<PAGE>
As filed with the Securities and Exchange Commission on March 1, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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WEC CAPITAL TRUST I
WEC CAPITAL TRUST II
WISCONSIN ENERGY CORPORATION (Exact name of each Registrant as
(Exact name of Registrant as specified specified in its Trust Agreement)
in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
WISCONSIN
(State or other jurisdiction of (To Be Applied For)
incorporation or organization) (I.R.S. Employer Identification No.)
39-1391525 c/o Wisconsin Energy Corporation
(I.R.S. Employer Identification No.) 231 West Michigan Street
P. O. Box 2949
231 West Michigan Street Milwaukee, Wisconsin 53201
P. O. Box 2949 (414) 221-2345
Milwaukee, Wisconsin 53201 (Address, including zip code, and
(414) 221-2345 telephone number, including area code,
(Address, including zip code, and of Registrants' principal executive
telephone number, including area code, offices)
of Registrant's principal executive
offices)
CALVIN H. BAKER
Treasurer and Chief Financial Officer
Wisconsin Energy Corporation
231 West Michigan Street
P. O. Box 2949
Milwaukee, Wisconsin 53201
(414) 221-2345
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------
Copies to:
BRUCE C. DAVIDSON GARY W. WOLF
Quarles & Brady LLP Cahill Gordon & Reindel
411 East Wisconsin Avenue 80 Pine Street
Milwaukee, Wisconsin 53202 New York, New York 10005
(414) 277-5000 (212) 701-3600
Approximate date of commencement of proposed sale of the securities to the
public: At such time or from time to time after the effective date of this
Registration Statement as the Registrants shall determine in light of market
conditions and other factors.
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, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum Amount of
Title of each class of Amount to be offering price aggregate registration
securities to be registered registered per unit offering price fee
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<S> <C> <C> <C> <C>
Debt Securities of Wisconsin
Energy Corporation............. (1) (2) (3) $300,000,000(3) $83,400(4)
Preferred Securities of WEC
Capital Trust I................
Preferred Securities of WEC
Capital Trust II...............
Guarantees of Preferred
Securities of WEC Capital Trust
I and WEC Capital Trust II by
Wisconsin Energy Corporation
(5)............................
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</TABLE>
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(1) Such indeterminate number or amount of Debt Securities of Wisconsin Energy
Corporation and Preferred Securities of WEC Capital Trust I and WEC Capital
Trust II as may from time to time be issued at indeterminate prices. Junior
Subordinated Debt Securities may be issued and sold to WEC Capital Trust I
and WEC Capital Trust II, in which event such Junior Subordinated Debt
Securities may later be distributed to the holders of Preferred Securities
upon a dissolution of WEC Capital Trust I and WEC Capital Trust II and the
distribution of the assets thereof. Securities registered hereunder (the
"Securities") may be sold separately, together or as units with other
Securities registered hereunder.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign currencies
or foreign currency units as shall result in an aggregate initial offering
price for all Securities not to exceed $300,000,000. If any Debt Securities
are issued at an original issue discount, such greater amount as may result
in the initial offering price for Securities aggregating $300,000,000. In
addition, this Registration Statement includes such presently indeterminate
number of Securities as may be issuable from time to time upon conversion
or exchange of the Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933. Accordingly, the
table does not specify by each class information as to the amount to be
registered or the proposed maximum offering price per unit.
(4) Calculated pursuant to Rule 457(o) (at the statutory rate of .000278 of the
maximum aggregate offering price) and paid with this filing of the
Registration Statement.
(5) Wisconsin Energy Corporation is also registering under this Registration
Statement all other obligations that it may have with respect to Preferred
Securities issued by WEC Capital Trust I and WEC Capital Trust II. No
separate consideration will be received for any Guarantee or any other such
obligations.
----------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
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 or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
<PAGE>
EXPLANATORY NOTE
This Registration Statement includes a prospectus to be used in connection
with offerings of (a) preferred securities issued by WEC Capital Trusts I and
II, severally, (b) debt securities issued by Wisconsin Energy Corporation,
including junior subordinated debentures issued to WEC Capital Trusts I and II,
and (c) guarantees by Wisconsin Energy Corporation of the preferred securities
issued severally by WEC Capital Trusts I and II. Each offering of securities
made under this Registration Statement will be made pursuant to this
prospectus, with the specifications of the securities offered thereby set forth
in an accompanying prospectus supplement. The prospectus may not be used to
consummate sales of securities unless accompanied by a prospectus supplement.
The prospectus supplement for the offering of preferred securities to be
issued by WEC Capital Trust I follows immediately after this Explanatory Note
which is then followed immediately by the related prospectus for the offering
of (a) the preferred securities issued by WEC Capital Trusts I and II,
severally, (b) the debt securities issued by Wisconsin Energy Corporation and
(c) the guarantees of the preferred securities issued severally by WEC Capital
Trusts I and II, and certain back-up obligations of Wisconsin Energy
Corporation.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus supplement is not complete and +
+may be changed. We may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This preliminary prospectus supplement is not an offer to sell these +
+securities and it is not soliciting an offer to buy these securities in any +
+state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 1, 1999
PROSPECTUS SUPPLEMENT
(To Prospectus Dated , 1999)
Preferred Securities
WEC CAPITAL TRUST I
% Trust Preferred Securities (TruPS(R))
($25 liquidation amount per Preferred Security)
Fully and unconditionally guaranteed, as described herein, by
[WISCONSIN ENERGY LOGO]
A brief description of the % Trust Preferred Securities (TruPS(R)) can be
found under "SUMMARY INFORMATION--Q&A" in this prospectus supplement.
--------
Application will be made to list the % Trust Preferred Securities
(TruPS(R)) on the New York Stock Exchange. If approved, we expect trading of
the % Trust Preferred Securities (TruPS(R)) to begin within 30 days after
they are first issued.
Investing in the Trust Preferred Securities (TruPS(R)) involves risks. See
"RISK FACTORS" beginning on page S-6.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
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<TABLE>
<CAPTION>
Per Trust
Preferred Security Total
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<S> <C> <C>
Public offering price............................ $ $
Underwriting commissions to be paid by Wisconsin
Energy Corporation.............................. See below. See below.
Proceeds to WEC Capital Trust I.................. $ $
</TABLE>
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Underwriting commissions of $ per % Trust Preferred Security (or
$ for all % Trust Preferred Securities) (TruPS(R)) will be paid by
Wisconsin Energy Corporation; except that for sales of or more % Trust
Preferred Securities (TruPS(R)) to a single purchaser, the commissions will be
$ per % Trust Preferred Security.
We expect that the % Trust Preferred Securities (TruPS(R)) will be ready
for delivery in book-entry form only through The Depository Trust Company on or
about , 1999.
"TruPS(R)" is a registered service mark of Salomon Smith Barney Inc.
Salomon Smith Barney
[Underwriter]
[Underwriter]
, 1999.
<PAGE>
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You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement and the accompanying
prospectus is accurate as of the date on the front of this prospectus
supplement only. Our business, financial condition, results of operations and
prospects may have changed since that date.
TABLE OF CONTENTS
<TABLE>
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Page
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Prospectus Supplement
<S> <C>
Summary Information--Q&A.................................................. S-3
Risk Factors.............................................................. S-6
Use of Proceeds........................................................... S-9
Selected Financial Information............................................ S-9
Capitalization............................................................ S-9
Accounting Treatment...................................................... S-9
Description of Securities................................................. S-10
Certain Terms of the Preferred Securities................................. S-10
Certain Terms of the Junior Subordinated Debentures....................... S-11
United States Taxation.................................................... S-12
Underwriting.............................................................. S-17
Prospectus
About this Prospectus..................................................... 2
Forward-Looking Statements and Cautionary Factors......................... 2
Wisconsin Energy.......................................................... 2
The WEC Trusts............................................................ 3
Use of Proceeds........................................................... 5
Ratio of Earnings to Fixed Charges........................................ 5
Description of Debt Securities............................................ 5
Description of Preferred Securities....................................... 15
Description of Guarantees................................................. 25
Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees............................... 28
Book-Entry Issuance....................................................... 29
Plan of Distribution...................................................... 32
Certain Legal Matters..................................................... 33
Experts................................................................... 33
Where You Can Find More Information....................................... 33
</TABLE>
S-2
<PAGE>
SUMMARY INFORMATION--Q&A
The following information supplements, and should be read together with, the
information contained in other parts of this prospectus supplement and in the
accompanying prospectus. This summary highlights selected information from this
prospectus supplement and the accompanying prospectus to help you understand
the % Trust Preferred Securities (TruPS(R)). You should carefully read this
prospectus supplement and the accompanying prospectus to understand fully the
terms of the preferred securities as well as the tax and other considerations
that are important to you in making a decision about whether to invest in the
preferred securities. You should pay special attention to the "RISK FACTORS"
section beginning on page S-6 of this prospectus supplement to determine
whether an investment in the preferred securities is appropriate for you.
What are the Preferred Securities?
Each preferred security represents an undivided beneficial interest in the
assets of WEC Capital Trust I. Each preferred security will entitle the holder
to receive quarterly cash distributions as described in this prospectus
supplement. The trust is offering preferred securities at a price of
$25 for each preferred security.
Who is the Trust?
The trust is a Delaware business trust. Its principal place of business is
c/o Wisconsin Energy Corporation, 231 West Michigan Street, P.O. Box 2949,
Milwaukee, Wisconsin 53201. Its telephone number is (414) 221-2345.
The trust will sell its preferred securities to the public and its common
securities to Wisconsin Energy Corporation (Wisconsin Energy). The trust will
use the proceeds from these sales to buy a series of % junior subordinated
debentures due , 20 , from Wisconsin Energy with the same financial
terms as the preferred securities. Wisconsin Energy will guarantee payments
made on the preferred securities as described below.
The First National Bank of Chicago will act as property trustee of the
trust. Two officers of Wisconsin Energy will act as administrative trustees.
First Chicago Delaware Inc. will be the Delaware trustee. The First National
Bank of Chicago will act as trustee under the indenture pursuant to which the
junior subordinated debentures will be issued, and will act as trustee under
the guarantee of Wisconsin Energy. The property trustee, Delaware trustee and
administrative trustees are sometimes referred to as the issuer trustees.
Who is Wisconsin Energy?
Wisconsin Energy is a holding company organized under the laws of Wisconsin
in 1981. It has its principal office at 231 West Michigan Street, P.O. Box
2949, Milwaukee, Wisconsin 53201. Its telephone number is (414) 221-2345.
Wisconsin Energy's principal subsidiary is Wisconsin Electric Power Company,
a regulated electric, gas and steam utility.
When will you receive quarterly distributions?
If you purchase the preferred securities, you are entitled to receive
cumulative cash distributions at an annual rate of % of the liquidation
amount of $25 per preferred security. Distributions will accumulate from the
date the trust issues the preferred securities and will be paid quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
beginning , 1999.
S-3
<PAGE>
When can payment of your distributions be deferred?
Wisconsin Energy can, on one or more occasions, defer interest payments on
the junior subordinated debentures for up to 20 consecutive quarterly periods.
A deferral of interest payments cannot extend, however, beyond the maturity
date of the junior subordinated debentures (which is , 20 ).
If Wisconsin Energy defers interest payments on the junior subordinated
debentures, the trust will also defer distributions on the preferred
securities. During this deferral period, distributions will continue to accrue
on the preferred securities at an annual rate of % of the liquidation amount
of $25 per preferred security. Also, the deferred distributions will themselves
accrue interest at an annual rate of % (to the extent permitted by law). Once
Wisconsin Energy makes all interest payments on the junior subordinated
debentures, with accrued interest, it can again defer interest payments on the
junior subordinated debentures.
During any period in which Wisconsin Energy defers interest payments on the
junior subordinated debentures, Wisconsin Energy will not be permitted to (with
limited exceptions):
. pay a dividend or make any distributions on its capital stock or redeem,
purchase, acquire or make a liquidation payment on any of its capital
stock, or make any guarantee payments with respect to the foregoing; or
. make an interest, principal or premium payment on, or repurchase or
redeem, any of its debt securities that rank equal to or junior to the
junior subordinated debentures.
If Wisconsin Energy defers payments of interest on the junior subordinated
debentures, the preferred securities will, from the time of the deferral, be
treated as being issued with original issue discount ("OID") for United States
federal income tax purposes. This means you will be required to recognize
interest income with respect to distributions and include those amounts in your
gross income for United States federal income tax purposes even though you will
not have received any cash distributions relating to that interest income. See
"UNITED STATES TAXATION--Interest Income and Original Issue Discount."
When can the trust redeem the preferred securities?
The trust must redeem all of the outstanding preferred securities and common
securities when the junior subordinated debentures are paid at maturity on
, 20 . In addition, if Wisconsin Energy redeems any junior subordinated
debentures before their maturity date, the trust will use the cash it receives
from the redemption to redeem, on a pro rata basis, preferred securities and
common securities having a combined liquidation amount equal to the principal
amount of the junior subordinated debentures redeemed.
Wisconsin Energy can redeem some or all of the junior subordinated
debentures before their maturity at % of their principal amount on one or
more occasions at any time on or after , 200 . Wisconsin Energy also has
the option to redeem the junior subordinated debentures, in whole but not in
part, at any time if certain changes in tax or investment company law occur and
other specified conditions are satisfied. In any case, Wisconsin Energy will
pay accrued interest to the date of redemption.
What is Wisconsin Energy's guarantee of the preferred securities?
Wisconsin Energy will guarantee the preferred securities based on:
. its obligations to make payments on the junior subordinated debentures;
. its obligations under the guarantee; and
. its obligations under the trust agreement.
S-4
<PAGE>
Wisconsin Energy's obligations under the junior subordinated debentures are
subordinate and junior in right of payment to all of its senior debt. At
December 31, 1998, Wisconsin Energy's senior debt totaled about $67 million,
and its subsidiaries had additional aggregate debt of approximately $2.1
billion.
The payment of distributions on the preferred securities is guaranteed by
Wisconsin Energy under the guarantee, but only to the extent the trust has
funds legally and immediately available to make distributions.
Wisconsin Energy's obligations under the guarantee are:
. subordinate and junior in right of payment to its other liabilities;
. equal in rank to its most senior preferred stock, if any is issued; and
. senior to its common stock.
When could the junior subordinated debentures be distributed to you?
Wisconsin Energy has the right to dissolve the trust at any time. If
Wisconsin Energy dissolves the trust, the trust will liquidate (after
satisfaction of any liabilities to creditors of the trust as provided by
applicable law) by distributing the junior subordinated debentures to holders
of the preferred securities and the common securities on a pro rata basis. If
the junior subordinated debentures are distributed, Wisconsin Energy will use
its best efforts to list the junior subordinated debentures on the New York
Stock Exchange (NYSE) (or any other exchange on which the preferred securities
are then listed) in place of the preferred securities.
Will the preferred securities be listed on a stock exchange?
Application will be made to list the preferred securities on the NYSE. If
approved, trading of the preferred securities is expected to begin within 30
days after they are first issued.
Will holders of the preferred securities have any voting rights?
Generally, the holders of the preferred securities will not have any voting
rights. See "DESCRIPTION OF THE PREFERRED SECURITIES--Voting Rights; Amendment
of Each Trust Agreement" in the accompanying prospectus.
In what form will the preferred securities be issued?
The preferred securities will be represented by one or more global
securities that will be deposited with and registered in the name of The
Depository Trust Company (DTC) or its nominee. This means that you will not
receive a certificate for your preferred securities and that your broker will
maintain your position in the preferred securities. Wisconsin Energy expects
that the preferred securities will be ready for delivery through DTC on or
about , 1999.
S-5
<PAGE>
RISK FACTORS
Your investment in the preferred securities will involve certain risks. You
should carefully consider the following discussion of risks, and the other
information in this prospectus supplement and the accompanying prospectus,
before deciding whether an investment in the preferred securities is suitable
for you.
Wisconsin Energy's Obligations Under the Guarantee and the Junior Subordinated
Debentures Are Subordinated.
Wisconsin Energy's obligations under the junior subordinated debentures will
rank junior in priority of payment to all of Wisconsin Energy's senior debt.
This means that Wisconsin Energy cannot make any payments on the junior
subordinated debentures if it defaults on a payment of senior debt and does not
cure the default within the applicable grace period of if the senior debt
becomes immediately due because of a default and has not yet been paid in full.
Although this rule does not apply to a default by one of Wisconsin Energy's
subsidiaries, the subsidiaries may be unable to pay dividends or make other
distributions to Wisconsin Energy when they are in default. Dividends and other
distributions from subsidiaries are Wisconsin Energy's only ongoing source of
revenues from which to repay the junior subordinated debentures. At December
31, 1998, senior debt of Wisconsin Energy totaled approximately $67 million and
senior debt of its subsidiaries aggregated approximately $2.1 billion.
Wisconsin Energy's obligations under the guarantee will rank in priority of
payment as follows:
. subordinate and junior in right of payment to all its other liabilities;
. equal in rank to its most senior preferred stock, if any is issued; and
. senior to its common stock.
This means that Wisconsin Energy cannot make any payments on the guarantee
if it defaults on a payment on any of its other liabilities. In addition, in
the event of the bankruptcy, liquidation or dissolution of Wisconsin Energy,
its assets would be available to pay obligations under the guarantee only after
Wisconsin Energy made all payments on its other liabilities.
Neither the preferred securities, the junior subordinated debentures nor the
guarantee limit the ability of Wisconsin Energy or its subsidiaries to incur
additional debts, including debts that rank senior in priority of payment to
the junior subordinated debentures and the guarantee. See "DESCRIPTION OF
GUARANTEES--Status of the Guarantees" and "DESCRIPTION OF THE DEBT SECURITIES"
in the accompanying prospectus.
Wisconsin Energy's Subsidiaries May be Restricted in Providing Funds for
Payments to the Trust.
Because Wisconsin Energy is a holding company and conducts all of its
operations through subsidiaries, holders of debt securities will generally have
a junior position to claims of creditors of the subsidiaries, including trade
creditors, debt holders, secured creditors, taxing authorities, guarantee
holders and any preferred stockholders. Various financing arrangements and
regulatory requirements impose restrictions on the ability of Wisconsin
Energy's utility subsidiaries to transfer funds to it in the form of cash
dividends, loans or advances. Under Wisconsin law, Wisconsin Electric is
prohibited from loaning funds, either directly or indirectly, to Wisconsin
Energy. The indenture does not limit Wisconsin Energy or its subsidiaries if we
decide to issue additional debt.
The Guarantee Only Covers Payments if the Trust has Cash Available.
The ability of the trust to pay scheduled distributions on the preferred
securities, the redemption price of the preferred securities and the
liquidation amount of each preferred security is solely dependent upon
Wisconsin Energy making the related payments on the junior subordinated
debentures when due.
S-6
<PAGE>
If Wisconsin Energy defaults on its obligations to pay principal or interest
on the junior subordinated debentures, the trust will not have sufficient funds
to pay distributions, the redemption price or the liquidation amount of each
preferred security. In those circumstances, you will not be able to rely upon
the guarantee for payment of these amounts.
Instead you:
. may directly sue Wisconsin Energy or seek other remedies to collect your
pro rata share of payments owed; or
. may rely on the property trustee to enforce the trust's rights under the
junior subordinated debentures.
Deferral of Distributions Would Have Tax Consequences for You and May Affect
the Trading Price of the Preferred Securities.
If Wisconsin Energy defers interest payments on the junior subordinated
debentures, you will be required to recognize interest income for United States
federal income tax purposes (based on your pro rata share of the interest on
the junior subordinated debentures held by the trust) before you receive any
cash relating to that interest. In addition, you will not receive the cash if
you sell the preferred securities before the end of any deferral period or
before the record date relating to distributions which are paid.
Wisconsin Energy can, on one or more occasions, defer interest payments on
the junior subordinated debentures for up to 20 consecutive quarterly periods.
If Wisconsin Energy defers interest payments on the junior subordinated
debentures, the trust will defer distributions on the preferred securities
during any deferral period. However, distributions would still accumulate and
the deferred distributions would themselves accrue interest at the rate of %
per annum (to the extent permitted by law).
Wisconsin Energy has no current intention of deferring interest payments on
the junior subordinated debentures. However, if Wisconsin Energy exercises its
right in the future, the preferred securities may trade at a price that does
not fully reflect the value of accrued but unpaid interest on the junior
subordinated debentures. If you sell the preferred securities during an
interest deferral period, you may not receive the same return on investment as
someone else who continues to hold the preferred securities. In addition, the
existence of Wisconsin Energy's right to defer payments of interest on the
junior subordinated debentures may mean that the market price for the preferred
securities (which represent an undivided beneficial interest in the junior
subordinated debentures) may be more volatile than other securities that do not
have these rights.
See "UNITED STATES TAXATION" for more information regarding the tax
consequences of purchasing, holding and selling the preferred securities.
Preferred Securities May be Redeemed at Any Time if Specified Changes in Tax or
Investment Company Law Occur.
If certain changes in tax or investment company law occur and are
continuing, and other conditions are satisfied, Wisconsin Energy has the right
to redeem the junior subordinated debentures, in whole but not in part, at any
time. Any redemption will cause a mandatory redemption of all preferred
securities and common securities at a redemption price equal to $25 per
security plus any accrued and unpaid distributions.
Preferred Securities May be Redeemed at the Option of Wisconsin Energy.
At the option of Wisconsin Energy, the junior subordinated debentures may be
redeemed, in whole, at any time, or in part, from time to time, on or after
, 200 , at a redemption price equal to % of the principal amount to
be redeemed plus any accrued and unpaid interest to the redemption date. See
"CERTAIN TERMS OF THE JUNIOR SUBORDINATED DEBENTURES--Redemption." You should
assume that Wisconsin Energy will exercise its redemption option if Wisconsin
Energy is able to refinance at a lower
S-7
<PAGE>
interest rate or it is otherwise in Wisconsin Energy's interest to redeem the
junior subordinated debentures. If the junior subordinated debentures are
redeemed, the trust must redeem the preferred securities and the common
securities having an aggregate liquidation amount equal to the aggregate
principal amount of junior subordinated debentures to be redeemed. See
"DESCRIPTION OF THE PREFERRED SECURITIES-- Redemption or Exchange" in the
accompanying prospectus.
There Can Be No Assurance as to the Market Prices for the Preferred Securities
or the Junior Subordinated Debentures.
The preferred securities that an investor may purchase, whether pursuant to
the offer made by this prospectus supplement or in the secondary market, or the
junior subordinated debentures that a holder of preferred securities may
receive upon a dissolution of the trust, may trade at a discount to the price
that the investor paid to purchase the preferred securities offered by this
prospectus supplement. As a result of Wisconsin Energy's right to defer
interest payments on the junior subordinated debentures, the market price of
the preferred securities (which represent undivided beneficial ownership
interests in the trust, substantially all of the assets of which consist of the
junior subordinated debentures) may be more volatile than the market prices of
other securities that are not subject to similar optional deferrals.
Wisconsin Energy May Dissolve the Trust at Any Time.
Wisconsin Energy has the right to dissolve the trust at any time. If
Wisconsin Energy decides to exercise its right to dissolve the trust, the trust
will liquidate (after satisfaction of any liabilities to creditors of the trust
as provided by applicable law) by distributing the junior subordinated
debentures to holders of the preferred securities and the common securities on
a pro rata basis.
If the trust is characterized for United States federal income tax purposes
as an association taxable as a corporation at the time it is dissolved or if
there is a change in law, the distribution of junior subordinated debentures to
you may be a taxable event to you. Under current United States federal income
tax law, a distribution of junior subordinated debentures to you on the
dissolution of the trust should not be a taxable event to you.
Wisconsin Energy has no current intention to cause the dissolution of the
trust and the distribution of the junior subordinated debentures. Wisconsin
Energy anticipates that it would consider exercising this right in the event
that expenses associated with maintaining the trust were substantially greater
than currently expected, such as if unfavorable changes in tax law or
investment company law occurred. See "DESCRIPTION OF DEBT SECURITIES--Certain
Provisions Relating to Junior Subordinated Debentures Issued to the WEC
Trusts--Redemption" in the accompanying prospectus. Wisconsin Energy cannot
predict the other circumstances under which this right would be exercised.
Although Wisconsin Energy will use its best efforts to list the junior
subordinated debentures on the NYSE (or any other exchange on which the
preferred securities are then listed) if they are distributed, we cannot assure
you that the junior subordinated debentures will be approved for listing or
that a trading market will exist for these securities.
You Have Voting Rights Only Under Limited Circumstances.
You will have limited voting rights. In particular, subject to certain
exceptions, only Wisconsin Energy can appoint or remove any of the issuer
trustees. See "DESCRIPTION OF THE PREFERRED SECURITIES--Voting Rights;
Amendment of Each Trust Agreement" in the accompanying prospectus.
S-8
<PAGE>
USE OF PROCEEDS
WEC Trust I will use all of the proceeds it receives from the sale of its
preferred securities and common securities to purchase senior subordinated
debentures from Wisconsin Energy. Wisconsin Energy intends to use the proceeds
from its sale of the junior subordinated debentures to the trust to fund a
capital contribution of approximately $105 million to Wisvest Connecticut, LLC,
an indirect wholly owned subsidiary of Wisconsin Energy, to support its
acquisition of certain generating assets from The United Illuminating Company,
and for repayment of short term borrowings. Wisconsin Energy's consolidated
short term borrowings are expected to approximate $ million before receipt of
the proceeds from the preferred securities and bear interest at a weighted
average annual rate of approximately %.
SELECTED FINANCIAL INFORMATION
The following is a selection of certain financial information covering
Wisconsin Energy. This information is taken from our audited financial
statements contained in our Annual Report on Form 10-K for the year ended
December 31, 1997, and from our consolidated financial statements for the year
ended December 31, 1998, for which an audit report has not yet been issued. See
"WHERE YOU CAN FIND MORE INFORMATION" in the accompanying prospectus.
<TABLE>
<CAPTION>
Years Ended
----------------------------------------------------------------
December 31, December 31, December 31, December 31, December 31,
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
Income Statement Data: (Unaudited) (Dollars in millions except per share amounts)
<S> <C> <C> <C> <C> <C>
Operating Revenues.... $1,980 $1,790 $1,774 $1,770 $1,742
Operating Income...... $ 277 $ 199 $ 306 $ 329 $ 263
Net Income............ $ 188 $ 61 $ 218 $ 234 $ 181
Earnings Per Share of
Common Stock......... $ 1.65 $ 0.54 $ 1.97 $ 2.13 $ 1.67
</TABLE>
CAPITALIZATION
The following table summarizes our historical capitalization as of December
31, 1998, and our capitalization as adjusted to reflect the assumed issuance
and sale of an aggregate of $300 million of preferred securities and the
related common securities of the trusts. The long-term debt shown does not
include $119 million of long term debt due within one year.
<TABLE>
<CAPTION>
December 31, 1998
(Unaudited)
---------------------
Actual As Adjusted
------ --------------
Amount Amount Percent
------ ------ -------
(Dollars in millions)
<S> <C> <C> <C>
Capital Structure:
Long Term Debt......................................... $1,749 $1,749 43.9%
Company Obligated Mandatorily Redeemable Preferred
Securities of a Subsidiary Holding Solely Parent
Debentures............................................ -- 300 7.5%
Preferred Stock of Wisconsin Electric Power Company
Without Mandatory Redemption Requirements............. 31 31 0.8%
Common Equity.......................................... 1,903 1,903 47.8%
------ ------ -----
Total Capitalization................................. $3,683 $3,983 100.0%
====== ====== =====
Short Term Debt.......................................... $ 287 $ 101 2.5%
====== ====== =====
</TABLE>
ACCOUNTING TREATMENT
WEC Trust I will be treated as Wisconsin Energy's subsidiary, and the
accounts of the trust will be included in our financial statements. Currently
the FASB is considering the classification of trust preferred securities within
the balance sheet. Pending clarification from the FASB, the preferred
securities will be presented as a separate line item in our balance sheet and
disclosures concerning the preferred securities, the guarantee and the junior
subordinated debentures will be included in the notes to the financial
statements. We will record distributions paid on the preferred securities as an
expense.
S-9
<PAGE>
DESCRIPTION OF SECURITIES
This prospectus supplement discloses the specific terms and provisions of
the preferred securities and the junior subordinated debentures and supplements
the general description of the terms and provisions of these securities in the
accompanying prospectus. These summaries are not meant to be a complete
description of each security. However, this prospectus supplement and the
accompanying prospectus contain the material terms and conditions for each
security. For more information, please refer to the trust agreement, the
indenture, the guarantee and the securities resolution of Wisconsin Energy
authorizing the issuance of the junior subordinated debentures. Forms of these
documents are filed as exhibits to the registration statement of which this
prospectus supplement and the accompanying prospectus are a part. All terms
used in this prospectus supplement have the meanings given to them in these
documents.
CERTAIN TERMS OF THE PREFERRED SECURITIES
Distributions
The preferred securities represent undivided beneficial interests in the
assets of the trust. Distributions on the preferred securities are cumulative
and will accumulate from the date they are first issued at the annual rate of
% of the $25 per preferred security liquidation amount. Distributions will
be payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, beginning , 1999. Distributions not paid when due
will accumulate additional distributions, compounded quarterly, at the annual
rate of % on the amount of unpaid distributions (to the extent permitted
by law). The term "distributions" includes any of these distributions. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
At any time and from time to time, so long as no event of default has
occurred and is continuing under the junior subordinated debentures, we may
defer interest payments for up to 20 consecutive quarters. However, no deferral
period will extend beyond the maturity date of the junior subordinated
debentures. The WEC Trust to which those junior subordinated debentures have
been issued will similarly defer quarterly distributions on the preferred
securities during any deferral period, but the amount of distributions due to
you would continue to accumulate at the rate stated above, compounded quarterly
to the extent permitted by law.
We have no current intention to exercise our right to defer interest
payments on the junior subordinated debentures issued to any WEC Trust. If we
defer interest payments on the junior subordinated debentures, we would be
subject to certain restrictions relating to the payment of dividends on or
purchases of our capital stock and payments on our debt securities ranking
equal with or junior to the junior subordinated debentures. See "DESCRIPTION OF
DEBT SECURITIES--Certain Provisions Relating to Junior Subordinated Debentures
Issued to the WEC Trusts--Option to Extend Interest Payment Date" in the
accompanying prospectus.
See the accompanying prospectus for additional terms of the preferred
securities, including provisions relating to the deferral of distributions, the
payment of distributions and the subordination of the common securities.
If distributions are payable on a date that is not a business day, payment
will be made on the next business day, without any interest or other payment in
respect for any delay. However, if the next business day is in the next
calendar year, payment of distributions will be made on the preceding business
day. A "business day" means each Monday, Tuesday, Wednesday, Thursday or Friday
which is not a day on which banking institutions in New York City are
authorized or obligated by law, regulation or executive order to close, or a
day on which the Federal Reserve Bank of New York is not open.
Redemption
When we pay the junior subordinated debentures at maturity on ,
20 , or upon early redemption, the property trustee will use the proceeds to
redeem a like amount of the preferred and common
S-10
<PAGE>
securities. The property trustee will give you at least 30 days, but not more
than 60 days, notice before the redemption date. The preferred and (unless
there is a default under the junior subordinated debentures) common securities
will be redeemed at a price equal to the liquidation amount of $25 per security
plus accrued and unpaid distributions to the date of redemption.
If less than all of the preferred and common securities are redeemed, then
the aggregate liquidation amount of preferred and common securities to be
redeemed will be the allocated 3% to the common securities holders, subject to
the exceptions as described in "DESCRIPTION OF PREFERRED SECURITIES--
Subordination of Common Securities" in the accompanying prospectus and 97% to
the preferred securities holders. The preferred and (unless there is a default
under the junior subordinated debentures) common securities to be redeemed will
be selected by the property trustee by a method determined to be fair and
appropriate by it subject to the subordination provisions of the common
securities.
Special Event Redemption
If a Tax Event or an Investment Company Event, each as defined in the
accompanying prospectus (each a Special Event), has occurred and is continuing,
we may redeem the junior subordinated debentures, in whole but not in part.
This will cause a mandatory redemption of the preferred securities and the
common securities, in whole but not in part and within 90 days following the
occurrence of the Special Event, at the liquidation amount of $25 per preferred
security plus unpaid distributions to the date of redemption.
However, in the case of an occurrence of a Tax Event, if we can eliminate,
within the 90 day period, the Tax Event by taking some action, such as filing a
form or making an election, or pursuing some other similar reasonable measure
which has no adverse effect on us, the WEC Trust or the preferred and common
security holders, we will pursue that action instead of redemption. We will
have no right to redeem the junior subordinated debentures while the WEC Trust
or the property trustee is pursuing any similar action based on its obligations
under the trust agreement.
See the accompanying prospectus for other redemption provisions and for
redemption procedures.
CERTAIN TERMS OF THE JUNIOR SUBORDINATED DEBENTURES
The junior subordinated debentures will be issued as a series pursuant to a
securities resolution dated as of , 1999, under the indenture. The
junior subordinated debentures are unsecured and rank subordinate and junior in
right of payment to all of our senior debt securities and subordinated debt
securities (if any).
Interest Rate and Maturity
The junior subordinated debentures will mature on , 20 , and
will bear interest at the annual rate of % of the principal amount
thereof, payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, beginning , 1999. Interest payments not
paid when due will accrue additional interest compounded quarterly at the
annual rate of % on the amount of unpaid interest (to the extent permitted
by law). The term "interest payments," includes this additional interest. The
amount of interest payable for any period will be computed based on a 360-day
year of twelve 30-day months. The interest payment provisions for the junior
subordinated debentures correspond to the distribution provisions of the
preferred securities.
See the accompanying prospectus for other terms of the junior subordinated
debentures, including provisions relating to the deferral of interest payments,
under "DESCRIPTION OF DEBT SECURITIES--Certain Provisions Relating to Junior
Subordinated Debentures Issued to the WEC Trusts" in the accompanying
prospectus.
S-11
<PAGE>
Redemption
We have the option to redeem the junior subordinated debentures prior to
maturity at a redemption price equal to % of the principal amount plus
accrued and unpaid interest to the redemption date (a) in whole or in part at
any time on or after , 20 , or (b) in whole but not in part if a
Special Event has occurred and is continuing.
Distribution of Junior Subordinated Debentures
If the property trustee distributes the junior subordinated debentures to
the preferred and common securities holders upon the dissolution and
liquidation of the trust, the junior subordinated debentures will be issued in
denominations of $25 and integral multiples thereof. We anticipate that the
junior subordinated debentures would be distributed in the form of one or more
global securities and DTC, or any successor depositary for the preferred
securities, would act as depositary for the junior subordinated debentures. The
depositary arrangements for the junior subordinated debentures would be
substantially similar to those in effect for the preferred securities.
For a description of DTC and the terms of the depository arrangements
relating to payments, transfers, voting rights, redemption and other notices
and other matters, see "BOOK-ENTRY ISSUANCE" in the accompanying prospectus.
UNITED STATES TAXATION
General
The following summary of the material United States federal income tax
consequences of purchasing, holding and selling the preferred securities is
based on the views of Quarles & Brady LLP, tax counsel to Wisconsin Energy.
This summary is based on (1) the Internal Revenue Code of 1986, as amended
("Code"), (2) income tax regulations issued under the Code, and (3) associated
administrative and judicial interpretations, all as they currently exist as of
the date of this prospectus supplement. These income tax laws and regulations,
however, may change at any time, and any change could be retroactive to the
issuance date of the preferred securities. As part of its fiscal year 2000
budget proposal, the Clinton Administration recently made certain proposals
aimed at curbing what have become known as "corporate tax shelters." Although
we believe that these proposals, if enacted into law in their current form, are
not likely to apply to the issuance of the preferred securities (based on both
their substance and the proposed effective date), because no specific statutory
language has been proposed and because the proposed effective date is subject
to change, the effect of the Clinton Administration's fiscal year 2000 budget
proposal is uncertain.
These income tax laws and regulations are also subject to various
interpretations, and the Internal Revenue Service ("IRS") or the courts could
later disagree with what we explain in this summary. The IRS has not formally
ruled (and we do not intend to seek a ruling) on the tax consequences of
purchasing, holding and selling the preferred securities. Accordingly, the IRS
could challenge the opinions expressed in this prospectus supplement concerning
such consequences, and a court could agree with the IRS.
Except where we state otherwise, this summary deals only with preferred
securities held as a capital asset (as defined in section 1221 of the Code) by
a holder who (a) purchases the preferred securities at their original offering
price when the trust originally issues them (an "Initial Holder") and (b) is a
US Holder (as defined below).
We do not address all of the tax consequences that may be relevant to a US
Holder. We also do not address, except as stated below, any of the tax
consequences to holders that are not US Holders or to holders that may be
subject to special tax treatment such as banks, thrift institutions, real
estate investment trusts, regulated investment companies, insurance companies,
brokers and dealers in securities or currencies, tax-
S-12
<PAGE>
exempt investors or persons that will hold the preferred securities as a
position in a "straddle," as part of a "synthetic security" or "hedge," or as
part of a "conversion transaction" or other integrated investment. Further, we
do not address:
. the United States federal income tax consequences to shareholders in, or
partners or beneficiaries of, a holder of the preferred securities;
. the United States federal alternative minimum tax consequences of the
purchase, ownership or sale of the preferred securities; or
. any state, local or foreign tax consequences of the purchase, ownership
and sale of preferred securities.
A "US Holder" is a preferred securities holder who or which is:
. a United States citizen or resident individual (or someone treated as a
citizen or resident individual for United States federal income tax
purposes);
. a corporation (including an entity treated as a corporation for United
States federal income tax purposes) created or organized in or under the
laws of the United States or any state or other political subdivision;
. an estate if its income is subject to United States federal income
taxation regardless of its source; or
. a trust if (1) a United States court can exercise primary supervision
over its administration and (2) one or more United States persons have
the authority to control all of its substantial decisions.
A "Non-US Holder" is a preferred securities holder other than a US Holder.
Characterization of the Trust
When the trust issues the preferred securities, Quarles & Brady LLP, tax
counsel to us and the trust, will give a legal opinion stating that under
current law and based on the representations, facts and assumptions described
in this prospectus supplement and the accompanying prospectus, and assuming
full compliance with the terms of the trust agreement, the underwriting
agreement governing the sale of the preferred securities by us to the
underwriters and the indenture (and other relevant documents), the trust will
be characterized for United States federal income tax purposes as a grantor
trust and will not be taxable as a corporation. Accordingly, for United States
federal income tax purposes, you will be treated as the beneficial owner of a
pro rata undivided interest in the junior subordinated debentures. You must
include in your gross income for United States federal income tax purposes all
interest on and any gain recognized with respect to your pro rata share of the
junior subordinated debentures.
Characterization of the Junior Subordinated Debentures
We and the trust will agree to treat the junior subordinated debentures as
debt for United States federal income tax purposes. By accepting the preferred
securities, you agree to treat the junior subordinated debentures as debt and
to accept the preferred securities as evidence of an indirect beneficial
ownership interest in the junior subordinated debentures. We can give no
assurance that this position will not be challenged by the IRS, however, or
that such a challenge would not be successful.
Interest Income and Original Issue Discount
Under applicable income tax regulations, if there is only a remote
likelihood that a company will not make its interest payments on time, then the
debt will be considered to be issued without OID. We believe that the
likelihood that we will elect to defer interest payments is remote, since this
would prevent us from declaring dividends on any of our capital stock or making
payments on our debt securities which rank equal with or
S-13
<PAGE>
junior to the junior subordinated debentures until we made up all of the missed
interest payments. Accordingly, we will take the position that the junior
subordinated debentures will not be issued with OID. As a result, the interest
payments on the junior subordinated debentures (which are used to make
distributions on the preferred securities) generally will be taxable to you as
ordinary income when they are paid or accrued depending on your method of
United States federal income tax accounting.
If, however, we elect to defer payments of interest, the junior subordinated
debentures would at that time be treated as re-issued with OID, and all
remaining interest payments would be treated as OID. In that case, all of your
taxable interest income on the junior subordinated debentures would have to be
included in your gross income for United States federal income tax purposes as
it accrued daily on an economic accrual basis even if you otherwise used a cash
basis method of tax accounting. This means that you would include interest
income for tax purposes, and pay United States federal income taxes, on the
interest income you should have received on the interest payment dates even
though we did not actually make cash interest payments on those dates.
If the likelihood that we will decide to defer any payments of interest were
not treated as remote, the junior subordinated debentures would be considered
as issued initially with OID in an amount equal to the sum of all the interest
payable over the term of the junior subordinated debentures. Again, this would
mean that you would have to include interest income in gross income for United
States federal income tax purposes as it accrued daily on an economic accrual
basis instead of on the dates you actually receive the cash payments.
The IRS has not issued any rulings or interpretation which define the
meaning of the term "remote" as used in the applicable income tax regulations.
The IRS could take a position that differs from what we state in this
prospectus supplement.
Corporate US Holders
Because the income from the preferred securities will not be considered to
be dividends for United States federal income tax purposes, corporate US
Holders of the preferred securities will not be entitled to a dividends-
received deduction for any income from the preferred securities.
Market Discount and Acquisition Premium
Holders of the preferred securities other than Initial Holders may be
considered to have acquired their undivided interests in the junior
subordinated debentures with market discount or acquisition premium (as each
phrase is defined for United States federal income tax purposes). Such holders
are urged to consult with their own tax advisors concerning the tax
consequences of purchasing, owning and selling the preferred securities.
Sales of Preferred Securities
If you sell your preferred securities, you will recognize a gain or loss
equal to the difference between the amount realized from the sale of the
preferred securities (generally, your selling price minus any portion
attributable to accrued but unpaid interest not otherwise includible as OID)
and your adjusted tax basis in the preferred securities. If we do not defer
interest on the junior subordinated debentures, your adjusted tax basis in the
preferred securities generally will equal the initial purchase price that you
paid for the preferred securities. If, however, we elect to defer interest
payments on the junior subordinated debentures, your adjusted tax basis in the
preferred securities generally will equal (1) the initial purchase price that
you paid for the preferred securities plus (2) any accrued and unpaid
distributions that you were required to treat as OID.
Except to the extent of any accrued market discount, a gain or loss on the
sale of preferred securities generally will be a capital gain or loss if the
preferred securities are held as capital assets. The maximum regular United
States federal income tax rate on capital gains for individual taxpayers is
currently 20% for sales and exchanges of capital assets held for more than one
year. All net capital gains of a corporate taxpayer are subject to tax at
ordinary corporate income tax rates of up to 35%. Subject to limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
S-14
<PAGE>
If you sell your preferred securities between record dates for payments of
distributions on the preferred securities, you will be required to include in
gross income for United States federal income tax purposes accrued and unpaid
interest not previously included in gross income through the date of sale, to
the extent you were not otherwise required to report this income as OID.
Receipt of Junior Subordinated Debentures or Cash Upon Liquidation of the Trust
Under certain circumstances, as described in the accompanying prospectus
under "DESCRIPTION OF PREFERRED SECURITIES--Liquidation Distribution Upon
Dissolution," the property trustee may distribute the junior subordinated
debentures to you in exchange for your preferred securities. This will result
in the liquidation and termination of the trust. Such a distribution would not
be a taxable event for United States federal income tax purposes, and you would
have an aggregate adjusted tax basis in the junior subordinated debentures you
received equal to your aggregate adjusted tax basis in your preferred
securities. For a description of adjusted tax basis, see the discussion above
in "Sales of Preferred Securities."
