<PAGE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 - Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-7530
Wisconsin Gas Company
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(Exact name of registrant as specified in its charter)
Wisconsin 39-0476515
-------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
626 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
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(Address of principal executive office) (Zip Code)
414-385-7000
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at April 16, 1999
- -------------------------- -----------------------------
Common Stock, $8 Par Value 1,125
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INTRODUCTION
Wisconsin Gas Company ("Wisconsin Gas" or "Company"), a natural
gas distribution public utility, is a Wisconsin corporation and a
wholly-owned subsidiary of WICOR, Inc. ("WICOR"), a diversified
holding company.
CONTENTS
PAGE
PART I - Financial Information 1
Financial Statements of Wisconsin Gas Company (Unaudited):
Statements of Operation for the Three
Months Ended March 31, 1999 and 1998 2
Balance Sheets as of March 31, 1999 and
December 31, 1998 3-4
Statements of Cash Flows for the Three
Months Ended March 31, 1999 and 1998 5
Notes to Financial Statements 6
Management's Discussion and Analysis of
Interim Financial Statements 7-9
Quantitative and Qualitative Disclosures About Market Risk 9
PART II. Other Information
Exhibits and Reports on Form 10-K 10
Signatures 11
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Forward-Looking Statements
- --------------------------
Certain matters discussed in this report are "forward-looking
statements" intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform
Act of 1995. These forward-looking statements generally can be
identified as such because they include words such as the Company
"believes," "anticipates," "expects," or words of similar import.
Similarly, statements that describe the Company's future plans,
objectives or goals also are considered forward-looking. Such
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from current
expectations. These factors include but are not limited to the
risks and uncertainties listed below. All of these factors are
difficult to predict and generally are beyond management's
control.
>> the impact of warmer- or colder-than-normal weather on the
energy business
>> economic conditions, including the availability of
individual discretionary income and changes in interest rates
>> changes in natural gas prices and supply availability
>> increased competition in deregulated energy markets
>> the pace and extent of energy industry deregulation
>> regulatory, governmental and judiciary decisions
>> increases in costs to clean up environmental contamination
>> the Company's ability to increase prices
>> market demand for the Company's products and services
>> unanticipated expenses or outcomes associated with year
2000 date conversion
Part I - Financial Information
Item 1 Financial Statements
- ----------------------------
The financial statements included herein have been prepared
without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although management believes that the
disclosures are adequate to make the information presented not
misleading. These condensed financial statements should be read
in conjunction with the audited financial statements and the
notes thereto included in the Company's Annual Report on Form 10-
K for the year ended December 31, 1998
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In the opinion of management, the information furnished reflects
all adjustments, which in all circumstances were normal and
recurring, necessary for a fair presentation of the results of
operations for the interim periods.
Because of seasonal factors, the results of operations for the
interim periods presented are not necessarily indicative of the
results to be expected for the full calendar year.
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WISCONSIN GAS COMPANY
Statements of Operation (Unaudited)
[CAPTION]
<TABLE>
Three Months Ended
March 31,
----------------------
1999 1998
---------- ----------
(Thousands of Dollars)
<S> <C> <C>
Operating Revenues $ 170,397 $ 169,447
---------- ----------
Operating Expenses:
Cost of gas sold 93,548 101,354
Operations 23,812 22,536
Maintenance 1,882 1,940
Depreciation 8,725 8,377
Taxes, other than income taxes 2,504 2,614
---------- ----------
130,471 136,821
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Operating Income 39,926 32,626
---------- ----------
Interest Expense 3,422 3,386
Other Income, net 299 247
---------- ----------
Income Before Income Taxes 36,803 29,487
Income Taxes 13,833 10,985
---------- ----------
Net Earnings $ 22,970 $ 18,502
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
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WISCONSIN GAS COMPANY
Balance Sheets
[CAPTION]
<TABLE>
March 31,
1999 December 31,
(Unaudited) 1998
----------- ------------
(Thousands of Dollars)
<S> <C> <C>
Assets
- ------
Property, Plant and Equipment, at cost $ 833,711 $ 828,748
Less - Accumulated depreciation 456,707 448,270
----------- ------------
377,004 380,478
----------- ------------
Current Assets:
Cash and cash equivalents 1,668 6,690
Accounts receivable, less allowance
for doubtful accounts of $15,042
and $10,170, respectively 76,575 39,580
Accrued revenues 27,481 42,524
Gas in storage, at weighted average cost 11,702 36,751
Materials and supplies, at weighted average cost 4,228 3,590
Deferred income taxes 12,578 12,579
Prepaid taxes 1,984 3,480
Other 1,563 2,330
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137,779 147,524
----------- ------------
Deferred Charges and Other:
Regulatory assets 58,036 59,319
Prepaid pension costs 43,219 42,396
Systems development costs 11,826 12,901
Other 9,490 8,434
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122,571 123,050
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$ 637,354 $ 651,052
=========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
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Wisconsin Gas Company
Balance Sheets
(continued)
[CAPTION]
<TABLE>
March 31,
1999 December 31,
(Unaudited) 1998
----------- ------------
<S> <C> <C>
Capitalization and Liabilities
- ------------------------------
Capitalization:
Common stock $ 9 $ 9
Other paid-in capital 120,978 120,888
Retained earnings 111,145 94,673
Accumulated other comprehensive income (2,224) (2,224)
Long-term debt 158,110 158,839
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388,018 372,185
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Current Liabilities:
Accounts payable 35,802 36,844
Accounts payable - intercompany, net 310 (440)
Short-term borrowings - 65,000
Current portion of long-term debt - 2,000
Refundable gas costs 50,115 18,570
Accrued payroll and benefits 8,098 8,394
Accrued taxes 14,442 1,675
Other 2,418 3,077
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111,185 135,120
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Deferred Credits and Other:
Postretirement benefit obligation 43,386 44,741
Deferred income taxes 40,375 40,375
Regulatory liabilities 30,106 32,153
Environmental remediation costs 6,764 7,922
Unamortized investment tax credit 6,000 6,357
Other 11,520 12,199
----------- ------------
138,151 143,747
----------- ------------
$ 637,354 $ 651,052
=========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE> 8
WISCONSIN GAS COMPANY
Statements of Cash Flows
[CAPTION]
<TABLE>
Three Months Ended
March 31,
----------------------
1999 1998
---------- ----------
(Thousands of Dollars)
<S> (Unaudited) <C> <C>
Operations:
Net earnings $ 22,970 $ 18,502
Adjustments to reconcile net earnings
to net cash flows:
Depreciation and amortization 10,333 10,210
Deferred income taxes - -
Net pension/other postretirement benefit (income) (2,235) (1,460)
Change in:
Receivables (21,952) (13,994)
Gas in storage 25,049 32,733
Other current assets 129 (326)
Accounts payable (1,042) (5,793)
Accrued taxes 14,263 8,305
Refundable gas costs 31,545 23,943
Other current liabilities (205) 71
Other non-current assets and liabilities (4,852) (3,137)
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74,003 69,054
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Investment Activities:
Capital expenditures (5,546) (4,442)
Other, net 21 110
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(5,525) (4,332)
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Financing Activities:
Change in short-term borrowings (65,000) (62,671)
Reduction of long-term debt (2,000) (2,000)
Cash dividends paid to WICOR, Inc. (6,500) (6,000)
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(73,500) (70,671)
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Change in Cash and Cash Equivalents (5,022) (5,949)
Cash and Cash Equivalents at Beginning of Period 6,690 7,854
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Cash and Cash Equivalents at End of Period $ 1,668 $ 1,905
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE> 9
Notes to Financial Statements (Unaudited):
- ------------------------------------------
1) At March 31, 1999, Wisconsin Gas had total unsecured lines
of credit available from several banks of $135.0 million.
