As filed with the Securities and Exchange Commission on October 20, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
___________________
WICOR, Inc.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1346701
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
626 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 291-7026
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
_______________________
Joseph P. Wenzler
Vice President, Treasurer and Chief Financial Officer
WICOR, Inc.
626 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 291-7026
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
______________________________
With a copy to:
Jere D. McGaffey, Esq. David P. Falck, Esq.
Foley & Lardner Winthrop, Stimson, Putnam &
777 East Wisconsin Avenue Roberts
Milwaukee, Wisconsin One Battery Park Plaza
53202-5367 New York, New York 10004-1490
(414) 271-2400 (212) 858-1000
____________________________
Approximate date of commencement of proposed sale to the public: As
soon as practicable 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, please 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, please check the following
box. [_]
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) of 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
Proposed Proposed Amount
Title of Each Maximum Maximum of
Class of Offering Aggregate Regis-
Securities to be Amount to be Price Per Offering tration
Registered Registered(1) Unit(2) Price(2) Fee
Common Stock, $1
par value, with
attached Common 1,265,000
Stock Purchase shares and
Rights rights $30.0625 $38,029,063 $13,114
(1) Each share of WICOR, Inc. Common Stock has attached thereto one
Common Stock Purchase Right.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 based upon
the average of the high and low prices for WICOR, Inc. Common Stock
as reported on the New York Stock Exchange on October 18, 1995. The
value attributable to the Rights is reflected in the price of the
Common Stock.
______________________
The Registrant hereby amends 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 the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 20, 1995
PROSPECTUS
1,100,000 Shares
WICOR, INC.
Common Stock
____________________
WICOR, Inc. (the "Company") is offering hereby 1,100,000 shares of
its common stock, $1.00 par value (the "Common Stock"). The Common Stock
is listed on the New York Stock Exchange under the symbol WIC. On October
19, 1995, the last reported sale price of the Common Stock on the New York
Stock Exchange was $30.125 per share.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR 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.
Price to Underwriting Proceeds to
Public Discount(1) Company(2)
Per Share . . . . . . $ $ $
Total(3) . . . . . . $ $ $
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933,
as amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at
$175,000.
(3) The Company has granted the Underwriters an option, exercisable for
30 days after the date of this Prospectus, to purchase up to an
additional 165,000 shares of Common Stock to cover over-allotments,
if any. If all of such additional shares are purchased, the total
Price to Public, Underwriting Discount and Proceeds to Company will
be $ , $ and $ , respectively. See
"Underwriting."
____________________
The shares of Common Stock offered hereby are offered by the
Underwriters, subject to prior sale, when, as and if issued to and
accepted by them and subject to approval of certain legal matters by
counsel for the Underwriters and to certain other conditions. The
Underwriters reserve the right to withdraw, cancel or modify such offer
and to reject orders in whole or in part. It is expected that delivery of
the Common Stock will be made in New York, New York, on or about
, 1995.
____________________
Merrill Lynch & Co.
Dean Witter Reynolds Inc.
Robert W. Baird & Co.
Incorporated
____________________
The date of this Prospectus is , 1995
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company under
the Exchange Act can 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 following Regional Offices of the
Commission: Northeast Regional Office, 7 World Trade Center, 13th Floor,
New York, New York 10048, and Midwest Regional Office, Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material also may be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. In addition, such reports, proxy statements and
other information concerning the Company can be inspected at the offices
of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto referred to
herein as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Common Stock
offered hereby. This 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 which may be inspected and copied in the manner and at the
sources described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
(File No. 1-7951) pursuant to the Exchange Act are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31 and June 30, 1995.
3. The Company's Registration Statement on Form 8-A under the
Exchange Act with respect to the Common Stock, including any
amendment or reports filed for the purpose of updating such
description.
4. The Company's Registration Statement on Form 8-A under the
Exchange Act with respect to the Common Stock Purchase Rights,
including any amendment or reports filed for the purpose of
updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of shares which is the
subject hereof shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The information relating to the Company contained in this Prospectus
summarizes, is based upon, or refers to, information and financial
statements contained in one or more of the documents incorporated herein
by reference; accordingly, such information contained herein is qualified
in its entirety by reference to such documents incorporated herein by
reference and should be read in conjunction therewith.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the
documents that have been or may be incorporated herein by reference (other
than exhibits thereto, unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates).
Requests should be directed to WICOR, Inc., 626 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, Attention: Robert A. Nuernberg, Secretary
(telephone: (414) 291-7026).
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and consolidated financial statements appearing
elsewhere in this Prospectus or in the documents incorporated in this
Prospectus by reference. All references to the Company herein include the
Company and all of its subsidiaries, except where the context otherwise
indicates. Unless otherwise indicated, the information contained in this
Prospectus assumes that the Underwriters' over-allotment option is not
exercised.
The Offering
Company . . . . . . . . . . WICOR, Inc.
Common Stock Offered . . . 1,100,000 shares
Common Stock to be
Outstanding after the
Offering . . . . . . . . shares
Use of Proceeds . . . . . . To finance a portion of the
purchase price of the Company's
July 1995 acquisition of Hypro
Corporation. See "Use of
Proceeds."
New York Stock Exchange
Symbol . . . . . . . . . WIC
Price Range on the New York
Stock Exchange from
January 1, 1995 through
October 19, 1995 . . . . High: $30.875 Low: $26.625
Last Reported Sale Price on
the New York Stock
Exchange on October 19,
1995 . . . . . . . . . . $30.125
Current Indicated Annual
Dividend Rate . . . . . . $1.64
The Company
The Company is a diversified holding company with two principal
business groups: natural gas distribution and related services, and
manufacturing of pumps and processing equipment used to pump, control,
transfer, hold and filter water and other fluids. The Company engages in
natural gas distribution through its Wisconsin Gas Company subsidiary
("Wisconsin Gas"). Wisconsin Gas is the oldest and largest natural gas
distribution utility in Wisconsin. For the year ended December 31, 1994,
Wisconsin Gas served approximately 495,000 customers in 496 communities.
Wisconsin Gas generated $556.6 million or 64.1% of the Company's 1994
operating revenues and $18.9 million or 57.0% of the Company's 1994 net
income. Through several nonutility subsidiaries, the Company also engages
in the manufacture and sale of pumps and processing equipment. The
Company's products primarily have water system, pool and spa,
agricultural, recreational vehicle ("RV")/marine and beverage/food service
applications. The Company markets its manufactured products in 100
countries. The Company's manufacturing subsidiaries generated $311.2
million or 35.9% of the Company's 1994 operating revenues and $14.3
million or 43.0% of the Company's 1994 net income.
<TABLE>
Summary of Consolidated Financial Data
(Dollars in thousands except for per share amounts)
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
1995 1994 1994 1993 1992
(Unaudited)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Operating Revenues:
Gas Distribution . . . . . $286,469 $341,497 $556,587 $574,835 $495,415
Manufacturing . . . . . . . 162,034 165,207 311,168 274,693 251,994
-------- ------- -------- -------- -------
Total Operating Revenues . 448,503 506,704 867,755 849,528 747,409
Operating Income . . . . . . 51,304 54,944 66,610 63,951 53,315
Net Income . . . . . . . . . 27,467 29,200 33,174 29,313 14,799(1)
Weighted Average Number of
Shares Outstanding (000) . 16,936 16,559 16,708 16,096 15,490
Earnings Per Common Share . . $ 1.62 $ 1.76 $ 1.99 $ 1.82 $ .96(1)
Cash Dividends Per Share of
Common Stock . . . . . . . .80 .78 1.58 1.54 1.50
Operating Data:
Degree Days . . . . . . . . . 4,086 4,506 6,431 6,775 6,683
Gas Sold and Transported
(Millions of Therms)
Sold . . . . . . . . . . . 659 661 1,077 1,031 956
Transported . . . . . . . . 64 61 119 174 214
------- ------ ------- ------- -------
Total . . . . . . . . . . . 723 722 1,196 1,205 1,170
======= ====== ======= ======= =======
<CAPTION>
At June 30, 1995
Actual(2) As Adjusted(3)
(Unaudited)
Balance Sheet Data:
Total Assets . . . . . . . . . . . $871,226 $871,226
Short-Term Debt (4) . . . . . . . . 11,524
Capitalization:
Long-Term Debt . . . . . . . . . . 167,679 35.4% 167,679 %
Common Stock Equity . . . . . . . . 306,517 64.6% %
-------- ------- -------- ------
Total Capitalization . . . . . . $474,196 100.0% $ %
======== ======= ======== ======
(1) Effective January 1, 1992, the Company adopted Statement of
Financial Accounting Standard Nos. 106 and 109, resulting in
a $6.2 million ($.40 per share) and a $1.8 million ($.11 per
share) charge, respectively, to net income for the year
ended December 31, 1992.
(2) On October 4, 1995, Wisconsin Gas filed an application with
the Public Service Commission of Wisconsin (the "PSCW")
seeking authority to issue up to $75 million aggregate
principal amount of debt securities. Subject to regulatory
approval and market conditions, it is currently expected
that Wisconsin Gas will issue such debt during the fourth
quarter of 1995. The net proceeds from such offering, if
completed, will be used to redeem the $50 million
outstanding aggregate principal amount of Wisconsin Gas' 9 %
Notes due 1997 and to repay short-term debt. The financial
information in the table above is not adjusted to reflect
the proposed issuance of such debt securities by Wisconsin
Gas.
(3) Adjusted to reflect the sale of 1,100,000 shares of Common
Stock offered by the Company hereby and assuming the
application of the estimated net proceeds therefrom to repay
short-term debt. See "Use of Proceeds."
(4) Does not reflect debt incurred to effect the July 19, 1995
acquisition of Hypro Corporation. See "Recent Development."
</TABLE>
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock, estimated at $
million, will be contributed to Hypro Corporation ("Hypro"), a wholly-
owned subsidiary of the Company, and will be used to repay a portion of
the borrowings under the credit facility entered into in connection with
the July 1995 acquisition of Hypro. See "Recent Development." Amounts
borrowed under this credit facility accrued interest at an annual rate of
approximately % as of October , 1995, and mature in July, 1996.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is traded on the New York Stock Exchange
under the symbol WIC. The last sale price for the Common Stock on October
, 1995 was $ . The following table sets forth the quarterly high
and low closing prices per share of the Common Stock as reported on the
New York Stock Exchange and the dividends declared per share of Common
Stock for the periods indicated.
Stock Price Cash
Dividends
High Low Declared
Fiscal Period
1993:
First Quarter . . . . . . . $29.000 $25.625 $0.38
Second Quarter . . . . . . . 31.375 27.750 0.38
Third Quarter . . . . . . . 32.750 29.375 0.39
Fourth Quarter . . . . . . . 32.875 28.000 0.39
1994:
First Quarter . . . . . . . $32.625 $27.000 $0.39
Second Quarter . . . . . . . 31.125 25.500 0.39
Third Quarter . . . . . . . 31.125 28.125 0.40
Fourth Quarter . . . . . . . 29.500 25.875 0.40
1995:
First Quarter . . . . . . . $30.500 $27.250 $0.40
Second Quarter . . . . . . . 29.750 26.625 0.40
Third Quarter . . . . . . . 30.875 27.125 0.41
Fourth Quarter (through 30.500 30.000 --
October 19, 1995) . . . . .
Certain of the Company's subsidiaries are subject to limitations or
restrictions on their ability to declare and pay dividends to the Company.
A November 1993 rate order of the PSCW requires Wisconsin Gas to request
PSCW approval prior to payment of dividends on its common stock to the
Company if the payment would reduce its common equity (net assets) below
43% of total capitalization (including short-term debt). Under this
requirement, $ million of Wisconsin Gas' net assets at September 30,
1995 were available for such dividends without PSCW approval. In
addition, the PSCW must also approve any dividends in excess of $16
million for the 12 month period beginning November 1 of each year if such
dividends would dilute Wisconsin Gas' total equity below 43.43% of its
total capitalization. Wisconsin Gas paid $16 million in dividends for the
12 months ending October 31, 1995, and its ratio of equity to total
capitalization as of such date was .