Further, the holding period of the junior subordinated debentures you
received would be the same as the period for which you held your preferred
securities. If, however, the distribution were caused by a Tax Event and the
trust was taxable as a corporation, the distribution would be a taxable event
for United States federal income tax purposes. In that case, you could
recognize a gain or loss, your adjusted tax basis in the junior subordinated
debentures could differ from your adjusted tax basis in the preferred
securities, and your holding period for the junior subordinated debentures
would not include the period during which you held the preferred securities.
The junior subordinated debentures may be redeemed for cash under certain
circumstances, and the proceeds would be used by the property trustee to redeem
a like amount of preferred securities. Such a redemption of preferred
securities would be a taxable event for United States federal income tax
purposes, and you would recognize gain or loss as if you had sold the preferred
securities for cash. See "Sales of Preferred Securities" above.
Non-US Holders
Payments to a Non-US Holder will generally not be subject to United States
federal withholding tax, provided the holder:
. does not own (directly or indirectly, actually or constructively) 10% or
more of the total combined voting power of all classes of stock of
Wisconsin Energy entitled to vote;
. is not a controlled foreign corporation that is related to Wisconsin
Energy actually or constructively through stock ownership; and
. is not a bank receiving interest described in section 881(c)(3)(A) of
the Code.
To qualify for this exemption from withholding, the last United States payer
in the chain of payment prior to payment to a Non-US Holder ("Withholding
Agent") must have received a statement that:
. is signed by the holder of the preferred securities under penalties of
perjury;
. certifies that such holder is not a US Holder; and
. provides the name and address of the holder.
The statement may be made on an appropriate IRS Form W-8 or a substantially
similar form, and the holder must inform the Withholding Agent of any change in
the information on the statement within 30 days of the change. Unless a change
in the information on the statement occurs, the statement will be valid through
the end of the third calendar year following the year in which the statement is
signed. If the preferred securities are held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent along with
a copy of the appropriate IRS Form W-8 or the substitute form provided by the
holder.
S-15
<PAGE>
A Non-US Holder will generally not be subject to United States federal
withholding or income tax on any gain realized upon the sale or other
disposition of the preferred securities. However, if a Non-US Holder holds the
preferred securities in connection with a trade or business conducted in the
United States, or is present in the United States in certain circumstances, the
holder may be subject to income tax on all income and gains recognized.
Backup Withholding
You may be subject to a "backup withholding" tax of 31% on distributions
made on the preferred securities and on the entire price received on the sale
of the preferred securities if you:
. fail to provide your social security or taxpayer identification number
to your broker;
. provide your broker with an incorrect social security or tax
identification number;
. fail to provide your broker with a certified statement that your social
security or tax identification number is correct and that you are not
subject to backup withholding; or
. improperly report interest and dividends on your tax return.
Backup withholding, however, may not apply to interest payments made to certain
exempt recipients such as corporations or tax-exempt organizations.
Backup withholding generally will not apply to payments made to a Non-U.S.
Holder who provides the required certificate or otherwise establishes an
exemption from backup withholding. Payments of the proceeds of a disposition of
the preferred securities by a United States office of a broker generally will
be subject to backup withholding at a rate of 31% unless the Non-U.S. Holder
certifies under penalties of perjury that it is a Non-U.S. Holder or otherwise
establishes an exemption.
Any withheld amounts will be allowed as a credit against your United States
federal income tax, provided the required information is provided to the IRS.
The tax information above is intended only as a summary of material United
States federal tax consequences of an investment in the trust. We urge you to
consult with your own tax advisor as to the United States federal, state,
local, foreign and other tax consequences associated with purchasing, owning
and selling the preferred securities. The statements of United States tax laws
described above are based on the laws in force as of the date of this
prospectus supplement, and are subject to any changes in United States law
occurring after that date.
S-16
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions of the underwriting agreement
dated , 1999, each underwriter named below, for whom Salomon Smith Barney Inc,
and are acting as representatives, has severally agreed to purchase from the
trust, and the trust has agreed to sell to such underwriter, the number of
preferred securities set forth opposite the name of such underwriter below.
<TABLE>
<CAPTION>
Number of
Name Preferred Securities
---- --------------------
<S> <C>
Salomon Smith Barney Inc.............................
----------
Total............................................
==========
</TABLE>
The underwriters are obligated to take and pay for the total number of
preferred securities offered hereby if any such preferred securities are
purchased. In the event of default by any underwriter, the underwriting
agreement provides that, in certain circumstances, purchase commitments of the
non-defaulting underwriters may be increased or the underwriting agreement may
be terminated.
The underwriting agreement provides that we and the trust will indemnify
the several underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended.
Our expenses associated with the offer and sale of the preferred securities
are estimated to be $ .
In view of the fact that the proceeds of the sale of the preferred
securities will ultimately be used to purchase our junior subordinated
debentures, the underwriting agreement provides that we will pay as
compensation to the underwriters $ per preferred security for the
accounts of the several underwriters ($ in the aggregate); provided that
such compensation will be $ per preferred security for sales of
or more preferred securities to a single purchaser. Therefore, to the extent
of such sales, the actual amount of underwriters' compensation will be less
than the aggregate amount specified in the preceding sentence.
The underwriters propose to offer the preferred securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this prospectus supplement, and to certain dealers at such price
less a concession of $ per preferred security. The underwriters may
allow, and such dealers may reallow, a concession not in excess of $ per
preferred security to certain brokers and dealers. After the preferred
securities are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the representatives of the
underwriters.
Application will be made to list the preferred securities on the NYSE. If
approved, trading of the preferred securities on the NYSE is expected to
commence within a 30-day period after the initial delivery of the preferred
securities. Prior to this offering, there has been no public market for the
preferred securities. In order to meet one of the requirements for listing the
preferred securities on the NYSE, the underwriters will undertake to sell lots
of 100 or more preferred securities to a minimum of 400 beneficial holders.
We and the trust have agreed, during the period of days from the date of
the underwriting agreement, not to sell, offer to sell, grant any option for
the sale of, or otherwise dispose of any preferred securities, any security
convertible into or exchangeable into or exercisable for preferred securities
or the junior subordinated debentures or any debt securities substantially
similar to the junior subordinated debentures or equity securities
substantially similar to the preferred securities (except for the junior
subordinated debentures and the preferred securities issued pursuant to the
underwriting agreement), without the prior written consent of the
representatives.
S-17
<PAGE>
In order to facilitate the offering of the preferred securities, the
underwriters may engage in transactions that stabilize, maintain or otherwise
affect the price of the preferred securities. Specifically, the underwriters
may overallot in connection with the offering, creating a short position in the
preferred securities for their own account. In addition, to cover
overallotments or to stabilize the price of the preferred securities, the
underwriters may bid for, and purchase, the preferred securities in the open
market. Finally, the underwriting syndicate may reclaim selling concessions
allowed to an underwriter or a dealer for distributing the preferred securities
in the offering, if the syndicate repurchases previously distributed preferred
securities in transactions to cover syndicate short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain
the market price of the preferred securities above independent market levels.
The underwriters are not required to engage in these activities, and if
commenced, may end any of these activities at any time.
Certain of the underwriters and their affiliates have in the past provided,
and may in the future provide, investment and/or commercial banking services to
us and our affiliates in the ordinary course of business.
S-18
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
SUBJECT TO COMPLETION, DATED MARCH 1, 1999
$300,000,000
WISCONSIN ENERGY CORPORATION
Debt Securities
-----------
WEC CAPITAL TRUST I
WEC CAPITAL TRUST II
Preferred Securities
Fully and Unconditionally Guaranteed
as described herein by
Wisconsin Energy Corporation
THE WEC TRUSTS:
. will issue and sell preferred securities (representing undivided
beneficial interests in a trust) to the public;
. will issue and sell common securities to Wisconsin Energy; and
. will use the proceeds from these sales to buy a series of junior
subordinated debentures from Wisconsin Energy with terms that correspond
to the preferred securities.
WISCONSIN ENERGY:
. will pay principal and interest on the junior subordinated debentures,
subject to payment on its more senior debt;
. may choose to distribute these junior subordinated debentures pro-rata to
the preferred and common securities holders if it dissolves the trust;
. will fully and unconditionally guarantee the preferred securities on a
junior subordinated level based on:
l its obligations to make payments on the corresponding junior
subordinated debentures;
l its obligations under the preferred securities guarantee (its payment
obligations are subject to payment on all of its general liabilities);
and
l its obligations under the trust agreement; and
. may also issue and sell other debt securities to the public.
We urge you to read this prospectus and the prospectus supplement carefully
before you make your investment decision.
- --------------------------------------------------------------------------------
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.
The date of this prospectus is , 1999.
<PAGE>
ABOUT THIS PROSPECTUS
In this prospectus, "we" and "Wisconsin Energy" refer to Wisconsin Energy
Corporation and a "trust" or "WEC Trust" refers to either WEC Capital Trust I
or WEC Capital Trust II, which are the Delaware statutory business trusts that
we have formed to issue the preferred securities.
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process,
Wisconsin Energy or the WEC Trusts may issue and sell to the public any
combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $300,000,000.
This prospectus provides you with only a general description of the
securities we or the WEC Trusts may issue and sell. Each time we or the trusts
issue and sell securities, we will provide a prospectus supplement that will
contain specific information about the particular securities and terms of that
offering. In the prospectus supplement, we will describe the interest rate,
payment dates, maturity and other terms of any debt securities that we issue
and sell, and the rights to periodic cash distributions, payments on
liquidation and other terms of a trust's preferred securities. The prospectus
supplement will also describe the proceeds and uses of proceeds from the
securities, together with the names and compensation of the underwriters
through whom the securities are being issued and sold, and other important
considerations for investors. It may also add to, update or change information
contained in this prospectus.
Unless we say otherwise in the prospectus supplement, we may redeem our debt
securities for cash, or cause the trusts to liquidate and give investors our
debt securities in place of the trusts' preferred securities.
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS
We have included or may include statements in this prospectus and any
prospectus supplement (including documents incorporated by reference) that
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You will be able to recognize a
forward-looking statement because it contains the words "anticipate,"
"believe," "estimate," "expect," "project," "objective" or a similar expression
to identify it as a forward-looking statement.
We caution you that any such forward-looking statements are not guarantees
of future performance and involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements
to differ materially from the future results, performance or achievements we
have anticipated in such forward-looking statements.
In addition to the assumptions and other factors referred to specifically in
connection with those statements, factors that could cause our actual results
to differ materially from those contemplated in the forward-looking statements
include factors we have described under the captions "Factors Affecting Results
of Operations" and "Cautionary Factors" in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" section of our
Annual Report on Form 10-K or under similar captions in the other documents we
have incorporated by reference.
WISCONSIN ENERGY
We were incorporated in the state of Wisconsin in 1981 and became a holding
company in 1986. Our principal subsidiary is Wisconsin Electric Power Company,
an electric, gas and steam utility. We also have subsidiaries engaged in
various non-utility businesses. We conduct our operations in the following four
business segments.
. Electric Operations: Our Wisconsin electric operations generate,
transmit, distribute and sell electric energy in a territory of
approximately 12,000 square miles with a population estimated at
2,300,000 in southeastern (including the metropolitan Milwaukee area),
east central and northern Wisconsin and in the Upper Peninsula of
Michigan. In May 1998, we acquired Edison Sault Electric
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Company, an electric utility which serves approximately 21,000
residential, commercial and industrial customers in Michigan's eastern
Upper Peninsula. We operate Wisconsin Electric and Edison Sault as
separate utility subsidiaries within their existing historical service
territories. Wisconsin Electric and Edison Sault continue to be
separately regulated by their respective states.
. Gas Operations: Our Wisconsin gas operations purchase, distribute and
sell natural gas to retail customers and transport customer-owned gas in
four distinct service areas of about 2,800 square miles in Wisconsin:
west and south of the City of Milwaukee, the Appleton area, the Prairie
du Chien area and northern Wisconsin. The gas service territory, which
has an estimated population of approximately 1,200,000, is largely
within Wisconsin Electric's electric service area.
. Steam Operations: Our steam operations generate, distribute and sell
steam supplied by Wisconsin Electric's Valley and Milwaukee County Power
Plants. Steam is used by customers for space heating and process
applications in the metropolitan Milwaukee area.
. Non-Utility Operations: Our non-utility subsidiaries are devoted
primarily to stimulating economic growth in the Wisconsin Electric
service area and to capitalizing on diversified investment opportunities
for stockholders.
We are an exempt holding company by order of the SEC under Section 3(a)(1)
of the Public Utility Holding Company Act of 1935, as amended. As a result, we
are exempt from the provisions of that Act, other than with respect to certain
acquisitions of securities of a public utility. Our principal executive
offices are located at 231 West Michigan Street, P.O. Box 2949, Milwaukee,
Wisconsin 53201. Our telephone number is (414) 221-2345.
THE WEC TRUSTS
Each WEC Trust is a statutory business trust that we have formed under
Delaware law. For each trust there is a trust agreement signed by us as
depositor, by The First National Bank of Chicago as property trustee, by First
Chicago Delaware Inc. as Delaware trustee and by two of our employees as
administrative trustees. For each trust there is also a certificate of trust
filed with the Delaware Secretary of State. When we are ready to issue and
sell securities through the trust, the trust agreement will be amended to read
substantially like the form of amended and restated trust agreement that is
filed with the SEC as an exhibit to the registration statement of which this
prospectus is a part. Each trust agreement will be qualified as an indenture
under the Trust Indenture Act of 1939.
The Issuance and Sale of the Trust Securities
We have created each WEC Trust solely to:
. issue and sell its trust securities (including the preferred securities
and the common securities), which represent proportionate beneficial
ownership interests in that WEC Trust and its assets;
. use the proceeds from the sale of the trust securities to buy from us a
series of our junior subordinated debentures, which will be the only
assets of that WEC Trust;
. maintain its status as a grantor trust for federal income tax purposes;
and
. engage in only those other activities necessary or convenient to
accomplish the other purposes.
Because the WEC Trusts' only assets will be junior subordinated debentures
that we issue to them, our payments on those debt securities will be the only
source of funds to be paid to purchasers or owners of the trust securities.
Each of the WEC Trusts is a separate legal entity, so the assets of one will
not be available to satisfy the obligations of any other similar trust we may
create.
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<PAGE>
We will acquire and own all of the common securities of each WEC Trust. The
common securities will have an aggregate liquidation amount of at least 3% of
the total capital of each WEC Trust. The remainder, representing up to 97% of
the ownership interests in the WEC Trust, will be preferred securities of the
WEC Trust which may be sold to the public. The common securities and the
preferred securities will have substantially the same terms, including the same
priority of payment, and will receive proportionate payments from the WEC Trust
in respect of distributions and payments upon liquidation, redemption or
otherwise at the same times, with one exception: if we default on the
corresponding junior subordinated debentures that we issue to the WEC Trust and
do not cure the default within the times specified in the indenture governing
our issuance of our junior subordinated debentures, our rights to payments as
holder of the common securities will be subordinated to the rights of the
holders of the preferred securities. See "DESCRIPTION OF PREFERRED SECURITIES--
Subordination of Common Securities."
Unless we say otherwise in the applicable prospectus supplement, each WEC
Trust will have a term of approximately 50 years. However, a WEC Trust may
dissolve earlier as provided in the applicable trust agreement and the
prospectus supplement.
Each WEC Trust's business and affairs will be conducted by its trustees,
whom we will appoint as holder of the common securities. Unless we say
otherwise in the applicable prospectus supplement, the trustees for each WEC
Trust will be:
. The First National Bank of Chicago, as the property trustee
. First Chicago Delaware Inc., as the Delaware trustee
. Two of our officers, as individual administrative trustees.
We refer to all of these trustees collectively as the "issuer trustees." The
First National Bank of Chicago, as property trustee, will act as sole indenture
trustee under each trust agreement for purposes of compliance with the Trust
Indenture Act. Unless we say otherwise in the applicable prospectus supplement,
The First National Bank of Chicago will also act as trustee under our guarantee
agreement relating to the preferred securities. See "DESCRIPTION OF GUARANTEES"
and "DESCRIPTION OF DEBT SECURITIES--Certain Provisions Relating to Junior
Subordinated Debentures Issued to the WEC Trusts."
As the holder of the common securities of a WEC Trust, we will ordinarily
have the right to appoint, remove or replace the property trustee or the
Delaware trustee for each WEC Trust. However, if we are in default with respect
to the corresponding junior subordinated debentures issued to that WEC Trust
(and we haven't cured that default within the time specified in the indenture),
then the holders of a majority in liquidation amount of that WEC Trust's
outstanding preferred securities will be entitled to appoint, remove or replace
the property trustee and/or the Delaware trustee. In no event will the holders
of the preferred securities have the right to vote to appoint, remove or
replace the administrative trustees; we retain that right exclusively as the
holder of the common securities. The duties and obligations of each issuer
trustee are governed by the applicable trust agreement.
Pursuant to the indenture and the trust agreement, we promise to pay all
fees and expenses related to each WEC Trust and the offering of the preferred
securities and will pay, directly or indirectly, all ongoing costs, expenses
and liabilities of each WEC Trust, except obligations under the preferred
securities and the common securities.
The WEC Trusts have no separate financial statements. Separate financial
statements would not be material to holders of the preferred securities because
the WEC Trusts have no independent operations. They exist solely for the
limited functions summarized above. We will guarantee the preferred securities
as described later in this prospectus.
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<PAGE>
The principal executive office of each WEC Trust is c/o Wisconsin Energy
Corporation, 231 West Michigan Street, P.O. Box 2949, Milwaukee, Wisconsin
53201, and its telephone number is (414) 221-2345.
USE OF PROCEEDS
Each WEC Trust will use all of the proceeds it receives from the sale of its
trust securities (including both the preferred securities and the common
securities) to purchase from us the corresponding junior subordinated
debentures that will provide the funds for the trust's payments to purchasers
of its trust securities. Except as otherwise described in the applicable
prospectus supplement, we intend to use the net proceeds from the sale of our
debt securities (either to the trusts or directly to the public) for
investments (including funding equity contributions to affiliates), for
repayment of borrowings, and/or for general corporate purposes. We may
temporarily invest any funds not required immediately for those purposes in
short-term marketable securities. We expect to borrow money or sell securities
from time to time, but we cannot predict the precise amounts or timing of doing
so. For current information, look at our current filings with the SEC. See
"WHERE YOU CAN FIND MORE INFORMATION."
RATIO OF EARNINGS TO FIXED CHARGES
Our historical ratios of earnings to fixed charges are described below for
the periods indicated.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............... 2.8x 1.7x 4.0x 4.1x 3.4x
</TABLE>
These computations include us and our subsidiaries. For these ratios,
"earnings" is determined by adding net income (including total allowances for
funds used during construction) plus current and deferred income taxes. "Fixed
charges" consists of interest charges, amortization of debt expenses, amounts
representing the interest factors of nuclear fuel rental expense and for a
long-term power purchase contract accounted for as a capital lease, and an
amount equal to the earnings before income taxes that would be required to pay
preferred dividends of wholly owned subsidiaries. See "WHERE YOU CAN FIND MORE
INFORMATION."
DESCRIPTION OF DEBT SECURITIES
The debt securities, including any junior subordinated debentures that we
issue to a WEC Trust, will be our direct unsecured general obligations. The
debt securities will be either senior debt securities, subordinated debt
securities or junior subordinated debt securities, including the junior
subordinated debentures that are issued to the WEC Trusts. The debt securities
will be issued in one or more series under the indenture described above
between us and The First National Bank of Chicago, as trustee and under a
securities resolution (which may be in the form of a resolution or a
supplemental indenture) authorizing the particular series.
We have summarized selected provisions of the indenture below. The summary
is not complete. The form of the indenture and a form of securities resolution
are filed as exhibits to the registration statement of which this prospectus is
a part. The securities resolution for each series also has been or will be
filed or incorporated by reference as an exhibit to the registration statement.
You should read the indenture and the applicable securities resolution for
provisions that may be important to you. In the summary below, we have included
references to section numbers in the indenture so that you can easily find
those provisions. The particular terms of any debt securities we offer will be
described in the related prospectus supplement, along with any applicable
modifications of or additions to the general terms of the debt securities
described below and in the indenture. For a description of the terms of any
series of debt securities, you should also review both the prospectus
supplement relating to that series and the description of the debt securities
set forth in this prospectus before making an investment decision.
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<PAGE>
General
The indenture does not significantly limit our operations. In particular, it
does not:
. limit the amount of debt securities that we can issue under the
indenture;
. limit the number of series of debt securities that we can issue from
time to time;
. restrict the total amount of debt that we or our subsidiaries may incur;
or
. contain any covenant or other provision that is specifically intended to
afford any holder of the debt securities special protection in the event
of highly leveraged transactions or any other transactions resulting in
a decline in our ratings or credit quality.
As of the date of this prospectus, there are no debt securities outstanding
under the indenture. The ranking of a series of debt securities with respect to
all of our indebtedness will be established by the securities resolution
creating the series.
Although the indenture permits the issuance of debt securities in other
forms or currencies, the debt securities covered by this prospectus will only
be denominated in U.S. dollars in registered form without coupons, unless
otherwise indicated in the applicable prospectus supplement.
Terms
A prospectus supplement and a securities resolution relating to the offering
of any series of debt securities will include specific terms relating to the
offering. The terms will include some or all of the following:
. the designation, aggregate principal amount, currency or composite
currency and denominations of the debt securities;
. the price at which the debt securities will be issued and, if an index,
formula or other method is used, the method for determining amounts of
principal or interest;
. the maturity date and other dates, if any, on which the principal of the
debt securities will be payable;
. the interest rate or rates, if any, or method of calculating the
interest rate or rates which the debt securities will bear;
. the date or dates from which interest will accrue and on which interest
will be payable, and the record dates for the payment of interest;
. the manner of paying principal and interest on the debt securities;
. the place or places where principal and interest will be payable;
. the terms of any mandatory or optional redemption of the debt securities
by us, including any sinking fund;
. the terms of any conversion or exchange right;
. the terms of any redemption of debt securities at the option of holders;
. any tax indemnity provisions;
. if payments of principal or interest may be made in a currency other
than U.S. Dollars, the manner for determining such payments;
. the portion of principal payable upon acceleration of any discounted
debt security (as described below);
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<PAGE>
. whether and upon what terms debt securities may be defeased (which means
that we would be discharged from our obligations by depositing
sufficient cash or government securities to pay the principal, interest,
any premiums and other sums due to the stated maturity date or a
redemption date of the debt securities of the series);
. whether any events of default or covenants in addition to or instead of
those set forth in the indenture apply;
. provisions for electronic issuance of debt securities or for debt
securities in uncertificated form;
. the ranking of the debt securities, including the relative degree, if
any, to which the debt securities of such series are subordinated to one
or more other series of debt securities in right of payment, whether
outstanding or not;
. any provisions relating to extending or shortening the date on which the
principal and premium, if any, of the debt securities of the series is
payable;
. any provisions relating to the deferral of payment of any interest;
. if the series of debt securities is to be issued to a WEC Trust, the
forms of the related trust agreement and guarantee agreement;
. the additions or changes, if any, to the indenture with respect to that
series of debt securities to permit or facilitate the issuance of that
series of debt securities to a WEC Trust; and
. any other terms not inconsistent with the provisions of the indenture,
including any covenants or other terms that may be required or advisable
under United States or other applicable laws or regulations, or
advisable in connection with the marketing of the debt securities.
(Section 2.01)
We may issue debt securities of any series as registered debt securities,
bearer debt securities or uncertificated debt securities, and in such
denominations as we specify in the securities resolution and prospectus
supplement for the series. (Section 2.01)
In connection with its original issuance, no bearer debt security will be
offered, sold or delivered to any location in the United States. We may deliver
a bearer debt security in definitive form in connection with its original
issuance only if a certificate in a form we specify to comply with United
States laws and regulations is presented to us. (Section 2.04)
A holder of registered debt securities may request registration of a
transfer upon surrender of the debt security being transferred at any agency we
maintain for that purpose and upon fulfillment of all other requirements of the
agent. (Sections 2.03 and 2.07)
We may issue debt securities under the indenture as discounted debt
securities to be offered and sold at a substantial discount from the principal
amount of those debt securities. Special United States federal income tax and
other considerations applicable to discounted debt securities will be described
in the related prospectus supplement. A discounted debt security is a debt
security where the amount of principal due upon acceleration is less than the
stated principal amount. (Sections 1.01 and 2.10)
Conversion and Exchange
The terms, if any, on which debt securities of any series will be
convertible into or exchangeable for our common stock or other equity or debt
securities, property, cash or obligations or a combination of any of the
foregoing, will be summarized in the prospectus supplement relating to the
series. The terms may include provisions for conversion or exchange, either on
a mandatory basis, at the option of the holder or at our option. (Section 9.01)
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Certain Covenants
Any restrictive covenants which may apply to a particular series of debt
securities will be described in the related prospectus supplement.
Ranking of Debt Securities
Unless stated otherwise in a prospectus supplement, the debt securities
issued under the indenture will rank equally and ratably with our other
unsecured and unsubordinated debt. The debt securities will not be secured by
any properties or assets and will represent our unsecured debt.
Because we are a holding company and conduct all of our operations through
subsidiaries, holders of debt securities will generally have a junior position
to claims of creditors of our subsidiaries, including trade creditors, debt
holders, secured creditors, taxing authorities, guarantee holders and any
preferred stockholders. Various financing arrangements and regulatory
requirements impose restrictions on the ability of our utility subsidiaries to
transfer funds to us in the form of cash dividends, loans or advances. Under
Wisconsin law, Wisconsin Electric is prohibited from loaning funds, either
directly or indirectly, to us. The indenture does not limit us or our
subsidiaries if we decide to issue additional debt. Some of our operating
subsidiaries have ongoing corporate debt programs used to finance their
business activities. As of December 31, 1998, our subsidiaries had
approximately $2.1 billion of outstanding debt, and preferred stock issued by
Wisconsin Electric was entitled to annual dividends of approximately $1.2
million.
Successor Obligor
The indenture provides that, unless otherwise specified in the securities
resolution establishing a series of debt securities, we will not consolidate
with or merge into, or transfer all or substantially all of our assets to,
another company, unless:
. that company is organized under the laws of the United States or a state
or is organized under the laws of a foreign jurisdiction and consents to
the jurisdiction of the courts of the United States or a state;
. that company assumes by supplemental indenture all of our obligations
under the indenture, the debt securities and any coupons;
. all required approvals of any regulatory body having jurisdiction over
the transaction shall have been obtained; and
. immediately after the transaction no default exists under the indenture.
The successor shall be substituted for us as if it had been an original
party to the indenture, securities resolutions and debt securities. Thereafter
the successor may exercise our rights and powers under the indenture, the debt
securities and any coupons, and all of our obligations under those documents
will terminate. (Section 5.01)
Exchange of Debt Securities
Registered debt securities may be exchanged for an equal principal amount of
registered debt securities of the same series and date of maturity in the
denominations requested by the holders upon surrender of the registered debt
securities at an agency we maintain for that purpose and upon fulfillment of
all other requirements of the agent. (Section 2.07)
Defaults and Remedies
Unless the securities resolution establishing the series provides for
different events of default, in which event the prospectus supplement will
describe the change, an event of default with respect to a series of debt
securities will occur if:
. we default in any payment of interest on any debt securities of that
series when the payment becomes due and payable and the default
continues for a period of 60 days;
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. we default in the payment of the principal and premium, if any, of any
debt securities of the series when those payments become due and payable
at maturity or upon redemption, acceleration or otherwise;
. we default in the payment or satisfaction of any sinking fund obligation
with respect to any debt securities of the series as required by the
securities resolution establishing the series and the default continues
for a period of 60 days;
. we default in the performance of any of our other agreements applicable
to the series and the default continues for 90 days after the notice
specified below;
. pursuant to or within the meaning of any Bankruptcy Law we:
--commence a voluntary case,
--consent to the entry of an order for relief against us in an
involuntary case,
--consent to the appointment of a custodian for us or for all or
substantially all of our property, or
--make a general assignment for the benefit of our creditors;
. a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that remains unstayed and in effect for 60 days and that:
--is for relief against us in an involuntary case,
--appoints a custodian for us or for all or substantially all of our
property, or
--orders us to liquidate; or
. there occurs any other event of default provided for in such series.
(Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law. (Section 6.01)
A default under the indenture means any event which is, or after notice or
passage of time would be, an event of default under the indenture. A default
under the fourth bullet point above is not an event of default until the
Trustee or the holders of at least 25% in principal amount of the series notify
us of the default and we do not cure the default within the time specified
after receipt of the notice. (Section 6.01)
If an event of default occurs under the indenture and is continuing on a
series, the trustee by notice to us, or (except as provided in the next
sentence) the holders of at least 25% in principal amount of the series by
notice both to us and to the trustee, may declare the principal of and accrued
interest on all the debt securities of the series to be due and payable
immediately. In the case of a series issued to a WEC Trust, if, upon an event
of default, the trustee or the holders of not less than 25% in aggregate
principal amount of the series fail to declare the principal of all the debt
securities of that series to be immediately due and payable, then the holders
of 25% in aggregate liquidation amount of the preferred securities then
outstanding shall have the right to do so by notice to us and to the trustee.
Discounted debt securities may provide that the amount of principal due upon
acceleration is less than the stated principal amount.
Except as provided in the next sentence, the holders of a majority in
principal amount of a series of debt securities, by notice to the trustee, may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing events of default on
the series have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration. In the case of a series
of debt securities issued to a WEC Trust, the holders of a majority in
aggregate liquidation amount of the preferred securities then outstanding shall
also have the right to rescind the acceleration and its consequences with
respect to such series, subject to the same conditions set forth above.
(Section 6.02)
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If an event of default occurs and is continuing on a series, the trustee may
pursue any available remedy to collect principal or interest then due on the
series, to enforce the performance of any provision applicable to the series,
or otherwise to protect the rights of the trustee and holders of the series.
(Section 6.03)
In the case of a series issued to a WEC Trust, any holder of the related
preferred securities of the WEC Trust shall have the right, upon the occurrence
and continuance of an event of default with respect to the series following our
failure to pay timely interest, principal or premium as described above, to sue
us directly. In that lawsuit the holder of the related preferred securities can
force us to pay to the holder the principal of, and premium, if any, and
interest on, the debt securities having a principal amount equal to the
aggregate liquidation amount of the preferred securities held by that holder.
(Section 6.06)
The trustee may require indemnity satisfactory to it before it performs any
duty or exercises any right or power under the indenture or the debt securities
which it reasonably believes may expose it to any loss, liability or expense.
(Section 7.01) With some limitations, holders of a majority in principal amount
of the debt securities of the series may direct the trustee in its exercise of
any trust or power with respect to that series. (Section 6.05) Except in the
case of default in payment on a series, the trustee may withhold notice of any
continuing default if it determines that withholding the notice is in the
interest of holders of the series. (Section 7.04) We are required to furnish
the trustee annually a brief certificate as to our compliance with all
conditions and covenants under the indenture. (Section 4.04)
The indenture does not have a cross-default provision. Thus, a default by us
on any other debt, including any other series of debt securities, would not
constitute an event of default under the indenture. A securities resolution may
provide for a cross-default provision; in that case the prospectus supplement
will describe the terms of that provision.
Amendments and Waivers
The indenture and the debt securities or any coupons of the series may be
amended, and any default may be waived. Unless the securities resolution
provides otherwise, in which event the prospectus supplement will describe the
revised provision, we and the trustee may amend the debt securities, the
indenture and any coupons with the written consent of the holders of a majority
in principal amount of the debt securities of all series affected voting as one
class. However, in the case of a series of debt securities issued to a WEC
Trust, we are not permitted to adopt an amendment that adversely affects the
holders of the preferred securities in any material respect, and no termination
of the indenture shall occur, without the prior consent of the holders of not
less than a majority in aggregate liquidation amount of the preferred
securities then outstanding unless and until the principal (and premium, if
any) of the debt securities of that series and all accrued and unpaid interest
thereon have been paid in full. Furthermore, in the case of a series issued to
a WEC Trust, no amendment can be made to the provisions of the indenture
allowing holders of preferred securities to sue directly following our failure
to make timely payments on the debt securities as described above without the
prior consent of the holder of each preferred security then outstanding unless
and until the principal (and premium, if any) of the debt securities of the
series and all accrued and unpaid interest thereon have been paid in full.
(Section 10.02)
Without the consent of each debt security holder affected, no amendment or
waiver may :
. reduce the principal amount of debt securities whose holders must
consent to an amendment or waiver;
. reduce the interest on or change the time for payment of interest on any
debt security (but this does not affect our right to elect to defer one
or more payments of interest as described below under "Certain
Provisions Relating to Junior Subordinated Debentures Issued to the WEC
Trusts--Option to Extend Interest Payment Date");
. change the fixed maturity of any debt security (subject to any right we
may have retained in the securities resolution and described in the
prospectus supplement);
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. reduce the principal of any non-discounted debt security or reduce the
amount of the principal of any discounted debt security that would be
due on acceleration thereof;
. change the currency in which the principal or interest on a debt
security is payable;
. make any change that materially adversely affects the right to convert
or exchange any debt security; or
. waive any default in payment of interest on or principal of a debt
security. (Section 10.02)
Without the consent of any debt security holder, we may amend the indenture
or the debt securities:
. to cure any ambiguity, omission, defect, or inconsistency;
. to provide for the assumption of our obligations to debt security
holders by the surviving company in the event of a merger or
consolidation requiring such assumption;
. to provide that specific provisions of the indenture shall not apply to
a series of debt securities not previously issued;
. to create a series of debt securities and establish its terms;
. to provide for a separate trustee for one or more series of debt
securities; or
. to make any change that does not materially adversely affect the rights
of any debt security holder. (Section 10.01)
Legal Defeasance and Covenant Defeasance
Debt securities of a series may be defeased at any time in accordance with
their terms and as set forth in the indenture and described briefly below,
unless the securities resolution establishing the terms of the series otherwise
provides. Any defeasance may terminate all of our obligations (with limited
exceptions) with respect to a series of debt securities and the indenture
("legal defeasance"), or it may terminate only our obligations under any
restrictive covenants which may be applicable to a particular series ("covenant
defeasance").
We may exercise our legal defeasance option even though we have also
exercised our covenant defeasance option. If we exercise our legal defeasance
option, that series of debt securities may not be accelerated because of an
event of default. If we exercise our covenant defeasance option, that series of
debt securities may not be accelerated by reference to any restrictive
covenants which may be applicable to that particular series. (Section 8.01)
To exercise either defeasance option as to a series of debt securities, we
must:
. irrevocably deposit in trust (the "defeasance trust") with the trustee
or another trustee money or U.S. government obligations;
. deliver a certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of principal and
interest when due on the deposited U.S. government obligations, without
reinvestment, plus any deposited money without investment, will provide
cash at the times and in the amounts necessary to pay the principal and
interest when due on all debt securities of the series to maturity or
redemption, as the case may be; and
. comply with certain other conditions. In particular, we must obtain an
opinion of tax counsel that the defeasance will not result in
recognition of any gain or loss to holders for federal income tax
purposes.
U.S. government obligations are direct obligations of (a) the United States or
(b) an agency or instrumentality of the United States, the payment of which is
unconditionally guaranteed by the United States, which, in either case (a) or
(b), have the full faith and credit of the United States of America pledged for
payment and which
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are not callable at the issuer's option. It also includes certificates
representing an ownership interest in such obligations. (Section 8.02)
Certain Provisions Relating to Junior Subordinated Debentures Issued to the WEC
Trusts
General. The junior subordinated debentures that we issue to a WEC Trust may
be issued in one or more series under the indenture with terms corresponding to
the terms of a series of preferred securities issued by that WEC Trust.
Concurrently with the issuance of each WEC Trust's preferred securities, the
WEC Trust will invest the proceeds from the sale of the preferred securities
and the consideration we pay for the common securities in a series of
corresponding junior subordinated debentures that we will issue to the WEC
Trust.
Each series of corresponding junior subordinated debentures:
. will be unsecured;
. will be in the principal amount equal to the aggregate stated
liquidation amount of the preferred securities and the common securities
of the WEC Trust; and
. will rank equally with all other series of junior subordinated debt
securities in terms of priority of payment.
Unless provided otherwise in the prospectus supplement, holders of the
preferred securities issued by a WEC Trust that owns a series of corresponding
junior subordinated debentures will have the rights summarized above in
connection with modifications to the indenture or upon occurrence of a trust
event of default. See "Amendments and Waivers" and "Defaults and Remedies,"
above and "RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES--Enforcement Rights of
Holders of Preferred Securities."
The prospectus supplement will describe specific terms relating to the
offering of the corresponding junior subordinated debentures. See "DESCRIPTION
OF DEBT SECURITIES--Terms."
Unless otherwise specified in the applicable prospectus supplement, we will
covenant, as to each series of corresponding junior subordinated debentures:
. to maintain, directly or indirectly, 100% ownership of the common
securities of the WEC Trust to which the corresponding junior
subordinated debentures have been issued (provided that certain
successors which are permitted pursuant to the indenture may succeed to
our ownership of the common securities);
. not to voluntarily dissolve, wind-up or liquidate any WEC Trust, except:
--in connection with a distribution of the junior subordinated
debentures to the holders of the preferred securities in liquidation
of the WEC Trust; or
--in connection with certain mergers, consolidations or amalgamations
permitted by the related trust agreement; and
. to use our reasonable efforts, consistent with the terms and provisions
of the related trust agreement, to cause such WEC Trust to remain
classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes.
For additional covenants relating to payment of expenses of the WEC Trusts, see
"DESCRIPTION OF PREFERRED SECURITIES--Payment of Expenses."
Option to Extend Interest Payment Date. Unless otherwise stated in the
applicable prospectus supplement, we will have the right at any time and from
time to time during the term of any series of corresponding junior subordinated
debentures to defer payments of interest for a specified number of consecutive
interest payment, or extension, periods. No extension period may extend beyond
the maturity date
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of that series of corresponding junior subordinated debentures. We may pay at
any time all or any portion of the interest accrued to that point during a
deferral period. At the end of the deferral period or at a redemption date, we
will be obligated to pay all interest accrued and unpaid (together with
interest on the unpaid interest to the extent permitted by applicable law.)
United States federal income tax consequences and special considerations
applicable to any corresponding junior subordinated debentures for which an
extension period has been elected will be described in the applicable
prospectus supplement. During any extension period, or while we are in default,
we will be restricted in our ability to make payments or incur obligations
related to our capital stock or debt securities ranking equal to or below the
junior subordinated debentures.
Prior to the termination of any extension period, we may further extend the
interest payment period. However, the deferral period, together with all prior
and further extensions, may not exceed 20 consecutive quarters or extend beyond
the maturity date of the junior subordinated debentures. After the termination
of any deferral period and the payment of all amounts due, we may decide to
begin a new deferral period, subject to the above requirements.
If the property trustee is the sole holder of the series of junior
subordinated debentures held by the WEC Trust, we will give the administrative
trustee and the property trustee notice of our selection of any deferral period
one business day prior to the earlier of:
. the next date distributions on the preferred securities are payable; or
. the date the WEC Trust is required to give notice to the New York Stock
Exchange (or other applicable self-regulatory organization) or to
holders of the preferred securities of the record date or the date any
distribution is payable.
If the property trustee is not the sole holder of the series of junior
subordinated debentures, we will give the debenture holders notice of our
selection of any deferral period ten business days prior to the earliest of:
. the next interest payment date; or
. the date upon which we are required to give notice to the New York Stock
Exchange (or other applicable self-regulatory organization) or to
holders of the junior subordinated debentures of the record or payment
date of any related interest payment.
Redemption. The junior subordinated debentures and the applicable securities
resolution will provide the terms upon which we can redeem the junior
subordinated debentures at our option, and will specify a date prior to which
we will not be allowed to redeem the junior subordinated debentures, and after
which we will have the right to redeem the junior subordinated debentures, in
whole or in part, upon not less than 30 days nor more than 60 days notice to
the holder of the junior subordinated debentures at a redemption price or
prices stated in the applicable prospectus supplement.
If the junior subordinated debentures are redeemed only in part, they will
be redeemed pro rata or by lot or by any other method selected by the trustee.
If a partial redemption of the corresponding junior subordinated debentures
would result in delisting of the preferred securities issued by the WEC Trust
from any national securities exchange or other self-regulatory organization on
which the preferred securities are then listed, we will not be permitted to
effect a partial redemption and may only redeem the corresponding junior
subordinated debentures as a whole.
Except as otherwise specified in the applicable prospectus supplement and
subject to the provisions of the applicable securities resolution, if a Tax
Event (as defined below) or an Investment Company Event (as defined below) in
respect of a WEC Trust occurs and is continuing, we have the option to redeem
the corresponding junior subordinated debentures held by the WEC Trust, in
whole but not in part, at any time within 90 days thereafter. If the applicable
WEC Trust is the holder of all outstanding corresponding junior subordinated
debentures, the proceeds of the redemption will be used by the WEC Trust to
redeem the corresponding preferred securities and common securities in
accordance with their terms.
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"Tax Event" means that the applicable WEC Trust will have received an
opinion of counsel (which may be counsel to us or an affiliate) experienced in
such matters to the effect that, as a result of any
. amendment to, or change (including any announced proposed change) in,
the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority, or
. official administrative written decision, pronouncement or action or
judicial decision interpreting or applying such laws or regulations,
in each case which amendment or change is effective or which proposed change,
pronouncement, action or decision is announced on or after the date of issuance
of the applicable series of junior subordinated debentures pursuant to the
applicable securities resolution, there is more than an insubstantial risk
that:
. the WEC Trust is, or will be within 90 days of the date of the opinion
of counsel, subject to United States Federal income tax with respect to
income received or accrued on the junior subordinated debentures;
. interest we pay on the corresponding junior subordinated debentures is
not, or will not be within 90 days of the date of the opinion of
counsel, deductible, in whole or in part, for United States Federal
income tax purposes; or
. the WEC Trust is, or will be within 90 days of the date of the opinion
of counsel, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Investment Company Event" means that the applicable WEC Trust will have
received an opinion of counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority on or after the date of
original issuance of the preferred securities by the WEC Trust, the WEC Trust
is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended.
Restrictions on Certain Payments. Unless otherwise provided in the
applicable prospectus supplement, we will promise, as to each series of junior
subordinated debentures issued to a WEC Trust, that we and our subsidiaries
will not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of our
capital stock, or
. make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities (including other junior
subordinated debentures) that rank equally with or junior in interest to
the junior subordinated debentures, or
. make any guarantee payments with respect to any of the debt securities
of any of our subsidiaries if the guarantee ranks equally with or junior
in interest to the junior subordinated debentures
other than:
. dividends or distributions payable in our common stock;
. redemptions or purchases of any rights pursuant to our shareholder
rights plan, if any, or any successor rights agreement, and the
declaration of a dividend of rights or the issuance of stock under a
rights agreement in the future;
. payments under any guarantee relating to the preferred securities of a
WEC Trust;
. purchases of common stock related to the issuance of common stock under
any benefit plans for our directors, officers or employees;
. obligations under any dividend reinvestment plan or stock purchase plan;
and
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. purchases of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of a security being
converted or exchanged for our capital stock.
These restriction apply only if:
. at that time we have actual knowledge that an event has occurred that
(a) with the giving of notice or the lapse of time, or both, would
constitute an event of default under the indenture with respect to the
junior subordinated debentures of that series and (b) we shall not have
taken reasonable steps to cure the event, or
. the corresponding junior subordinated debentures are held by a WEC Trust
which is the issuer of a series of related preferred securities, and we
are in default with respect to payment of any obligations under the
guarantee relating to those preferred securities, or
. we shall have given notice of our selection of a deferral of interest
extension period as provided pursuant to the securities resolution with
respect to the corresponding junior subordinated debentures and shall
not have rescinded the notice, or the extension period shall be
continuing.
