FERC remanded the
case to a settlement judge and directed the participants to attempt to reach a
resolution of the market power issues which formed the basis of the FERC's
reversal of the administrative law judge's findings.
The Board of Directors of Wisconsin Energy (the "Wisconsin Energy Board")
concluded that continuing the proposed Transaction, given the current
regulatory climate, was not in the best interest of Wisconsin Energy's
shareholders, customers and employees. In reaching its decision to terminate
the Merger Agreement, the Wisconsin Energy Board considered many factors,
including: the May 14, 1997 FERC ruling; the fact that any regulatory
approvals that might be obtained appeared to involve conditions which would
significantly reduce the benefits of the Transaction; and the impact on
shareholders and other constituencies of further delays in the regulatory
approval process as a result of the FERC action.
As reported in the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997, the Company charged to expense in the second quarter of
1997 $21.9 million ($13.2 million net of tax) of deferred transaction costs
and costs to achieve the cancelled Primergy merger.
1998 Test Year: On September 22, 1997, the Company filed testimony and
exhibits with the PSCW related to the 1998 test year showing a $220.4 million
revenue deficiency for its utility operations based upon a regulatory return
on equity of 12.5%, up from 11.8% authorized since February 13, 1997. The
dollar impacts and percentage increases on an annualized basis requested for
Wisconsin retail services are $192.7 million or 15.3% for electric operations,
$26.5 million or 7.9% for gas operations and $1.2 million or 9.0% for the City
of Milwaukee steam operations. In the filing, the Company asked that the PSCW
provide interim rate relief effective January 1, 1998 for 90% of the revenue
deficiency, subject to refund, if the PSCW does not issue a final order by
this date. In November 1997, the PSCW is expected to conclude public hearings
on the Company's request for interim rate relief and issue an order on interim
rate relief in December 1997. Public hearings on the 1998 Test Year filing
are anticipated in the first quarter of 1998. Further information regarding
this matter is contained in Item 5 Other Information - "1998 Test Year" in
Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997, which is incorporated by reference herein.
WISCONSIN ENERGY'S MERGER AGREEMENT WITH ESELCO: On May 13, 1997, Wisconsin
Energy and ESELCO, Inc. (ESELCO), parent company of Edison Sault Electric
Company ("Edison Sault"), entered into an Agreement and Plan of Reorganization
setting forth the terms of the proposed acquisition of ESELCO by Wisconsin
Energy. On October 7, 1997, the shareholders of ESELCO voted to approve the
proposed transaction. Consummation of the proposed transaction is contingent
upon several conditions including receipt of appropriate regulatory approvals
and other customary conditions. There can be no assurance that the conditions
will be satisfied, or that the proposed transaction will be consummated.
Edison Sault is an electric utility engaged in the generation, purchase,
transmission, distribution and sale, at wholesale and retail, of electric
energy and serves more than 21,000 residential, commercial and industrial
customers throughout
<PAGE> 10
Michigan's Eastern Upper Peninsula in a service territory of over 2,000 square
miles with a population of approximately 55,000. After the transaction,
Edison Sault would continue to operate as a separate utility subsidiary of
Wisconsin Energy.
<PAGE> 11
DESCRIPTION OF NEW BONDS
The New Bonds will be issued under the Mortgage and Deed of Trust dated
October 28, 1938 between the Company and Firstar Trust Company (formerly First
Wisconsin Trust Company), as Trustee, as amended and supplemented and as to be
supplemented by one or more Supplemental Indentures creating series of New
Bonds (collectively, the "Mortgage"). At September 30, 1997, the aggregate
principal amount of Bonds outstanding under the Mortgage was $993,443,000, of
which $130,000,000 of 5-7/8% First Mortgage Bonds matured on October 1, 1997
and were retired.
The following statements about the Mortgage and the New Bonds are summary
outlines of provisions contained therein, do not purport to be complete and
are qualified by reference thereto. The specific references below are to
provisions of the Mortgage unless otherwise indicated. Certain terms used
below are defined in the Mortgage. The term "Bonds" refers to Bonds issued
under the Mortgage, as amended and supplemented from time to time. Copies of
the documents constituting the Mortgage are filed as exhibits to the
Registration Statement or documents incorporated by reference in this
Prospectus.
THE NEW BONDS. The New Bonds of any series will be issued in aggregate
principal amount, will mature and bear interest, and will be redeemable (if
issued with redemption provisions) at the option of the Company, at the prices
and on the other terms as to be set forth in the Prospectus Supplement
relating to such series. The Prospectus Supplement will also indicate whether
the New Bonds of such series will be originally issued solely in book-entry
form as described under "Book-Entry Only System" below.
The New Bonds will be available only in fully registered form, without
coupons, in the denomination of $1,000 or any multiple thereof. The Company
will not impose charges for exchanges of New Bonds.
Principal and interest on the New Bonds will be payable in lawful money of the
United States, at the agency of the Company in the City of Milwaukee;
provided, however, at the option of the Company, payment of interest on any
New Bond may be made by check, mailed to the person entitled thereto at such
address as shall appear on the transfer register, or as otherwise may be
provided for in the Supplemental Indenture creating a series of New Bonds.
The interest paid on a New Bond on any interest payment date will, with
certain exceptions, be payable to the person in whose name such New Bond is
registered at the close of business on the last business day which is more
than ten days prior to such date.
SECURITY. In the opinion of Walter T. Woelfle, Director-Legal Services
Department of the Company, the New Bonds will be secured, together with all
other Bonds now or hereafter issued under the Mortgage, by a valid and direct
first lien (subject to certain leases, Permitted Liens and other minor
matters) on substantially all the properties and franchises of the Company,
other than cash, accounts receivable and other liquid assets, securities not
specifically pledged, and electric energy, materials, supplies or other
products produced or purchased by the Company for use, sale or lease. At
September 30, 1997, the gross amount (before depreciation) at which the
properties subject to the lien of the Mortgage were carried in the Company's
utility plant accounts was approximately $5,354,329,000. The Mortgage
contains provisions subjecting to the lien thereof after-acquired property
(other than property of types excepted as indicated above). (Granting Clauses
and Excepted Property)
<PAGE> 12
ADDITIONAL BONDS. Additional Bonds ranking equally with the New Bonds may be
issued for an aggregate principal amount up to (i) 60% of the amount of Net
Bondable Value of Property Additions Not Subject to an Unfunded Prior Lien
which the Company elects to use for such purpose, (ii) the amount of cash
which the Company deposits with the Trustee for such purpose, and (iii) the
previously unutilized amount of Bonds retired or to be retired (except out of
trust moneys). (Art. III, Sections 4, 5 and 6) Cash so deposited may be
withdrawn upon the bases and up to the amounts indicated in the foregoing
clauses (i) and (iii). (Art. VIII, Section 3)
Additional Bonds may not be issued unless Net Earnings of the Company
Available for Interest for a specified twelve-month period shall have been at
least equal to the greater of twice the annual interest charges on, or 10% of
the principal amount of, all Bonds and Prior Lien Bonds then outstanding and
then being issued, unless (i) such Additional Bonds are being issued to refund
Bonds or to refund a Prior Lien which simultaneously becomes a Funded Prior
Lien on Property Additions used for such issuance, and (ii) application to
issue Additional Bonds for either of these refunding purposes is made within
two years prior to the maturity of the Bonds or Prior Lien Bonds being
refunded. (Art. III, Sections 3, 4(h) and 6(b); Fifth Supp. Ind., Art. VI)
The New Bonds are to be issued against 60% of the Net Bondable Value of
Property Additions Not Subject to an Unfunded Prior Lien or the principal
amount of unutilized retired Bonds. Before reflecting the assumed issuance of
any of the New Bonds, as of September 30, 1997, the amount of such Property
Additions available for issuance of Bonds under the Mortgage was approximately
$1,266,479,000, sufficient under this 60% provision for the issuance of
approximately $759,888,000 principal amount of Additional Bonds. In addition,
approximately $1,177,407,000 of Additional Bonds could be issued under the
Mortgage on the basis of Bonds retired on or before that date.
Prior Lien Bonds secured by an Unfunded Prior Lien may be issued under the
circumstances and subject to the limitations provided in the Mortgage. (Art.
IV, Section 16)
DIVIDEND RESTRICTION. So long as any New Bonds are outstanding, the Company
may not declare any dividend on its Common Stock (other than in Common Stock)
or make any other distribution on, or acquire for value any shares of its
Common Stock (except in exchange for Common Stock), if after giving effect
thereto the aggregate of all such dividends, distributions or acquisitions
during the period commencing October 1, 1997 and ending on the last day of the
third month preceding the month in which any such dividend, distribution or
acquisition is paid or made shall exceed the sum of $1,013,759,569 plus the
net income of the Company during such period applicable to its Common Stock.
(Art. IV or other designated article of each Supplemental Indenture creating
series of New Bonds)
DEFAULT. Events of default under the Mortgage are: (i) default in the
payment of the principal of any Bond; (ii) default in the payment of any
installment of interest on any Bond or in the payment or satisfaction of any
sinking, improvement, maintenance or analogous fund and the continuation
thereof for a period of 30 days; (iii) default by the Company in the
performance or observance of any of the covenants, agreements or conditions in
the Mortgage or Bonds and the continuation thereof for 60 days after written
notice from the Trustee or the holders of 15% in amount of the outstanding
Bonds; (iv) default in the payment of principal of or interest on any Prior
Lien Bonds and the continuation thereof beyond the period of grace in such
<PAGE> 13
Bonds; (v) certain events in bankruptcy, assignments for the benefit of
creditors and establishments of receiverships or similar arrangements; (vi)
failure to discharge or provide for the discharge of a final judgment in
excess of $100,000 within 30 days of the rendering thereof or affirmance
thereof on appeal; and (vii) termination of the Company's corporate franchise
without transferring its assets before or within 120 days after such
termination to a successor corporation. (Art. IX, Section 1) The Company is
required to furnish the Trustee, not less than annually, a brief certificate
as to the Company's compliance with all conditions and covenants under the
Mortgage.
In case of an event of default, either the Trustee or the holders of 25% in
amount of the outstanding Bonds may declare the principal of all Bonds due and
payable, but the holders of a majority may, under certain circumstances,
rescind such acceleration if such event of default has been cured. No holder
of Bonds may enforce the lien of the Mortgage unless such holder has given the
Trustee written notice of default and unless the holders of 25% in amount of
the outstanding Bonds have requested the Trustee in writing to act, such
holder or holders have offered the Trustee security and indemnity satisfactory
to it and the Trustee has not acted within a reasonable time. (Art. IX,
Sections 1 and 12)
MODIFICATION OF MORTGAGE. With the consent of holders of 66-2/3% in amount of
the Bonds entitled to vote then outstanding, and holders of 66-2/3% in amount
of the Bonds of each series entitled to vote then outstanding and affected if
less than all of such series are affected, the Mortgage may be changed, except
to affect the terms of payment of the principal or interest on any Bond or to
reduce the percentage in amount of Bonds required to effect any change. (Art.
XV, Section 6, as amended by Twenty-Second Supp. Ind., effective October 5,
1995).
Certain additional modifications of the Mortgage set forth in the Twenty-
Second Supplemental Indenture were made effective by a resolution adopted at a
meeting of Bondholders called at the Company's request and held on October 23,
1992, following approval by the Board of Directors of the Company on
October 28, 1992. The amendments, in general terms: amend the definition of
"Board of Directors" to include a Committee of the Board; broaden the
definition of "Property Additions" by adding the phrase "gas (either natural
or artificial)" so that such definition refers in part to property "used or
useful for the business of generating, manufacturing, transmitting,
distributing or supplying electricity, gas (either natural or artificial) or
steam," by deleting a requirement that the properties be located in, or
directly connected with properties located in, Wisconsin, by including certain
leasehold interests in electric and gas plants and other properties, and by
deleting an exclusion for gas properties and adding a definition of
transportation properties; require certain opinions of counsel to refer to
pipelines; increase to $250,000 the amount above which certain insured losses
must be payable to the Trustee; permit the issuance of certain prior lien
bonds secured by purchase money mortgage on certain conditions; and permit
Bondholders' action by written consent.
Certain further modifications of the Mortgage set forth in the Twenty-Sixth
Supplemental Indenture became effective on October 5, 1995 when the last Bonds
of any series created prior to January 15, 1988 were redeemed and ceased to be
outstanding. (Twenty-Sixth Supp. Ind., Art. VI) These amendments provide
more flexibility in setting forth in an engineer's certificate the time period
during which gross property additions were purchased, constructed or otherwise
acquired by the Company in connection with a Company request to withdraw
<PAGE> 14
monies held by the Trustee, and alter the ratio used to determine the dollar
amount of funds that the Company may request the Trustee to pay over to the
Company on the basis of refundable Bonds.
Certain additional modifications of the Mortgage set forth in Art. VII of the
Thirty-Third Supplemental Indenture will become effective upon the earlier of
the date when no Bonds of any series created prior to October 1, 1992 remain
outstanding or the date such modifications are consented to by Bondholders.
Such modifications will, in general, (i) allow for the issuance of Additional
Bonds for an aggregate principal amount of up to 70% of the amount of Net
Bondable Value of Property Addition Not Subject to an Unfunded Prior Lien, as
compared with the limitation of 60% now set forth in the Mortgage, (ii) permit
the issuance of Prior Lien Bonds for an aggregate principal amount of up to
70% of the amount of Net Bondable Value of Property Additions Subject to an
Unfunded Prior Lien, as compared with the limitation of 60% now set forth in
the Mortgage, (iii) allow the Company to acquire property subject to any
Unfunded Prior Lien, if at the time of acquisition the principal amount of
outstanding indebtedness subject to such lien or liens does not exceed 70% (as
compared to 60% currently) of the lesser of the cost or fair value to the
Company of the property of the nature of Property Additions subject to such
lien or liens, (iv) amend the definitions of "Net Bondable Value of Property
Additions Not Subject to an Unfunded Prior Lien" and "Net Bondable Value of
Property Additions Subject to an Unfunded Prior Lien" by changing the ratio to
be applied to certain dollar amounts in each definition's calculation from
ten-sixths to ten-sevenths, (v) provide that, in the case of a proposed merger
in which the Company would not be the survivor, such a transaction may not
occur if the principal amount of indebtedness outstanding immediately after
the merger subject to a lien or liens prior to that of the Company's exceeds
70% (as compared to 60% currently) of the lesser of cost or fair value of the
property of the nature of Property Additions then owned by the survivor, and
(vi) make certain conforming and other changes. Each holder of a New Bond
shall be deemed to have consented to all such modifications. An aggregate of
$303,443,000 principal amount of Bonds of series created prior to October 1,
1992 were outstanding as of September 30, 1997.
WISCONSIN NATURAL DEBT INDENTURES
In conjunction with the merger of Wisconsin Natural into the Company effective
January 1, 1996, the Company assumed Wisconsin Natural's outstanding
indebtedness under, and agreed to abide by all of the applicable terms and
conditions of, the Mortgage and Deed of Trust dated June 1, 1950 between
Wisconsin Natural and Firstar Trust Company, as Trustee, as amended and
supplemented (the "Wisconsin Natural Mortgage"), and the Debt Securities
Indenture dated as of September 1, 1992 between Wisconsin Natural and Firstar
Trust Company, as Trustee, as supplemented (the "Wisconsin Natural DSI"). All
of the first mortgage bonds issued under the Wisconsin Natural Mortgage have
been retired and the Wisconsin Natural Mortgage was discharged as of March 14,
1997. At September 30, 1997, $31,300,000 aggregate principal amount of
debentures were outstanding under the Wisconsin Natural DSI.
<PAGE> 15
Under the terms of the Wisconsin Natural DSI, which does not currently subject
any property to a lien, certain restrictive covenants setting forth
limitations on the existence and creation of liens, the issuance of first
mortgage bonds and the entering into sale and leaseback transactions
terminated upon consummation of the merger with the Company.
REGARDING THE TRUSTEE. The Trustee provides services for the Company and
certain affiliates, including its parent, Wisconsin Energy, as a depository of
funds, registrar, trustee under other indentures and similar services. The
Trustee or certain affiliates of the Trustee may make loans to or otherwise
extend credit to the Company or affiliated companies from time to time. The
Company and the Trustee have entered into a Short Term Borrowing Agreement
providing for the Trustee to make loans to the Company from time to time. The
aggregate principal balance outstanding at any time on all loans made pursuant
to the Short Term Borrowing Agreement may not exceed $50,000,000. As of
September 30, 1997, a loan for $50,000,000 was outstanding under the Company's
Short Term Borrowing Agreement and WISPARK Corporation, a nonutility
subsidiary of Wisconsin Energy, had a term loan of $9.5 million from the
Trustee. Firstar Trust Company is also the trustee under the Indenture (as
defined below) providing for the Debt Securities as well as trustee under the
Wisconsin Natural DSI. See "Description of Debt Securities--Regarding the
Trustee." The Trustee also presently acts as trustee for the Company's master
pension trust, the decommissioning trust fund for the Company's Point Beach
Nuclear Plant and certain other employee benefit trusts. Geneva B. Johnson, a
director of the Company and Wisconsin Energy, is also a director of Firstar
Bank Milwaukee, N.A., an affiliate of the Trustee.
<PAGE> 16
The holders of a majority of the outstanding Bonds have the right to direct
the time, method and place of conducting any proceeding for any remedy open to
the Trustee and of exercising any power or trust conferred upon the Trustee
under the Mortgage. (Art. IX, Section 11) Subject to the duty of the Trustee
to act with the required standard of care during a default, the Trustee is
under no obligation to exercise any trust or power of the Mortgage at the
request, order or direction of any of the Bondholders unless such Bondholders
provide security or indemnity satisfactory to the Trustee against any costs,
expenses and liabilities to be incurred. (Art. XIII, Sections 1(d) and 2)
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under the Indenture,
dated as of December 1, 1995, between the Company and Firstar Trust Company,
as Trustee, as the same may be amended or supplemented (the "Indenture"). The
following summaries of certain provisions of the Indenture do not purport to
be complete and are qualified in their entirety by express reference to the
Indenture and the Securities Resolutions or the indentures supplemental
thereto (copies of which have been or will be filed with the Commission).
Certain terms defined in the Indenture are used in this summary without
definition.
The term "Securities," as used under this caption, refers to all Securities
issued under the Indenture and includes the Debt Securities.