As of March 31, 1999, no short-term borrowings were
outstanding under these credit agreements.
2) For purposes of the Statements of Cash Flows, income taxes
paid, net of refunds, and interest paid (excluding
capitalized interest) were as follows:
For the Three Months
Ended March 31,
-----------------------
1999 1998
---------- ----------
(Thousands of Dollars)
Income taxes paid $ 2,841 $ 5,859
Interest paid $ 2,570 $ 2,462
3) For the three months ended March 31, 1999 and 1998, net
earnings was the only component of other comprehensive
income.
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Item 2. Management's Discussion and Analysis
of Interim Financial Statements of
Wisconsin Gas Company
Results of Operations
- ---------------------
Net earnings increased by $4.5 million, or 24%, to $23.0 million
for the first quarter of 1999 compared to the same quarter of
last year. The following factors had a significant effect on the
results of operations during the three-month period ended March
31, 1999.
The increase in net earnings for the first quarter resulted from
increased gas margins which were partially offset by increased
operating expenses. The improvement in gas margins resulted
primarily from increased firm sales volumes and a $7.5 million
annual rate increase effective August 1, 1998.
Revenues, margins and volumes are summarized below. Margin,
defined as revenues less cost of gas sold, is a better
comparative performance indicator than revenues because changes
in the cost of gas sold are flowed through to revenue under a gas
adjustment clause with an insignificant effect on margin.
Three
Months Ended
March 31
---------------------- %
(Millions of Dollars) 1999 1998 Change
---------- ---------- ------
Gas Sales Revenues $ 162.3 $ 162.3 -
Cost of Gas Sold 93.5 101.4 (8)
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Gas Sales Margin 68.8 60.9 13
Gas Transport Margin 8.0 7.2 11
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Total Margin $ 76.8 $ 68.1 13
========== ==========
(Millions of Therms)
Utility Sales Volumes
- ---------------------
Firm 326.9 301.7 8
Interruptible 10.0 14.0 (29)
Transportation Volume 160.3 138.0 16
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Total Throughput 497.2 453.7 10
========== ==========
Heating Degree Days:
Actual 3,235 2,915 11
========== ==========
Twenty year average 3,421
==========
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The increase in firm sales volumes for the first quarter of 1999
as compared with the 1998 first quarter was caused principally by
colder weather. The weather was 11% colder in the first quarter
of 1999 than during the same period in 1998 although still 5%
warmer than the 20-year average. The increase in transportation
volumes was due to more customers purchasing gas from sources
other than Wisconsin Gas and transporting the volumes over the
Wisconsin Gas distribution system.
Operating and maintenance expenses increased by $1.2 million, or
5%, for the three-month period ended March 31, 1999, compared
with the same period of 1998. The increase reflects $1.9 million
of Public Service of Wisconsin (PSCW) approved additional
uncollectible accounts expense which became effective November 1,
1998. The increase was partially offset by lower labor and
benefit expenses.
Depreciation expense for the three months ended March 31, 1999,
increased by $0.3 million, or 4%, compared with the same period
of last year. The 1999 increase was due to plant additions.
Interest expense remained relatively flat for the three-months
ended March 31, 1999, compared with the similar period of 1998.
Income tax expense was $2.8 million higher for the first three
months of 1999, compared with the same period last year,
reflecting increased pre-tax income.
Financial Condition
- -------------------
Cash flow from operations for the three months ended March 31,
1999, increased by $4.9 million, or 7%, from the comparable
period in 1998. The cash flow improvement is due primarily to
lower gas prices and increased earnings. Due to the seasonal
nature of the energy business, accrued revenues, accounts
receivable and accounts payable levels are higher in the heating
season as compared with the summer months.
Capital expenditures for the three months ended March 31, 1999,
increased $1.1 million, or 25%, to $5.5 million.
The Company anticipates additional short-term borrowings during
the third and fourth quarters of 1999 to finance working capital,
primarily gas in storage and the financing of accounts receivable
during the heating season. The Company believes it has sufficient
capacity under existing lines of credit to satisfy its future
working capital needs.
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Proposed New Pipeline
- ---------------------
On March 10, 1999, the WICOR announced the formation of a joint
venture to construct the Guardian interstate natural gas pipeline
from the Chicago market hub near Joliet, Illinois to southeastern
Wisconsin. Subsidiaries of CMS Energy, a Dearborn, Michigan based
international energy company, and Northern States Power Company, a
Minneapolis based diversified energy company, are the sponsors of
the project with WICOR. The three partners will have equal
ownership interests in the project.
The Guardian Pipeline will consist of approximately 150 miles of
36-inch pipe and related compression equipment and will be
designed to carry at least 650,000 Dekatherms per day of gas. The
total cost of the project, which requires United States Federal
Energy Regulatory Commission (FERC) approval, is approximately
$230 million. The pipeline is scheduled to be in service by
November 1, 2002. Wisconsin Gas has committed to purchase 650,000
Dekatherms per day of capacity on the pipeline and will construct
a 35-mile lateral at a cost of approximately $45 million to
connect its distribution system to the Guardian Pipeline.
The project, if approved by FERC and placed in service, is
expected to increase the availability and reliability of gas
transportation service in Northern Illinois and southeastern
Wisconsin as well as introduce or increase competition among
pipelines serving the area.
Year 2000 Date Conversion
- -------------------------
Issues relating to Year 2000 conversion are the result of
computer software programs being written using two digits rather
than four to define the applicable year. Any of the Company's
software programs, computer hardware or equipment that have date
sensitive software or embedded chips may recognize a date using
"00" as the year 1900 rather than the year 2000. This could
result in a system failure or miscalculations causing disruptions
of operations, including, among other things, a temporary
inability to process transactions, send invoices, distribute
natural gas, manufacture products or engage in other normal
business activities.
<PAGE>
<PAGE> 13
The Company has developed a formal plan to ensure that its
significant date-sensitive computer software and hardware systems
(Information Technology) and other equipment utilized in its
various activities (Operating Equipment) will be Year 2000
compliant and operational on a timely basis. The plan addresses
all of the Company's locations, and includes a review of computer
applications that connect elements of the Company's business
directly to its customers and suppliers. The plan also includes
an assessment process to determine if the Company's significant
customers and suppliers will be Year 2000 compliant.
The Company's plan to resolve issues relating to Year 2000
conversion includes four major phases - assessment, remediation,
testing, and implementation. To assist the Company in reaching
Year 2000 compliance, the Company has retained third party
consultants. The Company has substantially completed the
assessment phase of its plan for all of its significant
Information Technology and Operating Equipment that it believes
could be affected by the Year 2000 conversion. Based upon its
assessment, the Company concluded that it would be necessary to
reprogram and/or replace certain of its Information Technology.
