<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED DECEMBER 9, 1998)
$50,000,000
WISCONSIN PUBLIC SERVICE CORPORATION
SENIOR NOTES, 6.08% SERIES DUE DECEMBER 1, 2028
---------
Wisconsin Public Service Corporation will pay interest on the Senior Notes
Due December 1, 2028, at the rate of 6.08% per annum on June 1 and December 1 of
each year, commencing on June 1, 1999. The Company may redeem the Notes in whole
at any time or in part from time to time at a redemption price equal to the
greater of (1) 100% of principal or (2) the sum of the present values of the
remaining scheduled payments of principal and interest thereon discounted to the
date of redemption in the manner described in this Prospectus Supplement at the
Treasury Yield (as defined in this Prospectus Supplement) plus 20 basis points,
plus in each case, accrued interest to the date of redemption. The Notes
constitute a series of the Company's Senior Debt Securities. See "Description of
the Senior Debt Securities" in the accompanying Prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
--------- ----------
<S> <C> <C>
Public Offering Price(1)............................................. 100.000% $50,000,000
Underwriting Commission(2)........................................... 0.875% $ 437,500
Proceeds to Company(1)(3)............................................ 99.125% $49,562,500
</TABLE>
- ------------------------
(1) Plus accrued interest from December 1, 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by the Company estimated at $200,000.
--------------
The Underwriters are severally offering the Notes, subject to the prior
receipt and acceptance of the Notes by the Underwriters and their right to
reject any order in whole or in part. Delivery of the Notes will be made in
book-entry form only through the facilities of The Depository Trust Company on
or about December 21, 1998.
--------------
SALOMON SMITH BARNEY
A.G. EDWARDS & SONS, INC.
LEGG MASON WOOD WALKER
INCORPORATED
December 15, 1998.
<PAGE>
You should rely only on the information contained or incorporated by reference
in this prospectus. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should not assume that the information
contained or incorporated by reference in this prospectus is accurate as of any
date other than the date on the front of this prospectus.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Certain Terms of Senior Notes, 6.08% Series Due December 1, 2028........................................... S-3
Summary Financial Information.............................................................................. S-6
Book-Entry Issuance--The Depository Trust Company.......................................................... S-6
Underwriting............................................................................................... S-7
PROSPECTUS
Available Information...................................................................................... 2
Incorporation of Certain Documents by Reference............................................................ 2
Summary Information........................................................................................ 3
The Company................................................................................................ 4
Use of Proceeds............................................................................................ 4
Description of the Senior Debt Securities.................................................................. 4
Description of First Mortgage Bonds........................................................................ 14
Legal Opinions and Experts................................................................................. 17
Plan of Distribution....................................................................................... 17
</TABLE>
S-2
<PAGE>
CERTAIN TERMS OF
SENIOR NOTES, 6.08% SERIES DUE DECEMBER 1, 2028
Please read the following information concerning the Notes in conjunction
with the statements under "Description of the Senior Debt Securities" in the
accompanying Prospectus which the following information supplements and, to the
extent inconsistent therewith, supersedes. Capitalized terms not defined in this
Prospectus Supplement are used as defined or otherwise provided in the
accompanying Prospectus.
<TABLE>
<S> <C>
NOTES OFFERED..................... $50 million principal amount of Senior Notes, 6.08% due
December 1, 2028.
MATURITY.......................... December 1, 2028.
INTEREST RATE..................... The Notes will bear interest from December 1, 1998 at
the rate of 6.08% per annum.
INTEREST PAYMENT DATES............ June 1 and December 1 (commencing June 1, 1999).
RANKING........................... Until the Release Date, all of the Notes will be secured
by a series of Collateral Bonds issued and delivered by
the Company to the Senior Trustee. On the Release Date,
the Notes will cease to be secured by Collateral Bonds
and will at the option of the Company either be secured
by a substitute mortgage indenture or become unsecured
general obligations of the Company on a parity with
other senior unsecured indebtedness of the Company.
CERTAIN COVENANTS................. The Notes will be issued under the Senior Indenture
which contains covenants that, among other things, limit
the ability of the Company to incur certain additional
liens or engage in certain sale-leaseback transactions
following the Release Date.
USE OF PROCEEDS................... The proceeds from the Notes will be added to the general
funds of the Company and be applied to refund
outstanding short-term indebtedness of the Company and
for other proper corporate purposes.
FORM AND DENOMINATION............. The Notes will initially be represented by a Global Note
registered in the name of a nominee of The Depository
Trust Company.
OPTIONAL REDEMPTION............... The Notes will be redeemable at the option of the
Company, in whole at any time or in part from time to
time, at a redemption price equal to the greater of (1)
100% of principal or (2) the sum of the present values
of the remaining scheduled payments of principal and
interest thereon discounted to the date of redemption on
a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Yield as
defined below plus two-tenths of one percent (.20%),
plus in each case accrued interest to the date of
redemption. The Notes have no sinking fund provisions.
"Treasury Yield" means, with respect to any redemption
date, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C>
principal amount) equal to the Comparable Treasury Price
for such redemption date.
"Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining
term of the Notes that would be utilized, at the time of
selection and in accordance with customary financial
practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term
of the Notes. "Independent Investment Banker" means
Salomon Smith Barney Inc. or, if such firm is unwilling
or unable to select the Comparable Treasury Issue, one
of the remaining Reference Treasury Dealers appointed by
the Senior Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked
prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount) on
the third business day preceding such redemption date,
as set forth in the daily statistical release (or any
successor release) published by the Federal Reserve Bank
of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if
such release (or any successor release) is not published
or does not contain such prices on such business day,
(A) the average of the Reference Treasury Dealer
Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer
Quotations for such redemption date, or (B) if the
Senior Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such
Quotations. "Reference Treasury Dealer Quotations"
means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to
the Company by such Reference Treasury Dealer at 5:00
p.m. on the third business day preceding such redemption
date.
"Reference Treasury Dealer" means (1) each of Salomon
Smith Barney Inc. ("Salomon") and any other primary U.S.
Government securities dealer in New York City (a
"Primary Treasury Dealer") designated by, and not
affiliated with, Salomon; provided, however, that if
Salomon or any of its designees shall cease to be a
Primary Treasury Dealer, the Company shall substitute
therefor another Primary Treasury Dealer; and (2) any
other Primary Treasury Dealer or Dealers selected by the
Company.
If less than all of the Notes are to be redeemed, the
Senior Trustee shall select, in such manner as it shall
deem fair and appropriate, the particular Notes or
portions thereof to be redeemed. Notice of redemption
shall be given by mail not less than 30 nor more than 45
days prior to the date fixed for
</TABLE>
S-4
<PAGE>
<TABLE>
<S> <C>
redemption to the Holders of Notes to be redeemed
(which, as long as the Notes are held in the book-entry
only system, will be The Depository Trust Company
("DTC") (or its nominee) or a successor depositary. On
and after the date fixed for redemption (unless the
Company shall default in the payment of the redemption
price and interest accrued thereon to such date),
interest on the Notes or the portions thereof so called
for redemption shall cease to accrue.
No notice of redemption of the Notes will be mailed
during the continuance of any event of default under the
Indenture, except that (1) when notice of redemption of
any Notes has been mailed, the Company shall redeem such
Notes but only if funds sufficient for that purpose have
prior to the occurrence of such event of default been
deposited with the Trustee or a paying agent for such
purpose, and (2) notices of redemption of all
outstanding Senior Notes may be given during the
continuance of an event of default under the Indenture.
If at the time of mailing of any notice of redemption,
unless the Company has deposited with the Senior Trustee
an amount in cash sufficient to redeem all of the Notes
called for redemption, such notice will state that it is
subject to the receipt of the redemption moneys by the
Senior Trustee before the redemption date, and such
notice shall be of no effect unless such moneys are so
received before such date.
</TABLE>
S-5
<PAGE>
SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30
---------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ----------
UNAUDITED
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA
Operating Revenues (000)........................... $ 663,693 $ 701,863 $ 690,478 $ 515,059 $ 485,733
Operating Income (000)............................. $ 78,756 $ 80,494 $ 79,321 $ 59,976 $ 59,584
Net Income (000)................................... $ 59,238 $ 60,390 $ 64,742 $ 48,230 $ 46,756
CAPITALIZATION AT SEPTEMBER 30, 1998
</TABLE>
<TABLE>
<CAPTION>
AS AS ADJUSTED
AMOUNT ADJUSTED(a) PERCENTAGE
---------- ----------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Long-term Debt(b).......................................................... $ 255,508 $ 305,508 35.5%
Preferred Stock (without mandatory redemption provisions).................. 51,200 51,200 6.0%
Common Stock Equity(b)..................................................... 502,485 502,485 58.5%
---------- ----------- -----
Total Capitalization............................................... $ 809,193 $ 859,193 100.0%
---------- ----------- -----
---------- ----------- -----
</TABLE>
- ------------------------
(a) Adjusted to reflect the issuance of $50,000,000 of the Notes.