In connection with its long-term debt agreements, Sta-Rite
Industries, Inc. ("Sta-Rite"), a manufacturing subsidiary of the Company,
is subject to restrictions on working capital, shareholder's equity and
debt. These agreements also limit the amount of retained earnings
available for the payment of cash dividends to the Company and for certain
investments. At September 30, 1995, $ million of Sta-Rite's net
assets were available for payment of dividends to the Company.
Future dividends will depend on future earnings, future rates allowed
Wisconsin Gas, the cash position and financial condition of the Company
and its subsidiaries and other factors. At current dividend rates, after
giving effect to the issuance of the shares in this offering (assuming the
Underwriters' over-allotment option is not exercised), the Company's
quarterly dividend payments on its outstanding Common Stock would be
approximately $ million.
THE COMPANY
The Company is a diversified holding company with two principal
business groups: natural gas distribution and related services, and
manufacturing of pumps and processing equipment used to pump, control,
transfer, hold and filter water and other fluids. The Company engages in
natural gas distribution through Wisconsin Gas, the oldest and largest
natural gas distribution utility in Wisconsin. At December 31, 1994,
Wisconsin Gas served approximately 495,000 customers in 496 communities.
Wisconsin Gas generated $556.6 million or 64.1% of the Company's 1994
operating revenues and $18.9 million or 57.0% of the Company's 1994 net
income. Through several nonutility subsidiaries, the Company also engages
in the manufacture and sale of pumps and processing equipment. The
Company's products primarily have water system, pool and spa,
agricultural, RV/marine and beverage/food service applications. The
Company markets its manufactured products in 100 countries. The Company's
manufacturing subsidiaries generated $311.2 million or 35.9% of the
Company's 1994 operating revenues and $14.3 million or 43.0% of the
Company's 1994 net income. The principal executive offices of the Company
are located at 626 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, and
its telephone number is (414) 291-7026. The Company is incorporated under
the laws of the State of Wisconsin and is exempt from registration as a
holding company under the Public Utility Holding Company Act of 1935, as
amended.
Natural Gas Distribution and Related Services Business
The Company's primary energy business is the distribution of natural
gas through its Wisconsin Gas subsidiary, which is a regulated public
utility. In response to regulatory changes in the natural gas industry,
the Company also has recently begun to expand its natural gas related
business to include selling natural gas supply services and marketing
energy related retail products and services, as well as marketing the
Company's expertise in managing meter reading and billing services for
gas, water and electric utilities. Natural gas distribution activities
accounted for 64.1% of the Company's 1994 operating revenues and 57.0% of
1994 net income.
Distribution of Natural Gas. At December 31, 1994, Wisconsin Gas
distributed gas to approximately 495,000 residential, commercial and
industrial customers in 496 communities throughout Wisconsin with an
estimated population of 1,458,000 based on the State of Wisconsin's
estimates for 1994. During 1994, Wisconsin Gas added more than 10,000 new
customers.
Wisconsin Gas' business is highly seasonal, particularly as to
residential and commercial sales for space heating purposes, with a
substantial portion of its sales occurring in the winter heating season.
Most of Wisconsin Gas' large commercial and industrial customers are
dual-fuel customers that are equipped to switch between natural gas and
alternate fuels. Wisconsin Gas actively assists customers in buying gas,
arranging transportation and managing other aspects of acquisition,
transportation and use of natural gas in order to facilitate customers'
decision to use natural gas rather than alternate fuels.
For the year ended December 31, 1994, Wisconsin Gas delivered 1,196
million therms of natural gas to its customers (1 therm equals 100,000
BTU's). Of this total, residential customers accounted for approximately
38.8%, commercial customers approximately 15.5%, large volume commercial
and industrial customers approximately 12.2%, commercial and industrial
interruptible customers approximately 23.6%, and transportation-only
customers approximately 9.9%. Wisconsin Gas earns the same margin
(difference between revenue and cost of natural gas) whether it sells
natural gas to customers or transports customer-owned gas.
Wisconsin Gas is subject to the jurisdiction of the PSCW as to
various phases of its operations, including rates, service and issuance of
securities. The PSCW has instituted a generic proceeding to consider how
its regulation of gas distribution utilities should change to reflect the
changing competitive environment in the gas industry. To date, the PSCW
has made a policy decision to deregulate gas costs for customer segments
with workably competitive market choices. Hearings are scheduled to begin
in January 1996, with the expectation that the general policy decisions
defining the scope of a new regulatory framework will be made by the end
of 1996. The Company is unable to determine what impact this proceeding
may have on Wisconsin Gas' future operations.
Other Natural Gas Related Businesses. In the spring of 1995, the
Company formed two non-regulated energy services-related businesses, WICOR
Energy Services Company, a wholly owned subsidiary of the Company, and
FieldTech, a division of Wisconsin Gas. These businesses offer a variety
of services, including natural gas supply and related services; energy and
risk management; and contract meter reading, field management and billing
services for public and municipal gas, water and electric utilities. The
Company views these businesses as important elements in meeting increasing
competitive challenges in the natural gas industry and as a new source of
growth for its energy related operations. The revenues derived from these
businesses are not, however, material to the Company at the present time.
Business Strategy. The Company's strategy for growing its natural
gas distribution business is to add new customers through on-main
additions and, when appropriate, to expand its distribution system to
serve more communities. In addition, the Company intends to expand its
existing gas equipment leasing program and offer pipe construction and
maintenance service to municipal utilities. Finally, as deregulation
continues to open natural gas markets, the Company intends to provide
additional services, such as load forecasting and information services, to
natural gas consumers, marketers and shippers.
The Company's strategy for growing its non-regulated natural gas
related business is to offer new services to existing customers and to
seek to exploit opportunities in the developing market for non-regulated
energy services. These growth opportunities include providing natural gas
supply and related services; energy and risk management services for large
customers; developing and marketing energy products and services for
residential and small commercial customers; selling other forms of energy
(such as oil and electricity); and providing contract meter reading, field
management, and turnkey automated meter reading programs for public and
municipal gas, water and electric utilities.
Manufacturing Business
Through its manufacturing subsidiaries, the Company manufactures and
sells pumps and processing equipment used to pump, control, transfer, hold
and filter water and other fluids for a wide array of specialized
applications and markets. The Company operates fourteen manufacturing
plants in six countries, including seven plants in the United States, and
has twenty-four sales/distribution centers in ten countries, including ten
centers in the United States. Manufacturing activities accounted for
35.9% of the Company's 1994 operating revenues and 43.0% of 1994 net
income.
Products and Markets. The Company's water and fluid pumping and
processing products are sold in five major markets and several smaller
markets. The five major markets below accounted for approximately 91% of
the Company's 1994 manufacturing operating revenues (adjusted on a pro
forma basis to include Hypro's revenues for such period), with the water
system, pool/spa and agricultural markets providing 49%, 19% and 12% of
such revenues, respectively. Products are distributed through
professional well drillers and plumbers (62%), retail stores (21%) and
original equipment manufacturers (17%).
Water Systems Market: The Company manufactures and sells
pumps, water storage and pressure tanks, and filters used to
supply groundwater for residential, commercial and farm use in
areas not served by municipal water systems.
Pool/Spa Market: The Company manufactures and sells pumps,
filters and accessories used in private and public swimming
pools, spas and hot tubs.
Agricultural Market: The Company manufactures and sells
pumps for agricultural and spot spraying and irrigation.
Primary uses include crop, turf and lawn spraying, irrigation
and pest control.
RV/Marine Market: The Company manufactures and sells pumps
used in potable water systems in motor homes, travel trailers
and boats, and bilge pumping systems, live well pumping systems
and wash down systems for marine applications. The Company also
manufactures and sells pumps used in engine cooling systems for
marine applications.
Beverage/Food Service Market: The Company manufactures and
sells pumps used for pumping soft drinks, condiments and other
food service products in restaurants and cafeterias.
Other Markets: The Company manufactures and sells a
variety of other pumps and accessories used in industrial, water
purification, high-pressure cleaning fire protection, sewage
removal, and water fountain systems.
Certain of the Company's products hold a significant share of the
markets in which they are sold. The Company believes it has the number
one or number two position in certain segments of the pump market for
water systems, agricultural, pool, recreational vehicle and beverage
applications. The Company's products are marketed under various brand
names, including Sta-Rite/R/, Berkeley/R/, Flotec/R/, Onga, Nocchi,
AquaTools, SHURflo/R/, Hypro/R/, SherTech/R/ and FoamPro/R/.
International Operations. The Company manufactures and sells the
products identified above to international markets through its
international subsidiaries and exports from the United States. The
Company has manufacturing facilities in Australia, Germany, Italy, New
Zealand and Russia, and sales/distribution centers in Australia, France,
Canada, England, Italy, Mexico, New Zealand and Singapore. Products are
sold in approximately 100 countries. Of the Company's 1994 manufacturing
operating revenues (adjusted on a pro forma basis to include Hypro's
revenues for such period), sales in North America accounted for 74%;
Australia accounted for 11%; Europe accounted for 11%; and Asia accounted
for 4%.
International and export sales have grown steadily over the past
decade, increasing from $20 million in 1985 to $114 million in 1994 and
accounted for 37% of 1994 manufacturing revenues.
Business Strategy. The Company's strategy for growing its
manufacturing business is based on making strategic acquisitions,
introducing new products to existing or related markets, continuing
international expansion and expanding its product distribution network.
Management believes that international markets offer the Company its
greatest opportunities for growth.
The pump and fluid processing equipment industry in which the Company
competes is generally fragmented, and acquisitions are a key part of the
Company's manufacturing business growth strategy. Beginning with Sta-Rite
in 1982, the Company has made twelve acquisitions related to the pump and
water processing equipment business. The 1993 acquisition of SHURflo Pump
Manufacturing Company and the 1995 acquisition of Hypro were strategic
transactions intended to improve the Company's market balance. The two
acquisitions expanded the Company's market mix by adding new products that
are sold principally to original equipment manufacturers in the
agricultural, RV/marine and the beverage/food service markets and by
adding higher-margin products to the Company's product mix.
The Company believes that new products are essential to the growth of
its manufacturing business, and intends to continue its commitment to new
product development. Investment in the business, primarily capital
expenditures and product research and development, exceeded $50 million in
the aggregate over the past five years. Management believes that
promising areas for new product development include water purification
systems, pumps for above-ground swimming pools and garden pools, fire
protection pump systems and food service pumps.
Historically, the PSCW has imposed restrictions on public utility
holding companies in Wisconsin, including the Company, relating to future
nonutility investments. The PSCW has ordered that Wisconsin Gas remain
the predominant business, as measured by equity, within the Company's
holding company system. In addition, the debt of the Company's non-
utility subsidiaries is not permitted to exceed 40% of the total
capitalization of such subsidiaries pursuant to an order of the PSCW.
After giving effect to the sale of the Common Stock offered hereby and the
application of the net proceeds therefrom as described in "Use of
Proceeds," the amount allowable for future nonutility investment would be
$ .
RECENT DEVELOPMENT
On July 19, 1995, the Company acquired Hypro in a merger for $58
million in cash and the assumption of $13.3 million in operating
liabilities. The acquisition was financed with borrowings under a credit
facility entered into in connection with the acquisition. The Company
intends to use the proceeds of the offering of the Common Stock to repay a
portion of the borrowings under this credit facility. See "Use of
Proceeds." Hypro designs, manufactures and markets pumps and water
processing equipment for the agricultural, high-pressure cleaning, marine,
industrial and fire protection markets. The acquisition of Hypro was
accounted for using the purchase method of accounting. The cost in excess
of net assets acquired was approximately $58 million and is being
amortized over forty years. For the year ended September 30, 1994, Hypro
had revenues of $41.1 million and operating income of $5.7 million.
DESCRIPTION OF CAPITAL STOCK
Authorized Shares
The authorized capital stock of the Company consists of 60,000,000
shares of Common Stock and 1,500,000 shares of Cumulative Preferred Stock,
$1.00 par value (the "Cumulative Preferred Stock"). The Cumulative
Preferred Stock is issuable in series, for such consideration and with
such designations, dividend rates, redemption prices, liquidation rights
and preferences, conversion rights, if any, sinking fund provisions, if
any, and voting rights, if any, as may be determined by the Board of
Directors of the Company. As of October , 1995, there were
shares of Common Stock issued and outstanding. No shares of Cumulative
Preferred Stock were issued and outstanding as of such date.