The Company also determined that certain of its Operating
Equipment would also require modification to ensure it remains
operational.
For its Information Technology applications as of March 31, 1999,
the Company believes it is approximately 89% compliant on all of
its significant systems, and estimates that it will complete
software reprogramming and/or replacement in the second quarter
of 1999. The Company believes that the Operating Equipment at
March 31, 1999 is approximately 81% compliant, and the Company is
targeting completion during the second quarter of 1999.
With respect to operations that involve third parties, the
Company has made inquiries of its significant customers and
suppliers and, at the present time and based on such inquiries,
is not aware of Year 2000 issues facing these third parties that
would materially impact the Company's operations. However, the
Company has no means of ensuring that these customers and
suppliers (and, in turn, their customers and suppliers) will be
Year 2000 compliant in a timely manner. The inability of these
parties to successfully resolve their Year 2000 issues could have
a material adverse effect on the Company.
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<PAGE> 14
Despite the efforts that the Company has undertaken, there can be
no assurances that every Year 2000 related issue will be
identified and addressed before January 1, 2000. An unexpected
failure as a result of a Year 2000 compliance issue could result
in an interruption in certain normal business activities or
operations. For that reason, the Company is currently developing
contingency plans to address alternatives in the event certain
Year 2000 compliance failures occur.
Through March 31, 1999, the Company had spent approximately $3.5
million for Year 2000 remediation. The amount of additional
development and remediation costs necessary for the Company to
prepare for Year 2000 is estimated to be approximately $0.5
million and is expected to be funded through operating cash flow.
Item 3. Quantitative and Qualitative Disclosures About Market.
- --------------------------------------------------------------
The Company's market risk includes the potential loss arising
from adverse changes in the price of natural gas. The Company's
objective in managing this risk is to reduce fluctuations in
earnings and cash flows associated with changes in natural gas
prices. The Company's policy prohibits the use of derivative
financial instruments for trading purposes.
Wisconsin Gas has a commodity risk management program that has
been approved by the PSCW. This program allows Wisconsin Gas to
utilize call and put option contracts to reduce market risk
associated with fluctuations in the price of natural gas
purchases and gas in storage. Under this program, Wisconsin Gas
has the ability to hedge up to 50% of its planned gas deliveries
for the heating season. The PSCW has also allowed Wisconsin Gas
to hedge gas purchased for storage during non-heating months. The
cost of the call and put option contracts, as well as gains or
losses realized under the contracts do not affect net income as
they are recovered dollar for dollar under the purchased gas
adjustment clause. The notional amount of these contracts is not
material to the Company.
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Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Wisconsin Gas Company By-laws, as amended.
27 Financial data schedule (EDGAR version only).
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
by the Company during the first quarter of 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
WISCONSIN GAS COMPANY
Dated: April 30, 1999 By: /s/ Joseph P. Wenzler
Joseph P. Wenzler
Senior Vice President and
Chief Financial Officer
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Wisconsin Gas Company
FORM 10-Q Exhibits
Exhibit No. Description
- ----------- -------------------------
3.1 Wisconsin Gas Company By-laws, as amended.
27 Financial data schedule
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EXHIBIT 3-1
BY-LAWS
OF
WISCONSIN GAS COMPANY
(a Wisconsin corporation)
Effective April 22, 1999
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<PAGE> 2
BY-LAWS
OF
WISCONSIN GAS COMPANY
(a Wisconsin corporation)
Effective April 22, 1999
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State
of Wisconsin, as the Board of Directors may designate or as the business
of the corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation
required by the Wisconsin Business Corporation Law to be maintained in
the State of Wisconsin may be, but need not be, identical with the
principal office in the State of Wisconsin, and the address of the
registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders shall
be held on the fourth Thursday in April of each year at 9:00 a.m. local
time, or at such other time and date within thirty days before or after
such date as may be fixed by or under the authority of the Board of
Directors, for the purpose of electing directors and for the transaction
of such other business as may come before the meeting. If the day fixed
for the annual meeting shall be a legal holiday in the State of
Wisconsin, such meeting shall be held on the next succeeding business
day.
2.02. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by the Wisconsin
Business Corporation Law, may be called by the Board of Directors, the
Chairman, the Vice Chairman or the President. The corporation shall call
a special meeting of shareholders in the event that the holders of at
least 10% of all of the votes entitled to be cast on any issue proposed
to be considered at the proposed special meeting sign, date and deliver
to the corporation one or more written demands for the meeting describing
one or more purposes for which it is to be held. The corporation shall
give notice of such a special meeting within thirty (30) days after the
date that the demand is delivered to the corporation.
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<PAGE> 3
2.03. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Wisconsin, as the place of
meeting for any annual or special meeting of shareholders. If no
designation is made, the place of meeting shall be the principal office
of the corporation. Any meeting may be adjourned to reconvene at any
place designated by vote of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the date, time and
place of any meeting of shareholders and, in case of a special meeting,
the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) days nor more than sixty (60) days
before the date of the meeting (unless a different time is provided by
the Wisconsin Business Corporation Law or the articles of incorporation),
either personally or by mail, by or at the direction of the Chairman, the
Vice Chairman, the President or the Secretary, to each shareholder of
record entitled to vote at such meeting and to such other persons as
required by the Wisconsin Business Corporation Law. If mailed, such
notice shall be deemed to be effective when deposited in the United
States mail, addressed to the shareholder at his or her address as it
appears on the stock record books of the corporation, with postage
thereon prepaid. If an annual or special meeting of shareholders is
adjourned to a different date, time or place, the corporation shall not
be required to give notice of the new date, time or place if the new
date, time or place is announced at the meeting before adjournment;
provided, however, that if a new record date for an adjourned meeting is
or must be fixed, the corporation shall give notice of the adjourned
meeting to persons who are shareholders as of the new record date.
2.05. Waiver of Notice. A shareholder may waive any notice required
by the Wisconsin Business Corporation Law, the articles of incorporation
or these by-laws before or after the date and time stated in the notice.
The waiver shall be in writing and signed by the shareholder entitled to
the notice, contain the same information that would have been required in
the notice under applicable provisions of the Wisconsin Business
Corporation Law (except that the time and place of meeting need not be
stated) and be delivered to the corporation for inclusion in the
corporate records. A shareholder's attendance at a meeting, in person or
by proxy, waives objection to all of the following: (a) lack of notice
or defective notice of the meeting, unless the shareholder at the
beginning of the meeting or promptly upon arrival objects to holding the
meeting or transacting business at the meeting; and (b) consideration of
a particular matter at the meeting that is not within the purpose
described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
<PAGE>
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2.06. Fixing of Record Date. The Board of Directors may fix in
advance a date as the record date for the purpose of determining
shareholders entitled to notice of and to vote at any meeting of
shareholders, shareholders entitled to demand a special meeting as
contemplated by Section 2.02 hereof, shareholders entitled to take any
other action, or shareholders for any other purpose. Such record date
shall not be more than seventy (70) days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If no record date is fixed by the Board of Directors or by the
Wisconsin Business Corporation Law for the determination of shareholders
entitled to notice of and to vote at a meeting of shareholders, the
record date shall be the close of business on the day before the first
notice is given to shareholders. If no record date is fixed by the Board
of Directors or by the Wisconsin Business Corporation Law for the
determination of shareholders entitled to demand a special meeting as
contemplated in Section 2.02 hereof, the record date shall be the date
that the first shareholder signs the demand. Except as provided by the
Wisconsin Business Corporation Law for a court-ordered adjournment, a
determination of shareholders entitled to notice of and to vote at a
meeting of shareholders is effective for any adjournment of such meeting
unless the Board of Directors fixes a new record date, which it shall do
if the meeting is adjourned to a date more than one hundred twenty (120)
days after the date fixed for the original meeting. The record date for
determining shareholders entitled to a distribution (other than a
distribution involving a purchase, redemption or other acquisition of the
corporation's shares) or a share dividend is the date on which the Board
of Directors authorized the distribution or share dividend, as the case
may be, unless the Board of Directors fixes a different record date.