GENERAL. The Indenture will not limit the amount of Securities that can be
issued thereunder and provides that the Securities may be issued from time to
time in one or more series pursuant to the terms of one or more Securities
Resolutions or supplemental indentures creating such series. At September 30,
1997, there were $300,000,000 aggregate principal amount of Securities
outstanding under the Indenture. The Debt Securities will be unsecured and
will rank on a parity with all other unsecured and unsubordinated debt of the
Company. Although the Indenture provides for the possible issuance of
Securities in other forms or currencies, the only Securities covered by this
Prospectus will be Securities denominated in U.S. dollars in registered form
without coupons.
Substantially all of the fixed properties and franchises of the Company are
subject to the lien of the Mortgage under which the Company's First Mortgage
Bonds are outstanding. See "Description of New Bonds."
TERMS. Reference is made to the Prospectus Supplement for the following
terms, if applicable, of the Securities offered thereby: (1) the designation,
aggregate principal amount, currency or composite currency and denominations;
(2) the price at which such Securities will be issued and, if an index formula
or other method is used, the method for determining amounts of principal or
interest; (3) the maturity date and other dates, if any, on which principal
will be payable; (4) the interest rate (which may be fixed or variable), if
any; (5) the date or dates from which interest will accrue and on which
interest will be payable, and the record dates for the payment of interest;
(6) the manner of paying principal and interest; (7) the place or places where
principal and interest will be payable; (8) the terms of any mandatory or
optional redemption by the Company; (9) the terms of any redemption at the
option of Holders; (10) whether such Securities are to be issuable as
registered Securities, bearer Securities, or both, and whether and upon what
terms any registered Securities may be exchanged for bearer Securities and
vice versa; (11) whether such Securities are to be represented in whole or in
<PAGE> 17
part by a Security in global form and, if so, the terms thereof and the
identity of the depositary ("Depositary") for any global Security; (12) any
tax indemnity provisions; (13) if the Securities provide that payments of
principal or interest may be made in a currency other than that in which
Securities are denominated, the manner for determining such payments; (14) the
portion of principal payable upon acceleration of a Discounted Security (as
defined below); (15) whether and upon what terms Securities may be defeased;
(16) whether the covenant referred to below under "Certain Covenants--
Limitations on Liens" applies, and any events of default or restrictive
covenants in addition to or in lieu of those set forth in the Indenture; (17)
provisions for electronic issuance of Securities or for Securities in
uncertificated form; and (18) any additional provisions or other special terms
not inconsistent with the provisions of the Indenture, including any terms
that may be required or advisable under United States or other applicable laws
or regulations, or advisable in connection with the marketing of the
Securities. (Section 2.01)
The Securities of a series may be issued in whole or in part in the form of
one or more global Securities that will be deposited with, or on behalf of, a
Depositary identified in the Prospectus Supplement relating to the series.
Global Securities may be issued in registered, bearer or uncertificated form
and in either temporary or permanent form. Unless and until it is exchanged
in whole or in part for Securities in definitive form, a global Security may
not be transferred except as a whole by the Depositary to a nominee or a
successor depositary. (Section 2.12) The specific terms of the depositary
arrangement with respect to any Securities of a series will be described in
the Prospectus Supplement relating to the series.
Securities of any series may be issued as registered Securities, bearer
Securities or uncertificated Securities, as specified in the terms of the
series. (Section 2.01) Unless otherwise indicated in the Prospectus
Supplement, registered Securities will be issued in denominations of $1,000
and whole multiples thereof and bearer Securities will be issued in
denominations of $5,000 and whole multiples thereof. One or more global
Securities will be issued in a denomination or aggregate denominations equal
to the aggregate principal amount of outstanding Securities of the series to
be represented by such global Security or Securities. (Section 2.12)
In connection with its original issuance, no bearer Security will be offered,
sold, resold, or mailed or otherwise delivered to any location in the United
States and a bearer Security in definitive form may be delivered in connection
with its original issuance only if the person entitled to receive the bearer
Security furnishes certification as described in United States Treasury
regulation section 1.163-5(c)(2)(i)(D)(3). (Section 2.04)
For purposes of this Prospectus, unless otherwise indicated, "United States"
means the United States of America (including the States and the District of
Columbia), its territories and possessions and all other areas subject to its
jurisdiction. "United States person" means a citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or a political subdivision
thereof or any estate or trust the income of which is subject to United States
federal income taxation regardless of its source. Any special United States
federal income tax considerations applicable to bearer Securities will be
described in the Prospectus Supplement relating thereto.
To the extent set forth in the Prospectus Supplement, except in special
circumstances set forth in the Indenture, principal and interest on bearer
Securities will be payable only upon surrender of bearer Securities and
<PAGE> 18
coupons at a paying agency of the Company located outside of the United
States. During any period thereafter for which it is necessary in order to
conform to United States tax law or regulations, the Company will maintain a
paying agent outside the United States to which the bearer Securities and
coupons may be presented for payment and will provide the necessary funds
therefor to the paying agent upon reasonable notice. (Section 2.04)
Registration of transfer of registered Securities may be requested upon
surrender thereof at any agency of the Company maintained for that purpose and
upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07) Bearer Securities and the coupons related thereto will be transferable
by delivery.
Securities may be issued under the Indenture as Discounted Securities to be
offered and sold at a substantial discount from the principal amount thereof.
Special United States federal income tax and other considerations applicable
thereto will be described in the Prospectus Supplement relating to such
Discounted Securities. "Discounted Security" means a Security where the
amount of principal due upon acceleration is less than the stated principal
amount.
CERTAIN COVENANTS. The Debt Securities will not be secured by any properties
or assets and will represent unsecured debt of the Company. The Indenture
does not limit the amount of unsecured debt that the Company can incur. As
indicated under "General" above, substantially all of the fixed properties and
franchises of the Company are subject to the lien of the Mortgage securing the
Company's First Mortgage Bonds.
As discussed below, the Indenture includes certain limitations on the
Company's ability to create liens. Such limitations will apply if the
Securities Resolution establishing the terms of a series so provides. If
applicable, the limitations are subject to a number of qualifications and
exceptions. The Indenture does not limit the Company's ability to issue
additional First Mortgage Bonds or to enter into sale and leaseback
transactions.
The covenant described below will apply if so indicated in a Prospectus
Supplement. Any obligations thereunder are subject to termination upon
defeasance. See "Legal Defeasance and Covenant Defeasance" below. Also,
unless otherwise indicated in a Prospectus Supplement, such covenant, if
applicable, does not afford holders of the Securities protection in the event
of a highly leveraged or other transaction involving the Company that may
adversely affect holders of the Securities.
LIMITATIONS ON LIENS. The Indenture provides that, so long as there
remain outstanding any Securities of any series to which this limitation
applies, and subject to termination as referred to above, the Company will
not, and will not permit any Subsidiary to, create or suffer to be created or
to exist any mortgage, pledge, security interest, or other lien (collectively,
"Lien") on any of its properties or assets now owned or hereafter acquired to
secure any indebtedness, without making effective provision whereby the
Securities of such series shall be equally and ratably secured. (At the date
of this Prospectus, the Company had no Subsidiaries.) This restriction does
not apply to or prevent the creation or existence of (1) the Mortgage securing
the Company's First Mortgage Bonds or any indenture supplemental thereto
subjecting any property to the Lien thereof or confirming the Lien thereof
upon any property, whether owned before or acquired after the date of the
Indenture; (2) Liens on property existing at the time of acquisition or
construction of such property (or created within one year after completion
<PAGE> 19
of such acquisition or construction), whether by purchase, merger,
construction or otherwise (or on the property of a Subsidiary at the date it
became a Subsidiary), or to secure the payment of all or any part of the
purchase price or construction cost thereof, including the extension of any
such Liens to repairs, renewals, replacements, substitutions, betterments,
additions, extensions and improvements then or thereafter made on the property
subject thereto; (3) any extensions, renewals or replacements (or successive
extensions, renewals or replacements), in whole or in part, of Liens permitted
by the foregoing clauses (1) and (2); (4) the pledge of any bonds or other
securities at any time issued under any of the Liens permitted by clauses (1),
(2) or (3) above; or (5) Permitted Encumbrances. (Section 4.07)
"Permitted Encumbrances" include, among other items, (a) the pledge or
assignment in the ordinary course of business of electricity, gas (either
natural or artificial) or steam, accounts receivable or customers' installment
paper, (b) Liens affixing to property of the Company or a Subsidiary at the
time a Person consolidates with or merges into, or transfers all or
substantially all of its assets to, the Company or a Subsidiary, provided that
in the opinion of the Board of Directors of the Company or Company management
(evidenced by a certified Board resolution or an Officers' Certificate
delivered to the Trustee) the property acquired pursuant to the consolidation,
merger or asset transfer is adequate security for the Lien; and (c) Liens or
encumbrances not otherwise permitted if, at the incurrence of and after giving
effect thereto, the aggregate of all obligations of the Company and its
Subsidiaries secured thereby does not exceed 10% of Tangible Net Worth.
"Tangible Net Worth" means (i) common stockholders' equity appearing on the
most recent balance sheet of the Company (or consolidated balance sheet of the
Company and its Subsidiaries if the Company then has one or more consolidated
Subsidiaries) prepared in accordance with generally accepted accounting
principles less (ii) intangible assets (excluding intangible assets
recoverable through rates as prescribed by applicable regulatory authorities).
(Section 4.06)
Further, this restriction will not apply to or prevent the creation or
existence of leases made, or existing on property acquired, in the ordinary
course of business. (Section 4.07)
OTHER COVENANTS. Any other restrictive covenants which may apply to a
particular series of Securities will be described in the Prospectus Supplement
relating thereto.
SUCCESSOR OBLIGOR. The Indenture provides that, unless otherwise specified in
the Securities Resolution establishing a series of Securities, the Company
will not consolidate with or merge into, or transfer all or substantially all
of its assets to, any person, unless (1) the Person is organized under the
laws of the United States or a State thereof; (2) the Person assumes by
supplemental indenture all the obligations of the Company under the Indenture,
the Securities and any coupons; and (3) immediately after the transaction no
Default (as defined) exists. The successor will be substituted for the
Company, and thereafter all obligations of the Company under the Indenture,
the Securities and any coupons shall terminate. (Section 5.01)
EXCHANGE OF SECURITIES. Registered Securities may be exchanged for an equal
aggregate principal amount of registered Securities of the same series and
date of maturity in such authorized denominations as may be requested upon
surrender of the registered Securities at an agency of the Company maintained
for such purpose and upon fulfillment of all other requirements of the agent.
(Section 2.07)
<PAGE> 20
To the extent permitted by the terms of a series of Securities authorized to
be issued in registered form and bearer form, bearer Securities may be
exchanged for an equal aggregate principal amount of registered or bearer
Securities of the same series and date of maturity in such authorized
denominations as may be requested upon surrender of the bearer Securities with
all unpaid coupons relating thereto (except as may otherwise be provided in
the Securities) at an agency of the Company maintained for such purpose and
upon fulfillment of all other requirements of the agent. (Section 2.07) As of
the date of this Prospectus, it is expected that the terms of a series of
Securities will not permit registered Securities to be exchanged for bearer
Securities.
DEFAULTS AND REMEDIES. Unless the Securities Resolution establishing the
series otherwise provides, an "Event of Default" with respect to a series of
Securities will occur if:
(1) the Company defaults in any payment of interest on any Securities of
the series when the same becomes due and payable and the Default
continues for a period of 60 days;
(2) the Company defaults in the payment of the principal of any Securities
of the series when the same becomes due and payable at maturity or upon
redemption, acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any sinking
fund obligation with respect to any Securities of a series as required
by the Securities Resolution establishing such series and the Default
continues for a period of 60 days;
(4) the Company defaults in the performance of any of its other agreements
applicable to the series and the Default continues for 90 days
after the notice specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian for it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or substantially
all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in the series.
(Section 6.01)
<PAGE> 21
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or a similar official under any Bankruptcy Law.
(Section 6.01)
"Default" means any event which is, or after notice or passage of time would
be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the series notify the Company of the Default and the Company does
not cure the Default within the time specified after receipt of the notice.
(Section 6.01) The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities of the series. (Section 7.01)
Subject to certain limitations, Holders of a majority in principal amount of
the Securities of the series may direct the Trustee in its exercise of any
trust or power. (Section 6.05) The Trustee may withhold from Securityholders
of the series notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in their
interest. (Section 7.04) The Company is required to furnish the Trustee, not
less than annually, a brief certificate as to the Company's compliance with
all conditions and covenants under the Indenture. (Section 4.04)
The failure to redeem any Securities subject to a Conditional Redemption (as
defined) is not an Event of Default if any event on which such redemption is
so conditioned does not occur before the redemption date. (Section 6.01)
The Indenture does not have a cross-default provision. Thus, a default by the
Company on any other debt would not constitute an Event of Default.
AMENDMENTS AND WAIVERS. The Indenture and the Securities or any coupons of
the series may be amended, and any default may be waived as follows: The
Securities and the Indenture may be amended with the consent of the Holders of
a majority in principal amount of the Securities of all series affected voting
as one class. (Section 9.02) A Default on a series may be waived with the
consent of the holders of a majority in principal amount of the Securities of
the series. (Section 6.04) However, without the consent of each
Securityholder affected, no amendment or waiver may (1) reduce the amount of
Securities whose Holders must consent to an amendment or waiver, (2) reduce
the interest on or change the time for payment of interest on any Security,
(3) change the fixed maturity of any Security, (4) reduce the principal of any
non-Discounted Security or reduce the amount of principal of any Discounted
Security that would be due on acceleration thereof, (5) change the currency in
which principal or interest on a Security is payable, or (6) waive any Default
in payment of interest on or principal of a Security. (Sections 6.04 and 9.02)
Without the consent of any Securityholder, the Indenture, the Securities or
any coupons may be amended to cure any ambiguity, omission, defect or
inconsistency; to provide for assumption of Company obligations to
Securityholders in the event of a merger or consolidation requiring such
assumption; to provide that specific provisions of the Indenture shall not
apply to a series of Securities not previously issued; to create a series and
establish its terms; to provide for a separate Trustee for one or more series;
or to make any change that does not materially adversely affect the rights of
any Securityholder. (Section 9.01)
LEGAL DEFEASANCE AND COVENANT DEFEASANCE. Securities of a series may be
defeased in accordance with their terms and, unless the Securities Resolution
establishing the terms of the series otherwise provides, as set forth below.
The Company at any time may terminate as to a series all of its obligations
(except for certain obligations, including obligations with respect to the
defeasance trust and obligations to register the transfer or exchange of a
<PAGE> 22
Security, to replace destroyed, lost or stolen Securities and coupons and to
maintain agencies in respect of the Securities) with respect to the Securities
of the series and any related coupons and the Indenture ("legal defeasance").
The Company at any time may terminate as to a series its obligations with
respect to the Securities and coupons of the series under the covenant
described under "Certain Covenants--Limitations on Liens" and any other
restrictive covenants which may be applicable to a particular series
("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event
of Default. If the Company exercises its covenant defeasance option, a series
may not be accelerated by reference to the covenant described under "Certain
Covenants--Limitations on Liens" or any other restrictive covenants which may
be applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, the Company must deposit
in trust (the "defeasance trust") with the Trustee money or U.S. Government
Obligations for the payment of principal, premium, if any, and interest on the
Securities of the series to redemption or maturity and must comply with
certain other conditions. In particular, the Company must obtain an opinion
of tax counsel that the defeasance will not result in recognition of any gain
or loss to holders for Federal income tax purposes. "U.S. Government
Obligations" are direct obligations of the United States of America which have
the full faith and credit of the United States of America pledged for payment
and which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations. (Section 8.02)
REGARDING THE TRUSTEE. Firstar Trust Company will act as Trustee and
Registrar for Securities issued under the Indenture and, unless otherwise
indicated in a Prospectus Supplement, the Trustee will also act as Transfer
Agent and Paying Agent with respect to the Securities. (Section 2.03) The
Company may remove the Trustee with or without cause if the Company so
notifies the Trustee six months in advance and if no Default occurs during the
six-month period. (Section 7.07) The Trustee is also trustee under the
Mortgage for the Company's First Mortgage Bonds, including the New Bonds, and
provides services for the Company and certain affiliates, including Wisconsin
Energy, as a depository of funds, registrar, trustee under other indentures
and similar services. See "Description of New Bonds--Regarding the Trustee."
BOOK-ENTRY ONLY SYSTEM
The New Bonds and Debt Securities of any series may be issued initially in the
form of one or more global securities under a book-entry only system operated
by a securities depository. Unless otherwise specified in the Prospectus
Supplement, The Depository Trust Company ("DTC") will act as securities
depository for the New Bonds and Debt Securities, which would be registered in
the name of CEDE & Co., as registered securityholder and nominee for DTC.
Individual purchases of Book-Entry Interests (as herein defined) in any such
New Bonds or Debt Securities will be made in book-entry form. Purchasers of
Book-Entry Interests in such New Bonds or Debt Securities will not receive
certificates representing their interests in such New Bonds or Debt
Securities. So long as CEDE & Co., as nominee of DTC, is the securityholder,
references herein to holders of the Bonds or Debt Securities or registered
owners will mean CEDE & Co., rather than the owners of Book-Entry Interests in
New Bonds or Debt Securities.
<PAGE> 23
DTC is a limited purpose trust company organized under the banking laws of the
State of New York and a "banking organization" within the meaning of that law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities deposited by its participants (the "DTC Participants") and
facilitates the settlement of securities transactions among DTC Participants
in such securities through electronic computerized book-entry changes in
accounts of the DTC Participants, thereby eliminating the need for physical
movement of securities certificates. Direct DTC Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of whom (including, possibly, the
underwriters with respect to the New Bonds or Debt Securities), together with
the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc., own DTC. Access to the DTC
system is also available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly (the "Indirect Participants").
