<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
SEMCO ENERGY, INC. MICHIGAN 38-2144267
(EXACT NAME OF REGISTRANT AS (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION
SPECIFIED IN ITS CHARTER) NO.)
</TABLE>
405 WATER STREET
PORT HURON, MICHIGAN 48060
(810) 987-2200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT J. DIGAN, II
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
SEMCO ENERGY, INC.
405 WATER STREET
PORT HURON, MICHIGAN 48060
(810) 987-2200
(NAME AND ADDRESS OF AGENT FOR SERVICE)
------------------------
COPIES TO:
JEFFREY S. RUPRICH
DICKINSON WRIGHT PLLC
500 WOODWARD, SUITE 4000
DETROIT, MICHIGAN 48226
(313) 223-3500
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box. [
]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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- --------------------------------------------------------------------------------------------------------------------
SHARES PROPOSED PROPOSED
TITLE OF EACH CLASS OF TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE* OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock................... 370,590 $17.4375 $6,462,163 $1,907
- --------------------------------------------------------------------------------------------------------------------
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</TABLE>
* The maximum offering price is estimated solely to calculate the registration
fee pursuant to Rule 457(c) under the Securities Act of 1933, based on the
high and low prices on July 28, 1998 as reported on the NASDAQ.
THE REGISTRANT HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
SUBJECT TO COMPLETION DATED JULY 31, 1998
PROSPECTUS
370,590 SHARES
(LOGO)
COMMON STOCK
------------------------
This Prospectus relates to 370,590 shares of common stock (the "Common
Stock") of SEMCO ENERGY, Inc., a Michigan corporation ("SEMCO" or the
"Company"), which may be offered from time to time by the selling shareholders
named herein (the "Selling Shareholders"). SEMCO will not receive any of the
proceeds from the sale of the Common Stock. SEMCO will bear the costs relating
to the registration of the Common Stock.
The Common Stock may be sold from time-to-time at the complete discretion
of the Selling Shareholders. See "Plan of Distribution" herein, for information
on pricing.
The Common Stock was issued as a result of the merger (the "Merger") on
March 31, 1998 of a wholly-owned subsidiary of SEMCO with Hotflame Gas, Inc. and
Hotflame Transport Co., both Michigan Corporations (hereafter jointly "Hot
Flame"). Pursuant to the Merger, SEMCO agreed to register the Common Stock for
resale by the Selling Shareholders.
The Common Stock is traded on the NASDAQ National Market System ("NASDAQ")
under the symbol SMGS. On August , 1998 the last reported sale price of the
Common Stock on NASDAQ was $ .
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is August , 1998.
<PAGE> 3
AVAILABLE INFORMATION
This Prospectus is part of a Registration Statement filed by SEMCO with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933. The Registration Statement and its exhibits contain more information
about the Company and the Common Stock. Statements in this Prospectus about
documents filed with the Commission are not necessarily complete; the actual
documents filed with the Commission may contain a more complete description of
the matter involved.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and therefore files reports and other
information with the Commission. Such reports, proxy statements, and other
information can be inspected and copied at prescribed rates at the Commission's
Public Reference Room at its principal office: Judiciary Plaza, 450 Fifth
Street, NW, Room 1024, Washington, DC 20549 or at the Commission's regional
office in New York at 7 World Trade Center, Suite 1300, New York, New York 10048
and in Chicago at the Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained by mail at
prescribed rates from the Public Reference Section of the Commission at its
principal office. The Commission maintains a Web site at http://www.sec.gov that
contains reports, proxy and other information regarding the Company.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, which have been or will be filed with the
Commission, are incorporated into this Prospectus: (a) the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997; (b) the
Company's Form 10-Q and 10-QA for the three months ended March 31, 1998; (c) the
Company's Form 8-K dated March 11, 1998 and (d) all documents later filed
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the
date of this Prospectus and prior to the termination of this offering.
The information in this Prospectus and in documents incorporated into this
Prospectus may be changed by information given at a later date. 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 that 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.
SEMCO Energy will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all documents incorporated herein by
reference (not including exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Edric R. Mason, Jr., Director of Investor Relations of SEMCO Energy,
Inc., 405 Water Street, Port Huron, Michigan 48060, telephone number (810)
989-4104.
THE COMPANY
The Company is a Michigan corporation with its principal offices at 405
Water Street, Port Huron, Michigan 48060 and its telephone number is (810)
987-2200. Prior to April 24, 1997, the Company's name was Southeastern Michigan
Gas Enterprises, Inc.