Regarding the Trustee
The First National Bank of Chicago will act as trustee and registrar for
debt securities issued under the indenture and, unless otherwise indicated in a
prospectus supplement, the trustee will also act as transfer agent and paying
agent with respect to the debt securities. (Section 2.03) We may remove the
trustee with or without cause if we notify the trustee three months in advance
and if no default occurs during the three-month period. (Section 7.07) The
trustee, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for us or our affiliates, and may otherwise
deal with us or our affiliates, as if it were not the trustee.
The First National Bank of Chicago is a participating lender with respect to
our existing credit agreements for our commercial paper program ($15 million)
and is a lender and administrative agent for a $75 million credit arrangement
for Wisconsin Electric, one of our subsidiaries. One of our directors is also a
director of the bank and of the bank holding company.
DESCRIPTION OF PREFERRED SECURITIES
The following section describes the general terms and provisions of the
preferred securities to which any prospectus supplement may relate. The
particular terms of the preferred securities offered by any WEC Trust and the
extent to which any of these general provisions do not apply to its preferred
securities will be described in the prospectus supplement relating to that WEC
Trust and its preferred securities.
Pursuant to the terms of the trust agreement for each WEC Trust, the
administrative trustees are authorized to issue the preferred securities and
the common securities on behalf of the WEC Trust. The preferred securities will
represent beneficial ownership interests in the assets of the WEC Trust. The
holders of the preferred securities will be entitled to a preference over
holders of the common securities of the WEC Trust in certain circumstances with
respect to distributions and amounts payable on redemption or liquidation.
Holders of preferred securities will also have certain other benefits as
described in the corresponding trust agreement.
We have summarized selected provisions of the preferred securities and each
trust agreement below. This summary is not complete. The form of trust
agreement has been filed as an exhibit to the registration statement of which
this prospectus forms a part. You should read the form of trust agreement for
provisions that may be important to you. You should also consider applicable
provisions of the Trust Indenture Act. Each of the WEC Trusts is a legally
separate entity, and the assets of one are not available to satisfy the
obligations of the other.
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General
The preferred securities of a WEC Trust will rank equally, and payments on
the preferred securities will be made pro rata, with the common securities of
that WEC Trust except as described under "--Subordination of Common
Securities." Legal title to the corresponding junior subordinated debentures
will be held by the property trustee in trust for the benefit of the holders of
the related preferred securities and for us as holder of the common securities.
Each guarantee agreement we execute for the benefit of the holders of a WEC
Trust's preferred securities will be a guarantee on a junior subordinated basis
with respect to the related preferred securities but will not guarantee payment
of distributions or amounts payable on redemption or liquidation of the
preferred securities when the related WEC Trust does not have funds available
to make such payments. See "DESCRIPTION OF GUARANTEES."
Distributions
Distributions on the preferred securities will be cumulative, will
accumulate from the date of original issuance and will be payable on the dates
specified in the applicable prospectus supplement. Except as specified in the
applicable prospectus supplement, in the event that any date on which
distributions are payable on the preferred securities is not a business day,
payment of the distribution will be made on the next succeeding day that is a
business day (without any interest or other payment in respect to the delay),
with the same force and effect as if made on the originally specified date.
Each date on which distributions are payable is referred to in this prospectus
as a distribution date.
A WEC Trust's preferred securities represent beneficial ownership interests
in the assets of that WEC Trust. The distributions on each preferred security
will be payable at a rate specified in the prospectus supplement for that
preferred security. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months unless
otherwise specified in the applicable prospectus supplement. Distributions to
which holders of preferred securities are entitled will accumulate additional
distributions at the rate per annum specified in the applicable prospectus
supplement. Distributions on preferred securities as used in this prospectus
includes any additional distributions unless otherwise stated.
The revenue of each WEC Trust available for distribution to holders of its
preferred securities will be limited to payments under the corresponding junior
subordinated debentures it owns. Each WEC Trust will invest the proceeds from
the issuance and sale of its trust securities in the corresponding junior
subordinated debentures, and it will have no other assets. See "DESCRIPTION OF
DEBT SECURITIES--Certain Provisions Relating to Junior Subordinated Debentures
Issued to the WEC Trusts." If we do not make interest payments on the
corresponding junior subordinated debentures, the property trustee will not
have funds available to pay distributions on the related preferred securities.
We have guaranteed the payment of distributions (if and to the extent the WEC
Trust has funds legally available for the payment of distributions and cash
sufficient to make the payments) on a limited basis as set forth herein under
"DESCRIPTION OF GUARANTEES."
Distributions on the preferred securities will be payable to the holders as
they appear on the register of the WEC Trust on the relevant record dates,
which, as long as the preferred securities remain in book-entry form, will be
one business day prior to the relevant distribution date. Subject to any
applicable laws and regulations and to the provisions of the applicable trust
agreement, each distribution payment will be made as described under "BOOK-
ENTRY ISSUANCE." In the event any preferred securities are not in book-entry
form, the relevant record date for such preferred securities shall be a date at
least 15 days prior to the relevant distribution date, as specified in the
applicable prospectus supplement.
Payment of Expenses
Pursuant to the indenture, we have agreed to pay all debts and obligations
(other than distributions on the trust securities) and all costs and expenses
of the WEC Trusts and to pay any and all taxes, duties, assessments or other
governmental charges (other than United States withholding taxes) imposed by
the United States or
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any other taxing authority. This includes, but is not limited to, all costs and
expenses relating to the organization of the WEC Trusts, the fees and expenses
of the property trustee, the Delaware trustee and the administrative trustees
and all costs and expenses relating to the operation of the WEC Trusts. As a
result, the net amounts received and retained by a WEC Trust after paying these
fees, expenses, debts and obligations will be equal to the amounts the WEC
Trust would have received and retained had no fees, expenses, debts and
obligations been incurred by or imposed on it. Our promise to pay these
obligations is for the benefit of, and shall be enforceable by, any creditor to
whom the fees, expenses, debts and obligations are owed, whether or not the
creditor has received notice of the promise. Any creditor may enforce these
obligations directly against us, and we have agreed to irrevocably waive any
right or remedy that would otherwise require that any creditor take any action
against the WEC Trust or any other person before proceeding against us. We will
execute such additional agreements as may be necessary to give full effect to
these promises.
Redemption or Exchange
If we repay or redeem, in whole or in part, any junior subordinated
debentures that have been issued to a WEC Trust, whether at maturity or
earlier, the proceeds from the repayment or redemption shall be applied by the
property trustee to redeem a like amount of the trust securities. The property
trustee will give not less than 30 nor more than 60 days notice, and the
redemption price will be equal to the sum of:
. the aggregate liquidation amount of the trust securities being redeemed;
plus
. accumulated but unpaid distributions on to the redeemed trust securities
to the date of redemption; plus
. the related amount of the premium, if any, that we pay upon the
concurrent redemption of corresponding junior subordinated debentures.
See "DESCRIPTION OF DEBT SECURITIES--Certain Provisions Relating to Junior
Subordinated Debentures Issued to the WEC Trusts--Redemption."
If we are repaying or redeeming less than all of any series of junior
subordinated debentures on a redemption date, then the proceeds from the
repayment or redemption shall be allocated to redeem the related trust
securities pro rata. The amount of premium, if any, that we pay to redeem all
or any part of any series of any corresponding junior subordinated debentures
will also be allocated to the redemption pro rata of the related trust
securities.
We will have the right to redeem any series of junior subordinated
debentures:
. subject to the conditions described under "DESCRIPTION OF DEBT
SECURITIES--Certain Provisions Relating to Junior Subordinated
Debentures Issued to the WEC Trusts--Redemption"; or
. as may be otherwise specified in the applicable prospectus supplement.
We have the right to dissolve a WEC Trust at any time and, after
satisfaction of any liabilities to creditors of the WEC Trust as provided by
applicable law, to cause the corresponding junior subordinated debentures owned
by the WEC Trust to be distributed to the holders of the related preferred
securities and common securities in liquidation of the WEC Trust.
If provided in the applicable prospectus supplement, we will have the right
to extend or shorten the maturity of any series of junior subordinated
debentures at the time that we exercise our right to elect to dissolve the
related WEC Trust and cause the corresponding junior subordinated debentures to
be distributed to the holders of the related preferred securities and common
securities in liquidation of the WEC Trust. However, we can extend the maturity
only if the conditions specified in the applicable prospectus supplement are
met at the time the election is made and at the time of the extension.
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After the liquidation date fixed for any distribution of corresponding
junior subordinated debentures to the holders of any series of preferred
securities:
. that series of preferred securities will no longer be deemed to be
outstanding;
. The Depository Trust Company (DTC) or its nominee, as the record holder
of the preferred securities, will receive a registered global
certificate or certificates representing the corresponding junior
subordinated debentures to be delivered in the distribution; and
. any certificates representing that series of preferred securities not
held by DTC or its nominee will be deemed to represent the corresponding
junior subordinated debentures having a principal amount equal to the
stated liquidation amount of that series of preferred securities, and
bearing accrued and unpaid interest in an amount equal to the accrued
and unpaid distributions on that series of preferred securities until
the certificates are presented to the administrative trustees or their
agent for transfer or reissuance.
We cannot predict the market prices for the preferred securities or the
corresponding junior subordinated debentures that may be distributed in
exchange for preferred securities. As a result, the preferred securities that
an investor may purchase, or the corresponding junior subordinated debentures
that an investor may receive on dissolution and liquidation of a WEC Trust, may
trade at a lower price than the investor paid to purchase the preferred
securities.
Redemption and Exchange Procedures
Any preferred securities that are redeemed on any redemption date will
receive the redemption price from the contemporaneous redemption of the
corresponding junior subordinated debentures. Redemptions of the preferred
securities will be made and the redemption price will be payable on each
redemption date only to the extent that the related WEC Trust has funds on hand
available for the payment of such redemption price. See "Subordination of
Common Securities."
If a WEC Trust gives a notice of redemption in respect of its preferred
securities, then, by 12:00 noon, New York City time, on the redemption date, to
the extent funds are available, the property trustee will deposit irrevocably
with DTC funds sufficient to pay the applicable redemption price and will give
DTC irrevocable instructions and authority to pay the redemption price to the
holders of such preferred securities. See "BOOK-ENTRY ISSUANCE." If the
preferred securities are no longer in book-entry form, the property trustee, to
the extent funds are available, will irrevocably deposit with the paying agent
for the preferred securities funds sufficient to pay the applicable redemption
price and will give the paying agent irrevocable instructions and authority to
pay the redemption price to the holders thereof upon surrender of their
certificates evidencing the preferred securities.
Nevertheless, distributions payable on or prior to the redemption date for
any preferred securities called for redemption shall be payable to the holders
of such preferred securities on the relevant record dates for the related
distribution dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of the preferred securities called for redemption will cease, except
the right of the holders of the preferred securities to receive the redemption
price, but without interest on the redemption price, and the preferred
securities will cease to be outstanding.
Except as specified in the applicable prospectus supplement, in the event
that any date fixed for redemption of preferred securities is not a business
day, then payment of the redemption price payable on such date will be made on
the next succeeding day which is a business day (and without any interest or
other payment in respect of any delay). In the event that payment of the
redemption price in respect of preferred securities called for redemption is
improperly withheld or refused and not paid either by the WEC Trust or by us
pursuant to the guarantee as described under "DESCRIPTION OF GUARANTEES," then:
. distributions on those preferred securities will continue to accrue at
the then applicable rate, from the redemption date originally
established by the WEC Trust for those preferred securities to the date
the redemption price is actually paid; and
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. the actual payment date will be the date fixed for redemption for
purposes of calculating the redemption price.
Subject to applicable law (including, without limitation, United States
federal securities law), we or our subsidiaries may at any time and from time
to time purchase outstanding preferred securities by tender, in the open market
or by private agreement.
Payment of the redemption price on the preferred securities and any
distribution of corresponding junior subordinated debentures to holders of
preferred securities will be made to the applicable record holders thereof as
they appear on the register for the preferred securities on the relevant record
date. Except as provided in the next sentence, the record date will be one
business day prior to the relevant redemption date or liquidation date, as
applicable. However, if any preferred securities are not in book-entry form,
the relevant record date for those preferred securities shall be a date at
least 15 days prior to the redemption date or liquidation date, as applicable,
as specified in the applicable prospectus supplement.
If less than all of the preferred securities and common securities issued by
a WEC Trust are to be redeemed on a redemption date, then the aggregate
liquidation amount of preferred securities and common securities to be redeemed
shall be allocated pro rata to the preferred securities and the common
securities based upon the relative liquidation amounts of the two classes. The
particular preferred securities to be redeemed shall be selected on a pro rata
basis not more than 60 days prior to the redemption date by the property
trustee from the outstanding preferred securities not previously called for
redemption. The property trustee shall promptly notify the trust registrar in
writing of the preferred securities selected for redemption and, in the case of
any preferred securities selected for partial redemption, the liquidation
amount to be redeemed. For all purposes of each trust agreement, unless the
context otherwise requires, all provisions relating to the redemption of
preferred securities shall relate, in the case of any preferred securities
redeemed or to be redeemed only in part, to the portion of the aggregate
liquidation amount of preferred securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of trust securities to be
redeemed at the holder's registered address. Unless we default in payment of
the redemption price on the corresponding junior subordinated debentures, on
and after the redemption date interest ceases to accrue on the corresponding
junior subordinated debentures or portions thereof (and distributions cease to
accrue on the related preferred securities or portions thereof) called for
redemption.
If any redemption date is not a business day, then the liquidation amount
and all accrued and unpaid distributions to the date of redemption will be
payable on the next business day (and without any interest or other payment in
respect of any such delay). However, if the business day is in the next
calendar year, the redemption amount will be payable on the preceding business
day.
Subordination of Common Securities
Payment of distributions on, and the redemption price of, each WEC Trust's
preferred securities and common securities, as applicable, generally shall be
made pro rata based on the liquidation amount of the preferred securities and
of the common securities. However, if on any distribution date or redemption
date an event of default with respect to any corresponding junior subordinated
debenture shall have occurred and be continuing, then:
. neither we nor the WEC Trust shall pay any distribution on, or
redemption price of, any of the WEC Trust's common securities, and
neither we nor the WEC Trust shall make any other payment on account of
the redemption, liquidation or other acquisition of such common
securities, unless
--all accumulated and unpaid distributions on all of the WEC Trust's
outstanding preferred securities are paid in cash for all distribution
periods terminating on or prior to any payment on the common
securities, and
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--in the case of a payment of the redemption price, the full amount of
the redemption price on all of the WEC Trust's outstanding preferred
securities then called for redemption shall have been paid or provided
for; and
. all funds available to the property trustee shall first be applied to
the payment in full in cash of all distributions on, or redemption price
of, the WEC Trust's preferred securities then due and payable.
In the case of any event of default with respect to any corresponding junior
subordinated debentures, we (as holder of the WEC Trust's common securities)
will be deemed to have waived any right to act with respect to the event of
default under the applicable trust agreement until the effect of all events of
default with respect to such preferred securities has been cured, waived or
otherwise eliminated. Until any events of default under the applicable trust
agreement with respect to the preferred securities have been cured, waived or
otherwise eliminated, the property trustee is required to act solely on behalf
of the holders of the preferred securities and not on our behalf as holder of
the WEC Trust's common securities, and only the holders of such preferred
securities will have the right to direct the property trustee to act on their
behalf.
Liquidation Distribution upon Dissolution
Pursuant to each trust agreement, each WEC Trust shall automatically
dissolve upon expiration of its term and shall dissolve on the first to occur
of:
. specified events relating to our bankruptcy, dissolution or liquidation;
. our written direction to the property trustee, as depositor, to dissolve
the WEC Trust and distribute the corresponding junior subordinated
debentures to the holders of the preferred securities in exchange for
the preferred securities (which direction is optional and wholly within
our discretion as depositor);
. the redemption of all of the WEC Trust's trust securities; and
. the entry of an order for the dissolution of the WEC Trust by a court of
competent jurisdiction.
If an early dissolution occurs in any manner except by the redemption of all
of the trust securities, then the WEC Trust will be liquidated by the issuer
trustees as expeditiously as the issuer trustees determine to be possible.
Except as provided in the next sentence, the issuer trustees shall distribute
(after satisfaction of any liabilities to creditors of such WEC Trust as
provided by applicable law) to the holders of such trust securities a like
amount of the corresponding junior subordinated debentures. However, if such a
distribution is determined by the property trustee not to be practical, the
holders of the trust securities will be entitled to receive out of the assets
of the WEC Trust available for distribution to holders (after satisfaction of
any liabilities to creditors of the WEC Trust as provided by applicable law) a
liquidation distribution in an amount equal to, in the case of holders of
preferred securities, the aggregate of the liquidation amount plus accrued and
unpaid distributions thereon to the date of payment. If the liquidation
distribution can be paid only in part because the WEC Trust has insufficient
assets available to pay in full the aggregate liquidation distribution, then
the amounts payable directly by the WEC Trust on its preferred securities will
be paid on a pro rata basis.
As the holder of the WEC Trust's common securities, we will be entitled to
receive distributions upon any liquidation pro rata with the holders of its
preferred securities. However, if an event of default relating to the
corresponding junior subordinated debentures has occurred and is continuing,
the preferred securities will have a priority over the common securities.
Events of Default; Notice
Any one of the following events constitutes a trust "event of default" under
each trust agreement with respect to the preferred securities issued thereunder
(whatever the reason for the trust event of default):
. the occurrence of an event of default with respect to a corresponding
series of junior subordinated debentures issued under the indenture to
the trust (see "DESCRIPTION OF DEBT SECURITIES--Defaults and Remedies");
or
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. default by the property trustee in the payment of any distribution when
it becomes due and payable, and continuation of the default for a period
of 60 days; or
. default by the property trustee in the payment of any redemption price
of any trust security when it becomes due and payable; or
. default in the performance, or breach, in any material respect, of any
covenant or warranty of the issuer trustees in the trust agreement
(other than a default in the payment of any distribution or any
redemption price as provided above), and continuation of that default or
breach for a period of 90 days after there has been given, by registered
or certified mail, to the defaulting issuer trustee or trustees by the
holders of at least 25% in aggregate liquidation preference of the
outstanding preferred securities of the applicable WEC Trust, a written
notice specifying the default or breach and requiring it to be remedied
and stating that the notice is a "notice of default" under the trust
agreement; or
. the occurrence of specified events of bankruptcy or insolvency with
respect to the property trustee and our failure to appoint a successor
property trustee within 60 days.
Within five days after the occurrence of any trust event of default actually
known to the property trustee, the property trustee is required to transmit
notice of the trust event of default to the holders of the WEC Trust's
preferred securities, to the administrative trustees and to us, as depositor,
unless the trust event of default shall have been cured or waived. We and the
administrative trustees are required to file annually with the property trustee
a certificate as to whether or not we each are in compliance with all the
conditions and covenants applicable to us under each trust agreement.
If an event of default with respect to a corresponding junior subordinated
debenture has occurred and is continuing, the preferred securities shall have a
preference over the common securities upon termination of the WEC Trust as
described above. See "Liquidation Distribution upon Dissolution." The existence
of a trust event of default does not entitle the holders of preferred
securities to cause the redemption of the preferred securities.
Removal of Issuer Trustees
We as the holder of the common securities may remove an administrative
trustee at any time. Unless an event of default with respect to a corresponding
junior subordinated debenture shall have occurred and be continuing, we as the
holder of the common securities may also remove the property trustee or the
Delaware trustee at any time. If a trust event of default resulting from an
event of default with respect to a corresponding junior subordinated debenture
has occurred and is continuing, the property trustee and the Delaware trustee
may be removed at such time by the holders of a majority in liquidation amount
of the outstanding preferred securities. In no event will the holders of the
preferred securities have the right to vote to appoint, remove or replace the
administrative trustees: that right belongs exclusively to us as the holder of
the common securities. No resignation or removal of an issuer trustee and no
appointment of a successor trustee will be effective until the successor
trustee accepts its appointment in accordance with the provisions of the
applicable trust agreement.
Co-trustees and Separate Property Trustee
Unless a trust event of default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the trust
property may at the time be located, we (as the holder of the common
securities) and the administrative trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the property trustee,
of all or any part of the trust property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable trust agreement. In case an event
of default with respect to a corresponding junior subordinated debenture has
occurred and is continuing, the property trustee alone will have power to make
such an appointment.
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Merger or Consolidation of Issuer Trustees
Any corporation into which the property trustee, the Delaware trustee or any
administrative trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such trustee, shall be the successor of such trustee under each
trust agreement, provided such corporation shall be otherwise qualified and
eligible.
Mergers, Consolidations, Conversions, Amalgamations or Replacements of the WEC
Trusts
A WEC Trust may not merge with or into, consolidate, convert into,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other person, except
as described below, as described in "Liquidation Distribution upon Dissolution"
or as described in the prospectus supplement with respect to the preferred
securities. A WEC Trust may, at our request, with the consent of the
administrative trustees and without the consent of the property trustee, the
Delaware trustee or the holders of the preferred securities, merge with or
into, consolidate, convert into, amalgamate, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to a
trust organized as such under the laws of any state; provided, that:
. the successor entity either (a) expressly assumes all of the obligations
of the WEC Trust with respect to the preferred securities or (b)
substitutes for the preferred securities other successor securities
having substantially the same terms as the preferred securities so long
as the successor securities rank the same as the preferred securities
rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise;
. we expressly appoint a trustee of such successor entity possessing the
same powers and duties as the property trustee as the holder of the
corresponding junior subordinated debentures;
. the successor securities are listed, or any successor securities will be
listed upon notification of issuance, on any national securities
exchange or other organization on which the preferred securities are
then listed, if any;
. the merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not cause the preferred securities
(including any successor securities) to be downgraded by a nationally
recognized statistical rating organization;
. the merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the preferred securities
(including any successor securities) in any material respect;
. the successor entity has a purpose substantially similar to that of the
WEC Trust;
. prior to the merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease, we have received an opinion
from independent counsel to the WEC Trust experienced in such matters to
the effect that
--the merger, consolidation, conversion, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the preferred securities
(including any successor securities) in any material respect, and
--following the merger, consolidation, conversion, amalgamation,
replacement, conveyance, transfer or lease, neither the WEC Trust nor
such successor entity will be required to register as an investment
company under the Investment Company Act; and
. we or any permitted successor or assignee owns all of the common
securities of the successor entity and guarantees the obligations of the
successor entity under the successor securities at least to the extent
provided by the guarantee.
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Notwithstanding the general provisions described above, a WEC Trust shall not,
except with the consent of holders of 100% in liquidation amount of the
preferred securities, merge with or into, consolidate, convert into,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease would cause the WEC Trust or the successor entity to be
classified as other than a grantor trust for United States federal income tax
purposes.
Voting Rights; Amendment of Each Trust Agreement
The holders of the preferred securities will have only the voting rights
described below and under "DESCRIPTION OF GUARANTEES--Amendments and
Assignment," plus any voting rights required by law.
Each trust agreement may be amended from time to time by us, the property
trustee and the administrative trustees, without the consent of the holders of
the preferred securities:
. to cure any ambiguity, correct or supplement any provisions in the trust
agreement that may be inconsistent with any other provision, or to
address matters or questions arising under the trust agreement in a way
which is consistent with the other provisions of the trust agreement; or
. to modify, eliminate or add to any provisions of the trust agreement if
necessary to ensure that the WEC Trust will be classified for United
States federal income tax purposes as a grantor trust or to ensure that
the WEC Trust will not be required to register as an "investment
company" under the Investment Company Act.
However, in the case of the first clause, the action must not adversely affect
in any material respect the interests of any holder of trust securities. Any
amendment of the trust agreement becomes effective when we give notice of the
amendment to the holders of the trust securities.
Each trust agreement may be amended by us and the issuer trustees with:
. the consent of holders representing not less than a majority (based upon
liquidation amounts) of the outstanding trust securities; and
. receipt by the issuer trustees of an opinion of counsel experienced in
such matters to the effect that the amendment or the exercise of any
power granted to the issuer trustees in accordance with the amendment
will not affect the WEC Trust's status as a grantor trust for United
States federal income tax purposes or the WEC Trust's exemption from
status as an "investment company" under the Investment Company Act.
However, without the consent of each holder of trust securities, no amendment
may:
. change the amount or timing of any distribution on the trust securities
or otherwise adversely affect the amount of any distribution required to
be made in respect of the trust securities as of a specified date; or
. restrict the right of a holder of trust securities to sue for the
enforcement of any distribution payment.
The property trustee is required to notify each holder of preferred
securities whenever the property trustee is notified of a default with respect
to the corresponding junior subordinated debentures. Furthermore, so long as
any junior subordinated debentures are held by the property trustee, the issuer
trustees are not permitted to:
. direct the time, method and place of conducting any proceeding for any
remedy available to the trustee under the indenture, or execute any
trust or power conferred on the property trustee with respect to the
corresponding junior subordinated debentures;
. waive any past default that is waivable under the indenture governing
the junior subordinated debentures;
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. exercise any right to rescind or annul a declaration that the principal
of all the corresponding junior subordinated debentures shall be due and
payable; or
. give a required consent to any amendment, modification or termination of
the indenture, the applicable securities resolution or the corresponding
junior subordinated debentures
unless, in each case, they first obtain the approval of the holders of a
majority in aggregate liquidation amount of all outstanding preferred
securities. However, where the indenture requires the consent of each affected
holder of corresponding junior subordinated debentures, the property trustee
cannot give the consent without first obtaining the consent of each holder of
the related preferred securities. The issuer trustees cannot revoke any action
previously authorized or approved by a vote of the holders of the preferred
securities except by subsequent vote of the holders of the preferred
securities.
In addition to obtaining approval of the holders of the preferred securities
as described above, the issuer trustees are required to obtain an opinion of
counsel to the effect that the proposed action will not cause the WEC Trust to
be classified as a corporation for United States federal income tax purposes.
Any required approval of holders of preferred securities may be given either
at a meeting of holders of preferred securities or pursuant to a written
consent. The property trustee must notify record holders of preferred
securities of any meeting in the manner set forth in each trust agreement.
No vote or consent of the holders of preferred securities will be required
for a WEC Trust to redeem and cancel its preferred securities in accordance
with the applicable trust agreement.
Whenever holders of preferred securities are entitled to vote or consent
under any of the circumstances described above, neither we nor the issuer
trustees will be permitted to vote. For purposes of any vote or consent, any of
the preferred securities that we own (or that are owned by the issuer trustees
or our affiliates) will be treated as if they were not outstanding.
Payment and Paying Agency
The depositary for the preferred securities will make payments in respect of
the preferred securities by crediting the relevant accounts at the depositary
on the applicable distribution dates. If any WEC Trust's preferred securities
are not held by the depositary, then the paying agent will mail checks to
registered holders of the preferred securities as their addresses appear on its
Register. Unless otherwise specified in the applicable prospectus supplement,
the paying agent shall initially be the property trustee and any co-paying
agent chosen by the property trustee and acceptable to the administrative
trustees and to us. The paying agent can resign upon 30 days' written notice to
the property trustee and to us. If the property trustee resigns as paying
agent, the administrative trustees will appoint a bank or trust company
acceptable to the administrative trustees and to us to act as paying agent.
Registrar and Transfer Agent
Unless otherwise specified in the applicable prospectus supplement, the
property trustee will act as registrar and transfer agent for the preferred
securities.
Each WEC Trust will register transfers of preferred securities without
charge, but will require payment of any tax or other governmental charges that
may be imposed in connection with any transfer or exchange. The WEC Trusts will
not register transfers of their preferred securities after the relevant
preferred securities are called for redemption.
Information Concerning the Property Trustee
The property trustee undertakes to perform only the duties that are
specifically set forth in each trust agreement, other than during the
continuance of a trust event of default. After a trust event of default, the
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property trustee is required to exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the property trustee has no obligation to exercise
any of its powers under the applicable trust agreement at the request of any
holder of preferred securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that it might incur by doing so. If
no trust event of default has occurred and is continuing and the property
trustee is required to decide between alternative courses of action, construe
ambiguous provisions in the applicable trust agreement or is unsure of the
application of any provision of the applicable trust agreement, then we will
have the right to tell the property trustee which action to take unless the
matter is one on which holders of preferred securities are entitled to vote. If
we don't give any directions, the property trustee will take whatever action it
deems advisable and in the best interests of the holders of the trust
securities. The property trustee will have no liability except for its own bad
faith, negligence or willful misconduct.
Miscellaneous
The administrative trustees are authorized and directed to operate the WEC
Trusts in such a way that:
. no WEC Trust will be:
--deemed to be an "investment company" required to be registered under
the Investment Company Act; or
--classified as an association taxable as a corporation for United
States federal income tax purposes; and
. the corresponding junior subordinated debentures will be treated as our
indebtedness for United States federal income tax purposes.
We and the administrative trustees are authorized to take any lawful action
(consistent with the certificate of trust of each WEC Trust and each trust
agreement) that we and the administrative trustees determine in our discretion
to be necessary or desirable for these purposes, as long as the action does not
materially and adversely affect the interests of the holders of the related
preferred securities.
Holders of the preferred securities have no preemptive or similar rights.
Neither WEC Trust may borrow money or issue debt or mortgage or pledge any
of its assets.
DESCRIPTION OF GUARANTEES
When the trust securities are issued, we will execute and deliver a
guarantee agreement for the benefit of the holders of the preferred securities.
The guarantee agreement will be qualified as an indenture under the Trust
Indenture Act. The First National Bank of Chicago will act as guarantee trustee
under each guarantee for the purposes of compliance with the Trust Indenture
Act, and will hold the guarantee for the benefit of the holders of the related
WEC Trust's preferred securities.
We have summarized certain provisions of the guarantees below. This summary
is not complete. The form of the guarantee agreement has been filed as an
exhibit to the registration statement of which this prospectus forms a part,
and you should read the guarantee agreement for provisions that may be
important to you. Reference in this summary to preferred securities means that
WEC Trust's preferred securities to which a guarantee relates.
General
We will promise to pay the guarantee payments to the holders of the
preferred securities, as and when due, regardless of any defense, right of set-
off or counterclaim that the WEC Trust may have or assert other than the
defense of payment. The guarantee payments will rank equal to the corresponding
junior subordinated
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debentures and will be junior and subordinated to our senior debt and
subordinated debt. The guarantee payments include the following, to the extent
not paid by or on behalf of the related WEC Trust:
. any accumulated and unpaid distributions required to be paid on the
preferred securities, but only if and to the extent that the applicable
WEC Trust has funds on hand available for the distributions at that
time;
. the redemption price with respect to any preferred securities called for
redemption, if and to the extent that the applicable WEC Trust has funds
on hand available to pay the redemption price at that time; or
. upon a voluntary or involuntary dissolution, winding up or liquidation
of a WEC Trust (unless the corresponding junior subordinated debentures
are distributed to the holders of the preferred securities), the lesser
of:
--the liquidation distribution; and
--the amount of assets of the applicable WEC Trust remaining available
for distribution to holders of preferred securities.
Our obligation to make a guarantee payment may be satisfied either by our
direct payment of the required amounts to the holders of the applicable
preferred securities or by causing the WEC Trust to pay them.
Each guarantee will be an irrevocable guarantee on a junior subordinated
basis of the related WEC Trust's obligations under the preferred securities,
but will apply only to the extent that the related WEC Trust has funds
sufficient to make the required payments. The guarantee is a guarantee of
payment, not a guarantee of collection.
If we do not make interest payments on the corresponding junior subordinated
debentures held by a WEC Trust, the WEC Trust will not be able to pay
distributions on the preferred securities. Each guarantee will rank subordinate
and junior in right of payment to all of our senior indebtedness and
subordinated indebtedness. See "Status of the Guarantees." Also, all of our
consolidated operating assets are owned by our subsidiaries, and most are owned
by regulated utilities. Various financing arrangements and regulatory
requirements impose restrictions on the ability of our utility subsidiaries to
transfer funds to us in the form of cash dividends, loans or advances. Under
Wisconsin law, Wisconsin Electric is prohibited from loaning funds, either
directly or indirectly, to us. We rely on funds obtained from our subsidiaries
to meet our obligations for payment of principal and interest on our
outstanding debt obligations and corporate expenses. Accordingly, our
obligations under the guarantees will be effectively subordinated to all
existing and future liabilities of our subsidiaries and could be affected by
regulatory limitations. See "DESCRIPTION OF DEBT SECURITIES--General" and
"Ranking of Debt Securities." Except as otherwise provided in the applicable
prospectus supplement, we and our subsidiaries are not limited in the amount of
secured or unsecured debt that we may have outstanding. See the prospectus
supplement relating to any offering of preferred securities.
We have also agreed to guarantee the obligations of the WEC Trusts with
respect to the common securities to the same extent as the guarantee to holders
of the preferred securities. However, if there is an event of default with
respect to a corresponding junior subordinated debenture, holders of preferred
securities will have priority over holders of common securities.
Our obligations described herein and in any accompanying prospectus
supplement, through the applicable guarantee agreement, the applicable trust
agreement, the corresponding junior subordinated debentures, and the applicable
securities resolution under the indenture, taken together, constitute our full,
irrevocable and unconditional guarantee of payments due on the preferred
securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes the guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the WEC Trust's obligations under
the preferred securities. See "THE WEC TRUSTS," "DESCRIPTION OF PREFERRED
SECURITIES," and "DESCRIPTION OF DEBT SECURITIES--Certain Provisions Relating
to Junior Subordinated Debentures Issued to the WEC Trusts."
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Status of the Guarantees
Each guarantee will constitute our unsecured obligation and will rank
subordinate and junior in right of payment to all of our senior debt and
subordinated debt.
Each guarantee will rank equally with all other guarantees we issue
relating to preferred securities issued by the WEC Trusts. Each guarantee will
constitute a guarantee of payment and not of collection (i.e., the guaranteed
party may institute a legal proceeding directly against us as the guarantor to
enforce its rights under the guarantee without first suing anyone else). Each
guarantee will be held for the benefit of the holders of the related preferred
securities. Each guarantee will be discharged only by payment of the guarantee
payments in full (to the extent not paid by the WEC Trust) or by distribution
of the corresponding junior subordinated debentures to the holders of the
preferred securities. None of the guarantees places a limitation on the amount
of additional senior indebtedness or subordinated indebtedness that we may
incur. We expect from time to time to incur additional indebtedness
constituting senior indebtedness or subordinated indebtedness.
Amendments and Assignment
Except with respect to any changes which do not adversely affect the rights
of holders of the related preferred securities in any material respect (in
which case no vote will be required), no guarantee may be amended without the
prior approval of the holders of not less than a majority of the aggregate
liquidation amount of the related outstanding preferred securities. The manner
of obtaining any required approval will be as set forth under "DESCRIPTION OF
PREFERRED SECURITIES--Voting Rights; Amendment of Each Trust Agreement." All
guarantees and agreements contained in each guarantee agreement will bind our
successors, assigns, receivers, trustees and representatives and will benefit
the holders of the related preferred securities then outstanding.
Events of Default
We will be in default under any guarantee agreement if (a) we don't make
required payments or (b) we are notified that we haven't performed some other
obligation and have not cured that failure within 90 days.
The holders of a majority in aggregate liquidation amount of the related
preferred securities have the right:
. to direct the time, method and place of conducting any proceeding for
any remedy available to the guarantee trustee in respect of the
guarantee agreement; or
. to direct the exercise of any power conferred upon the guarantee trustee
under the guarantee agreement.
Holders of a majority in aggregate liquidation amount of the related preferred
securities also have the right to waive any past event of default and its
consequences.
Any holder of the preferred securities may institute a legal proceeding
directly against us to enforce the WEC Trust's rights under the guarantee
agreement without first instituting a legal proceeding against the WEC Trust,
the guarantee trustee or anyone else.
As guarantor, we are required to file annually with the guarantee trustee a
certificate stating whether or not we are in compliance with all the
conditions and covenants applicable to us under the guarantee agreement.
Information Concerning the Guarantee Trustee
The guarantee trustee promises to perform only the duties that are
specifically set forth in each guarantee agreement, other than during the
occurrence and continuance of a default by us in performance of any guarantee.
After we default and while the default continues, the guarantee trustee must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision,
the guarantee trustee is under no obligation to exercise any of the powers
vested in it by any guarantee agreement at the request of any holder of any
preferred securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that it might incur by doing so.
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Termination of the Guarantees
Each guarantee will terminate upon full payment of the redemption price of
the related preferred securities, upon full payment of the amounts payable upon
liquidation of the related WEC Trust or upon distribution of corresponding
junior subordinated debentures to the holders of the related preferred
securities. Each guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of the related preferred
securities must restore payment of any sums paid under the preferred securities
or the guarantee.
Governing Law
Each guarantee agreement will be governed by and construed in accordance
with the laws of the State of New York.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
AND THE GUARANTEES
Full and Unconditional Guarantee
We irrevocably guarantee payments of distributions and other amounts due on
the preferred securities (to the extent the applicable WEC Trust has funds
available for the payment of the distributions) as and to the extent set forth
under "DESCRIPTION OF GUARANTEES." Taken together, our obligations under each
series of corresponding junior subordinated debentures, the related securities
resolution, the indenture, the related trust agreement and the related
guarantee agreement provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of distributions and other amounts due on
the related series of preferred securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes the full guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the WEC Trust's obligations under the preferred
securities.
If and to the extent that we do not make payments on any series of
corresponding junior subordinated debentures, the WEC Trust will not pay
distributions or other amounts due on its preferred securities. The guarantees
do not cover payment of distributions when the related WEC Trust does not have
sufficient funds to pay the distributions. In that event, the remedy for a
holder of a series of preferred securities is to institute a legal proceeding
directly against us for enforcement of payment of the distributions to such
holder. Our obligations under each guarantee are subordinate and junior in
right of payment to all of our senior indebtedness and subordinated
indebtedness.
Sufficiency of Payments
As long as all payments are made when due on each series of corresponding
junior subordinated debentures, those payments will be sufficient to cover
distributions and other payments due on the related preferred securities. This
is primarily because:
. the aggregate principal amount of each series of corresponding junior
subordinated debentures will be equal to the sum of the aggregate stated
liquidation amount of the related preferred securities and related
common securities;
. the interest rate and interest and other payment dates on each series of
corresponding junior subordinated debentures will match the distribution
rate and distribution and other payment dates for the related preferred
securities;
. we, as borrower, have promised to pay any and all costs, expenses and
liabilities of each WEC Trust except the WEC Trust's obligations under
its preferred securities; and
. each trust agreement provides that the WEC Trust will not engage in any
activity that is not consistent with the limited purposes of the WEC
Trust.
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We have the right to set-off any payment we are otherwise required to make
under the indenture if and to the extent we have already made, or are
concurrently making, a payment under the related guarantee agreement.
Enforcement Rights of Holders of Preferred Securities
A holder of any preferred security may institute a legal proceeding directly
against us to enforce its rights under the related guarantee agreement without
first instituting a legal proceeding against the guarantee trustee, the related
WEC Trust or anyone else.
Our default or event of default under any other senior or subordinated
indebtedness would not necessarily constitute a trust event of default.
However, in the event of payment defaults under, or acceleration of, our senior
or subordinated indebtedness, the subordination provisions of the applicable
securities resolution will provide that no payments may be made in respect of
the corresponding junior subordinated debentures until the senior or
subordinated indebtedness has been paid in full or any payment default
thereunder has been cured or waived. Our failure to make required payments on
any series of corresponding junior subordinated debentures would constitute a
trust event of default.
Limited Purpose of WEC Trusts
Each WEC Trust's preferred securities evidence undivided beneficial
ownership interests in the assets of that WEC Trust, and each WEC Trust exists
for the sole purposes of issuing its preferred securities and common
securities, investing the proceeds in corresponding junior subordinated
debentures and engaging in only those other activities necessary, convenient or
incidental to those purposes. A principal difference between the rights of a
holder of a preferred security and a holder of a corresponding junior
subordinated debenture is that a holder of a junior subordinated debenture is
entitled to receive from us the principal amount of and interest accrued on
corresponding junior subordinated debentures held, while a holder of preferred
securities is entitled to receive distributions from the WEC Trust (or from us
under the applicable guarantee agreement) if and to the extent the WEC Trust
has funds available for the payment of the distributions.
Rights Upon Dissolution
Upon any voluntary or involuntary dissolution of any WEC Trust involving the
liquidation of the corresponding junior subordinated debentures, the holders of
the related preferred securities will be entitled to receive the liquidation
distribution in cash, out of assets of the WEC Trust (and after satisfaction of
creditors of the WEC Trust as provided by applicable law). See "DESCRIPTION OF
PREFERRED SECURITIES--Liquidation Distribution upon Dissolution." If we become
subject to any voluntary or involuntary liquidation or bankruptcy, the property
trustee, as holder of the corresponding junior subordinated debentures, would
be one of our junior subordinated creditors. The property trustee would be
subordinated in right of payment to all of our senior indebtedness and
subordinated indebtedness, but it would be entitled to receive payment in full
of principal and interest before our stockholders receive payments or
distributions. We are the guarantor under each guarantee agreement and pursuant
to the indenture, as borrower, have agreed to pay all costs, expenses and
liabilities of each WEC Trust (other than the WEC Trust's obligations to the
holders of its preferred securities). Accordingly, in the event of our
liquidation or bankruptcy the positions of a holder of preferred securities and
of a holder of corresponding junior subordinated debentures are expected to be
substantially the same relative to our other creditors and to our stockholders.
BOOK-ENTRY ISSUANCE
The debt securities, preferred securities and corresponding junior
subordinated debentures of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, the depositary identified in the prospectus supplement relating to that
series. The depositary will be DTC unless otherwise indicated in the applicable
prospectus supplement for a series. Book-entry securities may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged for the individual securities that it represents, a book-
entry security may not be transferred except as a whole to a nominee of the
depositary or to a successor depositary or any nominee of the successor.
29
<PAGE>
DTC has advised us that DTC is a limited purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC holds securities that its participants deposit with DTC. DTC
also facilitates the settlement among participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain custodial
relationships with participants, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the SEC.
Purchases of book-entry securities within the DTC system must be made by or
through direct participants, which will receive a credit for the book-entry
securities on DTC's records. The ownership interest of each actual purchaser of
each book-entry security (Beneficial Owner) is in turn to be recorded on the
direct and indirect participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the direct
or indirect participants through which the Beneficial Owners purchased book-
entry securities. Transfers of ownership interests in the book-entry securities
are to be accomplished by entries made on the books of participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in book-entry securities, except in the
event that use of the book-entry system is discontinued. The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a global security.
To facilitate subsequent transfers, all book-entry securities deposited by
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of book-entry securities with DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the book-entry securities; DTC's
records reflect only the identity of the direct participants to whose accounts
such book-entry securities are credited, which may or may not be the Beneficial
Owners. The participants will remain responsible for keeping account of their
holdings on behalf of their customers.
We and the WEC Trusts expect that conveyance of notices and other
communications by DTC to direct participants, by direct participants to
indirect participants, and by direct participants and indirect participants to
Beneficial Owners and the voting rights of direct participants, indirect
participants and Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the book-entry securities.