Dividend Rights and Restrictions
After all cumulative dividends have been paid or declared and set
apart for payment on any shares of Cumulative Preferred Stock that are
outstanding, the Common Stock is entitled to such dividends as may be
declared from time to time by the Board of Directors in accordance with
applicable law. The Company's ability to pay dividends is dependent to a
great extent on the ability of its subsidiaries to pay dividends. See
"Price Range of Common Stock and Dividends."
Voting Rights
Except as provided under Wisconsin law and except as may be
determined by the Board of Directors of the Company with respect to any
series of Cumulative Preferred Stock, only the holders of Common Stock
shall be entitled to vote for the election of directors of the Company and
on all other matters. Subject to the limitations imposed by Wisconsin law
as described below, upon any such vote the holders of Common Stock shall
be entitled to one vote for each share of Common Stock held by them.
Shareholders have no cumulative voting rights in connection with the
election of directors, which means that holders of shares entitled to
exercise more than 50% of the voting power represented at any meeting of
shareholders are entitled to elect all of the directors to be elected at
any such meeting. The Company's Restated Articles of Incorporation and
By-Laws provide that the Board of Directors is to be divided into three
classes, with staggered terms of three years each. The terms of the
Common Stock generally may be modified by the affirmative vote of the
holders of a majority of the shares of Common Stock voted at a meeting of
shareholders at which a quorum is present.
Section 180.1150 of the Wisconsin Statutes provides that the voting
power of shares of Wisconsin corporations such as the Company held by any
person or persons acting as a group in excess of 20% of the voting power
in the election of directors is limited to 10% of the full voting power of
those shares. This restriction does not apply to shares acquired directly
from the Company or in certain specified transactions or shares for which
full voting power has been restored pursuant to a vote of shareholders.
Sections 180.1140 to 180.1144 of the Wisconsin Statutes contain
certain limitations and special voting provisions applicable to specified
business combinations involving Wisconsin corporations such as the Company
and a significant shareholder, unless the board of directors of the
corporation approves the business combination or the shareholder's
acquisition of shares before such shares are acquired. Similarly,
Sections 180.1130 to 180.1133 of the Wisconsin Statutes contain special
voting provisions applicable to certain business combinations, unless
specified minimum price and procedural requirements are met. Following
commencement of a takeover offer, Section 180.1134 of the Wisconsin
Statutes imposes special voting requirements on certain share repurchases
effected at a premium to the market and on certain asset sales by the
corporation, unless, as it relates to the potential sale of assets, the
corporation has at least three independent directors and a majority of the
independent directors vote not to have the provision apply to the
corporation.
Section 196.795(3) of the Wisconsin Statutes provides that no person
may hold or acquire directly or indirectly more than 10% of the
outstanding securities of a public utility holding company such as the
Company without approval of the PSCW.
Other Rights and Limitations
All shares of Common Stock are entitled to participate equally in
distributions in liquidation, subject to the prior rights of any shares of
Cumulative Preferred Stock which may be outstanding. Except as the Board
of Directors may in its discretion otherwise determine, holders of Common
Stock have no preemptive rights to subscribe for or purchase shares of the
Company. There are no conversion rights, or sinking fund or redemption
provisions applicable to the Common Stock.
The Restated Articles of Incorporation of the Company provide that
any director may be removed from office but only for cause by the
affirmative vote of holders of at least a majority of the voting power of
the then outstanding shares entitled to vote in the election of directors.
However, if at least the number of directors in the two largest classes of
directors plus one director vote to remove a director, such director may
be removed without cause by the affirmative vote of holders of at least a
majority of the voting power of the then outstanding shares of the Company
entitled to vote thereon. The Restated Articles of Incorporation of the
Company also provide that the provisions of the Company's By-Laws
regarding the classification, number, tenure and qualifications of
directors may only be amended, altered, changed or repealed by the
affirmative vote of holders of at least 75% of the voting power of the
then outstanding shares entitled to vote in the election of directors.
The shares of Common Stock offered hereby when issued and paid for in
the manner described herein will be fully paid and nonassessable, except
as provided by Section 180.0622(2)(b) of the Wisconsin Statutes regarding
personal liability of shareholders for all debts owing to employees of the
Company for services performed but not exceeding six months' service in
any one case.
Common Stock Purchase Rights
The Company has entered into a Rights Agreement (the "Rights
Agreement"), dated as of August 29, 1989, with Chemical Bank, as Rights
Agent. Pursuant to the Rights Agreement, each outstanding share of Common
Stock has attached thereto one Common Stock Purchase Right ("Right") and
each share subsequently issued by the Company prior to the expiration of
the Rights Agreement, including the shares sold in this offering, will
likewise have attached thereto one Right. Under certain circumstances
described below, the Rights will entitle the holder thereof to purchase
additional shares of Common Stock. In this Prospectus, unless the context
otherwise requires, all references to the Common Stock include the
accompanying Rights.
Currently, the Rights are not exercisable or separable and trade with
the Common Stock. In the event the Rights become exercisable, each Right
(unless held by a person or group which beneficially owns more than 20% of
the outstanding Common Stock) will initially entitle the holder to
purchase one share of Common Stock at a price of $75 per share, subject to
adjustment. The Rights will only become exercisable if a person or group
has acquired, or announced an intention to acquire, 20% or more of the
outstanding shares of Common Stock. Under certain circumstances,
including the existence of a 20% acquiring party, each holder of a Right,
other than the acquiring party, will be entitled to purchase at the
exercise price Common Stock having a market value of two times the
exercise price. In the event of the acquisition of the Company by another
corporation subsequent to such corporation or an affiliated party
acquiring 20% or more of the Common Stock, each holder of a Right will be
entitled to receive the acquiring corporation's common shares having a
market value of two times the exercise price. The Rights may be redeemed
at a price of $.01 per Right prior to the existence of a 20% acquiring
party, and thereafter may be exchanged for one share of Common Stock per
Right prior to the existence of a 50% acquiring party. The Rights will
expire on August 29, 1999. Under the Rights Agreement, the Board of
Directors of the Company may reduce the thresholds applicable to the
Rights from 20% to not less than 10%. The Rights do not have voting or
dividend rights and, until they become exercisable, have no dilutive
effect on the earnings of the Company.
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase
Agreement, the Company has agreed to sell to each of the Underwriters
named below (the "Underwriters") and each of the Underwriters has
severally agreed to purchase, the aggregate number of shares of Common
Stock set forth opposite their respective names:
Number
Underwriter of Shares
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . .
Dean Witter Reynolds Inc. . . . . . . . . .
Robert W. Baird & Co. Incorporated . . . .
________
Total . . . . . . . . . . . . . . 1,100,000
=========
In the Purchase Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all of
the shares of Common Stock if any shares of Common Stock are purchased.
The Underwriters have advised the Company that they propose initially
to offer the Common Stock to the public at the public offering price set
forth on the cover page of this Prospectus, and to certain dealers at such
price less a concession not in excess of $ per share. The
Underwriters may allow, and such dealers may reallow, a discount not in
excess $ per share to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be
changed.
The Company has granted the Underwriters an option exercisable for 30
days after the date of this Prospectus to purchase up to an aggregate of
165,000 additional shares of Common Stock at the public offering price set
forth on the cover page of this Prospectus, less the underwriting
discount. The Underwriters may exercise this option only to cover over-
allotments, if any, made on the sale of the Common Stock offered hereby.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended, or in certain circumstances, to contribute to payments which the
Underwriters may be required to make in respect thereof.
Robert W. Baird & Co. Incorporated acted as financial advisor to the
Company in connection with the July 1995 acquisition of Hypro. See
"Recent Development."
LEGAL MATTERS
Certain legal matters in connection with the sale of the Common Stock
offered hereby will be passed upon for the Company by Foley & Lardner,
Milwaukee, Wisconsin and for the Underwriters by Winthrop, Stimson, Putnam
& Roberts, New York, New York. Jere D. McGaffey, a partner of Foley &
Lardner, is a director of the Company. As of September 30, 1995, Foley &
Lardner attorneys who participated in the preparation of this Prospectus
beneficially owned an aggregate of 9,045 shares of Common Stock.
EXPERTS
The consolidated financial statements and schedules included in the
Company's Annual Report on Form 10-K, for the year ended December 31,
1994, incorporated by reference in this Prospectus and in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
<PAGE>
===================================================================
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company or any Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
Common Stock in any jurisdiction where, or to any person to whom, it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has not been any change in the facts set
forth in this Prospectus or in the affairs of the Company since the date
hereof.
_________________________________
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
By Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Price Range of Common Stock and
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Recent Development . . . . . . . . . . . . . . . . . . . . . . . . . 11
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . 11
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
=========================================================================
1,100,000 Shares
WICOR, Inc.
Common Stock
_________________________
PROSPECTUS
_________________________
Merrill Lynch & Co.
Dean Witter Reynolds Inc.
Robert W. Baird & Co.
Incorporated
==========================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses to be borne by
the Registrant in connection with the issuance and distribution of the
securities being registered hereby.
Securities and Exchange Commission $ 13,114
registration fee . . . . . . . . . . . .
National Association of Securities Dealers 4,303
filing fee . . . . . . . . . . . . . . .
New York Stock Exchange listing fee . . . . . 4,500
Printing and engraving expenses . . . . . . . 50,000
Blue Sky fees and expenses . . . . . . . . . 5,000
Transfer Agent and Registrar's fee . . . . . 1,000
Accounting fees and expenses . . . . . . . . 17,000
Legal fees and expenses . . . . . . . . . . . 75,000
Miscellaneous expenses . . . . . . . . . . . 5,083
-------
Total . . . . . . . . . . . . . . . . . $175,000
========
Item 15. Indemnification of Directors and Officers.
Pursuant to the provisions of the Wisconsin Business Corporation Law
and the Registrant's By-Laws, directors and officers of the Registrant are
entitled to mandatory indemnification from the Registrant against certain
liabilities and expenses (i) to the extent such officers or directors are
successful in the defense of a proceeding and (ii) in proceedings in which
the director or officer is not successful in defense thereof, unless (in
the latter case only) it is determined that the director or officer
breached or failed to perform his or her duties to the Registrant and such
breach or failure constituted: (a) a willful failure to deal fairly with
the Registrant or its shareholders in connection with a matter in which
the director or officer had a material conflict of interest; (b) a
violation of the criminal law unless the director or officer had
reasonable cause to believe his or her conduct was lawful or had no
reasonable cause to believe his or her conduct was unlawful; (c) a
transaction from which the director or officer derived an improper
personal profit; or (d) willful misconduct. It should be noted that the
Wisconsin Business Corporation Law specifically states that it is the
public policy of Wisconsin to require or permit indemnification in
connection with a proceeding involving securities regulation, as described
therein, to the extent required or permitted as described above.
Additionally, under the Wisconsin Business Corporation Law, directors of
the Registrant are not subject to personal liability to the Registrant,
its shareholders or any person asserting rights on behalf thereof for
certain breaches or failures to perform any duty resulting solely from
their status as directors, except in circumstances paralleling those
outlined in (a) through (d) above.
Expenses for the defense of any action for which indemnification may
be available may be advanced by the Company under certain circumstances.
The indemnification provided by the Wisconsin Business Corporation
Law and the Registrant's By-Laws is not exclusive of any other rights to
which a director or officer of the Registrant may be entitled.
The Company maintains a liability insurance policy for its directors
and officers as permitted by Wisconsin law which may extend to, among
other things, liability arising under the Securities Act of 1933, as
amended.
Item 16. Exhibits.
Exhibit
Number Description of Document
(1) Form of Purchase Agreement.
(4.1) Restated Articles of Incorporation of WICOR, Inc., as
amended (incorporated by reference to Exhibit 3.1 to WICOR,
Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1992).
(4.2) By-Laws of WICOR, Inc, as amended (incorporated by reference
to Exhibit 3.3 to WICOR, Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1994).
(4.3) Rights Agreement, dated as of August 29, 1989, between
WICOR, Inc. and Chemical Bank (f/k/a Manufacturers Hanover
Trust Company), as Rights Agent.