The Company is an energy-focused holding company established in 1977 and is
the parent company of three direct subsidiaries: SEMCO Energy Gas Company; SEMCO
Energy Services, Inc.; and SEMCO Energy Ventures, Inc. A substantial portion of
the Company's direct subsidiaries assets are invested in natural gas operations
regulated by various regulatory bodies including the Michigan Public Service
Commission. Weather has a significant impact on the Company's revenues.
2
<PAGE> 4
SEMCO ENERGY GAS COMPANY
SEMCO Energy Gas Company ("the Gas Company") purchases, distributes and
transports natural gas to approximately 240,000 customers in twenty-four
counties in the lower and upper peninsulas of Michigan. During the last four
years, its customer base has grown at an average of approximately 6,500
customers, or 3.0%, per year.
SEMCO ENERGY SERVICES, INC.
SEMCO Energy Services, Inc. ("Energy Services") is primarily a gas
marketing company. Its customers include industrial, commercial and municipal
natural gas users, natural gas distribution companies and other marketers. In
addition to its operations in Michigan. Energy Services, through independent
contractors, markets gas in approximately 19 other states.
SEMCO ENERGY VENTURES, INC.
SEMCO Ventures, Inc. ("Ventures") is an asset-based company with
investments in many segments of the natural gas industry including transmission,
gathering, and underground storage.
In August 1997, Ventures, through a wholly-owned subsidiary, acquired the
assets and business of Sub-Surface Construction ("Sub-Surface") for
approximately $15.6 million plus the assumption of certain liabilities. Because
of this acquisition and the acquisition of Maverick Pipeline Services, Inc. (in
December of 1997 for approximately $50,000 in cash and 450,000 shares of the
Company's Common Stock) and King Energy and Construction Inc. (in May of 1998
for approximately 18,062 shares of the Company's Common Stock), Ventures now
constructs and maintains underground natural gas pipelines and associated
facilities and provides pipeline consulting/engineering design and project
management services. On March 31, 1998, Ventures, through a wholly-owned
subsidiary, acquired the assets and business of Hotflame Gas, Inc. ("Hotflame")
for 352,944 shares of the Company's Common Stock. Hotflame supplies propane gas
to over 10,000 customers in Northern Michigan and Northeast Wisconsin.
The Company, through Ventures, has identified three specific areas in which
it intends to diversify and make investments and acquisitions. They are: (1) the
gas-related construction business; (2) gas-related engineering services to
distribution and transmission companies; and (3) the propane business. If the
Company is successful in pursuing such diversified investments, the Company
anticipates that its earnings mix over the long-term would change and that an
increased part of such earnings would arise from such unregulated aspects of the
gas business.
The business of the Company and its subsidiaries, is described in the
documents incorporated into this Prospectus to which documents reference is
hereby made. See "Incorporation of Certain Information by Reference."
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Common Stock
offered hereby; nor will such proceeds be available for the Company's use or
benefit.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, 500,000 shares of Cumulative Preferred Stock, par value $1.00
("Preferred Stock"), and 3,000,000 shares of Preference Stock, par value $1.00
("Preference Stock"). At June 30, 1998, there were outstanding 14,441,287 shares
of Common Stock and 6,751 shares of Series A Convertible Cumulative Preferred
Stock, a series of the Preferred Stock (the "Series A Preferred Stock"). Each
share of the Series A Preferred Stock outstanding is currently convertible into
4.11 shares of Common Stock or an aggregate of approximately 27,747 shares of
Common Stock. 2,000,000 shares of the Preference Stock are reserved for issuance
pursuant to a Shareholder Rights Plan described below; no Preference Stock is
outstanding.
3
<PAGE> 5
A copy of the Company's Articles of Incorporation is filed as an Exhibit to
the Registration Statement. The following summary does not purport to be
complete and is subject in all respects to the provisions of such Articles of
Incorporation and does not relate to or give effect to the provisions of the
statutory or common law of the State of Michigan. The summary given below is
qualified in its entirety by reference to such Articles of Incorporation and the
laws of the State of Michigan.
COMMON STOCK
Dividend Rights. The holders of Common Stock are entitled to dividends
when, as and if, declared by the Company's Board of Directors out of the surplus
of the Company after full cumulative dividends on the Preferred Stock and
Preference Stock shall have been paid or set apart for payment and any sinking
fund obligations with respect to the Preferred Stock and Preference Stock have
been satisfied.
