<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 June 30, 1994
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 2-2066
WISCONSIN NATURAL GAS COMPANY
(Exact name of registrant as specified in its charter)
Wisconsin 39-0713260
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
231 West Michigan Street, P.O. Box 2046, Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
(414) 221-2590
(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 August 1, 1994
------------------------- -----------------------------
$1 Par Value Common Stock 1,725,000 Shares
The registrant meets the conditions set forth in General Instruction H(1)(a)
and (b) of Form 10-Q for omission of data by certain wholly-owned subsidiaries
and is therefore filing this Form with the reduced disclosure format.
<PAGE> 2
<TABLE>
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WISCONSIN NATURAL GAS COMPANY
CONDENSED INCOME STATEMENT
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ ------------------
1994 1993 * 1994 1993 *
---- ---- ---- ----
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Operating Revenues $ 58,502 $ 60,082 $206,081 $184,002
Operating Expenses
Cost of gas sold 37,285 40,874 128,438 117,433
Other operation expenses 14,962 15,131 33,260 30,243
Maintenance 1,787 1,765 3,304 3,220
Revitalization - - 10,400 -
Depreciation 4,183 4,080 8,329 8,118
Income taxes (784) (1,577) 7,030 7,738
-------- -------- -------- --------
Total Operating Expenses 57,433 60,273 190,761 166,752
Operating Income 1,069 (191) 15,320 17,250
Other Income and Deductions
Miscellaneous - net 161 119 290 197
Income Taxes (49) (49) (103) (81)
-------- -------- -------- --------
Total Other Income and Deductions 112 70 187 116
Income Before Interest Charges 1,181 (121) 15,507 17,366
Interest Charges 1,772 1,939 3,864 4,131
-------- -------- -------- --------
Net Income (Loss) $ (591) $ (2,060) $ 11,643 $ 13,235
======== ======== ======== ========
<FN>
* Restated to reflect the merger of Wisconsin Southern Gas Company, Inc.
into Wisconsin Natural Gas Company effective on 1/1/94.
Note - Earnings and dividends per share of common stock are not applicable
because all of the company's common stock is owned by Wisconsin
Energy Corporation.
See accompanying notes to financial statements.
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</TABLE>
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<TABLE>
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
CONDENSED BALANCE SHEET
(Unaudited)
<CAPTION>
June 30, 1994 December 31, 1993 *
------------- -------------------
(Thousands of Dollars)
Assets
------
<S> <C> <C>
Utility Plant
Plant $451,692 $444,453
Accumulated provision for depreciation (212,136) (205,247)
-------- --------
Net Utility Plant 239,556 239,206
Other Property and Investments 2,248 1,013
Current Assets
Cash and cash equivalents 6,839 6,964
Accounts receivable 27,416 27,715
Accrued utility revenues 7,529 39,153
Materials, supplies and natural gas
stored 28,700 43,089
Prepayments and other assets 4,041 3,768
-------- --------
Total Current Assets 74,525 120,689
Deferred Charges and Other Assets
Accumulated deferred income taxes 17,792 14,370
Other 10,915 10,182
-------- --------
Total Deferred Charges and Other Assets 28,707 24,552
-------- --------
Total Assets $345,036 $385,460
======== ========
Capitalization and Liabilities
------------------------------
Capitalization
Common stock $ 81,016 $ 81,016
Retained earnings 53,189 46,797
-------- --------
Total Common Stock Equity 134,205 127,813
Long-term debt 68,155 80,482
-------- --------
Total Capitalization 202,360 208,295
Current Liabilities
Long-term debt due currently 13,570 2,653
Short-term debt 12,998 75,308
Accounts payable 20,849 29,561
Accrued liabilities 12,688 9,918
Other 16,516 3,448
-------- --------
Total Current Liabilities 76,621 120,888
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 30,934 30,083
Other 35,121 26,194
-------- --------
Total Deferred Credits and Other Liabilities 66,055 56,277
-------- --------
Total Capitalization and Liabilities $345,036 $385,460
======== ========
<FN>
* Restated to reflect the merger of Wisconsin Southern Gas Company, Inc.
into Wisconsin Natural Gas Company effective on 1/1/94.
See accompanying notes to financial statements.