DTC Participants purchasing Book-Entry Interests (as defined below) in any New
Bonds or Debt Securities will not receive certificates. Each DTC Participant
will receive a credit balance in the records of DTC in the amount of such DTC
Participant's interest in such New Bonds or Debt Securities, which will be
confirmed in accordance with DTC's standard procedures. The ownership
interest of each actual purchaser of a Book-Entry Interest in a New Bond or
Debt Security (the "Book-Entry Interests") will be recorded through the
records of the DTC Participant or through the records of the Indirect
Participant. Owners of Book-Entry Interests should receive from the DTC
Participant or Indirect Participant a written confirmation of their purchase
providing details of the Book-Entry Interests acquired. Transfers of Book-
Entry Interests will be accomplished by book entries made by the DTC
Participants or Indirect Participants who act on behalf of the owners of Book-
Entry Interests. Owners of Book-Entry Interests will not receive certificates
representing their ownership of Book-Entry Interests with respect to any New
Bonds or Debt Securities except as described below upon the resignation of
DTC.
Under the Mortgage and Indenture, payments made by the respective Trustee to
DTC or its nominee will satisfy the Company's obligations under the Mortgage
or Indenture, as the case may be, to the extent of the payments so made.
Owners of Book-Entry Interests will not be or be considered by the Company or
the respective Trustee to be, and will not have any rights as, holders of New
Bonds under the Mortgage or Debt Securities under the Indenture, as the case
may be.
NEITHER THE COMPANY NOR THE TRUSTEE UNDER THE MORTGAGE AND INDENTURE WILL HAVE
ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT
OR ANY OWNER OF A BOOK-ENTRY INTEREST OR ANY OTHER PERSON NOT SHOWN ON THE
REGISTRATION BOOKS OF SUCH TRUSTEE AS BEING A HOLDER OF NEW BONDS OR DEBT
SECURITIES WITH RESPECT TO: (1) ANY NEW BONDS OR DEBT SECURITIES, AS THE CASE
MAY BE; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY OWNER OF A BOOK-
ENTRY INTEREST IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST
ON SUCH NEW BONDS OR DEBT SECURITIES; (4) THE DELIVERY BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY OWNER OF A BOOK-ENTRY
INTEREST WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE MORTGAGE OR
INDENTURE TO BE GIVEN TO HOLDERS OF NEW BONDS OR DEBT SECURITIES; (5) THE
<PAGE> 24
SELECTION OF THE OWNERS OF A BOOK-ENTRY INTEREST TO RECEIVE PAYMENT IN THE
EVENT OF ANY PARTIAL REDEMPTION OF ANY NEW BONDS OR DEBT SECURITIES; OR (6)
ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ITS NOMINEE AS HOLDER OF NEW
BONDS OR DEBT SECURITIES.
Principal and redemption price of, and interest payments on, New Bonds and
Debt Securities registered in the name of DTC or its nominee will be made to
DTC or such nominee, as registered owner of such New Bonds or Debt Securities.
DTC is responsible for disbursing such payments to the appropriate DTC
Participants and such DTC Participants, and any Indirect Participants, are in
turn responsible for disbursing the same to the owners of Book-Entry
Interests. Unless it has reason to believe it will not receive payment, DTC's
current practice is to credit the accounts of the DTC Participants on a
payment date in accordance with their respective holdings shown on the records
of DTC. Payments by DTC Participants and Indirect Participants to owners of
Book-Entry Interests will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such DTC Participant or Indirect Participant and not of DTC,
the Company or the respective Trustee, subject to any statutory and regulatory
requirements as may be in effect from time to time.
DTC Participants and Indirect Participants carry the "position" of the
ultimate Book-Entry Interest owner on their records, and will be responsible
for providing information to the ultimate Book-Entry Interest owner as to the
New Bonds or Debt Securities in which the Book-Entry Interest is held, debt
service payments received, and other information. Each person for whom a DTC
Participant or Indirect Participant acquires an interest in New Bonds or Debt
Securities, as nominee, may desire to make arrangements with such DTC
Participant or Indirect Participant to receive a credit balance in the records
of such DTC Participant or Indirect Participant, to have all notices of
redemption or other communications to or by DTC which may affect such persons
forwarded in writing by such DTC Participant or Indirect Participant, and to
have notification made of all debt service payments.
Purchases, transfers and sales of Book-Entry Interests by the ultimate Book-
Entry Interest owners may be made through book entries made by DTC
Participants or Indirect Participants or others who act for the ultimate Book-
Entry Interest owner. The Trustee under the Mortgage and Indenture, the
Company and the underwriters, as such, have no role in those purchases,
transfers or sales.
Owners of Book-Entry Interests may be charged a sum sufficient to cover any
tax, fee, or other governmental charge that may be imposed in relation to any
transfer or exchange of a Book-Entry Interest.
Each Trustee will recognize and treat DTC (or any successor securities
depository) or its nominee as the holder of New Bonds and Debt Securities
registered in its name or the name of its nominee for all purposes, including
payment of debt service, notices, enforcement of remedies and voting. Under
DTC's current practice, a proxy will be given to the DTC Participants holding
Book-Entry Interests in New Bonds and Debt Securities in connection with any
matter on which holders of such New Bonds or Debt Securities are asked to vote
or give their consent. Crediting of debt service payments and transmittal of
notices and other communications by DTC to DTC Participants, by DTC
Participants to Indirect Participants and by DTC Participants and Indirect
Participants to the ultimate Book-Entry Interest owners are the responsibility
of those persons and will be handled by arrangements among them and are not
the responsibility of either Trustee, the Company or any underwriter, as such.
<PAGE> 25
Each Trustee, so long as a book-entry system is used for any series of New
Bonds or Debt Securities, will send any notice of redemption and any other
notices required by the Mortgage or Indenture to be sent to holders of such
New Bonds or Debt Securities, respectively, only to DTC (or such successor
securities depository) or its nominee. Any failure of DTC to advise any DTC
Participant, or of any DTC Participant or Indirect Participant to notify the
Book-Entry Interest owner, of any such notice and its content or effect will
not affect the validity of the redemption of the New Bonds or Debt Securities
called for redemption, or any other action premised on that notice. In the
event of a call for redemption, the Trustee's notification to DTC will
initiate DTC's standard call process, and, in the event of a partial call, its
lottery process by which the call will be randomly allocated to DTC
Participants holding positions in the New Bonds or Debt Securities to be
redeemed. When DTC and DTC Participants allocate the call for redemption, the
owners of the Book-Entry Interests that have been called should be notified by
the broker or other person responsible for maintaining the records of those
interests and subsequently credited by that person with the proceeds once such
New Bonds or Debt Securities are redeemed.
The Company, the Trustee under the Mortgage and the Indenture and any
underwriter or agent cannot and do not give any assurances that DTC, DTC
Participants or others will distribute payments of debt service on New Bonds
or Debt Securities made to DTC or its nominee as the registered owner, or any
redemption or other notices, to the Book-Entry Interest owners, or that they
will do so on a timely basis, or that DTC will serve and act in the manner
described in this Prospectus.
The Company understands that the current "Rules" applicable to DTC are on file
with the Commission, and that the current "Procedures" of DTC to be followed
in dealing with DTC Participants are on file with DTC.
If DTC is at any time unwilling or unable to continue as depository, and a
successor depository is not appointed by the Company within 90 days, the
Company will issue individual certificates to owners of Book-Entry Interests
in exchange for the New Bonds or Debt Securities held by DTC or its nominee,
as the case may be. In such instance, an owner of a Book-Entry Interest will
be entitled to physical delivery of certificates equal in principal amount to
such Book-Entry Interest and to have such certificates registered in its name.
Individual certificates so issued will be issued in denominations of $1,000 or
any multiple thereof.
Neither the Company, the Trustee under the Mortgage and the Indenture nor any
underwriter makes any representation as to the accuracy of the above
description of DTC's business, organization and procedures, which is based
upon information furnished by DTC.
PLAN OF DISTRIBUTION
The Company may sell New Bonds and Debt Securities to or through underwriters
or dealers and also may sell New Bonds and Debt Securities directly to other
purchasers or through agents.
The distribution of New Bonds and Debt Securities of any series may be
effected from time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices.
<PAGE> 26
In connection with the sale of New Bonds and Debt Securities, underwriters may
receive compensation from the Company or from purchasers of New Bonds and Debt
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that participate
in the distribution of New Bonds and Debt Securities may be deemed to be
"underwriters", and any discounts or commissions received by them from the
Company and any profit on the resale of New Bonds and Debt Securities by them
may be deemed to be underwriting discounts and commissions, under the
Securities Act.
The Prospectus Supplement relating to each series of New Bonds will also set
forth the terms of the offering of the New Bonds of each series, including, to
the extent applicable, the initial offering price, the proceeds to the
Company, the underwriting discounts or commissions, and any other discounts or
concessions to be allowed or re-allowed to dealers. The principal
underwriters with respect to each series sold to or through underwriters will
be named in the Prospectus Supplement relating to such series and only the
underwriters named in such Prospectus Supplement are deemed to be underwriters
in connection with the New Bonds offered thereby.
The Prospectus Supplement relating to each series of Debt Securities will also
set forth the terms of the offering of the Debt Securities of each series,
including, to the extent applicable, the initial offering price, the proceeds
to the Company, the underwriting discounts or commissions and any other
discounts or concessions to be allowed or re-allowed to dealers. The
principal underwriters with respect to each series sold to or through
underwriters will be named in the Prospectus Supplement relating to such
series and only the underwriters named in such Prospectus Supplement are
deemed to be underwriters in connection with the Debt Securities offered
thereby.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase New Bonds or Debt Securities from the Company at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to those conditions
set forth in the Prospectus Supplement and the Prospectus Supplement will set
forth the commission payable for the solicitation of such contracts.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of New Bonds and Debt
Securities may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents, underwriters or
dealers may be required to make in respect thereto. Agents, underwriters and
dealers may be customers of, engage in transactions with or perform services
for the Company in the ordinary course of business.
In connection with the offering of the New Bonds and Debt Securities,
underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the New Bonds or Debt Securities. Specifically, the
underwriters may over-allot in connection with the offerings of the New Bonds
or Debt Securities, creating a syndicate short position. In addition,
underwriters may bid for, and purchase, New Bonds or Debt Securities in the
open market to cover syndicate shorts or to stabilize the price of the New
Bonds or Debt Securities, as the case may be. Finally, the underwriting
syndicate may reclaim selling concessions allowed for distributing the new
Bonds or Debt Securities in the offering of the New Bonds or Debt Securities,
as the case may be, if the syndicate repurchases previously distributed New
Bonds or Debt Securities, as the case may be, in syndicate covering
<PAGE> 27
transactions, syndicate transactions or otherwise. Any of these activities
may stabilize or maintain the market prices of the New Bonds or Debt
Securities above independent market levels. The underwriters are not required
to engage in any of these activities, and may end any of them at any time.
The New Bonds and Debt Securities are not proposed to be listed on a
securities exchange, and any underwriters will not be obligated to make a
market in the New Bonds and Debt Securities. The Company cannot predict the
activity or liquidity of any trading in the New Bonds and Debt Securities.
EXPERTS
The financial statements incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
Future audited financial statements incorporated in this Prospectus by
reference to future filings under the Exchange Act, as provided under
"Incorporation of Certain Documents by Reference" above, will be so
incorporated in reliance on the related report or reports of the firm of
independent accountants auditing such financial statements, given on such
authority of such firm, if and to the extent such filings include the consent
of such firm to the incorporation of such report or reports herein.
LEGAL OPINIONS
Certain legal matters in connection with the New Bonds and Debt Securities
will be passed upon for the Company by Walter T. Woelfle, Director-Legal
Services Department of the Company, James D. Zakrajsheck, Counsel of the
Company, or A. William Finke, Counsel of the Company, and by Quarles & Brady,
411 East Wisconsin Avenue, Milwaukee, Wisconsin. Certain legal matters in
connection with the New Bonds and Debt Securities will be passed upon for the
underwriters by Cahill Gordon & Reindel (a partnership including a
professional corporation), 80 Pine Street, New York, New York. Quarles &
Brady and Cahill Gordon & Reindel will not pass upon the incorporation of the
Company, franchise matters, questions of title or the lien of the Mortgage.
Cahill Gordon & Reindel will rely upon the opinion of Mr. Woelfle, Mr.
Zakrajsheck or Mr. Finke as to all matters of Wisconsin law. Cahill Gordon &
Reindel and Quarles & Brady will rely upon such opinion as to matters of
Michigan law and the exempt status of the Company and Wisconsin Energy under
the Public Utility Holding Company Act of 1935, as amended. Also, such firms,
Mr. Woelfle, Mr. Zakrajsheck and Mr. Finke will rely on the opinion of Loomis,
Ewert, Parsley, Davis & Gotting, P.C., 232 South Capitol Avenue, Lansing,
Michigan, as to matters of Michigan law relating to authority to do business
and certain regulatory matters in Michigan.
The statements as to matters of law and legal conclusions under "Description
of New Bonds--Security" have been prepared under the supervision of, and
reviewed by, Walter T. Woelfle, Director-Legal Services Department of the
Company, and such statements are made on his authority. As of September 30,
1997, Mr. Woelfle, Mr. Zakrajsheck and Mr. Finke owned beneficially 6,992
shares, 350 shares and 15,383 shares of Common Stock of Wisconsin Energy,
respectively, and Mr. Woelfle held options to acquire 11,400 shares of
Wisconsin Energy Common Stock.
<PAGE> 28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated fees and expenses payable by the registrant in connection with
the issuance and distribution of the New Bonds and the Debt Securities (some
of which have been paid in connection with the prior registration statements
to which the combined prospectus contained herein relates) are as follows:
Securities and Exchange Commission registration fee .............. $125,400
Public Service Commission of Wisconsin fee ........................ 1,000
Trustee's fee and expenses ........................................ 15,000
Printing and engraving expenses ................................... 50,000
Legal fees and expenses ........................................... 250,000
Accounting fees and expenses ...................................... 60,000
Blue Sky fees and expenses ........................................ 30,000
Rating agency fees ................................................ 160,000
Miscellaneous ..................................................... 8,600
--------
Total ........................................................ $700,000
========
Item 15. Indemnification of Directors and Officers.
Chapter 180 of the Wisconsin Statutes includes provisions for indemnification
by a corporation of a director or officer against certain liabilities and
expenses incurred by him or her in any proceeding (whether threatened, pending
or completed, and whether brought by the corporation or any other person) to
which he or she was a party because of being a director or officer. In
general, under these provisions (1) a corporation is required to indemnify a
director or officer, to the extent he or she has been successful on the merits
or otherwise in the defense of any such proceeding, for all reasonable
expenses incurred in the proceeding, and (2) in other cases, the corporation
is required to indemnify a director or officer against liabilities (including,
among other things, judgments, penalties, fines and reasonable expenses)
incurred in any such proceeding unless liability was incurred because he or
she breached or failed to perform a duty to the corporation and the breach or
failure constitutes any of the following: (a) a willful failure to deal
fairly with the corporation or its shareholders in connection with a matter in
which he or she has a material conflict of interest, (b) a violation of
criminal law, unless he or she had reasonable cause to believe his or her
conduct was lawful or no reasonable cause to believe his or her conduct was
unlawful, (c) a transaction from which he or she derived an improper personal
profit, or (d) willful misconduct. The provisions specify that the
termination of a proceeding by judgment, order, settlement or conviction, or
upon a plea of no contest or an equivalent plea, does not, by itself, create a
presumption that indemnification is not required. Also, the provisions permit
II-1
<PAGE> 29
a corporation to pay or reimburse reasonable expenses as incurred if the
director or officer affirms his or her good faith belief that he or she has
not breached or failed to perform his or her duties to the corporation and
undertakes to make repayment to the extent it is ultimately determined that
indemnification is not required. With specified exceptions, these provisions
do not preclude additional indemnification. Chapter 180 specifically provides
that it is the public policy of the State of Wisconsin to require or permit
indemnification, allowance of expenses and insurance, to the extent required
or permitted generally thereunder, for any liability incurred in connection
with a proceeding involving a federal or state statute, rule or regulation
regulating the offer, sale or purchase of securities.
Chapter 180 of the Wisconsin Statutes also provides that, with certain
exceptions, a director is not liable to a corporation, its shareholders, or
any person asserting rights on behalf of the corporation or its shareholders,
for damages, settlements, fees, fines, penalties or other monetary liabilities
arising from a breach of, or failure to perform, any duty resulting solely
from his or her status as a director, unless the person asserting liability
proves that the breach or failure to perform constitutes any of the four
exceptions to mandatory indemnification referred to above.
The Bylaws of the registrant and the Bylaws of its parent, Wisconsin Energy
Corporation ("Wisconsin Energy"), provide generally for mandatory
indemnification of directors and officers of the respective companies to the
fullest extent permitted by law.
Underwriting or purchase agreements entered into by the registrant in
connection with the securities being registered may provide for
indemnification of directors, officers and controlling persons of the
registrant against certain liabilities, including liabilities under the
Securities Act of 1933.
Officers and directors of the registrant and Wisconsin Energy are covered by
insurance policies purchased by the registrant or Wisconsin Energy, under
which they are insured (subject to exceptions and limitations specified in the
policies) against expenses and liabilities arising out of actions, suits or
proceedings to which they are parties by reason of being or having been such
directors or officers.
Item 16. Exhibits.
The following exhibits are filed with or incorporated by reference in as part
of this registration statement.
Exhibit No.
- -----------
(1)-(1) Form of proposed Underwriting Agreement for New Bonds.
(2) Form of proposed Underwriting Agreement for Debt Securities.
II-2
<PAGE> 30
Mortgage or
Supplemental
Indenture Company Date Exhibit No. Under File No.