The Company has long-term debt agreements which contain restrictive
financial covenants including, among others, limits on the payment of dividends
beyond certain levels. The Company is currently in compliance with all of the
covenants in these agreements. With respect to the payment of dividends or any
other distributions in respect of its capital stock, such agreements provide
that the Company may not declare and pay any dividends (except dividends or
other distributions payable in shares of its capital stock), redeem or retire
its capital stock (or any warrants, rights, or options to purchase or acquire
its capital stock), or make other distributions with respect to its capital
stock (such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such other
payments or distributions being collectively referred to as "Restricted
Payments") if, after giving effect thereto, (i) any event of default under such
agreements exist; (ii) the aggregate amount of Restrictive Payments since
January 1, 1994 would exceed the Company's consolidated net income for the same
period plus an adjustment factor of $14,171,000; or (iii) would cause the
consolidated net worth of the Company to be less than $80,000,000. After
December 31, 1999, the adjustment factor of $14,171,000 is reduced each quarter
by $625,000 until the adjustment factor equals $11,000,000. Under the most
restrictive terms, as of March 31, 1998, $12,381,000 is available for dividends.
Voting Rights. The holders of Common Stock are entitled to one vote for
each share on all matters voted upon by the Company's shareholders and, subject
to any voting rights of the holders of the Cumulative Preferred Stock and
Preference Stock described below, the holders of such shares currently possess
all voting power. The Company's Articles of Incorporation provide for cumulative
voting for the election of directors of the Company.
Preemptive Rights. No holder of Common Stock has any preemptive right to
subscribe to any additional securities which may be issued by the Company.
Liquidation Rights. Subject to the preferential rights of holders of the
Preferred Stock and Preference Stock, the holders of the Common Stock are
entitled to share on a pro rata basis in the net assets of the Company which
remain after satisfaction of all liabilities.
PREFERRED STOCK
The Board of Directors of the Company is authorized, without further action
by shareholders, to issue Preferred Stock, in one or more series, from time to
time, with such rights and preferences as may be provided in a resolution
adopted by the Board of Directors. The authority of the Board includes, but is
not limited to, the determination or fixing of the following with respect to
shares of such class or any series thereof: (i) the rate of dividends and the
extent of further participation in dividend distribution, if any; (ii) the price
at and the terms and conditions on which the shares are redeemable; (iii) the
amount payable upon shares in event of voluntary or involuntary liquidation;
(iv) sinking fund provisions for the redemption or purchase of shares; and (v)
the terms and conditions on which shares are convertible.
In the event of the liquidation or dissolution of the Company, the holders
of Preferred Stock are entitled to receive a fixed amount for each series before
any distribution is made to the holders of Common Stock. As
4
<PAGE> 6
long as any Preferred Stock remains outstanding, the Company may not purchase
any shares of its Common Stock or redeem any Preference Stock.
As long as any Preferred Stock remains outstanding, the Company may not
without the consent of the holders of at least two-thirds of the outstanding
Preferred Stock authorize any class of stock having a priority or preference
over or ranking on a parity with the Preferred Stock as to dividends or
distribution of assets.
If at any time the Company shall fail to declare and pay or set apart for
payment in full eight quarterly dividends (whether or not consecutive) on all of
the outstanding Preferred Stock, then the holders of the outstanding Preferred
Stock shall, thereupon, have the right, voting as a single class irrespective of
series, to elect such number of directors of the Company as shall constitute one
less than the smallest number of directors necessary to constitute a majority of
the full Board of Directors, and such right shall continue (and may be exercised
at any annual or other meeting of shareholders for the election of directors)
until the Company shall have paid or declared and set apart for payment all
accrued dividends on the Preferred Stock for all past quarterly dividend
periods.
SERIES A PREFERRED STOCK
The Series A Preferred Stock carries a dividend of $2.3125 per share per
annum which accrued from the date of original issue. Upon redemption, the
holders of such shares are entitled to receive $25 per share plus all dividends
accrued or in arrears thereon. The preferential amount payable upon the shares
of this series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company or reduction of capital resulting in
the distribution of assets to the shareholders, is $25 per share together with
an amount equal to dividends accrued or in arrears thereon. The holders of
shares of this series shall have the right, at their option, to convert such
shares into shares of Common Stock of the Company at any time at a current
conversion price of 4.11 shares of Common Stock for each share of Series A
Preferred Stock. The conversion price is subject to adjustment as a result of
certain events. The holders of Series A Preferred Stock have the voting rights
described above under Preferred Stock.