2.07. Shareholders' List for Meetings. After a record date for a
special or annual meeting of shareholders has been fixed, the corporation
shall prepare a list of the names of all of the shareholders entitled to
notice of the meeting. The list shall be arranged by class or series of
shares, if any, and show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any
shareholder, beginning two (2) business days after notice of the meeting
is given for which the list was prepared and continuing to the date of
the meeting, at the corporation's principal office or at a place
identified in the meeting notice in the city where the meeting will be
held. A shareholder or his or her agent may, on written demand, inspect
and, subject to the limitations imposed by the Wisconsin Business
Corporation Law, copy the list, during regular business hours and at his
or her expense, during the period that it is available for inspection
pursuant to this Section 2.07. The corporation shall make the
shareholders' list available at the meeting and any shareholder or his or
her agent or attorney may inspect the list at any time during the meeting
or any adjournment thereof.
<PAGE>
<PAGE> 5
Refusal or failure to prepare or make available the shareholders' list
shall not affect the validity of any action taken at a meeting of
shareholders.
2.08. Quorum and Voting Requirements. Shares entitled to vote as a
separate voting group may take action on a matter at a meeting only if a
quorum of those shares exists with respect to that matter. If the
corporation has only one class of common stock outstanding, such class
shall constitute a separate voting group for purposes of this Section
2.08. Except as otherwise provided in the articles of incorporation, any
by-law adopted under authority granted in the articles of incorporation,
or the Wisconsin Business Corporation Law, a majority of the votes
entitled to be cast on the matter shall constitute a quorum of the voting
group for action on that matter. Once a share is represented for any
purpose at a meeting, other than for the purpose of objecting to holding
the meeting or transacting business at the meeting, it is considered
present for purposes of determining whether a quorum exists for the
remainder of the meeting and for any adjournment of that meeting unless a
new record date is or must be set for the adjourned meeting. If a quorum
exists, except in the case of the election of directors, action on a
matter shall be approved if the votes cast within the voting group
favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation, any by-law adopted under authority granted in
the articles of incorporation, or the Wisconsin Business Corporation Law
requires a greater number of affirmative votes. Unless otherwise
provided in the articles of incorporation, directors shall be elected by
a plurality of the votes cast by the shares entitled to vote in the
election of directors at a meeting at which a quorum is present. For
purposes of this Section 2.08, "plurality" means that the individuals
with the largest number of votes are elected as directors up to the
maximum number of directors to be chosen at the meeting. Though less
than a quorum of the outstanding votes of a voting group are represented
at a meeting, a majority of the votes so represented may adjourn the
meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the meeting as
originally noticed.
2.09. Conduct of Meeting. The Chairman, and in his or her absence,
the Vice Chairman, and in his or her absence, the President, and in his
or her absence, a Vice President in the order provided under Section 4.10
hereof, and in their absence, any person chosen by the shareholders
present shall call the meeting of the shareholders to order and shall act
as chairman of the meeting, and the Secretary of the corporation shall
act as secretary of all meetings of the shareholders, but, in the absence
of the Secretary, the presiding officer may appoint any other person to
act as secretary of the meeting.
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2.10. Proxies. At all meetings of shareholders, a shareholder may
vote his or her shares in person or by proxy. A shareholder may appoint
a proxy to vote or otherwise act for the shareholder by signing an
appointment form, either personally or by his or her attorney-in-fact.
An appointment of a proxy is effective when received by the Secretary or
other officer or agent of the corporation authorized to tabulate votes.
An appointment is valid for eleven (11) months from the date of its
signing unless a different period is expressly provided in the
appointment form. The presence of a shareholder who has filed a proxy
shall not of itself constitute revocation. The Board of Directors shall
have the power and authority to make rules establishing presumptions as
to the validity and sufficiency of proxies.
2.11. Voting of Shares. Except as provided in the articles of
incorporation or in the Wisconsin Business Corporation Law, each
outstanding share, regardless of class, is entitled to one vote on each
matter voted on at a meeting of shareholders.
2.12. Action without Meeting. Any action required or permitted by
the articles of incorporation or these by-laws or any provision of the
Wisconsin Business Corporation Law to be taken at a meeting of the
shareholders may be taken without a meeting and without action by the
Board of Directors if a written consent or consents, describing the
action so taken, is signed by all of the shareholders entitled to vote
with respect to the subject matter thereof and delivered to the
corporation for inclusion in the corporate records.
2.13. Acceptance of Instruments Showing Shareholder Action. If the
name signed on a vote, consent, waiver or proxy appointment corresponds
to the name of a shareholder, the corporation, if acting in good faith,
may accept the vote, consent, waiver or proxy appointment and give it
effect as the act of a shareholder. If the name signed on a vote,
consent, waiver or proxy appointment does not correspond to the name of a
shareholder, the corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act
of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports to
be that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the
shareholder and, if the corporation requests, evidence of fiduciary
status acceptable to the corporation is presented with respect to the
vote, consent, waiver or proxy appointment.
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(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence
of this status acceptable to the corporation is presented with respect to
the vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the corporation
requests, evidence acceptable to the corporation of the signatory's
authority to sign for the shareholder is presented with respect to the
vote, consent, waiver or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one
of the co-owners and the person signing appears to be acting on behalf of
all co-owners.
The corporation may reject a vote, consent, waiver or proxy
appointment if the Secretary or other officer or agent of the corporation
who is authorized to tabulate votes, acting in good faith, has reasonable
basis for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers. Classification and Number. All corporate
powers shall be exercised by or under the authority of, and the business
affairs of the corporation managed under the direction of, the Board of
Directors. The number of directors of the corporation shall be eight
(8).
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3.02. Tenure and Qualifications. Each director shall hold office
until the next annual meeting of shareholders and until his or her
successor shall have been elected and, if necessary, qualified, or until
his or her prior retirement, death, resignation or removal. The
retirement or resignation of a director who is an officer of this
corporation or an affiliated corporation, but not also the chief
executive officer of this corporation's parent corporation, shall take
effect at the time he or she ceases to hold his or her position as an
officer of this corporation or an affiliated corporation. Any other
director shall resign from the Board of Directors effective as of the
annual meeting of shareholders next following the date on which he or she
attains the age of seventy (70) years. Effective April 22, 1999, any
non-employee director of the corporation who (i) has a material change in
his or her position or employment, or (ii) is the subject of media
attention that might reflect unfavorably on his or her continued service
on the Board of Directors, or (iii) finds himself or herself to be in a
situation that may present, or appear to present, a conflict of interest
with the corporation, shall submit his or her resignation as a director,
which resignation shall be considered by the Board of Directors and
either accepted or rejected based upon the corporation's best interests.