Although voting with respect to the book-entry securities is limited to the
holders of record of the book-entry securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to book-entry securities. Under its usual procedures, DTC would mail an
omnibus proxy to the relevant trustee as soon as possible after the record
date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to
those direct participants to whose accounts such book-entry securities are
credited on the record date (identified in a listing attached to the omnibus
proxy).
As long as the book-entry securities are held by DTC or its nominee and DTC
continues to make its same-day funds settlement system available to us, all
payments on the book-entry securities (other than distribution payments on the
preferred securities or corresponding junior subordinated debentures) will be
made by us in immediately available funds to DTC. Distribution payments on the
preferred securities or the corresponding
30
<PAGE>
junior subordinated debentures will be made by the relevant trustee to DTC. We
and the WEC Trusts have been advised that DTC's practice is to credit direct
participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payments on such payment date. Payments by
participants to Beneficial Owners will be governed by standing instructions and
customary practices and will be the responsibility of such participant and not
of DTC, the relevant trustee, the WEC Trust (as applicable) or us, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment on book-entry securities to DTC is our responsibility or the
responsibility of the relevant trustee (as applicable), disbursement of such
payments to direct participants is the responsibility of DTC and disbursements
of such payments to the Beneficial Owners is the responsibility of direct and
indirect participants.
Unless otherwise specified in the applicable prospectus supplement, if a
depositary for a series of preferred securities is at any time unwilling,
unable or ineligible to continue as depositary and we do not appoint a
successor depositary within 90 days, we will issue individual preferred
securities of such series in exchange for the global security representing that
series of preferred securities. In addition, we may at any time and in our sole
discretion, subject to any limitations described in the prospectus supplement
relating to the preferred securities, determine not to have any preferred
securities of a series represented by one or more global securities and, in
that event, will issue individual preferred securities of that series in
exchange for the global security or securities representing that series of
preferred securities. Further, if we so specify with respect to preferred
securities of a series, an owner of a beneficial interest in a global security
representing preferred securities of that series may, on terms acceptable to
us, the property trustee and the depositary for such global security, receive
individual preferred securities of that series in exchange for that owner's
beneficial interests, subject to any limitations described in the prospectus
supplement relating to those preferred securities. In that instance, a
Beneficial Owner in the global security will be entitled to physical delivery
of individual preferred securities of the series represented by the global
security equal in liquidation amount to such beneficial interest and to have
such preferred securities registered in its name. Individual preferred
securities of the series so issued will be issued in the denominations set
forth in the related prospectus supplement.
DTC may discontinue providing its services as securities depositary with
respect to debt securities at any time by giving reasonable notice to us or the
indenture trustee. Under those circumstances, if we do not appoint a successor
depositary within 90 days, we will issue individual definitive debt securities
in exchange for all the global securities representing the debt securities. In
addition, we may at any time and in our sole discretion determine not to have
the debt securities represented by global securities and, in that event, will
issue individual definitive debt securities in exchange for all the global
securities representing the debt securities. Individual definitive debt
securities so issued will be issued in denominations of $1,000 and any larger
amount that is an integral multiple of $1,000 and registered in such names as
DTC shall direct.
If the WEC Trust issues certificated preferred securities, they will be
registered in the name of the security holder. The preferred securities may be
transferred or exchanged, based on administrative procedures in the trust
agreement, without the payment of any service charge (other than any tax or
other governmental charge) by contacting the registrar and transfer agent, The
First National Bank of Chicago, One First National Plaza, Suite 0126, Chicago,
Illinois 60670.
Distribution payments will be made by check if the WEC Trust issues
certificated preferred securities. Payment of the redemption price or
liquidation amount will be made in immediately available funds when you
surrender the preferred security.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we and the WEC Trusts believe to be
accurate, but we and the WEC Trusts assume no responsibility for the accuracy
thereof. Neither we nor the WEC Trusts have any responsibility for the
performance by DTC or its participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
31
<PAGE>
PLAN OF DISTRIBUTION
We and/or any WEC Trust may sell the securities in any one or more of the
following ways from time to time: (a) to or through underwriters or dealers;
(b) directly to one or more purchasers; or (c) through agents. The prospectus
supplement will set forth with respect to the securities being offered thereby
the terms of the offering of those securities, including the name or names of
any underwriters, the purchase price of those securities and the proceeds to us
and/or a WEC Trust from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers, and any
securities exchange on which those securities may be listed. Only underwriters
so named in the applicable prospectus supplement are deemed to be underwriters
in connection with the securities offered thereby.
If underwriters are used in the sale, the securities will be acquired by the
underwriters for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase those securities will be subject to
certain conditions precedent, and the underwriters will be obligated to
purchase all the securities of the series offered by us and/or the applicable
WEC Trust and described in the applicable prospectus supplement if any of those
securities are purchased. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
Securities may also be offered and sold, if so indicated in the prospectus
supplement, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, by one or more firms
("remarketing firms") acting as principals for their own accounts or as agents
for us and/or an applicable WEC Trust. Any remarketing firm will be identified
and the terms of its agreement, if any, with us and its compensation will be
described in the prospectus supplement. Remarketing firms may be deemed to be
underwriters in connection with the securities remarketed thereby.
Securities may also be sold directly by us and/or a WEC Trust or through
agents designated by us from time to time. Any agent involved in the offering
and sale of the securities in respect of which this prospectus is delivered
will be named, and any commissions payable by us and/or a WEC Trust to such
agent will be set forth, in the prospectus supplement. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If so indicated in the prospectus supplement, we and/or a WEC Trust will
authorize agents, underwriters or dealers to solicit offers by certain
institutional investors to purchase securities providing for payment and
delivery on a future date specified in the prospectus supplement. There may be
limitations on the minimum amount which may be purchased by any such
institutional investor or on the portion of the aggregate principal amount of
the particular securities which may be sold pursuant to such arrangements.
Institutional investors to which such offers may be made, when authorized,
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and such other
institutions as may be approved by us and/or a WEC Trust. The obligations of
any such purchasers pursuant to such delayed delivery and payment arrangements
will not be subject to any conditions except (a) the purchase by an institution
of the particular securities shall not at the time of delivery be prohibited
under the laws of any jurisdiction in the United States to which such
institution is subject, and (b) if the particular securities are being sold to
underwriters, we and/or a WEC Trust shall have sold to such underwriters all of
those securities other than the securities covered by such arrangements.
Underwriters will not have any responsibility in respect of the validity of
such arrangements or the performance by us or such institutional investors
thereunder.
If any underwriter or any selling group member intends to engage in
stabilizing, syndicate short covering transactions, penalty bids or any other
transaction in connection with the offering of securities that may stabilize,
maintain, or otherwise affect the price of those securities, such intention and
a description of such transactions will be described in the prospectus
supplement.
32
<PAGE>
Agents and underwriters may be entitled under agreements entered into with
us and/or the applicable WEC Trust to indemnification by us against certain
civil liabilities, including liabilities under the Securities Act of 1933, or
to contribution with respect to payments which the agents or underwriters may
be required to make in respect thereof. Agents and underwriters may engage in
transactions with, or perform services for, us and our subsidiaries in the
ordinary course of business.
CERTAIN LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplements, certain
legal matters in connection with the securities will be passed upon (a) for us
by Quarles & Brady LLP, Milwaukee, Wisconsin, our legal counsel, (b) for the
WEC Trusts (with respect to the validity of the preferred securities under
Delaware law) by Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware,
special Delaware counsel to us and the WEC Trusts, and (c) for any underwriters
by Cahill Gordon & Reindel (a partnership including a professional
corporation), New York, New York. Larry J. Martin, a partner in Quarles & Brady
LLP, serves as our general counsel.
EXPERTS
The financial statements incorporated in this prospectus by reference to our
Annual Report on Form 10-K for the year ended December 31, 1997, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
auditing and accounting.
Future audited financial statements incorporated in this prospectus by
reference to future filings under the Exchange Act, as provided under "WHERE
YOU CAN FIND MORE INFORMATION," will be so incorporated in reliance on the
related report or reports of the firm of independent accountants auditing such
financial statements, given on such authority of such firm, if and to the
extent such filings include the consent of such firm to the incorporation of
such report or reports herein.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. and through our own web
site at http://wisenergy.com. You may also read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, and Chicago,
as well as at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York, 10005, where our common stock is listed under the symbol"WEC."
You can call the SEC at 1-800-732-0330 for further information about the public
reference rooms.
The SEC allows us to "incorporate by reference" the information we file with
them, which means we are assumed to have disclosed important information to you
when we refer you to documents that are on file with the SEC. The information
we have incorporated by reference is an important 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 documents listed
below and any future documents we file with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell all of
the securities covered by this prospectus.
. Annual Report on Form 10-K for the fiscal year ended December 31, 1997
and Amendment No. 1 (on Form 10-K/A) dated June 27, 1998.
. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998.
33
<PAGE>
. Current Reports on Form 8-K dated December 23, 1997 and April 28, 1998.
You may request a copy of these documents at no cost by writing to us at the
following address:
Wisconsin Energy Corporation
231 West Michigan Street
P. O. Box 2949
Milwaukee, Wisconsin 53201
Attn: Mr. Thomas H. Fehring, Corporate Secretary
Telephone: (414) 221-2662
You should rely only on the information provided in or incorporated by
reference (and not later changed) in this prospectus or any prospectus
supplement. We have not authorized anyone else to provide you with additional
or different information. We are not making an offer of any securities in any
state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents.
34
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Preferred Securities
WEC CAPITAL TRUST I
% Trust Preferred Securities (TruPS(TM))
$25 liquidation amount per security
fully and unconditionally guaranteed, as set forth herein, by
[WISCONSIN ENERGY LOGO]
------------
PROSPECTUS SUPPLEMENT
, 1999
(Including prospectus dated , 1999)
------------
Salomon Smith Barney
[Underwriter]
[Underwriter]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution of
the securities covered by this Registration Statement are as follows:
<TABLE>
<S> <C>
SEC registration fee (actual)................................... $ 83,400
Trustee's fee and expenses...................................... 26,000
Printing and engraving expenses................................. 65,000
Legal fees and expenses......................................... 150,000
Accounting fees and expenses.................................... 60,000
Rating agency fees.............................................. 90,000
New York Stock Exchange listing fees............................ 83,900
Miscellaneous................................................... 16,700
--------
Total....................................................... $575,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Wisconsin Energy Corporation ("Wisconsin Energy") is incorporated under the
Wisconsin Business Corporation Law (the "WBCL").
Under Section 180.0851(1) of the WBCL, Wisconsin Energy is required to
indemnify a director or officer, to the extent such person is successful on the
merits or otherwise in the defense of a proceeding, for all reasonable expenses
incurred in the proceeding if such person was a party because he or she was a
director or officer of Wisconsin Energy. In all other cases, Wisconsin Energy
is required by Section 180.0851(2) to indemnify a director or officer against
liability incurred in a proceeding to which such person was a party because he
or she was a director or officer of Wisconsin Energy, unless it is determined
that he or she breached or failed to perform a duty owed to Wisconsin Energy
and the breach or failure to perform constitutes: (i) a willful failure to deal
fairly with Wisconsin Energy or its shareholders in connection with a matter in
which the director or officer has a material conflict of interest; (ii) a
violation of criminal law, unless the director or officer had reasonable cause
to believe his or her conduct was lawful or no reasonable cause to believe his
or her conduct was unlawful; (iii) a transaction from which the director or
officer derived an improper personal profit; or (iv) willful misconduct.
Section 180.0858(1) provides that, subject to certain limitations, the
mandatory indemnification provisions do not preclude any additional right to
indemnification or allowance of expenses that a director or officer may have
under Wisconsin Energy's Restated Articles of Incorporation, Bylaws, any
written agreement or a resolution of the Board of Directors or shareholders.
Section 180.0859 of the WBCL provides that it is the public policy of the
State of Wisconsin to require or permit indemnification, allowance of expenses
and insurance to the extent required or permitted under Sections 180.0850 to
180.0858 of the WBCL, for any liability incurred in connection with a
proceeding involving a federal or state statute, rule or regulation regulating
the offer, sale or purchase of securities.
Section 180.0828 of the WBCL provides that, with certain exceptions, a
director is not liable to a corporation, its shareholders, or any person
asserting rights on behalf of the corporation or its shareholders, for damages,
settlements, fees, fines, penalties or other monetary liabilities arising from
a breach of, or failure to perform, any duty resulting solely from his or her
status as a director, unless the person asserting liability proves that the
breach or failure to perform constitutes any of the four exceptions to
mandatory indemnification under Section 180.0851(2) referred to above.
Under Section 180.0833 of the WBCL, directors of Wisconsin Energy against
whom claims are asserted with respect to the declaration of improper dividends
or distributions to shareholders or certain other improper acts which they
approved are entitled to contribution from other directors who approved such
actions and from shareholders who knowingly accepted an improper dividend or
distribution, as provided therein.
II-1
<PAGE>
Articles V and VI of Wisconsin Energy's Bylaws provides that Wisconsin
Energy will indemnify to the fullest extent permitted by law any person who is
or was a party or threatened to be made a party to any legal proceeding by
reason of the fact that such person is or was a director or officer of
Wisconsin Energy, or is or was serving at the request of Wisconsin Energy as a
director or officer of another enterprise, against expenses (including attorney
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such legal proceeding. Wisconsin
Energy's Restated Articles of Incorporation and Bylaws do not limit the
indemnification to which directors and officers are entitled under the WBCL.
Officers and directors of Wisconsin Energy are covered by insurance policies
purchased by Wisconsin Energy under which they are insured (subject to
exceptions and limitations specified in the policies) against expenses and
liabilities arising out of actions, suits or proceedings to which they are
parties by reason of being or having been such directors or officers.
Under each trust agreement, Wisconsin Energy will agree to indemnify each of
the issuer trustees of the WEC Trusts or any predecessor issuer trustee for the
WEC Trusts, and to hold the issuer trustees harmless against, any loss, damage,
claims, liability or expense incurred without negligence or bad faith or its
part, arising out of or in connection with the acceptance or administration of
the trust agreements, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties under the trust agreements.
Item 16. Exhibits.
See Exhibit Index following the Signatures page in this Registration
Statement, which Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
The undersigned Registrants hereby undertake (in accordance with the
corresponding lettered undertakings in Item 512 of Regulation S-K):
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the Registration Statement is on Form S-3 or Form
S-8, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant with the Commission pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
the Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) 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.
(h) Reference is made to the indemnification provisions described in
Item 15 of this Registration Statement.
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.
(i) (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 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.
II-3
<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, State of Wisconsin, on February 26, 1999.
Wisconsin Energy Corporation
(Registrant)
/s/ R. A. Abdoo
By: _________________________________
R. A. Abdoo, Chairman of the
Board,
President and Chief Executive
Officer
Each person whose signature appears below hereby authorizes R. A. Abdoo and
C. H. Baker, or either of them, as attorneys-in-fact with full power of
substitution, to execute in the name and on behalf of such person,
individually, and in each capacity stated below or otherwise, and to file, any
and all amendments to this Registration Statement.
----------------
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of the 26th day of February, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ R. A. Abdoo Chairman of the Board, President and Chief
___________________________________________ Executive Officer (Principal Executive
R. A. Abdoo Officer)
and Director
/s/ C. H. Baker Treasurer and Chief Financial Officer
___________________________________________ (Principal Financial Officer)
C. H. Baker
/s/ A. K. Klisurich Controller (Principal Accounting Officer)
___________________________________________
A. K. Klisurich
/s/ J. F. Ahearne Director
___________________________________________
J. F. Ahearne
/s/ J. F. Bergstrom Director
___________________________________________
J. F. Bergstrom
/s/ B. L. Bowles Director
___________________________________________
B. L. Bowles
/s/ R. A. Cornog Director
___________________________________________
R. A. Cornog
/s/ R. R. Grigg, Jr Director
___________________________________________
R. R. Grigg, Jr.
/s/ G. B. Johnson Director
___________________________________________
G. B. Johnson
/s/ J. N. MacDonough Director
___________________________________________
J. N. MacDonough
/s/ J. B. North Director
___________________________________________
J. B. North
/s/ F. P. Stratton, Jr. Director
___________________________________________
F. P. Stratton, Jr.
</TABLE>
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, WEC Capital
Trust I 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, State of Wisconsin, on February 26,
1999.
WEC Capital Trust I
(Registrant)
By: Wisconsin Energy Corporation,
as Depositor
/s/ C. H. Baker
By: _________________________________
C. H. Baker
Treasurer and Chief Financial
Officer
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, WEC Capital
Trust II 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, State of Wisconsin, on February 26,
1999.
WEC Capital Trust II
(Registrant)
By: Wisconsin Energy Corporation,
as Depositor
/s/ C. H. Baker
By: _________________________________
C. H. Baker
Treasurer and Chief Financial
Officer
II-6
<PAGE>
WISCONSIN ENERGY CORPORATION
(the "Company")
(Commission File No. 1-9057)
EXHIBIT INDEX
TO
FORM S-3 REGISTRATION STATEMENT
The following exhibits are filed with or incorporated by reference in this
Registration Statement:
<TABLE>
<CAPTION>
Incorporated
Herein By Filed
Exhibit Description Reference To Herewith
------- ----------- ------------ --------
<C> <S> <C> <C>
1.1* Form of Underwriting Agreement
for Debt Securities
1.2* Form of Underwriting Agreement
for Preferred Securities
4.1 Form of Indenture for Debt X
Securities
4.2 Form of Securities Resolution X
4.3 Certificate of Trust of WEC X
Capital Trust I
4.4 Trust Agreement of WEC Capital X
Trust I
4.5 Certificate of Trust of WEC X
Capital Trust II
4.6 Trust Agreement of WEC Capital X
Trust II
4.7 Form of Amended and Restated X
Trust Agreement for WEC
Capital Trusts I and II
4.8 Form of Preferred Security X
Certificate for WEC Capital
Trusts I and II (incorporated
by reference to Exhibit D of
Exhibit 4.7)
4.9 Form of Guarantee Agreement X
for WEC Capital Trusts I
and II
5.1 Opinion of Quarles & Brady LLP X
5.2 Opinion of Morris, Nichols, X
Arsht & Tunnell as to the
legality of the Preferred
Securities to be issued by WEC
Capital Trust I and WEC
Capital Trust II
8* Opinion re tax matters of
Quarles & Brady LLP
12 Statement of Computation of X
Ratio of Earnings to Fixed
Charges
23.1 Consent of X
PricewaterhouseCoopers LLP
23.2 Consent of Quarles & Brady LLP Contained in Exhibit 5.1
23.3 Consent of Morris, Nichols, Contained in Exhibit 5.2
Arsht & Tunnell
24 Power of Attorney On Signature page
25.1 Form T-1, Statement of X
Eligibility under the Trust
Indenture Act of 1939 of The
First National Bank of Chicago
with respect to the Indenture
for Debt Securities and the
Guarantees for the benefit of
the holders of Preferred
Securities of WEC Capital
Trust I and WEC Capital Trust
II
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Incorporated
Herein By Filed
Exhibit Description Reference To Herewith
------- ----------- ------------ --------
<C> <S> <C> <C>
25.2 Form T-1, Statement of Eligibility under the X
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Amended and Restated Trust Agreement of WEC
Capital Trust I
25.3 Form T-1, Statement of Eligibility under the X
Trust Indenture Act of 1939 of The First
National Bank of Chicago with respect to the
Amended and Restated Trust Agreement of WEC
Capital Trust II
</TABLE>
- --------
* To be filed by amendment or under cover of Form 8-K and incorporated herein
by reference.
II-8
<PAGE>
EXHIBIT 4.1
-----------
[FORM OF INDENTURE]
================================================================================
WISCONSIN ENERGY CORPORATION
DEBT SECURITIES
------------------------------------
INDENTURE
DATED AS OF [ ], 1999
------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE
================================================================================
<PAGE>
PARTIAL CROSS-REFERENCE TABLE
INDENTURE SECTION TIA SECTION
2.05.......................................... 317(b)
2.06.......................................... 312(a), 313(c)
2.11.......................................... 316(a) (last sentence)
4.04.......................................... 314(a)(4)
4.05.......................................... 314(a)(1)
6.03.......................................... 317(a)(1)
6.04.......................................... 316(a)(1)(B)
6.05.......................................... 316(a)(1)(A)
6.07.......................................... 317(a)(1)
7.01.......................................... 315(a), 315(d)
7.04.......................................... 315(b)
7.05.......................................... 313(a), 313(d)
7.07.......................................... 310(a), 310(b)
7.09.......................................... 310(a)(2)
8.02.......................................... 310(a), 310(b)
10.04......................................... 316(c)
11.01......................................... 318(a)
11.02......................................... 313(c)
11.03......................................... 314(c)(1), 314(c)(2)
11.04......................................... 314(e)
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
ARTICLE 1 --DEFINITIONS
<S> <C>
SECTION 1.01. Definitions................................................................................... 1
SECTION 1.02. Other Definitions............................................................................. 4
SECTION 1.03. Rules of Construction......................................................................... 4
ARTICLE 2 --THE SECURITIES
SECTION 2.01. Issuable in Series............................................................................ 5
SECTION 2.02. Execution and Authentication.................................................................. 7
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and Other Agents......................... 8
SECTION 2.04. Bearer Securities............................................................................. 8
SECTION 2.05. Paying Agent to Hold Money in Trust........................................................... 9
SECTION 2.06. Securityholder Lists.......................................................................... 10
SECTION 2.07. Transfer and Exchange......................................................................... 10
SECTION 2.08. Replacement Securities........................................................................ 11
SECTION 2.09. Outstanding Securities........................................................................ 11
SECTION 2.10. Discounted Debt Securities.................................................................... 12
SECTION 2.11. Treasury Securities........................................................................... 12
SECTION 2.12. Global Securities............................................................................. 12
SECTION 2.13. Temporary Securities.......................................................................... 12
SECTION 2.14. Cancellation.................................................................................. 13
SECTION 2.15. Defaulted Interest............................................................................ 13
ARTICLE 3 --REDEMPTION
SECTION 3.01. Notices to Trustee............................................................................ 13
SECTION 3.02. Selection of Securities to Be Redeemed........................................................ 14
SECTION 3.03. Notice of Redemption.......................................................................... 14
SECTION 3.04. Effect of Notice of Redemption................................................................ 15
SECTION 3.05. Payment of Redemption Price................................................................... 15
SECTION 3.06. Securities Redeemed in Part................................................................... 16
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE 4 --COVENANTS
<S> <C>
SECTION 4.01. Payment of Securities......................................................................... 16
SECTION 4.02. Overdue Interest.............................................................................. 16
SECTION 4.03. No Lien Created, etc.......................................................................... 16
SECTION 4.04. Compliance Certificate........................................................................ 17
SECTION 4.05. SEC Reports................................................................................... 17
SECTION 4.06. Costs and Expenses of WEC Trusts.............................................................. 14
ARTICLE 5 --SUCCESSORS
SECTION 5.01. When Company May Merge, etc................................................................... 18
ARTICLE 6 --DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default............................................................................. 19
SECTION 6.02. Acceleration.................................................................................. 20
SECTION 6.03. Other Remedies................................................................................ 21
SECTION 6.04. Waiver of Past Defaults....................................................................... 21
SECTION 6.05. Control by Majority........................................................................... 21
SECTION 6.06. Limitation on Suits........................................................................... 22
SECTION 6.07. Collection Suit by Trustee.................................................................... 22
SECTION 6.08. Priorities.................................................................................... 22
ARTICLE 7 --TRUSTEE
SECTION 7.01. Rights of Trustee............................................................................. 23
SECTION 7.02. Individual Rights of Trustee.................................................................. 24
SECTION 7.03. Trustee's Disclaimer.......................................................................... 24
SECTION 7.04. Notice of Defaults............................................................................ 24
SECTION 7.05. Reports by Trustee to Holders................................................................. 25
SECTION 7.06. Compensation and Indemnity.................................................................... 25
SECTION 7.07. Replacement of Trustee........................................................................ 26
SECTION 7.08. Successor Trustee by Merger, etc.............................................................. 27
SECTION 7.09. Trustee's Capital and Surplus................................................................. 27
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE 8 --DISCHARGE OF INDENTURE
<S> <C>
SECTION 8.01. Defeasance.................................................................................... 27
SECTION 8.02. Conditions to Defeasance...................................................................... 28
SECTION 8.03. Application of Trust Money.................................................................... 29
SECTION 8.04. Repayment to Company.......................................................................... 29
ARTICLE 9 --CONVERSION
SECTION 9.01. Conversion Privilege.......................................................................... 29
SECTION 9.02. Conversion Procedure.......................................................................... 30
SECTION 9.03. Taxes on Conversion........................................................................... 31
SECTION 9.04. Company Determination Final................................................................... 31
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer................................................... 31
SECTION 9.06. Company to Provide Conversion Securities...................................................... 31
SECTION 9.07. Cash Settlement Option........................................................................ 32
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock..................................... 33
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below Market Price...................... 34
SECTION 9.10. Adjustment for Other Distributions............................................................ 36
SECTION 9.11. Voluntary Adjustment.......................................................................... 37
SECTION 9.12. When Adjustment May Be Deferred............................................................... 37
SECTION 9.13. When No Adjustment Required................................................................... 37
SECTION 9.14. Notice of Adjustment.......................................................................... 38
SECTION 9.15. Notice of Certain Transactions................................................................ 38
SECTION 9.16. Reorganization of the Company................................................................. 39
ARTICLE 10 --AMENDMENTS
SECTION 10.01. Without Consent of Holders.................................................................... 39
SECTION 10.02. With Consent of Holders....................................................................... 39
SECTION 10.03. Compliance with Trust Indenture Act........................................................... 41
SECTION 10.04. Effect of Consents............................................................................ 41
SECTION 10.05. Notation on or Exchange of Securities......................................................... 41
SECTION 10.06. Trustee Protected............................................................................. 41
ARTICLE 11 --MISCELLANEOUS
SECTION 11.01. Trust Indenture Act........................................................................... 42
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 11.02. Notices.............................................................. 42
SECTION 11.03. Certificate and Opinion as to Conditions Precedent.................. 43
SECTION 11.04. Statements Required in Certificate or Opinion....................... 43
SECTION 11.05. Rules by Company and Agents.......................................... 44
SECTION 11.06. Legal Holidays....................................................... 44
SECTION 11.07. No Recourse Against Others........................................... 44
SECTION 11.08. Duplicate Originals.................................................. 44
SECTION 11.09. Governing Law........................................................ 45
SIGNATURES........................................................................... S-1
EXHIBIT A: A Form of Registered Security............................................ A-1
EXHIBIT B: A Form of Bearer Security................................................ B-1
Notes to Exhibits A and B
EXHIBIT C: Assignment Form.......................................................... C-1
EXHIBIT D: Conversion Notice........................................................ D-1
</TABLE>
-iv-
<PAGE>
INDENTURE dated as of [ ], 1999 between WISCONSIN ENERGY
CORPORATION, a Wisconsin corporation (hereinafter called the "COMPANY"), and
THE FIRST NATIONAL BANK OF CHICAGO (the "TRUSTEE").
Each party agrees as follows for the benefit of the Holders (as
defined below) of the Company's debt securities issued under this Indenture:
ARTICLE 1 -- DEFINITIONS
SECTION 1.01. Definitions.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"AGENT" means any Registrar, Transfer Agent, Paying Agent, Conversion
Agent or other Agent appointed by the Company.
"AUTHORIZED NEWSPAPER" means a newspaper that is:
(1) printed in the English language or in an official language of the
country of publication;
(2) customarily published on each business day in the place of
publication; and
(3) of general circulation in the relevant place or in the financial
community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business days and in the
same or different Authorized Newspapers.
"BEARER SECURITY" means a Security payable to bearer.
"BOARD" means the Board of Directors of the Company or an authorized
committee of the Board.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of any person and all
warrants or options to acquire such capital stock.
<PAGE>
-2-
"COMMON STOCK" means the Common Stock, par value $.01 per share, of
the Company.
"COMPANY" means the party named as such above until a successor
replaces it and thereafter means the successor.
"CONVERSION RATE" means such number or amount of shares of Common
Stock or other equity or debt securities for which $1,000 aggregate principal
amount of Securities of any series is convertible, initially as stated in the
Securities Resolution authorizing the series and as adjusted pursuant to the
terms of this Indenture and the Securities Resolution.
"COUPON" means an interest coupon for a Bearer Security.
"DEFAULT" means any event which is, or after notice or passage of time
would be, an Event of Default (as defined below).
"DISCOUNTED DEBT SECURITY" means a Security where the amount of
principal due upon acceleration is less than the stated principal amount.
"HOLDER" or "SECURITYHOLDER" means the person in whose name a
Registered Security is registered and the bearer of a Bearer Security or coupon.
"INDENTURE" means this Indenture and any Securities Resolution as
amended from time to time.
"LIEN" means any mortgage, pledge, security interest or other lien.
"OFFICER" means the Chairman, any Vice-Chairman, the President, any
Executive or Senior Vice President, any Vice-President, the Treasurer or any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee, and delivered to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"PRINCIPAL" of a debt security means the principal of the security
plus the premium, if and when applicable, on the security.
<PAGE>
-3-
"REGISTERED SECURITY" means a Security registered as to principal and
interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the debt securities issued under this Indenture.
"SECURITIES RESOLUTION" means a resolution adopted by the Board or by
a committee of Officers or an Officer pursuant to Board delegation authorizing a
series or a supplemental indenture authorizing a series executed by an
authorized Officer.
"SERIES" means a series of Securities or the Securities of the series.
"SUBSIDIARY" means a corporation a majority of whose Voting Stock is
owned by the Company or a Subsidiary.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S) 77aaa-
77bbbb), as amended.
"TRADING DAY" means each day on which the securities exchange or
quotation system which is used to determine the Market Price is open for trading
or quotation.
"TRUSTEE" means the party named as such above until a successor
replaces it and thereafter means the successor.
"TRUST OFFICER" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"TRUST SECURITIES" means securities issued by a WEC Trust.
"UNITED STATES" means the United States of America, its territories
and possessions and other areas subject to its jurisdiction.
"VOTING STOCK" means capital stock having voting power under ordinary
circumstances to elect directors.
"WEC TRUST" means a statutory business trust created under Delaware
law pursuant to a trust agreement executed by the Company, as depositor of such
WEC Trust, and the trustees of such WEC Trust named therein and pursuant to a
certificate of trust filed with the Delaware Secretary of State, which WEC Trust
exists for the purposes of (i) issuing and selling its trust securities, (ii)
using the proceeds from the sale of such trust securities to ac-
<PAGE>
-4-
quire a series of Securities issued by the Company under this Indenture and
(iii) engaging in only those other activities necessary, convenient or
incidental thereto.
"YIELD TO MATURITY" means the yield to maturity on a Security at the
time of its issuance or at the most recent determination of interest on the
Security.
SECTION 1.02. Other Definitions.
TERM DEFINED IN SECTION
"ACTUAL KNOWLEDGE" 7.01
"BANKRUPTCY LAW" 6.01
"CONDITIONAL REDEMPTION" 3.04
"CONVERSION AGENT" 2.03
"CONVERSION DATE" 9.02
"CONVERSION NOTICE" 9.02
"CONVERSION RIGHT" 9.01
"CREDITOR" 4.06
"CUSTODIAN" 6.01
"EVENT OF DEFAULT" 6.01
"LEGAL HOLIDAY" 11.06
"MARKET PRICE" 9.07
"PAYING AGENT" 2.03
"PRICE PER SHARE" 9.09
"REGISTRAR" 2.03
"TRANSFER AGENT" 2.03
"TREASURY REGULATIONS" 2.04
"U.S. GOVERNMENT OBLIGATIONS" 8.02
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States;
(3) generally accepted accounting principles are those applicable
from time to time;
<PAGE>
-5-
(4) all terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings assigned to them by such
definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in the plural
include the singular.
ARTICLE 2 -- THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more series. Each series shall be created by a Securities Resolution
that establishes the terms of the series, which may include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate or rates, if any, or method of calculating
the interest rate or rates;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Registered
Securities;
(6) the dates when principal and interest are payable;
(7) the manner of paying principal and interest;
(8) the places where principal and interest are payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemption by the
Company including any sinking fund;
(11) the terms of any redemption at the option of Holders;
<PAGE>
-6-
(12) the denominations in which Securities are issuable;
(13) whether Securities will be issuable as Registered Securities,
Bearer Securities or uncertificated Securities;
(14) whether and upon what terms Registered Securities, Bearer
Securities and uncertificated Securities may be exchanged;
(15) whether any Securities will be represented by a Security in
global form;
(16) the terms of any global Security;
(17) the terms of any tax indemnity;
(18) the currencies (including any composite currency) in which
principal or interest may be paid;
(19) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the
manner for determining such payments;
(20) if amounts of principal or interest may be determined by
reference to an index, formula or other method, the manner for
determining such amounts;
(21) provisions for electronic issuance of Securities or for
Securities in uncertificated form;
(22) the portion of principal payable upon acceleration of a
Discounted Debt Security;
(23) whether any Events of Default or covenants in addition to or
in lieu of those set forth in this Indenture apply;
(24) whether and upon what terms Securities may be defeased;
(25) the forms of the Securities or any coupon, which may be in the
form of Exhibit A or B;
(26) any terms that may be required by or advisable under U.S. or
other applicable laws or regulations;
<PAGE>
-7-
(27) whether and upon what terms the Securities will be convertible
into or exchangeable for Common Stock of the Company or other
equity or debt securities, which may include the terms
provided in Article 9;
(28) the ranking of the Securities, including the relative degree,
if any, to which the Securities of such series shall be
subordinated to one or more other series of Securities in
right of payment, whether outstanding or not;
(29) any provisions relating to extending or shortening the date on
which the principal and premium, if any, of the Securities of
such series is payable;
(30) any provisions relating to the deferral of payment of any
interest;
(31) if such Securities are to be issued to a WEC Trust, the forms
of the related trust agreement and guarantee agreement
relating thereto;
(32) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary
to permit or facilitate the issuance of such Securities to a
WEC Trust; and
(33) any other terms not inconsistent with this Indenture.
All Securities of one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened for issuances of
additional Securities of such series.
The creation and issuance of a series and the authentication and
delivery thereof are not subject to any conditions precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities. An Officer
shall sign any coupons by facsimile signature.
If an Officer whose signature is on a Security or its coupons no
longer holds that office at the time the Security is authenticated or delivered,
the Security and coupons shall nevertheless be valid.
<PAGE>
-8-
A Security and its coupons shall not be valid until the Security is
authenticated by the manual or facsimile signature of the Registrar. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security shall be dated the date of its original
issuance or as provided in the Securities Resolution.
Securities may have notations, legends or endorsements required by
law, stock exchange rule, agreement or usage.
In the event Securities are issued in electronic or other
uncertificated form, such Securities may be validly issued without the
signatures or seal contemplated by this Section 2.02.
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and Other
Agents.
The Company shall maintain an office or agency where Securities may be
authenticated ("REGISTRAR"), where Securities may be presented for registration
of transfer or for exchange ("TRANSFER AGENT"), where Securities may be
presented for payment ("PAYING AGENT") and where Securities may be presented for
conversion ("CONVERSION AGENT"). Whenever the Company must issue or deliver
Securities pursuant to this Indenture, the Registrar shall authenticate the
Securities at the Company's request. The Transfer Agent shall keep a register
of the Securities and of their transfer and exchange.
The Trustee shall be, and is hereby appointed as, Registrar. The
Company may appoint more than one Transfer Agent, Paying Agent or Conversion
Agent or other Agent for a series. The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture. If the Company
does not appoint or maintain a Transfer Agent, Paying Agent or Conversion Agent
for a series, the Trustee shall act as such.
SECTION 2.04. Bearer Securities.
U.S. laws and Treasury Regulations restrict sales or exchanges of and
payments on Bearer Securities. Therefore, except as provided below:
(1) Bearer Securities will be offered, sold or delivered only
outside the United States and will be delivered in connection
with their original issuance only upon presentation of a
certificate in a form prescribed by the Company to comply with
U.S. laws and regulations.
<PAGE>
-9-
(2) Bearer Securities will not be issued in exchange for Registered
Securities.
(3) All payments of principal and interest (including original
issue discount) on Bearer Securities will be made outside the
United States by a Paying Agent located outside the United
States unless the Company determines that:
(A) such payments may not be made by such Paying Agent because
the payments are illegal or prevented by exchange controls
as described in Treasury Regulation (S) 1.163-5(c)(2)(v);
and
(B) making the payments in the United States would not have an
adverse tax effect on the Company.
If there is a change in the relevant provisions of U.S. laws or
Treasury Regulations or the judicial or administrative interpretation thereof, a
restriction set forth in paragraph (1), (2) or (3) above will not apply to a
series if the Company determines that the relevant provisions no longer apply to
the series or that failure to comply with the relevant provisions would not have
an adverse tax effect on the Company or on Securityholders or cause the series
to be treated as "registration-required" obligations under U.S. law.
The Company shall notify the Trustee of any determinations by the
Company under this Section.
"TREASURY REGULATIONS" means regulations of the U.S. Treasury
Department under the Internal Revenue Code of 1986, as amended.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent for a series other than
the Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of the persons entitled thereto all money held by the Paying Agent for
the payment of principal of or interest on the series, and will notify the
Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying
Agent to pay all money so held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent shall have no further liability
for the money.
<PAGE>
-10-
If the Company or an Affiliate acts as Paying Agent for a series, it
shall segregate and hold as a separate trust fund all money held by it as Paying
Agent for the series.
The Company may elect not to exchange or register the transfer of any
Security for a period of 15 days before a selection of Securities to be
redeemed.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Transfer Agent, the Company shall
furnish to the Trustee semiannually and at such other times as the Trustee may
request a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders of Registered Securities and
Holders of Bearer Securities whose names are on the list referred to below.
The Transfer Agent shall keep a list of the names and addresses of
Holders of Bearer Securities who file a request to be included on such list. A
request will remain in effect for two years but successive requests may be made.
Whenever the Company or the Trustee is required to mail a notice to
all Holders of Registered Securities of a series, it also shall mail the notice
to Holders of Bearer Securities of the series whose names are on the list.
Whenever the Company is required to publish a notice to all Holders of
Bearer Securities of a series, it also shall mail the notice to such of them
whose names are on the list.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented to the Transfer
Agent with a request to register a transfer or to exchange them for an equal
principal amount of Registered Securities of other denominations of the same
series, the Transfer Agent shall register the transfer or make the exchange if
its requirements for such transactions are met. Where Bearer Securities of a
series are presented to the Transfer Agent with a request to exchange them for
an equal principal amount of Bearer Securities of other denominations of the
same series, the Transfer Agent shall make the exchange if its requirements for
such transactions are met.
The Transfer Agent may require a Holder to pay a sum sufficient to
cover any taxes imposed on a transfer or exchange.
If a series provides for Registered and Bearer Securities and for
their exchange, Bearer Securities may be exchanged for Registered Securities and
Registered Securities may
<PAGE>
-11-
be exchanged for Bearer Securities as provided in the Securities or the
Securities Resolution if the requirements of the Transfer Agent for such
transactions are met and in the case of the exchange of registered securities
for bearer securities if Section 2.04 permits the exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it has been lost,
destroyed or wrongfully taken, then, in the absence of notice to the Company or
the Trustee that the Security or coupon has been acquired by a bona fide
purchaser, the Company shall issue a replacement Security or coupon if the
Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or
taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and any
taxes for replacing the Security or coupon.
A replacement Security shall have coupons attached corresponding to those, if
any, on the replaced Security.
Every replacement Security or coupon is an additional obligation of
the Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Registrar except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
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SECTION 2.10. Discounted Debt Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, the principal
amount of a Discounted Debt Security shall be the amount of principal that would
be due as of the date of such determination if payment of the Security were
accelerated on that date.
SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or an Affiliate shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which the Trustee knows are
so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Securities Resolution so provides, the Company may issue some
or all of the Securities of a series in temporary or permanent global form. A
global Security may be in registered form, in bearer form with or without
coupons or in uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the Registrar
shall endorse a global Security to reflect the amount of any increase or
decrease in the Securities represented thereby.
The Company may issue a global Security only to a depository
designated by the Company. A depository may transfer a global Security only as
a whole to its nominee or to a successor depository.
The Securities Resolution may establish, among other things, the
manner of paying principal and interest on a global Security and whether and
upon what terms a beneficial owner of an interest in a global Security may
exchange such interest for definitive Securities.
The Company, an Affiliate, the Trustee and any Agent shall not be
responsible for any acts or omissions of a depository, for any depository
records of beneficial ownership interests or for any transactions between the
depository and beneficial owners.
SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for delivery, the
Company may use temporary Securities. Temporary Securities shall be
substantially in the form of definitive
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Securities but may have variations that the Company considers appropriate for
temporary Securities. Temporary Securities may be in global form. Temporary
Bearer Securities may have one or more coupons or no coupons. Without
unreasonable delay, the Company shall deliver definitive Securities in exchange
for temporary Securities.
SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the Registrar for
cancellation. The Transfer Agent and the Paying Agent shall forward to the
Registrar any Securities and coupons surrendered to them for payment, exchange
or registration of transfer. The Registrar shall cancel all Securities or
coupons surrendered for payment, registration of transfer, exchange or
cancellation. The Registrar also will cancel all Bearer Securities and
unmatured coupons unless the Company requests the Registrar to hold the same for
redelivery. Any Bearer Securities so held shall be considered delivered for
cancellation under Section 2.09. The Registrar shall destroy cancelled
Securities and coupons unless the Company otherwise directs.
Unless the Securities Resolution otherwise provides, the Company may
not issue new Securities to replace Securities that the Company has paid or that
the Company has delivered to the Registrar for cancellation.
SECTION 2.15. Defaulted Interest.
If the Company defaults in a payment of interest on Registered
Securities, it need not pay the defaulted interest to Holders on the regular
record date. The Company may fix a special record date for determining Holders
entitled to receive defaulted interest, or the Company may pay defaulted
interest in any other lawful manner.
ARTICLE 3 -- REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before maturity shall be
redeemable in accordance with their terms and, unless the Securities Resolution
otherwise provides, in accordance with this Article.
In the case of a redemption by the Company, the Company shall notify
the Trustee of the redemption date and the principal amount of Securities to be
redeemed. The Company shall notify the Trustee at least 45 days before the
redemption date unless a shorter notice is satisfactory to the Trustee.
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If the Company is required to redeem Securities, it may reduce the
principal amount of Securities required to be redeemed to the extent that it is
permitted a credit against such redemption requirement by the terms of the
Securities Resolution and notifies the Trustee of the amount of such credit and
the basis for it. If the reduction is based on a credit for acquired or
redeemed Securities that the Company has not previously delivered to the
Registrar for cancellation, the Company shall deliver the Securities at the same
time as the notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities of the series outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities having
denominations larger than the minimum denomination for the series. Securities
and portions thereof selected for redemption shall be in amounts equal to the
minimum denomination for the series or an integral multiple thereof. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail to each Holder of
Registered Securities whose Securities are to be redeemed.
If Bearer Securities are to be redeemed, the Company shall publish a
notice of redemption in an Authorized Newspaper as provided in the Securities.
A notice shall identify the Securities of the series to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together with all
coupons, if any, maturing after the redemption date, must be
surrendered to the Paying Agent to collect the redemption
price;
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(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date;
(6) whether the redemption by the Company is mandatory or optional;
and
(7) whether the redemption is conditional as provided in Section
3.04, and if so, the terms of the conditions, and that, if the
conditions are not satisfied or are not waived by the Company,
the Securities will not be redeemed and such a failure to
redeem will not constitute an Event of Default.
