Filed Pursuant to Rule 424(b)(5)
Registration No. 033-64361
Prospectus
MADISON GAS AND ELECTRIC COMPANY
Dividend Reinvestment and Direct Stock Purchase Plan
(Investors Plus Plan)
1,776,513 Shares
Madison Gas and Electric Company hereby offers participation in
its Dividend Reinvestment and Direct Stock Purchase Plan. The
Plan is designed to provide investors with a convenient way to
purchase shares of our common stock and to reinvest all or a
portion of the cash dividends paid in common stock.
Participants in the Plan may:
* Make a direct initial investment in common stock with a cash
payment of no less than $50 and no more than $25,000 per
account.
* Increase their investment in common stock by making optional
cash payments of no less than $25 per payment and no more than
$25,000 for each calendar quarter per account.
* Reinvest all or a portion of cash dividends paid on common
stock registered in their names or on common stock credited to
their Plan accounts in additional shares of common stock.
* Receive cash dividends on any or all shares of common stock by
check or electronic deposit to a designated account.
* Receive, upon written request, certificates for whole shares
of common stock credited to their Plan account.
* Sell common stock credited to their Plan account through the
Plan.
* Deposit certificates representing shares of common stock into
the Plan for safekeeping.
Shares acquired under the Plan will be either shares purchased
on the open market by an independent agent selected by us, newly
issued shares, or treasury shares. The purchase price of shares
purchased on the open market will be the weighted average
purchase price, including normal brokerage commissions, carried
to four decimal places, of shares acquired on the open market by
the agent. The purchase price of newly issued shares or treasury
shares will be the average of the quoted closing prices, carried
to four decimal places, for the common stock as reported on the
Nasdaq National Market for the period of five trading days ending
on the dividend date or investment date. The sale price to
participants of shares sold through the Plan will be the market
price, including normal brokerage commissions, carried to four
decimal places, of shares purchased by the agent. We will pay all
costs of administration of the Plan, excluding normal brokerage
commissions.
The common stock is quoted on the Nasdaq National Market under
the symbol "MDSN."
Shares of common stock offered under the Plan are offered
through a registered broker-dealer selected by us.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
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The date of this Prospectus is September 30, 1999
MADISON GAS AND ELECTRIC COMPANY
We are a public utility engaged in the generation and
transmission of electric energy and in its distribution in
Madison and its environs (250 square miles) and in the purchase,
transportation, and distribution of natural gas in Madison and
the immediately surrounding territory (1,325 square miles). Our
principal executive offices are located at 133 South Blair
Street, Post Office Box 1231, Madison, WI 53701-1231, and our
telephone number is (608) 252-7000.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other
information with the Securities and Exchange Commission (SEC).
You may read and copy any document we file at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, DC 20549.
Our SEC filings are also available to the public over the
Internet on the SEC's Web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the
information we file with them, which means that we can disclose
important information to you by referring you to those documents.
The information incorporated by reference is considered part of
this prospectus, and information that we file later with the SEC
will automatically update and supersede this information. We
incorporate by reference the following documents we filed with
the SEC (file number 0-1125) and any further filings that we make
with the SEC under Section 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934:
* Our Annual Report on Form 10-K for the year ended December 31,
1998;
* Our Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999, and June 30, 1999.
You may request a copy of these filings at no cost, by writing
or calling:
Jeffrey C. Newman
Treasurer
Madison Gas and Electric Company
133 South Blair Street
Post Office Box 1231
Madison, WI 53701-1231
(608) 252-7000
You should rely only on the information incorporated by
reference or provided in this prospectus and any prospectus
supplement. We have not authorized anyone else to provide you
with different information.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide participants a simple
and convenient method of purchasing shares of our common stock
with initial investments, dividends, and optional cash payments.
If shares are purchased from our authorized but unissued shares
or from our treasury, we will receive additional funds which will
be used for general corporate purposes.
ADVANTAGES AND DISADVANTAGES
2. What are the advantages of the Plan?
* Persons and entities not presently owning shares of
common stock may become shareholders by making an initial direct
investment of no less than $50 and no more than $25,000 per
account (see Question 15).
* Additional investments in common stock may be made by
participants through optional cash payments for as little as $25
per payment, up to $25,000 per calendar quarter per account (see
Question 15).
* All or a portion of common stock dividends may be
automatically reinvested in additional shares of common stock
(see Question 9).
* Full investment of funds is possible under the Plan
because the Plan permits fractional shares to be credited to
participants' accounts (see Question 11).
* Our employees who participate in the Plan may arrange for
optional cash payments to be made through payroll deductions (see
Question 15).
* Shares purchased are credited to an account in the
participant's name, and a statement is furnished following each
transaction, thereby providing a simplified method of record
keeping (see Question 17).