(b) Long-term debt is increased by $7,848,000 and common stock equity is reduced
by the same amount to reflect the Company's guaranty of bank loans to the
Company's ESOP (Employee Stock Ownership Plan).
RATIOS OF EARNINGS TO FIXED CHARGES (UNAUDITED) (a)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------- NINE MONTHS ENDED
1993 1994 1995 1996 1997 SEPTEMBER 30, 1998
- --------- --------- --------- --------- --------- ---------------------
<S> <C> <C> <C> <C> <C>
4.43 4.21 4.17 4.25 4.34 4.62
</TABLE>
- ------------------------
(a) In computing the ratios, earnings represent income before interest expense,
amortization of debt discount, premium and expense, federal and state income
taxes, and the allowance for borrowed funds used during construction and the
estimated interest component of rentals. Fixed charges represent interest
expense, amortization of debt discount, premium and expense and the
estimated interest component of rentals.
BOOK-ENTRY ISSUANCE--THE DEPOSITORY TRUST COMPANY
DTC will act as securities depositary for the Notes. The Notes will
initially be issued only as fully-registered securities registered in the name
of Cede & Co. (DTC's partnership nominee). One or more fully-registered global
certificates representing the total aggregate principal amount of the Notes will
be issued and will be deposited with the Senior Trustee as custodian for DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the Notes as represented by a
global certificate.
For additional information relating to DTC and the book-entry issuance
system, see "Senior Debt Securities--Book-Entry Securities" in the accompanying
Prospectus.
S-6
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters has severally agreed to purchase, the respective principal
amounts of the Senior Notes 6.08% Series Due December 1, 2028, set forth
opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
- ------------------------------------------------------------------------------- -------------
<S> <C>
Salomon Smith Barney Inc....................................................... $ 32,500,000
A.G. Edwards & Sons, Inc....................................................... $ 12,500,000
Legg Mason Wood Walker, Incorporated........................................... $ 5,000,000
-------------
Total.................................................................. $ 50,000,000
-------------
-------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Notes, if any are taken.
The Underwriters propose to offer the Notes in part directly to purchasers at
the initial public offering price set forth on the cover page of this Prospectus
Supplement and in part to certain securities dealers at such price less a
concession of 0.50% of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed 0.25% of the
principal amount of the Notes to certain brokers and dealers. After the Notes
are released for sale to the public, the offering price and other selling terms
may from time to time be varied by the Underwriters.
The Notes constitute a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that they intend to
make a market in the Notes but are not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
The Underwriters are permitted to engage in certain transactions that
maintain or affect the price of the Notes. Such transactions may include
over-allotment transactions and purchases to cover short positions created by
the Underwriters in connection with the offering. If the Underwriters create a
short position in the Notes in connection with the offering (I.E., if they sell
Notes in an aggregate principal amount that exceeds the amount set forth on the
cover page of this Prospectus Supplement), the Underwriters may reduce that
short position by purchasing Notes in the open market. In general, purchases of
a security to reduce a short position could cause the price of the security to
be higher than it might be in the absence of such purchases.
Neither the Company nor the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Notes. In addition, neither the
Company nor the Underwriters makes any representation that the Underwriters will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.
Certain of the Underwriters and their affiliates have engaged and in the
future may engage in investment banking transactions with, and the provision of
services to, the Company and its affiliates in the ordinary course of business.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
S-7
<PAGE>
$102,000,000
WISCONSIN PUBLIC SERVICE CORPORATION
SENIOR DEBT SECURITIES
----------------
Wisconsin Public Service Corporation intends to offer up to $102,000,000 of
one or more series of its Senior Debt Securities at such times and on such terms
as the Company may determine in the light of market conditions and other
factors. The Senior Debt Securities will be secured by a pledge of first
mortgage bonds issued under the Company's Mortgage Indenture. This pledge will
remain in effect so long as there are other first mortgage bonds of the Company
outstanding other than bonds issued as security for Senior Debt Securities. Upon
the retirement of all other first mortgage bonds, the pledge will be released.
The specific designation, aggregate principal amount, purchase price, maturity,
rate and time of payment of interest, and the redemption terms or other specific
terms of the Senior Debt Securities will be set forth in an accompanying
Prospectus Supplement, together with the terms of offering of the Senior Debt
Securities. See also "Description of the Senior Debt Securities."
The Company may sell the Senior Debt Securities to or through underwriters
and also may sell the Senior Debt Securities directly to other purchasers or
through agents. The Prospectus Supplement will set forth the names of any
underwriters or agents involved in the sale of the Senior Debt Securities, the
principal amounts to be purchased by underwriters and the compensation of such
underwriters or agents.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS DECEMBER 9, 1998.
<PAGE>
AVAILABLE INFORMATION
Wisconsin Public Service Corporation (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports and other information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices, located at Suite 1400, Citicorp Center, 500
West Madison Street, Chicago, Illinois 60661 and at 13th Floor, Seven World
Trade Center, New York, New York 10048. Copies of such material may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, because the Company
files joint reports with its parent WPS Resources Corporation ("WPSR"), reports
concerning the Company can be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and the Chicago Stock
Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, on which exchanges
WPSR common stock is listed. Such information may also be accessed
electronically by means of the SEC home page on the world wide web located at
http:www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
Registration Statement) under the Securities Act of 1933, as amended (the
"Act"). The Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement and the exhibits thereto. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission
or incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such statement is qualified in
its entirety by such reference.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1997.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
3. The Company's Current Reports on Form 8-K filed June 11, 1998, July
22, 1998, and October 6, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document, which
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, on the written or oral request of
any such person, a copy of any or all of the documents referred to above which
have been or may be incorporated in this Prospectus by reference, other than
exhibits to such documents. Requests for such copies should be directed to
Francis J. Kicsar, Secretary, Wisconsin Public Service Corporation, 700 North
Adams Street, P.O. Box 19001, Green Bay, Wisconsin 54307-9001, telephone number
(920) 433-1466.
2
<PAGE>
SUMMARY INFORMATION
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus or in the Prospectus
Supplement or in the financial statements or other documents incorporated in
this Prospectus by reference.
THE OFFERING
<TABLE>
<S> <C>
COMPANY........................... Wisconsin Public Service Corporation
SECURITIES BEING OFFERED.......... Not exceeding $102,000,000 Senior Debt Securities
</TABLE>
THE COMPANY
<TABLE>
<S> <C>
BUSINESS.......................... Electric and gas utility
SERVICE AREA...................... Approximately 11,000 square miles in northeastern
Wisconsin and an adjacent part of upper Michigan
SOURCE OF REVENUES FOR THE YEAR
ENDED DECEMBER 31, 1997......... 69.4% Electric; 30.6% Gas
CUSTOMERS AT DECEMBER 31, 1997.... Electric-374,516; Gas-218,299
SOURCES OF ELECTRIC GENERATION IN
1997............................ 68.9% Coal; 8.2% Nuclear; 3.0% Hydro; 19.9% Other
Generation and Purchased Power
</TABLE>
RATIOS OF EARNINGS TO FIXED CHARGES (UNAUDITED) (a)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------- NINE MONTHS ENDED
1993 1994 1995 1996 1997 SEPTEMBER 30, 1998
- --------- --------- --------- --------- --------- ---------------------
<S> <C> <C> <C> <C> <C>
4.43 4.21 4.17 4.25 4.34 4.62
</TABLE>
- ------------------------
(a) In computing the ratios, earnings represent income before interest expense,
amortization of debt discount, premium and expense, federal and state income
taxes, and the allowance for borrowed funds used during construction and the
estimated interest component of rentals. Fixed charges represent interest
expense, amortization of debt discount, premium and expense and the
estimated interest component of rentals.
3
<PAGE>
THE COMPANY
The Company is a wholly-owned subsidiary of WPS Resources Corporation, Green
Bay, Wisconsin ("WPSR"). The Senior Debt Securities offered pursuant to this
Prospectus, however, are the obligation solely of the Company, and WPSR is not
obligated to make any payments of principal or interest on the Senior Debt
Securities.