PREFERENCE STOCK
The Board of Directors has the authority to divide the shares of Preference
Stock into series and, within the limitations set forth in the laws of the State
of Michigan and in the Articles of Incorporation, to fix and determine the
relative rights and preferences of the shares of any series so established. The
Preference Stock ranks junior to all series of Preferred Stock as to the payment
of dividends and the distribution of assets, except to the extent that a
specific series of Preferred Stock provides otherwise.
SERIES A PREFERENCE STOCK
In January, 1997, the Board of Directors created a series of Preference
Stock designated as Series A Preference Stock with the number of shares
constituting such series set at 2,000,000. No shares of Preference Stock are
outstanding.
If Series A Preference Stock was outstanding, dividends would accrue and be
cumulative in an amount per share per quarter equal to the greater of (i) $10.00
or (ii) the Adjustment Number (as defined below) times the per share amount of
all cash dividends, and the Adjustment Number times the per share amount
(payable in kind) of all non-cash dividends or other distributions (other than a
dividend payable in shares of Common Stock or a subdivision of the shares of
Common Stock), declared on the Common Stock since the preceding quarterly
dividend payment date, or, if later, since the issuance or such Series A
Preference Stock. Upon any liquidation or dissolution of the Company the holders
of Series A Preference Stock are entitled to receive $100 per share plus all
accrued and unpaid dividends. The Series A Preference Stock is not redeemable
and ranks junior to all series of Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any series provides
otherwise. If Series A Preference Stock was outstanding, a holder of Series A
Preference Stock would be entitled to the number of votes equal to the
Adjustment Number times the number of votes to which a holder of Common Stock is
entitled. Except as otherwise provided below or by law, Series A Preference
Stock and Common Stock shall vote together as one class on all
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<PAGE> 7
matters submitted to a vote of the holders of Common Stock. If any dividends on
Series A Preference Stock shall be in arrears for six or more quarterly
dividends, a "default period" shall begin. The default period shall end when all
accrued dividends shall have been paid or set apart for payment. During a
default period, Series A Preference Stock shall have the right to elect two
directors. This vote shall be as a class for all series of Preference Stock
entitled to vote.
The Articles of Incorporation initially set the Adjustment Number at 100.
If the Company shall (i) pay any dividend on Common Stock in shares of Common
Stock, (ii) subdivide the Common Stock, or (iii) combine the Common Stock into a
smaller number of shares, the Adjustment Number shall be modified by multiplying
it by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock outstanding immediately prior to such event.
DIRECT STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
The Company sponsors a direct stock purchase and dividend reinvestment plan
(the "Reinvestment Plan") under which investors may purchase shares of Common
Stock without paying brokerage fees and other expenses. Under the Reinvestment
Plan, Common Stock may be purchased at the average of the over-the-counter
closing ask prices for the three trading days prior to the fifth day of each
month as quoted in the NASDAQ System. The Company initially reserved 2,000,000
shares of its Common Stock for issuance under the Reinvestment Plan. As of May
15, 1998, 1,848,943 shares were available for issuance under the Reinvestment
Plan.
OTHER PROVISIONS
Articles of Incorporation. The following provisions of the Company's
Articles of Incorporation may delay, defer or prevent a person from acquiring
the Company or changing control of the Company's Board of Directors. The
Company's Articles of Incorporation divide the Board into three classes with
staggered terms; each director is elected for a three year term. Approximately
one-third of the Board positions are filled by a shareholder vote each year.
Directors may be removed but only for cause, at an annual meeting of
shareholders and by the affirmative vote of a majority of the shares then
entitled to vote for the election of directors. In addition to requirements
imposed under Section 7A of the Michigan Business Corporation Act (the "MBCA"),
the Company's Articles of Incorporation provide that a business combination
cannot occur unless a written opinion is obtained from an independent investment
banker that the consideration to be paid to the shareholders of the Company is
fair and reasonable; provided, however, the directors may waive this
requirement. The Company's Articles of Incorporation also contain provisions
limiting the personal liability of directors.
Anti-Takeover Statutes. The Company is subject to Chapter 7A of the MBCA,
which provides that business combinations subject to Chapter 7A between a
Michigan corporation and a beneficial owner of shares entitled to 10% or more of
the voting power of such corporation generally require the affirmative vote of
90% of the votes of each class of stock entitled to vote, and not less than 2/3
of each class of stock entitled to vote (excluding voting shares owned by such
10% owner), voting as a separate class. Such requirements do not apply if (i)
the corporation's board of directors approves the transaction prior to the time
the 10% owner becomes such or (ii) the transaction satisfies certain fairness
standards, certain other conditions are met and the 10% owner has been such for
at least five years.