(5) Opinion of Foley & Lardner.
(23.1) Consent of Foley & Lardner (included in Exhibit (5)).
(23.2) Consent of Arthur Andersen LLP
(24) Power of Attorney relating to subsequent amendments
(included on the signature page to this Registration
Statement).
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report
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.
(b) 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 the
foregoing provisions, 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 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.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or Rule 497(h) under the
Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment
that contains a form of prospectus 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Milwaukee, and State of
Wisconsin, on this 20th day of October, 1995.
WICOR, INC.
By: /s/ George E. Wardeberg
George E. Wardeberg
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated. Each person whose signature
appears below constitutes and appoints George E. Wardeberg and Joseph P.
Wenzler, and each of them individually, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any and all amendments (including post-
effective amendments) to this Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to
be done by virtue hereof.
Signature Title Date
/s/ George E. Wardeberg President, Chief October 20, 1995
George E. Wardeberg Executive Officer and
Director (Principal
Executive Officer)
/s/ Joseph P. Wenzler Vice President, October 20, 1995
Joseph P. Wenzler Treasurer and
Chief Financial
Officer (Principal
Financial and
Accounting Officer)
/s/ Wendell F. Bueche Director October 20, 1995
Wendell F. Bueche
/s/ Willie D. Davis Director October 20, 1995
Willie D. Davis
/s/ Jere D. McGaffey Director October 20, 1995
Jere D. McGaffey
/s/ Daniel F. McKeithan, Jr. Director October 20, 1995
Daniel F. McKeithan, Jr.
/s/ Guy A. Osborn Director October 20, 1995
Guy A. Osborn
/s/ Thomas F. Schrader Director October 20, 1995
Thomas F. Schrader
/s/ Stuart W. Tisdale Director October 20, 1995
Stuart W. Tisdale
/s/ Essie M. Whitelaw Director October 20, 1995
Essie M. Whitelaw
/s/ William B. Winter Director October 20, 1995
William B. Winter
<PAGE>
EXHIBIT INDEX
Exhibit
Number Document Description
(1) Form of Purchase Agreement.
(4.1) Restated Articles of Incorporation of WICOR, Inc, as amended
(incorporated by reference to Exhibit 3.1 to WICOR, Inc.'s
Annual Report on Form 10-K for the year ended
December 31, 1992).
(4.2) By-Laws of WICOR, Inc., as amended (incorporated by reference to
Exhibit 3.3 to WICOR, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1994).
(4.3) Rights Agreement, dated as of August 29, 1989, between WICOR,
Inc. and Chemical Bank (f/k/a Manufacturers Hanover Trust
Company), as Rights Agent.
(5) Opinion of Foley & Lardner.
(23.1) Consent of Foley & Lardner (included in Exhibit (5)).
(23.2) Consent of Arthur Andersen LLP
(24) Power of Attorney relating to subsequent amendments (included on
the signature page to this Registration Statement).
1,100,000 Shares
WICOR, Inc.
(a Wisconsin corporation)
Common Stock
($1.00 Par Value)
PURCHASE AGREEMENT
___________, 1995
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEAN WITTER REYNOLDS, INC.
ROBERT W. BAIRD & CO. INCORPORATED
As Representatives of the several Underwriters
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1327
Ladies and Gentlemen:
WICOR, Inc., a Wisconsin corporation (the "Company"), confirms
its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Dean Witter Reynolds Inc. and Robert
W. Baird & Co. Incorporated and each of the other Underwriters, if any,
named in Schedule A hereto (collectively, the "Underwriters", which term
shall also include any underwriter substituted as hereinafter provided in
Section 9 hereof), for whom you are acting as representatives (in such
capacity, you shall hereinafter be referred to as the "Representatives"),
with respect to the sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers
of shares of Common Stock, $1.00 par value per share, of the Company (the
"Common Stock") set forth in Schedule A hereto. The shares of Common
Stock to be purchased by the Underwriters are hereinafter called the "Firm
Securities". The Company also proposes to issue and sell severally to the
Underwriters not more than an additional 165,000 shares of Common Stock
(the "Additional Securities"), if and to the extent that the
Representatives, on behalf of the Underwriters, shall have determined to
exercise the right to purchase the Additional Securities pursuant to
Section 2 hereof. The Firm Securities and the Additional Securities are
hereafter collectively referred to as the "Securities."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-_____) and a related preliminary prospectus relating to the Securities
under the Securities Act of 1933, as amended (the "1933 Act"), and has
filed such amendments thereto, if any, and such amended preliminary
prospectus as may have been required to the date hereof. Such
registration statement (as amended, if applicable) has been declared
effective by the Commission. Such registration statement (as amended, if
applicable) and the prospectus constituting a part thereof (including in
each case all documents incorporated and deemed to be incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act (the
"Incorporated Documents") and the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations")), as from time
to time amended or supplemented pursuant to the 1933 Act, the 1933 Act
Regulations, the Securities Exchange Act of 1934, as amended (the "1934
Act"), or the rules and regulations of the Commission thereunder (the
"1934 Act Regulations"), are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively, except that if any revised
prospectus shall be provided to the Underwriters by the Company for use in
connection with the offering of the Securities which differs from the
Prospectus on file at the Commission at the time the Registration
Statement becomes effective (whether or not such revised prospectus is
required to be filed by the Company pursuant to Rule 424(b) of the 1933
Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the
Underwriters for such use. References to the Registration Statement and
the Prospectus shall, unless otherwise specified, be deemed to refer to
the Registration Statement and the Prospectus as amended or supplemented
to the date of this Agreement.
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or
"stated" in the Registration Statement or the Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is
deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include the filing of any document
under the 1934 Act which is or is deemed to be incorporated by reference
in the Registration Statement or the Prospectus, as the case may be, after
the date of effectiveness of the Registration Statement or issue date of
the Prospectus.
SECTION 1. Representations and Warranties. (a) The Company
represents and warrants to each Underwriter as of the date of this
Agreement as follows:
(i) The Registration Statement, at the time it was
declared effective by the Commission under the 1933 Act and at each
date any post-effective amendment or amendments thereto became
effective (the "Effective Date") (including the information deemed to
be included therein pursuant to Rule 430A(b) of the 1933 Act
Regulations), complied and, as of the date of this Agreement,
complies in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations. The Registration Statement, at the
Effective Date (including the information deemed to be included
therein pursuant to Rule 430A(b) of the 1933 Act Regulations), did
not and, at the date of this Agreement, does not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, at the time it was first
provided to the Underwriters for use in connection with the offering
of the Securities (whether or not required to be filed by the Company
with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations), did not and, as of the date of this Agreement, does not
and, as of the Closing Time (as defined in Section 2(c) hereof) and,
in respect of Additional Securities, at the Option Closing Time (as
defined in Section 2(c) hereof), will not include an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
the Prospectus, but nothing contained herein is intended as a waiver
of compliance with the 1933 Act, the 1934 Act, the 1933 Act
Regulations or the 1934 Act Regulations.
(ii) The Incorporated Documents, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act and the
1934 Act Regulations, and, when read together with the other
information in the Prospectus, at the Effective Date, as of the date
of this Agreement and at the Closing Time, will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(iii) The accountants who certified the financial
statements and supporting schedules incorporated by reference in the
Prospectus are independent certified accountants (the "Independent
Accountants") with respect to the Company within the meaning of the
1933 Act and the 1933 Act Regulations.
(iv) The financial statements incorporated by reference in
the Registration Statement and the Prospectus present fairly the
financial position of the Company and its consolidated subsidiaries
as at the dates indicated and the results of their operations for the
periods specified; except as otherwise stated in the Registration
Statement, such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included or incorporated by
reference in the Registration Statement present fairly the
information required to be stated therein.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change in the financial or business condition or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, that are material with
respect to the Company and its subsidiaries considered as one
enterprise and (C) except for regular quarterly dividends, there has
been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Wisconsin with corporate power and authority to own, lease and
operate its properties and to conduct its business as described in
the Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on the financial or business condition or the
earnings or business affairs of the Company and its subsidiaries
considered as one enterprise.
(vii) Each of Wisconsin Gas Company, Sta-Rite Industries,
Shurflo Pump Manufacturing Company and Hypro Corporation (the
"Subsidiaries") has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business as described
in the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the financial or business condition or the earnings or
business affairs of the Company and its subsidiaries considered as
one enterprise; all of the issued and outstanding capital stock of
each of the Subsidiaries has been duly authorized and validly issued,
is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(viii) The authorized capital stock of the Company is
60,000,000 shares of Common Stock and 1,500,000 shares of Cumulative
Preferred Stock, $1.00 par value, of which ______ shares and no
shares, respectively, are outstanding at September 30, 1995 (except
for subsequent issuances, if any, pursuant to dividend reinvestment
or employee benefit plans referred to in the Prospectus); the shares
of issued and outstanding Common Stock have been duly authorized and
validly issued and are fully paid and non-assessable; the Securities
have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration therefor, will be validly issued and fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectus; and the issuance of the
Securities is not subject to preemptive or other similar rights.
(ix) Neither the Company nor any of the Subsidiaries is in
violation of its charter or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of
the Subsidiaries is subject; and the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated herein have been duly authorized by all
necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any material
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of the Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of the Subsidiaries is
subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any applicable
law, administrative or court decree or, to the best knowledge of the
Company, any administrative regulation.
(x) No labor dispute with the employees of the Company or
any of the Subsidiaries exists or, to the knowledge of the Company,
is imminent; and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors which might be expected to result in any
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(xi) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending or, to the knowledge of the Company, threatened, against or
affecting the Company or any of the Subsidiaries, that is required to
be disclosed in the Registration Statement (other than as disclosed
therein), or that might result in any material adverse change in the
financial or business condition or in the earnings or business
affairs of the Company and its subsidiaries considered as one
enterprise, or that might materially and adversely affect the
properties or assets thereof or that might materially and adversely
affect the consummation of this Agreement; and all pending legal or
governmental proceedings to which the Company or any of the
Subsidiaries is a party or of which any of their respective
properties or assets is the subject that are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material; and there are no contracts or documents of the Company or
any of its subsidiaries which are required to be filed as exhibits to
the Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been so filed.
(xii) The Company and the Subsidiaries own or possess, or
can acquire on reasonable terms, the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names (collectively, "patent and proprietary rights") presently
employed by them in connection with the business now operated by
them, and neither the Company nor any of the Subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any patent or
proprietary rights, or of any facts which would render any patent and
proprietary rights invalid or inadequate to protect the interest of
the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xiii) No authorization, approval or consent of any court
or governmental authority or agency is necessary in connection with
the sale of the Securities hereunder, except such as may be required
under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(xiv) The Company and the Subsidiaries possess such
certificates, authorizations, franchises and permits issued by the
appropriate state, federal, local and foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, and
neither the Company nor any of the Subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authority, permit or franchise that, singly or
in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially and adversely affect the financial or
business condition or the earnings or business affairs of the Company
and its subsidiaries considered as one enterprise.
(xv) Neither the Company nor any of its subsidiaries is a
party to any agreement entitling any person or entity to require the
Company to register any securities of the Company owned of record or
beneficially by such person or entity as a result of the transactions
contemplated by this Agreement, or to file any registration statement
in connection therewith.
(b) Any certificate signed by any officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall
be deemed a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing. (a) On
the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees
to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the
Company, at a purchase price of $______ per share, the number of
Securities set forth in Schedule A hereto opposite the name of such
Underwriter, plus any additional number of Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
the Company agrees to sell to each of the Underwriters, and the
Underwriters shall have a one-time right to purchase from the Company,
severally and not jointly, at a purchase price $______ per share, up to
165,000 Additional Securities. Additional Securities may be purchased as
provided in Section 2(c) hereof solely for the purpose of covering over-
allotments made in connection with the public offering of the Firm
Securities. If any Additional Securities are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Securities that bears the same proportion to the total number
of Additional Securities to be purchased as the number of Firm Securities
set forth opposite the name of such Underwriter in Schedule A attached
hereto bears to the total number of Firm Securities.
