<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, 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 May 2, 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 March 31
---------------------------
1994 1993*
-------- --------
(Thousands of Dollars)
<S> <S> <S>
Operating Revenues $147,579 $123,920
Operating Expenses
Cost of gas sold 91,153 76,559
Other operation expenses 18,298 15,112
Maintenance 1,517 1,455
Revitalization 10,400 -
Depreciation 4,146 4,038
Income taxes 7,814 9,315
-------- --------
Total Operating Expenses 133,328 106,479
Operating Income 14,251 17,441
Other Income and Deductions
Miscellaneous - net 129 78
Income taxes (54) (32)
-------- --------
Total Other Income and Deductions 75 46
Income Before Interest Charges 14,326 17,487
Interest Charges 2,092 2,192
-------- --------
Net Income $ 12,234 $ 15,295
======== ========
<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.
- 2 -
</TABLE>
<PAGE> 3
<TABLE>
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
CONDENSED BALANCE SHEET
(Unaudited)
<CAPTION>
March 31, 1994 December 31, 1993 *
-------------- -------------------
Assets (Thousands of Dollars)
------
<S> <C> <C>
Utility Plant
Plant $447,281 $444,453
Accumulated provision for depreciation (208,466) (205,247)
-------- --------
Net Utility Plant 238,815 239,206
Other Property and Investments 1,073 1,013
Current Assets
Cash and cash equivalents 9,889 6,964
Accounts receivable 49,724 27,715
Accrued utility revenues 9,362 39,153
Materials, supplies and natural gas
stored 12,589 43,089
Prepayments and other assets 3,982 3,768
-------- --------
Total Current Assets 85,546 120,689
Deferred Charges and Other Assets
Accumulated deferred income taxes 14,341 14,370
Other 11,381 10,182
-------- --------
Total Deferred Charges and Other Assets $ 25,722 $ 24,552
-------- --------
Total Assets $351,156 $385,460
======== ========
Capitalization and Liabilities
------------------------------
Capitalization
Common stock $ 81,016 $ 81,016
Retained earnings 56,405 46,797
-------- --------
Total Common Stock Equity 137,421 127,813
Long-term debt 69,934 80,482
-------- --------
Total Capitalization 207,355 208,295
Current Liabilities
Long-term debt due currently 11,770 2,653
Short-term debt 22,943 75,308
Accounts payable 23,891 29,561
Accrued liabilities 16,815 9,918
Other 3,864 3,448
-------- --------
Total Current Liabilities 79,283 120,888
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 30,510 30,083
Other 34,008 26,194
-------- --------
Total Deferred Credits and Other Liabilities 64,518 56,277
-------- --------
Total Capitalization and Liabilities $351,156 $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.
- 3 -
</TABLE>
<PAGE> 4
<TABLE>
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended March 31
---------------------------
1994 1993*
---- -----
(Thousands of Dollars)
<S> <C> <C>
Operating Activities:
Net income $12,234 $15,295
Reconciliation to cash:
Depreciation 4,146 4,038
Revitalization - net 8,574 -
Deferred income taxes - net 456 443
Investment tax credit - net (124) (114)
Change in: Accounts receivable (22,009) (20,669)
Inventories 30,500 12,641
Accounts payable (5,670) (4,243)
Other current assets 29,577 17,630
Other current liabilities 7,313 8,926
Other (1,519) (1,341)
------- -------
Cash Provided by Operating Activities 63,478 32,606
Investing Activities:
Construction expenditures (3,089) (3,704)
Other (1,016) (105)
------- -------
Cash Used in Investing Activities (4,105) (3,809)
Financing Activities:
Sale of long-term debt 9,290 (27)
Retirement of long-term debt (10,748) (1,030)
Change in short-term debt (52,365) (26,379)
Dividends on stock - common (2,625) (2,394)
Other - 6
------- -------
Cash Used in Financing Activities (56,448) (29,824)
------- -------
Change in Cash and Cash Equivalents $ 2,925 $ (1,027)
======= =======
Supplemental Information Disclosures:
Cash Paid for -
Interest (net of amount capitalized) $ 2,595 $ 2,644
Income taxes 1,650 903
<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.
- 4 -
</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 ended March 31, 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.
- 5 -
<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
The $23.7 million increase in gas operating revenues during the first three
months of 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, reflects
increased natural gas therm deliveries, the $9.2 million, or 3.3%, annualized
rate increase effective since September 2, 1993 and the recovery of increased
purchased gas costs.
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.
Operating expenses during the first quarter of 1994 include a non-recurring
restructuring charge of approximately $6 million (net of tax). This charge
includes the cost of voluntary severance and early retirement packages which
are being used to reduce employee staffing levels at Wisconsin Natural. 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 $3 million during the first
quarter of 1994 compared to the same period during 1993.