The Company is subject to Chapter 7B of the MBCA which provides that,
unless a corporation's articles of incorporation or bylaws provide that Chapter
7B does not apply, "control shares" of a corporation acquired in a control share
acquisition have no voting rights except as granted by the stockholders of the
corporation. "Control shares" are shares which, when added to shares previously
owned by a stockholder, increase such stockholder's ownership of voting stock to
more than 20% but less than 33 1/3%, more than 33 1/3% but less than a majority,
or more than a majority, of the votes to which all of the capital stock of the
corporation is entitled. Voting rights of control shares must be approved by the
affirmative vote of a majority of all shares entitled to vote excluding voting
shares owned by the acquirer and certain officers and directors. However, no
such
6
<PAGE> 8
approval is required for gifts or other transactions not involving
consideration, for a merger to which the corporation is a party or certain other
transactions described in Chapter 7B.
Rights to Purchase Preference Stock. In January 1997, the Company adopted a
Shareholder's Rights Plan (the "Shareholders Rights Plan") pursuant to which
2,000,000 shares of Series A Preference Stock are reserved under the
Shareholders Rights Plan for sale to holders of Common Stock. The Common Stock
currently trades with a right (the "Right") to purchase such Series A Preference
Stock. The Right is intended to protect shareholders in the event of an
unsolicited attempt to acquire the Company and becomes exercisable upon the
occurrence of certain triggering events. The Right is transferred automatically
with the transfer of the Common Stock until separate rights certificates are
distributed upon the occurrence of certain events. The Right could have the
effect of delaying, deferring or preventing a person from acquiring the Company
or accomplishing a change in control of the Company's board of directors.
Transfer Agent. The Company is its own transfer agent and registrar for its
Common Stock.
SELLING SHAREHOLDERS
All of the shares of Common Stock offered by this Prospectus are owned by
the following shareholders (the "Selling Shareholders"):
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
NAME COMMON STOCK
---- ------------
<S> <C>
Alton R. Berquist Living Trust.............................. 123,530
Barry A. Berquist Living Trust.............................. 123,530
Craig A. Berquist Living Trust.............................. 123,530
-------
Total....................................................... 370,590
=======
</TABLE>
Under the terms of an escrow agreement with the Company, 37,059 of the
foregoing shares may not be sold prior to April, 1999.
None of the Selling Shareholders own any shares of Common Stock of the
Company other than those being offered hereby. Messrs. Alton, Barry and Craig
Berquist are brothers and prior owners of Hot Flame. As a result of the merger,
Hot Flame is a wholly-owned second tier subsidiary of the Company. Craig
Berquist is the President of Hot Flame and has an employment agreement extending
through March, 2001. Alton and Barry Berquist each have a consulting agreement
with Hot Flame extending through March, 2001.
PLAN OF DISTRIBUTION
The shares offered hereby may be sold from time to time by the Selling
Shareholders, or by pledgees, donees, transferees or other successors in
interest of the Selling Shareholders. Such sales may be made through the NASDAQ,
or otherwise, at prices and on terms then prevailing or at prices related to the
then-current market prices, or in negotiated transactions at negotiated prices.
The shares may be sold by one or a combination of the following: (a) a block
trade in which the broker or dealer so engaged will attempt to sell the shares
as agent, but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus; and
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from Selling
Shareholders in amounts to be negotiated immediately prior to the sale. The
Selling Shareholders and any broker-dealers that participate in the distribution
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended ("Securities Act"), and any commission
received by them and any profit on the resale of shares sold by them may be
deemed to be underwriting discounts and commissions.
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<PAGE> 9
LEGAL MATTERS
The validity of the Common Stock offered herein and certain related matters
will be passed upon for the Company by Arnold R. Madigan, General Counsel of the
Company.
EXPERTS
The Financial Statements and schedules included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, which are incorporated
by reference in this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated herein by reference in reliance upon the authority
of said firm as experts in giving said report.
With respect to the unaudited interim consolidated financial information in
the Company's Quarterly Report on Form 10-Q for the period ended March 31, 1998,
Arthur Andersen LLP has applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
report thereon states that they did not audit and they did not express an
opinion on that interim consolidated financial information. Accordingly, the
degree of reliance on their report on that information should be restricted in
light of the limited nature of the review procedures applied. In addition, the
accountants are not subject to the liability provisions of Section 11 of the
Securities Act, for their report on the unaudited interim consolidated financial
information because that report is not a "report" or "part" of the registration
statement prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Securities Act.
