SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
WPS RESOURCES CORPORATION
700 North Adams Street
Green Bay, Wisconsin 54307
(Name of company filing this statement
and address of principal executive offices)
Daniel A. Bollom Michael S. Nolan
President & Chief Executive Officer Foley & Lardner
WPS Resources Corporation 777 East Wisconsin Avenue
700 North Adams Street Milwaukee, Wisconsin 53202
P. O. Box 19001
Green Bay, Wisconsin 54307
(Names and addresses of agents for service)
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
A. PROPOSED SHARE EXCHANGE.
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WPS Resources Corporation (the "Company"), a Wisconsin
corporation, hereby applies for approval by the Securities and
Exchange Commission (the "Commission") under Section 10 of the
Public Utility Holding Company Act of 1935 (the "Act") of its
acquisition, pursuant to the proposed share exchange and corporate
restructuring described herein, of all of the outstanding shares of
common stock of Wisconsin Public Service Corporation ("WPSC"), a
Wisconsin corporation, and the indirect acquisition of 33.1% of the
capital stock of Wisconsin River Power Company ("River Power"), a
Wisconsin corporation through the ownership by WPSC of such stock.
In addition, the Company applies for an exemption under Section
3(a)(1) of the Act from all provisions of the Act except Section
9(a)(2), which exemption would be applicable following the proposed
share exchange and corporate restructuring described herein. See
Item 3, Part C, Section 3(a)(1), herein.
The Company is a wholly-owned subsidiary of WPSC and was
incorporated on December 3, 1993, for the purpose of effecting the
proposed share exchange and corporate restructuring. The Company
does not own any utility assets.
WPSC is a public utility engaged in the production,
transmission, distribution and sale of electricity and in the
purchase, distribution, transportation and sale of gas in
northeastern Wisconsin and an adjacent part of Upper Michigan.
River Power is a public utility engaged in the generation and sale
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of hydroelectric power in Wisconsin to the three companies which
own its capital stock. WPSC and River Power, and WPSC's other
subsidiaries are more fully described below.
WPSC and the Company propose to accomplish the proposed
share exchange and corporate restructuring by entering into an
Agreement and Plan of Share Exchange filed as Exhibit B-1 to this
Application, pursuant to which (i) one share of common stock, $1
par value, of the Company will be exchanged for each share of
outstanding common stock, $4 par value, of WPSC and (ii) the
outstanding shares of common stock of the Company held by WPSC will
be cancelled. As a result of the share exchange WPSC will become
a wholly-owned subsidiary of the Company. Subsequent to the share
exchange, WPSC will transfer to the Company all the outstanding
stock of WPS Communications, Inc. ("Communications") and Packerland
Energy Services, Inc. ("Packerland"). Following the share exchange
and corporate restructuring, all of the outstanding common stock of
the Company will be owned by the former WPSC common shareowners.
For a description of the present corporate structure of WPSC and
its subsidiaries and the proposed corporate structure following the
proposed share exchange and corporate restructuring, see the
caption "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
General" in the Prospectus/Proxy Statement included as Exhibit C-2
hereto.
There will be no exchange of the outstanding preferred
stock or first mortgage bonds of WPSC, and immediately following
the proposed share exchange and corporate restructuring, the
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Company will have no outstanding securities other than common
stock. Holders of WPSC preferred stock and first mortgage bonds
will continue to be security holders of WPSC.
Exhibit G-1 to this Application sets forth the
capitalization of the Company as of December 31, 1993, and the pro
forma consolidated capitalization of the Company as of such date
assuming completion of the proposed share exchange as of that date.
It is proposed that at a regular annual meeting of its
shareowners to be held on May 5, 1994, WPSC will seek the requisite
approval of the holders of its common stock for the share exchange.
The Company has filed a Registration Statement including
a Prospectus/Proxy Statement with the Commission on Form S-4 (the
"Registration Statement") for the purpose of registering under the
Securities Act of 1933 the offering and issuance of shares of
common stock of the Company in exchange for shares of common stock
of WPSC pursuant to the Plan and Agreement of Share Exchange and
for the purpose of complying with the requirements of the
Securities Exchange Act of 1934 in connection with the solicitation
of proxies of holders of WPSC common stock. The Registration
Statement was declared effective on March 3, 1994 (File
No. 033-52199). The Registration Statement and the definitive
Prospectus/Proxy Statement are included as Exhibits C-1 and C-2 to
this application. A copy of the Prospectus/Proxy Statement will be
furnished to each shareholder of WPSC.
In connection with the share exchange, the Company's
common stock will be listed on the New York Stock Exchange and the
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Chicago Stock Exchange and WPSC's common stock will be delisted by
such Exchanges. Following the effective time of the share
exchange, the Company will be required to file reports with the
Commission pursuant to Section 13(a) of the Securities Exchange Act
of 1934.
B. DESCRIPTION OF WPSC AND SUBSIDIARIES.
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WPSC
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WPSC is an operating public utility company engaged
chiefly in the production, transmission, distribution and sale of
electricity and in the purchase, distribution and sale of gas.
WPSC serves approximately 347,000 electric customers and 190,000
gas customers in a 10,000 square mile area in northeastern
Wisconsin and an adjacent part of Upper Michigan. The largest
cities served are Green Bay, Sheboygan, Oshkosh and Wausau, with
populations ranging from 153,642 to 60,854, including contiguous
urban areas (1990 federal census). WPSC furnishes retail electric
service in all these cities except Sheboygan, and gas in all except
Wausau. Additionally, the Company provides wholesale electric
service to 13 communities. WPSC's total operating revenues for
1993 were $680,632 million, of which $493,256 million (72%) was
from electric service and $187,376 million (28%) was from gas
service. In 1993, 97.8% of operating revenues and 98.6% of net
income were derived from Wisconsin customers and 2.2% of operating
revenues and 1.4% of net income were derived from Michigan
customers.
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WPSC is subject to regulation by the Public Service
Commission of Wisconsin as to formation of a utility holding
company, retail rates, service rates, accounts, issuance of
securities, certain additions and extensions to facilities and in
other respects. It is also subject to regulation by the Michigan
Public Service Commission respecting retail service in Michigan and
issuance of securities and certain other matters. It is also
subject to the jurisdiction of the Federal Energy Regulatory
Commission ("FERC") under the Federal Power Act as to wholesale
rates, certain electric utility facilities, accounts and in other
respects. WPSC has been declared an exempt holding company
pursuant to Section 3(a)(2) of the Act (See, Wisconsin Public
Service Corporation, 1 S.E.C. 512 (1936)).
WPSC owns and operates electric properties comprising an
integrated system of production, transmission and distribution
facilities throughout the territory served. Generating facilities
consist of two steam plants (at Green Bay, and south of Wausau,
Wisconsin) with total rated capacity of 829,100 kw, a 41.2% share
of the Kewaunee Plant (nuclear) at Kewaunee, Wisconsin, which WPSC
operates, with a rated capacity of 535,000 kw (WPSC's share is
221,000 kw), a 31.8% share of the Columbia Energy Center at
Portage, Wisconsin, owned jointly with Wisconsin Power and Light
Company, the operator, and Madison Gas and Electric Company, with
a rated capacity of 1,054,000 kw (the Company's share is 335,200
kw), a 31.8% share of the Edgewater Steam Plant Unit #4 at
Sheboygan, Wisconsin, owned jointly with Wisconsin Power and Light
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Company, the operator, with a rated capacity of 330,000 kw (WPSC's
share is 104,940 kw), combustion turbines of 51,000 kw and 21,500
kw, respectively, south of Wausau, Wisconsin, two combustion
turbines of 41,850 kw each and a 68% share in a combustion turbine
of 83,500 kw owned jointly with Marshfield Electric and Water
Department (the WPSC share is 56,780 kw) all located near
Marinette, Wisconsin, 15 hydroelectric plants (14 in Wisconsin and
one on the border stream between Wisconsin and Michigan) with
aggregate rated capacity of 64,786 kw, a 4,000 kw diesel plant at
Eagle River, Wisconsin, and a 40 kw wind turbine located near
Kewaunee, Wisconsin. Its transmission and distribution facilities
include 52 transmission substations, 91 distribution substations
and approximately 21,870 route miles of transmission and
distribution lines. WPSC is interconnected with River Power, has
13 interconnections in Wisconsin for purposes of power pooling
(Wisconsin Power and Light Company and Madison Gas and Electric
Company), and 24 interconnections (22 in Wisconsin and two in
Michigan) with nonaffiliated neighboring utilities, principally for
the purpose of sharing reserve capacity and for emergencies. WPSC
also has ten interconnections to serve three neighboring municipal
utilities. Gas facilities include 3,409 miles of main, 65 gate and
city regulator stations and 173,835 services. All gas facilities
are located in Wisconsin except for distribution facilities in and
near the city of Menominee, Michigan, which receive gas from WPSC's
gas lines in the adjacent city of Marinette, Wisconsin. Natural
gas is purchased only within Wisconsin, from a nonaffiliated
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pipeline company, at points adjacent to the territory served. All
of WPSC's electric and gas facilities are located within the
borders of the states of Wisconsin and Michigan. Except for
electric and gas lines crossing the common border of those states
necessary to interconnect the various parts of its system, it does
not have any electric transmission or gas pipelines which deliver
or receive electric energy or gas at the borders of such states.
About 98% of utility plant is located in Wisconsin, and the balance
is in Michigan.
WISCONSIN RIVER POWER COMPANY ("RIVER POWER")
---------------------------------------------
WPSC owns 33.1% of the outstanding capital stock of River
Power, a Wisconsin corporation, incorporated in 1947. The
remaining capital stock is owned 33.1% by Wisconsin Power and Light
Company and 33.8% by Consolidated Water Power Company. Wisconsin
Power and Light Company is a public utility company operating in
southern and central Wisconsin. Consolidated Water Power Company
is a wholly-owned subsidiary of Consolidated Papers, Inc., which is
engaged principally in the manufacture and sale of paper, pulp and
paper products. The acquisition of the capital stock of River
Power by WPSC was approved by the Commission by order in File Nos.
70-1656 and 31-551, 27 S.E.C. 539 (1948). The business of River
Power consists of the ownership and operation of two dams and
relating hydroelectric plants on the Wisconsin River having an
aggregate installed capacity of about 35,000 kw. The output of the
hydroelectric plants is sold, at the sites of such plants, to the
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three companies which own its outstanding capital stock,
substantially in proportion to their stock ownership interests. No
electricity is delivered to or received by River Power at or
outside of the borders of Wisconsin. River Power does not own any
transmission or distribution facilities. At December 31, 1993,
River Power had no outstanding debt. Total assets of River Power
at December 31, 1993 were $6,057,000 or .51% of WPSC's assets.