GAS DELIVERIES
Three Months Ended March 31
---------------------------
Therms Delivered - Thousands 1994 1993* % Change
- ------------------------------- ---------- ---------- --------
Residential 167,669 147,302 13.8
Commercial and Industrial 93,491 88,653 5.5
Interruptible 16,978 10,710 58.5
---------- ----------
Total Sales 278,138 246,665 12.8
Transported Customer Owned Gas 69,263 78,555 (11.8)
---------- ----------
Total Gas Delivered 347,401 325,220 6.8
- -------------------------------
* Note: The 1993 amounts for gas therms delivered have been restated to
reflect the merger of Wisconsin Southern Gas Company, Inc. into Wisconsin
Natural effective on 1/1/94.
Natural gas therm deliveries during the first quarter of 1994 were positively
impacted by, among other things, colder weather conditions. As measured by
heating degree days, the first quarter of 1994 was 9.4% colder compared to the
same period during 1993.
- 6 -
<PAGE> 7
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
-----------------------------------
PART I - FINANCIAL INFORMATION (Cont'd)
GAS DELIVERIES - Cont'd
Wisconsin Natural transports gas for its customers who purchase gas directly
from other suppliers, which accounted for approximately 19.9% of total therms
delivered by Wisconsin Natural during the first quarter of 1994 compared to
24.2% during the first 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.
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 March 31, 1994
the cost of natural gas stored for future use was $9.1 million, representing
an $8.7 million increase over the cost of natural gas stored at March 31,
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.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following Exhibits are filed with this report:
Exhibit No.
(3)-1 Bylaws of Wisconsin Natural Gas Company, as amended
to April 1, 1994 to decrease the size of the Board
from six to five members. (Section 1 of Bylaw II).
- 7 -
<PAGE> 8
FORM 10-Q
WISCONSIN NATURAL GAS COMPANY
-----------------------------------
PART II - OTHER INFORMATION (Cont'd)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - Cont'd
Exhibit No.
(4)-1 Securities Resolution No. 3 of Wisconsin Natural Gas
Company, dated March 29, 1994, authorizing issuance
of $2,290,000 principal amount of 10-1/4% Debentures
due January 15, 1998 under the Indenture dated as of
September 1, 1992.
2 Securities Resolution No. 4 of Wisconsin Natural Gas
Company, dated March 29, 1994, authorizing issuance
of $7,000,000 principal amount of 9.47% Debentures
due March 1, 2006 under the Indenture dated as of
September 1, 1992.
(b) Reports on Form 8-K:
A report on Form 8-K dated January 1, 1994 was filed by Wisconsin
Natural reporting the effectiveness of the acquisition of Wisconsin
Southern Gas Company, Inc. by Wisconsin Energy through a merger of
Wisconsin Southern Gas Company, Inc. into Wisconsin Natural, a
wholly-owned subsidiary of Wisconsin Energy, and filing the related
historical financial statements and pro forma financial information.
Additionally, a report on Form 8-K dated January 24, 1994 was filed
by Wisconsin Natural reporting the announced plan of Wisconsin Energy
to merge Wisconsin Natural into Wisconsin Energy's wholly-owned
principal utility subsidiary, Wisconsin Electric, anticipated to be
effective by year-end 1994.
- 8 -
<PAGE> 9
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: May 13, 1994 J. W. Boston, President and Chief
Operating Officer
s/A. K. Klisurich
------------------------------------
Date: May 13, 1994 A. K. Klisurich, Controller
(Chief Accounting Officer)
- 9 -
<PAGE> 10
Wisconsin Natural Gas Company
EXHIBIT INDEX
-------------
Exhibit
Number
-------
(3)-1 Bylaws of Wisconsin Natural Gas Company, as amended to
April 1, 1994 to decrease the size of the Board from six
to five members (Section 1 of Bylaw II).
(4)-1 Securities Resolution No. 3 of Wisconsin Natural Gas Company,
dated March 29, 1994, authorizing issuance of $2,290,000
principal amount of 10-1/4% Debentures due January 15, 1998
under the Indenture dated as of September 1, 1992.
2 Securities Resolution No. 4 of Wisconsin Natural Gas Company,
dated March 29, 1994, authorizing issuance of $7,000,000
principal amount of 9.47% Debentures due March 1, 2006 under
the Indenture dated as of September 1, 1992.
<PAGE> 1
EXHIBIT (3)-1
BYLAWS
OF
WISCONSIN NATURAL GAS COMPANY
___________________________________________
AS AMENDED TO APRIL 1, 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 June 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.
February 23, 1988
<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 five. 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.