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TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................ 2
Incorporation of Certain Information
by Reference....................... 2
The Company.......................... 2
Use of Proceeds...................... 3
Description of Capital Stock......... 3
Selling Shareholders................. 7
Plan of Distribution................. 7
Legal Matters........................ 8
Experts.............................. 8
</TABLE>
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(LOGO)
COMMON STOCK
PAR VALUE, $1.00 PER SHARE
---------------------------
PROSPECTUS
---------------------------
AUGUST , 1998
------------------------------------------------------
------------------------------------------------------
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSE OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts and commissions, to be borne by the Company in
connection with the distribution of the shares offered hereby:
<TABLE>
<S> <C>
SEC Registration Fee........................................ $1,907
Accountant's Fees........................................... 2,500
Legal Fees.................................................. 6,000
Printing Costs.............................................. 5,000
Miscellaneous............................................... 593
-------
Total Estimated Expenses............................... $16,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Bylaws of the Company provide that directors and officers, former
directors and officers, their heirs, executors and administrators of the Company
are entitled to indemnification to the extent and under the circumstances
permitted by the Michigan Business Corporation Act ("MBCA") including, where
permitted and upon satisfaction of any undertaking required, advance of
expenses.
Through reference to the MBCA, the Company's Bylaws contain indemnification
provisions concerning third party actions as well as actions in the right of the
Company. The Bylaws, through reference to the MBCA, provide that the Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company) by reason of the fact that he or she is or
was a director or officer of the Company, or is or was serving at the request of
the Company as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, whether for profit or not, against expenses (including
attorneys' fees), judgments, penalties, fees and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding if he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the Company
or its shareholders, and with respect to any criminal action or proceeding, had
no reasonable cause to believe his or her conduct was unlawful.
With respect to derivative actions, the Bylaws, through the reference to
the MBCA, provide that the Company shall indemnify any person who was or is a
party to or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Company to procure a judgment
in its favor by reason of the fact that he or she is or was a director or
officer of the Company, or is or was serving at the request of the Company as a
director, officer, partner, trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection with the defense or settlement of such judgment or suit
if he or she acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company or its shareholders
and except that no indemnification shall be made in respect of any claim, issue
or matter as to which such person has been found liable to the Company unless
and only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all relevant circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses, but such indemnification is
limited to reasonable expenses incurred.
The MBCA provides for corporate power to purchase and maintain insurance on
behalf of directors and officers (including persons acting as a director,
officer, employee or agent of another business entity on behalf
II-1
<PAGE> 12
of the corporation) against any liability due to such status, whether or not the
corporation would have power to indemnify such person against such liability.
The Company provides such insurance.
The Company's Articles of Incorporation provide that a director of the
Company shall not be personally liable to the Company or its shareholders for
monetary damages for breach of the director's fiduciary duty. However, it does
not eliminate or limit the liability of a director for any breach of a duty, act
or omission for which the elimination or limitation of liability is not
permitted by the MBCA, currently including, without limitation, the following:
(1) the amount of a financial benefit received by a director to which he or she
is not entitled; (2) intentional infliction of harm on the Company or its
shareholders; (3) illegal loans, distributions of dividends or assets, or stock
purchases as described in Section 551(1) of MBCA; and (4) an intentional
criminal act committed by the director.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
FILED
---------------------
EXHIBIT BY
NO. DESCRIPTION HEREWITH REFERENCE
------- ----------- -------- ---------
<C> <S> <C> <C>
3.(i).1 Articles of Incorporation of SEMCO Energy, Inc., as restated
July 11, 1989.(a) X
3.(i).2 Certificate of Amendment to Article III of the Articles of
Incorporation dated May 16, 1990.(b) X
3.(i).3 Certificate of Amendment to Articles I, III and VI of the
Articles of Incorporation dated April 16, 1997.(e) X
3.(ii) Bylaws -- last revised August 15, 1997.(f) X
4.1 Note Agreement dated as of June 1, 1994, relating to
issuance of long-term debt.(c) X
4.2 Shareholder Rights Agreement dated as of April 15, 1997(d) X
5 Opinion of Arnold R. Madigan re: legality. X
23.1 Consents of Arthur Andersen LLP. X
23.2 Consent of Arnold R. Madigan (in Exhibit 5). X
24 Power of Attorney. X
</TABLE>
KEY TO EXHIBITS INCORPORATED BY REFERENCE
(a) Filed with Form 10-K for 1989, dated March 29, 1990, File No. 0-8503.