A redemption notice given by publication need not identify Registered
Securities to be redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Except as provided below, once notice of redemption is given,
Securities called for redemption become due and payable on the redemption date
at the redemption price stated in the notice.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as described
in such notice ("CONDITIONAL REDEMPTION"), and such notice of Conditional
Redemption shall be of no effect unless all such conditions to the redemption
have occurred on or before such date or have been waived by the Company in its
sole discretion.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date.
When the Holder of a Security surrenders it for redemption in
accordance with the redemption notice, the Company shall pay to the Holder on
the redemption date the redemption price and accrued interest to such date,
except that:
(1) the Company will pay any such interest (except defaulted
interest) to Holders on the record date of Registered
Securities if the redemption date occurs on an interest payment
date; and
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(2) the Company will pay any such interest to Holders of coupons
that mature on or before the redemption date upon surrender of
such coupons to the Paying Agent.
Coupons maturing after the redemption date on a called Security are
void absent a payment default on that date. Nevertheless, if a Holder
surrenders for redemption a Bearer Security missing any such coupons, the
Company may deduct the face amount of such coupons from the redemption price.
If thereafter the Holder surrenders to the Paying Agent the missing coupons, the
Company will return the amount so deducted. The Company may waive surrender of
the missing coupons if it receives an indemnity bond satisfactory to the
Company.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall deliver to the Holder a new Security of the same series equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE 4 -- COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a series in
accordance with the terms of the Securities for the series, any related coupons,
and this Indenture. Principal and interest on a series shall be considered paid
on the date due if the Paying Agent for the series holds on that date money
sufficient to pay all principal and interest then due on the series.
SECTION 4.02. Overdue Interest.
Unless the Securities Resolution otherwise provides, the Company shall
pay interest on overdue principal of a Security of a series at the rate (or
Yield to Maturity in the case of a Discounted Debt Security) borne by the
series; the Company shall pay interest on overdue installments of interest at
the same rate or Yield to Maturity to the extent lawful.
SECTION 4.03. No Lien Created, etc.
This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Company or any Subsidiary.
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SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, a brief certificate signed by the
principal executive officer, principal financial officer or principal accounting
officer of the Company, as to the signer's knowledge of the Company's compliance
with all conditions and covenants under this Indenture (determined without
regard to any period of grace or requirement of notice provided herein).
Any other obligor on the Securities shall also deliver to the Trustee
such a certificate as to its compliance with this Indenture within 120 days
after the end of each of its fiscal years.
The certificates need not comply with Section 11.04.
SECTION 4.05. SEC Reports.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the SEC, copies of the annual reports
and of the information, documents, and other reports (or such portions of the
foregoing as the SEC may prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Any other obligor on the Securities shall do likewise as to the above
items which it is required to file with the SEC pursuant to those sections.
SECTION 4.06. Costs and Expenses of WEC Trusts.
The Company shall pay all debts and obligations (other than with
respect to the Trust Securities) and all costs and expenses of any WEC Trust
(including, but not limited to, all costs and expenses relating to the
organization of the applicable WEC Trust, the fees and expenses of any trustee
or trustees for the WEC Trust and all costs and expenses relating to the
operation of the applicable WEC Trust (other than with respect to the Trust
Securities)) and to pay any and all taxes, duties, assessments or other
governmental charges of whatever nature (other than United States withholding
taxes) imposed by the United States or any other taxing authority, so that the
net amounts received and retained by the applicable WEC Trust after paying such
fees, expenses, debts and obligations will be equal to the amounts the
applicable WEC Trust would have received and retained had no such fees,
expenses, debts and obligations been incurred by or imposed on the applicable
WEC Trust. The foregoing obligations of the Company are for the benefit of, and
shall be enforceable by, any person to whom such fees, expenses, debts and
obligations are owed (each, a "CREDITOR"), whether or not such
<PAGE>
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Creditor has received notice thereof. Any such Creditor may enforce such
obligations of the Company directly against the Company, and the Company
irrevocably waives any right or remedy to require that any such Creditor take
any action against the applicable WEC Trust or any other person before
proceeding against the Company. The Company shall execute such additional
agreements as may be necessary to give full effect to the foregoing.
ARTICLE 5 -- SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
Unless the Securities Resolution establishing a Series otherwise
provides, the Company shall not consolidate with or merge into any person in any
transaction in which the Company is not the survivor, or transfer all or
substantially all of its assets to any person, unless:
(1) the person is organized under the laws of the United States or
a State thereof or is organized under the laws of a foreign
jurisdiction and consents to the jurisdiction of the courts of
the United States or a State thereof;
(2) the person assumes by supplemental indenture all the
obligations of the Company under this Indenture, the Securities
and any coupons;
(3) all required approvals of any regulatory body having
jurisdiction over the transaction shall have been obtained;
(4) immediately after the transaction no Default exists; and
(5) the Company provides an Officers' Certificate and an Opinion of
Counsel to the effect that all the provisions in this Section
5.01 have been complied with.
The successor shall be substituted for the Company, and thereafter all
obligations of the Company under this Indenture, the Securities and any coupons
shall terminate.
<PAGE>
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ARTICLE 6 -- DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
Unless the Securities Resolution otherwise provides, an "EVENT OF
DEFAULT" on a series occurs if:
(1) the Company defaults in any payment of interest on any
Securities of the series when the same becomes due and payable
and the Default continues for a period of 60 days;
(2) the Company defaults in the payment of the principal and
premium, if any, of any Securities of the series when the same
becomes due and payable at maturity or upon redemption,
acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any
sinking fund obligation with respect to any Securities of the
series as required by the Securities Resolution establishing
such series and the Default continues for a period of 60 days;
(4) the Company defaults in the performance of any of its other
agreements applicable to the series and the Default continues
for 90 days after the notice specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian for it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
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(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect for 60
days; or
(7) there occurs any other Event of Default provided for in the
series.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "CUSTODIAN" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the series notify
the Company of the Default and the Company does not cure the Default within the
time specified after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If Holders notify the Company of a Default, they shall notify the
Trustee at the same time.
The failure to redeem any Security subject to a Conditional Redemption
is not an Event of Default if any event on which such redemption is so
conditioned does not occur and is not waived before the scheduled redemption
date.
SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing on a series, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the series (or, in the case of a series issued to a WEC Trust, so long
as any of the related preferred securities of such WEC Trust remain outstanding,
if, upon such Event of Default, the Trustee or the Holders of not less than 25%
in aggregate principal amount of such series fail to declare the principal of
all the Securities of such series to be so immediately due and payable, the
holders of 25% in aggregate liquidation amount of such preferred securities then
outstanding shall have such right) by notice to the Company and the Trustee, may
declare the principal of and accrued interest on all the Securities of the
series to be due and payable immediately. Discounted Debt Securities may
provide that the amount of principal due upon acceleration is less than the
stated principal amount.
The Holders of a majority in principal amount of the series by notice
to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default on the series have been cured or waived except nonpayment of
principal or interest that has become due solely be-
<PAGE>
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cause of the acceleration; provided, that in the case of a series issued to a
WEC Trust, so long as any of the related preferred securities of such WEC Trust
remain outstanding, the holders of a majority in aggregate liquidation amount of
such preferred securities then outstanding shall instead have such right to
rescind the of acceleration and its consequences with respect to such series,
subject to the same conditions set forth above.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing on a series, the
Trustee may pursue any available remedy to collect principal or interest then
due on the series, to enforce the performance of any provision applicable to the
series, or otherwise to protect the rights of the Trustee and Holders of the
series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or coupons or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Unless the Securities Resolution otherwise provides, the Holders of a
majority in principal amount of a series (or, in the case of a series issued to
a WEC Trust, so long as any of the related preferred securities of such WEC
Trust remain outstanding, the holders of a majority in aggregate liquidation
amount of such preferred securities then outstanding) by notice to the Trustee
may waive an existing Default on the series and its consequences except:
(1) a Default in the payment of the principal of or interest on the
series, or
(2) a Default in respect of a provision that under Section 10.02
cannot be amended without the consent of each Securityholder
affected.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of a series may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or of exercising any trust or power conferred on the Trustee,
with respect to such series. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or if the Trustee in good
faith shall determine that the action or direction might involve the Trustee in
personal liability.
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SECTION 6.06. Limitation on Suits.
A Securityholder of a series may pursue a remedy with respect to the
series only if:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default on the series;
(2) the Holders of at least 25% in principal amount of the series
make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the series do not give the Trustee a
direction inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
In the case of a series issued to a WEC Trust, any holder of the
related preferred securities of such WEC Trust shall have the right, upon the
occurrence and continuance of an Event of Default described in Sections 6.01(1)
and (2) hereof with respect to such series, to institute a suit directly against
the Company to enforce payment to such holder of the principal of, and premium,
if any, and interest on, the Securities having a principal amount equal to the
aggregate liquidation amount of such preferred securities held by such holder.
SECTION 6.07. Collection Suit by Trustee.
If an Event of Default in payment of interest, principal or sinking
fund specified in Section 6.01(1), (2) or (3) occurs and is continuing on a
series, the Trustee may recover judgment in its own name and as trustee of an
express trust against the Company for the whole amount of principal and interest
remaining unpaid on the series.
SECTION 6.08. Priorities.
If the Trustee collects any money for a series pursuant to this
Article, it shall pay out the money in the following order:
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First: to the Trustee for amounts due under Section 7.06;
Second: to Securityholders of the series for amounts due and unpaid
for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable for principal and interest,
respectively; and
Third: to the Company.
The Trustee may fix a payment date for any payment to Securityholders.
ARTICLE 7 -- TRUSTEE
SECTION 7.01. Rights of Trustee.
(1) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter
stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in
good faith in reliance on the Certificate or Opinion.
(3) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with
due care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(5) The Trustee may refuse to perform any duty or exercise any
right or power which it reasonably believes may expose it to
any loss, liability or expense unless it receives indemnity
satisfactory to it against such loss, liability or expense.
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by
law.
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(7) The Trustee shall have no duty with respect to a Default
unless a Trust Officer has actual knowledge of the Default. As
used herein, the term "actual knowledge" means the actual fact
or statement of knowing, without any duty to make any
investigation with regard thereto.
(8) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized
and within its powers.
(9) Any Agent shall have the same rights and be protected to the
same extent as if it were Trustee.
(10) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties
hereunder.
SECTION 7.02. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities or coupons and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities or any coupons; it shall not be accountable for
the Company's use of the proceeds from the Securities; it shall not be
responsible for any statement in the Securities or any coupons; it shall not be
responsible for any overissue; it shall not be responsible for determining
whether the form and terms of any Securities or coupons were established in
conformity with this Indenture; it shall not be responsible for determining
whether any Securities were issued in accordance with this Indenture; and it
shall not be responsible for the acts or omissions of any other Trustees
appointed hereunder.
SECTION 7.04. Notice of Defaults.
If a Default occurs and is continuing on a series and if the Trustee
has actual knowledge of such Default, the Trustee shall mail a notice of the
Default within 90 days after it occurs to Holders of Registered Securities of
the series. Except in the case of a Default in payment on a series, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interest of Holders
of the series. The Trustee shall withhold notice of a Default described in
Section 6.01(4) until at least 60 days after it occurs.
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SECTION 7.05. Reports by Trustee to Holders.
Any report required by TIA (S) 313(a) to be mailed to Securityholders
shall be mailed by the Trustee on or before May 15th of each year.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which any Securities are
listed. The Company shall notify the Trustee when any Securities are listed on
a stock exchange.
SECTION 7.06. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or willful
misconduct.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities and any coupons on all money
or property held or collected by the Trustee, except that held in trust to pay
principal or interest on particular securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive any termination or
discharge of this Indenture (including without limitation any termination under
any Bankruptcy Law) and the resignation or removal of the Trustee.
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SECTION 7.07. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee with the Company's
consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b)
or with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a Custodian or other public officer takes charge of the Trustee
or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(5) or (6) occurs
with respect to the Trustee.
The Company also may remove the Trustee with or without cause if the
Company so notifies the Trustee three months in advance and if no Default occurs
during the three-month period.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b) or
with Section 7.09, any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Registered Securities. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.06.
SECTION 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.09. Trustee's Capital and Surplus.
The Trustee at all times shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published report of
financial condition.
ARTICLE 8 -- DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution otherwise provides, in accordance with
this Article.
The Company at any time may terminate as to a series all of its
obligations under this Indenture, the Securities of the series ("legal
defeasance option"). The Company at any time may terminate as to a series its
obligations, if any, under any restrictive covenants which may be applicable to
a particular series ("covenant defeasance option"). However, in the case of the
legal defeasance option, the Company's obligations in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 7.06, 7.07 and 8.04 shall survive until the Securities of the
series are no longer outstanding; thereafter the Company's obligations in
Section 7.06 shall survive.
The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option. If the Company exercises
its legal defeasance option, a series may not be accelerated because of an Event
of Default. If the Company exercises its covenant defeasance option, a series
may not be accelerated by reference to any restrictive covenants as to which the
covenant defeasance option applicable to such series has been so exercised.
<PAGE>
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The Trustee upon request shall acknowledge in writing the discharge of
those obligations or restrictions that the Company terminates by defeasance.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal defeasance option or
its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with the Trustee or
another trustee money or U.S. Government Obligations;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants
expressing their opinion that the payments of principal and
interest when due on the deposited U.S. Government Obligations
without reinvestment plus any deposited money without
investment will provide cash at such times and in such amounts
as will be sufficient to pay principal and interest when due on
all the Securities of the series to maturity or redemption, as
the case may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the deposit does not cause the Trustee to have a conflicting
interest under TIA (S) 310(a) or (S) 310(b) as to another
series;
(6) the Company delivers to the Trustee an Opinion of Counsel to
the effect that Holders of the series will not recognize
income, gain or loss for Federal income tax purposes as a
result of the defeasance;
(7) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.01(5) or (6) occurs
that is continuing at the end of the period; and
(8) the Company provides an Officers' Certificate and an Opinion of
Counsel to the effect that all conditions precedent pursuant to
this Section 8.02 have been satisfied.
Before or after a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
<PAGE>
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"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of (i) the
United States or (ii) an agency or instrumentality of the United States, the
payment of which is unconditionally guaranteed by the United States, which, in
either case, have the full faith and credit of the United States pledged for
payment and which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.02. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal and interest on
Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to the Company, Securityholders entitled
to the money must look to the Company for payment as unsecured general creditors
unless an abandoned property law designates another person.
ARTICLE 9 -- CONVERSION
SECTION 9.01. Conversion Privilege.
If the Securities Resolution establishing the terms of a series of
securities so provides, Securities of any series may be convertible at the
option of the holders into or for Common Stock or other equity or debt
securities (a "CONVERSION RIGHT"). The Securities Resolution may establish,
among other things, the Conversion Rate, provisions for adjustments to the
Conversion Rate and limitations upon exercise of the Conversion Right.
Unless the Securities Resolution otherwise provides, a Holder may
convert a portion of a Security if the portion is $1,000 or an integral
multiples thereof. Provisions of this Indenture that apply to the conversion of
the aggregate principal amount of a Security also apply to conversion of a
portion of it.
<PAGE>
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The Securities Resolution providing for Securities with a Conversion
Right may establish any terms in addition to, or other than (including terms
inconsistent with), those set forth in this Article 9 with respect to the
conversion of the Securities established thereby (other than those of Section
9.16).
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all requirements in the
Securities or the Securities Resolution and (i) complete and manually sign the
conversion notice (the "CONVERSION NOTICE") provided for in the Securities
Resolution or the Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other office or agency
maintained for such purpose, (ii) surrender the Security to the Conversion Agent
or at such other office or agency by physical delivery, (iii) if required,
furnish appropriate endorsements and transfer documents, and (iv) if required,
pay all transfer or similar taxes. The date on which such notice shall have
been received by and the Security shall have been so surrendered to the
Conversion Agent is the "CONVERSION DATE." Such Conversion Notice shall be
irrevocable and may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conversion of Securities
not later than the fifth business day following the Conversion Date in respect
of the cash portion elected to be delivered in lieu of the securities into which
the Security is convertible and not later than the seventh business day
following the Conversion Date in respect of the portion to be settled in such
securities.
If any Security is converted between the record date for the payment
of interest and the next succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such succeeding interest
payment date on the principal amount so converted (unless such Security shall
have been called for redemption during such period, in which case no such
payment shall be required). A Security converted on an interest payment date
need not be accompanied by any payment, and the interest on the principal amount
of the Security being converted will be paid on such interest payment date to
the registered holder of such Security on the immediately preceding record date.
Subject to the aforesaid right of the registered holder to receive interest, no
payment or adjustment will be made on conversion for interest accrued on the
converted Security or for interest, dividends or other distributions payable on
any security issued on conversion.
If a Holder converts more than one Security at the same time, the
securities into which the Security is convertible issuable or cash payable upon
the conversion shall be based on the total principal amount of the Securities
converted.
<PAGE>
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Upon surrender of a Security that is converted in part the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered; except that if a global
Security is so surrendered the Trustee shall authenticate and, if applicable,
deliver to the depository a new global Security in a denomination equal to and
in exchange for the unconverted portion of the principal of the global Security
so surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion Right, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on the
issue of the securities into which the Security is convertible upon the
conversion. However, the Holder shall pay any such tax which is due because
securities or other property are issued in a name other than the Holder's name.
Nothing herein shall preclude any income tax or other withholding required by
law or regulations.
SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors makes pursuant to this
Article 9 or consistent with terms provided for in any Securities Resolution is
conclusive, absent manifest error.
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the Company) has no
duty to determine when or if an adjustment under this Article 9 or any
Securities Resolution should be made, how it should be made or calculated or
what it should be. The Trustee (and each Conversion Agent other than the
Company) makes no representation as to the validity or value of any securities
issued upon conversion of Securities. The Trustee (and each Conversion Agent
other than the Company) shall not be responsible for the Company's failure to
comply with this Article 9 or any provision of a Securities Resolution relating
to a Conversion Right.
SECTION 9.06. Company to Provide Conversion Securities.
The Company shall reserve out of its authorized but unissued Common
Stock or its Common Stock held in treasury sufficient shares to permit the
conversion of all of the Securities convertible into Common Stock. The Company
shall arrange and make available
<PAGE>
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for issuance upon conversion the full amount of any other securities into which
the Securities are convertible to permit such conversion of the Securities.
All shares of Common Stock or other equity securities of any person
which may be issued upon conversion of the Securities shall be validly issued,
fully paid and non-assessable, subject to the personal liability which may be
imposed on shareholders by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law (or any successor provision), as judicially interpreted, for
debts owing to employees for services performed.
The Company will comply with all securities laws regulating the offer
and delivery of securities upon conversion of Securities.
SECTION 9.07. Cash Settlement Option.
If the Securities Resolution so provides, the Company may elect to
satisfy, in whole or in part, a Conversion Right of Securities convertible into
Common Stock or other securities of any person by the delivery of cash. The
amount of cash to be delivered shall be equal to the Market Price on the last
Trading Day preceding the applicable Conversion Date of a share of Common Stock
or other securities of any person into which the Securities are convertible
multiplied by the number of shares of Common Stock or the number of shares or
principal amount of other securities into which the Securities are convertible,
respectively, in respect of which the Company elects to deliver cash. If the
Company elects to satisfy, in whole or in part, a Conversion Right by the
delivery of shares of Common Stock or other securities, no fractional shares or
portion of other securities will be delivered. Instead, the Company will pay
cash based on the Market Price for such fractional share of Common Stock or
portion of other securities.
The "MARKET PRICE" of the Common Stock into which Securities or other
equity securities into which the Securities are convertible may be converted
pursuant to a Securities Resolution or this Article 9 on any Trading Day means
the weighted average per share sale price for all sales of the Common Stock or
other equity securities on such Trading Day (or, if the information necessary to
calculate such weighted average per share sale price is not reported, the
average of the high and low sale prices, or if no sales are reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices), as reported in the composite
transactions for the New York Stock Exchange, or if the Common Stock or other
equity securities into which the Securities are convertible are not listed or
admitted to trading on such exchange, as reported in the composite transactions
for the principal national or regional United States securities exchange on
which the Common Stock or other equity securities into which the Securities are
convertible are listed or admitted to trading or, if the Common Stock or other
equity securities into which the Securities are convertible are not listed or
admitted to trading on a United States national or
<PAGE>
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regional securities exchange, as reported by NASDAQ or by the National Quotation
Bureau Incorporated, or if not so reported, as determined in the manner set
forth in the appropriate Securities Resolution. In the absence of such
quotations, the Company shall be entitled to determine the Market Price on the
basis of such quotations as it considers appropriate.
The "MARKET PRICE" of any debt security into which Securities are
convertible shall be determined as set forth in the applicable Securities
Resolution.
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock.
If the Securities are convertible into Common Stock and the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of
its Capital Stock,
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company (or, at the Company's option, an equivalent amount in cash) which he
would have owned immediately following such action if he had converted the
Security immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If the security into which the Securities are convertible is other
than Common Stock of the Company, the conversion rate shall be subject to
adjustment as set forth in the applicable Securities Resolution.
<PAGE>
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If after an adjustment a Holder of a Security may, upon conversion,
receive shares of two or more classes of Capital Stock of the Company or other
securities, the Board of Directors of the Company shall determine the allocation
of the adjusted Conversion Rate between or among the classes of Capital Stock or
other securities. After such allocation, the conversion privilege and the
Conversion Rate of each class of Capital Stock or other securities shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Article or in such Securities Resolution.
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below
Market Price.
If the Securities are convertible into Common Stock, and the Company
issues to all holders of Common Stock rights, options or warrants to subscribe
for or purchase shares of Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock, or rights, options or warrants to
subscribe for or purchase such convertible or exchangeable securities at a Price
Per Share (as defined and determined according to the formula given below) lower
than the current Market Price on the date of such issuance, the Conversion Rate
shall be adjusted in accordance with the following formula:
AC = CC . (O + N )
-------
O . R
-
M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding immediately prior to
such issuance (which number shall include shares owned or held by or
for the account of the Company).
N = the "Number of Shares," which (i) in the case of rights, options or
warrants to subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable for shares of Common
Stock, is the maximum number of shares of Common Stock initially
issuable upon exercise, conversion or exchange thereof; and (ii) in
the case of rights, options or warrants to subscribe for or purchase
convertible or exchangeable securities, is the maximum number of
shares of Common Stock initially issuable upon the conversion or
exchange of the convertible or exchangeable securities issuable upon
the exercise of such rights, options or warrants.
<PAGE>
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R = the proceeds received or receivable by the Company, which (i) in the
case of rights, options or warrants to subscribe for or purchase
shares of Common Stock or of securities convertible into or
exchangeable for shares of Common Stock, is the aggregate amount
received or receivable by the Company in consideration for the sale
and issuance of such rights, options, warrants or convertible or
exchangeable securities, plus the minimum aggregate amount of
additional consideration, other than the convertible or exchangeable
securities, payable to the Company upon exercise, conversion or
exchange thereof; and (ii) in the case of rights, options or warrants
to subscribe for or purchase convertible or exchangeable securities,
is the aggregate amount received or receivable by the Company in
consideration for the sale and issuance of such rights, options or
warrants, plus the minimum aggregate consideration payable to the
Company upon the exercise thereof, plus the minimum aggregate amount
of additional consideration, other than the convertible or
exchangeable securities, payable upon the conversion or exchange of
the convertible or exchangeable securities; provided, that in each
--------
case the proceeds received or receivable by the Company shall be
deemed to be the amount of gross cash proceeds without deducting
therefrom any compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or others
performing similar services or any expenses incurred in connection
therewith.
M = the current Market Price per share of Common Stock on the date of
issue of the rights, options or warrants to subscribe for or purchase
shares of Common Stock or the securities convertible into or
exchangeable for shares of Common Stock or the rights, options or
warrants to subscribe for or purchase convertible or exchangeable
securities.
"PRICE PER SHARE" shall be defined and determined according to the
following formula:
P = R
-
N
where:
P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants or convertible
or exchangeable securities with respect to its Common Stock for a consideration
consisting, in whole or in part, of property other than cash the amount of such
consideration shall be deter-
<PAGE>
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mined in good faith by the Board of Directors whose determination shall be
conclusive and evidenced by a resolution of the Board of Directors filed with
the Trustee.
The adjustment shall be made successively whenever any such additional
rights, options, warrants or convertible or exchangeable securities with respect
to its Common Stock are issued, and shall become effective immediately after the
date of issue of such shares, rights, options, warrants or convertible or
exchangeable securities.
To the extent that such rights, options or warrants to acquire Common
Stock expire unexercised or to the extent any convertible or exchangeable
securities with respect to its Common Stock are redeemed by the Company or
otherwise cease to be convertible or exchangeable into shares of Common Stock,
the Conversion Rate shall be readjusted to the Conversion Rate which would then
be in effect had the adjustment made upon the date of issuance of such rights,
options, warrants or convertible or exchangeable securities been made upon the
basis of the issuance of rights, options or warrants to subscribe for or
purchase only the number of shares of Common Stock as to which such rights,
options or warrants were actually exercised and the number of shares of Common
Stock that were actually issued upon the conversion or exchange of the
convertible or exchangeable securities.
If the Securities are convertible into securities other than the
Common Stock, any adjustment in the Conversion Rate required for the issuance or
sale of the securities into which the Securities are convertible shall be made
as set forth in the Securities Resolution.
SECTION 9.10. Adjustment for Other Distributions.
If the Securities are initially convertible into Common Stock and the
Company distributes to all holders of its Common Stock any of its assets or debt
securities or any rights or warrants to purchase assets or debt securities of
the Company, the Conversion Rate shall be adjusted in accordance with the
following formula:
AC = CC . (O . M)
-------
((O . M) - F)
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date
mentioned below (which number shall include shares owned or held by or
for the account of the Company).
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M = the current Market Price per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets, securities,
rights or warrants distributed. The Board of Directors of the Company
shall determine the fair market value.
The adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If the securities into which the Securities are convertible are other
than Common Stock, any adjustments for such other distribution shall be made as
set forth in the Securities Resolution.
This Section does not apply to cash dividends or distributions or to
reclassifications or distributions referred to in Section 9.08. Also, this
Section does not apply to shares issued below Market Price referred to in
Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion Rate, temporarily
or otherwise, by any amount but in no event shall such Conversion Rate result in
the issuance of Capital Stock at a price less than the par value of such Capital
Stock at the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the
adjustment would require a change of at least 1% in the Conversion Rate. Any
adjustments that are not made due to the immediately preceding sentence shall be
carried forward and taken into account in any subsequent adjustment; provided,
--------
that any adjustment carried forward shall be deferred not in excess of three
years, whereupon any adjustment to the Conversion Rate will be effected.
All calculations under this Article 9 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
SECTION 9.13. When No Adjustment Required.
Except as set forth in Section 9.09, no adjustment in the Conversion
Rate shall be made because the Company issues, in exchange for cash, property or
services, shares of
<PAGE>
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Common Stock, or any securities convertible into shares of Common Stock, or
securities carrying the right to purchase shares of Common Stock or such
convertible securities.
No adjustment in the Conversion Rate need be made for rights to
purchase or the sale of Common Stock pursuant to a Company plan providing for
reinvestment of dividends or interest.
No adjustment in the Conversion Rate need be made for a change in the
par value of the Common Stock or other securities having a par value.
No adjustment need be made for a transaction referred to in Section
9.08, 9.09 or 9.10 if Securityholders are to participate in the transaction on a
basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock or
other securities into which the Securities are convertible participate in the
transaction.
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall promptly
mail to Holders of Securities affected a notice of the adjustment. The Company
shall file with the Trustee an Officers' Certificate or a certificate from the
Company's independent public accountants stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct, absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that would require an
adjustment in the Conversion Rate,
(2) the Company proposes to take any action that would require a
supplemental indenture pursuant to Section 9.16, or
(3) there is a proposed liquidation or dissolution of the Company
or of the issuer of any other security into which the
Securities are convertible,
the Company shall mail to registered Holders of Securities of any affected
series a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
<PAGE>
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SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to Section 5.01,
the successor corporation (if other than the Company) shall enter into a
supplemental indenture which shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which he
would have owned immediately after the consolidation, merger or transfer if he
had converted the Security immediately before the effective date of the
transaction. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article. The successor company shall mail to Holders of Securities
of any affected series a notice briefly describing the supplemental indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10 do not apply.
ARTICLE 10 -- AMENDMENTS
SECTION 10.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the Securities
without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5 or Section 9.16;
(3) to provide that specific provisions of this Indenture shall not
apply to a series not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or more series; or
(6) to make any change that does not materially adversely affect
the rights of any Securityholder.
SECTION 10.02. With Consent of Holders.
Unless the Securities Resolution otherwise provides, the Company and
the Trustee may amend this Indenture, the Securities and any coupons with the
written consent of the Holders of a majority in principal amount of the
Securities of all series affected by the amendment voting as one class; provided
that, in the case of a series issued to a WEC Trust,
<PAGE>
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so long as any of the related preferred securities of such WEC Trust remains
outstanding, no such amendment shall be made that adversely affects the holders
of such preferred securities in any material respect, and no termination of this
Indenture shall occur, without the prior consent of the holders of not less than
a majority in aggregate liquidation amount of such preferred securities then
outstanding unless and until the principal (and premium, if any) of the
Securities of such series and all accrued and unpaid interest thereon have been
paid in full; and provided further that, in the case a series issued to a WEC
Trust, so long as any of the related preferred securities of such WEC Trust
remain outstanding, no amendment shall be made to the third paragraph of Section
6.06 of this Indenture without the prior written consent of the holders of each
such preferred security then outstanding unless and until the principal (and
premium, if any) of the Securities of such series and all accrued and unpaid
interest thereon have been paid in full. However, without the consent of each
Securityholder affected, an amendment under this Section may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment;
(2) reduce the interest on or change the time for payment of
interest on any Security (except an election to defer interest
in accordance with the applicable Securities Resolutions and
Section 2.01(30) hereof);
(3) change the fixed maturity of any Security;
(4) reduce the principal of any non-Discounted Debt Security or
reduce the amount of principal of any Discounted Debt Security
that would be due upon an acceleration thereof;
(5) change the currency in which principal or interest on a
Security is payable;
(6) make any change that materially adversely affects the right to
convert or exchange any Security; or
(7) make any change in Section 6.04 or 10.02, except to increase
the amount of Securities whose Holders must consent to an
amendment or waiver or to provide that other provisions of this
Indenture cannot be amended or waived without the consent of
each Securityholder affected thereby.
An amendment of a provision included solely for the benefit of one or
more series does not affect Securityholders of any other series.
<PAGE>
-41-
Securityholders need not consent to the exact text of a proposed
amendment or waiver; it is sufficient if they consent to the substance thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 10.01 or 10.02 shall be set forth
in a supplemental indenture (except any amendment pursuant to Section 10.01(4),
which may be set forth in a Securities Resolution) that complies with the TIA.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect.
SECTION 10.04. Effect of Consents.
An amendment or waiver becomes effective in accordance with its terms
and thereafter binds every Securityholder entitled to consent to it.
A consent to an amendment or waiver by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security that
evidences the same debt as the consenting Holder's Security. Any Holder or
subsequent Holder may revoke the consent as to his Security if the Trustee
receives notice of the revocation before the amendment or waiver becomes
effective.
The Company may fix a record date for the determination of Holders of
Registered Securities entitled to give a consent. The record date shall not be
less than 10 nor more than 60 days prior to the first written solicitation of
Securityholders.
SECTION 10.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate notation about an
amendment or waiver on any Security thereafter authenticated. The Company may
issue in exchange for affected Securities new Securities that reflect the
amendment or waiver.
SECTION 10.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that adversely
affects its rights. The Trustee shall be provided with, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment or supplement or waiver
authorized pursuant to this Article is authorized or permitted by this
Indenture, and that such amendment or supplement or waiver constitutes the
legal, valid and binding obligation of the Company.
<PAGE>
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ARTICLE 11 -- MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.
The provisions of TIA (S)(S) 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not expressly set forth herein.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 11.02. Notices.
Any notice by one party to another is duly given if in writing and
delivered in person, sent by facsimile transmission confirmed by mail or mailed
by first-class mail to the other's address shown below:
Company:
Wisconsin Energy Corporation
231 West Michigan Street
Milwaukee, Wisconsin 53201
Fax: (414) 221-2594
Attention: [ ]
Trustee:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Fax: (312) 407-1708
Attention: Corporate Trust Division
A party by notice to the other parties may designate additional or
different addresses for subsequent notices.
<PAGE>
-43-
Any notice mailed to a Securityholder shall be mailed to his address
shown on the register kept by the Transfer Agent or on the list referred to in
Section 2.06. Failure to mail a notice to a Securityholder or any defect in a
notice mailed to a Securityholder shall not affect the sufficiency of the notice
mailed to other Securityholders or the sufficiency of any published notice.
If a notice is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice to Securityholders, it shall mail a copy
to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice
required to be mailed or to publish a notice required to be published, the
Company may give such substitute notice as the Trustee approves. Failure to
publish a notice as required or any defect in it shall not affect the
sufficiency of any mailed notice.
All notices shall be in the English language, except that any
published notice may be in an official language of the country of publication.
A "notice" includes any communication required by this Indenture.
SECTION 11.03. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.04. Statements Required in Certificate or
Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
<PAGE>
-44-
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 11.05. Rules by Company and Agents.
The Company may make reasonable rules for action by or a meeting of
Securityholders. An Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 11.06. Legal Holidays.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open or a day on which the Federal Reserve
Bank of New York is not open. If a payment date is a Legal Holiday at a place of
payment, unless the Securities Resolution establishing a series otherwise
provides with respect to Securities of the series, payment may be made at that
place on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period.
SECTION 11.07. No Recourse Against Others.
All liability described in the Securities of any director, officer,
employee or stockholder, as such, of the Company is waived and released.
SECTION 11.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
<PAGE>
-45-
SECTION 11.09. Governing Law.
The laws of the State of Wisconsin shall govern this Indenture, the
Securities and any coupons, unless federal law governs.
<PAGE>
-46-
S-1
SIGNATURES
Dated: [ ], 1999 WISCONSIN ENERGY CORPORATION
By_________________________________
Name:
Title:
Dated: [ ], 1999 THE FIRST NATIONAL BANK OF
CHICAGO
By_________________________________
Name:
Title:
<PAGE>
EXHIBIT A
A Form of Registered Security
No. [$]
WISCONSIN ENERGY CORPORATION
[Title of Security]
WISCONSIN ENERGY CORPORATION
promises to pay to
or registered assigns
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
WISCONSIN ENERGY CORPORATION
By:_______________________________________
[Title of Authorized Officer]
By:_______________________________________
[Title of the Authorized Officer]
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By: _____________________________
Authorized Signature
A-1
<PAGE>
WISCONSIN ENERGY CORPORATION
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
Wisconsin Energy Corporation ("Company"), a Wisconsin corporation,
promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest on
and of each year commencing , . Interest
on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from
, . Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT./2/
The Company will pay interest on the Securities to the persons who are
registered holders of Securities at the close of business on the
record date for the next interest payment date, except as otherwise
provided in the Indenture. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money. It may mail an interest check to a holder's registered
address.
3. SECURITIES AGENTS./2A/
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Paying Agent, Transfer Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
A-2
<PAGE>
4. INDENTURE.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of [ ], 1999 ("Indenture") between
the Company and The First National Bank of Chicago (the "Trustee").
The terms of the Securities include those stated in the Indenture and
in the Securities Resolution creating the Securities and those made
part of the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code
(S)(S) 77aaa-77bbbb). Securityholders are referred to the Indenture,
the Securities Resolution and the Act for a statement of such terms.
5. OPTIONAL REDEMPTION./3/
On or after , the Company may redeem all the Securities
at any time or some of them from time to time at the following
redemption prices (expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
---- ---------- ---- ----------
and thereafter at 100%.
6. MANDATORY REDEMPTION./4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued interest to
the redemption date.5 The Company may reduce the principal amount of
Securities to be redeemed pursuant to this paragraph by subtracting
100% of the principal amount (excluding premium) of any Securities (i)
that the Company has acquired or that the Company has redeemed other
than pursuant to this paragraph and (ii) that the Company has
delivered to the Registrar for cancellation. The Company may so
subtract the same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION./6/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $ principal amount of
Securities on
A-3
<PAGE>
and on each thereafter through at a redemption price of
100% of principal amount, plus accrued interest to the redemption
date.
8. NOTICE OF REDEMPTION./7/
Notice of redemption will be mailed at least 30 but not more than 60
days before the redemption date to each holder of Securities to be
redeemed at his registered address.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
9. CONVERSION./8/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any
time before the close of business on ___________, or, if the Security
is called for redemption, the Holder may convert it at any time before
the close of business on the redemption date. The initial Conversion
Rate is ____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as provided
in Article 9 of the Indenture./9/ The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment
for interest accrued on the Securities will be made nor for dividends
on the Common Stock issued on conversion. If any Security is
converted between the record date for the payment of interest and the
next succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted (unless
such Security shall have been called for redemption, in which case no
such payment shall be required). A Security converted on an interest
payment date need not be accompanied by any payment, and the interest
on the principal amount of the Security being converted will be paid
on such interest payment date to the registered holder of such
Security on the immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by the Registrar or Conversion
Agent and (4) pay any transfer or similar tax if
A-4
<PAGE>
required. A Holder may convert a portion of a Security if the portion
is $1,000 or an integral multiple of $1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in denominations
of $1,000/10/ and whole multiples of $1,000. The transfer of
Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Transfer Agent may require a holder,
among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or the
Indenture. The Transfer Agent need not exchange or register the
transfer of any Security or portion of a Security selected for
redemption. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to
be redeemed.
11. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its owner for
all purposes.
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./11/
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder.
13. RESTRICTIVE COVENANTS./12/
The Securities are unsecured general obligations of the Company
limited to $ principal amount. The Indenture does not limit
other unsecured debt.
14. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities and the Indenture, the Company will be released from those
obligations.
A-5
<PAGE>
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./13/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the
Securities to redemption or maturity. U.S. Government Obligations are
securities backed by the full faith and credit of the United States of
America or certificates representing an ownership interest in such
Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default/14/ includes: default for 60 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare the
principal/15/ of all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of principal
or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate
to the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or
A-6
<PAGE>
the Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Securityholder by accepting a
Security waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
A-7
<PAGE>
EXHIBIT B
A Form of Bearer Security
No. [$]
WISCONSIN ENERGY CORPORATION
[Title of Security]
WISCONSIN ENERGY CORPORATION
promises to pay to
bearer
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
WISCONSIN ENERGY CORPORATION
By: __________________________________
[Title of Authorized Officer]
By: __________________________________
[Title of Authorized Officer]
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By: _______________________________
Authorized Signature
B-1
<PAGE>
WISCONSIN ENERGY CORPORATION
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. INTEREST./1/
WISCONSIN ENERGY CORPORATION ("Company"), a Wisconsin corporation,
promises to pay to bearer interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay
interest on and of each year commencing ,
. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid,
from , . Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT./2/
Holders must surrender Securities and any coupons to a Paying Agent to
collect principal and interest payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money.
3. SECURITIES AGENTS./2A/
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Transfer Agent, Paying Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
4. INDENTURE.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of [ ], 1999 ("Indenture") between the
Company and The First National Bank of Chicago (the "Trustee"). The
terms of the Securities include those stated in the Indenture and the
Securities Resolution and those made part of the Indenture by the
Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb).
Securityholders are referred to the Indenture, the Securities
Resolution and the Act for a statement of such terms.
B-2
<PAGE>
5. OPTIONAL REDEMPTION./3/
On or after , the Company may redeem all the Securities
at any time or some of them from time to time at the following
redemption prices (expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
---- ---------- ---- ----------
and thereafter 100%.
6. MANDATORY REDEMPTION./4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued interest to
the redemption date./5/ The Company may reduce the principal amount of
Securities to be redeemed pursuant to this paragraph by subtracting
100% of the principal amount (excluding premium) of any Securities (i)
that the Company has acquired or that the Company has redeemed other
than pursuant to this paragraph and (ii) that the Company has
delivered to the Registrar for cancellation. The Company may so
subtract the same Security only once.
7. ADDITIONAL OPTIONAL REDEMPTION./6/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $ principal amount of
Securities on and on each thereafter through
at a redemption price of 100% of principal amount, plus accrued
interest to the redemption date.
8. NOTICE OF REDEMPTION./7/
Notice of redemption will be published once in an Authorized Newspaper
in the City of New York and if the Securities are listed on any stock
exchange located outside the United States and such stock exchange so
requires, in any other required city outside the United States at
least 30 but not more than 60 days before the redemption date. Notice
of redemption also will be mailed to holders who have filed their
names and addresses with the Transfer Agent
B-3
<PAGE>
within the two preceding years. A holder of Securities may miss
important notices if he fails to maintain his name and address with
the Transfer Agent.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
9. CONVERSION./8/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any
time before the close of business on ___________, or, if the Security
is called for redemption, the Holder may convert it at any time before
the close of business on the redemption date. The initial Conversion
Rate is ____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as provided
in Article 9 of the Indenture./9/ The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment
for interest accrued on the Securities will be made nor for dividends
on the Common Stock issued on conversion. If any Security is
converted between the record date for the payment of interest and the
next succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted (unless
such Security shall have been called for redemption, in which case no
such payment shall be required). A Security converted on an interest
payment date need not be accompanied by any payment, and the interest
on the principal amount of the Security being converted will be paid
on such interest payment date to the registered holder of such
Security on the immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by the Registrar or Conversion
Agent and (4) pay any transfer or similar tax if required. A Holder
may convert a portion of a Security if the portion is $1,000 or an
integral multiple of $1,000.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in bearer form with coupons in denominations of
$5,000/10/ and whole multiples of $5,000. The Securities may be
transferred by delivery
B-4
<PAGE>
and exchanged as provided in the Indenture. Upon an exchange, the
Transfer Agent may require a holder, among other things, to furnish
appropriate documents and to pay any taxes and fees required by law or
the Indenture. The Transfer Agent need not exchange any Security or
portion of a Security selected for redemption. Also, it need not
exchange any Securities for a period of 15 days before a selection of
Securities to be redeemed.
11. PERSONS DEEMED OWNERS.
The holder of a Security or coupon may be treated as its owner for all
purposes.
12. AMENDMENTS AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./11/
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder.
13. RESTRICTIVE COVENANTS./12/
The Securities are unsecured general obligations of the Company
limited to $ principal amount. The Indenture does not limit
other unsecured debt.
14. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities, any coupons and the Indenture, the Company will be
released from those obligations.
15. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY./13/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities, any coupons and
the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on
the Securities to redemption or
B-5
<PAGE>
maturity. U.S. Government Obligations are securities backed by the
full faith and credit of the United States of America or certificates
representing an ownership interest in such Obligations.
16. DEFAULTS AND REMEDIES.
An Event of Default/14/ includes: default for 60 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare the
principal/15/ of all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their
interests. The Company must furnish annual compliance certificates
to the Trustee.
17. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
18. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for
the issue of the Securities.
B-6
<PAGE>
19. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
20. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
B-7
<PAGE>
$_____________
[$]____________
Due __________
WISCONSIN ENERGY CORPORATION
[Title of Security]
Unless the Security attached to this coupon has been called for
redemption, Wisconsin Energy Corporation ("Company") will pay to bearer, upon
surrender, the amount shown hereon when due. This coupon may be surrendered for
payment to any Paying Agent listed on the back of this coupon unless the Company
has replaced such Agent. Payment may be made by check. This coupon represents
months' interest.