------------ ------- ---- ----------- --------------
(4)-(1)* - Mortgage Wisconsin 10/28/38 B-1 2-4340
and Deed Electric
of Trust ("WE")
(2)* - Second WE 06/01/46 7-C 2-6422
(3)* - Third WE 03/01/49 7-C 2-8456
(4)* - Fourth WE 06/01/50 7-D 2-8456
(5)* - Fifth WE 05/01/52 4-G 2-9588
(6)* - Sixth WE 05/01/54 4-H 2-10846
(7)* - Seventh WE 04/15/56 4-I 2-12400
(8)* - Eighth WE 04/01/58 2-I 2-13937
(9)* - Ninth WE 11/15/60 2-J 2-17087
(10)* - Tenth WE 11/01/66 2-K 2-25593
(11)* - Eleventh WE 11/15/67 2-L 2-27504
(12)* - Twelfth WE 05/15/68 2-M 2-28799
(13)* - Thirteenth WE 05/15/69 2-N 2-32629
(14)* - Fourteenth WE 11/01/69 2-O 2-34942
(15)* - Fifteenth WE 07/15/76 2-P 2-54211
(16)* - Sixteenth WE 01/01/78 2-Q 2-61220
(17)* - Seventeenth WE 05/01/78 2-R 2-61220
(18)* - Eighteenth WE 05/15/78 2-S 2-61220
(19)* - Nineteenth WE 08/01/79 (a)2(a) 1-1245
(9/30/79
Form 10-Q)
(20)* - Twentieth WE 11/15/79 (a)2(a) 1-1245
(12/31/79
Form 10-K)
(21)* - Twenty-First WE 04/15/80 (4)-21 2-69488
(22)* - Twenty-Second WE 12/01/80 (4)-1 1-1245
(12/31/80
Form 10-K)
(23)* - Twenty-Third WE 09/15/85 (4)-1 1-1245
(9/30/85
Form 10-Q)
(24)* - Twenty-Fourth WE 09/15/85 (4)-2 1-1245
(09/30/85
Form 10-Q)
(25)* - Twenty-Fifth WE 12/15/86 (4)-25 1-1245
(12/31/86
Form 10-K)
(26)* - Twenty-Sixth WE 01/15/88 4 1-1245
(01/26/88
Form 8-K)
(27)* - Twenty-Seventh WE 04/15/88 4 1-1245
(03/31/88
Form 10-Q)
(28)* - Twenty-Eighth WE 09/01/89 4 1-1245
(09/30/89
Form 10-Q)
(29)* - Twenty-Ninth WE 10/01/91 (4)-1 1-1245
(12/31/91
Form 10-K)
II-3
<PAGE> 31
Mortgage or
Exhibit Supplemental
No. Indenture Company Date Exhibit No. Under File No.
- ------- ------------ ------- ---- ----------- --------------
(4)-(30)* - Thirtieth WE 12/01/91 (4)-2 1-1245
(12/31/91
Form 10-K)
(31)* - Thirty-First WE 08/01/92 (4)-1 1-1245
(06/30/92
Form 10-Q)
(32)* - Thirty-Second WE 08/01/92 (4)-2 1-1245
(06/30/92
Form 10-Q)
(33)* - Thirty-Third WE 10/01/92 (4)-1 1-1245
(09/30/92
Form 10-Q)
(34)* - Satisfaction WE 10/29/92 (4)-3 1-1245
and Discharge (09/30/92
of Mortgage Form 10-Q)
and Deed of
Trust and
Reconveyance
of Trust
Estate of
Former Wisconsin
Michigan Power
Company to
Wisconsin Electric
Power Company
(35)* - Thirty-Fourth WE 11/01/92 (4)-2 1-1245
(09/30/92
Form 10-Q)
(36)* - Thirty-Fifth WE 12/15/92 (4)-1 1-1245
(12/31/92
Form 10-K)
(37)* - Thirty-Sixth WE 01/15/93 (4)-2 1-1245
(12/31/92
Form 10-K)
(38)* - Thirty-Seventh WE 03/15/93 (4)-3 1-1245
(12/31/92
Form 10-K)
(39)* - Thirty-Eighth WE 08/01/93 (4)-1 1-1245
(06/30/93
Form 10-Q)
(40)* - Thirty-Ninth WE 09/15/93 (4)-1 1-1245
(09/30/93
Form 10-Q)
(41)* - Fortieth WE 01/01/96 (4)-1 1-1245
(1/1/96
Form 8-K)
(42)* - Form of proposed Supplemental
Indenture creating
series of New Bonds WE 11/15/95 (4)-(41) 33-64343
(Form S-3)
II-4
<PAGE> 32
Mortgage or
Exhibit Supplemental
No. Indenture Company Date Exhibit No. Under File No.
- ------- -------------- ------- ---- ----------- --------------
(4)-(43)* - Form of New Bonds
(included in
Exhibit (4)-(42))
(44)* - Indenture for Debt
Securities
including, as
exhibits,
forms of Registered
Security and Bearer
Security thereunder
the ("Indenture") WE 12/01/95 (4)-1 1-1245
(12/31/95
Form 10-K)
(45)* - Securities
Resolution No. 1
under the Indenture WE 12/05/95 (4)-2 1-1245
(12/31/95
Form 10-K)
(46)* - Securities
Resolution No. 2
under the Indenture WE 11/12/96 4.44 1-1245
(12/31/96
Form 10-K)
(5) - Opinion of Walter T. Woelfle, Esq., Director-Legal Services
Department of the Company, as to the legality of the New Bonds
and Debt Securities being registered.
(12) - Statement of Computation of Ratios of Earnings to Fixed Charges.
(23)-(1) - Consent of Price Waterhouse LLP.
(2) - Consent of Walter T. Woelfle, Esq., contained in his opinion
filed as Exhibit (5).
(3) - Consent of James D. Zakrajsheck, Esq.
(4) - Consent of A. William Finke, Esq.
(5) - Consent of Loomis, Ewert, Parsley, Davis & Gotting, P.C.
(6) - Consent of Quarles & Brady.
(24) - Power of Attorney, contained in signature page of Registration
Statement.
(25)-(1) - Statement of Eligibility of Firstar Trust Company, as
Trustee, on Form T-1 with respect to the New Bonds.
(2) - Statement of Eligibility of Firstar Trust Company, as Trustee, on
Form T-1 with respect to the Debt Securities.
- --------------------
* The exhibits listed above and marked with an asterisk were filed as exhibits
to Registration Statements and Reports previously filed with the Commission
under the exhibit number and file number as shown after each such exhibit,
and they are hereby incorporated herein by reference.
II-5
<PAGE> 32A
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934, as amended, 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 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-6
<PAGE> 33
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions referred to in Item
15, 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 that Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in that Act
and will be governed by the final adjudication of such issue.
II-7
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Milwaukee, State of Wisconsin, on
the 14th day of November, 1997.
WISCONSIN ELECTRIC POWER COMPANY
By /s/ R. A. Abdoo
----------------------------------
R. A. Abdoo, Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes R. A. Abdoo or
C. H. Baker, or either of them, as attorneys-in-fact with full power of
substitution, to execute in the name and on behalf of such person,
individually, and in each capacity stated below or otherwise, and to file, any
and all pre-effective or post-effective amendments to this registration
statement.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities indicated on the 14th day of November, 1997.
Signature and Title
-------------------
/s/ R. A. Abdoo
- -----------------------------------
R. A. Abdoo, Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer and Director)
/s/ C. H. Baker
- -----------------------------------
C. H. Baker, Vice President-Finance
and Chief Financial Officer
(Principal Financial Officer)
/s/ A. K. Klisurich /s/ D. K. Porter
- ----------------------------------- --------------------------------
A. K. Klisurich, Controller D. K. Porter, Director
(Principal Accounting Officer)
/s/ J. F. Ahearne /s/ R. R. Grigg
- ----------------------------------- --------------------------------
J. F. Ahearne, Director R. R. Grigg, Director
/s/ J. F. Bergstrom /s/ G. B. Johnson
- ----------------------------------- --------------------------------
J. F. Bergstrom, Director G. B. Johnson, Director
/s/ R. A. Cornog /s/ F. P. Stratton, Jr.
- ----------------------------------- --------------------------------
R. A. Cornog, Director F. P. Stratton, Jr., Director
- -------------------------
* Each of the above signatures is affixed as of November 14, 1997.
II-8
<PAGE> 35
Wisconsin Electric Power Company
Registration Statement on Form S-3
EXHIBIT INDEX
The following exhibits are filed with or incorporated by reference in as part
of this registration statement.
Mortgage or
Exhibit Supplemental
No. Indenture Company Date Exhibit No. Under File No.
- ------- ------------ ------- ---- ----------- --------------
(1)-(1) Form of proposed Underwriting Agreement for New Bonds.
(2) Form of proposed Underwriting Agreement for Debt Securities.
(4)-(1)* - Mortgage Wisconsin 10/28/38 B-1 2-4340
and Deed Electric
of Trust ("WE")
(2)* - Second WE 06/01/46 7-C 2-6422
(3)* - Third WE 03/01/49 7-C 2-8456
(4)* - Fourth WE 06/01/50 7-D 2-8456
(5)* - Fifth WE 05/01/52 4-G 2-9588
(6)* - Sixth WE 05/01/54 4-H 2-10846
(7)* - Seventh WE 04/15/56 4-I 2-12400
(8)* - Eighth WE 04/01/58 2-I 2-13937
(9)* - Ninth WE 11/15/60 2-J 2-17087
(10)* - Tenth WE 11/01/66 2-K 2-25593
(11)* - Eleventh WE 11/15/67 2-L 2-27504
(12)* - Twelfth WE 05/15/68 2-M 2-28799
(13)* - Thirteenth WE 05/15/69 2-N 2-32629
(14)* - Fourteenth WE 11/01/69 2-O 2-34942
(15)* - Fifteenth WE 07/15/76 2-P 2-54211
(16)* - Sixteenth WE 01/01/78 2-Q 2-61220
(17)* - Seventeenth WE 05/01/78 2-R 2-61220
(18)* - Eighteenth WE 05/15/78 2-S 2-61220
(19)* - Nineteenth WE 08/01/79 (a)2(a) 1-1245
(9/30/79
Form 10-Q)
(20)* - Twentieth WE 11/15/79 (a)2(a) 1-1245
(12/31/79
Form 10-K)
(21)* - Twenty-First WE 04/15/80 (4)-21 2-69488
(22)* - Twenty-Second WE 12/01/80 (4)-1 1-1245
(12/31/80
Form 10-K)
(23)* - Twenty-Third WE 09/15/85 (4)-1 1-1245
(9/30/85
Form 10-Q)
(24)* - Twenty-Fourth WE 09/15/85 (4)-2 1-1245
(09/30/85
Form 10-Q)
(25)* - Twenty-Fifth WE 12/15/86 (4)-25 1-1245
(12/31/86
Form 10-K)
(26)* - Twenty-Sixth WE 01/15/88 4 1-1245
(01/26/88
Form 8-K)
<PAGE> 36
Mortgage or
Supplemental
Indenture Company Date Exhibit No. Under File No.
------------ ------- ---- ----------- --------------
(27)* - Twenty-Seventh WE 04/15/88 4 1-1245
(03/31/88
Form 10-Q)
(28)* - Twenty-Eighth WE 09/01/89 4 1-1245
(09/30/89
Form 10-Q)
(29)* - Twenty-Ninth WE 10/01/91 (4)-1 1-1245
(12/31/91
Form 10-K)
(30)* - Thirtieth WE 12/01/91 (4)-2 1-1245
(12/31/91
Form 10-K)
(31)* - Thirty-First WE 08/01/92 (4)-1 1-1245
(06/30/92
Form 10-Q)
(32)* - Thirty-Second WE 08/01/92 (4)-2 1-1245
(06/30/92
Form 10-Q)
(33)* - Thirty-Third WE 10/01/92 (4)-1 1-1245
(09/30/92
Form 10-Q)
(34)* - Satisfaction WE 10/29/92 (4)-3 1-1245
and Discharge (09/30/92
of Mortgage Form 10-Q)
and Deed of
Trust and
Reconveyance
of Trust
Estate of
Former Wisconsin
Michigan Power
Company to
Wisconsin Electric
Power Company
(35)* - Thirty-Fourth WE 11/01/92 (4)-2 1-1245
(09/30/92
Form 10-Q)
(36)* - Thirty-Fifth WE 12/15/92 (4)-1 1-1245
(12/31/92
Form 10-K)
(37)* - Thirty-Sixth WE 01/15/93 (4)-2 1-1245
(12/31/92
Form 10-K)
(38)* - Thirty-Seventh WE 03/15/93 (4)-3 1-1245
(12/31/92
Form 10-K)
(39)* - Thirty-Eighth WE 08/01/93 (4)-1 1-1245
(06/30/93
Form 10-Q)
(40)* - Thirty-Ninth WE 09/15/93 (4)-1 1-1245
(09/30/93
Form 10-Q)
(41)* - Fortieth WE 01/01/96 (4)-1 1-1245
(1/1/96
Form 8-K)
<PAGE> 37
Mortgage or
Exhibit Supplemental
No. Indenture Company Date Exhibit No. Under File No.
- ------- ------------ ------- ---- ----------- --------------
(42)* - Form of proposed
Supplemental
Indenture creating
series of New Bonds WE 11/15/95 (4)-(41) 33-64343
(Form S-3)
(43)* - Form of New Bonds
(included in
Exhibit (4)-(42))
(44)* - Indenture for Debt
Securities
including, as
exhibits,
forms of Registered
Security and Bearer
Security thereunder
the ("Indenture") WE 12/01/95 (4)-1 1-1245
(12/31/95
Form 10-K)
(45)* - Securities
Resolution No. 1
under the Indenture WE 12/05/95 (4)-2 1-1245
(12/31/95
Form 10-K)
(46)* - Securities
Resolution No. 2
under the Indenture WE 11/12/96 4.44 1-1245
(12/31/96
Form 10-K)
(5) - Opinion of Walter T. Woelfle, Esq., Director-Legal Services
Department of the Company, as to the legality of the New Bonds
and Debt Securities being registered.
(12) - Statement of Computation of Ratios of Earnings to Fixed Charges.
(23)-(1) - Consent of Price Waterhouse LLP.
(2) - Consent of Walter T. Woelfle, Esq., contained in his opinion
filed as Exhibit (5).
(3) - Consent of James D. Zakrajsheck, Esq.
(4) - Consent of A. William Finke, Esq.
(5) - Consent of Loomis, Ewert, Parsley, Davis & Gotting, P.C.
(6) - Consent of Quarles & Brady.
(24) - Power of Attorney, contained in signature page of Registration
Statement.
(25)-(1) - Statement of Eligibility of Firstar Trust Company, as
Trustee, on Form T-1 with respect to the New Bonds.
(2) - Statement of Eligibility of Firstar Trust Company, as Trustee, on
Form T-1 with respect to the Debt Securities.
- --------------------
* The exhibits listed above and marked with an asterisk were filed as exhibits
to Registration Statements and Reports previously filed with the Commission
under the exhibit number and file number as shown after each such exhibit,
and they are hereby incorporated herein by reference.
EXHIBIT (1)-(1)
WISCONSIN ELECTRIC POWER COMPANY
FIRST MORTGAGE BONDS
UNDERWRITING AGREEMENT
New York, New York
Dated the date set
forth in Schedule I hereto
To the Underwriters
set forth in
Schedule II hereto
Dear Sirs and Madams:
Wisconsin Electric Power Company, a Wisconsin corporation
(the "Company"), proposes to issue and sell to the underwriter or
underwriters named in Schedule II hereto (the "Underwriters"), the
aggregate principal amount of a new series of its First Mortgage Bonds
(the "Securities") set forth in Schedule I hereto, to be issued pursuant
to the Mortgage and Deed of Trust dated October 28, 1938, as heretofore
supplemented and amended and as supplemented by a Supplemental Indenture
to be dated the date set forth in Schedule I hereto (said Mortgage and
Deed of Trust as so supplemented and amended is hereinafter called the
"Indenture"), between the Company and Firstar Trust Company (formerly
First Wisconsin Trust Company), as trustee (the "Trustee"). The terms of
the Securities are also set forth in Schedule I hereto. The terms "you"
and "yours" refer to those Underwriters who sign the Underwriting
Agreement either on behalf of themselves only or on behalf of themselves
and as representative or representatives of the Underwriters (the
"Representatives") named in Schedule II hereto, as the case may be.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter that:
(a) The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act"). The
Company has filed with the Securities and Exchange Commission (the
"Commission") two registration statements on such Form (Nos. 33-
49199 and 51749), which have become effective, for the registration
under the Act of the Securities (the "Original Registration
Statements"). In addition, the Company has subsequently filed with
the Commission a registration statement on such Form (No. 33-
_____), which has also become effective (the "New Registration
Statement"). Both the original Registration Statements and the New
Registration Statement, as amended at the date of this Agreement,
meet the requirements set forth in Rule 415(a)(1)(x) under the Act
and comply in all other material respects with said Rule. The
Company proposes to file with the Commission pursuant to Rule
424(b)(2) or 424(b)(5) under the Act a supplement (the "Prospectus
Supplement") to the form of prospectus, which constitutes a
"combined prospectus" as that term is used in Rule 429 under the
Act, included in the new Registration Statement relating to the
Securities and the plan of distribution thereof and has previously
advised you of all further information (financial and other) with
respect to the Company to be set forth therein. The Original
Registration Statements and the New Registration Statement,
including the exhibits thereto, as amended at the date of this
Agreement, are hereinafter collectively called the "Registration
-2-
Statement"; such prospectus in the form in which it appears in the
New Registration Statement is hereinafter called the "Basic
Prospectus"; and the Basic Prospectus, as supplemented by the
Prospectus Supplement, in the form in which it shall be filed with
the Commission pursuant to Rule 424(b)(2) or 424(b)(5) is
hereinafter called the "Final Prospectus". Any preliminary form of
the Final Prospectus which has heretofore been filed pursuant to
Rule 424(b)(2) or 424(b)(5) is hereinafter called the "Preliminary
Final Prospectus". Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act") on or before the date of this
Agreement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case
may be; and any reference herein to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this
Agreement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case
may be, deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus is
first filed or transmitted for filing pursuant to Rule 424(b)(2) or
424(b)(5) under the Act, when, prior to the Closing Date (as
hereinafter defined), any amendment to the Registration Statement
becomes effective (including the filing of any document
incorporated by reference in the Registration Statement), when any
supplement to the Final Prospectus is filed with the Commission and
at the Closing Date, (i) the Registration Statement, as then
amended as of any such time, and the Final Prospectus, as then
amended or supplemented as of such time, and the Indenture will
comply in all material respects with the applicable requirements of
the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the Exchange Act and the respective rules
thereunder and (ii) neither the Registration Statement, as then
amended as of such time, nor the Final Prospectus, as then amended
or supplemented, as of such time, will contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein not misleading; provided, however, that the Company makes
no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the Trust Indenture Act of the Trustee
or (ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity
with information furnished in writing to the Company by or on
behalf of any Underwriter specifically for use in connection with
the preparation of the Registration Statement and the Final
Prospectus.