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</TABLE>
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<TABLE>
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended June 30
--------------------------
1994 1993 *
---- ----
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net income $11,643 $13,235
Reconciliation to cash:
Depreciation 8,329 8,118
Revitalization - net 8,531 -
Deferred income taxes - net (2,571) 839
Investment tax credit - net (248) (228)
Change in: Accounts receivable 299 (3,084)
Inventories 14,389 (7,553)
Accounts payable (8,712) (6,006)
Other current assets 31,351 32,321
Other current liabilities 15,838 4,997
Other 431 (205)
-------- --------
Cash Provided by Operating Activities 79,280 42,434
Investing Activities:
Construction expenditures (8,171) (9,217)
Other (2,216) (273)
-------- --------
Cash Used in Investing Activities (10,387) (9,490)
Financing Activities:
Sale of long-term debt 9,290 (43)
Retirement of long-term debt (10,748) (1,069)
Change in short-term debt (62,310) (26,512)
Dividends on stock - common (5,250) (4,768)
Other - 18
-------- --------
Cash Used in Financing Activities (69,018) (32,374)
-------- --------
Change in Cash and Cash Equivalents $ (125) $ 570
======== ========
Supplemental Information Disclosures:
Cash Paid for:
Interest (net of amount capitalized) $ 3,836 $ 3,854
Income taxes 6,900 4,978
<FN>
* Restated to reflect the merger of Wisconsin Southern Gas Company, Inc.
into Wisconsin Natural Gas Company effective on 1/1/94.
See accompanying notes to financial statements.
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</TABLE>
<PAGE> 5
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
-------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited financial statements should be read in
conjunction with the company's 1993 Annual Report on Form 10-K. In the
opinion of management, all adjustments necessary to a fair statement of
the results of operations and financial position of the company have been
included in the accompanying income statement and balance sheet. The
results of operations for the three months and six months ended June 30,
1994 are not, however, necessarily indicative of the results which may
be expected for the year 1994 because of seasonal and other factors.
2. In the first quarter of 1994, Wisconsin Natural Gas Company recorded
a $10.4 million charge related to its revitalization program. The charge
reflects primarily the costs of voluntary severance and early retirement
packages which are being used to reduce employee staffing levels.
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<PAGE> 6
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
--------------------------------
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Second Quarter Results:
The $1.6 million decrease in gas operating revenues during the three months
ended June 30, 1994, relative to the same period in 1993, adjusted for the
merger of Wisconsin Southern Gas Company Inc. ("Wisconsin Southern") into
Wisconsin Natural Gas Company ("Wisconsin Natural") effective January 1, 1994,
largely reflects the slight decrease in natural gas therm deliveries during
the second quarter of 1994.
The merger of Wisconsin Southern into Wisconsin Natural was structured to
qualify as a pooling of interests for accounting and financial reporting
purposes beginning in 1994. Accordingly, historical financial data is
restated to include Wisconsin Southern.
GAS DELIVERIES
Three Months Ended June 30
---------------------------
Therms Delivered - Thousands 1994 1993* % Change
- ------------------------------- ---------- ---------- --------
Residential 42,982 49,127 (12.5)
Commercial and Industrial 32,894 28,984 13.5
Interruptible 10,612 6,198 71.2
---------- ----------
Total Sales 86,488 84,309 2.6
Transported Customer Owned Gas 55,365 57,971 (4.5)
---------- ----------
Total Gas Delivered 141,853 142,280 (0.3)
- -------------------------------
* Note: The 1993 amounts for gas therms delivered have been restated to
reflect the merger of Wisconsin Southern into Wisconsin Natural effective
on 1/1/94.
Wisconsin Natural transports gas for its customers who purchase gas directly
from other suppliers, which accounted for approximately 39.0% of total therms
delivered by Wisconsin Natural during the second quarter of 1994 compared to
40.7% during the second quarter of 1993. Largely due to the Federal Energy
Regulatory Commission ("FERC") Order 636, which has fostered increased
competition in the natural gas industry, Wisconsin Natural believes that some
of its existing gas transportation customers will switch to purchasing gas
directly from Wisconsin Natural, reducing the amount of customer-owned gas to
be transported. However, since rates charged for transportation services are
designed to recover the same margin as gas sold directly by Wisconsin Natural,
no significant impact on operating income is expected due to this change.
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<PAGE> 7
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
-----------------------------------
PART I - FINANCIAL INFORMATION (Cont'd)
SOURCES OF NATURAL GAS
As a result of FERC Order 636, the number of service choices now available to
Wisconsin Natural has expanded, but the responsibility for selecting the
proper mix and level of services has commensurately increased.
Wisconsin Natural arranges for its own gas supply under contracts with terms
of various lengths. Changes in the cost of natural gas purchased at market
prices are passed through to customers via Wisconsin Natural's purchased gas
adjustment clause.
With the decoupling of rates and services under FERC Order 636, Wisconsin
Natural has been purchasing more gas than it has in the past for storage
pending future withdrawal during the heating season under various arrangements
that it has made with gas storage facilities. This storage effectively
replaces storage used by the pipeline companies to provide gas sales service
to Wisconsin Natural in the pre-FERC Order 636 environment. At June 30, 1994
the cost of natural gas stored for future use was $24.5 million compared to
$20.2 million stored at June 30, 1993. Gas stored at these facilities is
purchased by Wisconsin Natural from a number of suppliers.