April 1, 1994
<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
<PAGE> 7
6
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
7
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
<PAGE> 9
8
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
9
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
<PAGE> 11
10
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
<PAGE> 12
11
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
<PAGE> 13
12
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
<PAGE> 14
13
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
<PAGE> 1
EXHIBIT (4)-1
10-1/4% DEBENTURES DUE JANUARY 15, 1998
SECURITIES RESOLUTION NO. 3
OF
WISCONSIN NATURAL GAS COMPANY
The actions described below are taken by the Board (as defined in the
Indenture referred to below) of WISCONSIN NATURAL GAS COMPANY (the "Company")
pursuant to resolutions adopted by the Board of Directors of the Company as of
December 13, 1993 and February 21, 1994, and Section 2.01 of the Indenture
dated as of September 1, 1992 (the "Indenture") between the Company and
Firstar Trust Company (formerly First Wisconsin Trust Company), as trustee.
Terms used herein and not defined have the same meaning as in the Indenture.
RESOLVED, that a new series of Securities is authorized as follows:
1. The title of the series is 10-1/4% Debentures due January 15, 1998
("10-1/4% Debentures").
2. The form of the 10-1/4% Debentures shall be substantially in the
form of Exhibit 1 hereto.
3. The 10-1/4% Debentures shall have the terms set forth in Exhibit 1.
4. The 10-1/4% Debentures shall be issued in exchange for the
$2,290,000 principal amount of the Wisconsin Southern Gas Company,
Inc.("Wisconsin Southern") First Mortgage Bonds, 10-1/4% Series K, due
January 15, 1998 held by Aid Association for Lutherans, Appleton, Wisconsin,
which were assumed by the Company following the acquisition of Wisconsin
Southern by Wisconsin Energy Corporation, the Company's parent, on January 1,
1994 and simultaneous merger of Wisconsin Southern into the Company, on the
following terms:
Exchange Price : 100.00%
Closing Date: March 29, 1994
This Securities Resolution shall be effective as of March 29, 1994.
<PAGE> 2
EXHIBIT 1
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS
REGISTERED THEREUNDER OR UNLESS SOLD OR TRANSFERRED IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SAID ACT.
No. _____________ $_____________
PPN _____________
WISCONSIN NATURAL GAS COMPANY
10-1/4% Debentures due January 15, 1998
WISCONSIN NATURAL GAS COMPANY
promises to pay to ______________________________________________
or registered assigns
the principal sum of _______________ Dollars on January 15, 1998
Interest Payment Dates: January 15 and July 15
Record Dates: December 31 and June 30
Dated:
FIRSTAR TRUST COMPANY WISCONSIN NATURAL GAS COMPANY
Transfer Agent and Paying Agent
by
______________________________
Authenticated: [Title of Authorized Officer]
FIRSTAR TRUST COMPANY (CORPORATE SEAL)
Registrar, by
______________________________ ______________________________
Authorized Signature [Assistant] Secretary
-2-
<PAGE> 3
WISCONSIN NATURAL GAS COMPANY
10-1/4% Debentures due January 15, 1998
1. INTEREST.
Wisconsin Natural Gas Company (the "Company"), a Wisconsin
corporation, promises to pay interest on the principal amount of
this Security at the rate per annum shown above. The Company will
pay interest semiannually on January 15 and July 15 of each year
commencing July 15, 1994. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if
no interest has been paid, from January 15, 1994. Interest will
be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the persons who
are registered holders of Securities at the close of business on
the record date for the next interest payment date, except as
otherwise provided in the Indenture. Unless otherwise agreed upon
by the Company and a holder, holders must surrender Securities to
a Paying Agent to collect principal payments. If requested by the
Company, the holder of any Security which has been paid in full,
whether by redemption, at maturity or otherwise, shall promptly
return such Security to the Company for cancellation. The Company
will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and
private debts. Unless otherwise agreed upon by the Company and a
holder, the Company may pay principal and interest by check
payable in such money and may mail an interest check to a holder's
registered address.
3. SECURITIES AGENTS.
Initially, Firstar Trust Company, 615 East Michigan Street,
Milwaukee, WI 53202, will act as Paying Agent, Transfer Agent and
Registrar. The Company may change any Paying Agent or Transfer
Agent without notice. The Company or any Affiliate may act in any
such capacity. Subject to certain conditions, the Company may
change the Trustee.
4. INDENTURE.
The Company issued the securities of this series (the
"Securities") under an Indenture dated as of September 1, 1992
(the "Indenture") between the Company and Firstar Trust Company
(formerly First Wisconsin Trust Company) (the "Trustee"). The
terms of the
-3-
<PAGE> 4
Securities include those stated in the Indenture and in the
Securities Resolution creating the Securities and those made part
of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code
ss 77aaa-77bbbb). Securityholders are referred to the Indenture,
the Securities Resolution and the Act for a statement of such
terms.
5. REDEMPTION.
(a) At Company's Option. On or after January 15, 1995, the
Company may redeem all the Securities at any time or some of them
from time to time at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest to the
redemption date.
If redeemed during the 12-month period beginning January 15,
Year Percentage
1995 ........ 102.28%
1996 ........ 101.14
and thereafter at 100%.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of
Securities to be redeemed at such holder's registered address.