(b) Filed with Form 10-K for 1990, dated March 28, 1991, File No. 0-8503.
(c) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended June
30, 1994, File No. 0-8503.
(d) Filed with Form 10-K for 1996, dated March 27, 1997, File No. 0-8503.
(e) Filed with Form 10-Q for the quarter ended March 31, 1997, File No.
0-8503.
(f) Filed with Form 10-Q for the quarter ended September 30, 1997, File No.
0-8503.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in a periodic report filed
with or furnished to the Securities and Exchange Commission by the
registrant
II-2
<PAGE> 13
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 and incorporated by reference in this Registration Statement;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed with or furnished to the Securities and Exchange Commission
by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated by reference in this
Registration Statement; provided, however that any increase or decrease
in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and
Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of SEMCO Energy's Form 10-K pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to any charter provision,
bylaw, contract, arrangement, statute, or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer, or controlling person of
the Registrant in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 18. FINANCIAL STATEMENTS AND SCHEDULES.
Not applicable.
II-3
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, SEMCO Energy,
Inc. certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has July caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Port Huron and State of Michigan, on
the 31st day of July, 1998.
SEMCO ENERGY, INC.
By /s/ WILLIAM L. JOHNSON
------------------------------------
William L. Johnson
President and C.E.O.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the capacities indicated on July 31, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ WILLIAM L. JOHNSON President (Director and Principal Executive Officer)
- ---------------------------------------------
William L. Johnson
/s/ ROBERT J. DIGAN, II Senior Vice President (Principal Financial and
- --------------------------------------------- Accounting Officer)
Robert J. Digan, II
/s/ DANIEL A. BURKHARDT* Director
- ---------------------------------------------
Daniel A. Burkhardt
/s/ EDWARD J. CURTIS* Director
- ---------------------------------------------
Edward J. Curtis
/s/ JOHN T. FERRIS* Director
- ---------------------------------------------
John T. Ferris
/s/ MICHAEL O. FRAZER* Director
- ---------------------------------------------
Michael O. Frazer
/s/ HARVEY I. KLEIN* Director
- ---------------------------------------------
Harvey I. Klein
/s/ STEWART J. KNIFF* Director
- ---------------------------------------------
Stewart J. Kniff
/s/ BRUCE G. MACLEOD* Director
- ---------------------------------------------
Bruce G. Macleod
/s/ FREDERICK S. MOORE* Director
- ---------------------------------------------
Frederick S. Moore
/s/ EDITH A. STOTLER* Director
- ---------------------------------------------
Edith A. Stotler
/s/ DONALD W. THOMASON* Director
- ---------------------------------------------
Donald W. Thomason
</TABLE>
*By /s/ WILLIAM L. JOHNSON
----------------------------
William L. Johnson
Attorney-in-fact
II-4
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
FILED
---------------------
EXHIBIT BY
NO. DESCRIPTION HEREWITH REFERENCE
------- ----------- -------- ---------
<C> <S> <C> <C>
3.(i).1 Articles of Incorporation of SEMCO Energy, Inc., as restated
July 11, 1989.(a) X
3.(i).2 Certificate of Amendment to Article III of the Articles of
Incorporation dated May 16, 1990.(b) X
3.(i).3 Certificate of Amendment to Articles I, III and VI of the
Articles of Incorporation dated April 16, 1997.(e) X
3.(ii) Bylaws -- last revised August 15, 1997.(f) X
4.1 Note Agreement dated as of June 1, 1994, relating to
issuance of long-term debt.(c) X
4.2 Shareholder Rights Agreement dated as of April 15, 1997(d) X
5 Opinion of Arnold R. Madigan re: legality. X
23.1 Consents of Arthur Andersen LLP. X
23.2 Consent of Arnold R. Madigan (in Exhibit 5). X
24 Power of Attorney. X
</TABLE>
KEY TO EXHIBITS INCORPORATED BY REFERENCE
(a) Filed with Form 10-K for 1989, dated March 29, 1990, File No. 0-8503.
(b) Filed with Form 10-K for 1990, dated March 28, 1991, File No. 0-8503.
(c) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended June
30, 1994, File No. 0-8503.