2. Purchase and Sale. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth,
the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, the
principal amount of the Securities set forth opposite such Underwriter's
-3-
name in Schedule II hereto, in each case at the purchase price set forth
in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at the office, on the date and at the time
specified in Schedule I hereto, which date and time may be postponed by
agreement between you and the Company or as provided in Section 9 hereof
(such date and time of delivery and payment for the Securities being
herein called the"Closing Date"). Delivery of the Securities shall be
made to you or your designee for the respective accounts of the several
Underwriters against payment of the purchase price thereof to or upon the
order of the Company by either wire transfer or certified or official
bank check or checks payable in either immediately available funds or
next-day funds, all as set forth in Schedule I hereto. Certificates for
the Securities shall be registered in such names and in such
denominations as you may request not less than two full business days in
advance of the Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by you in New York, New York, not
later than 1:00 P.M. on the business day immediately preceding the
Closing Date.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the Securities for sale to the
public as set forth in the Final Prospectus.
5. Agreements. The Company agrees with the several
Underwriters that:
(a) Prior to the termination of the offering of the
Securities, the Company will not file any amendment to the
Registration Statement or supplement (including the Final
Prospectus or the Basic Prospectus) unless the Company has
furnished to you copies for your review prior to filing and will
not file any such proposed amendment or supplement to which you
reasonably object (except any filings required to be made pursuant
to the Exchange Act or the rules and regulations thereunder).
Subject to the foregoing sentence, the Company will cause the Final
Prospectus to be filed with the Commission pursuant to Rule
424(b)(2) or 424(b)(5) or will cause the Final Prospectus to be
transmitted by a means reasonably calculated to result in filing
with the Commission pursuant to said Rule. The Company will
promptly advise you (i) when the Final Prospectus shall have been
transmitted to the Commission for filing or filed pursuant to Rule
424(b)(2) or 424(b)(5), (ii) when any amendment to the Registration
Statement shall have been filed or become effective, (iii) of any
request by the Commission for any amendment of the Registration
Statement or amendment or supplement to the Final Prospectus or for
any additional information, (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or any amendment thereto or the initiation or the
threatened initiation of any proceeding for that purpose and (v) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or the threatened initiation of any
proceeding for such purpose. The Company will use its best efforts
to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
-4-
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event
occurs as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the
Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance.
(c) As soon as practicable, the Company will make generally
available to its security holders and to you an earnings statement
or statements of the Company which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriters and
counsel for the Underwriters without charge, copies of the
Registration Statement (including exhibits thereto) and each
amendment thereto which shall become effective on or prior to the
Closing Date, the Basic Prospectus and, so long as delivery of a
prospectus by the Underwriters or a dealer may be required by the
Act, as many copies of any Preliminary Final Prospectus, the Final
Prospectus, any amendments and supplements thereto and incorporated
by reference therein as you may reasonably request. The Company
will pay the expenses of printing all documents relating to the
offering of the Securities.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as you may
designate, will maintain such qualifications in effect so long as
required for the distribution of the Securities and will arrange
for the determination of the legality of the Securities for
purchase by institutional investors; provided, however, that the
Company shall not be required to qualify as a foreign corporation
or to file any consent to service of process under the laws of any
jurisdiction or to comply with any other requirements deemed by the
Company to be unduly burdensome.
Until the business day following the Closing Date, the
Company will not without your consent offer, sell or contract to
sell, or announce the offering of, any debt securities covered by
the Registration Statement or any other registration statement
filed under the Act.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part
of the Company contained herein as of the date hereof, as of the date of
the effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date (including the filing of any document
incorporated by reference therein) and as of the Closing Date, to the
accuracy of the statements of the Company or the Company officers made in
any certificates pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
-6-
(a) No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened; and the Final Prospectus shall have been
filed or the Company will cause the Final Prospectus to be
transmitted by a means reasonably calculated to result in filing
with the Commission not later than 5:00 P.M., New York City time,
on the business day following the date hereof.
(b) The Company shall have furnished to the Underwriters
the opinion of Walter T. Woelfle, Esq., Director - Legal Department
of the Company, James D. Zakrajsheck, Counsel of the Company, or A.
William Finke, Esq., Counsel of the Company, dated the Closing
Date, to the effect that:
(i) the Company has been duly incorporated
and is validly existing as a corporation in active status
under the laws of the State of Wisconsin, with full corporate
power and authority to own its properties and conduct its
business as described in the Final Prospectus and is duly
qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases
material properties or conducts
material business;
(ii) the Securities conform as to legal
matters in all material respects to the description thereof
contained in the Final Prospectus;
(iii) the Indenture has been duly authorized,
executed and delivered by the Company and the Trustee, has
been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as
to enforcement, to the qualifications set forth in the next
sentence); and the Securities have been duly authorized by
all necessary corporate action of the Company, executed and
authenticated in accordance with the provisions of the
Indenture (assuming that the Securities have been duly
authenticated by the Trustee, which fact such counsel need
not verify by an inspection of the Securities) and constitute
legal, valid and binding obligations of the Company entitled
to the benefits and security of the Indenture and enforceable
in accordance with their terms (subject, as to enforcement,
to the qualifications set forth in the next sentence). The
opinions that the Indenture and the Securities are
enforceable in accordance with their terms are subject to:
(i) applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights
generally from time to time in effect; (ii) general equity
principles; and (iii) the qualification that certain of the
remedial provisions in the Indenture may be limited or
rendered unenforceable under applicable laws and judicial
decisions, including, but not limited to, the provisions
regarding right of possession, assignment of rents without a
receiver, power of sale, and waiver of the right of
redemption, but that this should not materially interfere
with the practical realization of the security intended to be
provided by the Indenture;
-7-
(iv) the Company has good and marketable
title in fee simple to all of the real property specifically
described in the granting clauses of the Indenture other than
leasehold estates, except property which has been released
from the lien of the Indenture in accordance with the
provisions thereof, and also has good title to all other
physical properties, rights of way and easements used in
connection with its business, subject only to: (i) the
exceptions referred to in said granting clauses; (ii)
existing leases to others; (iii) certain liens, reservations,
defects, rights of way and encumbrances; and (iv) the lien of
the Indenture and permitted liens as defined in the
Indenture.
Substantially all of the electric transmission lines of the
Company of over 66,000 volts are constructed on private
rights of way held by deed or easements. The other electric
transmission lines, the electric distribution lines, some of
the electric substations and the steam distribution mains are
located in or on streets and highways, and on land owned for
the most part by others than the Company.
Various parcels of land owned by the Company are
subject to rights of way for railroads, pipe lines, highways,
pole lines and other similar easements and to minor defects
and encumbrances. In the opinion of such counsel, the
Company has satisfactory title to its properties for use in
its business, and such liens, reservations, defects, rights
of way and encumbrances as may exist do not and will not
materially interfere with the use of such properties.
Examinations of title to land acquired in fee by the
Company or Wisconsin Michigan Power Company ("Wisconsin
Michigan"), a former subsidiary which was merged into the
Company in 1977, were made at the time of acquisition of such
land by the Company or Wisconsin Michigan and examinations of
title to land on which permanent structures or transmission
lines of over 66,000 volts are located pursuant to easements
or other rights were made at the time of acquisition of such
rights by the Company or Wisconsin Michigan. Additionally,
examinations of title to property owned in fee on which major
improvements are located are made on a periodic basis. In
the case of electric lines of 66,000 volts or less and steam
mains the Company or Wisconsin Michigan obtained, from the
apparent owners of the land involved, agreements granting the
necessary easements and rights of way. In most cases no
detailed examination of the title of such owners has been
made. A substantial part of the lines of the Company located
on land owned by others has been in use by it or Wisconsin
Michigan for more than 20 years, the period of the statute of
limitations in Wisconsin and Michigan being 20 years (under
certain circumstances, 10 years) and 15 years, respectively,
and no adverse claims have been made with respect thereto.
In the opinion of such counsel, the Company possesses the
power of eminent domain with respect to its present utility
operations;
-8-
(v) the Company conducts its business
under valid franchises, permits and licenses which contain
no burdensome restrictions and which are adequate for the
business of the Company in the territories which it serves,
except that the Company has no franchise in several small
areas where, for the most part, the Company is serving
certain customers at the request of other companies who have
franchises in those areas;
(vi) the Indenture has been duly (i)
recorded in each of the counties in Wisconsin and Michigan in
which any of the real properties of the Company are situated,
(ii) filed in the office of The Secretary of State of
Michigan and (iii) filed for recording with the Interstate
Commerce Commission of the United States;
(vii) the Indenture constitutes, and the
Securities are secured equally and ratably with all now
outstanding and bonds which may hereafter be issued under the
Indenture by, a valid and direct first lien on substantially
all of the fixed properties and interests therein owned and
all franchises held by the Company at the date of such
opinion, subject to: (i) the exceptions set forth in the
granting clauses of the Indenture; (ii) existing leases,
other than those which by their terms are subordinate to the
lien of the Indenture; (iii) existing easements for streets,
rights of way and railroad purposes, permitted liens as
defined in the Indenture, and certain exceptions and
reservations in the instruments by which the Company acquired
title to its properties, none of which, in the opinion of
such counsel, materially affects the Company's title to, or
its right to use, such properties; and (iv) the prior lien of
the Trustee for its compensation, expenses and liabilities.
The Indenture will constitute a valid and direct first lien
on all property of the character above referred to hereafter
acquired by the Company subject, however, to any liens,
charges or encumbrances existing thereon at the time of
acquisition, to liens for taxes and assessments and to any
rights of creditors, purchasers or others having superior
equities which may attach prior to the recording or filing of
an appropriate supplemental indenture subjecting such after-
acquired property to the lien of the Indenture;
(viii) there is no pending legal proceeding
or, to the best knowledge of such counsel (after due
inquiry), threatened action, suit or other legal proceeding
before any court or governmental agency, authority, or body
or any arbitrator involving the Company, of a character
required to be disclosed in the Registration Statement which
is not adequately disclosed in the Final Prospectus; there is
no franchise, contract or other document of a character
required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit, which is not
described or filed as required; and the statements included
or incorporated by reference in the Final Prospectus
describing any legal proceedings or material contracts or
agreements relating to the Company fairly summarize such
matters;
-9-
(ix) the Registration Statement and any
amendments thereto have become effective under the Act; no
stop order suspending the effectiveness of the Registration
Statement, as amended, has been issued, no proceedings for
that purpose have been instituted or, to the best knowledge
of such counsel, threatened, and the Registration Statement,
the Final Prospectus and each amendment thereof or supplement
thereto as of their respective effective or issue dates
(other than the financial statements and other financial and
statistical information contained or incorporated by
reference therein as to which such counsel need express no
opinion) on their face complied as to form in all material
respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder; and such
counsel has no reason to believe that the Registration
Statement, or any amendment thereof, at the time it became
effective and at the date of this Agreement, contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Final
Prospectus, as amended or supplemented, includes any untrue
statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(x) this Agreement has been duly authorized,
executed and delivered by the Company;
(xi) all requisite approvals of the Public
Service Commission of Wisconsin ("PSCW") and the Michigan
Public Service Commission ("MPSC") for the execution and
delivery of the Indenture and the issuance and sale by the
Company of the Securities to the Underwriters under this
Agreement have been obtained; the Securities have been issued
and sold to the Underwriters by the Company in conformity
with the orders of such Commissions issued with respect
thereto; and such counsel knows of no other approvals of
regulatory authorities required in connection with such
matters, other than approvals which may be required under
blue sky or state securities laws;
(xii) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach of, or
constitute a default under the Restated Articles of
Incorporation or Bylaws of the Company, as amended, or the
terms of any indenture or other agreement or instrument to
which the Company is a party or bound, or any law, rule,
order, decision, judgment or regulation applicable to the
Company of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company;
(xiii) no holders of securities of the Company
have rights to the registration of such securities under the
Registration Statement; and
-10-
(xiv) each of the Company and Wisconsin
Energy Corporation ("Wisconsin Energy") is exempt from the
provisions of the Public Utility Holding Company Act of 1935,
as amended (the "Public Utility Holding Company Act"), except
Section 9(a)(2) thereof relating to the acquisition of
securities of other public utility companies.
In rendering such opinion such counsel may rely (A) as to
matters of Michigan law relating to authority to do business and
regulatory approval for the Securities in Michigan upon the opinion of
Messrs. Loomis, Ewert, Parsley, Davis & Gotting, P.C., Michigan counsel
to the Company, furnished to the Underwriters; and (B) as to matters of
fact, to the extent he deems proper, on certificates of responsible
officers of the Company, the Trustee and public officials.
(c) The Company shall have furnished to the Underwriters
the opinion of Quarles & Brady, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Indenture has been duly authorized,
executed and delivered by the Company, has been duly
qualified under the Trust Indenture Act, and constitutes a
valid instrument legally binding upon the Company; the
Securities have been duly authorized by all necessary
corporate action of the Company, have been duly issued
(assuming that the Securities have been duly authenticated by
the Trustee, which fact such counsel need not verify by an
inspection of the Securities), constitute legal, valid and
binding obligations of the Company enforceable in accordance
with their terms (subject, as to enforcement, to the
qualifications set forth in the next sentence) and are
entitled to the benefits and security of the Indenture. The
opinion that the Securities are enforceable in accordance
with their terms is subject to: (i) applicable bankruptcy,
reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in
effect; (ii) general equity principles; and (iii) the
qualification that certain of the remedial provisions in the
Indenture may be limited or rendered unenforceable under
applicable laws and judicial decisions, including, but not
limited to, the provisions regarding right of possession,
assignment of rents without a receiver, power of sale, and
waiver of the right of redemption, but that this should not
materially interfere with the practical realization of the
security intended to be provided by the Indenture;
(ii) the Company's Registration Statements on
Form S-3 (File Nos. 33-49199, and 33-51749) relating to the
Securities have become effective under the Act and, to the
best of the knowledge of such counsel, no stop order
proceedings with respect thereto are pending or threatened
under Section 8(d) of the Act;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) all requisite approvals of the PSCW and
the MPSC for the execution and delivery of the Indenture and
the issuance and sale by the Company of the Securities to the
Underwriters under this Agreement have been obtained; the
Securities have been issued and sold to the Underwriters by
-11-
the Company in conformity with the orders of such Commissions
issued with respect thereto; and such counsel know of no
other approvals of regulatory authorities required in
connection with such matters, other than approvals which may
be required under blue sky or state securities laws;
(v) the Securities conform as to legal
matters in all material respects to the description thereof
in the Final Prospectus insofar as relating to provisions of
the Indenture and the Bonds referred to therein; and
(vi) the Registration Statement, when it
became effective, and the Final Prospectus, as of the date of
the Prospectus Supplement, appeared on their face to comply
as to form, in all material respects, with the requirements
of the Act, the Trust Indenture Act and the applicable rules
and regulations of the Commission thereunder and further that
nothing came to the attention of such counsel in the course
of their representation of the Company which has caused such
counsel to believe that the Registration Statement, when it
became effective, contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary in order to make the
statements therein not misleading or that the Final
Prospectus, on the date of the Prospectus Supplement and on
the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Such opinion may state that such counsel have not
independently verified, do not pass upon and do not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement and
Final Prospectus except for those made under the captions
"Description of New Bonds" in the Basic Prospectus and
"Certain Terms of the New Bonds of this Series" and
"Underwriting" in the Prospectus Supplement insofar as they
relate to the provisions of documents therein described and
that they do not express any opinion or belief as to the
financial statements or other financial data or statistical
information contained or incorporated by reference in the
Registration Statement, the Basic Prospectus or the
Prospectus Supplement, as to the incorporation of the
Company, franchise matters, questions of title or the
lien of the Indenture, or as to the Statement of Eligibility
on Form T-1 of the Trustee.
In rendering such opinion or opinions, such counsel may rely
(A) as to [all] matters of Michigan law and the exempt status of the
Company and Wisconsin Energy under the Public Utility Holding Company Act
upon the opinion of Walter T. Woelfle, Esq., James D. Zakrajsheck, Esq.
or A. William Finke, Esq.; (B) as to [all] matters of Michigan law
relating to regulatory approval for the Securities in Michigan upon the
opinion of Loomis, Ewert, Parsley, Davis & Gotting, P.C., Michigan
counsel to the Company, furnished to you; and (C) as to matters of fact,
to the extent they deem proper on certificates of responsible officers of
the Company, the Trustee and public officials, and may state that they
are not passing upon the incorporation of the Company, its franchises,
matters relating to the title of the Company to the properties purported
to be owned by it, or the lien of the Indenture on property now owned or
hereafter acquired by the Company.
-12-
(d) The Underwriters shall have received from Cahill Gordon
& Reindel, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of
the Securities, the Indenture, and other related matters as you may
reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
In rendering such opinion such counsel may rely (A) as to
[all] matters of Wisconsin and Michigan law and the exempt status of the
Company and Wisconsin Energy under the Public Utility Holding Company Act
upon the opinion of Walter T. Woelfle, Esq., James D. Zakrajsheck, Esq.,
or A. William Finke, Esq.; (B) as to [all] matters of Michigan law
relating to regulatory approval for the Securities in Michigan upon the
opinion of Loomis, Ewert, Ederer, Parsley, Davis & Gotting, P.C.,
Michigan counsel to the Company, furnished to you; and (C) as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company, the Trustee and public officials.
(e) The Company shall have furnished to you a certificate
of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration
Statement, the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the
effectiveness of the Registration Statement, as amended, has
been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent
financial statements included or incorporated by reference in
the Final Prospectus, there has been no material adverse
change in the condition (financial or other), earnings,
business or properties of the Company, whether or not arising
from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Prospectus.