WISCONSIN ENERGY CORPORATION
By_____________________________________
[REVERSE OF COUPON]
PAYING AGENTS
B-8
<PAGE>
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate per annum, insert a
description of the manner in which the rate of interest is to be
determined. If the Security is not to bear interest prior to maturity, so
state.
2 If the method or currency of payment is different, insert a statement
thereof.
2A As is done in Section 2.03 of the Indenture, the Trustee must be appointed
Registrar under Section 182.23, Wis. Stats., in order for Officers'
signatures on Securities and the corporate seal to be facsimiles.
3 If applicable. If the Security is to be subject to a nonrefunding
restriction, insert a brief summary thereof. If the redemption is to be
subject to a condition, insert a brief summary thereof.
4 Such provisions as are applicable, if any.
5 If the Security is a Discounted Debt Security, insert amount to be redeemed
or method of calculating such amount.
6 If applicable. Also insert, if applicable, provisions for repayment of
Securities at the option of the Securityholder.
7 If applicable.
8 If applicable. If convertible into securities other than Common Stock,
insert appropriate summary.
9 If additional or different adjustment provisions apply so specify.
10 If applicable. Insert additional or different denominations and terms as
appropriate.
11 If different terms apply, insert a brief summary thereof.
12 If applicable. If additional or different covenants apply, insert a brief
summary thereof.
13 If applicable. If different defeasance terms apply, insert a brief summary
thereof.
14 If additional or different Events of Default apply, insert a brief summary
thereof.
15 If the Security is a Discounted Debt Security, set forth the amount due and
payable upon an Event of Default.
Note: U.S. tax law may require certain legends on Discounted Debt and Bearer
Securities.
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_________________________________________
: :
:_________________________________________:
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date: _______________ Your Signature: ________________________
______________________________________________
(Sign exactly as your name(s) appear(s) on the
other side of this Security)
Signature(s) guaranteed by: ___________________________________________
(All signatures must be guaranteed by an "eligible
guarantor institution" as defined by Rule 17Ad-15
of the Securities Exchange Act of 1934, as amended)
C-1
<PAGE>
EXHIBIT D
CONVERSION NOTICE
To convert this Security, check the box:
-------
-------
To convert only part of this Security, state the
amount (must be in integral multiples of $1,000);
$_____________________________
If you want the securities delivered upon
conversion made out in another person's name, fill in
the form below:
(Insert other person's Social Security or Tax I.D.
Number)
______________________________
______________________________
______________________________
______________________________
(Print or type other person's name, address and
zip code
Date: ____________ Signature(s): ____________________________
_____________________________________________
(Sign exactly as your name(s)
appear(s) on the other side of this Security)
Signature(s) guaranteed by: ___________________________________________
(All signatures must be guaranteed by an "eligible
guarantor institution" as defined by Rule 17Ad-15
of the Securities Exchange Act of 1934, as amended)
D-1
<PAGE>
Exhibit 4.2
[FORM OF SECURITIES RESOLUTION]
================================================================================
SECURITIES RESOLUTION NO._____
OF
WISCONSIN ENERGY CORPORATION
Dated as of ______________, 1999
pursuant to Section 2.01 of the
INDENTURE
between
WISCONSIN ENERGY CORPORATION,
as Issuer
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
Dated as of ___________________
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
<S> <C>
SECTION 1.1. Definition of Terms................................................................2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount...................................................4
SECTION 2.2. Maturity...........................................................................4
SECTION 2.3. Form and Payment...................................................................4
SECTION 2.4. Global Debenture...................................................................4
SECTION 2.5. Interest...........................................................................6
SECTION 2.6. Redemption.........................................................................7
SECTION 2.7. No Sinking Fund....................................................................7
SECTION 2.8. Depository.........................................................................7
SECTION 2.9. Appointment of Agents..............................................................7
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption...........................................................8
SECTION 3.2. Optional Redemption by Company.....................................................9
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period..............................................10
SECTION 4.2. Notice of Extension...............................................................10
SECTION 4.3. Limitation of Transactions........................................................11
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses...............................................................12
SECTION 5.2. Payment Upon Resignation or Removal...............................................12
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE VI
SUBORDINATION
<S> <C>
SECTION 6.1. Subordination.....................................................................13
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange............................................................13
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture.................................................................13
ARTICLE IX
EFFECTIVENESS OF THIS SECURITIES RESOLUTION
SECTION 9.1. Effectiveness.....................................................................15
ARTICLE X
ORIGINAL ISSUE OF DEBENTURES
SECTION 10.1. Original Issue of Debentures......................................................15
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Ratification of Indenture.........................................................15
SECTION 11.2. Governing Law.....................................................................15
SECTION 11.3. Separability......................................................................16
</TABLE>
(ii)
<PAGE>
This SECURITIES RESOLUTION NO. ____ (the "Securities Resolution") sets
---------------------
forth actions taken by the Board of Directors or an authorized committee of the
Board of Directors (the "Board") of WISCONSIN ENERGY CORPORATION (the
-----
"Company"), or by an officer or committee of officers on ________, pursuant to
-------
the authorized delegation of the Board and in accordance with Section 2.01 of
the Indenture, dated as of _____________, 1999 (the "Indenture") between the
---------
Company and The First National Bank of Chicago, as Trustee (the "Trustee").
-------
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
debentures, notes or other evidence of indebtedness (the "Securities"), to be
----------
issued from time to time in one or more series as might be determined by the
Company under the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its ___% Junior Subordinated Debentures due _________ (the "Debentures"), the
----------
form and substance of such Debentures and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this Securities
Resolution;
WHEREAS, WEC Capital Trust I, a Delaware statutory business trust (the
"Trust"), intends to offer to the public $______ million aggregate liquidation
-----
amount of its ___% Trust Originated Preferred Securities (the "Preferred
---------
Securities"), representing preferred undivided beneficial interests in the
- ----------
assets of the Trust, and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Company
of $______ million aggregate liquidation amount of its ____% Common Securities,
in $______ million aggregate principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee make the
Debentures, when executed by the Company and authenticated and delivered by the
Trustee in accordance with this Securities Resolution, the valid obligations of
the Company.
NOW THEREFORE, RESOLVED, that a new series of Securities is authorized
as follows:
<PAGE>
-2-
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms
-------------------
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in
this Securities Resolution;
(b) a term defined anywhere in this Securities Resolution has the
same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the Trust
Agreement: (i) Administrative Trustee; (ii) Business Day; (iii) Clearing
Agency; (iv) Delaware Trustee; (v) Guarantee; (vi) Preferred Securities
Certificate; (vii) Property Trustee; (viii) Trust Securities; and (ix)
Underwriting Agreement; and
(f) the following terms have the meanings given to them in this
Section 1.1(f):
"Additional Interest" shall have the meaning set forth in Section
-------------------
2.5(c).
"Change in 1940 Act Law" shall have the meaning set forth in Section
----------------------
3.1.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
-------------------
"Coupon Rate" shall have the meaning set forth in Section 2.5(a).
-----------
"Deferred Interest" shall have the meaning set forth in Section 4.1.
-----------------
"Dissolution Event" means that the Trust is to be dissolved in
-----------------
accordance with the Trust Agreement, and the Debentures held by the
Property Trustee are to be distributed to the holders of the Trust
Securities issued by the Trust pro rata in accordance with the Trust
Agreement.
<PAGE>
-3-
"Extended Interest Payment Period" shall have the meaning set forth in
--------------------------------
Section 4.1.
"Global Debenture" shall have the meaning set forth in Section 2.4(a).
----------------
"Interest Payment Date" shall have the meaning set forth in Section
---------------------
2.5(a).
"Investment Company Event" shall have the meaning set forth in Section
------------------------
3.1.
"Maturity Date" means the date on which the Debentures mature and on
-------------
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"Ministerial Action" shall have the meaning set forth in Section 3.1.
------------------
"90 Day Period" shall have the meaning set forth in Section 3.1.
-------------
"Non Book-Entry Preferred Securities" shall have the meaning set forth
-----------------------------------
in Section 2.4(a).
"Optional Redemption Price" shall have the meaning set forth in
-------------------------
Section 3.2(a).
"Redemption Price" shall have the meaning set forth in Section 3.1.
----------------
"Special Event" shall have the meaning set forth in Section 3.1.
-------------
"Tax Event" shall have the meaning set forth in Section 3.1.
---------
"Trust Agreement" means the Amended and Restated Trust Agreement of
---------------
WEC Capital Trust I, a Delaware statutory business trust, dated as of
__________, 1999.
<PAGE>
-4-
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
--------------------------------
There is hereby authorized a series of Securities designated the "___%
Junior Subordinated Debentures due _________ ", limited in aggregate principal
amount to $_____ million, to be substantially in the form set forth in Article
VIII hereof, subject to changes in the form thereof made by the Company and
acceptable to the Trustee.
SECTION 2.2. Maturity.
--------
The Maturity Date of the Debentures is ____________, 20__.
SECTION 2.3. Form and Payment.
----------------
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons in denominations of
$25 or integral multiples of $25. The Place of Payment for the Debentures issued
in certificated form where the transfer of such Debentures will be registrable
and where such Debentures will be exchangeable for Debentures bearing identical
terms and provisions shall be the Corporate Trust Office of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Property Trustee, the payment of the principal of and interest
(including Compounded Interest and Additional Interest, if any) on such
Debentures held by the Property Trustee will be made at such place and to such
account as may be designated to the Company in writing by the Property Trustee.
SECTION 2.4. Global Debenture.
----------------
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a global Debenture in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in the name
----------------
of the Depository, or its nominee, and delivered by the Trustee to the
Depository for crediting to the accounts of its participants pursuant to
the instructions of the Administrative Trustee. The Company upon any such
presentation shall execute a Global Debenture in such aggregate
<PAGE>
-5-
principal amount and deliver the same to the Trustee for authentication and
delivery in accordance with the Indenture and this Securities Resolution.
Payments on the Debentures issued as a Global Debenture will be made to the
Depository; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Debentures in certificated form may be presented to
the Trustee by the Property Trustee and any Preferred Security Certificate
which represents Preferred Securities other than Preferred Securities held
by the Clearing Agency or its nominee ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial interests in Debentures
presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the Non Book-
Entry Preferred Securities until such Preferred Security Certificates are
presented to the Security Registrar for transfer or reissuance at which
time such Preferred Security Certificates will be cancelled and a
Debenture, registered in the name of the holder of the Preferred Security
Certificate or the transferee of the holder of such Preferred Security
Certificate, as the case may be, with an aggregate principal amount equal
to the aggregate liquidation amount of the Preferred Security Certificate
cancelled, will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the In denture and this
Securities Resolution. On issue of such Debentures, Debentures with an
equivalent aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been cancelled.
(b) Unless and until it is exchanged for the Debentures in registered
form, a Global Debenture may be transferred, in whole but not in part, only to
another nominee of the Depository, or to a successor Depository selected or
approved by the Company or to a nominee of such successor Depository.
(c) If at any time the Depository notifies the Company that it is
unwilling or unable to continue as Depository or if at any time the Depository
for such series shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depository for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, the Company will execute, and, subject to
Article 3 of the Indenture, the Trustee, upon written notice from the Company,
will authenticate and deliver the Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture in exchange for
such Global Debenture. In addition, the Company may at any time determine that
the Debentures shall no longer be represented by the Global Debenture. In such
event the Company will execute, and subject to Section 2.02 of the Indenture,
the Trustee, upon receipt of an Officers' Certificate evi-
<PAGE>
-6-
dencing such determination by the Company, will authenticate and deliver the
Debentures in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. Upon the
exchange of the Global Debenture for such Debentures in definitive registered
form without coupons, in authorized denominations, the Global Debenture shall be
cancelled by the Trustee. Such Debentures in definitive registered form issued
in exchange for the Global Debenture shall be registered in such names and in
such authorized denominations as the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Debentures to the Depository for delivery to the
Persons in whose names such Debentures are so registered.
SECTION 2.5. Interest.
--------
(a) Each Debenture will bear interest at the rate of ___% per annum
(the "Coupon Rate") from the original date of issuance until the principal
-----------
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on [March
31, June 30, September 30 and December 31] of each year (each, an "Interest
--------
Payment Date," commencing on _________), to the Person in whose name such
- ------------
Debenture or any predecessor Debenture is registered at the close of business on
the regular record date for such interest installment, which, in respect of (i)
Debentures of which the Property Trustee is the Holder and the Preferred
Securities are in book-entry only form or (ii) a Global Debenture, shall be the
close of business on the Business Day next preceding that Interest Payment Date.
Notwithstanding the foregoing sentence, if (i) the Debentures are held by the
Property Trustee and the Preferred Securities are no longer in book-entry only
form or (ii) the Debentures are not represented by a Global Debenture, the
Company may select a regular record date for such interest installment which
shall be any date at least one Business Day but less than sixty Business Days
before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except asprovided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 90-day period. In the event
that any date on which interest is payable on the Debentures is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
<PAGE>
-7-
(c) If, at any time while the Property Trustee is the Holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
----------
Interest") on the Debentures held by the Property Trustee, such additional
- --------
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges will be equal to the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.
SECTION 2.6. Redemption.
----------
The Debentures are not subject to redemption at the option of the
Holder and are subject to redemption solely at the option of the Company or
otherwise as provided in Article III hereof.
SECTION 2.7. No Sinking Fund.
---------------
The Debentures shall not be entitled to the benefit of any sinking
fund or analogous provision.
SECTION 2.8. Depository.
----------
The Depository Trust Company (or its nominee) shall act as the initial
Depository (the "Depository") for any Global Debenture which may be issued
pursuant to this Securities Resolution.
SECTION 2.9. Appointment of Agents.
---------------------
The Company hereby appoints, or confirms the appointment of, The First
National Bank of Chicago as the initial Trustee, Securities Registrar and Paying
Agent with respect to the Debentures, subject to the provisions of the Indenture
with respect to resignation, removal and succession, and subject, further, to
the right of the Company to appoint additional agents (including Paying Agents).
<PAGE>
-8-
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Special Event Redemption.
------------------------
If a Special Event (as defined below) has occurred and is continuing
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company
shall have the right upon not less than 30 days nor more than 60 days notice to
the Holders of the Debentures to redeem the Debentures, in whole but not in
part, for cash within 90 days following the occurrence of such Special Event
(the "90 Day Period") at a redemption price equal to 100% of the principal
-------------
amount to be redeemed plus any accrued and unpaid interest thereon, including
Compounded Interest and Additional Interest, if any, to the date of such
redemption (the "Redemption Price"); provided, however, that in the case of an
----------------
occurrence of a Tax Event, if at the time there is available to the Company the
opportunity to eliminate, within the 90 Day Period, the Tax Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or making an
------------------
election, or pursuing some other similar reasonable measure which has no adverse
effect on the Company, the Trust or the Holders of the Trust Securities issued
by the Trust, the Company shall pursue such Ministerial Action in lieu of
redemption, and, provided, further, that the Company shall have no right to
redeem the Debentures while the Trust is pursuing any Ministerial Action
pursuant to its obligations under the Trust Agreement. The Redemption Price
shall be paid prior to 12:00 noon, New York time, on the date of such redemption
or at such earlier time as the Company determines, provided that the Company
shall deposit with the Trustee an amount sufficient to pay the Redemption Price
by 10:00 a.m., New York time, on the date such Redemption Price is to be paid.
A "Special Event" shall mean either a Tax Event or an Investment
-------------
Company Event. "Tax Event" shall mean that the Company shall have received an
---------
opinion of counsel (which may be regular counsel to the Company or an Affiliate,
but not an employee thereof, which must be acceptable to the Property Trustee of
the Trust) experienced in such matters to the effect that, as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or (b)
any official administrative written decision, pronouncement or action or
judicial decision interpreting or applying such laws or regulations by any
court, governmental agency or regulatory authority, in each case which amendment
or change is enacted, promulgated, issued or announced or which interpretation
or application is issued or announced on or after the date of original issuance
of Preferred Securities, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date of the opinion of counsel,
subject
<PAGE>
-9-
to United States Federal income tax with respect to interest received on the
Debentures, (ii) interest payable by the Company to the Trust on the Debentures
is not, or will not be within 90 days of the date of the opinion of counsel,
deductible for United States Federal income tax purposes, or (iii) the Trust is,
or will be within 90 days of the date of the opinion of counsel, subject to more
than a de minimis amount of other taxes, duties, assessments or other
governmental charges. "Investment Company Event" shall mean the occurrence
------------------------
of a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law") to the effect that the Trust
----------------------
is or will be considered an "Investment Company" that is required to be
registered under the Investment Company Act of 1940, as amended, which Change in
1940 Act Law becomes effective on or after the date of original issuance of the
Preferred Securities.
SECTION 3.2. Optional Redemption by Company
------------------------------
(a) Subject to the provisions of Section 3.2(b) and to the provisions
of Article 3 of the Indenture, except as otherwise may be specified in this
Securities Resolution, the Company shall have the right to redeem the
Debentures, in whole or in part, from time to time, on or after _________, ____,
upon not less than 30 days nor more than 60 days notice to the Holder of the
Debentures at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest thereon, including Compounded
Interest and Additional Interest, if any, to the date of such redemption (the
"Optional Redemption Price").
-------------------------
If the Debentures are only partially redeemed pursuant to this Section
3.2, the Debentures will be redeemed pro rata or by lot or by any other method
utilized by the Trustee; provided, that if at the time of redemption the
Debentures are registered as a Global Debenture, the Depository shall determine,
in accordance with its procedures, the principal amount of such Debentures held
by each Debenture Holder to be redeemed. The Optional Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional Redemption
Price by 10:00 a.m., New York time, on the date such Optional Redemption Price
is to be paid.
(b) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
then listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.
<PAGE>
-10-
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
------------------------------------
The Company shall have the right, at any time and from time to time
during the term of the Debentures, so long as no Event of Default with respect
to the Debentures has occurred and is continuing, to defer payments of interest
by extending the interest payment period of such Debentures for a period not
exceeding 20 consecutive quarters (the "Extended Interest Payment Period"),
--------------------------------
during which Extended Interest Payment Period no interest shall be due and
payable; provided that no Extended Interest Payment Period may extend beyond the
Maturity Date. To the extent permitted by applicable law, interest, the payment
of which has been deferred because of the extension of the interest payment
period pursuant to this Section 4.1, will bear interest thereon at the Coupon
Rate compounded quarterly for each quarter of the Extended Interest Payment
Period ("Compounded Interest"). At the end of the Extended Interest Payment
-------------------
Period, the Company shall pay all interest accrued and unpaid on the Debentures,
including any Additional Interest and Compounded Interest (together, "Deferred
--------
Interest") that shall be payable to the Holders of the Debentures in whose names
- --------
the Debentures are registered in the Security Register on the first record date
after the end of the Extended Interest Payment Period. Before the termination of
any Extended Interest Payment Period, the Company may further extend such
period, provided that such period together with all such further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond the Maturity
Date. Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except (i) at the end thereof and (ii) upon a redemption of the Debentures
during an Extended Interest Payment Period, but the Company may prepay at any
time all or any portion of the interest accrued during an Extended Interest
Payment Period.
SECTION 4.2. Notice of Extension.
-------------------
(a) If the Property Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period one Business Day before the earlier of (i) the next succeeding
date on which Distributions on the Preferred Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give notice of the record
date, or the date such Distributions are payable, to the New York Stock Exchange
or other applica-
<PAGE>
-11-
ble self-regulatory organization or to holders of the Preferred Securities
issued by the Trust, but in any event at least one Business Day before such
record date.
(b) If the Property Trustee is not the only Holder of the Debentures
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least ten Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such interest payment to the New York Stock Exchange or other applicable self-
regulatory organization or to Holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
SECTION 4.3. Limitation of Transactions.
--------------------------
If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1, (ii) there shall have occurred any Event of
Default, as defined in the Indenture, or (iii) the Company shall be in default
with respect to its payment obligations under the Guarantee, then (a) the
Company shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (i) as a result of a
reclassification of its capital stock or the exchange or conversion of one class
or series of its capital stock for another class or series of its capital stock,
(ii) any payment of a dividend in connection with the implementation of a
shareholder rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto,
(iii) purchases of its common stock related to the issuance of such stock under
any of the Company's benefit plans for its directors, officers or employees,
(iv) obligations under any dividend reinvestment plan or stock purchase plan of
the Company, (v) the purchase of fractional interests in shares of its capital
stock pursuant to the conversion or exchange provisions of such capital stock or
security being converted or exchanged or (vi) dividends or distributions in its
common stock) or make any guarantee payment with respect thereto, (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Company which
rank pari passu with or junior to the Debentures and (c) the Company shall not
make any guarantee payments with respect to any of the payment obligations
referred to in subparagraph (b) of this Section 4.3 (other than pursuant to the
Guarantee and any similar guarantee issued by the Company on behalf of holders
of preferred securities issued by an issuer holding Securities issued under the
Indenture).
<PAGE>
-12-
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
-------------------
In connection with the offering, sale and issuance of the Debentures
to the Property Trustee and in connection with the sale of the Trust Securities
by the Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters
payable pursuant to the Underwriting Agreement and compensation of the
Trustee under the Indenture in accordance with the provisions of Section
7.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing,
and disposition of Trust assets);
(c) be primarily liable for any indemnification obligations arising
with respect to the Trust Agreement; and (d) pay any and all taxes (other
than United States withholding taxes attributable to the Trust or its
assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal
-----------------------------------
Upon termination of this Securities Resolution or the Indenture or the
removal or resignation of the Trustee pursuant to this Section 5.2, the Company
shall pay to the Trustee all amounts accrued to the date of such termination,
removal or resignation. Upon termination of the Trust Agreement or the removal
or resignation of the Delaware Trustee or the Property Trustee, as the case may
be, pursuant to Section 8.10 of the Trust Agreement, the Company shall pay to
the Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued to the date of such termination, removal or resignation.
<PAGE>
-13-
ARTICLE VI
SUBORDINATION
SECTION 6.1. Subordination.
-------------
The indebtedness evidenced by the Debentures shall be, to the extent
and in the manner set forth in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all indebtedness senior to the
Debentures, and the Debentures shall rank pari passu in right of payment with
each other series of Securities issued under the Indenture, with the exception
of any series of Securities which by its terms provides otherwise.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange.
----------------------
If the Debentures are to be distributed to the holders of Preferred
Securities as described in Section 2.4(a), the Company will, if the Debentures
are not already so listed, use its best efforts to list such Debentures on the
New York Stock Exchange, Inc. or on such other exchange as the Preferred
Securities are then listed.
ARTICLE VIII
FORM OF DEBENTURE
SECTION 8.1. Form of Debenture.
-----------------
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms:
(FORM OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT -- THIS
DEBENTURE IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME
<PAGE>
-14-
OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. THIS DEBENTURE IS EXCHANGEABLE FOR
DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. ____________________
$_______________________
CUSIP No. ______________
[TERMS OF DEBENTURE INCLUDED HERE]
<PAGE>
-15-
ARTICLE IX
EFFECTIVENESS OF THIS SECURITIES RESOLUTION
SECTION 9.1. Effectiveness.
-------------
This Securities Resolution shall be effective as of [ ].
ARTICLE X
ORIGINAL ISSUE OF DEBENTURES
SECTION 10.1. Original Issue of Debentures.
----------------------------
Debentures in the aggregate principal amount of $___________ may, upon
execution of this Securities Resolution, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman, its Vice Chairman, its President, or any Vice
President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Ratification of Indenture.
-------------------------
The Indenture, as supplemented by this Securities Resolution as
provided for in Section 2.01 of the Indenture, is in all respects ratified and
confirmed, and this Securities Resolution shall be deemed part of the Indenture
in the manner and to the extent herein and therein provided.
SECTION 11.2. Governing Law.
-------------
This Securities Resolution and each Debenture shall be deemed to be a
contract made under the internal laws of the State of Wisconsin, and for all
purposes shall be construed in accordance with the laws of said State.
<PAGE>
-16-
SECTION 11.3. Separability.
------------
In case any one or more of the provisions contained in this Securities
Resolution or in the Debentures shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Securities
Resolution or of the Debentures, but this Securities Resolution and the
Debentures shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
<PAGE>
OFFICERS' CERTIFICATE
RELATING TO
SECURITIES RESOLUTION NO. [ ]
OF
WISCONSIN ENERGY CORPORATION
The undersigned, as Officers of Wisconsin Energy Corporation (the
"Company"), do hereby certify that the foregoing is a true and correct copy of
- --------
Securities Resolution No. [ ], relating to the Indenture between the Company
and The First National Bank of Chicago, as trustee (the "Indenture"), which has
---------
been duly adopted by the Board of Directors (the "Board") of the Company or by
-----
an Officer or a committee of Officers pursuant to the authorized delegation of
the Board on the [ ] day of [ ]; and that said resolution has
not been rescinded and remains in full force and effect. Capitalized terms used
but not defined herein have the meanings given such terms in the Indenture.
IN WITNESS WHEREOF, this Officers' Certificate has been duly executed
on this [ ] day of [ ].
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
<PAGE>
Exhibit 4.3
-----------
CERTIFICATE OF TRUST
OF
WEC CAPITAL TRUST I
This Certificate of Trust of WEC Capital Trust I (the "Trust"), dated
-----
February 25, 1999, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
-- ---
1. Name. The name of the business trust being formed hereby is WEC
----
Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are as
follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
--------------
immediately upon its filing with the Secretary of State of the State of
Delaware.
<PAGE>
-2-
In Witness Whereof, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By: /s/ Sandra L. Caruba
--------------------
Name: Sandra L. Caruba
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
--------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Calvin H. Baker
-------------------
Calvin H. Baker, as Administrative Trustee
/s/ Thomas H. Fehring
---------------------
Thomas H. Fehring, as Administrative Trustee
<PAGE>
Exhibit 4.4
-----------
TRUST AGREEMENT
OF
WEC CAPITAL TRUST I
This Trust Agreement, dated as of February 25, 1999, between Wisconsin
Energy Corporation, a Wisconsin corporation, as "Depositor," and The First
---------
National Bank of Chicago, a national banking association organized under the
laws of the United States, First Chicago Delaware Inc., a Delaware corporation,
Calvin H. Baker and Thomas H. Fehring, each solely as trustee and not in its or
his individual capacity, as "Trustees." The Depositor and the Trustees hereby
--------
agree as follows:
SECTION 1. The Trust. The trust created hereby shall be known as WEC Capital
---------
Trust I (the "Trust"), in which name the Trustees, or the Depositor to the
-----
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
SECTION 2. The Trust Estate. The Depositor hereby assigns, transfers, conveys
----------------
and sets over to the Trustees the sum of $10. The Trustees hereby acknowledge
receipt of such amount from the Depositor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the trust
estate for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. (S)(S) 3801 et seq. (the "Business Trust Act"),
------------------
and that this document constitutes the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in accordance with the provisions of
the Business Trust Act.
SECTION 3. Amended and Restated Trust Agreement. The Depositor and the
------------------------------------
Trustees will enter into an amended and restated Trust Agreement, satisfactory
to each such party and substantially in the form included as an exhibit to the
1933 Act Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the issuance of the
Preferred Securities (as defined below) and common securities referred to
therein. Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustees shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery any licenses,
consents or approvals required by applicable law or otherwise.
SECTION 4. Certain Authorizations. The Depositor and the Trustees hereby
----------------------
authorize the Depositor, as the sponsor of the Trust, (i) to file with the
Securities and Ex-
<PAGE>
-2-
change Commission (the "Commission") and execute, in each case on behalf of the
----------
Trust, (a) the Registration Statement on Form S-3 (the "1933 Act Registration
---------------------
Statement"), including any pre-effective or post-effective amendments to such
- ---------
1933 Act Registration Statement (including the prospectus and the exhibits
contained therein), relating to the registration under the Securities Act of
1933, as amended, of the preferred securities of the Trust (the "Preferred
---------
Securities") and possibly certain other securities and (b) a Registration
- ----------
Statement on Form 8-A (the "1934 Act Registration Statement") (including all
-------------------------------
pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b) of the
Securities Exchange Act of 1934, as amended; (ii) to file with the New York
Stock Exchange or any other national stock exchange or The Nasdaq National
Market (each, an "Exchange") and execute on behalf of the Trust one or more
--------
listing applications and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on any of the Exchanges; (iii) to file and
execute on behalf of the Trust such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or blue sky laws, and to obtain any
permits under the insurance laws of such jurisdictions as the Depositor, on
behalf of the Trust, may deem necessary or desirable; (iv) to execute on behalf
of the Trust letters or documents, or instruments for filing with, a depository
relating to the Preferred Securities; and (v) to execute on behalf of the Trust
one or more underwriting agreements with one or more underwriters relating to
the offering of the Preferred Securities.
In the event that any filing referred to in clauses (i) through (iv)
above is required by the rules and regulations of the Commission, an Exchange or
any state securities or blue sky laws, to be executed on behalf of the Trust by
the Trustees, in their capacities as Trustees of the Trust, the Trustees are
hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that The
First National Bank of Chicago and First Chicago Delaware Inc., in their
capacities as Trustees of the Trust, shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission, an Exchange or any state securities
or blue sky laws. In connection with all of the foregoing, the Depositor and
each Trustee, solely in its capacity as Trustee of the Trust, hereby constitutes
and appoints Calvin H. Baker and Thomas H. Fehring, and each of them, as his,
her or its, as the case may be, true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the Depositor or in the
Depositor's name, place and stead, in any and all capacities, to sign the 1933
Act Registration Statement and any and all amendments (including post-effective
amendments) thereto and the 1934 Act Registration Statement and any and all
amendments (including post-effective amendments) thereto and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform
<PAGE>
-3-
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Depositor might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their respective substitute or substitutes, shall
do or cause to be done by virtue hereof.
SECTION 5. Counterparts. This Trust Agreement may be executed in one or more
------------
counterparts.
SECTION 6. Trustees. The number of Trustees initially shall be four (4) and
--------
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware or, if not a natural person, an
entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. A Trustee may resign upon thirty days' prior notice to the
Depositor.
SECTION 7. Delaware Trustee. First Chicago Delaware Inc., in its capacity as
----------------
Trustee, shall not have any of the powers or duties of the Trustees set forth
herein (except as may be required under the Business Trust Act) and shall be a
Trustee of the Trust for the sole purpose of satisfying the requirements of
Section 3807(a) of the Business Trust Act.
SECTION 8. Governing Law. This Trust Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware (without regard
to conflict of laws principles).
<PAGE>
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
WISCONSIN ENERGY CORPORATION,
as Depositor
By: /s/ Calvin H. Baker
-------------------
Name: Calvin H. Baker
Title: Treasurer and Chief Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Sandra L. Caruba
--------------------
Name: Sandra L. Caruba
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Trustee
By: /s/ Sandra L. Caruba
--------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Calvin H. Baker
-------------------
Calvin H. Baker, as Trustee
/s/ Thomas H. Fehring
---------------------
Thomas H. Fehring, as Trustee
<PAGE>
Exhibit 4.5
-----------
CERTIFICATE OF TRUST
OF
WEC CAPITAL TRUST II
This Certificate of Trust of WEC Capital Trust II (the "Trust"), dated
-----
February 25, 1999, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
-- ---
1. Name. The name of the business trust being formed hereby is WEC
----
Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are as
follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
--------------
immediately upon its filing with the Secretary of State of the State of
Delaware.
<PAGE>
-2-
In Witness Whereof, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By: /s/ Sandra L. Caruba
----------------------------------------
Name: Sandra L. Caruba
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
----------------------------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Calvin H. Baker
---------------------------------------------
Calvin H. Baker, as Administrative Trustee
/s/ Thomas H. Fehring
---------------------------------------------
Thomas H. Fehring, as Administrative Trustee
<PAGE>
Exhibit 4.6
-----------
TRUST AGREEMENT
OF
WEC CAPITAL TRUST II
This Trust Agreement, dated as of February 25, 1999, between Wisconsin
Energy Corporation, a Wisconsin corporation, as "Depositor," and The First
---------
National Bank of Chicago, a national banking association organized under the
laws of the United States, First Chicago Delaware Inc., a Delaware corporation,
Calvin H. Baker and Thomas H. Fehring, each solely as trustee and not in its or
his individual capacity, as "Trustees." The Depositor and the Trustees hereby
--------
agree as follows:
SECTION 1. The Trust. The trust created hereby shall be known as WEC
---------
Capital Trust II (the "Trust"), in which name the Trustees, or the Depositor to
-----
the extent provided herein, may conduct the business of the Trust, make and
execute contracts, and sue and be sued.
SECTION 2. The Trust Estate. The Depositor hereby assigns,
----------------
transfers, conveys and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount from the Depositor, which amount shall
constitute the initial trust estate. The Trustees hereby declare that they will
hold the trust estate for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under Chapter
38 of Title 12 of the Delaware Code, 12 Del. C. (S)(S) 3801 et seq. (the
"Business Trust Act"), and that this document constitutes the governing
------------------
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act.
SECTION 3. Amended and Restated Trust Agreement. The Depositor and
------------------------------------
the Trustees will enter into an amended and restated Trust Agreement,
satisfactory to each such party and substantially in the form included as an
exhibit to the 1933 Act Registration Statement (as defined below), to provide
for the contemplated operation of the Trust created hereby and the issuance of
the Preferred Securities (as defined below) and common securities referred to
therein. Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustees shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery any licenses,
consents or approvals required by applicable law or otherwise.
SECTION 4. Certain Authorizations. The Depositor and the Trustees
----------------------
hereby authorize the Depositor, as the sponsor of the Trust, (i) to file with
the Securities and Ex-
<PAGE>
-2-
change Commission (the "Commission") and execute, in each case on behalf of the
----------
Trust, (a) the Registration Statement on Form S-3 (the "1933 Act Registration
---------------------
Statement"), including any pre-effective or post-effective amendments to such
- ---------
1933 Act Registration Statement (including the prospectus and the exhibits
contained therein), relating to the registration under the Securities Act of
1933, as amended, of the preferred securities of the Trust (the "Preferred
---------
Securities") and possibly certain other securities and (b) a
- ----------
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
-------------------------------
(including all pre-effective and post-effective amendments thereto) relating to
the registration of the Preferred Securities of the Trust under Section 12(b) of
the Securities Exchange Act of 1934, as amended; (ii) to file with the New York
Stock Exchange or any other national stock exchange or The Nasdaq National
Market (each, an "Exchange") and execute on behalf of the Trust one or more
--------
listing applications and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on any of the Exchanges; (iii) to file and
execute on behalf of the Trust such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or blue sky laws, and to obtain any
permits under the insurance laws of such jurisdictions as the Depositor, on
behalf of the Trust, may deem necessary or desirable; (iv) to execute on behalf
of the Trust letters or documents, or instruments for filing with, a depository
relating to the Preferred Securities; and (v) to execute on behalf of the Trust
one or more underwriting agreements with one or more underwriters relating to
the offering of the Preferred Securities.
In the event that any filing referred to in clauses (i) through (iv)
above is required by the rules and regulations of the Commission, an Exchange or
any state securities or blue sky laws, to be executed on behalf of the Trust by
the Trustees, in their capacities as Trustees of the Trust, the Trustees are
hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that The
First National Bank of Chicago and First Chicago Delaware Inc., in their
capacities as Trustees of the Trust, shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission, an Exchange or any state securities
or blue sky laws. In connection with all of the foregoing, the Depositor and
each Trustee, solely in its capacity as Trustee of the Trust, hereby constitutes
and appoints Calvin H. Baker and Thomas H. Fehring, and each of them, as his,
her or its, as the case may be, true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for the Depositor or in the
Depositor's name, place and stead, in any and all capacities, to sign the 1933
Act Registration Statement and any and all amendments (including post-effective
amendments) thereto and the 1934 Act Registration Statement and any and all
amendments (including post-effective amendments) thereto and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents 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
<PAGE>
-3-
intents and purposes as the Depositor might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or cause to be
done by virtue hereof.
SECTION 5. Counterparts. This Trust Agreement may be executed in
------------
one or more counterparts.
SECTION 6. Trustees. The number of Trustees initially shall be four
--------
(4) and thereafter the number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by the Depositor which may
increase or decrease the number of Trustees; provided, however, that to the
extent required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. A Trustee may resign upon thirty days' prior notice to the
Depositor.
SECTION 7. Delaware Trustee. First Chicago Delaware Inc., in its
----------------
capacity as Trustee, shall not have any of the powers or duties of the Trustees
set forth herein (except as may be required under the Business Trust Act) and
shall be a Trustee of the Trust for the sole purpose of satisfying the
requirements of Section 3807(a) of the Business Trust Act.
SECTION 8. Governing Law. This Trust Agreement shall be governed
-------------
by, and construed in accordance with, the laws of the State of Delaware (without
regard to conflict of laws principles).
<PAGE>
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.
WISCONSIN ENERGY CORPORATION,
as Depositor
By: /s/ Calvin H. Baker
----------------------------------------------
Name: Calvin H. Baker
Title: Treasurer and Chief Financial Officer
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Sandra L. Caruba
----------------------------------------------
Name: Sandra L. Caruba
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Trustee
By: /s/ Sandra L. Caruba
----------------------------------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Calvin H. Baker
--------------------------------------------------
Calvin H. Baker, as Trustee
/s/ Thomas H. Fehring
--------------------------------------------------
Thomas H. Fehring, as Trustee
<PAGE>
Exhibit 4.7
-----------
[FORM OF AMENDED AND RESTATED TRUST AGREEMENT]
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
WISCONSIN ENERGY CORPORATION, AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE,
FIRST CHICAGO DELAWARE INC,
AS DELAWARE TRUSTEE
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF [ ]
WEC CAPITAL TRUST _____
================================================================================
<PAGE>
Certain Sections of this Trust Agreement Relating
to Section 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Sections of this
Act Section Trust Agreement
- ------------ ---------------
<S> <C>
Section 310(a)(1)............................................... 8.7(a), 8.7(b)
(a)(2).......................................................... 8.7(a)
(a)(3).......................................................... 8.9
(a)(4).......................................................... 8.5, 2.7(a)(ii)
(b)............................................................. 8.8
Section 311(a).................................................. 8.13
(b)............................................................. 8.13
Section 312(a).................................................. 5.7
(b)............................................................. 5.7
(c)............................................................. 5.7
Section 313(a).................................................. 8.14(a)
(a)(4).......................................................... 8.14(a)
(b)............................................................. 8.14(a)
(c)............................................................. 8.14(a), 10.8
Section 314(a).................................................. 8.15
(b)............................................................. Not Applicable
(c)(1).......................................................... 8.16
(c)(2).......................................................... 8.16
(c)(3).......................................................... Not Applicable
(d)............................................................. Not Applicable
(e)............................................................. 1.1, 8.16
Section 315(a).................................................. 8.1(a), (c), 8.3(a)
(b)............................................................. 8.2, 10.8
(c)............................................................. 8.1(a)
(d)............................................................. 8.1, 8.3
(e)............................................................. Not Applicable
Section 316(a).................................................. Not Applicable
(a)(1)(A)....................................................... Not Applicable
(a)(1)(B)....................................................... Not Applicable
(a)(2).......................................................... Not Applicable
(b)............................................................. 5.14
(c)............................................................. 6.7
Section 317(a)(1)............................................... Not Applicable
(a)(2).......................................................... Not Applicable
(b)............................................................. 5.9, 8.2
Section 318(a).................................................. 10.10
</TABLE>
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINED TERMS..............................................................................2
Section 1.1. Definitions.......................................................................2
ARTICLE II ESTABLISHMENT OF THE TRUST................................................................10
Section 2.1. Name.............................................................................10
Section 2.2. Office of the Delaware Trustee; Principal Place of Business......................11
Section 2.3. Initial Contribution of Trust Property; Organizational Expenses..................11
Section 2.4. Issuance of the Preferred Securities.............................................11
Section 2.5. Issuance of the Common Securities; Subscription and Purchase of Debentures.......12
Section 2.6. Declaration of Trust.............................................................12
Section 2.7. Authorization to Enter into Certain Transactions.................................13
Section 2.8. Assets of Trust..................................................................17
Section 2.9. Title to Trust Property..........................................................17
ARTICLE III PAYMENT ACCOUNT...........................................................................17
Section 3.1. Payment Account..................................................................17
ARTICLE IV CERTAIN TERMS OF THE TRUST SECURITIES.....................................................18
Section 4.1. Distributions....................................................................18
Section 4.2. Redemption.......................................................................19
Section 4.3. Subordination of Common Securities...............................................21
Section 4.4. Payment Procedures...............................................................22
Section 4.5. Tax Returns and Reports..........................................................22
Section 4.7. Payments under Indenture.........................................................22
ARTICLE V TRUST SECURITIES CERTIFICATES.............................................................23
Section 5.1. Initial Ownership................................................................23
Section 5.2. The Trust Securities Certificates................................................23
Section 5.3. Execution and Delivery of Trust Securities Certificates..........................23
Section 5.4. Registration of Transfer and Exchange of Preferred Securities Certificates.......24
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates...............25
Section 5.6. Persons Deemed Securityholders...................................................25
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 5.7. Access to List of Securityholders' Names and Addresses...........................25
Section 5.8. Maintenance of Office or Agency..................................................26
Section 5.9. Appointment of Paying Agent......................................................26
Section 5.10. Ownership of Common Securities by Depositor......................................27
Section 5.11. Book-Entry Preferred Securities Certificates; Common Securities Certificate......27
Section 5.12. Notices to Clearing Agency.......................................................28
Section 5.13. Definitive Preferred Securities Certificates.....................................28
Section 5.14. Rights of Securityholders........................................................29
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING.................................................31
Section 6.1. Limitations on Voting Rights.....................................................31
Section 6.2. Notice of Meetings...............................................................32
Section 6.3. Meetings of Preferred Securityholders............................................33
Section 6.4. Voting Rights....................................................................33
Section 6.5. Proxies, etc.....................................................................33
Section 6.6. Securityholder Action by Written Consent.........................................34
Section 6.7. Record Date for Voting and Other Purposes........................................34
Section 6.8. Acts of Securityholders..........................................................34
Section 6.9. Inspection of Records............................................................35
ARTICLE VII REPRESENTATIONS AND WARRANTIES............................................................36
Section 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee..36
Section 7.2. Representations and Warranties of Depositor......................................37
ARTICLE VIII THE TRUSTEES..................................................................................38
Section 8.1. Certain Duties and Responsibilities..............................................38
Section 8.2. Certain Notices..................................................................40
Section 8.3. Certain Rights of Property Trustee...............................................40
Section 8.4. Not Responsible for Recitals or Issuance of Securities...........................42
Section 8.5. May Hold Securities..............................................................43
Section 8.6. Compensation; Indemnity; Fees....................................................43
Section 8.7. Corporate Property Trustee Required; Eligibility of Trustees.....................44
Section 8.8. Conflicting Interests............................................................45
Section 8.9. Co-Trustees and Separate Trustee.................................................45
Section 8.10. Resignation and Removal, Appointment of Successor................................47
Section 8.11. Acceptance of Appointment by Successor...........................................48
Section 8.12. Merger, Conversion, Consolidation or Succession to Business......................49
Section 8.13. Preferential Collection of Claims Against Depositor or Trust.....................49
Section 8.14. Reports by the Property Trustee..................................................49
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 8.15. Reports to the Property Trustee..................................................50
Section 8.16. Evidence of Compliance with Conditions Precedent.................................50
Section 8.17. Number of Trustees...............................................................50
Section 8.18. Delegation of Power..............................................................51
ARTICLE IX TERMINATION, LIQUIDATION AND MERGER.......................................................51
Section 9.1. Dissolution Upon Expiration Date.................................................51
Section 9.2. Early Dissolution................................................................51
Section 9.3. Termination......................................................................52
Section 9.4. Liquidation......................................................................52
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of the Trust..............54
ARTICLE X MISCELLANEOUS PROVISIONS..................................................................55
Section 10.1. Limitation of Rights of Securityholders..........................................55
Section 10.2. Amendment........................................................................55
Section 10.3. Separability.....................................................................56
Section 10.4. Governing Law....................................................................57
Section 10.5. Payments Due on Non-Business Day.................................................57
Section 10.6. Successors.......................................................................58
Section 10.7. Headings.........................................................................58
Section 10.8. Reports, Notices and Demands.....................................................58
Section 10.9. Agreement Not to Petition........................................................59
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act...........................59
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture..................60
SIGNATURES.................................................................................................S-1
EXHIBIT A Certificate of Trust............................................................................A-1
EXHIBIT B Letter of Representation........................................................................B-1
EXHIBIT C Form of Common Security.........................................................................C-1
EXHIBIT D Form of Preferred Security......................................................................D-1
</TABLE>
-iii-
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of [ ],
among (i) Wisconsin Energy Corporation, a Wisconsin corporation (including any
successors or assigns, the "Depositor"), (ii) The First National Bank of
---------
Chicago, a national banking association organized under the laws of the United
States, as property trustee (the "Property Trustee" and, in its separate
----------------
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
----
(iii) First Chicago Delaware Inc., a Delaware corporation, as Delaware trustee
(the "Delaware Trustee"), (iv) Calvin H. Baker, an individual, and Thomas H.