(d) Filed with Form 10-K for 1996, dated March 27, 1997, File No. 0-8503.
(e) Filed with Form 10-Q for the quarter ended March 31, 1997, File No.
0-8503.
(f) Filed with Form 10-Q for the quarter ended September 30, 1997, File No.
0-8503.
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF ARNOLD R. MADIGAN]
Securities and Exchange Commission July 31, 1998
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: SEMCO Energy, Inc.
Gentlemen:
I am General Counsel of SEMCO Energy, Inc., a Michigan corporation (the
"Company") and furnish this letter in connection with the proposed issuance and
sale by Selling Shareholders of shares of outstanding Common Stock ("Common
Stock") of the Company. The Common Stock is described in a Registration
Statement on Form S-3 (the "Registration Statement") being filed by the Company
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended.
Based upon my examination of such corporate records and other documents and
certificates as I deemed it necessary to examine, it is my opinion that:
1. The Company is a corporation validly existing under the laws of the
State of Michigan.
2. The Common Stock being sold by the Selling Shareholders named in
the Registration Statement is legally issued, fully paid and nonassessable
and when sold, will be legally issued, fully paid and nonassessable.
I hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement and to the use of my name under the caption "Legal
Matters" in the related Prospectus.
Very truly yours,
/s/ Arnold R. Madigan
<PAGE> 1
EXHIBIT 23.1
[ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated March 10, 1998
included in SEMCO Energy, Inc.'s Form 10-K for the year ended December 31, 1997,
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Detroit, Michigan,
July 29, 1998.
<PAGE> 2
[ARTHUR ANDERSEN LLP LETTERHEAD]
To SEMCO Energy, Inc.:
We are aware that SEMCO Energy, Inc. has incorporated by reference in this
registration statement its Form 10-Q for the quarter ended March 31, 1998, which
includes our report dated May 5, 1998, covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the Securities Act of
1933, that report is not considered a part of the registration statement
prepared or certified by our Firm or a report prepared or certified by our Firm
within the meaning of Sections 7 and 11 of the Act.
/s/ Arthur Andersen LLP
Detroit, Michigan,
July 29, 1998.
<PAGE> 1
EXHIBIT 24
SEMCO ENERGY, INC.
POWER OF ATTORNEY
Whereas, the Board of Directors of SEMCO Energy, Inc., a Michigan
corporation, at a meeting held on June 11, 1998, authorized the execution of one
or more Registration Statements for the registration and sale of up to 370,592
shares of Common Stock for issuance and sale to the public and the filing of
said Registration Statements with the Securities and Exchange Commission under
the Securities Act of 1933, as amended.
NOW, THEREFORE, each of the undersigned herby appoints William L. Johnson
and Robert J. Digan, II, his or her true and lawful attorneys to execute, in
his/her name and in the capacity shown below, said Registration Statements and
any and all amendments thereto and to file the same with the Securities and
Exchange Commission. Each of said attorneys shall have full power of
substitution and resubstitution.
IN WITNESS WHEREOF, we have hereunto set our hands as of the 11th day of
June, 1998.
<TABLE>
<S> <C>
/s/ DANIEL A. BURKHARDT /s/ HARVEY I. KLEIN
- ----------------------------------------------------- -----------------------------------------------------
Daniel A. Burkhartd, Director Harvey I. Klein, Director
/s/ EDWARD J. CURTIS /s/ STEWART J. KNIFF
- ----------------------------------------------------- -----------------------------------------------------
Edward J. Curtis, Director Stewart J. Kniff, Director
/s/ ROBERT J. DIGAN, II /s/ BRUCE G. MACLEOD
- ----------------------------------------------------- -----------------------------------------------------
Robert J. Digan, II, Senior Vice President and CFO Bruce G. Macleod, Director
(Principal Financial and Accounting Officer)
/s/ JOHN T. FERRIS /s/ FREDERICK S. MOORE
- ----------------------------------------------------- -----------------------------------------------------
John T. Ferris, Director Frederick S. Moore, Director
/s/ MICHAEL O. FRAZER /s/ EDITH A. STOTLER
- ----------------------------------------------------- -----------------------------------------------------
Michael O. Frazer, Director Edith A. Stotler, Director
/s/ WILLIAM L. JOHNSON /s/ DONALD W. THOMASON
- ----------------------------------------------------- -----------------------------------------------------
William L. Johnson, Chairman, President and CEO and Donald W. Thomason, Director
Director (Principal Executive Officer)
</TABLE>