* Participants may deposit common stock certificates into
their Plan accounts for safekeeping, whether or not the common
stock represented by such certificates was purchased through the
Plan. This convenience is provided at no cost to the participant
and eliminates the possibility of loss, inadvertent destruction,
or theft of certificates (see Question 23).
* Participants may transfer shares held in their Plan
account to another individual or entity at no cost. The normal
transfer requirements will apply.
* Participants may receive cash dividends on any or all
shares of common stock by check or electronic deposit to a
designated account (see Questions 9 and 20).
3. What are the disadvantages of the Plan?
* Participants have no control over the price at which
shares are purchased or sold through the Plan or the timing of
such purchases or sales. A participant bears the market risk
associated with fluctuations in the price of the common stock
pending the execution of a purchase or sale of shares for the
participant's account (see Questions 12 and 25).
* No interest is paid on funds pending investment (see
Question 14).
* Requests for issuance of certificates or the sale of
shares from a Plan account (withdrawals) may be delayed during
the dividend processing period. Requests for other changes in
Plan participation may also be delayed during this period (see
Question 25).
COSTS
4. Are there any expenses to participants under the Plan?
When common stock purchased under the Plan is newly issued
or treasury shares, rather than purchased on the open market,
there are no expenses to participants because shares are
purchased from Madison Gas and Electric Company and no brokerage
commission is incurred. When common stock is purchased on the
open market under the Plan, the price per share paid by the
participant includes normal brokerage commissions incurred to
acquire the shares. Because purchases are consolidated, a
participant's proportionate share of brokerage commissions
resulting from open market purchases should be lower than the
commissions for individual purchases. Shares sold through the
Plan will incur normal brokerage commissions (see Questions 12
and 25).
We will pay all costs of administration of the Plan,
excluding normal brokerage commissions incurred to purchase
shares on the open market or to sell shares. Participants will
receive advance notice if we determine not to pay all
administrative costs.
ADMINISTRATION
5. How will the Plan be administered?
We administer the Plan, performing only clerical and
ministerial functions such as keeping a continuing record of
participants' accounts, advising them of purchases and other
transactions, and performing other duties relating to the Plan.
We believe that our serving as administrator rather than a
registered broker-dealer or a federally insured banking
institution poses no material risks to participants because of
the administrative nature of the functions we perform. In
addition, initial investments and optional cash investments will
be transmitted promptly to a segregated escrow account at a bank
or to the independent agent and will not be subject to any liens
or claims of any creditors of Madison Gas and Electric Company.
Purchases of common stock for the accounts of participants will
be registered in the name of the Plan nominee (a bank) as
custodian for participants in the Plan.
PARTICIPATION
6. Who is eligible to participate?
Any interested person or entity making an initial investment
of at least $50 and all registered shareholders are eligible to
participate. Beneficial owners of common stock registered in
others' names, such as brokers or bank trustees and nominees, who
want to participate by reinvesting dividends paid on these shares
may be required by their brokers or banks to withdraw their
shares from the beneficial accounts and register the shares in
their own names.
7. How do eligible investors participate?
After receiving a prospectus, investors may join the Plan by
signing an enrollment form and returning it to Madison Gas and
Electric Company, Shareholder Services Department, Post Office
Box 1231, Madison, WI 53701-1231 (see Question 9). Enrollment
forms may be obtained at any time by written request to us, by
telephoning us at the appropriate toll-free number listed on page
14 of this prospectus, or by downloading the form from our Web
site (www.mge.com). Investors making first-time purchases of
common stock must submit the enrollment form with the initial
investment to purchase common stock or arrange for the initial
investment to be made through a payroll deduction (see Questions
14 and 15). A person who is a current owner of common stock must
sign an enrollment form exactly as such person's name appears on
his or her common stock certificate. If the common stock is
registered to more than one person, each person must sign the
enrollment form. A person or persons who are making an initial
investment must specify exactly how the shares to be purchased
are to be registered and sign their names accordingly.
8. When may an eligible investor join the Plan?
Eligible investors may join the Plan at any time.
Participation for reinvestment of dividends will commence with
the next common stock cash dividend date (currently on or about
March 15, June 15, September 15, and December 15) after we
receive, at least 15 days prior to the dividend date, a properly
completed enrollment form. If the enrollment form is not received
in time, participation through reinvestment of dividends will be
delayed until the following dividend date.
Optional cash payments received by us prior to the close of
business on the "investment date," defined as the 15th day of
each month (or the next business day thereafter if the 15th day
of the month is not a business day) and initial investments with
a properly completed enrollment form received at least three
business days prior to the investment date will be invested
monthly on the investment date.
9. What does an enrollment form authorize?
An enrollment form authorizes us in our capacity as
administrator of the Plan to enroll participants under the
following options:
* Legal name under which shares are to be registered:
- Individual or joint--Joint accounts will be presumed to
be joint tenants with right of survivorship unless otherwise
indicated.