For additional information regarding matters pertaining to gas operations,
refer to ITEM 1. BUSINESS - GAS UTILITY OPERATIONS in PART I of Wisconsin
Natural's Annual Report on Form 10-K for the year ended December 31, 1993.
Year-to-Date Results:
The $1.6 million decrease in net income during the six months ended June 30,
1994 compared to the same period during 1993 primarily reflects a non-
recurring restructuring charge of approximately $6 million (net of tax)
incurred during the first quarter of 1994 as part of the "Revitalization"
program undertaken at Wisconsin Natural. This charge includes the cost of
voluntary severance and early retirement packages used to reduce employee
staffing levels. It is anticipated that this charge will be offset by the end
of 1995 through savings in operation and maintenance costs. Excluding the
non-recurring charge, earnings would have increased approximately $4 million
during the 6 month period ended June 30, 1994 compared to the same period
during 1993. Contributing positively to earnings during the first half of
1994 were increased natural gas deliveries.
Operating revenues increased 12.0% during the six months ended June 30, 1994
compared to the same period during 1993, reflecting the increase in gas
deliveries, the $9.2 million, or 3.3%, annualized rate increase effective
since September 2, 1993 and the recovery of increased purchased gas costs.
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<PAGE> 8
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
-----------------------------------
PART I - FINANCIAL INFORMATION (Cont'd)
GAS DELIVERIES
Six Months Ended June 30
---------------------------
Therms Delivered - Thousands 1994 1993* % Change
- ------------------------------- ---------- ---------- --------
Residential 210,651 196,429 7.2
Commercial and Industrial 126,385 117,637 7.4
Interruptible 27,590 16,908 63.2
---------- ----------
Total Sales 364,626 330,974 10.2
Transported Customer Owned Gas 124,628 136,501 (8.7)
---------- ----------
Total Gas Delivered 489,254 467,475 4.7
- -------------------------------
* Note: The 1993 amounts for gas therms delivered have been restated to
reflect the merger of Wisconsin Southern into Wisconsin Natural effective
on 1/1/94.
Natural gas therm deliveries during the first six months of 1994 were
positively impacted by, among other things, colder weather conditions during
the first quarter of 1994. As measured by heating degree days, the first
quarter of 1994 was 9.4% colder compared to the same period during 1993.
Customer-owned gas transported by Wisconsin Natural accounted for 25.5% of
total therms delivered during the six months ended June 30, 1994 compared to
29.2% in the same period during 1993.
For certain other information which may impact Wisconsin Natural's future
financial condition or results of operations, see ITEM 5. OTHER INFORMATION in
Part II.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
EFFECTIVE DATE OF PLANNED MERGER OF WN INTO WE DELAYED
In a current report on Form 8-K dated January 24, 1994 (File No. 2-2066), an
announcement was made regarding the intent to merge Wisconsin Natural, the
wholly-owned natural gas utility subsidiary of Wisconsin Energy Corporation,
into Wisconsin Electric Power Company, the principal utility subsidiary of
Wisconsin Energy Corporation. At that time it was anticipated that such
merger would be effective by year-end 1994.
The completion of the planned merger, which is subject to a number of
conditions including requisite regulatory approvals, is currently anticipated
to occur by year-end 1995.
As part of the company's current "Revitalization" effort, the combination of
the electric and gas utilities is expected to reduce operating costs and
improve the competitive position of Wisconsin Energy Corporation's utility
operations.
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FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
-----------------------------------
PART II - OTHER INFORMATION (Cont'd)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The following Exhibit is filed with this report:
(3)-1 Bylaws of Wisconsin Natural Gas Company, as amended to
May 18, 1994 to provide that the annual meeting of
stockholders may be held on or before the 1st of July
of each year. (Section 1 of Bylaw I)
The following exhibit is incorporated herein by reference to the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994
of Wisconsin Energy Corporation (File No. 1-9057), with which
it is filed as an exhibit bearing the same exhibit number:
(10)-1 Executive Non-Qualified Trust by and between Wisconsin
Energy Corporation and Firstar Trust Company, dated
May 12, 1994, established to provide a source of funds
to assist in the meeting of the liabilities under various
nonqualified deferred compensation plans made between the
Registrant or its subsidiaries and various plan participants.
(b) Reports on Form 8-K:
No current reports on Form 8-K were filed in the quarter ended June 30,
1994.