(b) At Holder's Option. In the event the Company shall fail to
exchange the Securities for First Mortgage Bonds of Wisconsin
Electric as required by Section 11 hereof, and such failure shall
not have been remedied within 30 days after written notice thereof
shall have been received by the Company from any holder of the
Securities, then such holder may, at its option, in addition to
any other right, power or remedy permitted by law or equity, by
notice in writing to the Company, require the Company to redeem
all of the Securities held by such holder, in which case, the
Company shall, within five business days after the receipt of such
notice, redeem all Securities held by such holder by the payment
of the redemption price set forth in Section 5(a) above, plus
accrued interest on the Securities to the redemption date.
6. SINKING FUND
As and or for a sinking fund for the retirement of the Securities,
the Company will, until all the Securities are paid or payment
thereof provided for, deposit with the Trustee, on or prior to
January 15 in each year
-4-
<PAGE> 5
beginning with the year 1995, an amount in cash sufficient to
redeem on each such January 15, $570,000 aggregate principal
amount of the Securities, in each case at a redemption price equal
to the principal amount thereof, together with accrued interest to
the redemption date.
7. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. The
transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Transfer Agent may
require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees
required by law or the Indenture. The Transfer Agent need not
exchange or register the transfer of any Security or portion of a
Security selected for redemption. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days
before a selection of Securities to be redeemed.
8. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its owner
for all purposes.
9. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may
be amended with the consent of the holders of a majority in
principal amount of the Securities of all series affected by the
amendment. Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a majority in
principal amount of the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any
ambiguity, omission, defect or inconsistency; to provide for
assumption of Company obligations to Securityholders; or to make
any change that does not materially adversely affect the rights of
any Securityholder.
10. RESTRICTIVE COVENANTS.
The Securities are unsecured general obligations of the Company
limited to $2,290,000 principal amount. The Indenture does not
limit other unsecured debt. Sections 4.07, 4.08 and 4.09 of the
Indenture, which if applicable limit certain mortgages and other
liens, the issuance of additional first mortgage bonds and certain
sale and leaseback transactions, will apply with
-5-
<PAGE> 6
respect to the Securities. The limitations are subject to a
number of important qualifications and exceptions, and will
terminate in the event of a merger of the Company into,
consolidation with, or transfer of all or substantially all of its
assets to Wisconsin Electric Power Company or a successor thereto.
As provided in Section 11, in the event of any such merger,
consolidation or transfer of assets, the holders of the Securities
shall have the right to exchange the Securities for First Mortgage
Bonds of Wisconsin Electric. On January 24, 1994, Wisconsin
Energy Corporation announced its intent to merge the Company into
Wisconsin Electric.
11. EXCHANGE RIGHT UPON MERGER INTO WISCONSIN ELECTRIC POWER COMPANY
(a) In the event that the Company shall merge into, consolidate
with, or transfer all or substantially all of its assets (the
"MERGER") to Wisconsin Electric Power Company ("WISCONSIN
ELECTRIC"), the Company shall promptly provide written notice (the
"MERGER NOTICE") of such fact to all holders of the Securities
then outstanding. The Merger Notice shall be delivered promptly
upon the effectiveness of the Merger, but in no event later than
two business days thereafter. The Merger Notice shall be in
writing and shall set forth (i) a statement that the Merger has
taken place, (ii) the date on which the Merger took place, (iii) a
reference to this Section 11 and the right of the holders of the
Securities to require the Company to exchange the outstanding
Securities for First Mortgage Bonds of Wisconsin Electric (the "WE
BONDS") issued under and secured by that certain Indenture dated
October 28, 1938 from Wisconsin Electric to Firstar Trust Company
(formerly First Wisconsin Trust Company), as Trustee (the "WE
INDENTURE") and (iv) an irrevocable offer to exchange the
Securities for WE Bonds. Each holder of the Securities then
outstanding shall have the right to accept such offer and require
the Company to exchange all the Securities held by such holder by
written notice to the Company (the "EXCHANGE NOTICE") given not
later than 180 days prior to the date of maturity for the
Securities.
Upon receipt by the Company of an Exchange Notice from any holder
of Securities, the Company will promptly take all actions
necessary for the due authorization, execution and delivery of
such WE Bonds including, without limitation, (i) the filing,
within 30 days after receipt of the Exchange Notice, of
applications with the Public Service Commission of Wisconsin and
any other governmental commission, board or regulatory body in
order to obtain the requisite approvals, authorization, consents
and orders necessary for the
-6-
<PAGE> 7
issuance of the WE Bonds, (ii) compliance with all requirements of
the WE Indenture for the issuance and delivery of a new series of
WE Bonds and (iii) the taking of all other actions the holders of
the Securities may reasonably request in connection with the
delivery of the WE Bonds, including the delivery of legal opinions
and an exchange agreement between the Company and the holders of
the Securities in form and substance reasonably satisfactory to
the holders of the Securities. In no event shall WE Bonds be
delivered later than 90 days after receipt of all regulatory
approvals required for the issuance of the WE Bonds.