- Custodial--A minor child is the beneficial owner of the
account with an adult custodian managing the account until the
minor comes of age as specified in the Uniform Gifts/Transfers to
Minors Act in the minor's state of residence.
- Transfer on Death (TOD)--The beneficiary of a TOD
registration may be an individual or other entity. Only one
beneficiary is allowed per TOD account.
- Trust--Trust accounts are established in accordance
with the provisions of a trust agreement.
- Corporation, partnership, or other entity.
* Method of dividend payments:
- Full dividend reinvestment--Reinvest all dividends:
dividends paid on shares held by the participant, dividends on
shares held in the participant's Plan account, and any initial
investment and optional cash payments will be invested in common
stock and credited to the participant's Plan account.
- Partial dividend reinvestment--Reinvest a portion of
dividends: participants may request cash dividends on a
designated percentage of shares held by the participant and held
in the participant's Plan account, as indicated by the
participant on the enrollment form. Dividends paid on remaining
shares and any optional cash payments will be invested in common
stock and credited to the participant's Plan account.
- No dividend reinvestment--Pay all cash dividends:
receive all cash dividends on shares held by the participant and
in the participant's Plan account. Participants may purchase
shares through the Plan with an initial investment and optional
cash payments.
* Certificate safekeeping--Existing stockholders may
deposit any MGE stock certificates they are holding into their
accounts for safekeeping (see Question 23).
* Telephone transactions--Participants may authorize us to
take certificate issuance or sell orders by telephone. We will
employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. This procedure may include
personal identification via taxpayer identification number,
account number, and address of record.
* The enrollment form incorporates an IRS Substitute
Form W-9 with which the participant can certify that the taxpayer
identification number shown on the enrollment form is correct and
that the participant is not subject to backup withholding (see
accompanying IRS information on backup withholding).
* The enrollment form also acknowledges the participant's
receipt of this prospectus and acceptance of participation
subject to the terms and conditions of the Plan as described in
this prospectus.
If the enrollment form is incomplete upon receipt by us, we
will return the enrollment form and any payment for stock
purchase to the participant.
SOURCE OF SHARES AND USE OF PROCEEDS
10. What is the source of and use of proceeds from common stock
purchased under the Plan?
Shares purchased under the Plan will be shares purchased on
the open market by the independent agent, newly issued shares, or
treasury shares. If shares purchased under the Plan are purchased
on the open market, we will not receive any additional funds from
such purchases. If shares to be purchased under the Plan will be
newly issued shares, we will be required to request an order from
the Public Service Commission of Wisconsin approving such
purchases. If shares purchased under the Plan are newly issued or
treasury shares, we will receive additional funds from such
purchases to be used for general corporate purposes, including
the financing of capital expenditures, the refinancing of
indebtedness, and possible investments and acquisitions.
PURCHASES
11. How many shares of common stock will be purchased for
participants?
The number of shares to be purchased depends on the amount
of a participant's initial investment, optional cash payment,
dividend, or a combination thereof, and the price of the shares.
Each participant's account will be credited with that number of
shares, including fractions computed to four decimal places,
equal to the total amount invested divided by the purchase price.
12. What will be the price of shares of common stock purchased
under the Plan?
When shares are purchased on the open market, the price per
share to participants will be the weighted average purchase
price, including normal brokerage commissions, carried to four
decimal places, of shares acquired on the open market by the
independent agent. Because purchases are consolidated, a
participant's proportionate share of brokerage commissions
resulting from open market purchases should be lower than the
commissions for individual purchases. The agent is a securities
broker-dealer registered under the Securities Exchange Act of
1934 who is a market maker in the common stock and will purchase
shares of common stock as agent for the participants in the Plan.
The purchases will be made in over-the-counter market purchases
or negotiated transactions on terms determined by the agent.
When shares are purchased from authorized but unissued
shares of common stock or from our treasury, the price per share
of shares to participants will be the average of the quoted
closing prices for the common stock as reported on the Nasdaq
National Market for the period of five trading days ending on the
dividend date or investment date (or the period of five trading
days immediately preceding the dividend date or the investment
date if the Nasdaq National Market is closed on such date). In
each case, the price will be calculated to four decimal places.
We will pay all costs of administration of the Plan,
excluding normal brokerage commissions incurred to purchase
shares on the open market or to sell shares.
13. When will dividend funds be invested?
On each dividend date, the dividends on any designated
shares registered in the names of the participants, as well as on
the common stock held in the Plan accounts of the participants,
will be invested in common stock as of such dividend date, along
with optional cash payments received prior to the close of
business on such dividend date (see Question 8). Dividends that
are not invested within 30 days of the dividend date will be paid
to the shareholder. For administrative purposes, the actual
crediting of the common stock to a participant's account and the
purchase of shares through the Plan may take place several days
after each dividend date.