The Company is engaged in the production, transmission, distribution and
sale of electricity and in the purchase, distribution, transportation and sale
of gas in northeastern Wisconsin and an adjacent part of upper Michigan. It was
incorporated under the laws of the State of Wisconsin in 1883. Its executive
offices are at 700 North Adams Street, P.O. Box 19001, Green Bay, Wisconsin
54307. Its telephone number is (920) 433-1598.
The Company's Wisconsin retail utility rates and service and the issuance of
securities by the Company are regulated by the Public Service Commission of
Wisconsin ("PSCW"). The Company's Michigan retail utility rates and service are
regulated by the Michigan Public Service Commission. The Company's wholesale
electric rates, hydroelectric projects and certain other matters are regulated
by the Federal Energy Regulatory Commission. The operation of the Kewaunee
nuclear plant, of which the Company is the operator and currently a 41.2% owner,
is regulated by the Federal Nuclear Regulatory Commission. It is anticipated
that the Company's ownership interest in the Kewaunee plant will increase to 59%
in 2000. The Company is also subject to limited regulation by local authorities.
USE OF PROCEEDS
The proceeds from the sale of the Senior Debt Securities will be used to
refund outstanding short-term indebtedness and, if necessary or desirable to
achieve greater flexibility to meet industry restructuring requirements, may be
used to redeem or repurchase any or all of the following series of the Company's
Preferred Stock: 5.00%, 5.04%, 5.08%, 6.76%, 6.88%. Any remaining proceeds will
be used for other proper corporate purposes.
DESCRIPTION OF THE SENIOR DEBT SECURITIES
GENERAL: The Company will issue from time to time, in one or more series,
Senior Debt Securities under a trust indenture dated as of December 1, 1998
between the Company and Firstar Bank Milwaukee, N.A., National Association, as
trustee (the "Senior Trustee"), as supplemented and amended by supplemental
indentures thereto (collectively the "Senior Indenture"). The form of the Senior
Indenture is an exhibit to the Registration Statement.
The description of the offered Senior Debt Securities in the attached
Prospectus Supplement modifies the following description. Please read both
descriptions. The following statements are brief summaries of certain provisions
of the Senior Indenture. Such statements do not purport to be complete and in
each case are qualified in their entirety by the more detailed provisions of the
Senior Indenture, which is incorporated herein by reference. Capitalized terms
used in this section and not otherwise defined herein have the meanings given to
them in the Senior Indenture.
Until the Release Date (as defined below) the Senior Debt Securities will be
secured by one or more series of the Company's first mortgage bonds (the "First
Mortgage Bonds") issued under the first mortgage and deed of trust dated January
1, 1941 from the Company to First Wisconsin Trust Company (subsequently merged
into Firstar Bank Milwaukee, N.A., National Association), Milwaukee, Wisconsin
("Firstar" or the "Mortgage Trustee") as supplemented and amended by the
supplemental indentures thereto (collectively, the "Mortgage Indenture"). See
"--Security; Release Date." Any First Mortgage Bonds issued as security for
Senior Debt Securities will be issued and delivered to the Senior Trustee and
are referred to in this Prospectus as "Collateral Bonds."
4
<PAGE>
ON THE RELEASE DATE (AS DEFINED BELOW), THE SENIOR DEBT SECURITIES WILL
CEASE TO BE SECURED BY THE COLLATERAL BONDS AND, AT THE COMPANY'S OPTION, EITHER
(i) WILL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (ii) WILL BE
SECURED BY FIRST MORTGAGE BONDS (THE "SUBSTITUTED COLLATERAL BONDS") ISSUED
UNDER A MORTGAGE INDENTURE OTHER THAN THE MORTGAGE INDENTURE. The Senior
Indenture provides that, in addition to the Senior Debt Securities offered
hereby, additional Senior Debt Securities may be issued thereunder, without
limitation as to aggregate principal amount, from time to time, in one or more
series, provided that, prior to the Release Date, the amount of Senior Debt
Securities that may be issued cannot exceed the aggregate principal amount of
Collateral Bonds that the Company is able to issue under the Mortgage Indenture.
There is no requirement, under either the Senior Indenture or the Mortgage
Indenture (collectively, the "Indentures"), that future issues of debt
securities of the Company be issued under the Indentures, and, subject to
certain restrictions following the Release Date which are described in
"Description of the Senior Debt Securities--Restrictions," the Company will be
free to employ other indentures or documentation, containing provisions
different from those included in the Indentures, in connection with future
issues of such other debt securities.
The Indentures do not contain any debt covenants or provisions which would
afford holders of Senior Debt Securities protection in the event of a highly
leveraged transaction.
Please refer to the Prospectus Supplement relating to the Senior Debt
Securities being offered (the "Offered Senior Debt Securities") for, among other
things, the following terms thereof:
- the title of the Offered Senior Debt Securities;
- any limit on the aggregate principal amount of the Offered Senior Debt
Securities;
- the date on which the Offered Senior Debt Securities will mature;
- the rate or rates per annum (which may be fixed or variable) at which the
Offered Senior Debt Securities will bear interest or the method by which
such rate or rates shall be determined;
- the date from which interest will accrue or the method by which such date
shall be determined;
- the dates on which such interest will be payable and the Regular Record
Dates for such Interest Payment Dates;
- the dates, if any, on which, and the price or prices at which, the Offered
Senior Debt Securities may, pursuant to any mandatory or optional sinking
fund provisions, be redeemed by the Company and other detailed terms and
provisions of such sinking funds;
- the date, if any, after which, and the price or prices at which, the
Offered Senior Debt Securities may, pursuant to any optional redemption
provisions, be redeemed at the option of the Company or of the Holder
thereof and other detailed terms and provisions of such optional
redemption; and
- any other terms of the Offered Senior Debt Securities.
The following activities relating to the Senior Debt Securities will occur
at the office of the Senior Trustee in Milwaukee, Wisconsin:
- payment of principal and interest
- exchange, transfer and registration of certificated Senior Debt
Securities.
At its option, the Company may pay interest by check mailed or by wire
transfer to the registered holder.
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The Offered Senior Debt Securities will be represented either by Global
Securities registered in the name of a depositary, or its nominee, or by
certificates in certificated form issued to the registered holders thereof as
set forth in the applicable Prospectus Supplement. See "--Book Entry Securities"
herein.
DEFINITIONS: For purposes of the descriptions of the Senior Debt
Securities, certain defined terms have the following meanings:
"Capitalization" means the total of all the following items appearing on, or
included in, the consolidated balance sheet of the Company; (i) liabilities for
indebtedness maturing more than twelve (12) months from the date of
determination; and (ii) common stock, preferred stock, Hybrid Preferred
Securities (as defined in the Senior Indenture), premium on capital stock,
capital surplus, capital in excess of par value, and retained earnings (however
the foregoing may be designated), less, to the extent not otherwise deducted,
the cost of shares of capital stock of the Company held in its treasury.
"Debt" means any outstanding debt for money borrowed evidenced by notes,
debentures, bonds or other securities or guarantees of any thereof.
"Net Tangible Assets" means the amount shown as total assets on the
consolidated balance sheet of the Company, less the following: (i) intangible
assets including, but without limitation, such items as goodwill, trademarks,
trade names, patents, and unamortized debt discount and expense and (ii)
appropriate adjustments, if any, on account of minority interests. Net Tangible
Assets shall be determined in accordance with generally accepted accounting
principles and practices applicable to the type of business in which the Company
is engaged and that are approved by the independent accountants regularly
retained by the Company, and may be determined as of a date not more than sixty
(60) days prior to the happening of the event for which such determination is
being made.
"Operating Property" means (i) any interest in real property owned by the
Company and (ii) any asset owned by the Company that is depreciable in
accordance with GAAP, excluding, in either case, any interest of the Company as
lessee under any lease (except for a lease that results from a Sale and
Lease-Back Transaction) which has been or would be capitalized on the books of
the lessee in accordance with GAAP.