WPSC's equity in net income for 1993 was $310,000 or .50% of WPSC's
total net income.
Other Subsidiaries
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WPSC owns 100% of the capital stock of Communications
which was incorporated September 10, 1985 under the laws of the
state of Wisconsin and has its principal office at the principal
executive offices of WPSC. The directors and officers of
Communications are also officers of WPSC. Communications was
organized to participate as a partner in the NorLight Partnership
which was created to construct and operate a fiber optics
communication system. Communications is not and will not be a
public utility. In December 1991, the partners of NorLight sold
the assets of the partnership to Midwest Relay Company. Certain
contingencies relating to the sale will expire in December 1994 and
an escrow in which a portion of the purchase price was deposited
will terminate. Any funds then held in the escrow and not payable
to Midwest Relay Company will be distributed to the NorLight
partners. It is anticipated that Communications will be dissolved
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at that time. Total assets of Communications at December 31, 1993
were $1,836,000 or .15% of WPSC's total assets. WPSC's equity in
net gain for the year 1993 was $70,000 or .11% of WPSC's total net
income.
WPSC owns 100% of the capital stock of Packerland
(formerly called Wisconsin Public Service Resources, Inc.).
Packerland was incorporated on April 13, 1973 under the laws of the
state of Wisconsin and has its principal office at the principal
executive offices of WPSC. The director and officers of Packerland
are also officers of the Company. Packerland has been inactive
since 1973, but it is anticipated that Packerland will be used as
a vehicle to provide energy supply consulting and natural gas
supply/transportation procurement services for commercial and
industrial customers within and outside WPSC's traditional service
area. Packerland is not and will not be a public utility.
WPSC owns approximately 26.9% of the voting stock of
Wisconsin Valley Improvement Company ("Valley Improvement"), a
Wisconsin corporation, which operates a system of dams and water
reservoirs on the Wisconsin River and tributary streams for the
purpose of producing as nearly uniform a stream flow as practicable
through all seasons. Valley Improvement generates no electricity
and renders no public utility service. In its order in File No.
31-480 8 S.E.C. 13 (1940), the Commission declared Valley
Improvement not to be a subsidiary of WPSC within the meaning of
the Act. Total assets of Valley Improvement at December 31, 1993
were $837,000 or .07% of WPSC's assets. WPSC's equity in net
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income for the year 1993 was $21,000 or .03% of WPSC's total net
income.
ACCOUNTING FOR SUBSIDIARIES/ADDITIONAL INFORMATION
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WPSC's investment in subsidiaries is accounted for by the
equity method. WPSC's investment in River Power is accounted for
by the cost method.
For additional information concerning WPSC and its
subsidiaries, see WPSC's Annual Report on Form 10-K for the year
ended December 31, 1993, filed pursuant to the Securities Exchange
Act of 1934, and WPSC's Form U-3A-2 dated February 11, 1994, filed
pursuant to the Act, which are incorporated by reference as
Exhibits G-3 and G-4 to this Application.
No company other than those described above is a
subsidiary company, associate company or an affiliate of the
Company or WPSC within the meaning of the Act.
C. PURPOSE AND BENEFITS OF THE SHARE EXCHANGE AND CORPORATE
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RESTRUCTURING.
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The principal reasons for the proposed corporate
restructuring are to (i) create a structure which can more
effectively address the growing competition in the energy industry,
(ii) facilitate selective diversification into non-utility
businesses which are related to the utility business of WPSC or
energy conservation or resources or which may otherwise benefit the
service territory of WPSC, (iii) afford separation between the
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utility and non-utility businesses, and (iv) provide additional
flexibility for financing and for maintaining appropriate utility
capital ratios. WPSC's Board of Directors believes these
objectives can most effectively be accomplished through the
proposed restructuring, as it provides the necessary flexibility
required to meet competitive challenges and to diversify while
insulating the utility business from the risks of the non-utility
business.
The regulatory and business climate in which the Company
is operating has undergone substantial change in the past several
years. Additional material changes can be anticipated. These
industry changes have included or may include: (i) increased
competition experienced by the Company for service of large
industrial customers, wholesale customers and municipalities,
including the introduction of competition from non-utility
developers for the construction, ownership and operation of
electric generating plants under the federal Public Utility
Regulatory Policy Act of 1978; (ii) the demand for construction and
financing of electric/steam cogeneration projects for retail
utility customers and the impact thereon of the recent decision of
the Public Service Commission of Wisconsin (the "PSCW")
establishing a bidding process for construction approvals of new
generating facilities, which could dictate that utilities establish
separate affiliates to develop exempt wholesale generating
facilities ("EWG's") under the federal Energy Policy Act of 1992
("Energy Policy Act") for facilities constructed within the utility
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service area; (iii) the possible implementation by the PSCW of
retail wheeling of electricity under the Energy Policy Act (i.e.,
the PSCW may under the Act enable end users of electricity to have
access to and make use of transmission facilities owned by
utilities to transport electricity from generating sources other
than their local utility) which could encourage utilities to
provide brokering or agency services outside of utility operation;
(iv) the substantial development of electric and gas conservation
or "demand side management" as alternatives to the use of
electricity and, the potential for obtaining attractive investment
returns from non-utility businesses servicing these developing
markets; (v) deregulation of the supply of natural gas which has
allowed large industrial customers to seek alternate natural gas
suppliers and the need for gas pipeline construction and financing
for gas utility retail customers, if the Federal Energy Regulatory
Commission ("FERC") continues to permit retail gas utility by-pass
pipeline extensions; and (vi) the potential for other gas service
and supply businesses.
WPSC believes that it must protect its competitive
position and enhance its ability to pursue investment opportunities
associated with the gas and electric utility industries by
establishing a corporate structure able to adapt to the changing
competitive environment. WPSC believes that industry changes may
require development of non-utility, unregulated businesses which
are related to the utility business of WPSC or energy conservation
or energy resources or which otherwise benefit the service
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territory of WPSC. WPSC is presently developing plans to provide
energy consulting and gas brokerage services through its subsidiary
Packerland and may in the future undertake similar activities with
respect to electric energy. WPSC is currently in the process of
pursuing the licensing by the Wisconsin Commission for a 120
megawatt electric and steam cogenerating plant to be built on the
premises of Rhinelander Paper Company in Rhinelander, Wisconsin.
In conjunction with that proposed project, WPSC expects to propose
establishment of one or more special purpose corporate subsidiaries
of the utility to hold title to and finance the steam and electric
components of the project. The affiliate owning the steam
facilities will be a non-utility, unregulated business, while the
utility or non-utility status of the affiliate owning the electric
facilities is uncertain. Although the Company currently has no
specific plans to establish other non-utility, unregulated
business, such business when developed would also primarily be
carried out by corporate affiliates separate from the Company.
Under Wisconsin law and PSCW regulations, WPSC as a
utility may transfer funds to an affiliate only so long as the
transfer leaves the utility's equity within an acceptable range,
currently set by the PSCW to between 47% to 52%. WPSC's equity
currently constitutes approximately 54% of its total capitalization
as measured in a rate proceeding. The utility is not permitted to
loan funds to an affiliate, and therefore all transfers by the
utility to the affiliate are deemed to be transfers of equity. A
utility is not permitted by the PSCW to issue securities to raise
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capital for any non-utility purposes. If new business non-utility
opportunities develop which require anything more than nominal
equity investments, WPSC with its current corporate structure would
not have access to the security markets to raise additional capital
which may be necessary to pursue non-utility investments related to
the electric and gas industries.
As noted above, except for the proposed energy consulting
and gas brokerage business of Packerland, possible future electric
energy consulting and brokerage activities and the Rhinelander
electric and steam cogeneration plant proposal presently under
consideration, WPSC has no current specific plans to establish new
non-utility affiliates. Any investments in non-utility businesses
would be subject to prior approval of the Company's Board of Directors,
would be pursued only if perceived rewards were projected to exceed
perceived risks and would be subject to restrictions on size and
economic impact by Wisconsin law. See "Regulation - Wisconsin
Holding Company Act." WPSC believes, however, that changes in the
industry and investment opportunities requiring the proposed
corporate restructuring will occur without sufficient advance
notice to permit a reorganization initiated at that time and a
timely response to the opportunity.
WPSC is of the view that a holding company structure will
facilitate the deployment of any portion of WPSC's earnings which
are not required for reinvestment in the utility business, as well
as deploying capital which might be raised by a non-utility holding
company for non-utility purposes.
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In WPSC's view, corporate restructuring will increase
opportunities to diversify into businesses which are related to the
utility business of WPSC or energy conservation or energy resources
or which otherwise benefit the service territory of WPSC that will
develop with the changing utility marketplace but which will not be
regulated as public utilities. Financing alternatives may also be
enhanced as a result of engaging in a greater number of businesses.
Diversification that succeeds in promoting employment and commerce
in the areas served by WPSC may also benefit WPSC and its
customers, as well as the shareholders.
The holding company structure is designed generally to
insulate the customers of WPSC and the holders of WPSC's securities
from the risks of the non-utility businesses by segregating the
non-utility businesses into separate corporations that will be
direct or indirect subsidiaries of the holding company and not of
WPSC. Because non-utility businesses of the holding company will
be conducted through separate subsidiaries, any liabilities
incurred by those subsidiaries will generally not constitute
liabilities of the utility subsidiaries. The corporate separation
also insures that all costs of a particular non-utility subsidiary
will be charged to that subsidiary and not allocated to any utility
subsidiary. This type of cost allocation is in keeping with
requirements of the Wisconsin Holding Company Act as described
under "Regulation-Wisconsin Holding Company Act." Thus, the
corporate structure and the regulatory requirements provide for the
insulation of customers of WPSC from risks of the non-utility
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businesses. Likewise, the preferred shareholders and debt security
holders of WPSC after the corporate restructuring will generally be
insulated from the risks of the operations. In the gas business,
deregulation in the supply of natural gas has allowed large
industrial customers to seek alternate natural gas supplies. The
ability to seek alternate sources and thus increased competition
may also result from proposed additional gas pipeline
interconnections within WPSC's traditional service territory and
elsewhere.
The holding company structure is intended to afford
additional flexibility for maintaining the capital ratios of WPSC
at levels determined to be appropriate by regulatory authorities.
This ability to adjust the components of the capital structure of
WPSC will help WPSC maintain stable utility rates. One component
of utility rates is cost of capital. Equity capital is the most
expensive type of capital and if the equity component of a
utility's capital structure is too high, it may result in
increasing pressure to raise rates. If the equity component is too
low, it may result in increases in the cost of debt because of
increased leverage and risk which will also tend to increase rates.
Under the holding company structure, capital ratios of the utility
would be subject to adjustment from time to time through dividends
to, or equity investments from, the holding company.