(f) At the time this Agreement is executed and at the
Closing Date, Price Waterhouse shall have furnished to the
Underwriters a letter or letters, dated as of the date of this
Agreement and the Closing Date (which may refer to the letter
previously delivered to the Underwriters), in form and substance
satisfactory to the Underwriters, confirming that they are
independent accountants within the meaning of the Act and the
applicable published rules and regulations thereunder, and stating
in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement and
the Final Prospectus and reported on by them comply as to
-13-
form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related
published rules and regulations with respect to registration
statements on Form S-3;
(ii) on the basis of procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter, consisting of:
a) reading the minutes of meetings
of the stockholders and directors of the Company
since a specified date as of the end of the last
period for which they have audited the financial
statements of the Company, as set forth in the
minute books, through a specified date not more
than five business days prior to the date of
such letter;
b) reading the unaudited interim
financial data of the Company included or
incorporated by reference in the Registration
Statement and the Final Prospectus and the
unaudited interim financial data as of the
latest date made available by the Company; and
c) making inquiries of certain
officials of the Company who have responsibility
for financial and accounting matters regarding
the specific items for which representations are
requested below;
nothing has come to their attention as a result of the
foregoing procedures that caused them to believe that:
(1) any unaudited financial data included or
incorporated by reference in the Registration Statement and
the Final Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the published
rules and regulations thereunder; and said unaudited
financial data are not stated on a basis substantially
consistent with that of the audited financial statements
included or incorporated in the Registration Statement and
the Final Prospectus; or
(2) with respect to the period subsequent to the date
of the most recent financial statements incorporated in the
Registration Statement and the Final Prospectus, there were
any changes, at a specified date not more than five business
days prior to the date of the letter, in the long-term debt
of the Company or capital stock of the Company or decreases
in the stockholders' equity of the Company or any decrease in
retained earnings of the Company as compared with the amounts
shown on the most recent balance sheet included or
incorporated by reference in the Registration Statement and
the Final Prospectus, or for the period from the date of the
most recent financial statements incorporated by reference in
the Registration Statement and the Final Prospectus to the
date of the latest available unaudited consolidated financial
-14-
data of the Company there were any decreases, as compared
with the corresponding period in the preceding year, in
Operating Revenues, Operating Income or Net Income of the
Company, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by you; and
(iii) they have performed certain other
specified procedures as a result of which they determined
that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial
or statistical information derived from the general
accounting records of the Company subject to its system of
internal accounting controls) set forth in the Registration
Statement, as amended, and the Final Prospectus, as amended
or supplemented, and in Exhibit 12 to the Registration
Statement, including the information included under the
captions "Capitalization" in the Final Prospectus or "Certain
Summary Financial Information" or "Recent Developments" in
the Basic Prospectus and the Final Prospectus, or included or
incorporated by reference in Items 1, 3, 5, 6, 7 and 11 of
the Company's annual report on Form 10-K incorporated therein
or in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated
in any of the Company's quarterly reports on Form 10-Q
incorporated by reference therein, agrees with the accounting
records of the Company, excluding any question of legal
interpretation.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (f) of
this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting particularly the business or
properties of the Company the effect of which, in any case referred
to in clause (i) or (ii) above, is, in your judgment, so material
and adverse as to make it impractical or inadvisable to proceed
with the offering or the delivery of the Securities as contemplated
by the Registration Statement and the Final Prospectus.
(h) Subsequent to the execution of this Agreement, there
shall not have been any decrease in the ratings of any of the
Company's debt securities by Moody's Investors Service, Inc., or
Standard & Poor's Corporation.
(i) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and
documents as you may reasonably request.
(j) The issuance and sale of the Securities as contemplated
in this Agreement and the Final Prospectus shall have been duly
authorized and approved by orders of the PSCW and the MPSC; such
orders shall be in full force and effect at the Closing Date and
shall not contain any modifications from their form at the date
hereof not reasonably acceptable to you; and no action,
authorization or approval of any other regulatory authority or
court shall then be required in connection with the issuance and
sale by the Company of the Securities.
-15-
If any of the conditions specified in this Section 6 shall
not have been fulfilled in all material respects when and as provided in
this Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement shall not be in all material
respects reasonably satisfactory in form and substance to you, this
Agreement and all the obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date. Notice
of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale
of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6
hereof or any condition to the obligations of the Company in Section 10
hereof is not satisfied, because of any termination pursuant to
Section 11 or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision
hereof, other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters, severally, upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by the Underwriters in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for
the registration of the Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus or the Final Prospectus,
any Preliminary Final Prospectus or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that (i) the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of the Underwriter specifically for use in connection with the
preparation thereof and (ii) such indemnity with respect to the Basic
Prospectus or any Preliminary Final Prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter)
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if such person did
not receive a copy of the Final Prospectus (or the Final Prospectus, as
amended or supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of the Securities
to such person in any case where such delivery is required by the Act and
the untrue statement or omission of a material fact contained in the
Basic Prospectus or any Preliminary Final Prospectus was corrected in the
Final Prospectus (or the Final Prospectus, as amended or supplemented).
-16-
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who
signs the Registration Statement and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to written information relating to such
Underwriter, furnished to the Company by or on behalf of such
Underwriter, specifically for use in the preparation of the documents
referred to in the foregoing indemnity. This indemnity agreement will be
in addition to any liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt
of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable
to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by
you in the case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or
(iii) the indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability shall
be only in respect of the counsel referred to in such clause (i) or
(iii).
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in paragraph
(a) of this Section 8 is due in accordance with its terms but is for any
reason held by a court to be unavailable from the Company on grounds of
-17-
policy or otherwise, the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) to which the Company and one or more of the Underwriters
may be subject in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount bears to the sum of such discount and the purchase
price of the Securities and the Company is responsible for the balance;
provided, however, that (y) in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the
offering of the Securities) be responsible for any amount in excess of
the underwriting discount applicable to the Securities purchased
hereunder and (z) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the
Exchange Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning
of either the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company,
subject in each case to clauses (y) and (z) of this paragraph (d). Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another
party or parties under this paragraph (d), notify such party or parties
from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d). This contribution
agreement will be in addition to any liability which the Company or any
Underwriter may otherwise have.
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities
agreed to be purchased by such Underwriter or Underwriters hereunder and
such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Securities set forth opposite their names
in Schedule II hereto bears to the aggregate amount of Securities set
forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all, but shall
not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter
as set forth in this Section 9, the Closing Date shall be postponed for
such period, not exceeding seven days, as you shall determine in order
that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default
hereunder.
-18-
10. Conditions to the Obligations of the Company. The
obligation of the Company to sell the Securities shall be subject to the
condition that the issuance and sale of the Securities as contemplated in
this Agreement and the Final Prospectus shall have been duly authorized
and approved by orders of the PSCW and MPSC; such orders shall be in full
force and effect at the Closing Date and shall not contain any
modification from their form at the date hereof not reasonably acceptable
to the Company; and no authorization or approval of any other regulatory
authority shall then be required in connection with the issuance and sale
by the Company of the Securities.
11. Termination. This Agreement shall be subject to
termination in your absolute discretion by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such
time (i) trading in the common stock of Wisconsin Energy Corporation
shall have been suspended by the Commission or the New York Stock
Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall
have been established on such Exchange; (ii) a banking moratorium shall
have been declared either by federal or New York State authorities; or
(iii) there shall have occurred any outbreak or material escalation of
hostilities, declaration by the United States of a national emergency or
war or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in your judgment,
impracticable to market the Securities.
12. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this
Agreement.
13. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Underwriters
will be mailed, delivered or telegraphed and confirmed to you, at the
address set forth in Schedule I; or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 231 West Michigan
Street, P.O. Box 2046, Milwaukee, Wisconsin 53201, attention of the Chief
Financial Officer.
14. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors
and the officers and directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
15. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
16. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
-19-
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate
hereof, whereupon this letter and your acceptance shall represent a
binding agreement between the Company and the Underwriters.
Very truly yours,
WISCONSIN ELECTRIC POWER COMPANY
By:
---------------------------
Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
[NAME(S) OF REPRESENTATIVE(S)]
By: _________________________
Authorized Signatory
For itself and the other Underwriters,
if any, named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated _________, 199_
Registration Statement No. 33-_______
Name and Address of Representative(s):
Date of Supplemental Indenture: __________________, 199_
Title and Certain Terms of Securities:
Title: First Mortgage Bonds ______% Series due ________________,
____
Principal amount: $_________
Maturity: ________, ____ (__ years)
Interest Rate: ______%
Interest Payment Dates: _________ and _________
Sinking Fund:
Redemption provisions:
Purchase Price (include accrued interest or amortization,
if any): ______% of principal amount, plus accrued
interest, if any, from _______, 199_ to the date of delivery
Payment for the Securities shall be made in the following form
and funds:
Closing Date, Time and Location:
________, 199_ ____ _.M. (_________ time)
Offices of:
Securities delivered to:
SCHEDULE II
Underwriter Amount
$
----------
----------
----------
Total $
==========
EXHIBIT (1)-(2)
WISCONSIN ELECTRIC POWER COMPANY
DEBT SECURITIES
UNDERWRITING AGREEMENT
New York, New York
Dated the date set
forth in Schedule I hereto
To the Underwriters
set forth in
Schedule II hereto
Dear Sirs and Madams:
Wisconsin Electric Power Company, a Wisconsin corporation (the
"Company"), proposes to issue and sell to the underwriter or underwriters
named in Schedule II hereto (the "Underwriters"), the aggregate principal
amount of one or more new series of its debt securities (the "Securities") set
forth in Schedule I hereto, to be issued pursuant to an indenture dated as of
________, 1995 (the "Indenture"), between the Company and Firstar Trust
Company, as trustee (the "Trustee"). The terms of the Securities are also set
forth in Schedule I hereto. The terms "you" and "yours" refer to those
Underwriters who sign the Underwriting Agreement either on behalf of
themselves only or on behalf of themselves and as representative or
representatives of the Underwriters (the "Representatives") named in Schedule
II hereto, as the case may be.
Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter that:
The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). The Company has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement on such Form (having the number set forth in
Schedule I hereto), which has become effective, for the registration
under the Act of the Securities. Such registration statement, as
amended at the date of this Agreement, meets the requirements set forth
in Rule 415(a)(1)(x) under the Act and complies in all other material
respects with said Rule. The Company proposes to file with the
Commission pursuant to Rule 424(b)(2) or 424(b)(5) under the Act a
supplement (the "Prospectus Supplement") to the form of prospectus
included in such registration statement relating to the Securities and
the plan of distribution thereof and has previously advised you of all
further information (financial and other) with respect to the Company to
be set forth therein. Such registration statement, including the
exhibits thereto, as amended at the date of this Agreement, is
-2-
hereinafter called the "Registration Statement"; such prospectus in the
form in which it appears in the Registration Statement is hereinafter
called the "Basic Prospectus"; and the Basic Prospectus, as supplemented
by the Prospectus Supplement, in the form in which it shall be filed
with the Commission pursuant to Rule 424(b)(2) or 424(b)(5) is
hereinafter called the "Final Prospectus". Any preliminary form of the
Final Prospectus which has heretofore been filed pursuant to Rule
424(b)(2) or 424(b)(5) is hereinafter called the "Preliminary Final
Prospectus". Any reference herein to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the date of this Agreement, or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; and any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the date
of this Agreement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may
be, deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus is
first filed or transmitted for filing pursuant to Rule 424(b)(2) or
424(b)(5) under the Act, when, prior to the Closing Date (as hereinafter
defined), any amendment to the Registration Statement becomes effective
(including the filing of any document incorporated by reference in the
Registration Statement), when any supplement to the Final Prospectus is
filed with the Commission and at the Closing Date, (i) the Registration
Statement, as then amended as of any such time, and the Final
Prospectus, as then amended or supplemented as of such time, and the
Indenture will comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the Exchange Act and the respective
rules thereunder and (ii) neither the Registration Statement, as then
amended as of such time, nor the Final Prospectus, as then amended or
supplemented, as of such time, will contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; provided, however, that the Company makes no representations
or warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of the Underwriter specifically for use in connection with the
preparation of the Registration Statement and the Final Prospectus.
Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, the principal amount of the
Securities set forth opposite such Underwriter's name in Schedule II hereto,
in each case at the purchase price set forth in Schedule I hereto.
-3-
Delivery and Payment. Delivery of and payment for the
Securities shall be made at the office, on the date and at the time specified
in Schedule I hereto, which date and time may be postponed by agreement
between you and the Company (such date and time of delivery and payment for
the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to you for the respective accounts of the several
Underwriters against payment of the purchase price thereof to or upon the
order of the Company by wire transfer or certified or official bank check or
checks payable in immediately available funds or next-day funds, all as set
forth in Schedule I hereto. Certificates for the Securities shall be
registered in such names and in such denominations as you may request not less
than two full business days in advance of the Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by you in New York, New York, not later
than 1:00 P.M. on the business day immediately preceding the Closing Date.
Offering by Underwriters. It is understood that the several
Underwriters proposes to offer the Securities for sale to the public as set
forth in the Final Prospectus.
Agreements. The Company agrees with the several Underwriters
that:
Prior to the termination of the offering of the Securities, the
Company will not file any amendment to the Registration Statement or
supplement (including the Final Prospectus or the Basic Prospectus)
unless the Company has furnished to you copies for your review prior to
filing and will not file any such proposed amendment or supplement to
which you reasonably object (except any filings required to be made
pursuant to the Exchange Act or the rules and regulations thereunder).
Subject to the foregoing sentence, the Company will cause the Final
Prospectus to be filed with the Commission pursuant to Rule 424(b)(2) or
424(b)(5) or will cause the Final Prospectus to be transmitted by a
means reasonably calculated to result in filing with the Commission
pursuant to said Rule. The Company will promptly advise you (i) when
the Final Prospectus shall have been transmitted to the Commission for
filing or filed pursuant to Rule 424(b)(2) or 424(b)(5), (ii) when any
amendment to the Registration Statement shall have been filed or become
effective, (iii) of any request by the Commission for any amendment of
the Registration Statement or amendment or supplement to the Final
Prospectus or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any amendment thereto or the initiation or the
threatened initiation of any proceeding for that purpose and (v) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or the threatened initiation of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein
in light of the circumstances under which they were made not misleading,
or if it shall be necessary to amend the Registration Statement or
supplement the Final Prospectus to comply with the Act or the Exchange
-4-
Act or the respective rules thereunder, the Company promptly will
prepare and file with the Commission, subject to the first sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or an amendment which will effect
such compliance.
(c) As soon as practicable, the Company will make generally
available to its security holders and to you an earnings statement or
statements of the Company which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Underwriters and counsel
for the Underwriters without charge, copies of the Registration
Statement (including exhibits thereto) and each amendment thereto which
shall become effective on or prior to the Closing Date, the Basic
Prospectus and, so long as delivery of a prospectus by the Underwriters
or a dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus, the Final Prospectus, any amendments and
supplements thereto and documents incorporated by reference therein as
you may reasonably request. The Company will pay the expenses of
printing all documents relating to the offering of the Securities.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as you may
designate, will maintain such qualifications in effect so long as
required for the distribution of the Securities and will arrange for the
determination of the legality of the Securities for purchase by
institutional investors; provided, however, that the Company shall not
be required to qualify as a foreign corporation or to file any consent
to service of process under the laws of any jurisdiction or to comply
with any other requirements deemed by the Company to be unduly
burdensome.
(f) Until the business day following the Closing Date, the
Company will not without your consent offer, sell or contract to sell,
or announce the offering of, any debt securities covered by the
Registration Statement or any other registration statement filed under
the Act.
Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and
as of the Closing Date, to the accuracy of the statements of the Company or
the Company officers made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been instituted or threatened;
and the Final Prospectus shall have been filed or the Company will cause
the Final Prospectus to be transmitted by a means reasonably calculated
to result in filing with the Commission not later than 5:00 P.M., New
York City time, on the business day following the date hereof.
(b) The Company shall have furnished to the Underwriters the
opinion of Walter T. Woelfle, Esq., Director - Legal Services Department
of the Company, James D. Zakrajsheck, Counsel of the Company, or
-5-
A. William Finke, Esq., Counsel of the Company, dated the Closing Date,
to the effect that:
the Company has been duly incorporated and is validly
existing as a corporation in active status under the laws of the
State of Wisconsin, with full corporate power and authority to
own its properties and conduct its business as described in the
Final Prospectus and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material
business;
(ii) the Securities conform as to legal
matters in all material respects to the description thereof
contained in the Final Prospectus;
(iii) the Indenture has been duly authorized,
executed and delivered by the Company and the Trustee, has been
duly qualified under the Trust Indenture Act, and constitutes a
legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to
enforcement, to the qualifications set forth in the next
sentence); and the Securities have been duly authorized by all
necessary corporate action of the Company, executed and
authenticated in accordance with the provisions of the Indenture
(assuming that the Securities have been duly authenticated by
the Trustee, which fact such counsel need not verify by an
inspection of the Securities) and constitute legal, valid and
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable in accordance with their terms
(subject, as to enforcement, to the qualifications set forth in
the next sentence). The opinions that the Indenture and the
Securities are enforceable in accordance with their terms are
subject to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally
from time to time in effect and general equity principles;
(iv) the Company conducts its business under
valid franchises, permits and licenses which contain no
burdensome restrictions and which are adequate for the business
of the Company in the territories which it serves, except
that the Company as no franchise in several small areas where,
for the most part, the Company is serving certain customers at
the request of other companies who have franchises in those
areas;
(v) there is no pending legal proceeding
or, to the best knowledge of such counsel (after due inquiry),
threatened action, suit or other legal proceeding before any
court or governmental agency, authority, or body or any
arbitrator involving the Company, of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Final Prospectus; there is no franchise,
contract or other document of a character required to be
described in the Registration Statement or Final Prospectus, or
to be filed as an exhibit, which is not described or filed as
required; and the statements included or incorporated by
reference in the Final Prospectus describing any legal
proceedings or material contracts or agreements relating to the
Company fairly summarize such matters;
-6-
(vi) the Registration Statement and any
amendments thereto have become effective under the Act; no stop
order suspending the effectiveness of the Registration
Statement, as amended, has been issued, no proceedings for that
purpose have been instituted or, to the best knowledge of such
counsel, threatened, and the Registration Statement, the Final
Prospectus and each amendment thereof or supplement thereto as
of their respective effective or issue dates (other than the
financial statements and other financial and statistical
information contained or incorporated by reference therein as to
which such counsel need express no opinion) on their face
complied as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective
rules thereunder; and such counsel has no reason to believe that
the Registration Statement, or any amendment thereof, at the
time it became effective and at the date of this Agreement,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that
the Final Prospectus, as amended or supplemented, includes any
untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) all requisite approvals of the Public
Service Commission of Wisconsin ("PSCW") and the Michigan Public
Service Commission ("MPSC") for the execution and delivery of
the Indenture and the issuance and sale by the Company of the
Securities to the Underwriters under this Agreement have been
obtained; the Securities have been issued and sold to the
Underwriter by the Company in conformity with the orders of such
Commission issued with respect thereto; and such counsel knows
of no other approvals of regulatory authorities required in
connection with such matters, other than approvals which may be
required under state securities laws;
(ix) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach of, or
constitute a default under the Restated Articles of
Incorporation or Bylaws of the Company, as amended, or the terms
of any indenture or other agreement or instrument to which the
Company is a party or bound, or any law, rule, order, decision,
judgment or regulation, applicable to the Company of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company;
(x) no holders of securities of the Company
have rights to the registration of such securities under the
Registration Statement; and
(xi) each of the Company and Wisconsin Energy
Corporation ("Wisconsin Energy") is exempt from the provisions
of the Public Utility Holding Company Act of 1935, as amended
(the "Public Utility Holding Company Act"), except Section
9(a)(2) thereof relating to the acquisition of securities of
other public utility companies.