INITIAL INVESTMENTS AND OPTIONAL CASH PAYMENTS
14. When must the initial investments and optional cash payments
be made?
Initial investments must be received with a properly
completed enrollment form at least three business days prior to
the investment date (see Question 8 for definition of investment
date). On each investment date, we will invest any optional cash
payments received prior to the close of business on the
investment date and initial investments in common stock for the
account of such participant. If received after the investment
date, we may hold the investment until the next investment date.
Initial investments and optional cash payments that are not
invested within 35 days of receipt will be returned to the
participant. Only participants who have properly completed,
signed, and returned an enrollment form as provided in
Questions 8 and 9 are eligible to make an initial investment and
optional cash payments.
A participant may withdraw an initial investment or optional
cash payment by notifying our Shareholder Services Department in
writing not less than two business days before an investment
date. Any withdrawn amount will be returned as promptly as
practicable without interest.
We will acknowledge receipt of all initial investments and
optional cash payments. No interest will be paid on initial
investments and optional cash payments held by us pending
investment. Participants are requested not to send cash.
15. How are initial investments and optional cash payments made?
Participants may make initial investments of not less than
$50 and optional cash payments of not less than $25 per payment
nor more than $25,000 for each calendar quarter per account. When
enrolling in the Plan, an initial investment and optional cash
payment may be made by the participant by enclosing with the
enrollment form a check or money order payable to the order of
Madison Gas and Electric Company. Thereafter, optional cash
payments may be made through the use of the remittance form for
optional cash payments sent by us to participants. We will
promptly transmit all initial investments and optional cash
payments to the segregated escrow account at a bank or to the
independent agent.
It is recommended that all payments be made so as to reach
us at least five business days prior to the investment date. Each
payment by a participant must be made by check or money order
payable to the order of Madison Gas and Electric Company and the
same amount of money need not be sent each time, subject to the
minimum and maximum payment levels. There is no obligation to
make optional cash payments.
Employees of Madison Gas and Electric Company or its
subsidiaries participating in the Plan may arrange for an initial
investment or optional cash payments to be made through payroll
deductions. The $50 and $25 minimum payment requirement for
initial investments and optional cash payments, respectively,
will not apply to payments made through payroll deductions.
Application forms for such employee payroll deductions are
available from our Shareholder Services Department. Commencement,
revision, or termination of payroll deductions will become
effective as soon as practicable after receipt of the request.
16. What happens if a check is returned unpaid by a
participant's financial institution?
In the event that any check is returned unpaid for any
reason and we are unable to collect funds from the participant,
we will consider the request for investment of such funds null
and void. We will remove from the participant's account any
shares purchased upon the prior credit of such funds. Those
shares may be sold to satisfy any uncollected amount. If the net
proceeds of such sale are insufficient to satisfy the balance of
such uncollected amount, additional shares may be sold from the
participant's account as necessary to satisfy the uncollected
balance.
REPORTS TO PARTICIPANTS
17. What kind of reports will be sent to participants in the
Plan?
Each participant will receive a statement of account
following each purchase or sale of common stock for the
participant's account under the Plan. Statements of account will
be issued quarterly for all Plan participants and for each month
when the participant purchases or sells shares. Quarterly
statements of account are cumulative, showing activity for all
three months of the quarter and calendar year to date. Account
statements are the participant's continuing record of purchases
and should be retained for income tax purposes. The final
statement of the calendar year will indicate the total dividends
credited to the participant's account for the year for the
participant's Plan account, and a Form 1099-DIV will be issued to
each participant for use in reporting dividends received for
income tax purposes.
For participants who are not making optional cash payments
or reinvesting dividends but have shares held in the Plan,
information regarding share balances and year-to-date dividends
will accompany their dividend check.
18. What other communications will participants receive from
Madison Gas and Electric Company?
Each participant will receive the same communications as
every other shareholder of record, including Quarterly Reports,
the Annual Report, the Notice of Annual Meeting of Shareholders
and the Proxy Statement, Proxy, and income tax information,
including 1099 forms for reporting dividends and sale proceeds
received by the participant. See Question 29 regarding voting of
proxies.
DIVIDENDS ON FRACTIONS OF SHARES AND ELECTRONIC DEPOSIT
19. Will participants be paid or credited with dividends on
fractions of shares?
Yes.
20. Will Madison Gas and Electric Company automatically deposit
dividends which are not reinvested directly into a participant's
designated account?
In lieu of receiving dividends by check, a participant may
receive dividends by electronic deposit to a designated account.
A participant must complete and sign a direct deposit
authorization form and return it to Madison Gas and Electric
Company, Shareholder Services Department, Post Office Box 1231,
Madison, WI 53701-1231. Direct deposit will become effective as
soon as practicable after receipt of a properly completed direct
deposit authorization form. Changes in direct deposit
instructions may be made by delivering a new properly completed
direct deposit authorization form.