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<PAGE> 10
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
-------------------------------
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 NATURAL GAS COMPANY
--------------------------------------
(Registrant)
/s/J. W. Boston
------------------------------------
Date: August 12, 1994 J. W. Boston, President and Chief
Operating Officer
/s/A. K. Klisurich
------------------------------------
Date: August 12, 1994 A. K. Klisurich, Controller
(Chief Accounting Officer)
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<PAGE> 11
Wisconsin Natural Gas Company
EXHIBIT INDEX
-------------
Form 10-Q for Quarter ended 6/30/94
Exhibit
Number
-------
(3)-1 Bylaws of Wisconsin Natural Gas Company, as amended to
May 18, 1994 to provide that the annual meeting of
stockholders may be held on or before the 1st of July
of each year. (Section 1 of Bylaw I)
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<PAGE> 1
EXHIBIT (3)-1
BYLAWS
OF
WISCONSIN NATURAL GAS COMPANY
___________________________________________
AS AMENDED TO MAY 18, 1994, INCLUSIVE
___________________________________________
<PAGE> 2
BYLAWS
OF
WISCONSIN NATURAL GAS COMPANY
BYLAW I. STOCKHOLDERS
SECTION 1. DATE OF ANNUAL MEETING
The annual meeting of the stockholders of the corporation shall be held on or
before the first day of July of each year, on the date and at the time
designated by the Board of Directors or the Chairman of the Board or the
President, for the purposes of electing directors and of transacting such
other business as may properly be brought before the meeting.
SECTION 2. CALL OF SPECIAL MEETINGS
Special meetings of the stockholders may be held upon call of the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
or the holders of not less than one-tenth (defined as provided in Section 5 of
this Bylaw) of all shares of the corporation entitled to vote at the meeting
at such time as may be stated in the call and notice; or in case the meeting
is for the purpose of enabling the holders of the $100 Par Value Serial
Preferred Stock to elect directors of the corporation, upon the conditions set
forth in the Articles of Incorporation, then, upon call as therein provided.
SECTION 3. PLACE OF MEETINGS
The Board of Directors may designate any place, either within or without the
State of Wisconsin, as the place of meeting for any annual meeting or for any
special meeting called by the Board of Directors. If no designation is made,
or if a special meeting be otherwise called, the place of meeting shall be the
principal business office of the corporation in the State of Wisconsin or such
other suitable place in the county of such principal office as may be
designated by the person calling such meeting, but any meeting may be
adjourned to reconvene at any place designated by vote of a majority (defined
as provided in Section 5 of this Bylaw) of the shares represented thereat.
SECTION 4. NOTICE OF MEETINGS
Notice of the time and place of every meeting of the stockholders, and in the
case of a special meeting further stating the purposes for which such meeting
is called, shall be delivered personally or mailed at least ten (10) days
before the meeting to each stockholder of record entitled to vote at the
meeting, at his address as it may appear on the books of the corporation.
Such further notice shall be given by mail, publication or otherwise, as may
be required by law. Whenever any notice whatever is required to be given to
any stockholder of the corporation under the Articles of Incorporation, Bylaws
or any provision of law, a waiver thereof in writing, signed at any time,
whether before or after the time of meeting, by the stockholder entitled to
such notice, shall be deemed equivalent to the giving of such notice.
May 18, 1994
<PAGE> 3
2
SECTION 5. VOTING AT MEETINGS
A. Proxies
Every stockholder entitled to vote at any meeting may so vote either in
person or by proxy.
B. Balloting and Inspectors of Election
Voting at meetings of stockholders need not be by written ballot unless
so determined in a resolution of the Board of Directors relating
thereto. Voting at meetings of stockholders shall be conducted by one
or more inspectors of election appointed by the Board of Directors.
However, no director or person who is a candidate for the office of
director shall be appointed as such inspector. The inspectors or
persons representing the inspector if the inspector is an institution,
before entering upon the discharge of their duties, shall take and
subscribe an oath faithfully to execute the duties of inspector at such
meeting with strict impartiality and according to the best of their
ability.
C. Quorum
Except as otherwise provided in the Articles of Incorporation, a
majority (defined as provided below in this Section 5) of the shares
entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of stockholders. If a quorum is present, the
affirmative vote of the majority (as so defined) of the shares
represented at the meeting and entitled to vote on the subject matter
shall be the act of the stockholders unless the vote of a greater number
or voting by classes is required by law, the Articles of Incorporation
or any other provisions of the Bylaws. Though less than a quorum of the
outstanding shares are represented at a meeting, a majority (as so
defined) of the shares 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.
D. Proxies Upon Accrual of Special Right
In connection with the first election of a majority of the members of
the Board of Directors by the holders of the $100 Par Value Serial
Preferred Stock upon accrual of the special right of such holders to
elect a majority of the members of the Board, as provided in Article III
of the Articles of Incorporation, the corporation shall prepare and mail
to such holders of record such proxy forms, communications and documents
as may be deemed appropriate (and also such as may be required by any
governmental authority having jurisdiction) for the purpose of
soliciting proxies for the election of directors by such holders, voting
separately as a class without regard to series.