A director may be removed from office at a meeting of the shareholders
called for the purpose of removing the director, and the meeting notice
shall state that the purpose, or one of the purposes, of the meeting is
removal of the director. A director may be removed from office with or
without cause if the number of votes cast to remove the director exceeds
the number of votes cast not to remove such director. A director may
resign at any time by delivering written notice which complies with the
Wisconsin Business Corporation Law to the Board of Directors, to the
Chairman or to the corporation. A director's resignation is effective
when the notice is delivered unless the notice specifies a later
effective date. Directors need not be residents of the State of
Wisconsin or shareholders of the corporation. No other restrictions,
limitations or qualifications may be imposed on individuals for service
as a director.
3.03. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this by-law immediately after the
annual meeting of shareholders and each adjourned session thereof. The
place of such regular meeting shall be the principal business office of
the corporation in the State of Wisconsin, or such other suitable place
as may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the date, time and place, either
within or without the State of Wisconsin, for the holding of additional
regular meetings of the Board of Directors without other notice than such
resolution.
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3.04. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman, the Vice Chairman,
the President, Secretary or any two (2) directors. The Chairman, the
Vice Chairman, the President or Secretary may fix any place, either
within or without the State of Wisconsin, as the place for holding any
special meeting of the Board of Directors, and if no other place is fixed
the place of the meeting shall be the principal business office of the
corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each meeting of the Board of
Directors (unless otherwise provided in or pursuant to Section 3.03)
shall be given by written notice delivered or communicated in person, by
telegraph, teletype, facsimile or other form of wire or wireless
communication, or by mail or private carrier, to each director at his
business address or at such other address as such director shall have
designated in writing filed with the Secretary, in each case not less
than forty-eight (48) hours prior to the meeting. The notice need not
describe the purpose of the meeting of the Board of Directors or the
business to be transacted at such meeting. If mailed, such notice shall
be deemed to be effective when deposited in the United States mail so
addressed, with postage thereon prepaid. If notice is given by telegram,
such notice shall be deemed to be effective when the telegram is
delivered to the telegraph company. If notice is given by private
carrier, such notice shall be deemed to be effective when delivered to
the private carrier. Whenever any notice whatever is required to be
given to any director of the corporation under the articles of
incorporation or these by-laws or any provision of the Wisconsin Business
Corporation Law, a waiver thereof in writing, signed at any time, whether
before or after the date and time of meeting, by the director entitled to
such notice shall be deemed equivalent to the giving of such notice. The
corporation shall retain any such waiver as part of the permanent
corporate records. A director's attendance at or participation in a
meeting waives any required notice to him or her of the meeting unless
the director at the beginning of the meeting or promptly upon his or her
arrival objects to holding the meeting or transacting business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting.
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3.06. Quorum. Except as otherwise provided by the Wisconsin Business
Corporation Law or by the articles of incorporation or these by-laws, a
majority of the number of directors specified in Section 3.01 of these
by-laws shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors. Except as otherwise provided by the
Wisconsin Business Corporation Law or by the articles of incorporation or
by these by-laws, a quorum of any committee of the Board of Directors
created pursuant to Section 3.12 hereof shall consist of a majority of
the number of directors appointed to serve on the committee. A majority
of the directors present (though less than such quorum) may adjourn any
meeting of the Board of Directors or any committee thereof, as the case
may be, from time to time without further notice.
3.07. Manner of Acting. The affirmative vote of a majority of the
directors present at a meeting of the Board of Directors or a committee
thereof at which a quorum is present shall be the act of the Board of
Directors or such committee, as the case may be, unless the Wisconsin
Business Corporation Law, the articles of incorporation or these by-laws
require the vote of a greater number of directors.
3.08. Conduct of Meetings. The Chairman, and in his or her absence,
the Vice Chairman, and in his or her absence, the President, and in his
or her absence, a Vice President in the order provided under Section
4.10, and in their absence, any director chosen by the directors present,
shall call meetings of the Board of Directors to order and shall act as
chairman of the meeting. The Secretary of the corporation shall act as
secretary of all meetings of the Board of Directors but in the absence of
the Secretary, the presiding officer may appoint any other person present
to act as secretary of the meeting. Minutes of any regular or special
meeting of the Board of Directors shall be prepared and distributed to
each director.
3.09. Vacancies. Any vacancies occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors,
shall be filled only as provided in the articles of incorporation. A
vacancy that will occur at a specific later date, because of a
resignation effective at a later date or otherwise, may be filled before
the vacancy occurs, but the new director may not take office until the
vacancy occurs.
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3.10. Compensation. The Board of Directors, irrespective of any
personal interest of any of its members, may establish reasonable
compensation of all directors for services to the corporation as
directors, officers or otherwise, or may delegate such authority to an
appropriate committee. The Board of Directors also shall have authority
to provide for or delegate authority to an appropriate committee to
provide for reasonable pensions, disability or death benefits, and other
benefits or payments, to directors, officers and employees and to their
estates, families, dependents or beneficiaries on account of prior
services rendered by such directors, officers and employees to the
corporation.
3.11. Presumption of Assent. A director who is present and is
announced as present at a meeting of the Board of Directors or any
committee thereof created in accordance with Section 3.12 hereof, when
corporate action is taken, assents to the action taken unless any of the
following occurs: (a) the director objects at the beginning of the
meeting or promptly upon his or her arrival to holding the meeting or
transacting business at the meeting; (b) the director dissents or
abstains from an action taken and minutes of the meeting are prepared
that show the director's dissent or abstention from the action taken; (c)
the director delivers written notice that complies with the Wisconsin
Business Corporation Law of his or her dissent or abstention to the
presiding officer of the meeting before its adjournment or to the
corporation immediately after adjournment of the meeting; or (d) the
director dissents or abstains from an action taken, minutes of the
meeting are prepared that fail to show the director's dissent or
abstention from the action taken, and the director delivers to the
corporation a written notice of that failure that complies with the
Wisconsin
Business Corporation Law promptly after receiving the minutes. Such
right of dissent or abstention shall not apply to a director who votes in
favor of the action taken.
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3.12. Committees. The Board of Directors by resolution adopted by
the affirmative vote of a majority of all of the directors then in office
may create one or more committees, appoint members of the Board of
Directors to serve on the committees and designate other members of the
Board of Directors to serve as alternates. Each committee shall have two
(2) or more members who shall, unless otherwise provided by the Board of
Directors, serve at the pleasure of the Board of Directors. A committee
may be authorized to exercise the authority of the Board of Directors,
except that a committee may not do any of the following: (a) authorize
distributions; (b) approve or propose to shareholders action that the
Wisconsin Business Corporation Law requires to be approved by
shareholders; (c) fill vacancies on the Board of Directors or, unless the
Board of Directors provides by resolution that vacancies on a committee
shall be filled by the affirmative vote of the remaining committee
members, on any Board committee; (d) amend the corporation's articles of
incorporation; (e) adopt, amend or repeal by-laws; (f) approve a plan of
merger not requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method
prescribed by the Board of Directors; and (h) authorize or approve the
issuance or sale or contract for sale of shares, or determine the
designation and relative rights, preferences and limitations of a class
or series of shares, except that the Board of Directors may authorize a
committee to do so within limits prescribed by the Board of Directors.