"Sale and Lease-Back Transaction" means any arrangement with any person
providing for the leasing to the Company of any Operating Property (except for
leases for a term, including any renewal thereof, of not more than 48 months),
which Operating Property has been or is to be sold or transferred by the Company
to such person; PROVIDED, HOWEVER, Sale and Lease-Back Transaction shall not
include any arrangement first entered into prior to the date of the Indenture
and shall not include any transaction pursuant to which the Company sells
Operating Property to, and thereafter purchases energy or services from, any
entity which transaction is ordered or authorized by any regulatory authority
having jurisdiction over the Company or its operations or is entered into
pursuant to any plan or program of industry restructuring ordered or authorized
by any such regulatory authority.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (i) the net proceeds to the
Company from the sale or transfer of the property leased pursuant to such Sale
and Lease-Back Transaction or (ii) the net book value of such property, as
determined in accordance with generally accepted accounting principles by the
Company at the time of entering into such Sale and Lease-Back transaction, in
either case multiplied by a fraction, the numerator of which shall be equal to
the number of full years of the term of the lease that is part of such Sale and
Lease-Back Transaction remaining at the time of determination and the
denominator of which shall be equal to the number of full years of such term,
without regard, in any case, to any renewal or extension options contained in
such lease.
ORIGINAL ISSUE DISCOUNT SECURITIES. The Senior Debt Securities may be
issued under the Senior Indenture as Original Issue Discount Securities to be
offered and sold at a substantial discount below their principal amount. Special
federal income tax, accounting and other considerations applicable to any such
Original Issue Discount Securities will be described in any Prospectus
Supplement relating thereto.
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"Original Issue Discount Security" means any security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof as a result of the
occurrence of an Event of Default and the continuation thereof.
SECURITY; RELEASE DATE. Until the Release Date (as defined below), the
Senior Debt Securities will be secured by one or more series of the Collateral
Bonds issued and delivered by the Company to the Senior Trustee. See
"Description of the First Mortgage Bonds." Upon the issuance of Senior Debt
Securities prior to the Release Date, the Company will simultaneously issue and
deliver Collateral Bonds to the Senior Trustee, as security for such Senior Debt
Securities. Such Collateral Bonds will have the same stated rate or rates of
interest (or interest calculated in the same manner), interest payment dates,
stated maturity date and redemption provisions, and will be in the same
aggregate principal amount as the Senior Debt Securities being issued. The
Company has agreed to issue a Related Series of Collateral Bonds in the name of
the Senior Trustee in its capacity as trustee under the Senior Indenture
concurrently with the issuance of each series of Senior Debt Securities. The
Senior Trustee has agreed to hold each series of Collateral Bonds in such
capacity under all circumstances and not transfer such Collateral Bonds until
the earlier of the Release Date or the prior retirement of the Related Series of
Senior Debt Securities through redemption, repurchase or otherwise. Prior to the
Release Date, the Company shall make payments of the principal of, and premium
or interest on, each series of Collateral Bonds to the Senior Trustee, which
payments shall be applied by the Senior Trustee to satisfaction of all
obligations then due on the Related Series of Senior Debt Securities.
THE "RELEASE DATE" WILL BE THE DATE THAT ALL FIRST MORTGAGE BONDS OF THE
COMPANY ISSUED AND OUTSTANDING UNDER THE MORTGAGE INDENTURE, OTHER THAN THE
COLLATERAL BONDS, HAVE BEEN RETIRED (AT, BEFORE OR AFTER THE MATURITY THEREOF)
THROUGH PAYMENT, REDEMPTION OR OTHERWISE, PROVIDED THAT NO DEFAULT OR EVENT OF
DEFAULT UNDER THE SENIOR INDENTURE HAS OCCURRED AND IS CONTINUING. ON THE
RELEASE DATE, THE SENIOR TRUSTEE WILL DELIVER TO THE COMPANY FOR CANCELLATION
ALL COLLATERAL BONDS AND NOT LATER THAN 30 DAYS AFTER THE RELEASE DATE WILL
PROVIDE NOTICE TO ALL HOLDERS OF SENIOR DEBT SECURITIES OF THE OCCURRENCE OF THE
RELEASE DATE. AS A RESULT, ON THE RELEASE DATE, THE COLLATERAL BONDS WILL CEASE
TO SECURE THE SENIOR DEBT SECURITIES, AND, AT THE OPTION OF THE COMPANY, THE
SENIOR DEBT SECURITIES, EITHER (i) WILL BECOME UNSECURED GENERAL OBLIGATIONS OF
THE COMPANY OR (ii) WILL BE SECURED BY SUBSTITUTED COLLATERAL BONDS. EACH ISSUE
OF COLLATERAL BONDS WILL BE SECURED BY A LIEN ON CERTAIN PROPERTY OWNED BY THE
COMPANY. IN CERTAIN CIRCUMSTANCES PRIOR TO THE RELEASE DATE, THE COMPANY IS
PERMITTED TO REDUCE THE AGGREGATE PRINCIPAL AMOUNT OF A SERIES OF COLLATERAL
BONDS HELD BY THE SENIOR TRUSTEE, BUT IN NO EVENT TO AN AMOUNT LOWER THAN THE
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE SENIOR DEBT SECURITIES INITIALLY
ISSUED CONTEMPORANEOUSLY WITH SUCH COLLATERAL BONDS. FOLLOWING THE RELEASE DATE,
THE COMPANY WILL CAUSE THE MORTGAGE INDENTURE TO BE DISCHARGED, AND THE COMPANY
WILL NOT ISSUE ANY ADDITIONAL BONDS UNDER SUCH MORTGAGE INDENTURE.
RESTRICTIONS. The Senior Indenture provides that the Company shall not
consolidate with, merge with or into any other corporation (whether or not the
Company shall be the surviving corporation), or sell, assign, transfer or lease
all or substantially all of its properties and assets as an entirety or
substantially as an entirety to any Person or group of affiliated Persons, in
one transaction or a series of related transactions, unless: (1) either the
Company shall be the continuing Person or the Person (if other than the Company)
formed by such consolidation or with which or into which the Company is merged
or the Person (or group of affiliated Persons) to which all or substantially all
the properties and assets of the Company are sold, assigned, transferred or
leased is a corporation (or constitute corporations) and expressly assumes, by
an indenture supplemental to the Senior Indenture, all the obligations of the
Company under the Senior Debt Securities and the Senior Indenture, executed and
delivered to the Senior Trustee in form satisfactory to the Senior Trustee, and
expressly assumes, by an indenture supplemental to the Mortgage Indenture (if
prior to the Release Date) or any Substituted Mortgage Indenture (if on or after
the Release Date) all of the obligations of the Company under any outstanding
Collateral Bonds or Substituted Collateral Bonds and under the Mortgage
Indenture or Substituted Mortgage Indenture, executed and delivered to the
Mortgage Trustee or the trustee under the Substituted Mortgage Indenture in form
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satisfactory to the Mortgage Trustee or the trustee under the Substituted
Mortgage Indenture; (2) immediately before and after giving effect to such
transaction or series of transactions, no Event of Default, and no Default, with
respect to the Senior Debt Securities shall have occurred and be continuing; and
(3) the Company shall have delivered to the Senior Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indentures comply with the Senior
Indenture, the Mortgage Indenture or the Substituted Mortgage Indenture, as the
case may be.
LIMITATION ON LIENS. The Senior Indenture provides that, so long as any
Senior Debt Securities are outstanding, the Company may not issue, assume,
guarantee or permit to exist after the Release Date any Debt that is secured by
any mortgage, security interest, pledge or lien ("Lien") of or upon any
Operating Property of the Company, whether owned at the date of the Senior
Indenture or thereafter acquired, without in any such case effectively securing
the Senior Debt Securities (together with, if the Company shall so determine,
any other indebtedness of the Company ranking equally with the Senior Debt
Securities) equally and ratably with such Debt (but only so long as such Debt is
so secured).
The foregoing restriction will not apply to:
- Liens on any Operating Property existing at the time of its acquisition
(which Liens may also extend to subsequent repairs, alterations and
improvements to such Operating Property);
- Liens on Operating Property of a corporation existing at the time such
corporation is merged into, or consolidated with, or such corporation
disposes of its properties (or those of a division) as or substantially as
an entirety to, the Company;
- Liens on Operating Property to secure the cost of acquisition,
construction, development or substantial repair, alteration or improvement
of property or to secure indebtedness incurred to provide funds for any
such purpose or for reimbursement of funds previously expended for any
such purpose, provided such Liens are created or assumed contemporaneously
with, or within 18 months after, such acquisition or the completion of
substantial repair or alteration, construction, development or substantial
improvement;
- Liens in favor of any State or any department, agency or instrumentality
or political subdivision of any State, or for the benefit of holders of
securities issued by any such entity (or providers of credit enhancement
with respect to such securities), to secure any Debt (including, without
limitation, obligations of the Company with respect to industrial
development, pollution control or similar revenue bonds) incurred for the
purpose of financing all or any part of the purchase price or the cost of
substantially repairing or altering, constructing, developing or
substantially improving Operating Property of the Company;
- Any Lien created by any Substituted Mortgage Indenture securing
Substituted Collateral Bonds; or
- Any extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of any Lien referred to in the
foregoing exceptions, provided, however, that the principal amount of Debt
secured thereby and not otherwise authorized by the foregoing exception,
shall not exceed the principal amount of Debt, plus any premium or fee
payable in connection with any such extension, renewal or replacement, so
secured at the time of such extension, renewal or replacement.