CERTIFICATES FOR SHARES
21. Will certificates be issued for the common stock purchased?
Normally, certificates for common stock purchased under the
Plan will not be issued to participants. Instead, the common
stock purchased for each participant will be credited to the
participant's Plan account and will be shown on the participant's
statement of account. This convenience protects against loss,
theft, or destruction of common stock certificates. See
Question 17 regarding issuance of statements of account.
Certificates for any number of whole shares credited to an
account under the Plan will be issued in the participant's name
upon the written request of a participant. A participant must
furnish separate written instructions to us each time the
issuance of certificates is desired. Requests should be mailed to
Madison Gas and Electric Company, Shareholder Services
Department, Post Office Box 1231, Madison, WI 53701-1231.
Requests for certificates will be handled without charge to
participants, but participants are restricted to one request per
quarter.
Certificates for fractions of shares will not be issued to a
participant under any circumstances. See Questions 24 and 25
regarding withdrawal of fractional shares from the Plan.
Common stock credited to the account of a participant under
the Plan may not be pledged. A participant who wishes to pledge
common stock must request that certificates for such common stock
be issued in his or her name.
22. In whose name will certificates be registered when issued?
Accounts in the Plan will be maintained in a participant's
name as shown on our shareholder records. Certificates for whole
shares will be similarly registered when issued.
Upon written request, certificates can also be registered
and issued in names other than that of a participant, subject to
compliance with any applicable laws and to payment by the
participant of any applicable taxes, and provided that the
request, in proper form, bears the signature of the participant
and the signature is guaranteed by an eligible financial
institution acceptable to our transfer agent.
SAFEKEEPING OF CERTIFICATES
23. Can certificates be sent to Madison Gas and Electric Company
for safekeeping?
Participants who wish to have us hold their certificated
shares in safekeeping may send the certificate(s) to us for
deposit to a Plan account in the participant's name. Send the
certificate, unsigned, with an enrollment form to Madison Gas and
Electric Company, Shareholder Services Department, Post Office
Box 1231, Madison, WI 53701-1231. Enrollment forms may be
obtained at any time by writing to us or telephoning us at the
appropriate toll-free number listed on page 14. It is recommended
the certificate(s) be sent by registered or certified mail,
return receipt requested. Participants bear all risk of loss in
sending certificates for safekeeping. Certificates received for
safekeeping will be canceled and registered in the name of the
nominee as custodian for participants in the Plan. Participants
using safekeeping services must advise us as to their choice of
dividend payment options by indicating their choice on the
enrollment form under "Participation."
WITHDRAWAL
24. What are the options for withdrawal of common stock from the
Plan?
When a participant withdraws all or a portion of his or her
common stock from the Plan, the participant has five options. A
participant may elect (i) to have a certificate issued for all of
the whole shares credited to the participant's Plan account and
receive a cash payment for any fraction of a share, (ii) to have
us sell all of the participant's Plan shares and receive a check
for the proceeds, (iii) to have a certificate issued for a
specified number of whole shares to be withdrawn from the Plan,
leaving the remaining shares in the Plan, (iv) to have us sell a
specified number of Plan shares and receive a check for the
proceeds, leaving the remaining shares in the Plan, or (v) to
discontinue reinvestment of dividends but continue to have shares
held in safekeeping.
25. When and how may participants withdraw all or a portion of
their common stock from the Plan?
A participant may withdraw from the Plan at any time by
sending a written request to Madison Gas and Electric Company,
Shareholder Services Department, Post Office Box 1231, Madison,
WI 53701-1231.
When a participant requests to withdraw all of his or her
common stock from the Plan, termination of participation in the
Plan will be effective upon the issuance of a certificate or sale
of his or her common stock. If a participant withdraws all of his
or her common stock from the Plan and requests a certificate for
the shares, a certificate for all of the whole shares credited to
the participant's Plan account will be issued and a cash payment
representing any fraction of a share will be mailed directly to
the participant. The cash payment to each such participant will
be based on the actual sale price when accumulated fractional
sales of withdrawing participants are sold through the Plan.
If a request for withdrawal is received less than 30 days
preceding a dividend date, the request may be held until dividend
processing is complete.
Sales of whole shares and any fractional shares will be made
directly to the independent agent. The sale price to participants
of shares sold through the Plan will be the market price,
including normal brokerage commissions, carried to four decimal
places, of shares purchased by the agent. Sale proceeds will be
mailed to the participant. Sales of whole and fractional shares
may be accumulated; sales transactions will, however, normally
occur weekly and at least every 30 days. Participants will
receive certificates for shares or cash for shares which are sold
no later than 30 days after our receipt of the written notice of
withdrawal.
We cannot guarantee that shares will be sold on any specific
day or at any specific price.