February 23, 1988
<PAGE> 4
3
E. Majority, Etc., to be Based on Votes Entitled to be Cast
The references in Sections 2 and 3 and this Section 5 of Bylaw I and in
Section 2 of Bylaw II to one-tenth or a majority of specified shares
shall mean one-tenth or a majority, as the case may be, of the votes
entitled to be cast by holders of such specified shares.
SECTION 6. CONDUCT OF MEETINGS
Meetings of the stockholders shall be presided over by the Chairman of the
Board if there be an incumbent in that office, or in his absence or at his
request, by the President, or if he is not present, by a Vice President, or if
no Vice President is present, by a chairman to be chosen at the meeting. The
Secretary of the corporation, or if he is not present, an Assistant Secretary
of the corporation, or if no Assistant Secretary is present, a person
appointed by the chairman of the meeting, shall act as secretary of the
meeting.
SECTION 7. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE
For the purpose of determining stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make a
determination of stockholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining stockholders
entitled to notice of or to vote at a meeting of stockholders, such books
shall be closed for at least ten days immediately preceding such meeting. In
lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of stockholders,
such date in any case to be not more than fifty days and, in case of a meeting
of stockholders, not less than ten days prior to the date on which the
particular action, requiring such determination of stockholders, is to be
taken. If the stock transfer books are not closed and no record date is fixed
for the determination of stockholders entitled to notice of or to vote at a
meeting of stockholders, or stockholders entitled to receive payment of a
dividend, the close of business on the date on which notice of the meeting is
mailed or on the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record
date for such determination of stockholders. When a determination of
stockholders entitled to vote at any meeting of stockholders has been made as
provided in this Section 7, such determination shall apply to any adjournment
thereof except where the determination has been made through the closing of
the stock transfer books and the stated period of closing has expired.
SECTION 8. UNANIMOUS CONSENT WITHOUT A MEETING
Any action required by the Articles of Incorporation, Bylaws or any provision
of law to be taken at a meeting of stockholders or any
February 23, 1988
<PAGE> 5
4
other action which may be taken at such a meeting may be taken without a
meeting if consent in writing setting forth the action so taken shall be
signed by all of the stockholders entitled to vote with respect to the subject
matter thereof and such consent shall have the same force and effect as a
unanimous vote.
BYLAW II. DIRECTORS
SECTION 1. NUMBER
The number of directors constituting the whole Board of Directors shall be
such number as shall be fixed from time to time by the affirmative vote of the
whole Board but in no event shall the number be less than three. Until so
fixed at a different number, the number shall be six. The number of directors
at any time constituting the whole Board shall not be reduced so as to shorten
the term of any director then in office.
The directors shall hold office until the next annual meeting of stockholders
at which their respective terms of office shall expire and until their
respective successors are duly elected and qualified.
SECTION 2. VACANCIES
Any vacancy occurring among the directors, including a vacancy created by an
increase in the number of directors, shall be filled by the affirmative vote
of a majority of the remaining directors and each director so elected shall
hold office until the next annual meeting of stockholders. However, in
filling any vacancy occurring among the directors elected by the holders of
the $100 Par Value Serial Preferred Stock, the Board shall be limited to
voting upon a candidate or candidates nominated by the remaining director or a
majority of the remaining directors elected by the holders of the $100 Par
Value Serial Preferred Stock; in filling any vacancy occurring among the
directors elected by the Common stockholders, the Board shall be limited to
voting upon candidates nominated by the remaining director or a majority of
the remaining directors elected by the Common stockholders.
At any meeting of the stockholders, the holders of a majority (defined as
provided in Section 5 of Bylaw I) of shares of the $100 Par Value Serial
Preferred Stock of the corporation, voting separately as a class without
regard to series, may remove any director theretofore elected by the holders
of the $100 Par Value Serial Preferred Stock or elected by the Board to fill a
vacancy among the directors elected by the holders of the $100 Par Value
Serial Preferred Stock, and may fill any vacancy in the Board for the
unexpired term thus caused; and the holders of a majority (defined as provided
in Section 5 of Bylaw I) of the shares of Common Stock of the corporation,
voting separately as a class, may remove any director theretofore elected by
the Common stockholders or elected by the Board to fill a vacancy among the
directors elected by the Common stockholders, and may fill the vacancy in the
Board for the unexpired term thus caused.
May 1, 1992
WN
<PAGE> 6
5
SECTION 3. REMOVAL
A director may be removed from office only by affirmative vote by a majority
if for cause, or at least 80% if without cause, of the aggregate number of
votes which the holders of the then outstanding shares of Common Stock and
Preferred Stock are entitled to cast, voting together as a class, in the
election of directors.