Financing alternatives are expected to be improved by the
holding company structure in that the planning of financings best
suited to the particular needs and circumstances of the separate
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businesses should be facilitated. It is contemplated that in the
normal course, the Company, in addition to receiving dividends from
its subsidiaries, will obtain funds through debt or equity
financings, that WPSC will obtain funds through its own financings
(which may include the issuance of additional first mortgage bonds
or preferred stock, as well as the issuance of additional shares of
its common stock to the Company), and that the non-utility
businesses owned by non-utility subsidiaries of the Company will
obtain funds from the Company, from other non-utility affiliates,
or from their own outside financings. Any financings will depend
on the financial and other conditions of the entities involved and
on market conditions.
The Wisconsin Holding Company Act (Section 196.795,
Wisconsin Statutes), under which the Public Service Commission of
Wisconsin must approve the proposed corporate restructuring,
provides that the maintenance of a financially healthy utility is
contingent upon the maintenance of an economically healthy service
area and that the public interest and the interest of investors and
consumers can be benefitted if public utility holding companies, in
the service territories of their public utility affiliates or in
Wisconsin, conduct substantial business activities, attract new
businesses, expand existing businesses, provide investment capital
for new business ventures, and otherwise directly or indirectly
promote employment and commerce. The corporate restructuring is
proposed by the Board of Directors with a view toward
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implementation of those goals and the other purposes indicated
above.
The Board of Directors of WPSC intends that the utility
operations of WPSC will continue to constitute the predominant
activity of the holding company system for the foreseeable future
and that there be no capital impairment of WPSC and no adverse
effect on WPSC's levels of service as a result of the
restructuring. This intention accords with the limitations and
other provisions in the Wisconsin Holding Company Act.
ITEM 2. FEES, COMMISSIONS AND EXPENSES
The estimated fees and expenses to be paid or incurred,
directly or indirectly, in connection with the proposed merger and
reorganization are set forth in Exhibit H-1 hereto.
ITEM 3. APPLICABLE STATUTORY PROVISIONS
A. APPLICABLE PROVISIONS.
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Section 9(a)(2) and Section 10 of the Act are applicable
to the acquisition by the Company of the common stock of WPSC
pursuant to the proposed merger and reorganization and indirect
acquisition of securities of River Power as described herein.
Section 3(a)(1) of the Act is applicable, upon consummation of the
merger and reorganization, to the exemption of the Company and its
subsidiaries from all provisions of the Act other than Section
9(a)(2).
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B. AFFILIATED PUBLIC UTILITY COMPANIES.
-----------------------------------
The Company is an affiliate of WPSC, which is a public
utility company. Upon consummation of the share exchange and
corporate restructuring, the Company will be affiliated with two
public utility companies: WPSC, which will be a wholly-owned
subsidiary of the Company and River Power, which will continue to
be a 33.1% owned subsidiary of WPSC.
C. COMPLIANCE WITH APPLICABLE STATUTORY STANDARDS
----------------------------------------------
Section 9(a)(2) and Section 10. The Company is
required to obtain the approval of the Commission to consummate the
proposed share exchange and corporate restructuring under Section
9(a)(2) of the Act. The applicable standards for determining if
the proposed share exchange and corporate restructuring should be
approved are set forth in Sections 10(b), 10(c) and 10(f) and by
reference Section 11 of the Act. The Company believes that the
proposed share exchange and corporate restructuring complies with
the applicable standards of Section 10 and Section 11 of the Act.
The proposed share exchange and corporate restructuring
does not involve or tend towards the creation of any additional
relationships among public utility companies. The proposed share
exchange and corporate restructuring involves only the formation of
a holding company over WPSC and, through WPSC, River Power.
Subsequent to the share exchange WPSC will transfer to the Company
all of the outstanding common stock of its two non-utility
subsidiaries, Communications and Packerland thereby making those
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corporations direct wholly-owned subsidiaries of the Company. The
relationship between WPSC and River Power which has existed for in
excess of 40 years, will not be changed by the proposed share
exchange and corporate restructuring. Each company will continue
its public utility operations in essentially the same manner as
before the proposed merger and reorganization. The relationship of
WPSC and River Power to other non-affiliated entities and to the
other subsidiaries of the Company will not be changed by the
proposed share exchange and corporate restructuring. The proposed
share exchange and corporate restructuring will not involve the
acquisition of any utility assets not already owned or controlled
by WPSC. The control of WPSC and River Power will remain
essentially unchanged. WPSC will be controlled by the Company, as
sole common shareowner; however, the ultimate control will remain
in the hands of the same public shareowners who own WPSC common
stock and WPSC preferred stock (with the exception of shareowners
who choose to dispose of their shares). WPSC will continue to have
its 33.1% control of River Power. The proposed share exchange and
corporate restructuring will not, therefore, result in any
additional interlocking relationships or any concentration of
control of public utility companies, and will not affect
competition among public utility companies.
The consideration (excluding fees, commissions and other
remuneration) to be given in the proposed share exchange and
corporate restructuring is the Company's common stock, in that the
proposed share exchange provides for a one-for-one exchange of
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WPSC's common stock for the Company's common stock. The
proportionate equity ownership interest of each common shareowner
will remain the same in the Company as it was in WPSC. It is
expected that the market price of the Company's common stock after
the proposed share exchange and corporate restructuring will be
substantially equal to the market price of the WPSC's common stock
prior to the proposed share exchange and corporate restructuring.
The sums invested in WPSC and River Power and the earning capacity
of the utility assets of WPSC and River Power immediately following
the proposed share exchange and corporate restructuring will not
change in any material respect. All expenses, fees, commissions
and other remuneration to be paid in connection with the proposed
share exchange and corporate restructuring, if consummated, will be
paid by the Company or WPSC. An estimate of such amounts is included
in Exhibit H-1 hereto. Such amounts relate to required fees to be
paid to governmental bodies and stock exchanges, expenses to be
incurred to obtain shareholder approval of the proposed share
exchange and corporate restructuring, fees for professional
services rendered in connection with the proposed share exchange
and corporate restructuring and other expenses necessary to carry
out the proposed share exchange and corporate restructuring. The
Company believes that such fees and expenses are reasonable and
customary for a transaction such as the proposed share exchange and
corporate restructuring and are not material when measured against
WPSC's consolidated book value or the earning capacity of its
assets. Therefore, the consideration, including all fees,
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commissions and other remuneration to be given, directly or
indirectly, in connection with the proposed share exchange and
corporate restructuring is reasonable and bears a fair relation to
the sum invested in and the earning capacity of the utility assets
underlying the securities to be acquired by the Company in
connection with the proposed share exchange.
The structure of the holding company system resulting
from the proposed share exchange will not be any different or more
complicated than exists prior to the proposed share exchange and
corporate restructuring, except for the interposition of the
Company as an ownership entity between WPSC and the owners of
common stock and except for the transfer by WPSC to Company of
Communications and Packerland. The proposed share exchange and
corporate restructuring will not involve the creation of any
ownership interests other than those which are necessary to
maintain the basic corporate relationships of the holding company
system to be created. The preferred stock and first mortgage bonds
of WPSC will not be affected by the proposed share exchange and
corporate restructuring. The common stock ownership interest of
WPSC will be transferred to the Company but, as described above,
ultimate public control will remain in the hands of the Company's
common shareholders. The Company is not authorized under its
Restated Articles of Incorporation to issue preferred stock and the
Company has no current expectation to seek authority to issue
preferred stock or to issue long-term debt securities in the
foreseeable future. Therefore, the proposed share exchange and
-23-
<PAGE>
corporate restructuring will not unduly complicate the capital
structure of the holding company system.
After the proposed share exchange, WPSC and River Power
will continue to be subject to the jurisdiction of the Public
Service Commission of Wisconsin and WPSC will continue to be
subject to the jurisdiction of the Michigan Public Service
Commission to the same extent as is presently the case. In
particular, transactions between the Company and WPSC or any other
entity which is an "affiliated interest" of the Company within the
meaning of the Wisconsin Statutes will be subject to approval by
the Public Service Commission of Wisconsin to the extent provided
in the Wisconsin Statutes. As described in more detail above, the
principal reasons for the proposed restructuring are to create a structure
which can more effectively address the growing national competition
in the energy industry, facilitate selective diversification into
non-utility businesses which are related to the utility business of
WPSC or energy conservation or energy resources or which otherwise
benefit the service territory of WPSC, afford separation between
the utility and non-utility businesses, and provide additional
flexibility for financing and for maintaining appropriate utility
capital ratios. The significant benefits of the share exchange and
corporate restructuring are also discussed in Item 1, Part C.,
above. The formation of holding companies by utilities subject to
the jurisdiction of the Public Service Commission of Wisconsin is
extensively regulated. Furthermore, the permissible activities of
-24-
<PAGE>
utility holding companies in Wisconsin is also regulated. Section
196.795 of the Wisconsin Statutes limits diversification, in that
(in summary) the net book value of the assets (other than
investments in system affiliates) of all non-utility affiliates may
not exceed the sum of 25% of the net book value of all electric
utility affiliates and a percentage, to be determined by the Public
Service Commission of Wisconsin (but not less than 25%), of the net
book value of all other public utility affiliates, provided that
for the first 36 months after the holding company formation non-
utility assets are limited to 40% of the maximum amount allowed
under the foregoing provisions. As a result of these provisions
and the intention of management of WPSC and the Company, it is
expected that utility operations of WPSC will continue to
constitute the predominant activity of the holding company system
for the foreseeable future. For a further discussion of the extent
of regulation of the future operations of WPSC and the Company in
this regard, reference is made to the information under the caption
"Proposed Share Exchange and Corporate Restructuring--Regulation--
Wisconsin Holding Company Act" in the Prospectus/Proxy Statement
included as Exhibit C-2 hereto. See also, Wisconsin Energy
Corporation, Public Utility Holding Company Act Release 35-24267
(37 S.E.C. Docket 296) December 18, 1986 and WPL Holdings, Inc.,
Public Utility Holding Company Act Releases No. 35-24590 (40 S.E.C.
Docket 634) February 26, 1988; No. 35-25096 (46 S.E.C. Docket 481)
May 25, 1990; and No. 35-25377 (49 S.E.C. Docket 1255) September
18, 1991. The proposed merger and reorganization will not result
in any change in the operation of the utility properties of WPSC or
-25-
<PAGE>
River Power nor is it expected to result in any increase in
operating expenses or reduction in net income of the consolidated
enterprises or to affect adversely the dividend paying ability of
the consolidated enterprise. Therefore, the proposed share
exchange and corporate restructuring will not be detrimental to the
public interest or the interests of investors or consumers or the
proper functioning of WPSC or River Power.