-7-
In rendering such opinion such counsel may rely (A) as to
matters of Michigan law relating to the authority to do business and
regulatory approval for the Securities in Michigan upon the opinion of
Messrs. Loomis, Ewert, Parsley, Davis & Gotting, P.C., Michigan counsel
to the Company, furnished to the Underwriters; and (B) as to matters of
fact, to the extent he deems proper, on certificates of responsible
officers of the Company, the Trustee and public officials.
The Company shall have furnished to the Underwriters the opinion
of Quarles & Brady, counsel for the Company, dated the Closing Date, to
the effect that:
the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the
Trust Indenture Act, and constitutes a valid instrument legally
binding upon the Company; the Securities have been duly
authorized by all necessary corporate action of the Company,
have been duly issued (assuming that the Securities have been
duly authenticated by the Trustee, which fact such counsel need
not verify by an inspection of the Securities), constitute
legal, valid and binding obligations of the Company entitled to
the benefits of the Indenture and enforceable in accordance with
their terms subject, as to enforcement, to applicable
bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time in
effect and general equity principles;
(ii) the Company's Registration Statement on
Form S-3 relating to the Securities has become effective under
the Act and, to the best of the knowledge of such counsel, no
stop order proceedings with respect thereto are pending or
threatened under Section 8(d) of the Act;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) all requisite approvals of the PSCW and
the MPSC for the execution and delivery of the Indenture and the
issuance and sale by the Company of the Securities to the
Underwriters under this Agreement have been obtained; the
Securities have been issued and sold to the Underwriters by the
Company in conformity with the orders of such Commission issued
with respect thereto; and such counsel know of no other
approvals of regulatory authorities required in connection with
such matters, other than approvals which may be required under
state securities laws;
(v) the Securities conform as to legal
matters in all material respects to the description thereof in
the Final Prospectus insofar as relating to provisions of the
Indenture and the Debt Securities referred to therein; and
(vi) the Registration Statement, when it
became effective, and the Final Prospectus, as of the date of
the Prospectus Supplement, appeared on their face to comply as
to form, in all material respects, with the requirements of the
Act, the Trust Indenture Act and the applicable rules and
regulations of the Commission thereunder and further that
nothing came to the attention of such counsel in the course of
their representation of the Company which has caused such
-8-
counsel to believe that the Registration Statement, when it
became effective, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading or that the Final Prospectus, on the date of the
Prospectus Supplement and on the Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. Such opinion may state that such counsel have not
independently verified, do not pass upon and do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Final
Prospectus except for those made under the captions "Description
of Securities" in the Basic Prospectus and "Certain Terms of the
Debentures" and "Underwriting" in the Prospectus Supplement
insofar as they relate to the provisions of documents therein
described and that they do not express any opinion or belief as
to the financial statements or other financial data or
statistical information contained or incorporated by reference
in the Registration Statement, the Basic Prospectus or the
Prospectus Supplement, as to the incorporation of the Company or
franchise matters or as to the Statement of Eligibility on Form
T-1 of the Trustee.
In rendering such opinion or opinions, such counsel may rely (A)
as to [all] matters of Michigan law and the exempt status of the Company
and Wisconsin Energy under the Public Utility Holding Company Act, upon
the opinion of Walter T. Woelfle, Esq., James D. Zakrajsheck, Esq., or
A. William Finke, Esq.; (B) as to [all] matters of Michigan law relating
to regulatory approval for the Securities in Michigan upon the opinion
of Loomis, Ewert, Parsley, Davis & Gotting, P.C., Michigan counsel to
the Company, furnished to you; and (C) as to matters of fact, to the
extent they deem proper on certificates of responsible officers of the
Company, the Trustee and public officials, and may state that they are
not passing upon the incorporation of the Company or its franchises.
The Underwriters shall have received from Cahill Gordon &
Reindel, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, and other related matters as you may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
In rendering such opinion such counsel may rely (A) as to all
matters of Wisconsin and Michigan law and the exempt status of the
Company and Wisconsin Energy under the Public Utilities Holding Company
Act, upon the opinion of Walter T. Woelfle, Esq., James D. Zakrajsheck,
Esq., or A. William Finke, Esq.; (B) as to [all] matters of Michigan law
relating to regulatory approval for the Securities in Michigan upon the
opinion of Loomis, Ewert, Parsley, Davis & Gotting, P.C., Michigan
counsel to the Company, furnished to you; and (C) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers
of the Company, the Trustee and public officials.
The Company shall have furnished to you a certificate of the
Company, signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have
-9-
carefully examined the Registration Statement, the Final Prospectus and
this Agreement and that:
the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the
effectiveness of the Registration Statement, as amended, has
been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent
financial statements included or incorporated by reference in
the Final Prospectus, there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus.
At the time this Agreement is executed and at the Closing Date,
Price Waterhouse shall have furnished to the Underwriters a letter or
letters, dated as of the date of this Agreement and the Closing Date
(which may refer to the letter previously delivered to the
Underwriters), in form and substance satisfactory to the Underwriters,
confirming that they are independent accountants within the meaning of
the Act and the applicable published rules and regulations thereunder,
and stating in effect that:
in their opinion the audited financial statements
included or incorporated by reference in the Registration Statement and
the Final Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations
with respect to registration statements on Form S-3;
(ii) on the basis of procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter, consisting of:
a) reading the minutes of meetings of the
stockholders and directors of the Company since a
specified date as of the end of the last period for
which they have audited the financial statements of the
Company, as set forth in the minute books, through a
specified date not more than five business days prior
to the date of such letter;
b) reading the unaudited interim financial
data of the Company included or incorporated by
reference in the Registration Statement and the Final
Prospectus and the unaudited interim financial data
as of the latest date made available by the Company; and
-10-
c) making inquiries of certain officials
of the Company who have responsibility for financial and
accounting matters regarding the specific items for
which representations are requested below;
nothing has come to their attention as a result of the foregoing
procedures that caused them to believe that:
(1) any unaudited financial data included or
incorporated by reference in the Registration Statement and the
Final Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Exchange
Act as it applies to Form 10-Q and the published rules and
regulations thereunder; and said unaudited financial data are
not stated on a basis substantially consistent with that of the
audited financial statements included or incorporated in the
Registration Statement and the Final Prospectus; or
(2) with respect to the period subsequent to the
date of the most recent financial data incorporated in the
Registration Statement and the Final Prospectus, there were any
changes, at a specified date not more than five business days
prior to the date of the letter, in the long-term debt of the
Company or capital stock of the Company or decreases in the
stockholder's equity of the Company or any decrease in retained
earnings of the Company as compared with the amounts shown on
the most recent balance sheet incorporated by reference in the
Registration Statement and the Final Prospectus, or for the
period from the date of the most recent financial data
incorporated by reference in the Registration Statement and the
Final Prospectus to the date of the latest available unaudited
consolidated financial data of the Company there were any
decreases, as compared with the corresponding period in the
preceding year, in Operating Revenues, Operating Income or Net
Income of the Company, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by you; and
they have performed certain other specified procedures
as a result of which they determined that certain information of
an accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived from
the general accounting records of the Company subject to its
system of internal accounting controls) set forth in the
Registration Statement, as amended, and the Final Prospectus, as
amended or supplemented, and in Exhibit 12 to the Registration
Statement, including the information included under the captions
"Capitalization" in the Final Prospectus or "Certain Summary
Financial Information" or "Recent Developments" in the Basic
Prospectus and the Final Prospectus, or included or incorporated
by reference in Items 1, 3, 5, 6, 7 and 11 of the Company's
annual report on Form 10-K incorporated therein or in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated in any of the
Company's quarterly reports on Form 10-Q incorporated by
reference therein, agrees with the accounting records of the
Company, excluding any question of legal interpretation.
-11-
Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, there
shall not have been (i) any change or decrease specified in the letter
or letters referred to in paragraph (f) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Company the
effect of which, in any case referred to in clause (i) or (ii) above,
is, in your judgment, so material and adverse as to make it impractical
or inadvisable to proceed with the offering or the delivery of the
Securities as contemplated by the Registration Statement and the Final
Prospectus.
Subsequent to the execution of this Agreement, there shall not
have been any decrease in the ratings of any of the Company's debt
securities by Moody's Investors Service, Inc., or Standard & Poor's
Corporation.
(i) Prior to the Closing Date, the Company shall have
furnished to you such further information, certificates and documents as
you may reasonably request.
(j) The issuance and sale of the Securities as contemplated
in this Agreement and the Final Prospectus shall have been duly
authorized and approved by orders of the PSCW and the MPSC; such orders
shall be in full force and effect at the Closing Date and shall not
contain any modifications from their form at the date hereof not
reasonably acceptable to you; and no action, authorization or approval
of any other regulatory authority or court shall then be required in
connection with the issuance and sale by the Company of the Securities.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to you, this Agreement and all the
obligations of the Underwriter hereunder may be cancelled by you at, or at any
time prior to, the Closing Date. Notice of such cancellation shall be given
to the Company in writing or by telephone or telegraph confirmed in writing.
Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof or any condition
to the obligations of the Company in Section 10 hereof is not satisfied,
because of any termination pursuant to Section 11 or because of any refusal,
inability or failure on the part of the Company to perform any agreement
herein or comply with any provision hereof, other than by reason of a default
by the Underwriters, the Company will reimburse the Underwriters upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by the Underwriters in connection with
the proposed purchase and sale of the Securities.
Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either the Act or the Exchange
Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Securities as originally
-12-
filed or in any amendment thereof, or in the Basic Prospectus or the Final
Prospectus, any Preliminary Final Prospectus or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Underwriter specifically for use in
connection with the preparation thereof and (ii) such indemnity with respect
to the Basic Prospectus or any Preliminary Final Prospectus shall not inure to
the benefit of any Underwriter (or any person controlling such Underwriter)
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if such person did not
receive a copy of the Final Prospectus (or the Final Prospectus, as amended or
supplemented) excluding documents incorporated therein by reference at or
prior to the confirmation of the sale of the Securities to such person in any
case where such delivery is required by the Act and the untrue statement or
omission of a material fact contained in the Basic Prospectus or any
Preliminary Final Prospectus was corrected in the Final Prospectus (or the
Final Prospectus, as amended or supplemented). This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter, furnished to
the Company by or on behalf of the Underwriter, specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent that it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however, that
if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it or other
indemnified parties which are different from or additional to those available
to the indemnifying party, the indemnified party or parties shall have the
right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel, the indemnifying
-13-
party will not be liable to such indemnified party under this Section 8 for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel, approved by you in the case of
paragraph (a) of this Section 8, representing the indemnified parties under
such paragraph (a) who are parties to such action), (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in paragraph (a) of
this Section 8 is due in accordance with its terms but is for any reason held
by a court to be unavailable from the Company on grounds of policy or
otherwise, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to
which the Company and one or more of the Underwriters may be subject in such
proportion so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount bears to the sum
of such discount and the purchase price of the Securities and the Company is
responsible for the balance; provided, however, that (y) in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount applicable to the Securities purchased
hereunder and (z) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to clauses (y) and (z) of this paragraph (d). Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d). This
contribution agreement will be in addition to any liability which the Company
or any Underwriter may otherwise have.
Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions
which the amount of Securities set forth opposite their names in Schedule II
hereto bears to the aggregate amount of Securities set forth opposite the
names of all the remaining Underwriters) the Securities which the defaulting
-14-
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as you shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company
and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
Conditions to the Obligations of the Company. The obligation of
the Company to sell the Securities shall be subject to the condition that the
issuance and sale of the Securities as contemplated in this Agreement and the
Final Prospectus shall have been duly authorized and approved by the order of
the PSCW and MPSC; such order shall be in full force and effect at the Closing
Date and shall not contain any modification from its form at the date hereof
not reasonably acceptable to the Company; and no authorization or approval of
any other regulatory authority shall then be required in connection with the
issuance and sale by the Company of the Securities.
Termination. This Agreement shall be subject to termination in
your absolute discretion by notice given to the Company prior to delivery of
and payment for the Securities, if prior to such time (i) trading in the
common stock of Wisconsin Energy Corporation shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange; (ii) a banking moratorium
shall have been declared either by federal or New York State authorities; or
(iii) there shall have occurred any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on the financial markets of
the United States is such as to make it, in your judgment, impracticable to
market the Securities.
Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers and of the Underwriter set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Company or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriters will be mailed,
delivered or telegraphed and confirmed to you, at the address set forth in
Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 231 West Michigan Street, P.O. Box 2046,
Milwaukee, Wisconsin 53201, attention of the Chief Financial Officer.
-15-
Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Underwriters.
Very truly yours,
WISCONSIN ELECTRIC POWER COMPANY
By: _______________________________
Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
[NAME(S) OF REPRESENTATIVE(S)]
By: _____________________________
Authorized Signatory
For itself and the other Under-
writers, if any, named in
Schedule II to the foregoing
Agreement.
SCHEDULE I
Underwriting Agreement dated _________, 199_
Registration Statement No. 33-_______
Name and Address of Underwriter(s):
Title and Certain Terms of Securities:
Title: ______% ________ due _______,_____
Principal amount: $_________
Maturity: ________, ____ (__ years)
Interest Rate: ______%
Interest Payment Dates: _________ and _________
Sinking Fund:
Redemption provisions:
Purchase Price (include accrued interest or amortization, if any):
______% of principal amount, plus accrued interest from _______, 199_ to the
date of delivery
Payment for the Securities shall be made in the following form
and funds:
Closing Date, Time and Location:
________, 199_ ____ _.M. (_________ time)
Offices of:
Securities delivered to:
SCHEDULE II
Underwriter Amount
- ----------- ------
$
_________
Total $_________
EXHIBIT (5)
[WE LETTERHEAD]
November 14, 1997
Wisconsin Electric Power Company
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
Ladies and Gentlemen:
I refer to the Registration Statement on Form S-3 (the "Registration
Statement") being filed by Wisconsin Electric Power Company (the "Company")
with the Securities and Exchange Commission (the "SEC") under the Securities
Act of 1933 with respect to the proposed offering pursuant to the combined
prospectus (the "Prospectus") contained in the Registration Statement of up to
$400,000,000 aggregate principal amount of (a) one or more new series of the
Company's First Mortgage Bonds (each such series being hereinafter referred to
as a "Series of New Bonds," collectively the "New Bonds") and/or (b) one or
more new series of the Company's debt securities (the "Debt Securities") (each
such series being hereinafter referred to as a "Series of Securities,"
collectively the "Securities").
As Director-Legal Services Department of the Company, I have examined (i) the
Registration Statement, (ii) the Mortgage and Deed of Trust dated October 28,
1938, from the Company to Firstar Trust Company (formerly First Wisconsin
Trust Company), as Trustee, as supplemented and amended, and as proposed to be
supplemented by a Supplemental Indenture relating to each Series of New Bonds
(such Mortgage and Deed of Trust, as so supplemented and amended and to be
supplemented in respect of a Series of New Bonds, being herein called the
"Mortgage" relating to such Series of New Bonds), (iii) the Indenture dated as
of December 1, 1995 (including, as exhibits, forms of Registered Security and
Bearer Security thereunder) from the Company to Firstar Trust Company, as
Trustee, providing for the issuance of the Securities from time to time in one
or more Series, pursuant to the terms of one or more Securities Resolutions or
supplemental indentures creating such Series (the "Indenture"), (iv) minutes
of the meetings of the Company's Board of Directors or the Finance Committee
of the Board of Directors held on April 28, 1993, July 26, 1995, October 25,
1995, May 22, 1996, October 30, 1996 and July 30, 1997 and (v) such other
documents and records, and such matters of law, as I have deemed necessary or
advisable for the purposes of this opinion.
On the basis of the foregoing, I advise you that, in my opinion:
1. The Company is a corporation duly organized and existing under the laws
of the State of Wisconsin.
Wisconsin Electric Power Company
November 14, 1997
Page 2
2. When (a) the Registration Statement, as it may have been amended or
supplemented, shall have become effective under the Securities Act of
1933 and the Mortgage relating to the New Bonds shall have been
qualified under the Trust Indenture Act of 1939, and (b) in the case of
each Series of New Bonds, the Board of Directors (including any duly
authorized committee thereof) shall have taken all necessary further
action to approve the terms of such Series and of the related
Supplemental Indenture and to authorize the issuance and sale of such
Series as contemplated in the Registration Statement, all requisite
Public Service Commission of Wisconsin ("PSCW") approvals and any other
necessary regulatory approvals with respect to such Series shall be in
effect at the time of the issuance of such Series, and the Supplemental
Indenture setting forth the terms of such Series shall have been duly
executed and delivered by the Company and the Trustee, then, upon
execution and delivery of such Series against payment in accordance with
the authorization of the Board of Directors (including any duly
authorized committee thereof), such regulatory approvals and the
Mortgage relating to such Series, such Series of New Bonds will be
legally valid and binding obligations of the Company, entitled to the
benefits and security of the Mortgage relating to such Series.
3. When (a) the Registration Statement, as it may have been amended or
supplemented, shall have become effective under the Securities Act of
1933 and the Indenture relating to the Securities shall have been
qualified under the Trust Indenture Act of 1939 and duly executed and
delivered by the Company and Trustee, and (b) in the case of each Series
of Securities, the Board of Directors (including any duly authorized
committee thereof) shall have taken all necessary further action to
approve the terms of such Series and of the related Securities
Resolution or supplemental indenture creating such Series and to
authorize the issuance and sale of such Series as contemplated in
the Registration Statement, all requisite PSCW approvals and
any other necessary regulatory approvals with respect to such Series
shall be in effect at the time of the issuance of such Series, and the
Securities Resolution or supplemental indenture setting forth the terms
of such Series shall have been duly adopted, or duly executed and
delivered by the Company and the Trustee, as the case may be, then, upon
execution and delivery of such Series against payment in accordance with
the authorization of the Board of Directors (including any duly
authorized committee thereof), such regulatory approvals and the
Indenture relating to such Series, such Series of Securities will be
legally valid and binding obligations of the Company, entitled to the
benefits of the Indenture relating to such Series.