SECTION 4. REGULAR MEETINGS
Regular meetings of the Board of Directors shall be held at such time and
place within or without the State of Wisconsin as may from time to time be
fixed by the Board without notice other than the resolution or other action of
the Board establishing the time and place of such regular meeting.
SECTION 5. SPECIAL MEETINGS
Special meetings of the Board of Directors may be called by or at the request
of the Board of Directors, the Executive Committee, the Chairman of the Board,
the President, or any two directors. The persons calling any special meeting
of the Board of Directors 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 called by them, and if no other place is fixed, the place of
meeting shall be the principal business office of the corporation.
SECTION 6. NOTICE OF MEETINGS
Notice of each meeting of the Board of Directors (unless otherwise provided in
or pursuant to Section 4 of this Bylaw) shall be given by written notice
delivered personally or mailed or given by telephone or telegram 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 6 hours prior thereto. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice be given by telegram, such notice shall be deemed
to be delivered when the telegram is delivered to the telegraph company; if by
telephone, at the time the call is completed. Whenever any notice whatever is
required to be given to any director of the corporation under the Articles of
Incorporation, Bylaws or any provision of law, a waiver thereof in writing,
signed at any time, whether before or after the time of meeting, by the
director entitled to such notice, shall be deemed equivalent to the giving of
such notice. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting
and objects thereat to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the Board need be
specified in the notice or waiver of notice of such meeting.
February 23, 1988
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SECTION 7. QUORUM
A majority of the members of the Board shall constitute a quorum for the
transaction of business, but if at any meeting of the Board there shall be
less than a quorum present, a majority of the directors present may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall have been obtained, when any business may be
transacted which might have been transacted at the meeting as first convened
had there been a quorum.
SECTION 8. MANNER OF ACTING
The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors, unless the act
of a greater number is required by the Articles of Incorporation, Bylaws or
any provision of law.
SECTION 9. EXECUTIVE COMMITTEE.
The Board of Directors, by resolution adopted by the affirmative vote of a
majority of all the directors then in office, may appoint an Executive
Committee, to consist of not less than three directors, as the Board may from
time to time determine. The Executive Committee shall have and may exercise,
when the Board is not in session, all of the powers vested in the Board,
except that it may not: (a) authorize distributions; (b) approve or propose
to shareholders action that the Wisconsin Business Corporation Law requires be
approved by shareholders; (c) fill vacancies on the Board of Directors or any
of its committees, except that the Board of Directors may provide by
resolution that any vacancies on the Executive Committee shall be filled by
the affirmative vote of a majority of the remaining committee members; (d)
amend the Articles of Incorporation; (e) adopt, amend or repeal Bylaws; (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 or (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 within limits prescribed by the Board of Directors.
The Board shall have the power at any time to fill vacancies in, to change the
membership of, or to dissolve, the Executive Committee. The Executive
Committee may make rules for the conduct of its business and may appoint such
assistants as it shall from time to time deem necessary. A majority of the
Executive Committee shall constitute a quorum.
November 23, 1992
<PAGE> 8
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SECTION 10. OTHER COMMITTEES
The Board of Directors, by resolution adopted by the affirmative vote of a
majority of all the directors then in office, may also create one or more
other committees, each committee to consist of two (2) or more directors as
members, which to the extent provided in the resolution as initially adopted,
and as thereafter supplemented or amended by further resolution adopted by a
like vote, may exercise the authority of the Board of Directors, except that
no committee may: (a) authorize distributions; (b) approve or propose to
shareholders action that the Wisconsin Business Corporation Law requires be
approved by shareholders; (c) fill vacancies on the Board of Directors or any
of its committees, except that the Board of Directors may provide by
resolution that any vacancies on a committee shall be filled by the
affirmative vote of a majority of the remaining committee members; (d) amend
the Articles of Incorporation; (e) adopt, amend or repeal Bylaws; (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 or (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 within
limits prescribed by the Board of Directors. The Board of Directors may elect
one or more of its members as alternate members of any such committee who may
take the place of any absent member or members at any meeting of such
committee, upon request by the Chairman of the Board, if there is one, the
President or upon request by the chairman of such meeting. Each such
committee shall fix its own rules (consistent with the Wisconsin Business
Corporation Law, the Articles of Incorporation and these Bylaws) governing the
conduct of its activities and shall make such reports to the Board of
Directors of its activities as the Board of Directors may request. Unless
otherwise provided by the Board of Directors in creating a committee, a
committee may employ counsel, accountants and other consultants to assist it
in the exercise of authority. The creation of a committee, delegation of
authority to a committee or action by a committee does not relieve the Board
of Directors or any of its members of any responsibility imposed on the Board
of Directors or its members by law. A majority of any such committee may
determine its actions and fix the time and place of its meetings, unless the
Board shall otherwise provide.