26. When may former participants rejoin the Plan?
Generally, a former participant may again become a
participant at any time (see Question 8). However, we reserve the
right to reject any enrollment form from a previous participant
on grounds of excessive joining and termination. Such reservation
is intended to minimize unnecessary administrative expense and to
encourage use of the Plan as a long-term investment service.
OTHER INFORMATION
27. When and how may participants change their status concerning
dividend reinvestment in the Plan?
Participants may change their status at any time by
indicating a new designation on an enrollment form. However, if a
participant's request to change is received less than 30 days
preceding a dividend date, the dividend paid on such date may, at
our option, be processed under the participant's previous
designation. All requests to change will be processed as promptly
as possible.
28. What happens if Madison Gas and Electric Company issues a
stock dividend or declares a stock split?
Any stock dividends or split shares distributed by us on
common stock held in the Plan for a participant will be credited
to the participant's Plan account. Stock dividends or split
shares distributed on certificated shares registered in the name
of a participant will be registered in the participant's name and
may be issued in certificate form.
29. How will participants' common stock be voted at meetings of
shareholders?
The common stock credited to a participant's account may
only be voted in accordance with the participant's instructions
given on a proxy form which will be furnished to all
shareholders.
30. What is the responsibility of Madison Gas and Electric
Company and the nominee under the Plan?
Neither Madison Gas and Electric Company, the independent
agent, the nominee, nor any agents, in administering the Plan,
will be liable for any act done in good faith, or for any
omission to act in good faith, including, without limitation, any
act giving rise to a claim of liability arising out of failure to
terminate a participant's account upon such participant's death
prior to the receipt of notice in writing of such death.
A participant should recognize that neither Madison Gas and
Electric Company, the independent agent, the nominee, nor any
agents can assure a profit or protect against a loss on the
common stock purchased or sold under the Plan.
The foregoing does not affect a participant's right to bring
a cause of action based on alleged violations of federal
securities laws.
31. What provision is made for shareholders whose dividends are
subject to tax withholding?
In the case of participating shareholders whose dividends
are subject to tax withholding, we will invest an amount equal to
the cash dividend less the amount of tax required to be withheld.
Only the net dividend will be applied by us to the purchase of
common stock. Our quarterly statements for such participants will
indicate the amount of tax withheld and the net dividend
reinvested.
32. Can the Plan be changed or discontinued?
We reserve the right to suspend, modify, or terminate the
Plan at any time. Notice of any such suspension, modification, or
termination will be sent to all affected participants.
33. Who interprets and regulates the Plan?
We reserve the right to interpret and regulate the Plan.
34. Which law governs the Plan?
The Plan is governed by and construed in accordance with the
laws of the State of Wisconsin.
FEDERAL TAX CONSEQUENCES
The federal tax information in Questions 35 through 37 is
provided only as a guide to noncorporate participants, who are
urged to consult with their own tax advisors for more specific
information on rules regarding the tax consequences of the Plan
under federal and state income tax laws and the tax basis of
shares held under the Plan in special cases, such as death of a
participant or a gift of such shares and for other tax
consequences.
Because state income tax laws vary between states,
information on state tax consequences is not discussed in this
prospectus. Plan participants are urged to consult with their own
tax advisors regarding the tax consequences of Plan participation
under the specific state income tax laws with which they must
abide.
35. What are the federal income tax consequences of
participation in the Plan?
Participants in the Plan, in general, have the same federal
income tax obligations with respect to dividends on their common
stock as do shareholders who are not participants in the Plan.
Cash dividends which a participant elects to have reinvested
under the Plan will be treated for federal income tax purposes as
having been received even though the participant does not
actually receive cash but, instead, purchases common stock under
the Plan.
Participants in the Plan will not recognize any income for
federal income tax purposes upon the purchase of shares of common
stock with initial investments and optional cash payments. See
Question 36 regarding the tax basis of such shares.
36. What is the federal tax basis of shares of common stock
acquired under the Plan?
In order to determine the tax basis of shares acquired under
the Plan and for other tax consequences, the participant is
advised to consult with the participant's tax advisor.
37. What are the federal income tax consequences of a sale of
common stock acquired under the Plan?
A participant will not realize any federal taxable income
upon receipt of certificates for whole shares of common stock
previously credited to the participant's account, whether upon
request, withdrawal from the Plan, or our termination of the
Plan. However, gain or loss will be realized when shares are sold
and with respect to any cash payment by us for a fractional
share. The gain or loss will be equal to the difference between
the amount received for such shares and the participant's tax
basis therefor. If shares of common stock acquired under the Plan
are held for more than one year, the gain or loss realized upon
the sale thereof generally will be long-term capital gain or
loss; if such shares are held for a shorter period, such gain or
loss will be short-term capital gain or loss.
DESCRIPTION OF COMMON STOCK
General
Our Articles of Incorporation authorize us to issue
50,000,000 shares of common stock, of which 16,079,718 shares
were issued and outstanding as of September 1, 1999, and
1,175,000 shares of cumulative preferred stock, no shares of
which are outstanding. None of the common stock has been redeemed
or is held as treasury stock.