I consent to (a) the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement, and (b) the reference
made to me under or with respect to material under the captions "Legal
Opinions" and "Description of New Bonds" in the Prospectus constituting a part
of the Registration Statement.
Very truly yours,
/s/ Walter T. Woelfle
- ----------------------------------
Walter T. Woelfle
Director-Legal Services Department
WTW/jmd
<PAGE> 1
<TABLE>
Exhibit (12)
WISCONSIN ELECTRIC POWER COMPANY
Statement of Computation of Ratios of Earnings to Fixed Charges
(Unaudited)
(Thousands of Dollars)
<CAPTION>
Year Ended December 31 12 Months
------------------------------------------------ Ended
1992 1993 1994 1995 1996 9/30/97
---- ---- ---- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Income $175,950 $192,080 $181,754 $240,668 $211,315 $111,668
Income Taxes 91,830 101,127 101,854 141,934 127,828 59,693
Pretax Income 267,780 293,207 283,608 382,602 339,143 171,361
FIXED CHARGES:
- --------------
Interest on Long-Term Debt
(Including Amortization of
Debt Premium, Discount
& Expense) 90,967 103,262 102,059 99,727 100,133 108,338
Other Interest Expense 4,165 3,945 7,610 11,960 7,821 5,641
Interest Factor of Rents
- ------------------------
Nuclear Fuel 2,098 1,697 1,896 2,401 2,332 732
Total Fixed Charges 97,230 108,904 111,565 114,088 110,286 114,711
Earnings Before Income
Taxes & Fixed Charges $365,010 $402,111 $395,173 $496,690 $449,429 $286,072
Ratio of Earnings to
Fixed Charges 3.8x 3.7x 3.5x 4.4x 4.1x 2.5x
</TABLE>
EXHIBIT (23)-(1)
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 29, 1997 appearing on page 112 of the combined Wisconsin Energy
Corporation and Wisconsin Electric Power Company's Annual Report on Form 10-K
for the year ended December 31, 1996. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/Price Waterhouse LLP
- -----------------------
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
November 14, 1997
EXHIBIT (23)-(2)
Consent of Walter T. Woelfle, Esq.
EXHIBIT (23)-(2)
SEE EXHIBIT (5)
Exhibit (23)-(3)
[WE LETTERHEAD]
November 14, 1997
Wisconsin Electric Power Company
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
Ladies and Gentlemen:
I hereby consent to the reference to me under the caption "Legal Opinions" in
the Prospectus constituting a part of the Registration Statement on Form S-3
relating to First Mortgage Bonds and Debt Securities which you are filing
under the Securities Act of 1933. In giving this consent, I do not admit that
I come within the category of persons whose consent is required under Section
7 of the Securities Act of 1933 and the Rules and Regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/James D. Zakrajsheck
- -----------------------
James D. Zakrajsheck
Counsel of the Company
MES/jmd
Exhibit (23)-(4)
[WE LETTERHEAD]
November 14, 1997
Wisconsin Electric Power Company
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
Ladies and Gentlemen:
I hereby consent to the reference to me under the caption "Legal Opinions" in
the Prospectus constituting a part of the Registration Statement on Form S-3
relating to First Mortgage Bonds and Debt Securities which you are filing
under the Securities Act of 1933. In giving this consent, I do not admit that
I come within the category of persons whose consent is required under Section
7 of the Securities Act of 1933 and the Rules and Regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/A. William Finke
- -------------------
A. William Finke
Counsel of the Company
MES/jmd
<PAGE> 1
Exhibit (23)-(5)
[LOOMIS, EWERT, PARSLEY, DAVIS & GOTTING LETTERHEAD]
November 14, 1997
Wisconsin Electric Power Company
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
Ladies and Gentlemen:
We hereby consent to the reference to our firm under the caption "Legal
Opinions" in the Prospectus constituting a part of the Registration Statement
on Form S-3 relating to First Mortgage Bonds and Debt Securities which you are
filing under the Securities Act of 1933. In giving this consent, we do not
admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933.
Very truly yours,
/s/Loomis, Ewert,
Parsley, Davis & Gotting, P.C.
---------------------------------
LOOMIS, EWERT,
PARSLEY, DAVIS & GOTTING, P.C.
Exhibit (23)-(6)
[Q&B LETTERHEAD]
November 14, 1997
Wisconsin Electric Power Company
231 West Michigan Street
P.O. Box 2046
Milwaukee, WI 53201
Ladies and Gentlemen:
We hereby consent to the reference to our firm under the caption "Legal
Opinions" in the Prospectus constituting a part of the Registration Statement
on Form S-3 relating to First Mortgage Bonds and Debt Securities which you are
filing under the Securities Act of 1933. In giving this consent, we do not
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933.
Very truly yours,
/s/Quarles & Brady
------------------
QUARLES & BRADY
EXHIBIT (24)
Power of Attorney, contained in signature page of
Registration Statement
EXHIBIT (24)
SEE SIGNATURE PAGE OF
REGISTRATION STATEMENT
Exhibit (25)-(1)
Securities and Exchange Commission
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
________________________
Check if an Application to Determine Eligibility of a Trustee
Pursuant to Section 305(b)(2) ___________
________________________
FIRSTAR TRUST COMPANY
(Exact name of trustee as specified in its charter)
Wisconsin 39-0281260
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. National Bank) Identification Number)
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Kevin C. Schuller, Vice President and Assistant Secretary
Firstar Trust Company
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telephone (414) 765-5725
(Name, address, and telephone number of agent for service)
WISCONSIN ELECTRIC POWER COMPANY
(Exact name of obligor as specified in its charter)
Wisconsin 39-0476280
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
231 West Michigan Street
P.O. Box 2046
Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
First Mortgage Bonds
(Title of indenture securities)
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Office of Commissioner of Banking, Madison, Wisconsin
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The corporate trustee is authorized to exercise
corporate trust powers.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of October 31, 1997
Col. A Col. B
Title of class Amount outstanding
Per General Instruction B to Form T-1, no response is required
to this item because the obligor is not presently in default.
Item 4. Trusteeships under Other Indentures.
If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, furnish the following information:
(a) Title of the securities outstanding under each such
other indenture.
Per General Instruction B to Form T-1, no response is required
to this item because the obligor is not presently in default.
(b) A brief statement of the facts relied upon as a basis for
the claim that no conflicting interest within the meaning
of Section 310(b)(1) of the Act arises as a result of the
trusteeship under any such other indenture, including a
statement as to how the indenture securities will rank as
compared with the securities issued under such other
indenture.
Per General Instruction B to Form T-1, no response is
required to this item because the obligor is not
presently in default.
1
Item 5. Interlocking Directorates and Similar Relationships with the
Obligor or Underwriters.
If the trustee or any of the directors or executive officers of
the trustee is a director, officer, partner, employee,
appointee, or representative of the obligor or of any
underwriter for the obligor, identify each such person having
any such connection and state the nature of each such
connection.
Per General Instruction B to Form T-1, no response is required
to this item because the obligor is not presently in default.
Item 6. Voting Securities of the Trustee Owned by the Obligor or its
Officials.
Furnish the following information as to the voting securities of
the trustee owned beneficially by the obligor and each director,
partner, and executive officer of the obligor:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of owner Title of class Amount owned Percentage of
beneficially voting securities
represented by
amount given
in Col. C
Per General Instruction B to Form T-1, no response is required
to this item because the obligor is not presently in default.
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of
the trustee owned beneficially by each underwriter for the
obligor and each director, partner, and executive officer of
each such underwriter.
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of owner Title of class Amount owned Percentage of
beneficially voting securities
represented by
amount given
in Col. C
Per General Instruction B to Form T-1, no response is required
to this item because the obligor is not presently in default.
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the
obligor owned beneficially or held as collateral security for
obligations in default by the trustee:
2
As of October 31, 1997
Col. A Col. B Col. C Col. D
Title of class Whether Amount owned Percent of
the securities beneficially or held class represented
are voting as collateral security by amount given
or nonvoting for obligations in Col. C
securities in default
Per General Instruction B to Form T-1, no response is required
to this item because the obligor is not presently in default.
Item 9. Securities of Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of an underwriter for
the obligor, furnish the following information as to each class
of securities of such underwriter any of which are so owned or
held by the trustee:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 10. Ownership or Holdings by the Trustee of Voting Securities of
Certain Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security
for obligations in default voting securities of a person who, to
the knowledge of the trustee (1) owns 10 percent or more of the
voting securities of the obligor or (2) is an affiliate, other
than a subsidiary, of the obligor, furnish the following
information as to the voting securities of such person:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
3
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of a person who, to the
knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to
each class of securities of such person any of which are so owned
or held by the trustee:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to
the trustee, furnish the following information:
Col. A Col. B Col. C
Nature of indebtedness Amount outstanding Date due
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with
respect to the securities under this indenture.
Explain the nature of any such default.
Per General Instruction B to Form T-1, no response is
required to this item because the obligor is not
presently in default.
(b) If the trustee is a trustee under another indenture
under which any other securities, or certificates of
interest or participation in any other securities, of
the obligor are outstanding, or is trustee for more
than one outstanding series of securities under the
indenture, state whether there has been a default under
any such indenture or series, identify the indenture or
series affected, and explain the nature of any such
default.
Per General Instruction B to Form T-1, no response is
required to this item because the obligor is not
presently in default.
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
4
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee
is authorized to act as sole trustee under indentures qualified or
to be qualified under the Act.
Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the Articles of Association of Firstar Trust
Company as now in effect (incorporated by reference to
Exhibit 1 to the Form T-1 filed by Firstar Trust Company on
December 29, 1993 as Exhibit 25 to the Registration Statement
on Form S-3 of Wisconsin Electric Power Company, Registration
No. 33-51749 (the "1993 Form T-1")).
2. Certificate of authority of the Trustee to commence business
(contained in Exhibit 1 hereto).
3. Authorization of the Trustee to exercise corporate trust
powers (contained in Exhibit 1 hereto).
4. A copy of the existing By-Laws of Firstar Trust Company
(incorporated by reference to Exhibit 4 to the 1993 Form
T-1).
6. The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939 (filed herewith).
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority (incorporated by reference
to Exhibit 7 to the Form T-1 filed by Firstar Trust Company
on June 13, 1997 as Exhibit 25.03 to the Registration
Statement on Form S-3 of Wisconsin Power and Light Company,
Registration No. 33-60917).
5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Firstar Trust Company, a corporation organized and existing under the
laws of the State of Wisconsin, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Milwaukee, and State of Wisconsin, on the 14th day of November,
1997.
FIRSTAR TRUST COMPANY
(Trustee)
By: /s/ Gene E. Ploeger
---------------------------------
Gene E. Ploeger, Vice President
(Name and Title)
By: /s/ Amy E. Nolde
---------------------------------
Amy E. Nolde, Assistant Secretary
(Name and Title)
6
EXHIBIT 6
(Form T-1)
CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
Firstar Trust Company, as Trustee herein named, hereby consents that
reports of examination of said Trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
FIRSTAR TRUST COMPANY
as Trustee
By: /s/ Gene E. Ploeger
---------------------------------
Gene E. Ploeger, Vice President
By: /s/ Amy E. Nolde
---------------------------------
Amy E. Nolde, Assistant Secretary
Dated: November 14, 1997
7
Exhibit (25)-(2)
Securities and Exchange Commission
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
________________________
Check if an Application to Determine Eligibility of a Trustee
Pursuant to Section 305(b)(2) ___________
________________________
FIRSTAR TRUST COMPANY
(Exact name of trustee as specified in its charter)
Wisconsin 39-0281260
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. National Bank) Identification Number)
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Kevin C. Schuller, Vice President and Assistant Secretary
Firstar Trust Company
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telephone (414) 765-5725
(Name, address, and telephone number of agent for service)
WISCONSIN ELECTRIC POWER COMPANY
(Exact name of obligor as specified in its charter)
Wisconsin 39-0476280
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
231 West Michigan Street
P.O. Box 2046
Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of indenture securities)
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Office of Commissioner of Banking, Madison, Wisconsin
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The corporate trustee is authorized to exercise
corporate trust powers.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting Securities of the Trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of October 31, 1997
Col. A Col. B
Title of class Amount outstanding
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 4. Trusteeships under Other Indentures.
If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or participation
in any other securities, of the obligor are outstanding, furnish
the following information:
(a) Title of the securities outstanding under each such
other indenture.
Per General Instruction B to Form T-1, no response is
required to this item because the obligor is not
presently in default.
(b) A brief statement of the facts relied upon as a basis
for the claim that no conflicting interest within the
meaning of Section 310(b)(1) of the Act arises as a
result of the trusteeship under any such other
indenture, including a statement as to how the
indenture securities will rank as compared with the
securities issued under such other indenture.
1
Per General Instruction B to Form T-1, no response is
required to this item because the obligor is not
presently in default.
Item 5. Interlocking Directorates and Similar Relationships with the
Obligor or Underwriters.
If the trustee or any of the directors or executive officers of
the trustee is a director, officer, partner, employee, appointee,
or representative of the obligor or of any underwriter for the
obligor, identify each such person having any such connection and
state the nature of each such connection.
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 6. Voting Securities of the Trustee Owned by the Obligor or its
Officials.
Furnish the following information as to the voting securities of
the trustee owned beneficially by the obligor and each director,
partner, and executive officer of the obligor:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Owner Title of Class Amount owned Percentage of
beneficially voting securities
represented by
amount given
in Col. C
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 7. Voting Securities of the Trustee Owned by Underwriters or their
Officials.
Furnish the following information as to the voting securities of
the trustee owned beneficially by each underwriter for the obligor
and each director, partner, and executive officer of each such
underwriter.
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Owner Title of Class Amount owned Percentage of
beneficially voting securities
represented by
amount given
in Col. C
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
2
Item 8. Securities of the Obligor Owned or Held by the Trustee.
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations
in default by the trustee:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Title of Class Whether Amount owned Percent of
the securities beneficially or held class represented
are voting as collateral security by amount given
or nonvoting for obligations in Col. C
securities in default
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 9. Securities of Underwriters Owned or Held by the Trustee.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of an underwriter for
the obligor, furnish the following information as to each class
of securities of such underwriter any of which are so owned or
held by the trustee:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 10. Ownership or Holdings by the Trustee of Voting Securities of
Certain Affiliates or Security Holders of the Obligor.
If the trustee owns beneficially or holds as collateral security
for obligations in default voting securities of a person who, to
the knowledge of the trustee (1) owns 10 percent or more of the
voting securities of the obligor or (2) is an affiliate, other
than a subsidiary, of the obligor, furnish the following
information as to the voting securities of such person:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
3
Item 11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor.
If the trustee owns beneficially or holds as collateral security
for obligations in default any securities of a person who, to the
knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to
each class of securities of such person any of which are so owned
or held by the trustee:
As of October 31, 1997
Col. A Col. B Col. C Col. D
Name of Amount Amount owned Percent of
issuer and outstanding beneficially or held class represented
title of class as collateral security by amount given
for obligations in in Col. C
default by trustee
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to
the trustee, furnish the following information:
Col. A Col. B Col. C
Nature of indebtedness Amount outstanding Date due
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with
respect to the securities under this indenture.
Explain the nature of any such default.
Per General Instruction B to Form T-1, no response is
required to this item because the obligor is not
presently in default.
(b) If the trustee is a trustee under another indenture
under which any other securities, or certificates of
interest or participation in any other securities, of
the obligor are outstanding, or is trustee for more
than one outstanding series of securities under the
indenture, state whether there has been a default
under any such indenture or series, identify the
indenture or series affected, and explain the nature
of any such default.
Per General Instruction B to Form T-1, no response is
required to this item because the obligor is not
presently in default.
4
Item 14. Affiliations with the Underwriters.
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
Per General Instruction B to Form T-1, no response is required to
this item because the obligor is not presently in default.
Item 15. Foreign Trustee.
Identify the order or rule pursuant to which the foreign trustee
is authorized to act as sole trustee under indentures qualified
or to be qualified under the Act.
Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the Articles of Association of Firstar Trust
Company as now in effect (incorporated by reference to
Exhibit 1 to the Form T-1 filed by Firstar Trust Company on
December 29, 1993 as Exhibit 25 to the Registration
Statement on Form S-3 of Wisconsin Electric Power Company,
Registration No. 33-51749 (the "1993 Form T-1")).
2. Certificate of authority of the Trustee to commence business
(contained in Exhibit 1 hereto).
3. Authorization of the Trustee to exercise corporate trust
powers (contained in Exhibit 1 hereto).
4. A copy of the existing By-Laws of Firstar Trust Company
(incorporated by reference to Exhibit 4 to the 1993 Form
T-1).
6. The consent of the Trustee required by Section 321(b) of the
Trust Indenture Act of 1939 (filed herewith).
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority (incorporated by reference
to Exhibit 7 to the Form T-1 filed by Firstar Trust Company
on June 13, 1997 as Exhibit 25.03 to the Registration
Statement on Form S-3 of Wisconsin Power and Light Company,
Registration No. 33-60917).
5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Firstar Trust Company, a corporation organized and existing under the
laws of the State of Wisconsin, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all
in the City of Milwaukee, and State of Wisconsin, on the 14th day of November,
1997.
FIRSTAR TRUST COMPANY
(Trustee)
By: /s/ Joseph S. Quinn
-------------------------------------
Joseph S. Quinn, Vice President
(Name and Title)
By: /s/ Amy E. Nolde
-------------------------------------
Amy E. Nolde, Assistant Secretary
(Name and Title)
6
EXHIBIT 6
(Form T-1)
CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
Firstar Trust Company, as Trustee herein named, hereby consents that
reports of examination of said Trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
FIRSTAR TRUST COMPANY,
as Trustee
By: /s/ Joseph S. Quinn
-------------------------------------
Joseph S. Quinn, Vice President
By: /s/ Amy E. Nolde
-------------------------------------
Amy E. Nolde, Assistant Secretary
Dated: November 14, 1997
7