----------------
Fehring, an individual, each of whose address is c/o Wisconsin Energy
Corporation, 231 West Michigan Street, Milwaukee, Wisconsin 53201 (each, an
"Administrative Trustee" and, collectively, the "Administrative Trustees") (the
- ----------------------- -----------------------
Property Trustee, the Delaware Trustee and the Administrative Trustees referred
to collectively as the "Trustees") and (v) the several Holders, as hereinafter
--------
defined (this "Trust Agreement").
---------------
W I T N E S S E T H :
--------------------
WHEREAS, the Depositor and the Trustees have heretofore duly declared
and established a business trust pursuant to the Delaware Business Trust Act by
entering into that certain Trust Agreement, dated as of February 25, 1999 (the
"Original Trust Agreement"), and by the execution and filing with the Secretary
------------------------
of State of the State of Delaware of the Certificate of Trust, filed on February
25, 1999, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate
the Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement and (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the
Debentures;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
<PAGE>
-2-
ARTICLE I
DEFINED TERMS
Section 1.1. Definitions.
-----------
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
---
"Administrative Trustee" means each of Calvin H. Baker and Thomas H.
----------------------
Fehring, solely in such Person's capacity as Administrative Trustee of the Trust
created and continued hereunder and not in such Person's individual capacity, or
such Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust
----
Agreement.
"Bankruptcy Event" means, with respect to any Person:
----------------
<PAGE>
-3-
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of such Person or of any substantial part of its
property or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by such Person in furtherance
of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
---------------
"Book-Entry Preferred Securities Certificates" means a beneficial
--------------------------------------------
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
------------
day on which banking institutions in The City of New York are authorized or
required by law to remain closed, or (c) a day on which the Property Trustee's
Corporate Trust Office or the corporate trust office of the Indenture Trustee is
closed for business.
"Certificate Depository Agreement" means the agreement among the
--------------------------------
Trust, the Depositor and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
<PAGE>
-4-
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" has the meaning specified in the Underwriting
------------
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing
-----------------------------
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial ownership interest in
---------------
the assets of the Trust, having a Liquidation Amount of $[ ] and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means the principal office of the Property
----------------------
Trustee.
"Debenture Event of Default" means an event of default under the
--------------------------
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to
-------------------------
be redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debentures" means the aggregate principal amount of the Depositor's
----------
_____% Junior Subordinated Debentures, Series _____, issued pursuant to a
Securities Resolution under the Indenture.
"Definitive Preferred Securities Certificates" means either or both
--------------------------------------------
(as the context requires) of (a) Preferred Securities Certificates issued as
Book-Entry Preferred Securities Certificate as provided in Section 5.11(a) and
(b) Preferred Securities Certificates issued in certificated, fully registered
form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
---------------------------
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from time
-- ----
to time.
<PAGE>
-5-
"Delaware Trustee" means the corporation identified as the "Delaware
---------------- --------
Trustee" in the preamble to this Trust Agreement solely in its capacity as
- -------
Delaware Trustee of the Trust created and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
---------
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
-----------------
"Distributions" means amounts payable in respect of the Trust
-------------
Securities as provided in Section 4.1.
"Event of Default" means any one of the following events (whatever the
----------------
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of an Event of Default with respect to a Debenture;
or
(b) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 60 days; or
(c) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in this Trust Agreement (other
than a covenant or warranty a default in the performance or breach of which
is dealt with in clause (b) or (c) above) and continuation of such default
or breach for a period of 90 days after there has been given, by registered
or certified mail, to the defaulting Trustee or Trustees by the Holders of
at least 25% in aggregate liquidation preference of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Expiration Date" has the meaning specified in Section 9.1.
---------------
<PAGE>
-6-
"Guarantee" means the Guarantee Agreement executed and delivered by
---------
the Depositor and [The First National Bank of Chicago], as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Trust Securities, as amended from time to
time.
"Indenture" means the Indenture, dated as of [ ], 1999,
---------
between the Depositor and the Indenture Trustee, together with the Securities
Resolution dated [ ] relating to the Debentures, each as amended
or supplemented from time to time.
"Indenture Trustee" means The First National Bank of Chicago, a
-----------------
national banking association organized under the laws of the United States, as
trustee under the Indenture and any successor thereto.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
----
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
-----------
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, allocated to the Common Securities and the Preferred Securities based
upon the relative Liquidation Amounts of such classes and the proceeds of which
will be used to pay the Redemption Price of such Trust Securities, and (b) with
respect to a distribution of Debentures to Holders of Trust Securities in
connection with a dissolution or liquidation of the Trust, Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount (expressed in U.S.
------------------
Dollars) per Trust Security.
"Liquidation Date" means the date on which Debentures are to be
----------------
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section
------------------------
9.4(d).
"Ministerial Action" means the taking of an action, such as filing a
------------------
form or making an election, or pursuing some other similar reasonable measure
that will have no adverse effect on the Trust, the Depositor or the Holders of
the Trust Securities and will involve no material cost.
"1940 Act" means the Investment Company Act of 1940, as amended.
--------
<PAGE>
-7-
"Officer" means the Chairman, any Vice-Chairman, the President, any
-------
Executive or Senior Vice President, any Vice President, the Treasurer or any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Depositor.
"Officers' Certificate" means a certificate signed by two Officers of
---------------------
the Depositor and delivered to the appropriate Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 8.16 shall be the
principal executive, financial or accounting officer of the Depositor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
------------------------
to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
-----------
as of the date of determination, all Preferred Securities theretofore executed
and delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore cancelled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Preferred Securities; provided
that, if such Pre-
<PAGE>
-8-
ferred Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which
have been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to act with respect to such Preferred Securities and that the pledgee
is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
-----
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as reflected
in the records of a Person maintaining an account with such Clearing Agency
(directly or indirectly, in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
------------
pursuant to Section 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
---------------
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint
------
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
<PAGE>
-9-
"Preferred Securities Certificate" means a certificate evidencing
--------------------------------
ownership of Preferred Securities, substantially in the form attached as Exhibit
D.
"Preferred Security" means an undivided beneficial ownership interest
------------------
in the assets of the Trust, having a Liquidation Amount of $[ ] and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Property Trustee" means the commercial bank or trust company
----------------
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore created and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
---------------
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Trust Security, the
----------------
Liquidation Amount of such Trust Security, plus accumulated but unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
----------------
"Securities Register" and "Securities Registrar" have the respective
------------------- --------------------
meanings specified in Section 5.4.
"Securities Resolution" means a resolution of the board of directors
---------------------
of the Depositor or any authorized committee of such board or by a committee of
Officers or an Officer pursuant to delegation by such board authorizing a series
or a supplemental indenture authorizing a series executed by an authorized
Officer.
"Securityholder" or "Holder" means a Person in whose name a Trust
-------------- ------
Security or Trust Securities is registered in the Securities Register; any such
Person being a beneficial owner within the meaning of the Delaware Business
Trust Act.
"series" means a series of securities or the securities of the series
------
issued under the Indenture.
<PAGE>
-10-
"Trust" means the Delaware business trust created and continued hereby
-----
and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
---------------
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
-------------------
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
--------------
or owing to, the Payment Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Property Trustee pursuant to the terms of this Trust
Agreement.
"Trust Securities Certificate" means any one of the Common Securities
----------------------------
Certificates or the Preferred Securities Certificates.
"Trust Security" means any one of the Common Securities or the
--------------
Preferred Securities.
"Trustees" means, collectively, the Property Trustee, the Delaware
--------
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
----------------------
[ ], among the Trust, the Depositor and the underwriters named
therein.
ARTICLE II
ESTABLISHMENT OF THE TRUST
Section 2.1. Name.
----
The Trust continued hereby shall be known as "WEC Capital Trust
_____," as such name may be modified from time to time by the Administrative
Trustees following
<PAGE>
-11-
written notice to the Holders of Trust Securities and the other Trustees, in
which name the Trustees may conduct the business of the Trust, make and execute
contracts and other instruments on behalf of the Trust and sue and be sued.
Section 2.2. Office of the Delaware Trustee; Principal Place of
--------------------------------------------------
Business.
---------
The address of the Delaware Trustee in the State of Delaware is 300
King Street, Wilmington, Delaware 19801, Attention: Corporate Trust Division, or
such other address in the State of Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is c/o Wisconsin Energy Corporation, 231
West Michigan Street, Milwaukee, Wisconsin 53201.
Section 2.3. Initial Contribution of Trust Property; Organizational
------------------------------------------------------
Expenses.
---------
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.4. Issuance of the Preferred Securities.
------------------------------------
On [ ], the Depositor, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Underwriters named in
the Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, representing
____________________ Preferred Securities having an aggregate Liquidation Amount
of $__________, against receipt of such aggregate purchase price of such
Preferred Securities of $__________, which amount the Administrative Trustee
shall promptly deliver to the Property Trustee. If there is a Closing Date as a
result of the exercise of an over-allotment option pursuant to the Underwriting
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Underwriters named in the
Underwriting Agreement Preferred Securities Certificates, registered in the name
of the nominee of the initial Clearing Agency, representing up to __________
Preferred Securities having an aggregate Liquidation Amount of up to
$__________, against receipt of such aggregate purchase price of such Preferred
Securities of $__________, which amount such Administrative Trustees shall
promptly
<PAGE>
-12-
deliver to the Property Trustee in accordance with instructions provided by such
Underwriters, on the date specified pursuant to the Underwriting Agreement.
Section 2.5. Issuance of the Common Securities; Subscription and
---------------------------------------------------
Purchase of Debentures.
-----------------------
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, representing
______________ Common Securities having an aggregate Liquidation Amount of
$____________ against payment by the Depositor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Debentures, registered in the
name of the Trust and having an aggregate principal amount equal to
$___________, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the
sum of $___________. If there is a Closing Date as a result of the exercise of
an over-allotment option pursuant to the Underwriting Agreement, an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 5.2 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, representing up to ___________ Common
Securities having an aggregate Liquidation Amount of up to $__________ against
payment by the Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Debentures, registered in the name of the Trust and having an
aggregate principal amount of up to $__________, and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the amount received from one of the
Administrative Trustees pursuant to the last sentence of Section 2.4.
Section 2.6. Declaration of Trust.
--------------------
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the
Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein, except as required by the Delaware Business Trust
Act. The Delaware Trustee shall be one of the Trus-
<PAGE>
-13-
tees of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807(a) of the Delaware Business Trust Act.
Section 2.7. Authorization to Enter into Certain Transactions.
------------------------------------------------
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have
the power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to acquire the Debentures with the proceeds of the sale of the
Trust Securities; provided, however, that the Administrative Trustees
shall cause legal title to the Debentures to be held of record in the
name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of the Common Securities;
(C) execution of the Trust Securities in accordance with this Trust
Agreement;
(D) the negotiation of the terms, and execution and delivery, for
and on behalf of the Trust, of the Underwriting Agreement providing
for the sale of the Preferred Securities;
(E) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Certificate Depository Agreement
and such other agreements as may be necessary or desirable in
connection with the purposes and function of the Trust;
(F) assisting in the registration of the Preferred Securities under
the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a
trust indenture under the Trust Indenture Act;
<PAGE>
-14-
(G) assisting in the listing of the Preferred Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant
to the foregoing;
(H) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures to
the Securityholders in accordance with this Trust Agreement;
(I) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(J) registering transfer of the Trust Securities in accordance with
this Trust Agreement;
(K) to the extent provided in this Trust Agreement, the winding up
of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(L) unless otherwise required by the Trust Indenture Act, to
execute on behalf of the Trust (either acting alone or together with
any or all of the Administrative Trustees) any documents that the
Administrative Trustees have the power to execute pursuant to this
Trust Agreement; and
(M) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
<PAGE>
-15-
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of a
holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding up
of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) after an event of Default the taking of any action incidental
to the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the terms of
this Trust Agreement and protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder);
(J) registering transfers of the Trust Securities in accordance
with this Trust Agreement;
(K) to engage in such Ministerial Activities as shall be necessary,
appropriate, convenient or incidental to effect the repayment of the
Preferred Securities and the Common Securities to the extent the
Debentures mature or are redeemed; and
(L) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not cause the Trust to (i) acquire
any investments or engage in any activities not authorized by this Trust
Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
other-
<PAGE>
-16-
wise dispose of any of the Trust Property or interests therein, including to
Securityholders, except as expressly provided herein, (iii) take any action that
would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States Federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt or (v) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the interest
of the Trust or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any
such States;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments
thereto;
(v) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Preferred Securities; and
<PAGE>
-17-
(vi) the taking of any other actions deemed by the Depositor
necessary or desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act, or taxed as a
corporation for United States Federal income tax purposes and so that the
Debentures will be treated as indebtedness of the Depositor for United States
Federal income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that each of
the Depositor and the Administrative Trustees determines in their discretion to
be necessary or desirable for such purposes, as long as such action does not
adversely affect in any material respect the interests of the holders of the
Preferred Securities.
Section 2.8. Assets of Trust.
---------------
The assets of the Trust shall consist of the Trust Property.
Section 2.9. Title to Trust Property.
-----------------------
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
Section 3.1. Payment Account.
---------------
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
<PAGE>
-18-
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
CERTAIN TERMS OF THE TRUST SECURITIES
Section 4.1. Distributions.
-------------
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from __________and shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year, commencing on [ ] except as provided below. The Depositor has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
extending, in the aggregate, beyond the maturity date of the Debentures (each,
an "Extension Period"). During such
----------------
Extension Period, no interest shall be due and payable on the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate, compounded
quarterly during any such Extension Period (to the extent permitted by
applicable law). Payments of accrued Distributions will be payable to Holders
as they appear on the books and records of the Trust on the first record date
after the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Depositor may commence a new
Extension Period; provided that such Extension Period together with all such
previous and further extensions thereof may not extend beyond the maturity date
of the Debentures. If any date on which a Distribution is otherwise payable on
the Trust Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment of
such Distribution shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date (each date on
which distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date").
- ------------------
(b) The Trust Securities represent undivided beneficial ownership
interests in the Trust Property, and, as a practical matter, the Distributions
on the Trust Securities shall be payable at a rate of ___% per annum (the
"Coupon Rate") of the Liquidation Amount of the Trust Securities. Distributions
-----------
in arrears for more than one quarter will accumulate and
<PAGE>
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compound at the Coupon Rate. The term "Distributions" as used in this Trust
Agreement includes such cash distributions and any such accumulated amounts that
are payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor. The
amount of Distributions payable for any full period shall be computed on the
basis of a 360-day year of twelve 30-day months.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
available in the Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be one Business Day prior to such Distribution Date; provided, however,
that in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
Section 4.2. Redemption.
----------
(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
<PAGE>
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(v) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
distributions thereon will cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Trust Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, so long as the Trust
Securities are in book-entry-only form, irrevocably deposit with the Clearing
Agency for the Trust Securities funds sufficient to pay the applicable
Redemption Price and will give such Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the holders thereof. If the Trust
Securities are no longer in book-entry-only form, the Property Trustee, subject
to Section 4.2(c), will irrevocably deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Trust Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Register for the
Trust Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then immediately prior to the close of business on the date of such
deposit, all rights of Securityholders holding Trust Securities so called for
redemption will cease, except the right of such Securityholders to receive the
Redemption Price and any Distribution payable on or prior to the Redemption
Date, but without interest, and such Securities will cease to be outstanding.
In the event that any date on which any Redemption Price is payable is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such Business
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such date. In the event that payment of the Redemption Price in
respect of any Trust Securities called for redemption is improperly withheld or
refused and not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to accrue, at
the then applicable rate, from the Redemption Date originally established by the
Trust for such Trust Securities to the date such Redemption Price is actually
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
<PAGE>
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(e) Payment of the Redemption Price on the Trust Securities shall be
made to the recordholders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be one Business
Day prior to the relevant Redemption Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date 15 days prior to the relevant Redemption
Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption which may
provide for the selection for redemption of portions (equal to $[ ] or an
integral multiple of $[ ] in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $[___]. The Property Trustee
shall promptly notify the Security Registrar in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Trust Agreement, unless the context otherwise requires,
all provisions relating to the redemption of Preferred Securities shall relate,
in the case of any Preferred Securities redeemed or to be redeemed only in part,
to the portion of the Liquidation Amount of Preferred Securities that has been
or is to be redeemed.
Section 4.3. Subordination of Common Securities.
----------------------------------
(a) Payment of Distributions on, and the Redemption Price of, the
Trust Securities, as applicable, shall be made, subject to Section 4.2(f), pro
rata among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all Outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of payment
of the Redemption Price the full amount of such Redemption Price on all
Outstanding Preferred Securities, shall have been made or provided for, and all
funds immediately available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, or the Redemption Price of,
Preferred Securities then due and payable.
<PAGE>
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(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
Section 4.4. Payment Procedures.
------------------
Payments of Distributions in respect of the Preferred Securities shall
be made by check mailed to the address of the Person entitled thereto as such
address shall appear on the Securities Register or, if the Preferred Securities
are held by a Clearing Agency, such Distributions shall be made to the Clearing
Agency in immediately available funds, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable distribution dates. Payments
in respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Common Securityholder.
Section 4.5. Tax Returns and Reports.
-----------------------
The Administrative Trustees shall prepare (or cause to be prepared),
at the Depositor's expense, and file all United States Federal, state and local
tax and information returns and reports required to be filed by or in respect of
the Trust. In this regard, the Administrative Trustees shall (a) prepare and
file (or cause to be prepared and filed) the appropriate Internal Revenue
Service form required to be filed in respect of the Trust in each taxable year
of the Trust and (b) prepare and furnish (or cause to be prepared and furnished)
to each Securityholder the appropriate Internal Revenue Service form required to
be provided or the information required to be provided on such form. The
Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Trustees shall comply with United States Federal withholding
and backup withholding tax laws and information reporting requirements with
respect to any payments to Securityholders under the Trust Securities.
Section 4.6. Payments under Indenture.
------------------------
Any amount payable hereunder to any Holder of Preferred Securities
(and any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant to
Section 6.06 of the Indenture.
<PAGE>
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ARTICLE V
TRUST SECURITIES CERTIFICATES
Section 5.1. Initial Ownership.
-----------------
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
Section 5.2. The Trust Securities Certificates.
---------------------------------
The Preferred Securities Certificates shall be issued in minimum
denominations of $[ ] Liquidation Amount and integral multiples of $[ ]
in excess thereof, and the Common Securities Certificates shall be issued in
denominations of $[ ] Liquidation Amount and integral multiples of $[ ] in
excess thereof. The Trust Securities Certificates shall be executed on behalf
of the Trust by manual signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
Section 5.3. Execution and Delivery of Trust Securities Certificates.
-------------------------------------------------------
At each Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its Chairman or a Vice
Chairman of the Board, President or a Vice President, and by its Treasurer,
Assistant Treasurer, Comptroller, an Assistant Comptroller, Secretary or an
Assistant Secretary without further corporate action by the Depositor, in
authorized denominations.
<PAGE>
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Section 5.4. Registration of Transfer and Exchange of Preferred
--------------------------------------------------
Securities Certificates.
------------------------
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
-------------------
registrar designated by the Depositor (the "Securities Registrar"), subject to
--------------------
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.8, the Administrative Trustees or any one of them shall execute and deliver,
in the name of the designated transferee or transferees, one or more new
Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Administrative
Trustee or Trustees.
The Securities Registrar shall not be required to register the
transfer of any Preferred Securities that have been called for redemption. At
the option of a Holder, Preferred Securities Certificates may be exchanged for
other Preferred Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of the Preferred
Securities Certificates to be exchanged at the office or agency maintained
pursuant to Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by the
Property Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
<PAGE>
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Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
-----------------------------------------------------
Certificates.
-------------
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, lose or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial ownership interest in the assets of the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
Section 5.6. Persons Deemed Securityholders.
------------------------------
The Administrative Trustees or the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving distributions and for all other purposes whatsoever,
and neither the Trustees nor the Securities Registrar shall be bound by any
notice to the contrary.
Section 5.7. Access to List of Securityholders' Names and Addresses.
------------------------------------------------------
At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Depositor shall furnish
or cause to be furnished to the Property Trustee (a) semi-annually on or before
January 15 or July 15 in each year, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Securityholders as of
the most recent regular record date (as provided in Section 4.1(d)) and (b)
promptly after receipt by any Administrative Trustee or the Depositor of a
request therefor from the Property Trustee, such other information as the
Property Trustee may reasonably require in order to enable the Property Trustee
to discharge its obligations under this Trust Agreement, in each case to the
extent such information is in the possession or control of the Administrative
Trustees or the Depositor and is not identical to a previously supplied list
<PAGE>
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or has not otherwise been received by the Property Trustee in its capacity as
Securities Registrar. The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Trust Agreement or under
the Trust Securities, and the corresponding rights of the Trustee shall be as
provided in the Trust Indenture Act. Each Holder, by receiving and holding a
Trust Securities Certificate, and each Owner shall be deemed to have agreed not
to hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 5.8. Maintenance of Office or Agency.
-------------------------------
The Administrative Trustees shall maintain an office or offices or
agency or agencies where Preferred Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be served.
The Administrative Trustees initially designate Wisconsin Energy Corporation,
231 West Michigan Street, Milwaukee, Wisconsin 53201, Attn: [ ], as
its principal corporate trust office for such purposes. The Administrative
Trustees shall give prompt written notice to the Depositor and to the
Securityholder of any change in the location of the Securities Register or any
such office or agency.
Section 5.9. Appointment of Paying Agent.
---------------------------
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying
Agent shall initially be the Bank. The Paying Agent may choose any co-paying
agent that is acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Paying Agent
or a successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Administrative
Trustees to execute and deliver to the Trustees an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Trustees
that as Paying Agent, such successor Paying Agent or additional Paying Agent
will hold all sums, if any, held by it for payment to the Securityholders in
trust
<PAGE>
-27-
for the benefit of the Securityholders entitled thereto until such sums shall be
paid to such Securityholders. The Paying Agent shall return all unclaimed funds
to the Property Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in
its role as Paying Agent, for so long as the Bank shall act as Paying Agent and,
to the extent applicable, to any other paying agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
Section 5.10. Ownership of Common Securities by Depositor.
--------------------------------------------
At each Closing Date, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, other than transactions permitted by Section 5.01 of the
Indenture, any attempted transfer of the Common Securities shall be void. The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE
OTHER THAN IN ACCORDANCE WITH THE TRUST AGREEMENT (AS DEFINED BELOW)".
Section 5.11. Book-Entry Preferred Securities Certificates; Common
----------------------------------------------------
Securities Certificate.
-----------------------
(a) The Preferred Securities Certificates, upon original issuance,
will be issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no beneficial owner will
receive a Definitive Preferred Securities Certificate representing such
beneficial owner's interest in such Preferred Securities, except as provided in
Section 5.13. Unless and until Definitive Preferred Securities Certificates
have been issued to beneficial owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar, the Paying Agent and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Book-Entry Preferred Securities
Certificates (including the payment of the Liquidation Amount of and
Distributions on the Book-Entry Preferred Securities Certificate and the
giving of instructions or directions to Owners of Book-Entry Preferred
<PAGE>
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Securities) as the sole Holder of Book-Entry Preferred Securities and shall
have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the provisions
of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing Agency
and shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless and
until Definitive Preferred Securities Certificates are issued pursuant to
Section 5.13, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments on
the Preferred Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.12. Notices to Clearing Agency.
--------------------------
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
Section 5.13. Definitive Preferred Securities Certificates.
--------------------------------------------
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
ownership interests aggregating at least a majority of the Liquidation Amount
advise the Property Trustee in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the
Owners of Preferred Securities Certificates, then the Property Trustee shall
notify the Clearing Agency and the Clearing Agency shall notify all Owners of
Preferred Securities Certificates and the other Trustees of the occurrence of
any such event and of
<PAGE>
-29-
the availability of the Definitive Preferred Securities Certificates to Owners
of such class or classes, as applicable, requesting the same. Upon surrender to
the Property Trustee of the typewritten Preferred Securities Certificate or
Certificates representing the Book-Entry Preferred Securities Certificates by
the Clearing Agency, accompanied by registration instructions, the
Administrative Trustees, or any one of them, shall execute the Definitive
Preferred Securities Certificates in accordance with the instructions of the
Clearing Agency. Neither the Securities Registrar nor the Trustees shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Preferred Securities Certificates, the Trustees shall recognize
the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
Section 5.14. Rights of Securityholders.
-------------------------
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial ownership interests in the assets of the Trust conferred by
their Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. By acceptance of a
beneficial interest in the Trust Securities, Holders agree to treat the
Debentures as indebtedness for all United States tax purposes. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Securityholders against payment of the purchase price therefor will
be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default, the Indenture Trustee fails or the holders of
not less than 25% in aggregate principal amount of the outstanding Debentures
fail to declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in aggregate Liquidation Amount of the
Preferred Securities then Outstanding shall have such right by a notice in
writing to the Depositor and the Indenture Trustee; and upon any such
declaration such principal amount of and the accrued interest on all of the
Debentures shall become immediately due and payable; provided that the payment
of principal and interest on such Debentures shall remain subordinated to the
extent provided in the Indenture. At any time after such a declaration of
acceleration with respect to the Debentures has been made and before a
<PAGE>
-30-
judgment or decree for payment of the money due has been obtained by the
Indenture Trustee as in the Indenture provided, the Holders of a majority in
Liquidation Amount of the Preferred Securities, by written notice to the
Property Trustee, the Depositor and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Indenture Trustee
a sum sufficient to pay
(A) all overdue installments of interest on all of the Debentures,
(B) the principal of (and premium, if any, on) any Debentures which
have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Debentures, and
(C) all sums paid or advanced by the Indenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and the Property Trustee, their
agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the non-payment of the principal of the Debentures which has become
due solely by such acceleration, have been cured or waived as provided in
Section 8.01 of the Indenture.
The Holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture. No such waiver or rescission shall affect any subsequent default or
impair any right consequent thereon. Upon receipt by the Property Trustee of
written notice declaring such an acceleration, or rescission and annulment
thereof, by Holders of the Preferred Securities all or part of which is
represented by Book-Entry Preferred Securities Certificates, a record date shall
be established for determining Holders of Outstanding Preferred Securities
entitled to join in such notice, which record date shall be at the close of
business on the day the Property Trustee receives such notice. The Holders on
such record date, or their duly designated proxies, and only such Persons, shall
be entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that, unless such declaration of acceleration,
--------
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new written
no-
<PAGE>
-31-
tice of declaration of acceleration, or rescission and annulment thereof, as the
case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.14(b).
(c) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section
6.01(1) or 6.01(2) of the Indenture, any Holder of Preferred Securities shall
have the right to institute a proceeding directly against the Depositor,
pursuant to the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holder (a "Direct
------
Action"). In connection with any such Direct Action, the Holder of the Common
- ------
Securities will be subrogated to the rights of any Holder of the Preferred
Securities to the extent of any payment made by the Depositor to such Holder of
Preferred Securities as a result of such Direct Action. Except as set forth in
Section 5.14(b) and (c), the Holders of Preferred Securities shall have no right
to exercise directly any right or remedy available to the holders of, or in
respect of, the Debentures.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.1. Limitations on Voting Rights.
----------------------------
(a) Except as provided in this Section, in Sections 5.14, 8.10 and
10.2 and in the Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Indenture Trustee, or executing any
trust or power conferred an the Indenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable
<PAGE>
-32-
under Section 6.04 of the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable or (iv) consent to any amendment or modification under Section 10.02 or
termination of the Indenture or any amendment, modification or termination of
the Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities; provided, however,
that where a consent under the Indenture would require the consent of each
Holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of Preferred
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Preferred Securities, except by a
subsequent vote of the Holders of Preferred Securities. The Property Trustee
shall notify all Holders of the Preferred Securities of any notice of default
received from the Indenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Trustees shall, at the expense
of the Depositor, obtain an Opinion of Counsel experienced in such matters to
the effect that the Trust will not be classified as an association taxable as a
corporation for United States Federal income tax purposes on account of such
action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, the Trust would be classified as an
association taxable as a corporation for United States Federal income tax
purposes.
Section 6.2. Notice of Meetings.
------------------
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be
so considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
<PAGE>
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Section 6.3. Meetings of Preferred Securityholders.
-------------------------------------
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
record of 25% in aggregate Liquidation Amount of the Preferred Securities (based
upon their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Preferred
Securityholders to vote on any matters as to which Preferred Securityholders are
entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
Section 6.4. Voting Rights.
-------------
Securityholders shall be entitled to one vote for each $[ ] of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
Section 6.5. Proxies, etc.
------------
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy; provided that no proxy shall be voted at any meeting
--------
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless chal-
<PAGE>
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lenged at or prior to its exercise, and the burden of proving invalidity shall
rest on the challenger. No proxy shall be valid more than three years after its
date of execution.
Section 6.6. Securityholder Action by Written Consent.
----------------------------------------
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding a majority of all Outstanding
Trust Securities (based upon their Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.
Section 6.7. Record Date for Voting and Other Purposes.
-----------------------------------------
For the purposes of determining the Securityholders who are entitled
to notice of and to vote at any meeting or by written consent, or to participate
in any distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
Section 6.8. Acts of Securityholders.
-----------------------
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the Trustees, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The
<PAGE>
-35-
fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the
Securities Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Section 6.9. Inspection of Records.
---------------------
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
<PAGE>
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of the Property Trustee
------------------------------------------------------
and the Delaware Trustee.
------------------------
The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Securityholders that:
(a) the Property Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States;
(b) the Property Trustee meets the applicable eligibility requirements
set forth in Section 8.7, has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware corporation duly organized,
validly existing and in good standing in the State of Delaware;
(d) the Delaware Trustee meets the applicable eligibility requirements
set forth in Section 8.7, has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes
the valid and legally binding agreement of each of the Property Trustee and
the Delaware Trustee enforceable against each of them in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(f) the execution, delivery and performance of this Trust Agreement
have been duly authorized by all necessary corporate or other action on the
part of the Property Trustee and the Delaware Trustee and do not require
any approval of stockholders of the Property Trustee and the Delaware
Trustee and such execution, delivery and performance will not (i) violate
the charter or by-laws of the Property Trustee or the
<PAGE>
-37-
Delaware Trustee, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation
or imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee or
the Delaware Trustee is a party or by which it is bound, or (iii) violate
any law, governmental rule or regulation of the United States or the State
of Delaware, as the case may be, governing the corporate, banking, trust or
general powers of the Property Trustee or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Property Trustee or the
Delaware Trustee (as appropriate in context) contemplated herein or therein
requires the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to any
governmental authority or agency under any existing Federal law governing
the banking, trust or general powers of the Property Trustee or the
Delaware Trustee, as the case may be, or under the laws of the United
States or the State of Delaware; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against
or affecting the Property Trustee or the Delaware Trustee in any court or
before any governmental authority, agency or arbitration board or tribunal
which, individually or in the aggregate, would materially and adversely
affect the Trust or would question the right, power and authority of the
Property Trustee or the Delaware Trustee, as the case may be, to enter into
or perform its obligations as one of the Trustees under this Trust
Agreement.
Section 7.2. Representations and Warranties of Depositor.
-------------------------------------------
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at each Closing Date on
behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Trustees pursuant to the
terms and provisions of, and in accordance with the requirements of, this
Trust Agreement, and the Securityholders will be, as of each such date,
entitled to the benefits of this Trust Agreement; and
<PAGE>
-38-
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the
State of Delaware or any political subdivision thereof in connection with
the execution, delivery and performance by the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
Section 8.1. Certain Duties and Responsibilities.
-----------------------------------
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee,
subject to the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Trust Agreement shall require the Trustees to expend or risk their own
funds or otherwise incur any financial liability in the performance of any of
their duties hereunder, or in the exercise of any of their rights or powers, if
they shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release the Property
Trustee from liability for its own gross negligent action, its own gross
negligent failure to act, or its own willful misconduct. To the extent that, at
law or in equity, an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the Securityholders,
such Administrative Trustee shall not be liable to the Trust or to any
Securityholder for such Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that
they restrict the duties and liabilities of the Administrative Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not per-
<PAGE>
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sonally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement and, in the case of the Property Trustee, in
the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action or its own
negligent failure to act, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Payment. Account shall be to deal with such Property in similar manner as
the Property Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 3.1 and except to
the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
<PAGE>
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Section 8.2. Certain Notices.
---------------
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Administrative Trustee shall transmit,
in the manner and to the extent provided in Section 10.8, notice of such
exercise to the Securityholders and the Property Trustee, unless such exercise
shall have been revoked.
Section 8.3. Certain Rights of Property Trustee.
----------------------------------
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of
action or (ii) in construing any of the provisions of this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (iii) the Property Trustee is unsure
of the application of any provision of this Trust Agreement, then, except
as to any matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee
shall take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Depositor; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days after
it has delivered such notice, or such reasonably shorter period of time set
forth in such notice (which to the extent practicable shall not be less
than two Business Days), it may, but shall be under no duty to, take or
refrain from taking such action not inconsistent with this
<PAGE>
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Trust Agreement as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no
liability except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently
evidenced by an Officers Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established
before undertaking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may
be counsel to the Depositor or any of its Affiliates, and may include any
of its employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice, such counsel may be counsel to the Depositor
or any of its Affiliates, and may include any of its employees; the
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust Agreement from any court of
competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, note or other evidence of indebtedness or other paper or
document, unless requested in writing to do so
<PAGE>
-42-
by one or more Securityholders, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as it may see
fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to
selection of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Trust
Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 8.4. Not Responsible for Recitals or Issuance of Securities.
-------------------------------------------------------
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor, and the Trustees do not
assume any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Debentures.
<PAGE>
-43-
Section 8.5. May Hold Securities.
-------------------
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 8.6. Compensation; Indemnity; Fees.
-----------------------------
Pursuant to the Indenture, the Depositor, as borrower, agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee,
(iii) any officer, director, shareholder, employee, representative or agent
of any Trustee, and (iv) any employee or agent of the Trust or its
Affiliates, (referred to herein as an "Indemnified Person") from and
------------------
against any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by reason of
the creation, operation or termination of the Trust or any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Trust Agreement, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence or willful misconduct with
respect to such acts or omissions.
(d) to the fullest extent permitted by applicable law, to advance
expenses (including legal fees) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding, from time to time,
prior to the final disposi-
<PAGE>
-44-
tion of such claim, demand, action, suit or proceeding upon receipt by the
Depositor of (i) a written affirmation by or on behalf of the Indemnified
Person of its or his good faith belief that it or he has met the standard
of conduct set forth in this Section 8.6 and (ii) an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in the preceding subsection.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
Section 8.7. Corporate Property Trustee Required; Eligibility of
---------------------------------------------------
Trustees.
---------
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect to the
Trust Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
<PAGE>
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Section 8.8. Conflicting Interests.
---------------------
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement. The Depositor and any Trustee may engage in or possess an interest
in other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
Section 8.9. Co-Trustees and Separate Trustee.
--------------------------------
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age and
a resident of the United States or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.
<PAGE>
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Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-
trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act is to be
performed, the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any
other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
<PAGE>
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(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Section 8.10. Resignation and Removal, Appointment of Successor.
--------------------------------------------------
No resignation or removal of any Trustee (the "Relevant Trustee") and
----------------
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders.
If the instrument of acceptance by the successor Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 30 days after
the giving of such notice of resignation, the Relevant Trustee may petition
(pursuant to the Indenture, at the expense of the Depositor), any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring Trustee shall comply with the applicable requirements
of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign,
be removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders, by
Act of the Securityholders of a majority in Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of Section 8.11.
If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, at a time when a Debenture Event
of Default shall have oc-
<PAGE>
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curred and be continuing, the Common Securityholder by Act of the Common
Securityholder delivered to the Administrative Trustee shall promptly appoint a
successor Administrative Trustee or Administrative Trustees and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
by the Common Securityholder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder who has
been a Securityholder of Trust Securities for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of remaining Administrative Trustees if
there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees or Delaware Trustee, as the case may be, set forth
in Section 8.7).
Section 8.11. Acceptance of Appointment by Successor.
--------------------------------------
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor
<PAGE>
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Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and the
Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case way be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
Section 8.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
---------
Any corporation into which the Property Trustee or the Delaware
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
Section 8.13. Preferential Collection of Claims Against Depositor or
------------------------------------------------------
Trust.
------
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
Section 8.14. Reports by the Property Trustee.
-------------------------------
(a) The Property Trustee shall transmit to Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto. If required by Section 313(a) of
the Trust Indenture Act, the Property Trustee shall, within sixty days after
each [ ] following the date of this Trust Agreement deliver to
Secu-
<PAGE>
-50-
rityholders a brief report, dated as of such [ ], which complies with the
provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded,
with the Commission and with the Depositor.
Section 8.15. Reports to the Property Trustee.
-------------------------------
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
Section 8.16. Evidence of Compliance with Conditions Precedent.
-------------------------------------------------
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
Section 8.17. Number of Trustees.
------------------
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware
Trustee may be the same Person, subject to the applicable eligibility
requirements set forth herein.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance
<PAGE>
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with Section 8.10, the Administrative Trustees in office, regardless of their
number (and notwithstanding any other provision of this Agreement), shall have
all the powers granted to the Administrative Trustees and shall discharge all
the duties imposed upon the Administrative Trustees by this Trust Agreement.
Section 8.18. Delegation of Power.
-------------------
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of this Trust Agreement, as set forth herein.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
Section 9.1. Dissolution Upon Expiration Date.
--------------------------------
Unless earlier dissolved, the Trust shall automatically dissolve on
December 31, 2048 (the "Expiration Date"). Thereafter, the Trust Property shall
---------------
be distributed in accordance with Section 9.4.
Section 9.2. Early Dissolution.
-----------------
The first to occur of any of the following events is an "Early
Termination Event", the occurrence of which shall cause a dissolution of the
Trust:
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from the Depositor
at any time (which direction is optional and wholly within the discretion
of the Depositor) to
<PAGE>
-52-
dissolve the Trust and distribute Debentures to Securityholders in exchange
for the Preferred Securities;
(c) the redemption of all of the Preferred Securities; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 9.3. Termination.
-----------
As soon as is practicable after the occurrence of an event referred to
in Section 9.1 or 9.2, and upon the completion of the winding up and liquidation
of the Trust under Section 9.4, the Trustees (each of whom is hereby authorized
to take such action) shall file a certificate of cancellation with the Secretary
of State of the State of Delaware terminating the Trust and, upon such filing,
the respective obligations and responsibilities of the Trustees and the Trust
created and continued hereby shall terminate.
Section 9.4. Liquidation.
-----------
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid mailed not later than 30 nor more
than 60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Debentures, or
if Section 9.4(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than
<PAGE>
-53-
45 days prior to the Liquidation Date) and, either itself acting as exchange
agent or through the appointment of a separate exchange agent, shall establish
such procedures as it shall deem appropriate to effect the distribution of
Debentures in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall use its reasonable efforts to have the Debentures listed on
the New York Stock Exchange or on such other exchange, interdealer quotation
system or self-regulatory organization as the Preferred Securities are then
listed, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, upon the Expiration Date or the occurrence of
an Early Termination Event, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, the Trust
Property shall be liquidated, and the Trust shall be wound-up by the Property
Trustee in such manner as the Property Trustee determines. In such event,
Securityholders will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
-----------
Distribution"). If, upon any such winding-up, the Liquidation Distribution can
- ------------
be paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Common Securities will be entitled to receive Liquidation Distributions
upon any such winding-up pro rata (determined as aforesaid) with Holders of
Preferred Securities, except that, if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities.
<PAGE>
-54-
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements
------------------------------------------------------
of the Trust.
-------------
The Trust may not merge with or into, consolidate, convert into,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, except pursuant to this
Section 9.5 or Section 9.4. At the request of the Depositor, with the consent of
the Administrative Trustees and without the consent of the Holders of the
Preferred Securities, the Property Trustee or the Delaware Trustee, the Trust
may merge with or into, consolidate, convert into, amalgamate, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to a trust organized as such under the laws of any State; provided,
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
--------------------
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Debentures, (iii) the Successor Securities are listed or traded,
or any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed or traded, if any, (iv) such merger, consolidation,
conversion, amalgamation, replacement, conveyance, transfer or lease does not
cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
substantially identical to that of the Trust, (vii) prior to such merger,
consolidation, conversion, amalgamation, replacement, conveyance, transfer or
lease, the Depositor has received an Opinion of Counsel to the effect that (a)
such merger, consolidation, conversion, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, conversion, amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor such successor entity will be required to register
as an investment company under the 1940 Act and (viii) the Depositor owns all of
the common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of Holders of 100% in Liquidation Amount of the
Preferred Securities, consolidate, amalgamate, merge with or into, convert into
or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other Person or permit any
<PAGE>
-55-
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, conversion, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the successor entity to be classified
as other than a grantor trust for United States Federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Limitation of Rights of Securityholders.
---------------------------------------
The death, incapacity, dissolution, bankruptcy or termination of any
Person having an interest, beneficial or otherwise, in Trust Securities shall
not operate to terminate this Trust Agreement nor dissolve, terminate or annul
the Trust nor entitle the legal representatives or heirs of such Person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.2. Amendment.
---------
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i) to
cure any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that the Trust will be classified
for United States Federal income tax purposes as a grantor trust at all times
that any Trust Securities are outstanding or to ensure that the Trust will not
be required to register as an investment company under the 1940 Act; provided,
however, that in the case of clause (ii), such action shall not adversely affect
in any material respect the interests of any Securityholder, and any such
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Securityholders.
(b) Except as provided in Section 6.1(c) or Section 10.2(c) hereof,
any provision of this Trust Agreement may be amended by the Trustees and the
Depositor with (i) the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an
<PAGE>
-56-
Opinion of Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment will not affect
the Trust's status as a grantor trust for United States Federal income tax
purposes or the Trust's exemption from status of an investment company under the
1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder, this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the
Securityholders, this paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
Section 10.3. Separability.