Without limiting the foregoing, notwithstanding any failure on the
part of the Company to give the Merger Notice following the
Merger, each holder of the Securities that shall not have received
such Merger Notice shall have the right to require the Company to
exchange the Securities held by such holder for WE Bonds, and the
Company will exchange such Securities for WE Bonds in a manner
consistent with this Section 11.
(b) WE Bonds exchanged for Securities shall be issued under and
secured by the WE Indenture, shall rank on a parity with all other
first mortgage bonds issued and outstanding under the WE
Indenture, shall be dated the last date to which interest has been
paid on the Securities, shall bear interest at the rate of 10-1/4%
per annum, payable semiannually on the fifteenth day of January
and the fifteenth day of July in each year (commencing on the
first of such dates following the exchange), until the entire
principal is paid, shall have sinking fund and redemption
provisions identical to those applicable to the Securities and
shall otherwise be substantially in the form required by the WE
Indenture.
12. SUCCESSORS.
When a successor assumes all the obligations of the Company it is
required to assume under the Securities and the Indenture, the
Company will be released from all of its obligations under the
Securities and the Indenture.
13. DEFEASANCE PRIOR TO MATURITY.
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and
interest on the Securities to maturity. U.S. Government
obligations are securities backed by the full faith and credit of
-7-
<PAGE> 8
the United States of America or certificates representing an
ownership interest in such Obligations.
14. DEFAULTS AND REMEDIES.
An Event of Default includes: default for 30 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default by the Company for a specified period after
notice to it in the performance of any of its other agreements
applicable to the Securities; certain events of bankruptcy or
insolvency; and any other event of default provided for in the
series. If an Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in principal amount of the
Securities may declare the principal of all the Securities to be
due and payable immediately.
The following event shall also constitute an Event of Default with
respect to the Securities: default or the happening of any event
shall occur under any indenture, agreement, or other instrument
under which the Company shall have outstanding at least $5,000,000
aggregate principal amount of indebtedness for borrowed money, and
such default or event shall continue beyond the period of grace,
if any, allowed with respect thereto.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or
the Securities. Subject to certain limitations, holders of a
majority in principal amount of the Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it
determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the
Trustee.
15. TRUSTEE DEALINGS WITH COMPANY.
Firstar Trust Company, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with those persons, as if it
were not Trustee.
16. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim
based on, in respect of or
-8-
<PAGE> 9
by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with right of survivorship and not as tenants in common),
CUST (=custodian), U/G/M/A (=Uniform Gifts to Minors Act), and
U/T/M/A (=Uniform Transfers to Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE AND THE SECURITIES RESOLUTION, WHICH
CONTAINS THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
CORPORATE SECRETARY, WISCONSIN NATURAL GAS COMPANY, 231 WEST MICHIGAN STREET,
P.O. BOX 2046, MILWAUKEE, WI 53201.
\FM\WP\MES\WNG\RESO6.cln
-9-
<PAGE> 1
EXHIBIT (4)-2
9.47% DEBENTURES DUE MARCH 1, 2006
SECURITIES RESOLUTION NO. 4
OF
WISCONSIN NATURAL GAS COMPANY
The actions described below are taken by the Board (as defined in the
Indenture referred to below) of WISCONSIN NATURAL GAS COMPANY (the "Company")
pursuant to resolutions adopted by the Board of Directors of the Company as of
December 13, 1993 and February 21, 1994, and Section 2.01 of the Indenture
dated as of September 1, 1992 (the "Indenture") between the Company and
Firstar Trust Company (formerly First Wisconsin Trust Company), as trustee.
Terms used herein and not defined have the same meaning as in the Indenture.
RESOLVED, that a new series of Securities is authorized as follows:
1. The title of the series is 9.47% Debentures due March 1, 2006
("9.47% Debentures").
2. The form of the 9.47% Debentures shall be substantially in the form
of Exhibit 1 hereto.
3. The 9.47% Debentures shall have the terms set forth in Exhibit 1.
4. The 9.47% Debentures shall be issued in exchange for the $7,000,000
principal amount of the Wisconsin Southern Gas Company, Inc. ("Wisconsin
Southern") First Mortgage Bonds, 9.47% Series L, due March 1, 2006 held by Aid
Association for Lutherans, Appleton, Wisconsin, which were assumed by the
Company following the acquisition of Wisconsin Southern by Wisconsin Energy
Corporation, the Company's parent, on January 1, 1994 and simultaneous merger
of Wisconsin Southern into the Company, on the following terms:
Exchange Price : 100.00%
Closing Date: March 29, 1994
This Securities Resolution shall be effective as of March 29, 1994.