The following statements are summaries relating to the
common stock of certain provisions of the Articles, of the
Wisconsin Business Corporation Law, and of our Indenture of
Mortgage and Deed Trust (the "Indenture").
Voting rights noncumulative voting
Except as described below under "Limitation of Voting Rights
of Substantial Shareholders," each share of common stock entitles
the holder thereof to one vote for each share held on each matter
submitted to a vote at a meeting of shareholders and in all
elections of directors. Since the common stock does not have
cumulative voting rights, the holders of more than 50% of the
shares, if they choose to do so, can elect all of the directors.
The holders of common stock exclusively possess the full voting
power of Madison Gas and Electric Company.
Limitation of voting rights of substantial shareholders
Our Articles of Incorporation provide that so long as any
person is a Substantial Shareholder (as defined), the record
holders of the shares of our Voting Stock (as defined)
beneficially owned by such Substantial Shareholder have limited
voting rights. These provisions may render more difficult or
discourage a merger or takeover of Madison Gas and Electric
Company, the acquisition of control of Madison Gas and Electric
Company by a Substantial Shareholder, and the removal of
incumbent management. "Voting Stock" is defined to include common
stock and any class or series of preferred or preference stock
then outstanding entitling the holder thereof to vote on the
matter with respect to which a determination is being made,
unless the shareholders or board of directors expressly exempt
such class or series from such provisions.
A "Substantial Shareholder" is defined as any person or
entity (other than Madison Gas and Electric Company or a
subsidiary and other than employee benefit plans of Madison Gas
and Electric Company or any subsidiary and the trustees thereof),
or any group formed for the purpose of acquiring, holding,
voting, or disposing of shares of Voting Stock, that is the
beneficial owner of Voting Stock representing 10% or more of the
votes entitled to be cast by the holders of all the then
outstanding shares of Voting Stock. For purposes of our Articles
of Incorporation, a person is deemed to be a "beneficial owner"
of any shares of Voting Stock which such person (or any of its
affiliates or associates) beneficially owns, directly or
indirectly, or has the right to acquire or to vote, or which are
beneficially owned, directly or indirectly, by any other person
with which such person (or any of its affiliates or associates)
has an agreement, arrangement, or understanding for the purpose
of acquiring, holding, voting, or disposing of Voting Stock.
A Substantial Shareholder (including the shareholders of
record of its beneficially owned shares) is entitled to cast one
vote per share (or such other number of votes per share as may be
specified in or pursuant to our Articles of Incorporation) with
respect to the shares of Voting Stock which would entitle such
Substantial Shareholder to cast up to 10% of the total number of
votes entitled to be cast in respect of all the outstanding
shares of Voting Stock. With respect to shares of Voting Stock
that would entitle such Substantial Shareholder to cast more than
10% of such total number of votes, however, the Substantial
Shareholder is entitled to only one/one-hundredth (1/100th) of
the votes per share which it would otherwise be entitled to cast.
In addition, in no event may such Substantial Shareholder
exercise more than 15% of the total voting power of the holders
of Voting Stock (after giving effect to the foregoing
limitations).
If the shares of Voting Stock beneficially owned by a
Substantial Shareholder are held of record by more than one
person, the aggregate voting power of all such persons, as
limited by the provisions described above, will be allocated in
proportion to the number of shares held. In addition, the
Articles provide that a majority of the voting power of all the
outstanding shares of Voting Stock (after giving effect to the
foregoing limitations on voting rights) constitutes a quorum at
all meetings of shareholders.
The following is an example of how the foregoing provisions
would operate if Madison Gas and Electric Company had 1,000
outstanding shares of Voting Stock. If a Substantial Shareholder
beneficially owned 600 of the shares, he or she would be entitled
to 100 votes for his or her first 100 shares and, on the basis of
the limitation on voting rights with respect to shares in excess
of 10%, an additional five votes for his or her remaining 500
shares. These 105 votes would be out of a total of 505 votes then
entitled to be cast (that is, 105 votes by the Substantial
Shareholder and 400 votes by all other shareholders). Then,
because these 105 votes would constitute 21% of the total number
of votes, the provisions of the Articles would further limit the
Substantial Shareholder to approximately 71 votes of a total of
approximately 471 entitled to be cast by all shareholders (15% of
the total number of votes entitled to be cast). As a result of
the limitation of the Substantial Shareholder's voting rights,
the voting power of the other shareholders increases from 40% to
85%.
As this illustration makes clear, beneficial owners of more
than 10% of the outstanding shares of Voting Stock will be unable
to exercise voting rights proportionate to their equity
interests.
Generally, Section 180.1150 of the Wisconsin Statutes states
that the voting power of shares of certain Wisconsin
corporations, including Madison Gas and Electric Company, held by
any person in excess of 20% of the voting power in the election
of directors is limited to 10% of his or her full voting power.