Unless otherwise provided by the Board of Directors in creating the
committee, a committee may employ counsel, accountants and other
consultants to assist it in the exercise of its authority.
3.13. Alternate Members of Committees. The Board of Directors may
appoint annually and from time to time, as alternate members of any
committee of the Board of Directors, directors to serve whenever
designated by the committee or by the Chairman, the Vice Chairman or the
President to take the place of absent members, or to fill vacancies on
such committee until the next meeting of the Board of Directors. An
alternate member of any committee so designated to serve shall receive
compensation for such service as fixed by the Board of Directors.
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3.14. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or these
by-laws, members of the Board of Directors (and any committees thereof
created pursuant to Section 3.12 hereof) may participate in regular or
special meetings by, or through the use of, any means of communication by
which all participants may simultaneously hear each other, such as by
conference telephone. If a meeting is conducted by such means, then at
the commencement of such meeting the presiding officer shall inform the
participating directors that a meeting is taking place at which official
business may be transacted. Any participant in a meeting by such means
shall be deemed present in person at such meeting. Notwithstanding the
foregoing, no action may be taken at any meeting held by such means on
any particular matter which the presiding officer determines, in his or
her sole discretion, to be inappropriate under the circumstances for
action at a meeting held by such means. Such determination shall be made
and announced in advance of such meeting.
3.15. Action Without Meeting. Any action required or permitted by
the Wisconsin Business Corporation Law to be taken at a meeting of the
Board of Directors or a committee thereof created pursuant to Section
3.12 hereof may be taken without a meeting if the action is taken by all
members of the Board or of the committee. The action shall be evidenced
by one or more written
consents describing the action taken, signed by each director or
committee member and retained by the corporation. Such action shall be
effective when the last director or committee member signs the consent,
unless the consent specifies a different effective date.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall be a
Chairman, a President, the number of Vice Presidents as authorized from
time to time by the Board of Directors, a Secretary, and a Treasurer,
each of whom shall be elected by the Board of Directors. A Vice Chairman
and such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board of Directors. The Board of
Directors may also authorize any duly appointed officer to appoint one or
more officers or assistant officers. Any two (2) or more offices may be
held by the same person.
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4.02. Election and Term of Office. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the
Board of Directors at the first meeting of the Board of Directors held
after each annual meeting of the shareholders. If the election of
officers shall not be held at such meeting, such election shall be held
as soon thereafter as is practicable. Each officer shall hold office
until his or her successor shall have been duly elected or until his or
her prior death, resignation or removal.
4.03. Removal. The Board of Directors may remove any officer and,
unless restricted by the Board of Directors or these by-laws, an officer
may remove any officer or assistant officer appointed by that officer, at
any time, with or without cause and notwithstanding the contract rights,
if any, of the officer removed. The appointment of an officer does not
of itself create contract rights.
4.04. Resignation. An officer may resign at any time by delivering
notice to the corporation that complies with the Wisconsin Business
Corporation Law. The resignation shall be effective when the notice is
delivered, unless the notice specifies a later effective date and the
corporation accepts the later effective date.
4.05. Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification or otherwise, shall be filled by
the Board of Directors for the unexpired portion of the term. If a
resignation of an officer is effective at a later date as contemplated by
Section 4.04 hereof, the Board of Directors may fill the pending vacancy
before the effective date if the Board provides that the successor may
not take office until the effective date.
4.06. Chief Executive Officer. The Board of Directors shall from
time to time designate the Chairman, the Vice Chairman, if any, or the
President as the Chief Executive Officer of the corporation. The
President shall be the Chief Executive Officer when the offices of
Chairman and Vice Chairman are vacant, or when the Board of Directors has
not designated the Chairman or the Vice Chairman, if any, as Chief
Executive Officer. Subject to the control of the Board of Directors, the
Chief Executive Officer shall in general supervise and control all of the
business and affairs of the corporation and shall perform all duties
incident to the office of Chief Executive Officer and such other duties
as may be prescribed by the Board of Directors from time to time.
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4.07. Chairman. The Chairman shall, when present, preside at all
meetings of the shareholders and the Board of Directors. He or she shall
have authority, subject to such rules as may be prescribed by the Board
of Directors, to appoint such agents and employees of the corporation as
he or she shall deem necessary, to prescribe their powers, duties and
compensation, and to delegate authority to them. Such agents and
employees shall hold office at the discretion of the Chairman. He or she
shall have authority to sign, execute and acknowledge, on behalf of the
corporation, all deeds, mortgages, bonds, stock certificates, contracts,
leases, reports and all other documents or instruments necessary or
proper to be executed in the course of the corporation's regular
business, or which shall be authorized by resolution of the Board of
Directors; and, except as otherwise provided by law or the Board of
Directors, he or she may authorize any other officer or agent of the cor
poration to sign, execute and acknowledge such documents or instruments
in his or her place and stead. In general, he or she shall perform all
duties incident to the office of Chairman and such other duties as may be
prescribed by the Board of Directors from time to time.
4.08. Vice Chairman. The Vice Chairman, if any, shall have such
authority and responsibilities as may be prescribed by the Board of
Directors from time to time. In the absence of the Chairman, or in the
event of the Chairman's death or inability to act, or in the event for
any reason it shall be impracticable for the Chairman to act personally,
the Vice Chairman shall perform the duties of the Chairman, and when so
acting, shall have all the powers of and be subject to all of the
restrictions upon the Chairman. He or she shall have authority, subject
to such rules as may be prescribed by the Board of Directors, to appoint
such agents and employees of the corporation as he or she shall deem
necessary, to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents shall hold office at the
discretion of the Vice Chairman. He or she shall have authority to sign,
execute and acknowledge, on behalf of the corporation, all deeds,
mortgages, bonds, stock certificates, contracts, leases, reports and all
other documents or instruments necessary or proper to be executed in the
course of the corporation's regular business, or which shall be
authorized by resolution of the Board of Directors; and, except as
otherwise provided by law or the Board of Directors, he or she may
authorize the President or other officer or agent of the corporation to
sign, execute and acknowledge such documents or instruments in his or per
place and stead. In general, he or she shall perform all duties incident
to the office of Vice Chairman and such other duties as may be prescribed
by the Chairman or the Board of Directors from time to time.