(b) The Company has been advised by the Representatives that
the Underwriters propose to make a public offering of the Securities as
soon as the Representatives deem advisable after this Agreement has been
executed and delivered. The Company has further been advised that the
Underwriters propose to initially offer the Securities to the public at
the public offering price of $______ per share.
(c) Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Foley &
Lardner, Milwaukee, Wisconsin, or at such other place as shall be agreed
upon by the Representatives and the Company, at 10:00 A.M. on the third
business day (unless postponed in accordance with the provisions of
Section 9 hereof) following the date of this Agreement, or such other time
not later than ten business days after such date as shall be agreed upon
by the Representatives and the Company (such time and date of payment and
delivery being herein called the "Closing Time"). Payment for any
Additional Securities shall be made as provided above except that the hour
and date shall be designated in a written notice from the Representatives
to the Company (the "Option Closing Time") (which may be the same as the
Closing Time but shall in no event be earlier than the Closing Time nor
later than three business days after the giving of the notice herein
referred to). Such notice shall include the number of the Additional
Securities to be purchased. The notice of the determination to exercise
the option to purchase Additional Securities and of the Option Closing
Time may be given at any time within 30 days of the date of this
Agreement. Payment shall be made to the Company by certified or official
bank check or checks drawn in New York Clearing House funds or similar
next day funds payable to the order of the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. Certificates for
the Securities shall be in such denominations and registered in such names
as the Representatives may request in writing at least two business days
before the Closing Time or the Option Closing Time, as the case may be.
It is understood that each Underwriter has authorized the Representatives,
for its account, to accept delivery of, receipt for, and make payment of
the purchase price for, the Securities that it has agreed to purchase.
Merrill Lynch, individually and not as representative of the Underwriters,
may (but shall not be obligated to) make payment of the purchase price for
the Securities to be purchased by any Underwriter whose check has not been
received by the Closing Time or the Option Closing Time, as the case may
be, but such payment shall not relieve such Underwriter from its
obligations hereunder. The certificates for the Securities will be made
available for examination and packaging by the Representatives not later
than 10:00 A.M. on the last business day prior to the Closing Time or the
Option Closing Time, as the case may be, at the office
of______________________, New York, New York.
SECTION 3. Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) The Company will notify the Representatives immediately (i)
of the effectiveness of any amendment to the Registration Statement, (ii)
of the transmittal to the Commission for filing of any supplement to the
Prospectus, including any document to be filed pursuant to the 1934 Act
which will be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the Commission, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information
and (v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Company will give the Representatives notice of its
intention to file or prepare any amendment (including any post-effective
amendment) to the Registration Statement or, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
any amendment or supplement to the Prospectus and will furnish the
Representatives with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such amendment or supplement or use any
such prospectus to which the Representatives or counsel for the
Underwriters shall direct.
(c) The Company will deliver to the Representatives three
signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein) and will also deliver to the Representatives a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the Underwriters.
(d) The Company will furnish to the Representatives for the use
by the Underwriters, from time to time during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectus (as amended or supplemented) as
such Underwriter may reasonably request for the purposes contemplated by
the 1933 Act or the 1933 Act Regulations, or the 1934 Act or the 1934 Act
Regulations.
(e) During the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, if any event shall occur as
a result of which it is necessary to amend or supplement the Prospectus in
order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the
Company will forthwith amend or supplement the Prospectus (in form and
substance reasonably satisfactory to counsel for the Underwriters after
consultation with the Representatives) so that, as so amended or
supplemented, the Prospectus will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the
time it is delivered to a purchaser, not misleading, and the Company will
furnish to the Representatives for the use by the Underwriters a
reasonable number of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the
United States as the Representatives may reasonably designate; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In each
jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect until the
distribution of all of the Securities has been completed.
(g) The Company will make generally available to its security
holders as soon as practicable, but not later than 60 days after the close
of the period covered thereby, an earning statement covering a twelve
month period beginning not later than the first day of the Company's
fiscal quarter next following the Effective Date of the Registration
Statement, which earning statement shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 of the 1933 Act Regulations and which
need not be certified by independent public accountants unless required by
the 1933 Act.
(h) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
(i) If, at the Effective Date, any information shall have been
omitted therefrom in reliance upon Rule 430A(b) of the 1933 Act
Regulations, the Company will prepare, and file or transmit for filing
with the Commission in accordance with such Rule 430A(b) and Rule 424(b)
of the 1933 Act Regulations, copies of an amended Prospectus, or, if
required by such Rule 430A(b), a post-effective amendment to the
Registration Statement (including an amended Prospectus), containing all
information so omitted.
(j) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(k) During a period of [180] days from the date of this
Agreement, the Company will not, without the Representatives' prior
written consent, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Common Stock or any
security convertible into or exchangeable into or exercisable for Common
Stock (except for Common Stock issued pursuant to this Agreement or
pursuant to dividend reinvestment or employee benefit plans in effect on
the date hereof).
SECTION 4. Payment of Expenses. Except as otherwise provided
in this Agreement, the Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (a) the
printing and filing of the Registration Statement as originally filed and
of each amendment thereto, (b) the printing of this Agreement, (c) the
preparation, issuance and delivery of the certificates for the Securities
to the Underwriters, (d) the fees and disbursements of the Company's
counsel and accountants, (e) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the fee and disbursements of counsel for the
Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey (not to exceed in the aggregate
$6,000), (f) the printing and delivery to the Underwriters of copies of
the Registration Statement as originally filed and of each amendment
thereto, of the preliminary prospectuses, and of the Prospectus and any
amendments or supplements thereto, (g) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey, (h) fees payable in
connection with any required filing by the Underwriters with the National
Association of Securities Dealers Inc., and (i) the fees and expenses
incurred in connection with the listing of the Common Stock on the New
York Stock Exchange.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 hereof, the Company shall
reimburse the Underwriters for all of their reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for
the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters hereunder are subject to the accuracy, at
the date of this Agreement and at the Closing Time, of the representations
and warranties of the Company herein contained, to the performance by the
Company of its obligations hereunder, and to the following further
conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission. The price
of the Securities and any price-related information previously omitted
from the Registration Statement pursuant to Rule 430A(b) of the 1933 Act
Regulations shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) of the 1933 Act Regulations within the prescribed
time period and prior to Closing Time and the Company shall have provided
evidence satisfactory to the Representatives of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with such Rule
430A(b).
(b) At the Closing Time the Representatives shall have
received:
(1) The favorable opinion, dated as of Closing Time, of
Foley & Lardner, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Wisconsin and has corporate authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus; and to the best of
their knowledge and information, the Company is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required;
(ii) The authorized, issued and outstanding capital
stock of the Company is as set forth in Section 1(a)(viii) of
this Agreement and the shares of issued and outstanding Common
Stock have been duly authorized and validly issued and are fully
paid and non-assessable;
(iii) The Securities have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Company pursuant to this
Agreement against payment therefor, will be validly issued and
fully paid and non-assessable;
(iv) The issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of law,
under the charter or by-laws of the Company or, to the best of
their knowledge and information, otherwise;
(v) Each Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and, to
the best of their knowledge and information, is duly qualified
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required; all of the issued and outstanding capital stock of
each Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and, to the best of their
knowledge and information, is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(vi) This Agreement has been duly authorized,
executed and delivered by the Company;
(vii) The Registration Statement is effective under
the 1933 Act and, to the best of their knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission;
(viii) The Registration Statement, at the Effective
Date (including the information deemed to be included therein
pursuant to Rule 430A(b) of the 1933 Act Regulations), and the
Prospectus, at the date it was transmitted for filing to the
Commission pursuant to Rule 424(b) and as of the date hereof
(other than the financial statements and supporting schedules
included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations; and
the Incorporated Documents, at the time they were filed with the
Commission, complied as to form in all material respects with
the 1934 Act and the 1934 Act Regulations;
(ix) The Common Stock conforms to the description
thereof contained in the Prospectus, and the form of certificate
used to evidence the Common Stock is in due and proper form and
complies with all applicable statutory requirements;
(x) There are no legal or governmental proceedings
pending or threatened which are required to be disclosed in the
Prospectus, other than those disclosed therein, and to the best
of their knowledge and information, all pending legal or
governmental proceedings to which the Company or any subsidiary
is a party or to which any of their property is subject which
are not described in the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material;
(xi) There are no contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to
be described or referred to in the Registration Statement or to
be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as
exhibits thereto, the descriptions thereof or references thereto
are correct, and to the best of their knowledge and information,
no default exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument so described, referred to, or filed or
incorporated by reference;
(xii) No authorization, approval, consent or order of
any court or governmental authority or agency is required in
connection with the sale of the Securities to the Underwriters,
except such as may be required under the 1933 Act or the 1933
Act Regulations or state securities law; and, to the best of
their knowledge and information, the execution and delivery of
this Agreement and the consummation of the transactions
contemplated therein will not conflict with or constitute a
breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of the Subsidiaries pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company
or any of the Subsidiaries is subject, nor will such action
result in any violation of the provisions of the charter or by-
laws of the Company, or any applicable law, administrative
regulation or administrative or court decree; and
(xiii) Neither the Company nor any of its
subsidiaries is a party to any agreement entitling any person or
entity to require the Company to register any securities of the
Company owned of record or beneficially by such person or entity
as a result of the transactions contemplated by this Agreement,
or to file any registration statement in connection therewith.
(2) The favorable opinion, dated as of Closing Time, of
Winthrop, Stimson, Putnam & Roberts, counsel for the Underwriters,
with respect to the matters set forth in (iii) and (vi) to (ix),
inclusive, of subsection (b)(1) of this Section, except that, with
respect to the matters referred to in (ix), no opinion need be
expressed (A) as to whether any of the Company's outstanding shares
of Common Stock, other than the Securities, have been duly authorized
or validly issued or are fully paid or non-assessable or (B) with
respect to the statement that holders of Common Stock have no
preemptive rights, except to the extent that such rights may arise by
operation of law or under the charter or by-laws of the Company.
In giving such opinion, counsel for the Underwriters may rely
(i) as to all matters of Wisconsin law and legal conclusions based
thereon, upon the opinion of Foley & Lardner and (ii) as to matters
of fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
(3) In giving their opinions required by subsections
(b)(1) and (b)(2), respectively, of this Section, Foley & Lardner and
Winthrop, Stimson, Putnam & Roberts shall each additionally state
that nothing has come to their attention that would lead them to
believe that the Registration Statement (except for financial
statements and schedules and other financial or statistical data
included or incorporated by reference therein, as to which counsel
need make no statement), at the Effective Date or at the date hereof
(including the information deemed included therein pursuant to Rule
430A(b) of the 1933 Act Regulations), contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (except for financial statements
and schedules and other financial or statistical data included or
incorporated by reference therein, as to which counsel need make no
statement), at the date it was transmitted for filing to the
Commission pursuant to Rule 424 or at Closing Time, included or
includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(c) At the Closing Time there shall not have been, since the
date hereof or since the respective dates as of which information is given
in the Registration Statement and the Prospectus (without giving effect to
any amendment or supplement thereto), any material adverse change in the
financial or business condition or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President or
a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of the Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section l are true and correct with the
same force and effect as though expressly made at and as of the Closing
Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Time and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(d) At the time of the execution of this Agreement the
Representatives shall have received from the Independent Accountants a
letter dated the date of this Agreement, in form and substance
satisfactory to the Representatives, confirming, through a specified date
not more than five days prior to the date of this Agreement, that they are
independent certified accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act
Regulations and stating in effect that (i) in their opinion, the financial
statements and supplemental schedules of the Company and its subsidiaries
audited by them and incorporated by reference in the Prospectus and
included or incorporated by reference in the Company's most recent Form
10-K comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act Regulations and
(ii) on the basis of (1) procedures performed, as specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on the unaudited balance sheets and related unaudited
condensed statements of income, retained earnings and cash flows of the
Company incorporated by reference in the Registration Statement and
included in the Company's quarterly reports on Form 10-Q (collectively,
"Form 10-Qs"), (2) a reading of the latest unaudited operating revenues
and net income included or incorporated by reference in the Prospectus,
(3) a reading of the latest available unaudited financial statements of
the Company, (4) a reading of the minutes of the meetings of the
stockholder, the Board of Directors and the Executive Committee of the
Board of Directors of the Company as set forth in the minute books since
December 31, 1994, and (5) inquiries of certain officials of the Company
who have responsibility for financial and accounting matters (it being
understood that the foregoing procedures do not constitute an audit made
in accordance with generally accepted auditing standards and would not
necessarily reveal matters of significance with respect to the comments
made in such letter, and accordingly that the Independent Accountants make
no representations as to the sufficiency of such procedures for the
Representatives' purposes), nothing has come to their attention which
caused them to believe that (A) the unaudited financial statements
included in the Form 10-Qs do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act and
the 1934 Act Regulations, or that any material modifications should be
made to said unaudited financial statements for them to be in conformity
with generally accepted accounting principles, (B) on the date of the
latest available financial statements and on a specified date not more
than five days prior to the date of this Agreement, as the case may be,
there was any change in the common stock or long-term debt (except for
long-term debt acquired for sinking fund purposes or redeemed pursuant to
sinking fund provisions, or changes in obligations under capital leases
incurred in the ordinary course of the Company's business), of the
Company, or any decrease in its net assets (except as occasioned by the
declaration of dividends), in each case as compared with the amounts shown
in the most recent balance sheet included in the most recent Form 10-K or
Form 10-Q, except in all instances for changes or decreases which the
Registration Statement discloses have occurred or may occur, and (C) for
the period January 1, 1995 through the most recent month-end preceding the
date of the Prospectus there were any decreases in operating revenues or
net income compared to the corresponding period in the previous year.