In other words, a person holding 500 shares of such a corporation
with 1,000 shares outstanding would be limited to 230 votes on
any matter subjected to a shareholder vote. Full voting power may
be restored if a majority of the voting power shares represented
at a meeting are voted in favor of such a restoration.
Dividend rights
Dividends may be paid upon the common stock as and when
declared by the board of directors out of any funds legally
available therefor.
Under the terms of three supplemental indentures to the
indenture, so long as any of the bonds authorized by any such
supplemental indenture are outstanding, dividends on the common
stock cannot exceed retained income less such dividends less the
excess of the maintenance and replacement requirements over the
maintenance, repairs, and depreciation expenses, in each case
accumulated since December 31, 1945. No portion of retained
income is so restricted at this time.
Under the terms of all other supplemental indentures to the
indenture, so long as any of the bonds authorized by any such
supplemental indenture are outstanding, dividends on the common
stock cannot exceed retained income less such dividends, in each
case accumulated since December 31, 1945. No portion of retained
income is so restricted at this time.
Liquidation rights
In the event Madison Gas and Electric Company is liquidated
or dissolved, after all of our liabilities have been paid, and
after any holders of any other stock having senior liquidation
preferences to common stock have been paid or had funds set aside
in accordance with our Articles of Incorporation, the holders of
the then outstanding common stock are entitled to receive pro
rata the remaining assets available for distribution.
Preemptive and subscription rights
No holder of any class of stock of Madison Gas and Electric
Company, including the common stock, has any preemptive or
subscription rights.
Liability to further calls or to assessment
The shares of common stock, when issued and delivered by
Madison Gas and Electric Company and paid for as herein
contemplated, will be fully paid and nonassessable by Madison Gas
and Electric Company. However, in accordance with Section
180.0622(2)(b) of the Wisconsin Business Corporation Law,
shareholders may be personally liable for an amount equal to the
par value for all debts owing to our employees for services
performed, but not exceeding six months' service in any one case.
Miscellaneous
We reserve the right to increase, decrease, or reclassify
its authorized capital stock, or any class or series thereof, and
to amend or repeal any provisions in our Articles of
Incorporation or in any amendment thereto in the manner now or
hereafter prescribed by law, subject to the limitations in our
Articles of Incorporation; and all rights conferred on the
holders of common stock in the Articles or any amendment thereto
are subject to this reservation. There are no conversion rights
with respect to any class of capital stock of Madison Gas and
Electric Company.
COMMON STOCK DIVIDENDS AND MARKET
We have paid dividends on common stock in varying amounts
since we became publicly held.
Our practice of paying dividends quarterly (in March, June,
September, and December), the time of payment, and the amount of
future dividends are necessarily dependent upon earnings, our
financial requirements, and other factors.
The common stock is quoted on the Nasdaq National Market
under the symbol "MDSN."
Information and assistance with respect to the Plan may be
obtained through our Web site (www.mge.com); by e-mailing our
Shareholder Services Department ([email protected]); by
writing to Madison Gas and Electric Company, Shareholder Services
Department, Post Office Box 1231, Madison, WI 53701-1231; or by
telephoning us at the appropriate toll-free number:
252-4744 from Madison, Wisconsin
1-800-356-6423 Continental U.S.
A participant should include his or her name, address,
account number, telephone number during business hours, and
taxpayer identification number with all correspondence.
Participants should notify us of any change in address.
LEGAL MATTERS
Legal matters with respect to the common stock offered
hereby have been passed upon for us by Gary J. Wolter, Senior
Vice President - Administration and Secretary of the Company.
Mr. Wolter beneficially owns shares of common stock.
EXPERTS
The consolidated financial statements and financial
statement schedules of Madison Gas and Electric Company and its
subsidiaries as of December 31, 1998, 1997, and 1996 and for the
years then ended included (or incorporated by reference) in our
Annual Report on Form 10-K for the year ended December 31, 1998,
incorporated by reference herein, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as indicated
in their report with respect thereto, and are so incorporated by
reference herein in reliance upon the authority of said firm as
experts in accounting and auditing matters.
TABLE OF CONTENTS
Page
Madison Gas and Electric Company . . . . . . . . . . . . . . . .2
Where You Can Find More Information. . . . . . . . . . . . . . .2
Description of the Plan. . . . . . . . . . . . . . . . . . . . .2
Description of Common Stock. . . . . . . . . . . . . . . . . . 12
Common Stock Dividends and Market. . . . . . . . . . . . . . . 14
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . 14
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
MADISON GAS AND ELECTRIC COMPANY
DIVIDEND REINVESTMENT AND
DIRECT STOCK PURCHASE PLAN
(INVESTORS PLUS PLAN)
PROSPECTUS
September 30, 1999