<PAGE> 2
EXHIBIT 1
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED UNLESS
REGISTERED THEREUNDER OR UNLESS SOLD OR TRANSFERRED IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF SAID ACT.
No. _____________ $_____________
PPN _____________
WISCONSIN NATURAL GAS COMPANY
9.47% Debentures due March 1, 2006
WISCONSIN NATURAL GAS COMPANY
promises to pay to ______________________________________________
or registered assigns
the principal sum of _______________ Dollars on March 1, 2006
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Dated:
FIRSTAR TRUST COMPANY WISCONSIN NATURAL GAS COMPANY
Transfer Agent and Paying Agent
by
______________________________
Authenticated: [Title of Authorized Officer]
FIRSTAR TRUST COMPANY (CORPORATE SEAL)
Registrar, by
______________________________ ______________________________
Authorized Signature [Assistant] Secretary
-2-
<PAGE> 3
WISCONSIN NATURAL GAS COMPANY
9.47% Debentures due March 1, 2006
1. INTEREST.
Wisconsin Natural Gas Company (the "Company"), a Wisconsin
corporation, promises to pay interest on the principal amount of
this Security at the rate per annum shown above. The Company will
pay interest semiannually on March 1 and September 1 of each year
commencing September 1, 1994. Interest on the Securities will
accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from March 1, 1994. Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the persons who
are registered holders of Securities at the close of business on
the record date for the next interest payment date, except as
otherwise provided in the Indenture. Unless otherwise agreed upon
by the Company and a holder, holders must surrender Securities to
a Paying Agent to collect principal payments. If requested by the
Company, the holder of any Security which has been paid in full,
whether by redemption, at maturity or otherwise, shall promptly
return such Security to the Company for cancellation. The Company
will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and
private debts. Unless otherwise agreed to by the Company and a
holder, the Company may pay principal and interest by check
payable in such money and may mail an interest check to a holder's
registered address.
3. SECURITIES AGENTS.
Initially, Firstar Trust Company, 615 East Michigan Street,
Milwaukee, WI 53202, will act as Paying Agent, Transfer Agent and
Registrar. The Company may change any Paying Agent or Transfer
Agent without notice. The Company or any Affiliate may act in any
such capacity. Subject to certain conditions, the Company may
change the Trustee.
4. INDENTURE.
The Company issued the securities of this series (the
"Securities") under an Indenture dated as of September 1, 1992
(the "Indenture") between the Company and Firstar Trust Company
(formerly First Wisconsin
-3-
<PAGE> 4
Trust Company) (the "Trustee"). The terms of the Securities
include those stated in the Indenture and in the Securities
Resolution creating the Securities and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code ss
77aaa-77bbbb). Securityholders are referred to the Indenture, the
Securities Resolution and the Act for a statement of such terms.
5. REDEMPTION.
(a) At Company's Option. Any or all of the Securities shall be
redeemable at any time and from time to time, at the option of the
Company and upon the notice and in the manner and with the effect
provided in Article 3 of the Indenture, by the payment of the
principal amount of the Securities called for redemption and
accrued interest thereon to the date of redemption, together with
a premium equal to the Make-Whole Amount. In the event of the
partial redemption of any Securities, the proceeds of such
redemption shall be applied ratably to all outstanding Securities
in accordance with the unpaid principal amounts thereof and shall
be deemed to be applied first to the amount of principal scheduled
to remain unpaid on March 1, 2006, and then to the remaining
scheduled principal payments in inverse chronological order.
As used in this Section 5, the term "Make-Whole Amount" shall
mean, in connection with any optional redemption of the
Securities, the excess, if any, of (i) the aggregate present value
as of the date of such redemption of each dollar of principal
being redeemed (taking into account the required application of
such optional redemption to the scheduled payments and prepayments
of the Securities) and the amount of interest (exclusive of
interest accrued to the date of such optional redemption) that
would have been payable in respect of such dollar if such
redemption had not been made, determined by discounting such
amounts at the Reinvestment Rate from the respective dates on
which they would have been payable, over (ii) 100% of the
principal amount of the outstanding Securities being redeemed. If
the Reinvestment Rate is equal to or higher than 9.47%, the Make-
Whole Amount shall be zero. The Make-Whole Amount, if any, to be
paid in connection with the optional redemption of any Securities
shall be determined as of the date three business days prior to
the date of such redemption. For purposes of any determination of
the Make-Whole Amount:
"Reinvestment Rate" shall mean the sum of (x) 0.50%, (y)
plus the arithmetic mean of the yields under the respective
headings "This Week" and
-4-
<PAGE> 5
"Last Week" published in the Statistical Release under the
caption "Treasury Constant Maturities" for the maturity
(rounded to the nearest month) corresponding to the Weighted
Average Life to Maturity of the principal being redeemed
(taking into account the required application of such
optional redemption to the scheduled payments and
prepayments of the Securities). For purposes of the
preceding sentence, if no maturity exactly corresponds to
such Weighted Average Life to Maturity, yields for the two
published maturities most closely corresponding to such
Weighted Average Life to Maturity shall be calculated
pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For the purpose
of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the
Federal Reserve System and which establishes yields on
actively traded U.S. Government Securities adjusted to
constant maturities or, if such statistical release is not
published at the time of any determination hereunder, then
such other reasonably comparable index which shall be
designated by the holders of 66-2/3% in aggregate principal
amount of the outstanding Securities.