As described above, the proposed share exchange and
corporate restructuring will not result in any change in the
utility operations of WPSC or River Power or any change in the
relationship between WPSC and River Power. Consequently, the
proposed share exchange and corporate restructuring does not raise
any issues under Section 8 or Section 11 of the Act or regarding
the economical and efficient development of an integrated public
utility system. See Wisconsin Energy Corporation and WPL Holdings,
Inc., supra. The Company will comply with all applicable laws of
the states of Wisconsin and Michigan in connection with the
proposed share exchange and corporate restructuring. To evidence
the required approval of the share exchange and corporate
restructuring and related transactions by the Public Service
Commission of Wisconsin, the Company will file certified copies of
the Order of said Commission as Exhibit D-2 hereto. The Company has
been advised by counsel that approval of the Michigan Public
Service Commission is not required for the proposed share exchange
and corporate restructuring. In granting its approval, the Public
-26-
<PAGE>
Service Commission of Wisconsin may "impose such terms, limitations
or conditions on such approval which are consistent with and
necessary to satisfy the requirements of" the Wisconsin Holding
Company Act. Section 196.795(2)(f), Wis. Stats. Therefore, the
Company believes the standards of Section 10(f) will be met for the
proposed merger and reorganization.
Section 3(a)(1). WPSC is presently exempt from the
provisions of the Act (except Section 9(a)(2)) by reason of annual
exemption statements filed under Rule 2 and Section 3(a)(1) and
Section 3(a)(2) of the Act and by virtue of an order of exemption
in Wisconsin Public Service Corporation, 1 S.E.C. 512 (1936).
Following the proposed share exchange and corporate restructuring,
the Company and its subsidiaries will meet the requirements for an
exemption under Section 3(a)(1) of the Act. The Company, WPSC and
River Power are and will continue to be predominantly intrastate in
character and will continue to carry on their business
substantially in Wisconsin, the state in which they are organized.
For each of the three years in the period ended December 31, 1993,
WPSC derived the following percentages of its total operating
revenues from operations in the state of Wisconsin:
Year Ended December 31,
-----------------------
1993 1992 1991
---- ---- ----
Operating Revenues 97.8% 97.7% 97.6%
The Company believes that the proposed share exchange and
corporate restructuring and the granting of an exemption under
Section 3(a)(1) will not be detrimental in any respect to the
public interest or the interest of investors or consumers.
-27-
<PAGE>
ITEM 4. REGULATORY APPROVAL
A. FEDERAL.
-------
The proposed share exchange and corporate restructuring
will require the approval of the Federal Energy Regulatory
Commission ("FERC") under Section 203 of the Federal Power Act
which prohibits a public utility from selling, leasing or otherwise
disposing of its FERC-jurisdictional facilities with obtaining FERC
approval. An application (filed as Exhibit D-3 hereto) has been
filed and is pending before FERC.
The proposed share exchange and corporate restructuring
will require the approval of the Nuclear Regulatory Commission
("NRC") under 10 C.F.R. Sec. 50.80. A letter to the NRC requesting
such approval (filed as Exhibit D-5 hereto) has been filed and is
pending before the NRC.
B. STATE.
-----
The proposed share exchange and corporate restructuring
will require the approval of the Public Service Commission of
Wisconsin pursuant to Section 196.795, Wis. Stats. An application
(filed as Exhibit D-1 hereto) has been filed and is pending before
such Commission. The Company has been advised by counsel that the
approval of the Michigan Public Service Commission is not required
for the proposed share exchange and corporate restructuring.
-28-
<PAGE>
ITEM 5. PROCEDURE
The Commission is requested to issue an order as promptly
as possible after the filing of this Application, (i) approving the
acquisition by the Company, pursuant to the proposed share exchange
and corporate restructuring, of all of the shares of outstanding
common stock of WPSC, and the indirect acquisition of securities of
River Power as described herein and (ii) granting the Company and
its subsidiaries, upon consummation of the proposed share exchange
and corporate restructuring, exemption under Section 3(a)(1) of the
Act from all provisions of the Act except Section 9(a)(2).
No recommended decision by a hearing officer or other
responsible officer of the Commission is necessary or required in
connection with this Application. The Division of Investment
Management of the Commission may assist in the preparation of the
Commission's decision in this matter. Unless the Commission is
notified otherwise by the Company subsequent to the date hereof,
there should be no 30-day waiting period between the issuance and
the effective date of any order issued by the Commission in this
matter; and it is respectfully requested that any such order be
made effective immediately upon the entry thereof.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
No financial statements are filed for Applicant because
Applicant has only nominal assets and has not engaged in any
business operations.
-29-
<PAGE>
A-1 Restated Articles of Incorporation of the Company
(Incorporated by reference to Exhibit 3A to Registration
Statement on Form S-4 (File No. 033-52199) filed by WPS
Resources Corporation on February 8, 1994).
A-2 Restated Articles of Incorporation of WPSC, as amended
(Incorporated by reference to Exhibit 3A to Annual Report
on Form 10-K for year ended December 31, 1991 (File No.
1-3016) filed by Wisconsin Public Service Corporation on
March 19, 1992) and Exhibit 3 to Current Report on Form
8-K dated June 9, 1993 (File No. 1-3016) filed by
Wisconsin Public Service Corporation on June 11, 1993.
B-1 Agreement and Plan of Share Exchange (Incorporated by
reference to Exhibit A to Prospectus/Proxy Statement
contained in Registration Statement on Form S-4 (File No.
033-52199) filed by WPS Resources Corporation on
February 8, 1994).
B-2 Form of Affiliated Interest Agreement to be approved by
the Public Service Commission of Wisconsin (set forth as
Exhibit E to Exhibit D-1 hereto).
C-1 Registration Statement of the Company on Form S-4,
including all exhibits and consents (Incorporated by
reference to File No. 033-52199 filing made by Company on
February 8, 1994).
C-2 Prospectus/Proxy Statement for Annual Meeting of
Shareholders to be held on May 5, 1994 (Incorporated by
reference to Prospectus/Proxy Statement contained in
-30-
<PAGE>
Registration Statement on Form S-4 (File No. 033-52199)
filed by WPS Resources Corporation on February 8, 1994).
D-1 Application of the Company and WPSC for a Certificate of
Approval to Form a Holding Company Under Section 196.795,
Wis. Stats., and for approval of an Affiliated Interest
Agreement as filed with the Public Service Commission of
Wisconsin.
D-2 Certified copy of Certificate and Order of the Public
Service Commission of Wisconsin (to be filed by
amendment).
D-3 Application to Federal Energy Regulatory Commission
(including exhibits not otherwise filed with this
Application).
D-4 Certified copy of Order of Federal Energy Regulatory
Commission (to be filed by amendment).
D-5 Letter to Nuclear Regulatory Commission.
D-6 Letter from Nuclear Regulatory Commission (to be filed by
amendment).
E-1 Maps showing the properties of WPSC and River Power.
F-1 Preliminary Opinion of Counsel.
F-2 "Past-Tense" Opinion of Counsel (to be filed with
Certificate of Notification).
G-1
and G-2 Balance sheet of the Company as of December 31, 1993 and
statement of income and expenses of the Company for the
period from date of incorporation (December 3, 1993) to
December 31, 1993 and pro forma consolidated balance
-31-
<PAGE>
sheet of the Company as of December 31, 1993 and
consolidated statement of income and expenses for the 12
months ended December 31, 1993, assuming consummation of
the share exchange and corporate restructuring.
G-3 Form 10-K Annual Report of WPSC for the year ended
December 31, 1993, including statements of income,
balance sheets, statements of capitalization, statements
of cash flows and statements of retained earnings
(Incorporated by reference to Annual Report on Form 10-K
for year ended December 31, 1993 (File No. 1-3016) filed
by Wisconsin Public Service Corporation on February 8,
1994).
G-4 Form U-3A-2 of WPSC dated February 11, 1994,
(Incorporated by reference to filing made by Wisconsin
Public Service Corporation on February 11, 1994 (File No.
69-35)).
H-1 Estimated fees and expenses.
I-1 Proposed Notice of Proceeding required by Rule 22(f).
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
The proposed transaction, a share exchange and corporate
restructuring, neither involves a "major federal action" nor
"significantly affects the quality of the human environment" as
those terms are used in Section 102(2)(C) of the National
Environmental Policy Act. The only federal actions related to the
proposed transactions pertain to the Commission's declaration of
-32-
<PAGE>
the effectiveness of the Registration Statement, the applications
before the Federal Energy Regulatory Commission and the Nuclear
Regulatory Commission and this Application before the Commission.
Consummation of the proposed transaction will not result in changes
in the operation of WPSC or any of its subsidiaries that would have
any impact on the environment. No federal agency is preparing an
Environmental Impact Statement with respect to this matter.
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned company has duly
caused this Application to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: March 10, 1994.
WPS RESOURCES CORPORATION
/s/ Daniel P. Bittner
By ___________________________
Daniel P. Bittner
Senior Vice President
-33-
BEFORE THE
PUBLIC SERVICE COMMISSION OF WISCONSIN
- ---------------------------------
Application of Wisconsin Public )
Service Corporation and WPS )
Resources Corporation for a )
Certificate of Approval to Form ) Docket No. _______
a Holding Company Under Sec. )
196.795, Wis. Stats. and for )
approval of an Affiliated )
Interest Agreement )
- ---------------------------------
Wisconsin Public Service Corporation ("WPSC") and WPS Resources
Corporation ("WPS Resources") (collectively "The Applicants")
hereby apply to the Public Service Commission of Wisconsin (the
"Commission"), pursuant to Section 196.795 and Section 196.52, Wis.
Stats. for a Certificate of Approval to Form a Holding Company and
for approval of an Affiliated Interest Agreement. In support of
the application, Applicants represent and show the Commission as
follows:
SECTION 1 - THE NAMES AND CORPORATE RELATIONSHIPS
OF ALL COMPANIES WHICH WILL BE IN THE HOLDING
COMPANY SYSTEM WITH THE APPLICANTS WHEN THE
APPLICANTS FORM THE HOLDING COMPANY AND THE NAMES
OF THE APPLICANTS AND ANY PARENT OR SUBSIDIARY
CORPORATION OF THE APPLICANTS (SECTION
196.795(2)(b)1)
The names of the Applicants are WPS Resources Corporation ("WPS
Resources") and Wisconsin Public Service Corporation ("WPSC"). WPS
Resources is a wholly owned, inactive subsidiary of WPSC,
incorporated under the provisions of Chapter 180, Wis. Stats., on
December 3, 1993.
<PAGE>
-2-
The names and corporate relationships of all other companies which
will be in the holding company system are described on the
organization chart attached as Exhibit A-1. For reference
purposes, a chart showing the present WPSC corporate structure is
also included. WPSC will become a wholly owned subsidiary of WPS
Resources. Attached hereto as Exhibit A-2 is a complete listing of
the members of the boards of directors and officers of the
applicants and any parent or subsidiary assumed to be in the
holding company system at the time of formation.