Such letter shall also cover such other matters as the Representatives may
reasonably request.
(e) At the Closing Time the Representatives shall have received
from the Independent Accountants a letter, dated as of the Closing Time,
in form and substance satisfactory to the Representatives, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (d) of this Section 5, except that the specified date referred
to therein shall be a date not more than five days prior to the Closing
Time.
At the Option Closing Time, the Representatives shall receive
from the Independent Accountants a letter in respect of the Additional
Securities, dated the Option Closing Time, in form and substance
satisfactory to the Representatives, confirming as of a date not more than
five days prior to the date of the letter the statements contained in the
letters referred to above.
(f) At the time of the execution of this Agreement the
Representatives shall have received from Deloitte & Touche LLP, the
independent accountants for Hypro Corporation ("Hypro"), a letter dated
the date of this Agreement, in form and substance satisfactory to the
Representatives, with respect to financial information relating to Hypro
[and its subsidiaries] included or incorporated by reference in the
Registration Statement and the Prospectus as may be requested by the
Representatives.
(g) At the Closing Time and, with respect to the Additional
Securities, the Option Closing Time, counsel for the Underwriters shall
have been furnished with such documents as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form and
substance to counsel for the Underwriters.
(h) At the Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange upon notice of
issuance.
At the Option Closing Time, the Representatives shall be
entitled to receive the opinions and certificates described in subsections
(b) and (c) of this Section, modified to relate to the Additional
Securities.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representatives by notice to the Company at any time at
or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof.
SECTION 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter, its officers, directors,
employees and agents and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto) or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the Representatives), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is
not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Each Underwriter, acting severally and not jointly, agrees
to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense described
in the indemnity contained in subsection (a) of this Section 6, as
incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto). In
case any action shall be brought against the Company or any person so
indemnified based on the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) and in respect of which indemnity may be sought
against any Underwriter, such Underwriter shall have the rights and duties
given to the Company, and the Company and each person so indemnified shall
have the rights and duties given to the Underwriters in each case by the
provisions of subsection (a) of this Section 6.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
liability that it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in
the defense of such action. If it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any
other indemnifying parties receiving such notice, may assume the defense
of such action with counsel chosen by it reasonably satisfactory to such
indemnified parties in such action. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for
any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action; provided, however, that if such
indemnified parties reasonably object to such assumption on the ground
that there may be legal defenses available to them that are different from
or in addition to those available to such indemnifying party, then the
fees and expenses of separate counsel for the indemnified parties shall be
paid by the indemnifying parties. In no event shall the indemnifying
parties be liable for the fees and expenses of more than one counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction (plus local counsel)
arising out of the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in Section 6 hereof is for any reason held to be
unenforceable by the indemnified parties although applicable in accordance
with its terms, the Company and the Underwriters shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Company and one
or more of the Underwriters in respect of such offering in such
proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on
the cover page of the Prospectus bears to the initial public offering
price appearing thereon, and the Company is responsible for the balance;
provided, however, that person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements
contained in this Agreement, or contained in certificates of officers of
the Company submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company,
and shall survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement. (a) The Representatives,
in consultation with the other Underwriters, may terminate this Agreement,
by notice to the Company, at any time at or prior to the Closing Time, (i)
if there has occurred any outbreak of hostilities, or escalation thereof,
or other calamity or crisis, the effect of which is such as to make it, in
the judgment of the Representatives, impracticable to market the
Securities or to enforce contracts for the sale of the Securities or (ii)
if trading in the Common Stock has been suspended by the Commission or the
New York Stock Exchange, or trading generally on either the American Stock
Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices
for securities have been required, by either of such Exchanges or by order
of the Commission or any other governmental authority or (iii) if a
banking moratorium has been declared by either Federal, Wisconsin or New
York authorities.
(b) If this Agreement is terminated pursuant to this Section 9,
such termination shall be without liability of any party to any other
party except as provided in Sections 4 and 6 hereof.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time to purchase the
Securities that it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; provided, however,
that if the Representatives shall not have completed such arrangements
within such 24-hour period, then:
(a) If the number of Defaulted Securities does not exceed 10%
of the Securities, the non-defaulting Underwriters shall be obligated to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters.
(b) If the number of Defaulted Securities exceeds 10% of the
Securities, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company, except with respect to
the payment of expenses to be borne by the Company and the Underwriters as
provided in Section 4 hereof and the indemnities of the Company and the
Underwriters contained in Section 6 hereof.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either the Representatives or the Company
shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus, or any supplements or amendments
thereto, or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given
if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed to the Representatives, c/o
Merrill Lynch, Merrill Lynch World Headquarters, North Tower, World
Financial Center, New York, New York 10281-1327, attention of General
Counsel ________ _________; notices to the Company shall be directed to it
at 626 East Wisconsin Avenue, P. O. Box 334, Milwaukee, Wisconsin 53201,
attention of _______________, _______________.
SECTION 12. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the Underwriters and the Company and their respective
successors and the controlling persons and officers and directors referred
to in Section 6 hereof and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and
their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. Governing Law and Time. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State.
Specified times of day refer to New York City time.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters and the Company in accordance
with its terms.
Very truly yours,
WICOR, INC.
By
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DEAN WITTER REYNOLDS INC.
ROBERT W. BAIRD & CO. INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:_____________________________________________
Authorized Signatory
For themselves and as Representatives
of the other Underwriters named in Schedule A hereto.
<PAGE>
SCHEDULE A
Number
Name of Underwriter of Shares
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ...........................
Dean Witter Reynolds Inc. ................
Robert W. Baird & Co. Incorporated .......
_________
Total ............................... 1,100,000
WICOR, INC.
and
MANUFACTURERS HANOVER TRUST COMPANY
Rights Agent
________________
Rights Agreement
Dated as of August 29, 1989
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . 3
Section 3. Issue of Right Certificates . . . . . . . . . . . . . 3
Section 4. Form of Right Certificates . . . . . . . . . . . . . 5
Section 5. Countersignature and Registration . . . . . . . . . . 5
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates . . . . . . . . . . 6
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . . . . 6
Section 8. Cancellation and Destruction of Right Certificates . 8
Section 9. Reservation and Availability of Common Shares . . . . 8
Section 10. Common Shares Record Date . . . . . . . . . . . . . . 8
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights . . . . . . . . . . . . . 9
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . . . . . . 16
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . . 16
Section 14. Fractional Rights and Fractional Shares . . . . . . . 18
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . 19
Section 16. Agreement of Right Holders . . . . . . . . . . . . . 19
Section 17. Right Certificate Holder Not Deemed a Shareholder . . 20
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . 20
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . 20
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . 21
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . 23
Section 22. Issuance of New Right Certificates . . . . . . . . . 24
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . 24
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . 24
Section 25. Notice of Certain Events . . . . . . . . . . . . . . 26
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . 26
Section 27. Supplements and Amendments . . . . . . . . . . . . . 27
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . 27
Section 29. Benefits of this Agreement . . . . . . . . . . . . . 28
Section 30. Severability . . . . . . . . . . . . . . . . . . . . 28
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . 28
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . 28
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . 28
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
RIGHTS AGREEMENT
This Agreement, dated as of August 29, 1989, between WICOR,
Inc., a Wisconsin corporation (the "Company"), and Manufacturers Hanover
Trust Company, a bank organized and existing under the laws of the State
of New York (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one common share purchase right (a "Right") for
each Common Share (as hereinafter defined) of the Company outstanding on
September 14, 1989 (the "Record Date"), and has authorized and directed
the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined), each Right representing the right to
purchase one Common Share of the Company, subject to adjustment as
hereinafter provided, and upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the Common Shares of the Company then
outstanding, but shall not include the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms
of any such plan or any trustee, administrator or fiduciary of such a
plan. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20% or
more of the Common Shares of the Company then outstanding; provided,
however, that if a Person becomes the Beneficial Owner of 20% or more of
the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional Common Shares of
the Company (other than Common Shares acquired solely as a result of
corporate action of the Company not caused, directly or indirectly, by
such Person), then such Person shall be deemed to be an "Acquiring
Person."
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership of securities of the Company,
shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
New York, New York time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York, New York
time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $1.00, of the Company.
"Common Shares" when used with reference to any Person other than the
Company shall mean the capital stock (or equivalent equity interest) with
the greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
(j) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(l) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the
earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth Business Day (or such later date as may be determined by action of
the Company's Board of Directors prior to such time as any Person becomes
an Acquiring Person) after the date of the commencement of, or of the
first public announcement of the intention of any Person to commence, a
tender or exchange offer the consummation of which would result in any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company
or any entity holding Common Shares for or pursuant to the terms of any
such plan or any trustee, administrator, or fiduciary of such a plan)
becoming the Beneficial Owner of Common Shares aggregating 20% or more of
the then outstanding Common Shares (including in either case any such date
which is after the date of this Agreement and prior to the Record Date;
the earlier of such dates being herein referred to as the "Distribution
Date"; provided, however, that if the tenth day or Business Day, as the
case may be, after the pertinent date occurs before the Record Date,
"Distribution Date" shall mean the Record Date), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates)
and not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of
Common Shares. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid mail, to each
record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit A
hereto (a "Right Certificate"), dated as of the Distribution Date,
evidencing one Right for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Common
Shares, in substantially the form of Exhibit B hereto (the "Summary of
Rights"), by first class, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Record Date, at the
address of such holder shown on the records of the Company. With respect
to certificates for Common Shares outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such stock
certificates registered in the names of the holders thereof together with
a copy of the Summary of Rights attached thereto. Until the Distribution
Date (or the earlier of the Redemption Date or Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in
the last sentence of this paragraph (c)) after the Record Date but prior
to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between WICOR, Inc. and Manufacturers
Hanover Trust Company dated as of August 29, 1989 (the
"Rights Agreement"), as may be amended from time to
time, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal executive offices of WICOR, Inc. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. WICOR, Inc. will mail to the holder of
this certificate a copy of the Rights Agreement
without charge after receipt of a written request
therefor. As described in the Rights Agreement,
Rights issued to, or held by, an Acquiring Person or
any Affiliate of or Associate thereof (as such terms
are defined in the Rights Agreement), whether held by
such Person or any subsequent holder shall become null
and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires
any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed
cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Common Shares and of
assignment to be printed on the reverse thereof) shall be substantially
the same as Exhibit A hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Rights may
from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates, when issued,
shall entitle the holders thereof to purchase such number of Common Shares
as shall be set forth therein at the price per Common Share set forth
therein (the "Purchase Price"), but the amount and type of securities
purchasable upon exercise of each Right and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its President
or any Vice President, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
individual who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
Rights Agreement any such individual was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date and certificate number of each of the
Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. (a) Subject to the provisions of Section 14 hereof, at any
time after the close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates (other
than Right Certificates representing Rights that have become void pursuant
to Section 11(a)(ii) hereof or that have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of Common Shares as the Right Certificate
or Right Certificates surrendered then entitle such holder to purchase.