SECTION 11. COMPENSATION
The Board of Directors, by affirmative vote of a majority of the directors
then in office, and irrespective of any personal interest of any of its
members, may (a) establish reasonable compensation of all directors for
services to the corporation as directors, officers or otherwise, and the
manner and time and payment thereof, and (b) 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.
November 23, 1992
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SECTION 12. PRESUMPTION OF ASSENT
A director who is present at a meeting of the Board of Directors or a
committee thereof of which he is a member at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply
to a director who voted in favor of such action.
SECTION 13. UNANIMOUS CONSENT WITHOUT A MEETING
Any action required by the Articles of Incorporation, Bylaws or any provision
of law to be taken at a meeting of directors or any other action which may be
taken at such a meeting may be taken without a meeting if a consent in writing
setting forth the action so taken shall be signed by all of the directors or
members of a committee thereof entitled to vote with respect to the subject
matter thereof and such consent shall have the same force and effect as a
unanimous vote.
BYLAW III. OFFICERS
SECTION 1. POSITIONS
The Board of Directors, as soon as may be after the election of directors held
in each year, shall elect one of its number Chairman of the Board unless it
determines not to fill such office, and shall elect one of its number
President of the corporation, and shall elect one or more Vice Presidents, a
Secretary and a Treasurer and from time to time shall appoint such Assistant
Secretaries, Assistant Treasurers and other officers as it may deem proper.
Any two or more offices may be held by the same person, except the offices of
President and Secretary and the offices of President and Vice President.
SECTION 2. TERM OF OFFICE
The term of office of all officers shall be one year or until their respective
successors are duly chosen or until their prior death, resignation or removal.
Any officer may be removed from office at any time by the affirmative vote of
a majority of the whole Board.
February 23, 1988
<PAGE> 10
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SECTION 3. POWERS AND DUTIES
Subject to such limitations as the Board of Directors may from time to time
prescribe, the officers of the corporation shall each have such powers and
duties as generally pertain to their respective offices, as well as such
powers and duties as from time to time may be conferred by the Board of
Directors or the Executive Committee. The Treasurer and the Assistant
Treasurers may be required to give bond for the faithful discharge of their
duties, in such sum and of such character as the Board may from time to time
prescribe.
BYLAW IV. INDEMNIFICATION
SECTION 1. MANDATORY INDEMNIFICATION
The corporation shall indemnify to the fullest extent permitted by law any
person who is or was a party or threatened to be made a party to any legal
proceeding by reason of the fact that such person is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another enterprise, against expenses
(including attorney fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such legal
proceeding.
SECTION 2. CERTAIN DEFINITIONS
As used in this Bylaw IV, (a) "indemnify" includes the advancement of expenses
upon receipt of an undertaking to repay upon specified conditions, (b)
"fullest extent permitted by law" means the fullest extent to which indemnity
may lawfully be provided by, pursuant to or consistently with, the provisions
of subsections (l) and (2) of Section 180.05 of the Wisconsin Statutes (or any
successor provision), a bylaw under subsection (6) of that Section (or any
successor provision) or any other applicable law, whether statutory or other-
wise, (c) "person" includes the person's heirs, executors and administrators,
(d) "legal proceeding" means any threatened, pending or completed action, suit
or proceeding, whether or not by or in right of the corporation, (e) "other
enterprise" includes any corporation, partnership, joint venture, trust,
dividend reinvestment plan, stock purchase plan, employee benefit plan or
other plan or entity, (f) "expenses" include expenses in the enforcement of
rights under this Bylaw and any excise taxes assessed with respect to an
employee benefit plan and (g) in respect of any of such plans, (i) "serving at
the request of the corporation as a director or officer" includes serving at
the request of the corporation in any capacity that involves services or
duties with respect to the plan or its participants or beneficiaries and
(ii) action reasonably believed to be in the interest of such participants or
beneficiaries shall be deemed reasonably believed to be in, or not opposed to,
the best interests of the corporation.
February 23, 1988
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SECTION 3. LEGAL ENFORCEABILITY
The rights provided to any person by the terms of this Bylaw IV shall be
legally enforceable against the corporation by such person, who shall be
presumed to have relied on the provisions of this Bylaw in undertaking or
continuing any of the positions with the corporation or other enterprise
referred to in Section 1 of this Bylaw IV.
SECTION 4. LIMITATION ON MODIFICATION OR TERMINATION
No modification or termination of this Bylaw IV shall be effected which would
impair any rights hereunder arising at any time out of events occurring prior
to such modification or termination.
SECTION 5. NON-EXCLUSIVE BYLAW
This Bylaw IV is not intended to be exclusive and accordingly shall not be
construed as impairing in any way the power and authority of the corporation,
to the extent legally permissible without regard to this Bylaw IV, in its
discretion to indemnify or agree to indemnify, or to purchase insurance
indemnifying, any employee, agent or other person.