SECTION 2 - A DESCRIPTION OF HOW THE APPLICANTS
PLAN TO FORM THE HOLDING COMPANY INCLUDING
a. ARTICLES OF INCORPORATION OR AMENDMENTS TO THE
ARTICLES OF INCORPORATION OF ALL COMPANIES WHICH
WILL BE IN THE HOLDING COMPANY SYSTEM WITH THE
APPLICANTS WHEN THE APPLICANTS FORM THE HOLDING
COMPANY (SECTION 196.795(2)(b)2)
The current stock ownership status of the corporations involved in
organizing the holding company system is as follows:
Corporation/ Authorized
Class of Stock Shares Issued Ownership
-------------- ---------- ------ ---------
WPSC
Common 32,000,000 23,896,962 Publicly
Held
Preferred 1,000,000 512,000 Publicly
Held
WPS Resources
Common 100,000,000 1,000 WPSC
WPS Communications, Inc. 56,000 1,000 WPSC
Packerland Energy
Services, Inc. 2,500 5 WPSC
The holding company will be formed as follows. WPS Resources and
WPSC will enter into a Plan and Agreement of Share Exchange (the
<PAGE>
-3-
"Share Exchange Agreement"). Pursuant to the Share Exchange
Agreement and after satisfaction of the conditions therein
specified, one share of common stock of WPS Resources will be
exchanged for each share of common stock of WPSC outstanding
immediately prior to the effective time of the share exchange. All
shares of WPS Resources outstanding immediately prior to the
effective time of the share exchange will be cancelled and cease to
be outstanding. As a result of the share exchange, therefore, all
current holders of common stock of WPSC will become shareholders of
WPS Resources, and WPS Resources will own all of the outstanding
common stock of WPSC. Following the share exchange, WPSC will
transfer to WPS Resources as a dividend all of the outstanding
shares of common stock of Packerland Energy Services, Inc. and WPS
Communications, Inc., which will thereby become direct wholly-owned
subsidiaries of WPS Resources. Attached as Exhibit B are complete
copies of the Articles of Incorporation and by-laws currently in
effect of the Applicants and any parent or subsidiary assumed to be
in the holding company system at the time of formation.
Following the restructuring, WPSC will continue its utility
operations. All bonds, preferred stock and other obligations of
WPSC outstanding immediately prior to the effective time of the
share exchange will continue outstanding as securities or
obligations of WPSC. Under the Wisconsin Business Corporation Law
(the WBCL"), holders of shares of any class or series of WPSC stock
dissenting from the share exchange will not be entitled to
appraisal rights if the shares of such class or series are
registered on a national securities exchange or quoted on the
National Association of Securities Dealers, Inc. automated
<PAGE>
-4-
quotation system on the record date for the shareholders' meeting
at which the share exchange will be acted upon. All outstanding
shares of WPSC common stock are listed on the New York and Chicago
Stock Exchanges. Under the WBCL and the Restated Articles of
Incorporation of WPSC, holders of outstanding preferred stock will
not be entitled to vote on the share exchange.
The Share Exchange Agreement will be submitted for approval to the
holders of common stock of WPSC at the 1994 annual meeting of
shareholders which is scheduled to be held on May 5, 1994. A
favorable vote of at least two-thirds of the outstanding shares of
common stock of WPSC is required for approval.
It will not be necessary for holders of WPSC common stock to
exchange their stock certificates for stock certificates of WPS
Resources common stock. Such holders will at the effective time of
the share exchange automatically become holders of WPS Resources
common stock to which they are entitled, and the stock certificates
for WPSC common stock will thereafter automatically represent
shares of WPS Resources common stock.
b. COPIES OF ANY FILINGS, INCLUDING SECURITIES
FILINGS, RELATING TO THE FORMATION OF THE HOLDING
COMPANY MADE WITH ANY AGENCY OF THIS STATE OR THE
FEDERAL GOVERNMENT
No filings, including securities filings, related to the formation
of the holding company as provided for herein have been made with
any agency of the State of Wisconsin or the federal government.
<PAGE>
-5-
Filings, when prepared, are proposed to be made at appropriate
times before the effective time of the share exchange, as follows:
1. An application to the Securities and Exchange Commission under
the Public Utility Holding Company Act of 1935 seeking the
required approval under such Act to permit the share exchange
and restructuring, as well as a grant of, or appropriate
confirmation with respect to, the exemption of WPS Resources
from having to register as a holding company under that Act as
a result of the restructuring; and
2. A registration statement on Form S-4 with the Securities and
Exchange Commission, registering under the Securities Act of
1933 the issuance of shares of WPS Resources common stock
pursuant to the share exchange and a registration statement on
Form S-3 registering the sale of shares of such common stock
after the restructuring, under an automatic dividend
reinvestment and stock purchase plan.
3. An application to the Federal Energy Regulatory Commission
seeking approval of the indirect acquisition of jurisdictional
facilities by WPS Resources as a result of the share exchange.
4. An application to the Nuclear Regulatory Agency seeking its
consent to the share exchange and corporate restructuring.
The registration statement on Form S-4 will contain a joint
prospectus/proxy statement of WPS Resources and WPSC, which will
set forth the Share Exchange Agreement in full and contain
<PAGE>
-6-
extensive disclosures with respect to the share exchange and
restructuring.
Other contemplated filings will include filings with the Securities
and Exchange Commission with respect to registration of WPS
Resources common stock under the Securities Exchange Act of 1934
for listing on an appropriate stock exchange, and disclosure with
respect to completion of the share exchange and restructuring.
Following the restructuring WPS Resources will become a reporting
company under the Securities Exchange Act of 1934.
Application will be made to the Internal Revenue Service for a
favorable ruling to the effect that, for federal income tax
purposes, no gain or loss will be recognizable in connection with
the share exchange by any holder of WPSC common stock or by
corporate parties to the transaction.
SECTION 3 - THE COSTS AND FEES ATTRIBUTABLE TO THE
FORMATION OF THE HOLDING COMPANY (SECTION
196.795(2)(b)3)
The estimated costs and fees attributable to the formation of the
holding company are contained in Exhibit C.
SECTION 4 - THE METHOD BY WHICH MANAGEMENT,
PERSONNEL, PROPERTY, INCOME, LOSSES, COSTS AND
EXPENSES WILL BE ALLOCATED WITHIN THE HOLDING
COMPANY SYSTEM BETWEEN PUBLIC UTILITY AFFILIATES
AND NONUTILITY AFFILIATES (SECTION 196.795(2)(b)4)
Attached hereto as Exhibit D (set forth as Appendices A, B and C to
Exhibit E hereto) is a detailed explanation of the method by which
management, personnel, property, income, losses, costs and expenses
<PAGE>
-7-
will be allocated within the holding company system. Fully
allocated costs for such services will be determined, charged and
paid for as described in the Services Agreement attached as
Exhibit E.
SECTION 5 - A COPY OF ANY PROPOSED AGREEMENT
BETWEEN A PUBLIC UTILITY AFFILIATE AND ANY PERSON
WITH WHICH IT WILL BE AN AFFILIATED INTEREST AT
THE TIME THE HOLDING COMPANY IS FORMED
(SECTION 196.795(2)(b)5)
Attached hereto as Exhibit E is the Services Agreement to be
executed by WPSC, WPS Resources, and all nonutility affiliates
presently existing and proposed to exist at the effective time of
the share exchange. This agreement is intended to govern all
transactions between WPSC and any of the aforementioned companies.
SECTION 6 - AN IDENTIFICATION OF ALL PUBLIC
UTILITY ASSETS OR INFORMATION IN EXISTENCE AT THE
TIME OF FORMATION OF THE HOLDING COMPANY, SUCH AS
CUSTOMER LISTS, WHICH AN APPLICANT PLANS TO
TRANSFER TO OR PERMIT A NONUTILITY AFFILIATE, WITH
WHICH IT IS IN THE HOLDING COMPANY SYSTEM, TO USE.
THE IDENTIFICATION SHALL INCLUDE A DESCRIPTION OF
THE PROPOSED TERMS AND CONDITIONS UNDER WHICH THE
ASSETS OR INFORMATION WILL BE TRANSFERRED OR USED
(SECTION 196.795(2)(b)6)
WPSC will transfer common shareholder records to WPS Resources, and
costs associated with shareholder services will be allocated to WPS
Resources. WPSC does not envision transfer of information in
existence at the effective time of the share exchange such as
customer lists to any nonutility affiliate, nor does it propose to
permit use of that information by any nonutility entity.
The shareholder services records proposed to be transferred to WPS
Resources are summarized as follows:
<PAGE>
-8-
Various forms of common stock shareholder records in hard
copy and electronic media. Preferred shareholder and
bondholder records will remain with WPSC.
When and if such transfers occur in the future, staff positions
will be transferred at cost and equipment at net book value. Cost
for shareholder records would be nominal since WPSC will have use
of these records for various purposes.
SECTION 7 - A COPY OF A FINANCIAL FORECAST SHOWING
THE CAPITAL REQUIREMENTS OF EVERY PUBLIC UTILITY
AFFILIATE WHICH AT THE TIME OF THE FORMATION OF
THE HOLDING COMPANY WILL BE WITHIN THE HOLDING
COMPANY SYSTEM. THE FINANCIAL FORECAST SHALL
INCLUDE FOR EACH PUBLIC UTILITY AFFILIATE ON AN
ANNUAL BASIS FOR TEN YEARS FOLLOWING THE YEAR OF
APPLICATION
a. Projected capital requirements.
b. Sources of capital.
c. An itemization of major capital expenditures.
d. Projected capital structure.
e. An estimated amount of retained earnings available for
nonutility purposes.
f. The assumptions underlying the information included in
the financial forecast under subd. 6. a. to f.
A financial forecast is attached hereto as Exhibit F and includes
the following data:
a. The assumptions underlying the information included in
the financial forecast.
b. Projected capital requirements.
c. Sources of capital.
d. An itemization of major capital expenditure categories.
e. An estimated amount of retained earnings available for
nonutility purposes.
<PAGE>
-9-
f. Projected capital structure.
Wherefore, WPSC and WPS Resources respectfully request that the
Commission issue a Certificate of Approval pursuant to
Section 196.795, Wis. Stats. and approve the affiliated interest
agreement attached as Exhibit E.
Dated this 15th day of December, 1993.
WISCONSIN PUBLIC SERVICE CORPORATION
By: /s/ Daniel A. Bollom
---------------------------------------
Daniel A. Bollom
President and Chief Executive
Officer
WPS RESOURCES CORPORATION
By: /s/ Daniel A. Bollom
--------------------------------------
Daniel A. Bollom
President and Chief Executive
Officer
Attorneys for Applicants:
Foley & Lardner
By: Allen W. Williams, Jr.