"Weighted Average Life to Maturity" of the principal amount
of the Securities being redeemed shall mean, as of the time
of any determination thereof, the number of years obtained
by dividing the then Remaining Dollar-Years of such
principal by the aggregate amount of such principal. The
term "Remaining Dollar-Years" of such principal shall mean
the amount obtained by (i) multiplying (x) the remainder of
(1) the amount of principal that would have become due on
each scheduled payment date if such redemption had not been
made, less (2) the amount of principal on the Securities
scheduled to become due on such date after giving effect to
such redemption and the required application thereof, by (y)
the number of years (calculated to the nearest one-twelfth)
which will elapse between the date of determination and such
scheduled payment date, and (ii) totalling the products
obtained in (i).
-5-
<PAGE> 6
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of
Securities to be redeemed at his registered address.
(b) At Holder's Option. In the event the Company shall fail to
exchange the Securities for First Mortgage Bonds of Wisconsin
Electric as required by Section 11 hereof, and such failure shall
not have been remedied within 30 days after written notice thereof
shall have been received by the Company from the holder of any
Security, then such holder may, at its option, in addition to any
other right, power or remedy permitted by law or equity, by notice
in writing to the Company, require the Company to redeem all of
the Securities held by such holder, in which case, the Company
shall, within five business days after the receipt of such notice,
redeem the Securities held by such holder by the payment of the
entire principal amount of the Securities so called for redemption
and all accrued interest on the Securities to the date of
redemption, together with a premium equal to the Make-Whole Amount
(as defined in Section 5(a) hereof).
6. SINKING FUND
As and or for a sinking fund for the retirement of the Securities,
the Company will, until all the Securities are paid or payment
thereof provided for, deposit with the Trustee, on or prior to
March 1 in each year beginning with the year 1997, an amount in
cash sufficient to redeem on each such March 1, $700,000 aggregate
principal amount of the Securities, in each case at a redemption
price equal to the principal amount thereof, together with accrued
interest to the redemption date.
7. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. The
transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Transfer Agent may
require a holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees
required by law or the Indenture. The Transfer Agent need not
exchange or register the transfer of any Security or portion of a
Security selected for redemption. Also, it need not exchange or
register the transfer of any Securities for a period of 15 days
before a selection of Securities to be redeemed.
-6-
<PAGE> 7
8. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its owner
for all purposes.
9. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may
be amended with the consent of the holders of a majority in
principal amount of the Securities of all series affected by the
amendment. Subject to certain exceptions, a default on a series
may be waived with the consent of the holders of a majority in
principal amount of the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any
ambiguity, omission, defect or inconsistency; to provide for
assumption of Company obligations to Securityholders; or to make
any change that does not materially adversely affect the rights of
any Securityholder.
10. RESTRICTIVE COVENANTS.
The Securities are unsecured general obligations of the Company
limited to $7,000,000 principal amount. The Indenture does not
limit other unsecured debt. Sections 4.07, 4.08 and 4.09 of the
Indenture, which if applicable limit certain mortgages and other
liens, the issuance of additional first mortgage bonds and certain
sale and leaseback transactions, will apply with respect to the
Securities. The limitations are subject to a number of important
qualifications and exceptions, and will terminate in the event of
a merger of the Company into, consolidation with, or transfer of
all or substantially all of its assets to Wisconsin Electric Power
Company or a successor thereto. As provided in Section 11, in the
event of any such merger, consolidation or transfer of assets, the
holders of the Securities shall have the right to exchange the
Securities for First Mortgage Bonds of Wisconsin Electric. On
January 24, 1994, Wisconsin Energy Corporation announced its
intent to merge the Company into Wisconsin Electric.