BYLAW V. STOCK CERTIFICATES AND TRANSFER
SECTION 1. STOCK CERTIFICATES AND FACSIMILE SIGNATURES
The interest of each stockholder in the corporation shall be evidenced by
certificates for shares of stock of the corporation in such form as the Board
of Directors may from time to time pre-scribe. The certificates for shares of
stock of the corporation shall be signed by the President or a Vice President,
and by the Secretary or an Assistant Secretary of the corporation, and sealed
with the seal of the corporation (which may be a facsimile, engraved or
printed) and shall be countersigned and registered in such manner, if any, as
the Board of Directors may from time to time prescribe. Whenever any such
certificate is manually signed by a transfer agent or a registrar, other than
the corporation itself or an employee of the corporation, the signature of the
transfer agent or registrar, whichever did not sign manually, and the
signatures of the aforesaid officers of the corporation upon such certificate
may be facsimiles. The transfer agent and the registrar may but need not be
the same person or agency. In case any such person acting as an officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon such certificate, shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be used
by the corporation with the same effect as if such officer, transfer agent or
registrar had not ceased to be such at the date of its issue.
February 23, 1988
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SECTION 2. TRANSFER OF STOCK
The shares of stock of the corporation shall be transferable on the books of
the corporation upon request by the holders thereof or by duly authorized
attorney, upon surrender and cancellation of certificates for a like number of
shares of the same class of stock, with duly executed assignment and power of
transfer endorsed thereon or attached thereto, and with such proof of the
authenticity of the signature as the corporation or its agents may reasonably
require.
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 powers 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 said endorsements are
genuine and effective and in compliance with such other regulations as may be
prescribed by or under the authority of the Board of Directors.
SECTION 3. LOST, DESTROYED OR STOLEN CERTIFICATES
Where the owner claims that his certificate for shares has 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, and (b) files with
the corporation a sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as may be prescribed by or under the authority of the
Board of Directors.
BYLAW VI. CONTRACTS, CHECKS, NOTES, BONDS, ETC.
SECTION 1. CONTRACTS
The Board of Directors may authorize any officer or officers, agent or agents,
to enter into any contract or execute or deliver any document or instrument,
whether of conveyance or otherwise, in the name of and on behalf of the
corporation, and such authorization may be general or confined to specific
instances.
SECTION 2. CHECKS, DRAFTS, ETC.
All checks and drafts on the corporation's bank accounts and all bills of
exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed or, in the case of wire
transfers, shall be authorized by such officer or officers, employee or
employees, or agent or agents
February 23, 1988
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as shall be thereunto authorized from time to time by the Board of Directors;
provided that checks drawn on the corporation's bank accounts may bear the
facsimile signature of such officer or officers, employee or employees, or
agent or agents as the Board of Directors shall authorize; and provided
further that in the case of notes, bonds or debentures issued under a trust
instrument of the corporation and required to be signed by two officers of the
corporation, the signatures of either or both of such officers may be in
facsimile if specifically authorized and directed by the Board of Directors of
the corporation and if such notes, bonds or debentures are required to be
authenticated by a corporate trustee which is a party to the trust instrument.
In case any such officer who has signed, or whose facsimile signature has been
placed upon such instrument shall have ceased to be such officer before such
instrument is issued, it may be issued by the corporation with the same effect
as if such officer had not ceased to be such at the date of its issue.
BYLAW VII. FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of January in
each year and shall end on the thirty-first day of December following.
BYLAW VIII. CORPORATE SEAL
The corporate seal shall have inscribed thereon the name of the corporation
and the words "Corporate Seal."
BYLAW IX. EFFECT OF HEADINGS
The descriptive headings in these Bylaws were formulated, used and inserted
herein for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
BYLAW X. AMENDMENTS
SECTION 1.
The Bylaws of the corporation may be altered, amended, added to, rescinded or
repealed and new Bylaws may be adopted at any meeting of the stockholders,
provided notice of the proposed change is given in the notice of the meeting.
SECTION 2.
Subject to the power of the stockholders to alter, amend, or repeal any Bylaws
made by the Board of Directors, the Board may make additional Bylaws for the
corporation and may from time to time alter and amend these Bylaws.
February 23, 1988
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SECTION 3.
Notwithstanding anything in these Bylaws to the contrary, the provisions of
Section 8 of Bylaw I, Sections 1, 3 and 6 of Bylaw II, Bylaw IV and this
Section 3 of Bylaw X, may be amended only by the affirmative vote of at least
80% of the aggregate number of votes which the holders of the then outstanding
shares of Common Stock and Preferred Stock, voting together as a class, are
entitled to cast in an election of directors.
February 23, 1988