Attachments
<PAGE>
-10-
STATE OF WISCONSIN )
) SS.
BROWN COUNTY )
DANIEL A. BOLLOM, being sworn on oath, deposes and says
that he is the President of Wisconsin Public Service Corporation
and of WPS Resources Corporation, the Applicants above named, and
makes this verification for and on behalf of said Applicants and by
his authority; that he has read the foregoing application and knows
the contents thereof, and that the same is true to his own
knowledge, except as to matters therein stated on information and
belief, and that as to those matters he believes it to be true;
that the reason he makes this verification is that said Applicants
are corporations and he is such officer as aforesaid; that the
sources of his knowledge and the grounds of his belief are his
connection with the affairs of said Wisconsin Public Service
Corporation and WPS Resources Corporation as such officer, and the
records and papers of said corporation in his possession.
/s/ Daniel A. Bollom
--------------------------------------
Daniel A. Bollom
Subscribed and sworn to before me
this 15th day of December, 1993.
/s/ Donna M. Sheedy
- ---------------------------------
Notary Public Donna M. Sheedy
State of Wisconsin
My Commission expires: 2-12-95
-----------
(Notarial Seal)
<PAGE>
-11-
PUBLIC SERVICE COMMISSION OF WISCONSIN
List of Exhibits Attached To
Application of Wisconsin Public Service Corporation
and WPS Resources Corporation
For Authority To Form
a Holding Company
---------------------------------------------------
Application
Exhibit No. Description
------------ -----------
A-1 Organization Charts - Present and
Proposed Structures
A-2 List of Directors and Officers of
Applicants and Subsidiaries
B Articles of Incorporation and By-laws of
Applicants and Subsidiaries
C Estimated Costs and Fees Attributable to
Formation of Holding Company
D Explanation of Method of Allocation of
Costs and Expenses -- set forth as
Appendices A, B and C to Exhibit E hereto
E Service Agreement
F Financial Forecast 1994 - 2003
<PAGE>
EXHIBIT A-1
PRESENT CORPORATE STRUCTURE
---------------------------
Wisconsin Public Service Corporation
------------------------------------
-------------------------------|------------------------------
| | |
Packerland Energy WPS Resources WPS Communications,
Services, Inc. Corporation Inc.
- ----------------- ------------- -------------------
HOLDING COMPANY STRUCTURE
-------------------------
WPS Resources Corporation
-------------------------
-------------------------------|---------------------------
| | |
Packerland Energy Wisconsin Public WPS Communications,
Services, Inc. Service Corporation Inc.
- ----------------- ------------------- -------------------
12/6/93
RHKnuth
<PAGE>
EXHIBIT A-2
WPS RESOURCES CORPORATION
GENERAL OFFICERS
----------------
Title Name Address
- ----- ---- -------
President and Chief
Executive Officer Daniel A. Bollom 700 N. Adams St., Green Bay, WI 54301
Vice President Patrick D. Schrickel 700 N. Adams St., Green Bay, WI 54301
Assistant Vice
President, Secretary Robert H. Knuth 700 N. Adams St., Green Bay, WI 54301
Treasurer Ralph G. Baeten 700 N. Adams St., Green Bay, WI 54301
DIRECTORS
---------
Name Address
- ---- -------
A. Dean Arganbright 5867 I-Ah-Maytah Road, Oshkosh, WI 54901
Michael S. Areins 655 West Ryan Street, Brillion, WI 54110
Richard A. Bemis 300 Mill Street, Sheboygan Falls, WI 53085
Daniel A. Bollom 700 North Adams Street, Green Bay, WI 54301
Sister M. Lois Bush 11925 West Lake Park Drive, Milwaukee, WI 53224
Robert C. Gallagher P. O. Box 19006, Green Bay, WI 54307
Kathryn M. Hasselblad-Pascale P. O. Box 11537, Green Bay, WI 54307
James L. Kemerling 333 Main Street, Green Bay, WI 54301
Linus M. Stoll 4373 Nicolet Drive, Green Bay, WI 54311
PACKERLAND ENERGY SERVICES, INC.
GENERAL OFFICERS
----------------
Title Name Address
- ----- ---- -------
President Daniel A. Bollom 700 N. Adams St., Green Bay, WI 54301
Vice President Daniel P. Bittner 700 N. Adams St., Green Bay, WI 54301
Secretary and
Assistant Treasurer Robert H. Knuth 700 N. Adams St., Green Bay, WI 54301
Treasurer and
Assistant Secretary Ralph G. Baeten 700 N. Adams St., Green Bay, WI 54301
DIRECTORS
---------
Name Address
- ---- -------
Ralph G. Baeten 700 North Adams Street, Green Bay, WI 54301
Daniel P. Bittner 700 North Adams Street, Green Bay, WI 54301
Daniel A. Bollom 700 North Adams Street, Green Bay, WI 54301
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION
GENERAL OFFICERS
----------------
Title Name Address
- ----- ---- -------
President and Chief
Executive Officer Daniel A. Bollom 700 N. Adams St., Green Bay, WI 54301
Senior Vice President Daniel P. Bittner 700 N. Adams St., Green Bay, WI 54301
Senior Vice President Richard A. Krueger 700 N. Adams St., Green Bay, WI 54301
Senior Vice President Patrick D. Schrickel 700 N. Adams St., Green Bay, WI 54301
Senior Vice President Clark R. Steinhardt 700 N. Adams St., Green Bay, WI 54301
Senior Vice President J. Gus Swoboda 700 N. Adams St., Green Bay, WI 54301
Vice President Larry L. Weyers 700 N. Adams St., Green Bay, WI 54301
Assistant Vice
President Richard E. James 700 N. Adams St., Green Bay, WI 54301
Assistant Vice
President-Secretary Robert H. Knuth 700 N. Adams St., Green Bay, WI 54301
Assistant Vice
President David W. Schonke 700 N. Adams St., Green Bay, WI 54301
Assistant Vice
President Glen R. Schwalbach 700 N. Adams St., Green Bay, WI 54301
Assistant Vice
President Bernard J. Treml 700 N. Adams St., Green Bay, WI 54301
Treasurer Ralph G. Baeten 700 N. Adams St., Green Bay, WI 54301
Controller Diane L. Ford 700 N. Adams St., Green Bay, WI 54301
Assistant Secretary Frank J. Kicsar 700 N. Adams St., Green Bay, WI 54301
DIRECTORS
---------
Name Address
- ---- -------
A. Dean Arganbright 5867 I-Ah-Maytah Road, Oshkosh, WI 54901
Michael S. Areins 655 West Ryan Street, Brillion, WI 54110
Richard A. Bemis 300 Mill Street, Sheboygan Falls, WI 53085
Daniel A. Bollom 700 North Adams Street, Green Bay, WI 54301
Sister M. Lois Bush 11925 West Lake Park Drive, Milwaukee, WI 53224
Robert C. Gallagher P. O. Box 19006, Green Bay, WI 54307
Kathryn M. Hasselblad-Pascale P. O. Box 11537, Green Bay, WI 54307
James L. Kemerling 333 Main Street, Green Bay, WI 54301
Linus M. Stoll 4373 Nicolet Drive, Green Bay, WI 54311
<PAGE>
WPS COMMUNICATIONS, INC.
GENERAL OFFICERS
----------------
Title Name Address
- ----- ---- -------
President Daniel P. Bittner 700 N. Adams St., Green Bay, WI 54301
Vice President J. Gus Swoboda 700 N. Adams St., Green Bay, WI 54301
Secretary and
Assistant Treasurer Robert H. Knuth 700 N. Adams St., Green Bay, WI 54301
Treasurer and
Assistant Secretary Ralph G. Baeten 700 N. Adams St., Green Bay, WI 54301
DIRECTORS
---------
Name Address
- ---- -------
Daniel P. Bittner 700 North Adams Street, Green Bay, WI 54301
Daniel A. Bollom 700 North Adams Street, Green Bay, WI 54301
J. Gus Swoboda 700 North Adams Street, Green Bay, WI 54301
12/6/93
RHKNUTH
<PAGE>
RESTATED ARTICLES OF INCORPORATION
OF
WPS RESOURCES CORPORATION
The Restated Articles of Incorporation of WPS Resources Corporation,
a corporation organized under the laws of the State of Wisconsin, (the
"Corporation"), in the form attached hereto as Exhibit A and which are
incorporated herein by reference (the "Restated Articles of Incorporation")
were approved by the unanimous written consent of the board of directors of the
Corporation on December 9, 1993, and proposed on said date by said board of
directors for approval by the shareholders of the Corporation, and the Restated
Articles of Incorporation of the Corporation were approved and adopted in
accordance with Section 180.1003 of the Wisconsin Business Corporation Law by
the sole shareholder of the Corporation on December 15, 1993. The Restated
Articles of Incorporation contain amendments to the Corporation's Articles of
Incorporation requiring such shareholder approval.
Executed by the President and Secretary of WPS Resources Corporation
this 21st day of December, 1993.
/s/ Daniel A. Bollom
--------------------------------------
Daniel A. Bollom, President
/s/ Robert H. Knuth
--------------------------------------
Robert H. Knuth, Secretary
This document was drafted by
Michael S. Nolan of
Foley & Lardner
Milwaukee, Wisconsin
<PAGE>
EXHIBIT A
RESTATED ARTICLES OF INCORPORATION
OF
WPS RESOURCES CORPORATION
WPS Resources Corporation, a corporation organized under
the laws of the State of Wisconsin and being subject to the
provisions of the Wisconsin Business Corporation Law, hereby amends
its Articles of Incorporation in their entirety and as so amended
adopts the following Restated Articles of Incorporation of said
Corporation, which supersede and take the place of the existing
Articles of Incorporation of said Corporation and any amendments to
the Articles of Incorporation of said Corporation.
ARTICLE 1
---------
The name of the Corporation is WPS Resources Corporation.
ARTICLE 2
---------
The Corporation is organized for the purpose of engaging
in any lawful activity within the purposes for which corporations
may be organized under the Wisconsin Business Corporation Law.
ARTICLE 3
---------
The aggregate number of shares which the Corporation
shall have authority to issue is One Hundred Million (100,000,000),
consisting of one class only, designated as "Common Stock," with a
par value of one dollar ($1) per share.
ARTICLE 4
---------
The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the owner thereof for all
purposes, and shall not be bound to recognize any equitable or
other claim to or interest in any such share or shares on the part
of any other person, whether or not it shall have express or other
notice thereof.