11. EXCHANGE RIGHT UPON MERGER INTO WISCONSIN ELECTRIC POWER COMPANY
(a) In the event that the Company shall merge into, consolidate
with, or transfer all or substantially all of its assets (the
"MERGER") to Wisconsin Electric Power Company ("WISCONSIN
ELECTRIC"), the Company shall promptly provide written notice (the
"MERGER NOTICE") of such fact to all holders of the Securities
then
-7-
<PAGE> 8
outstanding. The Merger Notice shall be delivered promptly upon
the effectiveness of the Merger, but in no event later than two
business days thereafter. The Merger Notice shall be in writing
and shall set forth (i) a statement that the Merger has taken
place, (ii) the date on which the Merger took place, (iii) a
reference to this Section 11 and the right of the holders of the
Securities to require the Company to exchange the outstanding
Securities for First Mortgage Bonds of Wisconsin Electric (the "WE
BONDS") issued under and secured by that certain Indenture dated
October 28, 1938 from Wisconsin Electric to Firstar Trust Company
(formerly First Wisconsin Trust Company), as Trustee (the "WE
INDENTURE") and (iv) an irrevocable offer to exchange the
Securities for WE Bonds. Each holder of the Securities then
outstanding shall have the right to accept such offer and require
the Company to exchange all the Securities held by such holder by
written notice to the Company (the "EXCHANGE NOTICE") given not
later than 180 days prior to the date of maturity for the
Securities.
Upon receipt by the Company of an Exchange Notice from any holder
of Securities, the Company will promptly take all actions
necessary for the due authorization, execution and delivery of
such WE Bonds including, without limitation, (i) the filing,
within 30 days after receipt of the Exchange Notice, of
applications with the Public Service Commission of Wisconsin and
any other governmental commission, board or regulatory body in
order to obtain the requisite approvals, authorization, consents
and orders necessary for the issuance of the WE Bonds, (ii)
compliance with all requirements of the WE Indenture for the
issuance and delivery of a new series of WE Bonds and (iii) the
taking of all other actions the holders of the Securities may
reasonably request in connection with the delivery of the WE
Bonds, including the delivery of legal opinions and an exchange
agreement between the Company and the holders of the Securities in
form and substance reasonably satisfactory to the holders of the
Securities. In no event shall WE Bonds be delivered later than 90
days after receipt of all regulatory approvals required for the
issuance of the WE Bonds.
Without limiting the foregoing, notwithstanding any failure on the
part of the Company to give the Merger Notice following the
Merger, each holder of the Securities that shall not have received
such Merger Notice shall have the right to require the Company to
exchange the Securities held by such holder for WE Bonds, and the
Company will exchange such Securities for WE Bonds in a manner
consistent with this Section 11.
-8-
<PAGE> 9
(b) WE Bonds exchanged for Securities shall be issued under and
secured by the WE Indenture, shall rank on a parity with all other
first mortgage bonds issued and outstanding under the WE
Indenture, shall be dated the last date to which interest has been
paid on the Securities, shall bear interest at the rate of 9.47%
per annum, payable semiannually on the first day of March and the
first day of September in each year (commencing on the first of
such dates following the exchange), until the entire principal is
paid, shall have sinking fund and redemption provisions identical
to those applicable to the Securities and shall otherwise be
substantially in the form required by the WE Indenture.
12. SUCCESSORS.
When a successor assumes all the obligations of the Company it is
required to assume under the Securities and the Indenture, the
Company will be released from all of its obligations under the
Securities and the Indenture.
13. DEFEASANCE PRIOR TO MATURITY.
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and
interest on the Securities to maturity. U.S. Government
Obligations are securities backed by the full faith and credit of
the United States of America or certificates representing an
ownership interest in such Obligations.
14. DEFAULTS AND REMEDIES.
An Event of Default includes: default for 30 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default by the Company for a specified period after
notice to it in the performance of any of its other agreements
applicable to the Securities; certain events of bankruptcy or
insolvency; and any other event of default provided for in the
series. If an Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in principal amount of the
Securities may declare the principal of all the Securities to be
due and payable immediately.
The following event shall also constitute an Event of Default with
respect to the Securities: default or the happening of any event
shall occur under any indenture, agreement, or other instrument
under which the Company shall have outstanding at least $5,000,000
aggregate
-9-
<PAGE> 10
principal amount of indebtedness for borrowed money, and such
default or event shall continue beyond the period of grace, if
any, allowed with respect thereto.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or
the Securities. Subject to certain limitations, holders of a
majority in principal amount of the Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it
determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the
Trustee.
15. TRUSTEE DEALINGS WITH COMPANY.
Firstar Trust Company, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with those persons, as if it
were not Trustee.
16. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and
releases all such liability. The waiver and release are part of
the consideration for the issue of the Securities.
17. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with right of survivorship and not as tenants in common),
CUST (=custodian), U/G/M/A (=Uniform Gifts to Minors Act), and
U/T/M/A (=Uniform Transfers to Minors Act).
-10-
<PAGE> 11
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE AND THE SECURITIES RESOLUTION, WHICH
CONTAINS THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
CORPORATE SECRETARY, WISCONSIN NATURAL GAS COMPANY, 231 WEST MICHIGAN STREET,
P.O. BOX 2046, MILWAUKEE, WI 53201.
\FM\WP\MES\WNG\RESO64.cln
-11-