------------
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
<PAGE>
-57-
Section 10.4. Governing Law.
-------------
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
SECURITYHOLDERS, THE TRUST, THE DEPOSITOR AND THE TRUSTEES SHALL BE GOVERNED BY
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE
SHALL NOT BE APPLICABLE TO THE SECURITYHOLDERS, THE TRUST, THE DEPOSITOR, THE
TRUSTEES OR THIS TRUST AGREEMENT ANY PROVISION OF THE LAWS (STATUTORY OR COMMON)
OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A
MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR
GOVERNMENT BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND
CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL
OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES
TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE
NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO
THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G)
THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR
LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE
LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF THE TRUSTEES AS SET
FORTH OR REFERENCED IN THIS TRUST AGREEMENT. SECTION 3540 OF TITLE 12 OF THE
DELAWARE CODE SHALL NOT APPLY TO THE TRUST.
Section 10.5. Payments Due on Non-Business Day.
--------------------------------
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
way be made an the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date.
<PAGE>
-58-
Section 10.6. Successors.
----------
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with
transactions permitted under Article 5 of the Indenture and pursuant to which
the assignee agrees in writing to perform the Depositor's obligations hereunder,
the Depositor shall not assign its obligations hereunder.
Section 10.7. Headings.
--------
The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
Section 10.8. Reports, Notices and Demands.
----------------------------
Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Wisconsin Energy
Corporation, 231 West Michigan Street, Milwaukee, Wisconsin 53201, Attention: [
], facsimile no.: (414) 221-2594. Such notice, demand or other communication
to or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (a) with respect to the Property Trustee to First
National Bank of Chicago, One First National Plaza, Chicago, Illinois, 60670-
0126, Attention: Corporate Trust Services Division; (b) with respect to the
Delaware Trustee, to First Chicago Delaware, Inc., 300 King Street, Wilmington,
Delaware, 19801, Attention: Corporate Trust Division; and (c) with respect to
the Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention Administrative Trustees of WEC Capital
Trust________." Such notice, demand or other communication to or upon the Trust
or the Property Trustee shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Trust or the Property Trustee.
<PAGE>
-59-
Section 10.9. Agreement Not to Petition.
-------------------------
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
---------------
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture
--------------------------------------------------
Act.
----
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Agreement
as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial ownership interests in the assets of the Trust.
<PAGE>
-60-
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
-----------------------------------------------------
Indenture.
----------
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL OWNERSHIP
INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE
GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST,
SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
<PAGE>
S-1
THIS TRUST AGREEMENT is executed as of the date first above written.
WISCONSIN ENERGY CORPORATION
By: _____________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as Property
Trustee
By: _____________________________________
Name:
Title:
FIRST CHICAGO DELAWARE INC., as Delaware Trustee
By: _____________________________________
Name:
Title:
_________________________________________
Calvin H. Baker,
as Administrative Trustee
_________________________________________
Thomas H. Fehring,
as Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
WEC CAPITAL TRUST _____
This Certificate of Trust of WEC Capital Trust _____ (the "Trust"),
-----
dated , 1999, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
-- ---
1. Name. The name of the business trust being formed hereby is WEC
----
Capital Trust _____.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust with a principal place of business in the State of Delaware are as
follows:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
3. Effective Date. This Certificate of Trust shall be effective
--------------
immediately upon its filing with the Secretary of State of the State of
Delaware.
In Witness Whereof, the undersigned, being all of the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE FIRST NATIONAL BANK OF CHICAGO, as Property
Trustee
By: _____________________________________
Name:
Title:
<PAGE>
-2-
FIRST CHICAGO DELAWARE INC., as Delaware Trustee
By: _____________________________________
Name:
Title:
_________________________________________
as Administrative Trustee
_________________________________________
as Administrative Trustee
<PAGE>
EXHIBIT B
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: [ ]
General Counsel's Office
Re:
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to
the issuance and deposit with The Depository Trust Company ("DTC") of the [TITLE
---
OF PREFERRED SECURITIES] (the "Preferred Securities"), of WEC Capital Trust
--------------------
_____, a Delaware business trust (the "Issuer"), formed pursuant to a Trust
------
Agreement between Wisconsin Energy Corporation ("WEC") and The First National
---
Bank of Chicago, as Property Trustee, First Chicago Delaware Inc, as Delaware
Trustee, and the Administrative Trustees named therein. The payment of
distributions on the Preferred Securities, and payments due upon liquidation of
Issuer or redemption of the Preferred Securities, to the extent the Issuer has
funds available for the payment thereof are guaranteed by WEC to the extent set
forth in a Guarantee Agreement dated _______, _____, _____ by WEC with respect
to the Preferred Securities. WEC and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
------------
Underwriting Agreement dated [ ] by and among the Underwriters,
the Issuer and WEC, and the Underwriters wish to take delivery of the Preferred
Securities through DTC. [ ] is acting as transfer agent and
registrar with respect to the Preferred Securities (then "Transfer Agent and
------------------
Registrar").
- ---------
To induce DTC to accept the Preferred Securities as eligible for
deposit at DTC, and to act in accordance with DTC's rules with respect to the
Preferred Securities, the Issuer, the Transfer Agent and Registrar and DTC agree
among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to
the Underwriters, which is expected to occur on or about ________, ________,
________,there shall be deposited with or on behalf of DTC one or more global
certificates (individually and collectively, the "Global Certificate")
------------------
registered in the name of DTC's Preferred Securities nominee, Cede & Co.,
representing an aggregate of Preferred Securities and bearing the following
legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A
<PAGE>
-2-
NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
2. The Amended and Restated Trust Agreement of the Issuer provides
for the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice of such event at least 5
business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of
rights with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the amount
of and conditions, if any, applicable to the payment of any such distribution or
any such offering or issuance of rights; (b) any applicable expiration or
deadline date, or any date by which any action on the part of the holders of
Preferred Securities is required; and (c) the date any required notice is to be
mailed by or on behalf of the Issuer to holders of Preferred Securities or
published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
----------------
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Preferred Securities. After establishing the amount of payment to be made on
the Preferred Securities, the Issuer or the Transfer Agent and Registrar
<PAGE>
-3-
will notify DTC's Dividend Department of such payment 5 business days prior to
payment date. Notices to DTC's Dividend Department by telecopy shall be sent to
(212) 709-1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at (212) 709-
1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a secure
means in the manner set forth in paragraph 4. Such redemption notice shall be
sent to DTC's Call Notification Department at (516) 227-4164 or (516) 227-4190,
and receipt of such notice shall be confirmed by telephoning (516) 227-4070.
Notice by mail or by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes) shall be sent, unless
notification to another department is expressly provided for herein, by telecopy
to DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094 and
receipt of such notice shall be confirmed by telephoning (212) 709-6884, or by
mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
<PAGE>
-4-
7. All notices and payment advices sent to DTC shall contain the
CUSIP number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this letter,
is "[TITLE OF PREFERRED SECURITIES]."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in [ ] funds on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be
made payable to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the Transfer
Agent and Registrar to use any other telecopy number or address of DTC as the
number or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by Global
Certificates, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and Registrar
the aggregate number of Preferred Securities deposited with it) and discharging
its responsibilities with respect thereto under applicable law. Under such
circumstances, the Issuer may determine to make alternative arrangements for
book-entry settlement for the Preferred Securities, make available one or more
separate global certificates evidencing Preferred Securities to any Participant
having Preferred Securities credited to its DTC account, or issue definitive
Preferred Securities to the beneficial holders thereof, and in any such case,
DTC agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar, and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
<PAGE>
-5-
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DTC of the
availability of certificates. In such event, the Issuer or the Transfer Agent
and Registrar shall issue, transfer and exchange certificates in appropriate
amounts, as required by DTC and others, and DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Nothing
herein shall be deemed to require the Transfer Agent and Registrar to advance
funds on behalf of WEC Capital Trust ______.
Very truly yours,
WEC CAPITAL TRUST ___
(As Issuer)
By: _____________________________________
Name:
Administrative Trustee
[ ]
(As Transfer Agent and Registrar)
By: _____________________________________
Name:
Title:
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: _____________________________________
Authorized Officer
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS
DESCRIBED IN THE TRUST AGREEMENT (AS DEFINED BELOW)
Certificate Number Number Of Common Securities: ____________
C-1
Certificate Evidencing Common Securities
of
WEC CAPITAL TRUST ___
_____% Common Securities
(Liquidation Amount $[ ] Per Common Security)
WEC Capital Trust ________, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that Wisconsin
-----
Energy Corporation (the "Holder") is the registered owner of (__________) common
------
securities of the Trust representing undivided beneficial ownership interests of
the Trust and designated the _____% Common Securities (liquidation amount $[
] per Common Security) (the "Common Securities"). To the extent set forth in
-----------------
Section 5.10 of the Trust Agreement (as defined below) the Common Securities are
not transferable and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Trust Agreement
of the Trust dated as of ________, _______, _______, as the same may be amended
from time to time (the "Trust Agreement") including the designation of the terms
---------------
of the Common Securities as set forth therein. The Trust will furnish a copy of
the Trust Agreement to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
-2-
In Witness Whereof, one of the Administrative Trustees of the Trust
has executed this certificate this _ day of __________, __________.
WEC CAPITAL TRUST ___
By: _____________________________________
Name:
Administrative Trustee
<PAGE>
EXHIBIT D
If the Preferred Security is to be a Global Certificate Insert:
THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") OR A NOMINEE OF THE
----------
DEPOSITORY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST
AGREEMENT AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER
OF THIS PREFERRED SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IN PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK)
TO EC CAPITAL TRUST _____ OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
Certificate Number Number Of Preferred Securities
P-_____ Cusip No. __________
Certificate Evidencing Preferred Securities
of
WEC CAPITAL TRUST _____
<PAGE>
-2-
[DESIGNATION OF PREFERRED SECURITIES]
(Liquidation Amount $[ ] Per Preferred Security)
WEC Capital Trust _, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that ______________
-----
(the "Holder") is the registered owner of (_____) preferred securities of the
------
Trust representing an undivided beneficial ownership interest in the assets of
the Trust and designated the [DESIGNATION OF PREFERRED SECURITIES] (the
"Preferred Securities"). The Preferred Securities are transferable on the books
--------------------
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of __________, __________ as the same may
be amended from time to time (the "Trust Agreement") including the designation
---------------
of the terms of Preferred Securities as set forth therein. The Holder is
entitled to the benefits of the Guarantee Agreement entered into by Wisconsin
Energy Corporation, a Wisconsin corporation, and [ ], as
guarantee trustee, dated as of [ ], as the same may be amended
from time to time (the "Guarantee"), to the extent provided therein. The Trust
---------
will furnish a copy of the Trust Agreement and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust
has executed this certificate this _____ day of __________, __________.
WEC CAPITAL TRUST ___
By: _____________________________________
Name:
Administrative Trustee
<PAGE>
ASSIGNMENT
----------
For Value Received, the undersigned assigns and transfers this
Preferred Security to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert assignee's social security
or tax identification number)
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature: ___________________________________________________
(Sign exactly as your name appears on the other side
of this Preferred Security Certificate)
_______________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
<PAGE>
EXHIBIT 4.9
-----------
[FORM OF GUARANTEE AGREEMENT]
================================================================================
GUARANTEE AGREEMENT
between
WISCONSIN ENERGY
CORPORATION
(as Guarantor)
and
THE FIRST NATIONAL BANK OF
CHICAGO
(as Trustee)
dated as of
[ ]
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS......................................................................... 2
Section 1.1. Definitions......................................................................... 2
ARTICLE II. TRUST INDENTURE ACT................................................................. 5
Section 2.1. Trust Indenture Act; Application.................................................... 5
Section 2.2. List of Holders..................................................................... 5
Section 2.3. Reports by the Guarantee Trustee.................................................... 5
Section 2.4. Periodic Reports to the Guarantee Trustee........................................... 6
Section 2.5. Evidence of Compliance with Conditions Precedent.................................... 6
Section 2.6. Events of Default; Waiver........................................................... 6
Section 2.7. Event of Default; Notice............................................................ 6
Section 2.8. Conflicting Interests............................................................... 7
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.................................. 7
Section 3.1. Powers and Duties of the Guarantee Trustee.......................................... 7
Section 3.2. Certain Rights of Guarantee Trustee................................................. 9
ARTICLE IV. GUARANTEE TRUSTEE................................................................... 11
Section 4.1. Guarantee Trustee: Eligibility...................................................... 11
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee....................... 11
ARTICLE V. GUARANTEE........................................................................... 12
Section 5.1. Guarantee........................................................................... 12
Section 5.2. Waiver of Notice and Demand......................................................... 12
Section 5.3. Obligations Not Affected............................................................ 13
Section 5.4. Rights of Holders................................................................... 14
Section 5.5. Guarantee of Payment................................................................ 14
Section 5.6. Subrogation......................................................................... 14
Section 5.7. Independent Obligations............................................................. 15
ARTICLE VI. COVENANTS AND SUBORDINATION......................................................... 15
Section 6.1. Subordination....................................................................... 15
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
Section 6.2. Pari Passu Guarantees.............................................................. 15
ARTICLE VII. TERMINATION........................................................................ 15
Section 7.1. Termination........................................................................ 15
ARTICLE VIII. MISCELLANEOUS...................................................................... 16
Section 8.1. Successors and Assigns............................................................. 16
Section 8.2. Amendments......................................................................... 16
Section 8.3. Notices....................................................................... 16
Section 8.4. Benefit....................................................................... 17
Section 8.5. Interpretation..................................................................... 17
Section 8.6. Governing Law...................................................................... 18
SIGNATURES............................................................................................. S-1
</TABLE>
-ii-
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of ______________, [ ], is
executed and delivered by WISCONSIN ENERGY CORPORATION, a Wisconsin corporation
(the "Guarantor") having its principal office at 231 West Michigan Street,
---------
Milwaukee, Wisconsin 53201, and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association organized under the laws of the United States, as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as defined herein)
-----------------
from time to time of the Preferred Securities (as defined herein) of WEC Capital
Trust ___, a Delaware statutory business trust (the "Issuer").
------
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of _____________, [ ] among the Issuer trustees
---------------
named therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial ownership interests in the assets of the Issuer, the Issuer
is issuing up to $_________ ________ aggregate liquidation preference of its
[TITLE OF PREFERRED SECURITIES] (liquidation preference $[ ] per preferred
security) (the "Preferred Securities") and $_________ aggregate liquidation
--------------------
preference of its common securities (the "Common Securities" and, together with
-----------------
the Preferred Securities, the "Securities") representing undivided beneficial
----------
ownership interests in the assets of the Issuer and having the terms set forth
in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities, will be used to purchase the Debentures (as defined in the
Trust Agreement) of the Guarantor which will be deposited with The First
National Bank of Chicago, as Property Trustee under the Trust Agreement, as
trust assets; and
WHEREAS, as incentive for the Holders to purchase the Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
<PAGE>
-2-
ARTICLE I. DEFINITIONS
Section 1.1. Definitions.
-----------
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the date
hereof.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 90 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Securities, to the extent not paid or
made by or on behalf of the Issuer; (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on such Securities, to
the extent the Issuer shall have funds on hand available therefor at such time,
(ii) the redemption price, including all accumulated and unpaid Distributions to
the date of redemption (the "Redemption Price"), with respect to the Securities
----------------
called for redemption by the Issuer to the extent the Issuer shall have funds on
hand available therefor at such time, and (iii) upon a voluntary or involuntary
termination, winding-up or liquidation of the Issuer, unless Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the liquidation
preference of $[ ] per Security plus accumulated and unpaid Distributions on the
Securities to the date of payment to the extent the Issuer shall have funds on
hand available to make such payment at such time and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
------------------------
"Guarantee Trustee" means The First National Bank of Chicago, until a
-----------------
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to
<PAGE>
-3-
the terms of this Guarantee Agreement and thereafter means each such Successor
Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
------
the Issuer, of any Securities; provided, however, that in determining whether
the holders of the requisite percentage of Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indebtedness" means, with respect to a Person, (i) the principal of
------------
and premium, if any, and interest, if any, on, (A) indebtedness of such Person
for money borrowed and (B) indebtedness evidenced by securities, notes,
debentures, bonds or other similar instruments issued by such Person; (ii) all
capital lease obligations of such Person; (iii) all obligations of such Person
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such Person and all obligations of such Person under any
conditional sale or title retention agreement (but excluding trade accounts
payable and accrued liabilities in the ordinary course of business); (iv) all
obligations, contingent or otherwise, of such Person in respect of any letters
of credit, banker's acceptance, security purchase facilities or similar credit
transactions; (v) all obligations in respect of interest rate swap, cap, floor,
collar or other agreements, interest rate future or option contracts, currency
swap agreements, currency future or option contracts and other similar
agreements; and (vi) all obligations of the type referred to in clauses (i)
through (v) of others for the payment of which such Person is responsible or
liable as obligor, guarantor or otherwise.
"Indenture" means the Indenture, dated as of [ ], 1999,
---------
between the Guarantor and The First National Bank of Chicago, as Indenture
Trustee, together with the Securities Resolution dated [ ]
relating to the Debentures, each as amended or supplemented from time to time.
"Junior Subordinated Indebtedness" means all Indebtedness of the
--------------------------------
Guarantor subordinate and junior to Subordinated Indebtedness and Senior
Indebtedness.
"List of Holders" has the meaning specified in Section 2.2(a).
---------------
"Majority in liquidation preference of the Preferred Securities"
--------------------------------------------------------------
means, except as provided by the Trust Indenture Act, a vote by the Holder(s),
voting separately as a class, of more than 50% of the liquidation preference of
all then outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by the Chairman or a Vice Chairman of the Board, the
President or a Vice President, and by
<PAGE>
-4-
the Treasurer, an Assistant Treasurer, the Comptroller, an Assistant
Comptroller, the Secretary or an Assistant Secretary of such Person, and
delivered to the Guarantee Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee,
-------------------
any Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust officer or any other officer of the Corporate
Trust Department of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" means all Indebtedness of the Guarantor, unless,
-------------------
in the instrument creating or evidencing the same or pursuant to which the same
is outstanding, it is provided that such obligations are not superior in right
of payment to Subordinated Indebtedness or Junior Subordinated Indebtedness or
to other Indebtedness of the Guarantor which is pari passu with, or subordinated
---- -----
to, Subordinated Indebtedness or Junior Subordinated Indebtedness.
"Subordinated Indebtedness" means all Indebtedness of the Guarantor
-------------------------
which is subordinated and Junior in right of payment to Senior Indebtedness, but
does not include Junior Subordinated Indebtedness.
<PAGE>
-5-
"Successor Guarantee Trustee" means a successor Guarantee Trustee
---------------------------
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
ARTICLE II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
--------------------------------
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
Section 2.2. List of Holders.
---------------
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before [ ] and [ ] of
each year, a list, in such form as the Guarantee Trustee may reasonably require,
of the names and addresses of the Holders ("List of Holders") as of a date not
---------------
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee.
--------------------------------
Not later than [ ] of each year, commencing [ ], the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust In-
<PAGE>
-6-
denture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313 (d) of the Trust Indenture Act.
Section 2.4. Periodic Reports to the Guarantee Trustee.
-----------------------------------------
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Section 2.5. Evidence of Compliance with Conditions Precedent.
------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6. Events of Default; Waiver.
-------------------------
The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
Section 2.7. Event of Default; Notice.
------------------------
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default known to the Guarantee Trustee, transmit by mail, first
class postage prepaid, to the Holders, notices of all such Events of Default
unless such defaults have been cured or waived before the giving of such notice;
provided, that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding such notice if
and so long as the Board of Directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Respon-
<PAGE>
-7-
sible Officer charged with the administration of the Trust Agreement shall have
obtained written notice, of such Event of Default.
Section 2.8. Conflicting Interests.
---------------------
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.
------------------------------------------
(a) This Guarantee Agreement shall be held by the Guarantee Trustee
for the benefit of the Holders, and the Guarantee Trustee shall not transfer
this Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder, and
such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
<PAGE>
-8-
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Guarantee Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation preference of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
<PAGE>
-9-
Section 3.2. Certain Rights of Guarantee Trustee.
-----------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document reasonably believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officer's
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting to take any
action hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and
the written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee, against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as may
be requested by the Guarantee Trustee; provided that, nothing contained in
this Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of
<PAGE>
-10-
its obligation to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
(viii) Any action taken by the Guarantee Trustee or its agents
hereunder shall bind the holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
such action. No third party shall be required to inquire as to the
authority of the Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Guarantee Agreement, both of which
shall be conclusively evidenced by the Guarantee's or its agent's taking
such action.
(ix) Whenever in the administration of this Guarantee Agreement
the Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders of a Majority in Liquidation Amount of the Securities, (B) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected in acting
in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
Section 3.3. Indemnity.
---------
<PAGE>
-11-
The Guarantor agrees to indemnify the Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee: Eligibility.
------------------------------
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(c) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority, then, for the purposes of this
Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.1(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee
-----------------------------------------------------
Trustee.
- -------
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
<PAGE>
-12-
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
Section 5.1. Guarantee.
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
Section 5.2. Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
<PAGE>
-13-
Section 5.3. Obligations Not Affected.
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Securities, or
any action on the part of the Issuer granting indulgence or extension of
any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
<PAGE>
-14-
Section 5.4. Rights of Holders.
-----------------
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) if the Guarantee Trustee fails to enforce this Guarantee Agreement
after a Holder has made a written request for the Guarantee Trustee to do so,
any Holder may, to the extent permitted by law, institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer or any other Person. Notwithstanding the foregoing, if the
Guarantor has failed to make a Guarantee Payment, a Holder may directly
institute a proceeding against the Guarantor for enforcement of this Guarantee
Agreement for such payment. The Guarantor waives, any right or remedy to
require that any action on this Guarantee Agreement be brought first against the
Issuer or any other Person or entity before proceeding directly against the
Guarantor.
Section 5.5. Guarantee of Payment.
--------------------
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon distribution of Debentures to Holders as provided in
the Trust Agreement.
Section 5.6. Subrogation.
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
<PAGE>
-15-
Section 5.7. Independent Obligations.
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination.
-------------
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness and Subordinated Indebtedness of the Guarantor. If an Event
of Default has occurred and is continuing under the Trust Agreement, the rights
of the holders of the Common Securities to receive Guarantee Payments hereunder
shall be subordinated to the rights of the holders of Preferred Securities to
receive Guarantee Payments under this Guarantee.
Section 6.2. Pari Passu Guarantees.
---------------------
This Guarantee Agreement shall rank pari passu with any similar
---- -----
Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by WEC Capital Trust __.
ARTICLE VII. TERMINATION
Section 7.1. Termination.
-----------
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Securities, (ii)
the distribution of Debentures to the Holders in exchange for all of the
Securities or (iii) full payment of the amounts payable in accordance with the
Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or this Guarantee Agreement.
<PAGE>
-16-
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns.
----------------------
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under Article 5 of the Indenture and
pursuant to which the assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.
Section 8.2. Amendments.
----------
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in liquidation
preference of all the outstanding Preferred Securities. The provisions of
Article VI of the Trust Agreement concerning meetings of the Holders shall apply
to the giving of such approval.
Section 8.3. Notices.
-------
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Guarantor and the Holders):
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Facsimile No.: (312) 407-1708
Attention: Corporate Trust Division
(b) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Holders of the Preferred Securities:
<PAGE>
-17-
Wisconsin Energy Corporation
231 West Michigan Street
Milwaukee, Wisconsin 53201
Facsimile No.: (414) 221-2594
Attention: [ ]
(c) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
WEC Capital Trust __
c/o Wisconsin Energy Corporation
231 West Michigan Street
Milwaukee, Wisconsin 53201
Facsimile No.: (414) 221-2594
Attention: [ ]
with a copy to:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Facsimile No.: (312) 407-1708
Attention: Corporate Trust Division
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.4. Benefit.
-------
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Preferred Securities.
Section 8.5. Interpretation.
--------------
In this Guarantee Agreement, unless the context otherwise requires:
<PAGE>
-18-
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to
them in Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
Section 8.6. Governing Law.
-------------
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
S-1
THIS GUARANTEE AGREEMENT is executed as of the date first above
written.
WISCONSIN ENERGY CORPORATION
By:___________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Guarantee Trustee
By:___________________________________
Name:
Title:
<PAGE>
EXHIBIT 5.1
QUARLES & BRADY LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
February 26, 1999
Wisconsin Energy Corporation
231 West Michigan Street
Milwaukee, WI 53203
Ladies and Gentlemen:
We are providing this opinion in connection with the Registration Statement
of Wisconsin Energy Corporation (the "Company") on Form S-3 (the "Registration
Statement") to be filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), with
respect to the proposed offering from time to time, together or separately, of
up to $300,000,000 of the Company's (i) unsecured debt securities ("Debt
Securities"), (ii) Preferred Securities of WEC Capital Trust I or WEC Capital
Trust II (each, a "WEC Trust"), and (iii) the guarantee by the Company of any
Preferred Securities issued by each WEC Trust pursuant to a Guarantee Agreement
to be executed by the Company (the "Guarantees"). The Debt Securities, the
Preferred Securities and the Guarantees are collectively referred to herein as
the "Offered Securities."
We have examined (i) the Registration Statement; (ii) the Company's
Restated Articles of Incorporation and Bylaws, as amended to date; (iii) the
proposed form of Indenture for Debt Securities (including, as exhibits, proposed
forms of Registered Security and Bearer Security thereunder) from the Company to
The First National Bank of Chicago, as Trustee (the "Indenture"), providing for
the issuance of the Debt Securities from time to time in one or more series
pursuant to the terms of one or more Securities Resolutions (as defined in the
Indenture) creating such series; (iv) other exhibits to the Registration
Statement relating to the Offered Securities; (v) corporate proceedings of the
Company relating to the Registration Statement, the Indenture and the
transactions contemplated thereby; and (vi) such other documents, and such
matters of law, as we have deemed necessary in order to render this opinion.
On the basis of and subject to the foregoing, we advise you that, in our
opinion:
1. The Company is a corporation validly existing under the laws of the
State of Wisconsin.
2. When (i) the Registration Statement has become effective under the
Act, (ii) the terms of any class or series of Offered Securities have
been authorized
<PAGE>
Wisconsin Energy Corporation
Page 2
February 26, 1999
by appropriate action of the Company in a manner that would not
violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by a court or a
governmental or regulatory body having jurisdiction over the Company,
(iii) any such class or series of Offered Securities has been duly
issued and sold, and payment has been received for such Offered
Securities in the manner contemplated in the Registration Statement
and any prospectus supplement relating thereto, then (a) the Debt
Securities and the Guarantees will be duly authorized and legally
issued and will constitute valid and binding obligations of the
Company enforceable in accordance with their respective terms subject
to (x) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally, (y) general principles of
equity (regardless of whether considered in a proceeding at law or in
equity) and (z) the qualification that the remedy of specific
performance and injunctive or other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court
before which any proceeding may be brought.
As to the legality of the Preferred Securities to be issued by the WEC
Trusts, you are receiving the opinion of Morris, Nichols, Arsht & Tunnell,
special Delaware counsel to the WEC Trusts and the Company.
Larry J. Martin, a partner in our firm, serves as General Counsel of the
Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Certain Legal
Matters" in the Prospectus constituting a part thereof. In giving our consent,
we do not admit that we are "experts" within the meaning of Section 11 of the
Act, or that we come within the category of persons whose consent is required by
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Quarles & Brady LLP
QUARLES & BRADY LLP
<PAGE>
EXHIBIT 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
February 26, 1999
The WEC Trusts
(as defined below)
c/o Wisconsin Energy Corporation
231 West Michigan Street
P.O. Box 2949
Milwaukee, Wisconsin 53201
Re: The WEC Trusts
--------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to WEC Capital Trust I, a
Delaware statutory business trust ("WEC Trust I"), and WEC Capital Trust II, a
Delaware statutory business trust ("WEC Trust II" and, collectively with WEC
Trust I, the "WEC Trusts"), in connection with certain matters of Delaware law
relating to the formation of the WEC Trusts and the proposed issuance of
Preferred Securities thereof to beneficial owners pursuant to and as described
in the Registration Statement (and the prospectus and the form of prospectus
supplement forming a part thereof) on Form S-3 to be filed with the Securities
and Exchange Commission by Wisconsin Energy Corporation, a Wisconsin corporation
(the "Company"), and the WEC Trusts on or about the date hereof (the
"Registration Statement"). Capitalized terms used herein and not otherwise
herein defined are used as defined in the form of Amended and Restated Trust
Agreement of the WEC Trusts to be attached as an exhibit to the Registration
Statement (the "Form Governing Instrument").
<PAGE>
The WEC Trusts
February 26, 1999
Page 2
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of WEC Trust I
as filed in the Office of the Secretary of State of the State of Delaware (the
"State Office") on February 25, 1999 (the "WEC Trust I Certificate"); the Trust
Agreement of WEC Trust I dated as of February 25, 1999 (the "WEC Trust I
Original Governing Instrument"); the Certificate of Trust of WEC Trust II as
filed in the State Office on February 25, 1999 (collectively with the WEC Trust
I Certificate, the "Certificates"); the Trust Agreement of WEC Trust II dated as
of February 25, 1999 (collectively with the WEC Trust I Original Governing
Instrument, the "Original Governing Instruments"); the Form Governing
Instrument; the form of Indenture to be entered into between the Company and The
First National Bank of Chicago, as trustee, (the "Indenture") and the form of
Securities Resolution supplementing the Indenture to be entered into between the
Company and The First National Bank of Chicago, as trustee; the form of
Guarantee Agreement to be entered into between the Company and The First
National Bank of Chicago, as trustee, with respect to each WEC Trust (each, a
"Guarantee"); the Registration Statement; and a certification of good standing
of each WEC Trust obtained as of a recent date from the State Office. In such
examinations, we have assumed the genuineness of all signatures, the conformity
to original documents of all documents submitted to us as drafts or copies or
forms of documents to be executed and the legal capacity of natural persons to
complete the execution of documents. We have further assumed for purposes of
this opinion: (i) the due formation or organization, valid existence and good
standing of each entity that is a party to any of the documents reviewed by us
under the laws of the jurisdiction of its respective formation or organization;
(ii) the due authorization, execution and delivery by, or on behalf of, each of
the parties thereto of the above referenced documents with respect to each WEC
Trust; (iii) that the Company, The First National Bank of Chicago, First Chicago
Delaware Inc. and the appropriate Administrative Trustees will duly authorize,
execute and deliver an amended and restated trust agreement in the form of the
Form Governing Instrument (each, a "Governing Instrument") and all other
documents contemplated thereby or by the Registration Statement to be executed
in connection with the formation of each WEC Trust and the issuance by each WEC
Trust of Preferred Securities, in each case prior to the first issuance of
Preferred Securities of such WEC Trust; (iv) that the Preferred Securities of
each WEC Trust will be offered and sold pursuant to the prospectus forming a
part of the Registration Statement and a prospectus supplement thereto
(collectively, the "Prospectus") that will be consistent with, and accurately
describe, the terms of the applicable Governing Instrument and the applicable
Guarantee relating to each such WEC Trust and all other relevant documents; (v)
that no event has occurred subsequent to the filing of any Certificate, or will
occur prior to the issuance of all Preferred Securities by each WEC Trust, that
would cause a dissolution or liquidation of any WEC Trust under the applicable
Original Governing Instrument or the applicable Governing Instrument; (vi) that
the activities of each WEC Trust have been and will be conducted in accordance
with its Original Governing Instrument or Governing Instrument, as applicable,
and the Delaware Business Trust Act, 12 Del. C. (S)(S) 3801 et seq. (the
"Delaware Act"); (vii) that prior to the first issuance of Preferred Securities
by each WEC Trust, payment of the required consideration therefor will have been
made in accordance with the terms and conditions of the applicable Governing
Instrument and as
<PAGE>
The WEC Trusts
February 26, 1999
Page 3
described in the Prospectus, and that the Preferred Securities of each WEC Trust
are otherwise issued and sold in accordance with the terms, conditions,
requirements and procedures set forth in the Governing Instrument of such WEC
Trust and as described in the Prospectus; and (viii) that the documents examined
by us, or contemplated hereby, express the entire understanding of the parties
thereto with respect to the subject matter thereof and have not been, and, prior
to the issuance of all Preferred Securities by each WEC Trust, will not be,
amended, supplemented or otherwise modified, except as herein referenced. No
opinion is expressed with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. We express no opinion as to, and
assume no responsibility for, the Registration Statement or any other offering
materials relating to the Preferred Securities offered by any WEC Trust. As to
any fact material to our opinion, other than those assumed, we have relied
without independent investigation on the above referenced documents and on the
accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. Each of the WEC Trusts is a duly formed and validly existing business
trust in good standing under the laws of the State of Delaware.
2. The Preferred Securities of each WEC Trust, upon issuance, will
constitute validly issued and, subject to the qualifications set forth in
paragraph 3 below, fully paid and nonassessable beneficial interests in the
assets of such WEC Trust.
3. Under the Delaware Act and the terms of the applicable Governing
Instrument, the Preferred Securityholders of each WEC Trust, in such capacity,
will be entitled to the same limitation of personal liability as that extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided, however, we express no
opinion with respect to the liability of any Preferred Securityholder who is,
was or may become a named Trustee of the Trust. Notwithstanding the foregoing,
we note that, pursuant to the applicable Governing Instrument, Preferred
Securityholders of each WEC Trust may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and reference to our opinion
under the heading "CERTAIN LEGAL MATTERS" in the prospectus forming a part
thereof. In giving this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. This opinion speaks only as of the date hereof
and is based on our understandings and assumptions as to present facts, and on
our review of the above referenced documents and the application of Delaware law
as the same exist as of the date
<PAGE>
The WEC Trusts
February 26, 1999
Page 4
hereof, and we undertake no obligation to update or supplement this opinion
after the date hereof for the benefit of any person or entity with respect to
any facts or circumstances that may hereafter come to our attention or any
changes in facts or law that may hereafter occur or take effect. This opinion is
intended solely for the benefit of the addressees hereof in connection with the
matters contemplated hereby and may not be relied on by any other person or
entity or for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE>
Exhibit 12
Wisconsin Energy Corporation
Statement of Computation of Earnings To Fixed Charges
(Unaudited)
(Thousands of Dollars)
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C>
Pretax Income
Net Income $180,868 $234,034 $218,135 $ 60,716 $188,132
Income Taxes $ 98,583 $138,504 $125,330 $ 31,005 $ 92,166
Total Pretax Income $279,451 $372,538 $343,465 $ 91,721 $280,298
Fixed Charges
Interest on Long-Term Debt(a) $103,897 $101,806 $103,045 $110,138 $108,509
Other Interest Expense $ 9,206 $ 14,002 $ 9,032 $ 9,552 $ 19,337
Interest Factor of Rents
Nuclear Fuel $ 1,896 $ 2,401 $ 2,332 $ 868 $ 3,136
Long-Term Power Purchase Contract(b) $ 0 $ 0 $ 0 $ 5,614 $ 20,297
Total Interest Charges $114,999 $118,209 $114,409 $126,172 $151,279
Preferred Stock Dividend Requirements of
Wisconsin Electric Power Company
Amount Not Tax Deductible $ 870 $ 722 $ 722 $ 722 $ 722
Ratio of Pretax Income To Net Income 1.55 1.59 1.57 1.51 1.49
$ 1,349 $ 1,148 $ 1,134 $ 1,090 $ 1,076
Amount Tax Deductible $ 481 $ 481 $ 481 $ 481 $ 481
Total Preferred Stock Dividend Requirements of
Wisconsin Electric Power Company $ 1,830 $ 1,629 $ 1,615 $ 1,571 $ 1,557
Fixed Charges As Defined $116,829 $119,838 $116,024 $127,743 $152,836
Earnings Before Income Taxes & Fixed Charges $396,280 $492,376 $459,489 $219,464 $433,134
Ratio of Earnings to Fixed Charges 3.4x 4.1x 4.0x 1.7x 2.8x
</TABLE>
(A) Includes amortization of debt discount and expense.
(B) Wisconsin Electric has entered into a long-term power purchase contract that
is being accounted for as a capital lease.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 28, 1998 appearing in the combined Wisconsin Energy Corporation and
Wisconsin Electric Power Company Annual Report on Form 10-K for the year ended
December 31, 1997. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
February 26, 1999
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) __
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
WISCONSIN ENERGY CORPORATION
(Exact name of obligors as specified in their trust agreements)
Wisconsin 39-1391525
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
231 West Michigan Street
P. O. Box 2949
Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantees of Preferred Securities of WEC Capital Trust I
and WEC Capital Trust II
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C..
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 18th day of February,
1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
-------------------------------------------
Sandra L. Caruba
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 16 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 18, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Indenture of Wisconsin Energy
Corporation to The First National Bank of Chicago, as Trustee, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
The First National Bank of Chicago
By: s/s Sandra L. Caruba
--------------------------------------
Sandra L. Caruba
Vice President
4
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU ----
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,898,646 1.a
b. Interest-bearing balances(2)..................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)........ 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,071,229 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
RC-C)............................................................. 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)............................. 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D).................................. 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)............. 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)......................... 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)....................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding......... 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)............................... 2143 295,823 10.
11. Other assets (from Schedule RC-F).................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)............................. 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)............................................. 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................. 6631 9,191,662 13.a1
(2) Interest-bearing................................................... 6636 11,773,462 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)...................................... 2200 15,912,956 13.b
(1) Noninterest bearing................................................. 6631 475,182 13.b1
(2) Interest-bearing.................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 359,381 15.a
b. Trading Liabilities(from Schedule RC-D)................................. RCFD 3548 5,614,049 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.............................. 2332 4,603,402 16.a
b. With original maturity of more than one year............................ A547 328,001 16.b
c. With original maturity of more than three years......................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... 2920 352,324 18.
19. Subordinated notes and debentures.......................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838 0 23.
24. Common stock............................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves.................................. 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments........................ 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27).......................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)...................................... 3300 61,971,271 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes
the most comprehensive level of auditing work performed for the bank by independent [N/A] Number
external auditors as of any date during 1996.....................................RCFD 6724.... M.1.
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)_____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
WEC CAPITAL TRUST I
(Exact name of obligors as specified in their
trust agreements)
Delaware (To be applied for)
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
c/o Wisconsin Energy Corporation
231 West Michigan Street
P.O. Box 2949
Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
Preferred Securities of WEC Capital Trust I
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C..
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
------------------------------
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
-----------------
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 18th day of February,
1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
-------------------------------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 18, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Amended and Restated Declaration of
Trust of WEC Capital Trust I, the undersigned, in accordance with Section 321(b)
of the Trust Indenture Act of 1939, as amended, hereby consents that the reports
of examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Sandra L. Caruba
--------------------------------------
Sandra L. Caruba
Vice President
4
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
----
RCFD BIL MIL THOU
---- ------------
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,898,646 1.a
b. Interest-bearing balances(2).................................... 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 6,071,229 3.
4. Loans and lease financing receivables: RCFD
----
a. Loans and leases, net of unearned income (from Schedule RC-C.... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses....................... 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve........................... 3128 0 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c)............................ 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)................................ 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)....................... 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F).................................. 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)........................... 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
---------
<S> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)................................................ 2200 20,965,124 13.a
(1) Noninterest-bearing(1)................................................ 6631 9,191,662 13.a1
(2) Interest-bearing...................................................... 6636 11,773,462 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)......................................... 2200 15,912,956 13.b
(1) Noninterest bearing................................................... 6631 475,182 13.b1
(2) Interest-bearing...................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:................................................................ RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................... RCON 2840 359,381 15.a
b. Trading Liabilities(from Schedule RC-D).................................... RCFD 3548 5,614,049 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less................................. 2332 4,603,402 16.a
b. With original maturity of more than one year.............................. A547 328,001 16.b
c. With original maturity of more than three years........................... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding....................... 2920 352,324 18.
19. Subordinated notes and debentures............................................. 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)........................................ 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)................................ 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................................. 3838 0 23.
24. Common stock.................................................................. 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)...................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves..................................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities................................................................. 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments........................... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)............................. 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)......................................... 3300 61,971,271 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank N/A Number
by independent external Number auditors as of any date during 1996............RCFD 6724 M.1.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5. = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6. = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7. = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8. = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EXHIBIT 25.3
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
______________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
_______________
WEC CAPITAL TRUST II
(Exact name of obligors as specified in their trust agreements)
Delaware (To be applied for)
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
c/o Wisconsin Energy Corporation
231 West Michigan Street
P. O. Box 2949
Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip Code)
Preferred Securities of WEC Capital Trust II
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 18th day of February,
1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
___________________________________________
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 18, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Amended and Restated Declaration of
Trust of WEC Capital Trust II, the undersigned, in accordance with Section
321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the
reports of examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Sandra L. Caruba
______________________________________
Sandra L. Caruba
Vice President
4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 7
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial and State-Chartered
Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts in thousands C400
RCFD BIL MIL THOU ----
---- ------------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule RC-A):... RCFD
a. Noninterest-bearing balances and currency and coin(1).................. 0081 4,898,646 1.a
b. Interest-bearing balances(2)............................................ 0071 4,612,143 1.b
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A).............. 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............ 1773 9,817,318 2.b
3. Federal funds sold and securities purchased under agreements to resell..... 1350 6,071,229 3.
4. Loans and lease financing receivables:..................................... RCFD
a. Loans and leases, net of unearned income (from Schedule RC-C)........... 2122 26,327,215 4.a
b. LESS: Allowance for loan and lease losses............................... 3123 412,850 4.b
c. LESS: Allocated transfer risk reserve................................... 3128 0 4.c
d. Loans and leases, net of unearned income, allowance, and reserve........ RCFD
(item 4.a minus 4.b and 4.c)............................................ 2125 25,914,365 4.d
5. Trading assets (from Schedule RD-D)........................................ 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)................... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)............................... 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M)....................................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding............... 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)..................................... 2143 295,823 10.
11. Other assets (from Schedule RC-F).......................................... 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)................................... 2170 61,971,271 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands
---------
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C.................. RCON
from Schedule RC-E, part 1)............................................ 2200 20,965,124 13.a
(1) Noninterest-bearing(1)............................................. 6631 9,191,662 13.a1
(2) Interest-bearing................................................... 6636 11,773,462 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and............... RCFN
IBFs (from Schedule RC-E, part II)..................................... 2200 15,912,956 13.b
(1) Noninterest bearing................................................ 6631 475,182 13.b1
(2) Interest-bearing................................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase:............................................................. RCFD 2800 4,245,925 14
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 359,381 15.a
b. Trading Liabilities(from Schedule RC-D)................................ RCFD 3548 5,614,049 15.b
16. Other borrowed money:...................................................... RCFD
a. With original maturity of one year or less.............................. 2332 4,603,402 16.a
b. With original maturity of more than one year........................... A547 328,001 16.b
c. With original maturity of more than three years........................ A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... 2920 352,324 18.
19. Subordinated notes and debentures.......................................... 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)..................................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)............................. 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 3838 0 23.
24. Common stock............................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)................... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves.................................. 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments........................ 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27).......................... 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)...................................... 3300 61,971,271 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below
that best describes the most comprehensive level of auditing work
performed for the bank by independent external auditors as of any
date during 1996.................................................RCFD 6724..
- ---------------
N/A Number
- --------------- M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