ARTICLE 5
---------
The general powers, number and classification of
Directors shall be as set forth in Article III, Sections 1, 2, 3
and 4 of the By-Laws (and as such Sections shall exist from time to
time) and such Article III, Sections 1, 2, 3 and 4 of the By-Laws,
<PAGE>
or any provision thereof, shall be amended, altered, changed or
repealed only by the affirmative vote of shareholders possessing at
least three-fourths of the voting power of the then outstanding
shares of all classes of stock of the corporation generally
possessing voting rights in elections for Directors, considered for
this purpose as one class; provided, however, that the Board of
Directors, by a resolution adopted by the Requisite Vote (as
defined herein), may amend, alter, change or repeal Sections 1, 2,
3 and 4 of Article III of the By-Laws, or any provision thereof,
without the vote of the shareholders. As used herein, the term
"Requisite Vote" shall mean the affirmative vote of at least
two-thirds of the Directors then in office plus one Director.
Any Director may be removed from office, but only for
cause as hereinafter defined, by the affirmative vote of
shareholders possessing at least a majority of the voting power of
the then outstanding shares of all classes of stock of the
corporation generally possessing voting rights in elections for
Directors, considered for this purpose as one class; provided,
however, that if the Board of Directors by a resolution adopted by
the Requisite Vote shall have recommended removal of a Director,
then the shareholders may remove such Director from office by the
foregoing vote without cause. As used herein, the meaning of
"cause" shall be construed to exist only if the Director whose
removal is proposed has been convicted of a felony by a court of
competent jurisdiction and such conviction is no longer subject to
direct appeal or has been adjudged to be liable for negligence or
misconduct in the performance of his duty to the corporation in a
matter which has a materially adverse effect on the business of the
corporation, and such adjudication is no longer subject to direct
appeal.
Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of
Directors, may be filled by the affirmative vote of a majority of
the Directors then in office, though less than a quorum of the
Board of Directors, or by a sole remaining Director. Any Director
so elected shall serve until the next election of the class for
which such Director shall have been chosen and until his successor
shall be elected and qualified.
The provisions of this Article 5 shall be amended,
altered, changed or repealed only by the affirmative vote of
shareholders possessing at least three-fourths of the voting power
of the then outstanding shares of all classes of stock of the
corporation generally possessing voting rights in elections for
Directors, considered for this purpose as one class.
ARTICLE 6
---------
The address of the registered office of the Corporation
is 700 North Adams Street, P.O. Box 19001, Green Bay, Wisconsin,
54307. The name of the Corporation's registered agent at such
address is R. H. Knuth.
ARTICLE 7
---------
The Bylaws of the Corporation may provide for a greater
or lower quorum requirement or a greater voting requirement for
shareholders or voting groups of shareholders than is provided by
the Wisconsin Business Corporation Law.
-2-
<PAGE>
Exhibit B
RESTATED ARTICLES OF INCORPORATION
WISCONSIN PUBLIC SERVICE CORPORATION
As Effective May 26, 1972
And Amended Through May 31, 1988
The corporation, organized under the laws of the State of Wisconsin and
being subject to the provisions of Chapter 180 of the Wisconsin Statutes, hereby
amends its Articles of Incorporation, as heretofore amended, in their entirety
and as so amended adopts the following Restated Articles of Incorporation of
said corporation, which supersede and take the place of its heretofore
existing Articles of Incorporation and all amendments thereto:
I. NAME
The name of the corporation is WISCONSIN PUBLIC SERVICE CORPORATION.
II. PURPOSE
The corporation is organized for the purpose of engaging in any lawful
activity within the purposes for which corporations may be organized under the
Wisconsin Business Corporation Law, including (without limiting or impairing the
generality of the foregoing by the following enumeration), the purchase,
production, transmission, delivery and furnishing of heat, light, power, gas,
steam and electric current, directly or indirectly, to or for the public or for
public purposes and the operation of systems for the rendition of electric, gas
and transportation services as a public utility.
III. AUTHORIZED SHARES
A. AUTHORIZED NUMBER AND CLASSES OF SHARES
(1) DESIGNATION OF CLASSES, PAR VALUE, AND AUTHORIZED NUMBER OF EACH
(Amended Effective May 7, 1987)
The aggregate number of shares which the corporation has the authority to
issue is Thirty-three Million (33,000,000) shares, divided into two classes
consisting of:
(a) Thirty-two Million (32,000,000) shares designated as "Common Stock,"
with a par value of Four Dollars ($4) per share; and
(b) One Million (1,000,000) shares of Preferred Stock, with a par value of
One Hundred Dollars ($100) per share, consisting of:
-1-
<PAGE>
(i) Three Hundred Sixty-Two Thousand (362,000 shares issued and
outstanding at May 23, 1972 (for convenience sometimes referred to herein
as "Old Preferred Stock"), of the series designations and in the number of
shares for each series as follows:
Designation of Old Series Shares Outstanding at May 23, 1972
------------------------- ----------------------------------
5% Series 132,000
5.04%Series 30,000
5.08%Series 50,000
6.76%Series 150,000; and
(ii) Six Hundred Thirty-Eight Thousand (638,000) shares, which are
unissued at May 23, 1972 and are issuable thereafter in series (for
convenience sometimes referred to herein as "New Preferred Stock"), which
authorized number may be increased to the extent that shares of Old
Preferred Stock are decreased by cancellation and reclassification as
permitted by paragraph C(4) of this Article III.
(2) ALL PREFERRED STOCK A SINGLE CLASS, ISSUABLE IN SERIES
Subject to the particular terms of different series of the Old Preferred
Stock which are set forth in Part E of this Article III and to the variations
between different series of the New Preferred Stock which shall be fixed and
determined hereafter as set forth in Part D of this Article III, all series of
the Preferred Stock of the corporation, whenever designated and issued, shall
have the same preferences, limitations and relative rights and shall rank
equally, share ratably and be identical in all respects as to all matters. All
shares of any one series of the Preferred Stock shall be alike in every
particular, and each series thereof shall be distinctively designated by letter
or descriptive words or figures.
B. COMMON STOCK
(1) VOTING RIGHTS
Except as otherwise fixed in our pursuant to this Article III, every holder
of the Common Stock of the corporation shall have one vote for each share of
Common Stock held and owned by him at every meeting at which, and on all matters
on which, the holders of Common Stock shall be entitled to vote and at every
election of the Directors, provided that upon accrual of and until divestment of
the right of the holders of the Preferred Stock to elect a majority of the Board
of Directors as provided in subdivision (b) of paragraph C(6) each share of the
Common Stock shall entitle the holder thereof to one-fourth (1/4) of one vote
per share as to all matters other than the election of Directors.
(2) DIVIDENDS
The holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, such dividends as may be declared from time
to time by the Board of Directors subject to any limitations of applicable law
-2-
<PAGE>
of the State of Wisconsin and to the rights of the holders of the Preferred
Stock and each series thereof as fixed in or pursuant to this Article III.
(3) RESTRICTIONS ON COMMON STOCK DIVIDENDS AND ACQUISITIONS
So long as any shares of the Preferred Stock of any series are outstanding
the corporation shall not pay any dividends on its Common Stock (other than
dividends payable in Common Stock) or make any distribution on, or purchase or
otherwise acquire for value, any of the shares of its Common Stock (each and all
of such actions being hereinafter embraced in the term "payment of Common Stock
dividends") except such as shall result in no breach of the following provisions
of this paragraph B(3):
(a) If and so long as the ratio of the capital represented by the Common
Stock, including premiums on the Common Stock, of the corporation plus the
surplus accounts of the corporation to the total capital and surplus accounts of
the corporation at the end of the third calendar month immediately preceding the
date of the proposed payment of Common Stock dividends adjusted to reflect the
proposed payment of Common Stock dividends (which ratio is hereinafter referred
to as the "capitalization ratio") is not less than 25%, the corporation shall
make no payment of Common Stock dividends which would reduce such capitalization
ratio below 25% except such as shall result in no breach of the following
provisions of subdivisions (b) and (c) of this paragraph B(3); the term "surplus
accounts" wherever used in this subdivision (a) shall be deemed not to include
premiums on preferred stock of any class;
(b) If and so long as such capitalization ratio is 20% or more, but less
than 25%, then the payment of Common Stock dividends, including the proposed
payment, during the twelve months' period ending with and including the calendar
month of the proposed payment shall not exceed 75% of the net income of the
corporation applicable to the Common Stock during the twelve calendar months
ending with and including the third calendar month immediately preceding the
date of the proposed payment of Common Stock dividends; and
(c) If and so long as such capitalization ratio is less than 20% then the
payment of Common Stock dividends, including the proposed payment, during the
twelve months' period ending with and including the calendar month of the
proposed payment shall not exceed 50% of the net income of the corporation
applicable to the Common Stock during the twelve calendar months ending with and
including the third calendar month immediately preceding the date of the
proposed payment of Common Stock dividends.
For the purpose of this condition:
(A) The total capital of the corporation shall be deemed to consist of the
aggregate of the principal amount of all outstanding indebtedness of the
corporation represented by bonds, notes or other evidences of indebtedness
maturing by their terms one year or more from the date of issue thereof and the
aggregate amount of stated capital or par value represented by all the capital
-3-
<PAGE>
stock, including premiums on capital stock, of all classes of the corporation;
(B) Surplus accounts (which shall be deemed to include capital surplus or
paid-in surplus) upon which capitalization ratios are computed shall be adjusted
to eliminate (i) the amount, if any, of the Maintenance and Depreciation
Deficiency calculated as provided in subdivision (E) of this paragraph B(3) and
(ii) any amounts on the books of the corporation known or estimated, if not
known, to represent the excess, if any, of recorded value over original cost of
used and useful utility plant and other property, and any item set forth on the
asset side of the balance sheet of the corporation as a result of accounting
convention, such as unamortized debt discount and expense, capital stock
discount and expense, and the excess, if any, of the aggregate amount payable
on involuntary dissolution, liquidation or winding up of the corporation upon
all outstanding shares of preferred stock of all classes over the aggregate
stated or par value of such shares, unless any such amount or item, as the
case may be, is being amortized or is being provided for by a reserve;
(C) In computing net income of the corporation applicable to the Common
Stock of the corporation for any particular twelve months' period for the
purpose of this condition, operating expenses, among other things, shall
include the greater of (i) the provision for depreciation for such period as
recorded on the books of the corporation or (ii) the amount by which 15% of
the gross operating revenues of the corporation for such period (calculated
in the manner and subject to the deductions provided in subdivision (E) of
this paragraph B(3)) exceeds the total of the charges included or reflected
in operating expense accounts during such period for ordinary repairs and
maintenance;
(D) If and so long as the corporation shall be obligated under the terms
of the Power Purchase Contract dated December 16, 1947 between Consolidated
Water Power & Paper Company, Wisconsin Power and Light Company, the corpora-
tion, and Wisconsin River Power Company, or any agreement amending, extending
or superseding said Power Purchase Contract and containing obligations of
similar effect to those provided in Article III of said Power Purchase
Contract, (i) there shall be included as outstanding indebtedness of the
corporation in all computations pursuant to the foregoing subdivision (A),
the portion of all then outstanding bonds of Wisconsin River Power Company
represented by the share (which shall be deemed one-third unless changed by
amending or superseding agreement or by assignment made to or
by the corporation in accordance with Section 8.01 of said Power
Purchase Contract) of expenses, charges and requirements of
Wisconsin River Power Company required to be paid to Wisconsin
River Power Company by the corporation pursuant to the terms of said Power
Purchase Contract, and (ii) there shall be included as surplus of the
corporation in all computations pursuant to the foregoing subdivision
(B) the amount by which the corporation's share (based on proportion
of stock ownership) of common capital stock and surplus of Wisconsin
River Power Company exceeds the corporation's book cost of stock of
Wisconsin River Power Company; and
-4-
<PAGE>
(E) The Maintenance and Depreciation Deficiency referred to in the
foregoing subdivision (B) shall be the amount, if any, by which the aggregate of
the charges included or reflected in operating expense accounts for the entire
period from November 1, 1947 to the end of the third calendar month immediately
preceding the date of the proposed payment of Common Stock dividends for
ordinary repairs and maintenance and of the appropriations from income
and/or earned surplus during such period for reserves for renewals,
replacements, retirements or depreciation of its plants and property
shall have been less than fifteen percent (15%) of the gross
operating revenues of the corporation (including therein all revenues
derived from the operation of physical property owned or
operated by the corporation and all rentals received by the corporation from
property subject to the lien of the indentures securing the mortgage bonds of
the corporation) during such period after the deduction from such gross
operating revenues of an amount equal to the cost to the corporation of
electric current and/or gas purchased and resold and rentals paid for
electric, and/or gas, generating, transmitting and/or distributing properties
leased (including leased water power property) included or reflected in its
operating expense accounts during such period.