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4.09. President. Subject to Section 4.06 hereof, the President shall
be the Chief Executive Officer of the corporation and, subject to the
control of the Board of Directors, shall supervise and control all the
affairs of the corporation. In the absence of the Vice Chairman, or in
the event of the Vice Chairman's death or inability to act, or in the
event for any reason it shall be impracticable for the Vice Chairman to
act personally, the President shall perform the duties of the Vice
Chairman, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the Vice Chairman. He or she shall have
authority, subject to such rules as may be prescribed by the Board of
Directors, to appoint such agents and employees of the corporation as he
or she shall deem necessary, to prescribe their powers, duties and
compensation, and to delegate authority to them. Such agents shall hold
office at the discretion of the President. He or she shall have
authority to sign, execute and acknowledge, on behalf of the corporation,
all deeds, mortgages, bonds, stock certificates, contracts, leases,
reports and all other documents or instruments necessary or proper to be
executed in the course of the corporation's regular business, or which
shall be authorized by resolution of the Board of Directors; and, except
as otherwise provided by law or the Board of Directors, he or she may
authorize any other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his or her place and
stead. In general, he or she shall perform all duties incident to the
office of President and such other duties as may be prescribed by the
Chairman, or the Vice Chairman, if any, or the Board of Directors from
time to time.
4.10. The Vice Presidents. In the absence of the President, or in
the event of the President's death, inability or refusal to act, or in
the event for any reason it shall be impracticable for the President to
act personally, the Vice President (or in the event there be more than
one Vice President, the Vice Presidents in the order designated by the
Board of Directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the President and,
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties and have such authority
as from time to time may be delegated or assigned to him or her by the
Chairman, the Vice Chairman, the President or the Board of Directors.
The execution of any instrument of the corporation by any Vice President
shall be conclusive evidence, as to third parties, of his or her
authority to act in the stead of the Chairman, the Vice Chairman or the
President.
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4.11. The Secretary. The Secretary shall: (a) keep minutes of the
meetings of the shareholders and of the Board of Directors (and of
committees thereof) in one or more books provided for that purpose
(including records of actions taken by the shareholders or the Board of
Directors (or committees thereof) without a meeting); (b) see that all
notices are duly given in accordance with the provisions of these by-laws
or as required by the Wisconsin Business Corporation Law; (c) be
custodian of the corporate records and of the seal of the corporation and
see that the seal of the corporation is affixed to all documents the
execution of which on behalf of the corporation under its seal is duly
authorized; (d) maintain a record of the shareholders of the corporation,
in a form that permits preparation of a list of the names and addresses
of all shareholders, by class or series of shares and showing the number
and class or series of shares held by each shareholder; (e) sign with the
Chairman, the Vice Chairman, the President or a Vice President,
certificates for shares of the corporation, the issuance of which shall
have been authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the corporation; and (g) in
general perform all duties incident to the office of Secretary and have
such other duties and exercise such authority as from time to time may be
delegated or assigned by the Chairman, the Vice Chairman, the President
or the Board of Directors.
4.12. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) maintain appropriate accounting records; (c) receive and
give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositaries as shall
be selected in accordance with the provisions of Section 5.04; and (d) in
general perform all of the duties incident to the office of Treasurer and
have such other duties and exercise such other authority as from time to
time may be delegated or assigned by the Chairman, the Vice Chairman, the
President or the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of
his or her duties in such sum and with such surety or sureties as the
Board of Directors shall determine.
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4.13. Assistant Secretaries and Assistant Treasurers. There shall be
such number of Assistant Secretaries and Assistant Treasurers as the
Board of Directors may from time to time authorize. The Assistant
Secretaries may sign with the Chairman, the Vice Chairman, the President
or a Vice President certificates for shares of the corporation the
issuance of which shall have been authorized by a resolution of the Board
of Directors. The Assistant Treasurers shall respectively, if required
by the Board of Directors, give bonds for the faithful discharge of their
duties in such sums and with such sureties as the Board of Directors
shall determine. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties and have such authority as shall from
time to time be delegated or assigned to them by the Secretary or the
Treasurer, respectively, or by the Chairman, the Vice Chairman, the
President or the Board of Directors.
4.14. Other Assistants and Acting Officers. The Board of Directors
shall have the power to appoint, or to authorize any duly appointed
officer of the corporation to appoint, any person to act as assistant to
any officer, or as agent for the corporation in his or her stead, or to
perform the duties of such officer whenever for any reason it is
impracticable for such officer to act personally, and such assistant or
acting officer or other agent so appointed by the Board of Directors or
an authorized officer shall have the power to perform all the duties of
the
office to which he or she is so appointed to be an assistant, or as to
which he or she is so appointed to act, except as such power may be
otherwise defined or restricted by the Board of Directors or the
appointing officer.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute or
deliver any instrument in the name of and on behalf of the corporation,
and such authorization may be general or confined to specific instances.
In the absence of other designation, all deeds, mortgages and instruments
of assignment or pledge made by the corporation shall be executed in the
name of the corporation by the Chairman, the Vice Chairman, the President
or one of the Vice Presidents and by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer; the Secretary or an
Assistant Secretary, when necessary or required, shall affix the
corporate seal, if any, thereto; and when so executed no other party to
such instrument or any third party shall be required to make any inquiry
into the authority of the signing officer or officers.
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5.02. Loans. No indebtedness for borrowed money shall be contracted
on behalf of the corporation and no evidences of such indebtedness shall
be issued in its name unless authorized by or under the authority of a
resolution of the Board of Directors. Such authorization may be general
or confined to specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in
the name of the corporation, shall be signed by such officer or officers,
agent or agents of the corporation and in such manner as shall from time
to time be determined by or under the authority of a resolution of the
Board of Directors.
5.04. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in
such banks, trust companies or other depositaries as may be selected by
or under the authority of a resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation. Subject always
to the specific directions of the Board of Directors, (a) any shares or
other securities issued by any other corporation and owned or controlled
by this corporation may be voted at any meeting of security holders of
such other corporation by the Chairman of this corporation if he or she
be present, or in his or her absence, by the Vice Chairman of this
corporation if he or she be present, or in his or her absence, by the
President of this corporation if he or she be present, or in his or her
absence by any Vice President of this corporation who may be present, and
(b) whenever, in the judgment of the Chairman, or in his or her absence,
of the Vice Chairman, or in his or her absence, of the President, or in
his or her absence, any Vice President, it is desirable for this
corporation to execute a proxy or written consent in respect to any
shares or other securities issued by any other corporation and owned by
this corporation, such proxy or consent shall be executed in the name of
this corporation by the Chairman, the Vice Chairman, the President or one
of the Vice Presidents of this corporation, without necessity of any
authorization by the Board of Directors, affixation of corporate seal, if
any, or countersignature or attestation by another officer. Any person
or persons designated in the manner above stated as the proxy or proxies
of this corporation shall have full right, power and authority to vote
the shares or other securities issued by such other corporation and owned
by this corporation the same as such shares or other securities might be
voted by this corporation.
<PAGE>
<PAGE> 20
ARTICLE VI. CERTIFICATES FOR SHARES; TRANSFER OF SHARES
6.01. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form, consistent with the Wisconsin
Business Corporation Law, as shall be determined by the Board of
Directors. Such certificates shall be signed by the Chairman, the Vice
Chairman, the President or a Vice President and by the Secretary or an
Assistant Secretary. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the person to
whom the shares represented thereby are issued, with the number of shares
and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be issued until
the former certificate for a like number of shares shall have been
surrendered and canceled, except as provided in Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the corporation on
any certificates for shares may be a facsimile. The signature of the
Chairman, the Vice Chairman, the President or Vice President and the
Secretary or Assistant Secretary upon a certificate may be facsimiles if
the certificate is manually signed on behalf of a transfer agent, or a
registrar, other than the corporation itself or an employee of the
corporation.