In addition, the foregoing restriction will not apply to the issuance,
assumption or guarantee by the Company of Debt secured by a Lien which would
otherwise be subject to the foregoing restriction up to an aggregate amount
which, together with all other secured Debt of the Company (not including
secured Debt permitted under any of the foregoing exceptions) and the Value of
Sale and Lease-Back Transactions existing at such time (other than Sale and
Lease-Back Transactions the proceeds of which have been applied to the
retirement of certain indebtedness, Sale and Lease-Back Transactions in which
the property involved would have been permitted to be subjected to a Lien under
any of the foregoing exceptions and Sale and Lease-Back Transactions that are
permitted by the first sentence of "Limitations on Sale and
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Lease-Back Transactions" below), does not exceed the greater of 10% of the Net
Tangible Assets or 10% of Capitalization.
LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS. The Senior Indenture
provides that so long as the Senior Debt Securities are outstanding, the Company
may not enter into or permit to exist after the Release Date any Sale and
Lease-Back Transaction with respect to any Operating Property (except for
transactions involving leases for a term, including renewals, of not more than
48 months), if the purchaser's commitment is obtained more than 18 months after
the later of the completion of the acquisition, construction or development of
such Operating Property or the placing in operation of such Operating Property
or of such Operating Property as constructed or developed or substantially
repaired, altered or improved. This restriction will not apply if (a) the
Company would be entitled pursuant to any of the provisions described in the
second paragraph under "Limitation on Liens" above to issue, assume, guarantee
or permit to exist Debt secured by a Lien on such Operating Property without
equally and ratably securing the Senior Debt Securities, (b) after giving effect
to such Sale and Lease-Back Transaction, the Company could incur pursuant to the
provisions described in the third paragraph under "Limitation on Liens," at
least $1.00 of additional Debt secured by Liens (other than Liens permitted by
clause (a)) or (c) the Company applies within 180 days an amount equal to, in
the case of a sale or transfer for cash, the net proceeds (not exceeding the net
book value), and, otherwise, an amount equal to the fair value (as determined by
its Board of Directors) of the Operating Property so leased to the retirement of
Senior Debt Securities or other Debt of the Company ranking equally with, the
Senior Debt Securities, subject to reduction for Senior Debt Securities and such
Debt retired during such 180-day period otherwise than pursuant to mandatory
sinking fund or prepayment provisions and payments at stated maturity.
EVENTS OF DEFAULT AND NOTICE THEREOF. The following are Events of Default
under the Senior Indenture with respect to the Senior Debt Securities of any
series;
- failure to pay interest on any Senior Debt Security when due and
(1) if such failure occurs prior to the Release Date, continued for 90
days, or
(2) if such failure occurs on or after the Release Date, continued for
30 days;
- failure to pay the principal of (or premium, if any, on) any Senior Debt
Security when due and payable at Maturity, upon redemption or otherwise;
- failure to observe or perform any other covenant, warranty or agreement
contained in the Senior Debt Securities of that series or in the Senior
Indenture (other than a covenant, agreement or warranty included in the
Senior Indenture solely for the benefit of Senior Debt Securities other
than that series) and
(1) if such failure occurs prior to the Release Date, continued for 90
days, or
(2) if such failure occurs on or after the Release date, continued for
60 days,
in each case, after notice has been given to the Company by the Senior
Trustee or Holders of at least 25% in aggregate principal amount of the
Outstanding Senior Debt Securities of that series;
- prior to the Release Date, the occurrence and continuance of a completed
default under the Mortgage Indenture, PROVIDED, HOWEVER, the waiver or
cure of such completed default under the Mortgage Indenture and the
rescission and annulment of the consequences thereof under the Mortgage
Indenture will constitute a waiver of the corresponding Event of Default
under the Senior Indenture;
- if any Substituted Collateral Bonds are outstanding, the occurrence and
continuance of an event of default or completed default under the
Substituted Mortgage, PROVIDED, HOWEVER, the waiver or cure of such event
of default or completed default under the Substituted Mortgage Indenture
and the rescission and annulment of the consequences thereof under the
Substituted Mortgage Indenture will constitute a waiver of the
corresponding Event of Default under the Senior Indenture;
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- certain events of bankruptcy, insolvency or reorganization relating to the
Company; and
- any other Event of Default with respect to the Senior Debt Securities of
that series specified in the Prospectus Supplement relating thereto or
Supplemental Indenture under which such series of Senior Debt Securities
is issued.
The Senior Trustee shall, within 30 days after the occurrence of any Default
or Event of Default with respect to Senior Debt Securities of any series, give
the Holders of Senior Debt Securities of that series notice of all uncured
Defaults or Events of Default known to it (the term "Default" includes any event
which after notice or passage of time or both would be an Event of Default);
provided, however, that, except in the case of an Event of Default or a Default
in payment on any Senior Debt Securities of any series, the Senior Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee of directors or responsible officers of the
Senior Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders of Senior Debt Securities of that series.
If an Event of Default with respect to Senior Debt Securities of any series
(other than due to events of bankruptcy, insolvency or reorganization) occurs
and is continuing, the Senior Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Senior Debt Securities of that
series, by notice in writing to the Company (and to the Senior Trustee if given
by the Holders of at least 25% in aggregate principal amount of the Senior Debt
Securities of that series) may declare the unpaid principal of and accrued
interest to the date of acceleration on all the Outstanding Senior Debt
Securities of that series to be due and payable immediately and, upon any such
declaration, the Senior Debt Securities of that series shall become immediately
due and payable.
If an Event of Default occurs due to bankruptcy, insolvency or
reorganization, all unpaid principal of and accrued interest on the Outstanding
Senior Debt Securities of any series will become immediately due and payable
without any declaration or other act on the part of the Senior Trustee or any
Holder of any Senior Debt Security of that series. Upon any acceleration of the
Senior Debt Securities prior to the Release Date, the Senior Trustee is
empowered to cause the mandatory redemption of the Collateral Bonds or
Substituted Collateral Bonds, as the case may be.
The Holders of not less than a majority of the principal amount of the
Outstanding Senior Debt Securities of any series may rescind a declaration of
acceleration and its consequences with respect to the Senior Debt Securities of
such series (including if given, the written demand for redemption of Collateral
Bonds or Substituted Collateral Bonds) if all existing Events of Default, other
than the nonpayment of principal of and interest on the Senior Debt Securities
of that series that have become due solely by such declaration of acceleration,
have been cured or waived; to the extent lawful, interest on overdue interest
and on overdue principal that has become due otherwise than by reason of such
acceleration has been paid; the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction; and all amounts due to the
Senior Trustee under the Senior Indenture have been paid. The Senior Indenture
provides that the Company shall periodically file statements with the Senior
Trustee regarding compliance by the Company with certain of the covenants
thereof and shall specify any Event of Default or Defaults with respect to
Senior Debt Securities, in performing such covenants, of which the signers may
have knowledge.
MODIFICATION OF THE SENIOR INDENTURE; WAIVER. The Company and the Senior
Trustee without the consent of any Holders may modify the Senior Indenture with
respect to certain matters, including (i) to cure any ambiguity, defect or
inconsistency or to correct or supplement any provision which may be
inconsistent with any other provision of the Senior Indenture and (ii) to make
any change that does not materially adversely affect the interests of any Holder
of Senior Debt Securities of any series. In addition, the Company and the Senior
Trustee may modify certain rights and obligations of the Company and the rights
of Holders of the Senior Debt Securities with the written consent of the Holders
of at least a majority in aggregate principal amount of the Outstanding Senior
Debt Securities of each series affected
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thereby. None of the following modifications, however, will be effective against
any holder of any outstanding Senior Debt Securities of any series affected
thereby without such Holder's consent:
- extension of the maturity or reduction of the principal amount of any
Senior Debt Securities or, reduction in the interest rate or extension of
the time for payment of interest,
- change in the optional redemption provisions in a manner adverse to any
Holder of Senior Debt Securities of such series,
- modification that would
- adversely impair the interest of the Senior Trustee in the Collateral
Bonds or Substituted Collateral Bonds held by it or,
- prior to the Release Date, reduce the principal amount of any issue of
Collateral Bonds securing the Senior Debt Securities of such series to
an amount less than the principal amount of the related issue of Senior
Debt Securities or
- alter the payment provisions of such Collateral Bonds or Substituted
Collateral Bonds in a manner adverse to the holders of the Senior Debt
Securities,
- other modification in the terms of payment of the principal of, or
interest on, such Senior Debt Securities of any series, or
- reduction of the percentage required for waivers of Defaults or Events of
Default under the Senior Indenture or for modifications of the Senior
Indenture
The Holders of not less than a majority in aggregate principal amount of the
Outstanding Senior Debt Securities of any series may on behalf of the Holders of
all Senior Debt Securities of that series waive any Event of Default or Default
under the Senior Indenture with respect to that series, except an Event of
Default or a Default in the payment of the principal of, or premium, if any, or
any interest on any Senior Debt Security of that series or in respect of a
provision which under the Senior Indenture cannot be modified or amended without
the consent of the Holder of each Outstanding Senior Debt Security of that
series affected.