Any registered holder desiring to transfer, split up, combine or exchange
any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction
or mutilation of a Right Certificate and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if mutilated,
the Company will make and deliver a new Right Certificate of like tenor to
the Rights Agent for delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) Each Right (except as otherwise provided herein)
shall be exercisable to purchase one Common Share, subject to further
adjustment as provided herein. The registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at
the principal office of the Rights Agent, together with payment of the
Purchase Price for each Common Share as to which the Rights are exercised,
at or prior to the earliest of (i) the close of business on August 29,
1999 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), and
(iii) the time at which such Rights are exchanged as provided in Section
24 hereof.
(b) The Purchase Price for each Common Share pursuant to the
exercise of Rights shall initially be $75, shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be
payable in lawful money of the United States of America or in Common
Shares in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the Common Shares to be
purchased as set forth below and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate
in accordance with Section 9 hereof, the Rights Agent shall thereupon
promptly (i) requisition from any transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional Common Shares
in accordance with Section 14 hereof, (iii) after receipt of such Common
Share certificates, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name
or names as may be designated by such holder, and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered
holder of such Right Certificate. The payment of the Purchase Price shall
be made in cash or by certified check, cashier's check, bank draft or
money order payable to the order of the Company, except that, if so
provided by the Board of Directors of the Company, the payment of the
Purchase Price following the occurrence of a Section 11(a)(ii) Event (as
such term is hereinafter defined) and until the first occurrence of a
Section 13 Event (as such term is hereinafter defined) may be made wholly
or in part by delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing a number of
Common Shares equal to the then Purchase Price divided by the closing
price (as determined pursuant to Section 11(d) hereof) per Common Share on
the Trading Day (as such term is hereinafter defined) immediately
preceding the date of such exercise.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder
of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to take any
action with respect to a registered holder of a Right Certificate upon the
occurrence of any purported transfer, assignment or exercise as set forth
in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate following the form of assignment or election to
purchase set forth on the reverse of the Right Certificate surrendered for
such transfer, assignment or exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the
Rights Agent for cancellation or in cancelled form, or, if surrendered to
the Rights Agent, shall be cancelled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all cancelled Right Certificates to the Company or shall, at
the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Common Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Common Shares or any
authorized and issued Common Shares held in its treasury, the number of
Common Shares that will be sufficient to permit the exercise in full of
all outstanding Rights in accordance with Section 7.
(b) If the Common Shares issuable upon the exercise of Rights
are then listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all Common Shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable, except as
otherwise provided by Section 180.40(6) of the Wisconsin Statutes and
judicial interpretations thereof.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any Common Shares upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates for the Common Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates for Common Shares
upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax is due.
Section 10. Common Shares Record Date. Each Person in whose
name any certificate for Common Shares is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date
of such surrender and payment is a date upon which the Common Shares
transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common
Shares transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Common Shares covered
by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Shares payable
in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine
the outstanding Common Shares into a smaller number of Common Shares or
(D) issue any shares of its capital stock in a reclassification of the
Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when
the Common Shares transfer books of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one Right. If
an event occurs which would require an adjustment under both Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event
(A) any Person shall become an Acquiring Person, other than
pursuant to any transaction set forth in Section 13(a), or
(B) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock
split), or recapitalization or reorganization of the Company, or any
merger or consolidation of the Company with any of its Subsidiaries or any
other transaction or series of transactions (whether or not with or into
or otherwise involving an Acquiring Person), other than a transaction or
transactions to which the provisions of Section 13(a) apply, which has the
effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding Common Shares or outstanding shares
of any class of equity securities or securities exercisable for or
convertible into Common Shares of the Company or any of its Subsidiaries
beneficially owned by any Acquiring Person or any Affiliate or Associate
thereof, or
(C) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Company or otherwise
combine with the Company, the Company shall be the continuing or surviving
corporation of such merger or combination, and the Common Shares shall
remain outstanding and shall not be changed or exchanged, (2) in one or
more transactions, transfer any assets to the Company in exchange (in
whole or in part) for Common Shares or for securities exercisable for or
convertible into Common Shares or otherwise obtain from the Company, with
or without consideration, any additional Common Shares or securities
exercisable for or convertible into Common Shares (other than as part of a
pro rata distribution to all holders of Common Shares), (3) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose
(in one transaction or a series of transactions), to, from or with the
Company or any of its Subsidiaries, assets on terms and conditions less
favorable to the Company than the Company would be able to obtain through
arm's-length negotiation with an unaffiliated third party, (4) receive any
compensation from the Company or any of its Subsidiaries other than
compensation for full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past practices, or
(5) receive the benefit, directly or indirectly (except proportionately as
a shareholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage provided by
the Company or any of its Subsidiaries,
each holder of a Right shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of Common Shares for which a Right is then
exercisable, in accordance with the terms of this Agreement, such number
of Common Shares as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of Common Shares for which a
Right is then exercisable and dividing that product by (y) 50% of the then
current per share market price of the Common Shares (determined pursuant
to Section 11(d)) on the date of the occurrence of any of the events
described in clauses (A), (B) or (C) above (such number of shares, the
"Adjustment Shares").
From and after the first occurrence on any of the events
described in clauses (A), (B) or (C) above (a "Section 11(a)(ii) Event"),
any Rights that are or were acquired or beneficially owned by such
Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be void and any holder of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof;
no Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to any nominee
of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence shall
be cancelled.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess, the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or
other equity securities of the Company, including, without limitation,
shares, or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same value as Common
Shares (such shares of preferred stock, hereinafter referred to as "common
stock equivalents"), (4) debt securities of the Company, (5) other assets
or (6) any combination of the foregoing, having an aggregate value equal
to the Current Value, where such aggregate value has been determined by
the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, if the Company shall not have
made adequate provision to substitute for the Adjustment Shares pursuant
to clause (B) above within thirty (30) days following the occurrence of a
Section 11(a)(ii) Event (the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Purchase Price, Common Shares
(to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely
that sufficient additional Common Shares might be authorized for issuance
for exercise in full of the Rights, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some action need
be taken pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to the last paragraph
of Section 11(a)(ii) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period to seek any authorization
of additional shares and/or to decide the appropriate form of distribution
to be made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Shares shall be the current per share
market price (as determined pursuant to Section 11(d) hereof) of the
Common Shares on the Section 11(a)(ii) Trigger Date and the value of any
"common stock equivalent" shall be deemed to have the same value as the
Common Shares on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Shares (or securities
convertible into Common Shares) at a price per Common Share (or having a
conversion price per share, if a security convertible into Common Shares)
less than the then current per share market price of the Common Shares (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price
and the denominator of which shall be the number of Common Shares
outstanding on such record date plus the number of additional Common
Shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Common Shares owned by or held for
the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share
market price of the Common Shares (as defined in Section 11(d)) on such
record date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Common Share and the
denominator of which shall be such current per share market price of the
Common Shares; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date
had not been fixed.
(d) For the purpose of any computation hereunder, the "current
per share market price" of the Common Shares on any date shall be deemed
to be the average of the daily closing prices per Common Share for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the current
per share market price of the Common Shares is determined during a period
following the announcement by the issuer of such Common Shares of (i) a
dividend or distribution on such Common Shares payable in Common Shares or
securities convertible into Common Shares, or (ii) any subdivision,
combination or reclassification of Common Shares and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the current market
price per Common Share. The closing price for each Trading Day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Common Shares are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then in use, or, if on
any such date the Common Shares are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Shares selected by
the Board of Directors of the Company. The term "Trading Day" shall mean
a day on which the principal national securities exchange on which the
Common Shares are listed or admitted to trading or NASDAQ, as the case may
be, is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange or
NASDAQ, as the case may be, a Business Day.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least
1% in the Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest one-hundredth of a share as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from
the date of the transaction which requires such adjustment or (ii) the
date of the expiration of the right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Common
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13
with respect to the Common Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Common
Shares purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of Common Shares (calculated to the nearest one-hundredth of a
Common Share) obtained by (i) multiplying (x) the number of Common Shares
covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of Common Shares purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
Common Shares for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one one-hundredth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights
to which such holders shall be entitled after such adjustment. Right
Certificates to be so distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Common Shares issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of Common Shares
which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the Common
Shares issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable (except as otherwise provided by Section 180.40(6) of the
Wisconsin Statutes) Common Shares at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Common Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the Common
Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision
of the Common Shares, issuance wholly for cash of any Common Shares at
less than the current market price, issuance wholly for cash of Common
Shares or securities which by their terms are convertible into or
exchangeable for Common Shares, dividends on Common Shares payable in
Common Shares or issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of
Common Shares shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), if at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 and
13 hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts accounting for
such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation
or merger, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the
outstanding Common Shares shall be changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, and
in each such case, proper provision shall be made so that: (i) each holder
of a Right (except as otherwise provided herein) shall thereafter have the
right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of Common Shares for which
a Right is then exercisable (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of any of the events described in clauses
(x), (y) or (z) above (a "Section 13 Event"), the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event
multiplied by the number of Common Shares for which a Right was
exercisable immediately prior to such first occurrence), in accordance
with the terms of this Agreement, such number of validly authorized and
issued, fully paid, nonassessable (except as otherwise required by any
corporation law applicable to the Principal Party (as such term is
hereinafter defined)) and freely tradeable Common Shares of the Principal
Party, not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of Common Shares
for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior
to the first occurrence of a Section 13 Event, multiplying the number of
such shares for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing that
product (which, following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d) hereof) per Common Share of such
Principal Party on the date of consummation of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its Common
Shares) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares are converted in
such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the
preceding twelve (12) month-period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Shares of which are and have been so registered,
"Principal Party" shall refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer
of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized Common Shares which have not been issued
or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the
Rights and the securities purchasable upon exercise of the Rights on
an appropriate form, and will use its best effort to cause such
registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final Expiration
Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that
a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the principal national
securities exchange on which the Rights are listed or admitted to trading
or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is
making a market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions of
Common Shares upon exercise of the Rights or to distribute certificates
which evidence fractional Common Shares. In lieu of fractional Common
Shares, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one Common Share. For purposes of this Section 14(b), the current market
value of a Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to the
Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Shares), without the consent of the Rights Agent or of
the holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in
the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Shares certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or other distributions or be deemed
for any purpose the holder of the Common Shares or any other securities of
the Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof)
or proceedings of the Company (except as provided herein), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by
it in connection with, its administration of this Agreement in reliance
upon any Right Certificate or certificate for the Common Shares or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or corporate trust business
of the Rights Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and in
all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the
President or any Vice President and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or
in the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Common Shares or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Common Shares or other
securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be by required by the Rights Agent for the carrying out
or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting
for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in, or act as the
transfer agent for, any of the Rights, Common Shares or other securities
of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and
to each transfer agent of the Common Shares by registered or certified
mail, and to the holders of the Right Certificates by first class mail at
the Company's expense. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares by registered or certified mail, and
to the holders of the Right Certificates by first class mail at the
Company's expense. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
authorized to do business as a banking institution, organized and doing
business under the laws of the United States or of the State of New York
or the State of Wisconsin (or, in the discretion of the Board of Directors
of the Company, any other state of the United States), in good standing,
having an office in the State of New York or the State of Wisconsin (or,
in the discretion of the Board of Directors of the Company, any other
state of the United States), which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus
of at least $50 million, or (b) an Affiliate of a corporation described in
clause (a) of this sentence. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with
the provisions of this Agreement.
Section 23. Redemption. (a) The Rights may be redeemed by
action of the Board of Directors pursuant to subsection (b) of this
Section 23 and shall not be redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option,
at any time prior to such time as any Person becomes an Acquiring Person,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(c) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the redemption of the Rights
pursuant to subsection (b) of this Section 23, and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after the effectiveness of the action of
the Board of Directors ordering the redemption of the Rights pursuant to
subsection (b) the Company shall mail a notice of redemption to all the
holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment
of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after any Person becomes an
Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares
at an exchange ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary,
or any entity holding Common Shares for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a)
of this Section 24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute (i) common stock equivalents (as such term
is defined in Section 11(a)(iii) hereof) or (ii) common shares of any
subsidiary of the Company (such common shares hereinafter referred to as
"subsidiary shares") for some or all of the Common Shares exchangeable for
Rights.