6.03. Signature by Former Officers. The validity of a share
certificate is not affected if a person who signed the certificate
(either manually or in facsimile) no longer holds office when the
certificate is issued.
6.04. Transfer of Shares. Prior to due presentment of a certificate
for shares for registration of transfer the corporation may treat the
registered owner of such shares as the person exclusively entitled to
vote, to receive notifications and otherwise to have and exercise all the
rights and power of an owner. Where a certificate for shares is
presented to the corporation with a request to register for transfer, the
corporation shall not be liable to the owner or any other person
suffering loss as a result of such registration of transfer if (a) there
were on or with the certificate the necessary endorsements, and (b) the
corporation had no duty to inquire into adverse claims or has discharged
any such duty. The corporation may require reasonable assurance that
such endorsements are genuine and effective and compliance with such
other regulations as may be prescribed by or under the authority of the
Board of Directors.
<PAGE>
<PAGE> 21
6.05. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the owner claims
that certificates for shares have been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner
(a) so requests before the corporation has notice that such shares have
been acquired by a bona fide purchaser, (b) files with the corporation a
sufficient indemnity bond if required by the Board of Directors or any
principal officer, and (c) satisfies such other reasonable requirements
as may be prescribed by or under the authority of the Board of Directors.
6.07. Consideration for Shares. The Board of Directors may authorize
shares to be issued for consideration consisting of any tangible or
intangible property or benefit to the corporation, including cash,
promissory notes, services performed, contracts for services to be
performed or other securities of the corporation. Before the corporation
issues shares, the Board of Directors shall determine that the
consideration received or to be received for the shares to be issued is
adequate. The determination of the Board of Directors is conclusive
insofar as the adequacy of consideration for the issuance of shares
relates to whether the shares are validly issued, fully paid and
nonassessable. The corporation may place in escrow shares issued in
whole or in part for a contract for future services or benefits, a
promissory note, or otherwise for property to be issued in the future, or
make other arrangements to restrict the transfer of the shares, and may
credit distributions in respect of the shares against their purchase
price, until the services are performed, the benefits or property are
received or the promissory note is paid. If the services are not
performed, the benefits or property are not received or the promissory
note is not paid, the corporation may cancel, in whole or in part, the
shares escrowed or restricted and the distributions credited.
6.08. Stock Regulations. The Board of Directors shall have the power
and authority to make all such further rules and regulations not
inconsistent with law as it may deem expedient concerning the issue,
transfer and registration of shares of the corporation.
ARTICLE VII. SEAL
7.01. Seal. The Board of Directors shall provide for a corporate
seal for the corporation which shall be circular in form and shall have
inscribed thereon the name of the corporation, the state of incorporation
and the words "Corporate Seal".
<PAGE>
<PAGE> 22
ARTICLE VIII. INDEMNIFICATION
8.01. Provision of Indemnification. The corporation shall, to the
fullest extent permitted or required by Sections 180.0850 to 180.0859,
inclusive, of the Wisconsin Business Corporation Law, including any
amendments thereto (but in the case of any such amendment, only to the
extent such amendment permits or requires the corporation to provide
broader indemnification rights than prior to such amendment), indemnify
its Directors and Officers against any and all Liabilities, and advance
any and all reasonable Expenses, incurred thereby in any Proceeding to
which any such Director of Officer is a Party because he or she is or was
a Director or Officer of the corporation. The corporation shall also
indemnify an employee who is not a Director or Officer, to the extent
that the employee has been successful on the merits or otherwise in
defense of a Proceeding, for all reasonable Expenses incurred in the
Proceeding if the employee was a Party because he or she is or was an
employee of the corporation. The rights to indemnification granted
hereunder shall not be deemed exclusive of any other rights to
indemnification against Liabilities or the advancement of Expenses which
a Director, Officer or employee may be entitled under any written
agreement, Board resolution, vote of shareholders, the Wisconsin Business
Corporation Law or otherwise. The corporation may, but shall not be
required to, supplement the foregoing rights to indemnification against
Liabilities and advancement of Expenses under this Section 8.01 by the
purchase of insurance on behalf of any one or more of such Directors,
Officers or employees, whether or not the corporation would be obligated
to indemnify or advance Expenses to such Director, Officer or employee
under this Section 8.01. All capitalized terms used in this Article VIII
and not otherwise defined herein shall have the meaning set forth in
Section 180.0850 of the Wisconsin Business Corporation Law.
ARTICLE IX. AMENDMENTS
9.01. By Shareholders. Except as otherwise provided in the articles
of incorporation, the shareholders shall have the power to adopt, amend,
alter, change or repeal any of the by-laws of the corporation at any
annual or special meeting of the shareholders at which a quorum is in
attendance.
<PAGE>
<PAGE> 23
9.02. By Directors. Except as otherwise provided by the Wisconsin
Business Corporation Law or in the articles of incorporation, the Board
of Directors shall have the power to adopt, amend, alter, change or
repeal any of the by-laws of the corporation by the affirmative vote of a
majority of the directors present at any meeting of the Board of
Directors at which a quorum is in attendance; but no by-law adopted by
the shareholders shall be amended or repealed by the Board of Directors
if the by-law so adopted so provides. The manner of adoption of these
by-laws or any section or provision thereof shall not be deemed to impair
or negate the power of the Board of Directors to adopt, amend, alter,
change or repeal these by-laws as provided herein.
9.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors which would be inconsistent
with the by-laws then in effect but which is taken or authorized by
affirmative vote of not less than the number of shares or the number of
directors required to amend the by-laws so that the by-laws would be
consistent with such action shall be given the same effect as though the
by-laws had been temporarily amended or suspended so far, but only so
far, as is necessary to permit the specific action so taken or
authorized.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
Wisconsin Gas Company FORM 10-Q for the three months ended March 31, 1999 and is
qualified in its entirety by reference to such financial statements and the
related footnotes.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 377,004
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 137,779
<TOTAL-DEFERRED-CHARGES> 122,571
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 637,354
<COMMON> 9
<CAPITAL-SURPLUS-PAID-IN> 120,978
<RETAINED-EARNINGS> 111,145
<TOTAL-COMMON-STOCKHOLDERS-EQ> 229,908
0
0
<LONG-TERM-DEBT-NET> 158,110
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 160,000
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 249,336
<TOT-CAPITALIZATION-AND-LIAB> 637,354
<GROSS-OPERATING-REVENUE> 170,397
<INCOME-TAX-EXPENSE> 13,833
<OTHER-OPERATING-EXPENSES> 130,471
<TOTAL-OPERATING-EXPENSES> 144,304
<OPERATING-INCOME-LOSS> 26,093
<OTHER-INCOME-NET> 299
<INCOME-BEFORE-INTEREST-EXPEN> 26,392
<TOTAL-INTEREST-EXPENSE> 3,422
<NET-INCOME> 22,970
0
<EARNINGS-AVAILABLE-FOR-COMM> 22,970
<COMMON-STOCK-DIVIDENDS> 6,500
<TOTAL-INTEREST-ON-BONDS> 72
<CASH-FLOW-OPERATIONS> 74,003
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