DEFEASANCE. The Company may terminate its substantive obligations in
respect of the Senior Debt Securities of any series (except for its obligations
to pay the principal of (and premium, if any, on) and the interest on the Senior
Debt Securities of that series) by (i) depositing with the Senior Trustee, under
the terms of an irrevocable trust agreement, money or U.S. Government
Obligations sufficient to pay all remaining indebtedness on the Senior Debt
Securities of that series, (ii) delivering to the Senior Trustee either an
Opinion of Counsel or a ruling directed to the Senior Trustee from the Internal
Revenue Service to the effect that the Holders of the Senior Debt Securities of
that series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and termination of obligations, and (iii)
complying with certain other requirements set forth in the Senior Indenture.
VOTING OF COLLATERAL BONDS HELD BY SENIOR TRUSTEE. The Senior Trustee, as
holder of Collateral Bonds, will attend any meeting of holders of First Mortgage
Bonds under the Mortgage Indenture, as to which it receives due notice, or, at
its option, will deliver its proxy in connection therewith. Either at such
meeting, or otherwise where the consent of holders of First Mortgage Bonds is
sought without a meeting, the Senior Trustee will vote all of the Collateral
Bonds held by it, or will consent with respect thereto, as directed by the
holders of a majority in aggregate principal amount of the outstanding Senior
Debt Securities; provided, however, that the Senior Trustee shall not vote the
Collateral Bonds of any particular series in favor of, or give consent to, any
action which in the Senior Trustee's opinion would materially adversely affect
such series of Collateral Bonds in a manner not shared generally by all other
Collateral Bonds, except upon notification by the Senior Trustee to the holders
of the related series of Senior Debt Securities of such proposal and consent
thereto of the holders of not less than a majority in principal amount of the
outstanding Senior Debt Securities of such series.
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CONCERNING THE SENIOR TRUSTEE. Firstar is the Senior Trustee under the
Senior Indenture. Firstar is also the Mortgage Trustee under the Mortgage
Indenture, a depositary of funds of the Company and the transfer agent for the
Company's Preferred Stock and for the Common Stock of its parent, WPSR. See
"Description of the First Mortgage Bonds--Concerning the Mortgage Trustee."
BOOK-ENTRY SECURITIES. The Senior Debt Securities may be issued initially
in the form of one or more global securities under a book-entry only system
operated by a securities depositary. Unless otherwise specified in the
applicable Prospectus Supplement, the Depository Trust Company ("DTC"), New
York, NY, will act as securities depositary for each series of Senior Debt
Securities, which will be issued as fully-registered securities registered in
the name of CEDE & Co. (DTC's partnership nominee). Individual purchases of
Book-Entry Interests (as defined below) in any such Senior Debt Securities will
be made in book-entry form. Purchasers of Book-Entry Interests in such Senior
Debt Securities will not receive certificates representing their interests in
such Senior Debt Securities. So long as CEDE & Co., as nominee of DTC, is the
securityholder, references herein to holders of the Senior Debt Securities or
registered owners will mean CEDE & Co., rather than the owners of Book-Entry
Interests in Senior Debt Securities.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities deposited by its participants (the "DTC Participants") and
facilitates the settlement among DTC Participants of securities transactions
such as transfers and pledges of deposited securities through electronic
computerized book-entry changes in accounts of the DTC Participants, thereby
eliminating the need for physical movement of securities certificates. Direct
DTC Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a number
of the DTC Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly
(the "Indirect Participants").
DTC Participants purchasing Book-Entry Interests in any Senior Debt
Securities will not receive certificates. Each DTC Participant will receive a
credit balance in the records of DTC in the amount of such DTC Participant's
interest in such Senior Debt Securities, which will be confirmed in accordance
with DTC's standard procedures. The ownership interest of each actual purchaser
of a Book-Entry Interest in Senior Debt Securities (the "Book-Entry Interests")
will be recorded through the records of the DTC Participant or through the
records of the Indirect Participant. Owners of Book-Entry Interests should
receive from the DTC Participant or Indirect Participant a written confirmation
of their purchase providing details of the Book-Entry Interests acquired.
Transfers of Book-Entry Interests will be accomplished by book entries made by
the DTC Participants or Indirect Participants who act on behalf of the owners of
Book-Entry Interests. Owners of Book-Entry Interests will not receive
certificates representing their ownership of Book-Entry Interests with respect
to any Senior Debt Securities except as described below upon the resignation of
DTC.
Under the Senior Indenture, payments made by the Senior Trustee to DTC or
its nominee will satisfy the Company's obligations under the Senior Indenture to
the extent of the payments so made. Owners of Book-Entry Interests will not be
or be considered by the Company or the Senior Trustee to be, and will not have
any rights as, holders of Senior Debt Securities under the Senior Indenture.
NEITHER THE COMPANY NOR THE SENIOR TRUSTEE UNDER THE SENIOR INDENTURE WILL
HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT
PARTICIPANT OR ANY OWNER OF A BOOK-ENTRY INTEREST OR ANY OTHER
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PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF SUCH SENIOR TRUSTEE AS BEING A
HOLDER OF SENIOR DEBT SECURITIES WITH RESPECT TO: (1) ANY SENIOR DEBT
SECURITIES; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY OWNER OF A
BOOK-ENTRY INTEREST IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR
INTEREST ON SUCH SENIOR DEBT SECURITIES; (4) THE DELIVERY BY DTC OR ANY DTC
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY OWNER OF A BOOK-ENTRY
INTEREST WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE SENIOR INDENTURE
TO BE GIVEN TO HOLDERS OF SENIOR DEBT SECURITIES; (5) THE SELECTION OF THE
OWNERS OF A BOOK-ENTRY INTEREST TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL
REDEMPTION OF ANY SENIOR DEBT SECURITIES; OR (6) ANY CONSENT GIVEN OR OTHER
ACTION TAKEN BY DTC OR ITS NOMINEE AS HOLDER OF SENIOR DEBT SECURITIES.
Principal and redemption price of, and interest payments on, Senior Debt
Securities registered in the name of DTC or its nominee will be made to DTC or
such nominee, as registered owner of such Senior Debt Securities. DTC is
responsible for disbursing such payments to the appropriate DTC Participants and
such DTC Participants, and any Indirect Participants, are in turn responsible
for disbursing the same to the owners of Book-Entry Interests. Unless it has
reason to believe it will not receive payment, DTC's current practice is to
credit the accounts of the DTC Participants on a payment date in accordance with
their respective holdings shown on the records of DTC. Payments by DTC
Participants and Indirect Participants to owners of Book-Entry Interests will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such DTC Participant or
Indirect Participant and not of DTC, the Company or the Senior Trustee, subject
to any statutory and regulatory requirements as may be in effect from time to
time.
DTC Participants and Indirect Participants carry the "position" of the
ultimate Book-Entry Interest owner on their records, and will be responsible for
providing information to the ultimate Book-Entry Interest owner as to the Senior
Debt Securities in which the Book-Entry Interest is held, debt service payments
received, and other information. Each person for whom a DTC Participant or
Indirect Participant acquires an interest in Senior Debt Securities, as nominee,
may desire to make arrangements with such DTC Participant or Indirect
Participant to receive a credit balance in the records of such DTC Participant
or Indirect Participant, to have all notices of redemption or other
communications to or by DTC which may affect such persons forwarded in writing
by such DTC Participant or Indirect Participant, and to have notification made
of all debt service payments.