(d) In the event that there shall not be sufficient Common
Shares, common stock equivalents or subsidiary shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take
all such action as may be necessary to authorize additional Common Shares,
common stock equivalents or subsidiary shares for issuance upon exchange
of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of the Right certificates with regard
to which such fractional Common Shares would otherwise be issued an amount
in cash equal to the same fraction of the current market value of a whole
Common Share. For the purposes of this paragraph (e), the current market
value of a whole Common Share shall be the closing price of a Common Share
(as determined pursuant to the second sentence of Section 11(d) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
Section 25. Notice of Certain Events. (a) In case the
Company shall propose, after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Common Shares or
to make any other distribution to the holders of Common Shares (other than
a regular quarterly cash dividend), (ii) to offer to the holders of Common
Shares rights or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of Common Shares
(other than a reclassification involving only the subdivision of
outstanding Common Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, or
(v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares if any such date
is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of Common Shares for purposes of such
action, and in the case of any such other action, at least 10 days prior
to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares, whichever shall
be the earlier.
(b) In case any Section 11(a)(ii) Event or Section 13 Event
shall occur, then the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall
include a brief summary of the Section 11(a)(ii) Event or Section 13
Event, as the case may be, and the consequences thereof to holders of
Rights.
Section 26. Notices. (a) Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
WICOR, Inc.
777 East Wisconsin Avenue
P.O. Box 334
Milwaukee, Wisconsin 53201
Attention: Secretary
(b) Subject to the provisions of Section 21 hereof, any notice
or demand authorized by this Agreement to be given or made by the Company
or by the holder of any Right Certificate to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Manufacturers Hanover Trust Company
450 West 33rd Street
New York, New York 10001
Attention: Vice President,
Stock Transfer Administration
(c) Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Right
Certificate shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this Section
27, the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval
of any holders of certificates representing Common Shares. Without
limiting the foregoing, the Company may at any time prior to such time as
any Person becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof from 20% to not less
than 10%, with appropriate exceptions for Persons then beneficially owning
Common Shares of the Company constituting a percentage of the number of
Common Shares then outstanding equal to or in excess of the new threshold.
From and after the Distribution Date and subject to the penultimate
sentence of this Section 27, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change
or supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); provided,
that from and after the Distribution Date this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of
Rights. Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be
made which changes the Redemption Price, the Final Expiration Date, the
Purchase Price or the number of Common Shares for which a Right is
exercisable. Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the holders of
Common Shares.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Wisconsin and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State, except that
the rights, duties and obligations of the Rights Agent under this
Agreement shall be governed by the laws of the State of New York.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year
first above written.
WICOR, INC.
Attest:
By: /s/ Robert A. Nuernberg By: /s/ Stuart W. Tisdale
Title: Secretary Title: President
MANUFACTURERS HANOVER
TRUST COMPANY
Attest:
By: /s/ R. Poplasky By: /s/ William R. Hogan
Title: Asst. Vice President Title: Vice President
<PAGE>
Exhibit A
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER AUGUST 29, 1999 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
WICOR, INC.
This certifies that ________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of August 29, 1989 (the
"Rights Agreement"), between WICOR, Inc., a Wisconsin corporation (the
"Company"), and Manufacturers Hanover Trust Company, a bank organized and
existing under the laws of the State of New York (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M., New York,
New York time, on August 29, 1999 at the principal office of the Rights
Agent, or at the office of its successor as Rights Agent, one fully paid
nonassessable (except as otherwise provided by Section 180.40(6) of the
Wisconsin Statutes) share of common stock, par value $1.00 ("Common
Shares"), of the Company, at a purchase price of $75 per Common Share (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of
Common Shares which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of August 29, 1989, based on the Common Shares as constituted at
such date. As provided in the Rights Agreement, the Purchase Price and
the number of Common Shares which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the principal office of the
Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent,
may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of Common Shares as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in
part for Common Shares.
The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, but prior to such
Person's acquisition of 50% or more of the outstanding Common Shares,
exchange the Rights evidenced by this Certificate for Common Shares, at an
exchange ratio of one Common Share per Right, subject to adjustment, as
provided in the Rights Agreement.
No fractional Common Shares will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights Agreement), or to
receive dividends, distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______________, 19__.
ATTEST: WICOR, INC.
By
Title:
Countersigned:
By
Authorized Signature
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Right
Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_______________________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: _______________________, 19__
Signature
Signature Guaranteed:
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights Agreement).
Signature
-----------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To WICOR, Inc.:
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to
purchase the Common Shares issuable upon the exercise of such Rights and
requests that certificates for such Common Shares be issued in the name
of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ___________________, 19__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
[Form of Reverse Side of Right Certificate -- continued]
------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights Agreement).
Signature
------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election
must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be
honored.
<PAGE>
Exhibit B
WICOR, INC.
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On August 29, 1989, the Board of Directors of WICOR, Inc. (the
"Company") declared a dividend of one common share purchase right (a
"Right") for each outstanding share of common stock, par value $1.00 (the
"Common Shares"), of the Company. The dividend is payable to the
shareholders of record on September 14, 1989 (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company one
Common Share at a price of $75 per Common Share, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company
and Manufacturers Hanover Trust Company, as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 20% or more
of the outstanding Common Shares (the "Shares Acquisition Date") or (ii)
10 business days (or such later date as may be determined by action of the
Board of Directors prior to such time as any person becomes an Acquiring
Person) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would
result in the beneficial ownership by a person or group of 20% or more of
such outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate with a copy of this Summary of Rights attached
thereto.
The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after the Record Date, upon
transfer or new issuance of Common Shares, will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender
for transfer of any certificates for Common Shares, outstanding as of the
Record Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on August 29, 1999 (the "Final Expiration Date"),
unless the Rights are earlier redeemed or exchanged by the Company, in
each case, as described below.
The Purchase Price payable, and the number of Common Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares, (ii) upon the grant to holders of
the Common Shares of certain rights or warrants to subscribe for or
purchase Common Shares at a price, or securities convertible into Common
Shares with a conversion price, less than the then current market price of
the Common Shares or (iii) upon the distribution to holders of the Common
Shares of evidences of indebtedness or assets (excluding regular quarterly
cash dividends or dividends payable in Common Shares) or of subscription
rights or warrants (other than those referred to above).
In the event that, at any time following the Shares Acquisition
Date, (i) the Company is acquired in a merger or other business
combination transaction or (ii) 50% or more of its consolidated assets or
earning power are sold (the events described in clauses (i) and (ii) are
herein referred to as "Flip-Over Events"), proper provision will be made
so that the holders of Rights will thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price, that number
of shares of common stock of the acquiring company which at the time of
such transaction will have a market value of two times the then current
Purchase Price.
In the event that (i) any person becomes an Acquiring Person,
(ii) the Company is the surviving corporation in a merger with an
Acquiring Person and the Common Shares are not changed or exchanged, (iii)
an Acquiring Person engages in one of a number of self-dealing
transactions specified in the Rights Agreement, or (iv) during such time
as there is an Acquiring Person, an event occurs which results in such
Acquiring Person's ownership interest being increased by more than 1% (the
events described in clauses (i) - (iv) are herein referred to as "Flip-In
Events"), the holders of Rights will thereafter have the right to receive
upon exercise that number of Common Shares (or, in certain circumstances
cash, property or other securities of the Company or a reduction in the
Purchase Price) having a market value of two times the then current
Purchase Price. Notwithstanding any of the foregoing, following the
occurrence of any Flip-In Event all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, or subsequently
become beneficially owned by an Acquiring Person or his transferees will
be null and void.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at
least one percent in such Purchase Price. No fractional shares will be
issued. In lieu of fractional shares, an adjustment in cash will be made
based on the market price of the Common Shares on the last trading day
prior to the date of exercise.
The Purchase Price is payable in cash or by certified check,
cashier's check, bank draft or money order or, if so provided by the
Company, the Purchase Price following the occurrence of a Flip-In Event
and until the first occurrence of a Flip-Over Event may be paid in Common
Shares having an equivalent value.
At any time after a person becomes an Acquiring Person and prior
to the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Acquiring Person
which have become void), in whole or in part, at an exchange ratio of one
Common Share (or any authorized equivalent equity security) per Right
(subject to adjustment).
At any time prior to a person becoming an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the rights may be made effective at such time on such basis
and with such conditions as the Board of Directors in its sole discretion
may establish. Immediately upon any redemption of the Rights, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Other than provisions relating to the principal economic terms
of the Rights, the terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
including an amendment to lower the threshold for exercisability of the
Rights from 20% to not less than 10%, with appropriate exceptions for a
person or group then beneficially owning a percentage of the number of
Common Shares then outstanding equal to or in excess of the new threshold,
except that from and after the Distribution Date no such amendment may
adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A filed with respect to the Rights. A copy of the
Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
FOLEY & LARDNER
A T T O R N E Y S A T L A W
FIRSTAR CENTER
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202-5367
A MEMBER OF GLOBALEX
WITH MEMBER OFFICES IN
MADISON BERLIN
CHICAGO TELEPHONE (414) 271-2400 BRUSSELS
WASHINGTON, D.C. DRESDEN
JACKSONVILLE TELEX 26-819 FRANKFURT
ORLANDO LONDON
TALLAHASSEE (FOLEY LARD MIL) PARIS
TAMPA SINGAPORE
WEST PALM BEACH FACSIMILE (414) 297-4900 STUTTGART
TAIPEI
WRITER'S DIRECT LINE
(414) 297-5644
October 20, 1995
WICOR, Inc.
626 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Gentlemen:
We have acted as counsel for WICOR, Inc., a Wisconsin
corporation (the "Company"), with respect to the preparation of a
Registration Statement on Form S-3 (the "Registration Statement"),
including the prospectus constituting a part thereof (the "Prospectus"),
to be filed by the Company with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act"),
relating to 1,100,000 shares of Common Stock, $1.00 par value, of the
Company (the "Common Stock") and the associated rights to purchase shares
of Common Stock accompanying such shares of Common Stock (the "Rights"),
together with up to 165,000 additional shares of Common Stock and Rights
being registered to cover the over-allotment option to be granted by the
Company to the underwriters. The terms of the Rights are as set forth in
that certain Rights Agreement, dated as of August 29, 1989, by and between
the Company and Chemical Bank (f/k/a Manufacturers Hanover Trust Company)
(the "Rights Agreement").
In connection with our representation, we have examined: (a)
the Registration Statement, including the Prospectus; (b) the exhibits
(including those incorporated by reference) constituting a part of said
Registration Statement; (c) the Restated Articles of Incorporation and By-
Laws of the Company, as amended to date; (d) the Rights Agreement; (e)
resolutions of the Company's Board of Directors relating to the
authorization of the issuance of the securities subject to the
Registration Statement; and (f) such other proceedings, documents and
records as we have deemed necessary to enable us to render this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing under the
laws of the State of Wisconsin.
2. The shares of Common Stock covered by the Registration
Statement, when the price thereof has been determined by action of the
Special Committee of the Company's Board of Directors and when issued and
paid for in the manner contemplated in the Registration Statement and
Prospectus, will be validly issued, fully paid and nonassessable, except
with respect to wage claims of, or other debts owing to, employees of the
Company for services performed, but not exceeding six months service in
any one case, as provided in Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law and as such section may be interpreted by a court
of law.
3. The Rights when issued pursuant to the terms of the Rights
Agreement will be validly issued.
We consent to the use of this opinion as an exhibit to the
Registration Statement and to the references to our firm therein. In
giving our consent, we do not admit that we are "experts" within the
meaning of Section 11 of the Securities Act or within the category of
persons whose consent is required by Section 7 of the Securities Act.
Very truly yours,
FOLEY & LARDNER
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated February
2, 1995 included in and incorporated by reference in WICOR, Inc.'s Form
10-K for the year ended December 31, 1994 and to all references to our
firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
October 20, 1995