Purchases, transfers and sales of Book-Entry Interests by the ultimate
Book-Entry Interest owners may be made through book entries made by DTC
Participants or Indirect Participants or others who act for the ultimate
Book-Entry Interest owner. The Trustee under the Senior Indenture, the Company
and the underwriters, as such, have no role in those purchases, transfers or
sales.
The Senior Trustee will recognize and treat DTC (or any successor securities
depositary) or its nominee as the holder of Senior Debt Securities registered in
its name or the name of its nominee for all purposes, including payment of debt
service, notices, enforcement of remedies and voting. Under DTC's current
practice, a proxy will be given to the DTC Participants holding Book-Entry
Interests in Senior Debt Securities in connection with any matter on which
holders of such Senior Debt Securities are asked to vote or give their consent.
Crediting of debt service payments and transmittal of notices and other
communications by DTC to DTC Participants, by DTC Participants to Indirect
Participants and by DTC Participants and Indirect Participants to the ultimate
Book-Entry Interest owners are the responsibility of those persons and will be
handled by arrangements among them and are not the responsibility of the Senior
Trustee, the Company or any underwriter, as such.
The Senior Trustee, so long as a book-entry system is used for any series of
Senior Debt Securities, will send any notice of redemption and any other notices
required by the Senior Indenture to be sent to holders of such Senior Debt
Securities only to DTC (or such successor securities depositary) or its nominee.
Any
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failure of DTC to advise any DTC Participant, or of any DTC Participant or
Indirect Participant to notify the Book-Entry Interest owner, of any such notice
and its content or effect will not affect the validity of the redemption of the
Senior Debt Securities called for redemption, or any other action premised on
that notice. In the event of a call for redemption, the Trustee's notification
to DTC will initiate DTC's standard call process, and, in the event of a partial
call, its lottery process by which the call will be randomly allocated to DTC
Participants holding positions in the Senior Debt Securities to be redeemed.
When DTC and DTC Participants allocate the call for redemption, the owners of
the Book-Entry Interests that have been called should be notified by the broker
or other person responsible for maintaining the records of those interests and
subsequently credited by that person with the proceeds once such Senior Debt
Securities are redeemed.
The Company, the Senior Trustee and any underwriter or agent cannot and do
not give any assurances that DTC, DTC Participants or others will distribute
payments of debt service on Senior Debt Securities made to DTC or its nominee as
the registered owner, or any redemption or other notices, to the Book-Entry
Interest owners, or that they will do so on a timely basis, or that DTC will
serve and act in the manner described in this Prospectus.
The Company understands that the current "Rules" applicable to DTC and DTC
Participants are on file with the Commission, and that the current "Procedures"
of DTC to be followed in dealing with DTC Participants are on file with DTC.
If DTC is at any time unwilling or unable to continue as depositary, and a
successor depositary is not appointed by the Company within 90 days, the Company
will issue individual certificates to owners of Book-Entry Interests in exchange
for the Senior Debt Securities held by DTC or its nominee, as the case may be.
In such instance, an owner of a Book-Entry Interest will be entitled to physical
delivery of certificates equal in principal amount to such Book-Entry Interest
and to have such certificates registered in its name. Individual certificates so
issued will be issued in denominations of $1,000 or any multiple thereof.
Neither the Company, the Senior Trustee nor any underwriter makes any
representation as to the accuracy of the above description of DTC's business,
organization and procedures, which is based upon information furnished by DTC.
DESCRIPTION OF FIRST MORTGAGE BONDS
GENERAL. Prior to the Release Date, any series of First Mortgage Bonds
issued as Collateral Bonds will be issued to the Senior Trustee. Each issue of
such Collateral Bonds to the Senior Trustee will be in a principal amount equal
to the principal amount of the Senior Debt Securities issued contemporaneously
with such Collateral Bonds. Prior to the Release Date, the Company shall make
payments of the principal of, and premium or interest on, each Series of
Collateral Bonds to the Senior Trustee, which payments shall be applied by the
Senior Trustee to satisfaction of all obligations then due on the related series
of Senior Debt Securities.
The following statements are brief summaries of certain provisions of the
Mortgage Indenture. Such statements do not purport to be complete and in each
case are qualified in their entirety by reference to the more detailed
provisions of the Mortgage Indenture. Capitalized terms used in this section and
not otherwise defined herein shall have the respective meanings given to them in
the Mortgage Indenture.
LIEN AND TITLES: The Collateral Bonds will be secured by the Mortgage
Indenture equally and ratably with all other bonds issued thereunder. At the
time of issuance of each series of the Collateral Bonds, the Company's counsel
will deliver its opinion that the Mortgage Indenture constitutes, except as
stated in this paragraph, a valid and direct first lien upon substantially all
of the real and fixed property and governmental licenses and permits owned by
the Company (including its interests as tenant-in-common), subject only to
permissible encumbrances and to the other limitations and exceptions stated as
to their opinion on titles
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below. Excepted from the lien are investments in other companies, items of the
general character such as would be included on the Balance Sheet as Current
Assets (unless deposited or required to be deposited with the Mortgage Trustee),
motor vehicles, advance payments for or other costs of nuclear fuel not situated
at the plant site, and timber and minor parcels of real estate. The term
"permissible encumbrances" includes liens upon transmission or distribution line
rights-of-way, and certain tax and other liens, easements or leases, and other
adverse interests of a nature or of such proportion as would not under ordinary
circumstances materially impair the lien of the Mortgage Indenture or the use of
the property.
The Mortgage Indenture by its terms also covers in general all
after-acquired property of the Company, other than property of the nature
excepted from the lien thereof as stated above. The lien on an after-acquired
system may be subject to a prior lien and, in case of merger, to possible
limitation to the system of the Company at that time.
At the time of issuance of each series of the Collateral Bonds, the
Company's counsel will deliver its opinion that the Company has good and
marketable title to the real and fixed properties described in the Mortgage
Indenture (other than properties disposed of and released thereunder and lands
described as held only under flowage rights) free and clear of all liens,
charges and encumbrances against the same prior to or on a party with the lien
of the Indenture, except for and subject only to "permissible encumbrances" and
to such exceptions, defects and qualifications as in such counsel's opinion do
not materially affect the security for the Collateral Bonds or the Company's
title to or its right to use such properties in the conduct of its business. The
opinion of counsel does not cover the validity of or title to easements or
rights-of-way for transmission and distribution lines.
The Mortgage Indenture does not prevent a merger or consolidation of the
Company, a sale by the Company of all or substantially all of its assets, a
recapitalization of the Company or other comparable transaction as long as (i)
the lien of the Mortgage Indenture and the rights and powers of the Mortgage
Trustee and the bondholders under the Mortgage Indenture are not impaired; (ii)
the principal amount of prior lien bonds secured by a prior lien or liens on
property of the successor corporation (exclusive of the property owned by the
Company immediately prior to the merger, consolidation or sale) and outstanding
immediately after such consolidation, merger or sale shall not exceed 60% of the
cost or fair value, whichever is less, of the property of the character of
permanent additions owned by the successor corporation, immediately prior to
such transaction; (iii) the earnings applicable to bond interest of the
successor corporation determined as provided in the Mortgage Indenture,
excluding net earnings of the Company, for a period of twelve consecutive
calendar months within the fifteen consecutive calendar months immediately
preceding the first day of the calendar month in which such consolidation,
merger or sale is made shall have been in the aggregate at least equal to twice
the interest requirements for a period of one year upon all prior lien bonds
secured by a prior lien or prior liens on the property of such successor
corporation and outstanding immediately after such transaction; and (iv) the
successor corporation assumes the obligations of the Company under the Mortgage
Indenture. If the foregoing conditions are satisfied with respect to any such
transaction, the Company may enter into such transaction. Although the Mortgage
Indenture limits the principal amount of additional bonds which may be issued,
it does not restrict the amount of unsecured debt that the Company may incur.
Except as hereinabove described, the Mortgage Indenture does not provide any
protection to the bondholder against a highly leveraged transaction however
structured.
OUTSTANDING AND ADDITIONAL BONDS: Under the Mortgage Indenture, there were
outstanding as of September 30, 1998, $234,175,000 principal amount of bonds of
various prior series. Additional bonds without limit as to aggregate amount may
be issued in a principal amount up to (a) 60% of the lesser of cost or fair
value of net permanent additions (electric, gas or steam property acquired after
January 1, 1941, less retirements after said date taken at undepreciated cost,
subject to certain adjustments) except permanent additions otherwise utilized
under the Mortgage Indenture or restricted under the terms of certain
supplemental indentures; (b) the amount of bonds retired or cancelled, except
from certain funds; and (c) the amount of cash deposited with the Mortgage
Trustee for the purpose, which cash may
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thereafter be withdrawn in lieu of the issuance of an equal amount of bonds
under clauses (a) or (b) but without any earnings' test requirement. Bonds may
be issued under clauses (a) and (c), and under certain circumstances under
clause (b), only if earnings applicable to bond interest for a period of 12
months within the preceding 15 months have been at least twice the annual
interest requirements upon all bonds then applied for and outstanding.
Earnings applicable to bond interest, as defined in the Mortgage Indenture,
for the twelve months ended September 30, 1998, were $117,622,637, resulting in
a ratio of 6.78 times the full annual interest requirements upon all bonds then
outstanding, and a ratio of 4.83 after issuance of $102,000,000 principal amount
of Collateral Bonds at an estimated weighted average interest rate of 6.85% per
annum. A difference of 0.125% in the assumed weighted average interest rate on
the Collateral Bonds would change the ratio approximately .025.
The aggregate amount of unbonded bondable property was approximately
$780,000,000 as of September 30, 1998, approximately $86,667,000 of which will
be applied as the basis for the issuance of approximately $52,000,000 of the
Collateral Bonds. The retirement of bonds of prior series is the basis for the
issuance of the balance of the Collateral Bonds which the Company presently
anticipates issuing.
RELEASE PROVISIONS: Property sold may be released from the lien of the
Mortgage Indenture upon deposit of its fair value with the Mortgage Trustee.
Purchase money obligations so deposited may not exceed 60% of fair value of the
released property. Release funds may be withdrawn on the basis of the lesser of
cost or fair value of net permanent additions applied for the purpose, or the
principal amount of bonds surrendered by the Company, or may be applied to bond
retirement. Bonds may be redeemed from release funds only when they are subject
to redemption and upon payment of the applicable regular redemption premium.
Property certified as no longer necessary in the Company's business and of less
than $500,000 value (but not to exceed in the aggregate per year an amount equal
to 1% of the outstanding bonds) may be released upon the Company's covenant to
deposit the proceeds of sale, if any, and such proceeds may be withdrawn upon
the Company's covenant to expend the same for permanent additions.
MODIFICATION OF MORTGAGE INDENTURE: With the consent of the Company and the
holders of 70% in principal amount of bonds then outstanding, the Mortgage
Indenture and the bonds (including the Collateral Bonds) may be modified except
as to (a) the due dates, amounts and other terms (other than sinking fund
provisions) of payment of principal or interest, or (b) the creation of any lien
ranking prior to or on a parity with the lien of the Mortgage Indenture, or (c)
deprivation of any nonassenting bondholder of a lien on the mortgaged property
for the security of such bondholder's bonds, or (d) reduction of the percentage
in the amount of bonds required to consent to a modification of the Mortgage
Indenture. The Company and the Mortgage Trustee may also modify the Mortgage
Indenture, without any action on the part of the bondholders, provided that any
modification that would adversely affect the rights of the holders of any bonds
then outstanding may not become effective until all bonds outstanding at the
time of the adoption of the modification have been redeemed or retired.
CONCERNING THE MORTGAGE TRUSTEE: The Mortgage Trustee under the Mortgage
Indenture is Firstar Bank Milwaukee, N.A., National Association. Firstar is also
the Senior Trustee under the Senior Indenture, a depositary of funds of the
Company and the transfer agent for the preferred stock of the Company and of the
common stock of WPSR.
DEFAULTS AND NOTICE THEREOF: The following events are defined as "completed
defaults" under the Mortgage Indenture: (a) default in the payment of the
principal of any bond; (b) default continued for 90 days in the payment of any
interest upon any bond; (c) default in certain covenants of the Company with
respect to bankruptcy, insolvency, assignment or receivership; or (d) default
continued for 90 days after notice to the Company from the Mortgage Trustee in
the performance of any other covenant, agreement or condition contained in the
Mortgage Indenture. The Mortgage Trustee may withhold notice to
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bondholders of defaults (other than in payment of principal, interest or a
sinking fund installment) if its responsible officers believe that the
withholding of such notice is in the interest of the bondholders.
The holders of a majority in principal amount of the bonds outstanding may
direct the Mortgage Trustee in the exercise of its powers, and in case of
completed default may require the Mortgage Trustee to declare the maturity of
the bonds accelerated, and upon certain conditions may rescind and annul such
declaration. The Mortgage Trustee may decline to follow any direction as to the
exercise of its powers if the Mortgage Trustee (i) is advised by counsel that
the directed action may not lawfully be taken or (ii) determines in good faith
that compliance with such directions would involve the Mortgage Trustee in
personal liability or that it will not be sufficiently indemnified for any
expenditures arising from compliance with such directions.
EVIDENCE OF COMPLIANCE WITH MORTGAGE INDENTURE PROVISIONS: There is no
general requirement for periodic evidence to be furnished to the Mortgage
Trustee as to absence of defaults or as to general compliance with the terms of
the Mortgage Indenture; however, in all cases where action by the Mortgage
Trustee is requested by the Company, such as the issuance of additional bonds or
the release of cash or property under the Mortgage Indenture, the Company is
required to deliver to the Mortgage Trustee certain certificates signed and
verified by officers, engineers, accountants or other experts, who in certain
cases are required to be independent persons. Under pertinent circumstances
these certificates certify as to absence of default, the fair value of property
in respect of which the action is requested and the net earnings of the Company,
and in all cases certificates or opinions are required as to compliance by the
Company with conditions precedent to such action.
LEGAL OPINIONS AND EXPERTS
Opinions as to legality of the Senior Debt Securities will be rendered by
Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, counsel
for the Company. Certain legal matters in connection with the offering or
offerings of the Senior Debt Securities will be passed upon for the Underwriters
or agents by their counsel. In giving their opinions such counsel may rely as to
all matters of Wisconsin law upon the opinion of Foley & Lardner. The
incorporation of the Company, the right of the Company to operate as a public
utility under the laws of Wisconsin, the titles to its properties, the
franchises and other operating rights of the Company, and the lien of the
Mortgage Indenture upon such property and franchises will be passed upon only by
Foley & Lardner. The statements as to matters of law and legal conclusions made
in this Prospectus under the captions "Description of Senior Debt Securities"
and "Description of First Mortgage Bonds" and in the documents incorporated by
reference in this Prospectus have been prepared under the supervision of, and
reviewed by, Foley & Lardner who are giving their opinion that such statements
are correct in all respects which Foley & Lardner deems material, and all such
statements are made on the basis of such opinion.
The financial statements and schedules which are incorporated by reference
into this Prospectus by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report. Future financial statements and schedules of the
Company and the reports thereon of Arthur Andersen LLP also will be incorporated
by reference in this Prospectus in reliance upon the authority of said firm as
experts in giving those reports to the extent said firm has audited those
financial statements and schedules and consented to the use of their reports
thereon.
PLAN OF DISTRIBUTION
The Company may sell the Senior Debt Securities to or through underwriters,
and also may sell the Senior Debt Securities directly to other purchasers or
through agents.
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The distribution of the Senior Debt Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
In connection with the sale of the Senior Debt Securities, underwriters may
receive compensation from the Company or from purchasers of the Senior Debt
Securities for whom they may act as agents in the form of discounts, concessions
or commissions. Underwriters may sell the Senior Debt Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers for whom they act as agents. Underwriters, dealers and agents that
participate in the distribution of the Senior Debt Securities may be deemed to
be underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of the Senior Debt Securities by them may
be deemed to be underwriting discounts and commissions, under the Act. The terms
of any particular offering, including the identity of any such underwriter or
agent and any such compensation received from the Company, will be described in
the Prospectus Supplement with respect to the Senior Debt Securities so offered.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of the Senior Debt Securities may be
entitled to indemnification by the Company against certain liabilities,
including liabilities under the Act.
The Senior Debt Securities are not proposed to be listed on a securities
exchange, and any underwriters will not be obligated to make a market in the
Senior Debt Securities. The Company cannot predict the activity or liquidity of
any trading in the Senior Debt Securities.
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$50,000,000
WISCONSIN PUBLIC
SERVICE CORPORATION
SENIOR NOTES, 6.08% SERIES DUE DECEMBER 1, 2028
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PROSPECTUS SUPPLEMENT
DECEMBER 15, 1998
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SALOMON SMITH BARNEY
A.G. EDWARDS & SONS, INC.
LEGG MASON WOOD WALKER
INCORPORATED
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