C. PREFERRED STOCK PREFERENCES AND PROVISIONS COMMON TO ALL SERIES
The provisions of this Part C shall apply to all series and shares of
Preferred Stock (both Old Preferred Stock and New Preferred Stock), except as
may be otherwise provided in respect to any one or more series of New
Preferred Stock as provided in paragraphs C(10) or C(11).
(1) DIVIDENDS
The holders of Preferred Stock of each series shall be entitled to receive
cumulative dividends thereon, when and as declared, payable quarterly on the 1st
days of February, May, August and November in each year, at the applicable rate
for each series of Old Preferred Stock specified in Part E of this Article III
and for each series of New Preferred Stock as may be determined therefor by the
Board of Directors prior to the issuance of each series thereof respectively,
out of any assets lawfully available therefor, before any dividends are paid
upon the Common Stock. No dividends shall be paid upon the Common Stock at any
time until all such cumulative dividends on the Preferred Stock for all past
quarterly dividend periods shall have been previously paid or funds for the
payment thereof (without interest) set apart therefor. In the case of all
shares of each issue of each series of Preferred Stock, the dividends shall be
cumulative from the quarter yearly dividend payment date next preceding the
date of issue of such shares unless issued on a dividend payment date, in which
event the dividends shall accumulate from such dividend payment date; provided,
however, that in the case of any series of Preferred Stock created after May
28, 1968, the Board of Directors in their discretion (a) may fix the date of
first original issue of shares of such series as the date from which dividends
shall accumulate, and (b) if the date of first original issue is within 30 days
preceding a regular dividend payment date, may provide that the accumulated
dividend otherwise payable on such regular dividend payment date shall be
payable only at the time of payment of the dividend for the next quarterly
period. Deferral for one
-5-
<PAGE>
calendar quarter of the payment of the initial dividend under the circumstances
provided in the foregoing clause (b) shall not be deemed to be a default in the
payment of dividends for any purpose.
(2) LIQUIDATION, DISSOLUTION OR WINDING UP
In case of voluntary or involuntary liquidation, dissolution or winding up
of the corporation, the holders of shares of each series of the Preferred Stock
shall be entitled to receive out of any assets of the corporation lawfully
available therefor, in money or money's worth, the applicable amounts specified
pursuant to paragraph D(l) with respect to series of New Preferred Stock, and
the applicable amount specified in Part E of this Article III with respect to
Old Preferred Stock, before any of such assets shall be paid or distributed to
holders of Common Stock; and if the assets of the corporation shall be
insufficient to pay the holders of all of the Preferred Stock then outstanding
the entire amounts to which they may be entitled, the holders of each
outstanding series of the Preferred Stock shall share ratably in such assets in
proportion to the amounts which would be payable with respect to such series if
all amounts payable thereon were paid in full. The consolidation or merger of
the corporation with or into any other corporation or corporations, or the
merger of any other corporation or corporations into the corporation, in
pursuance of the laws of the State of Wisconsin and of any other applicable
state providing for consolidation or merger, shall not be deemed a liquidation,
dissolution or winding up of the affairs of the corporation within the meaning
of the foregoing provisions of this paragraph C(2).
(3) DENIAL OF OTHER PARTICIPATION
The holders of the Preferred Stock shall not be entitled to participate in
any distribution of the profits, assets or capital of the Company, either in
money, property or stock, except as provided in or pursuant to this Article III.
(4) RECLASSIFICATION
Any shares of Preferred Stock at any time redeemed, purchased or held in
treasury, which have been restored upon cancellation to the status of authorized
but unissued shares, may, in the discretion of the Board of Directors, be
reclassified into authorized but unissued shares of Preferred Stock of any other
series thereof, or into authorized but unissued shares of Preferred Stock
undesignated as to series.
(5) PURCHASES OF OUTSTANDING PREFERRED STOCK
The corporation shall have the right at any time to purchase Preferred
Stock in the open market at prices not exceeding those fixed for redemption,
and to either cancel or resell the same; provided, however, that the corporation
shall not redeem less than all, nor purchase any, shares of Preferred Stock
during the existence of any default in the payment of dividends on the
Preferred Stock.
-6-
<PAGE>
(6) VOTING RIGHTS OF PREFERRED STOCK
Except as otherwise provided in or pursuant to this Article III or by
mandatory requirement of applicable law of the State of Wisconsin, the holders
of the Preferred Stock shall have no voting power.
(a) Ordinary Voting Rights After Dividend Defaults. Upon accrual of and
until divestment of the right of the holders of the Preferred Stock to elect a
majority of the Board of Directors as provided in subdivision (b) below, each
share of the Preferred Stock shall entitle the holder thereof to one vote per
share as to all matters other than the election of Directors.
(b) Election of Directors After Dividend Defaults. If and when the
corporation is in default in the payment of dividends payable on any of the
Preferred Stock at the time outstanding (herein called "dividend defaults") in
an amount equal to four (4) full quarterly dividends thereon, thereupon until
all dividend defaults shall have been made good, the holders of the Preferred
Stock, voting separately as a class, shall be entitled to elect the smallest
number of Directors necessary to constitute a majority of the full Board of
Directors as then constituted, and the holders of the Common Stock, voting
separately as a class, shall be entitled to elect the remaining Directors.
Upon accrual of said rights of the Preferred Stock, a meeting of the holders of
the Preferred Stock and the holders of the Common Stock for the election of
Directors shall be called by the President or Secretary of the corporation, and
held upon notice promptly given as provided in the By-Laws for a special
meeting. If within fifteen (15) days after the accrual of said right of the
Preferred Stock, the President or the Secretary shall fail to call such
meeting, then such meeting shall be held upon call by any holder or holders
of the Preferred Stock, after filing with the corporation a notice of his or
their intention to do so, and upon notice given by said shareholders similar
to that provided in the By-Laws for a special meeting. The terms of office
of all persons who may be Directors of the corporation at the time shall
terminate on the election of a majority of the Board of Directors by the
holders of the Preferred Stock, whether or not the holders of the Common
Stock shall at the time of such termination have elected the remaining
Directors; and thereafter, during the continuance of said right the
Preferred Stock, the holders of the Preferred Stock, voting separate
class, shall be entitled to elect a majority of the Board of Directors,
holders of the Common Stock, voting separately as a class, shall be entitled to
elect the remaining Directors; and all Directors so elected, whether at such
special meeting or any adjournment thereof or at any subsequent annual meeting
for the election of Directors held during the continuance of said right, shall
hold office until the next succeeding annual election and until their respective
successors elected by the holders of the Preferred Stock voting separately as a
class and by the holders of the Common Stock voting separately as a class are
elected and qualified, unless their terms of office shall be sooner terminated
as hereinafter provided. If and when all dividend defaults are made good (and
such defaults shall be made good out of any funds legally available therefor as
soon as reasonably practicable), the Preferred Stock shall thereupon be divested
of the aforesaid right to elect a majority of the Board of Directors (but
subject always to the revesting of such right in the Preferred Stock if and
when this subdivision shall again become applicable), and the terms of office of
the Directors
-7-
<PAGE>
elected by the holders of the Preferred Stock shall terminate forthwith
upon the election of their successors. The election of such successors may take
place either at a special meeting of the shareholders called by the President or
Secretary as aforesaid for such purpose or at an adjournment thereof, or at the
next succeeding annual election or adjournment thereof. If, within fifteen (15)
days after the divestment of the aforesaid right of the Preferred Stock, the
President or Secretary shall fail to call such meeting, then such meeting shall
be held upon call by any holder or holders of Common Stock after filing with the
corporation a notice of his or their intention to do so and upon notice given by
said shareholders similar to that provided in the By-Laws for a special meeting.
For the purposes of this paragraph a dividend default shall be deemed to have
been made good when the dividend with respect to which the default exists has
been either paid or declared and funds set aside.
(c) Quorum Requirements. At the first meeting for the election of
Directors after any accrual of the right of the Preferred Stock to elect a
majority of the Board of Directors as provided in subdivision (b) of this
paragraph C(6), and at any subsequent annual meeting for the election of
Directors held during the continuance of said right, the presence in person or
by proxy of the holders of record of a majority of all outstanding Preferred
Stock, shall be necessary to constitute a quorum for the election of the
Directors whom the holders of the Preferred Stock are entitled to elect, and the
presence in person or by proxy of the holders of record of a majority of all
outstanding Common Stock shall be necessary to constitute a quorum for the
election of the Directors whom the holders of the Common Stock are entitled to
elect. If at any such meeting there shall not be such a quorum of the holders
of the Preferred Stock, the meeting shall be adjourned from time to time without
notice other than an announcement at the meeting until such a quorum shall have
been obtained; provided that if such quorum shall not have been obtained within
ninety (90) days from the date of such meeting as originally called (or, in the
case of any annual meeting held during the continuance of said right, from the
date fixed for such annual meeting) the presence in person or by proxy of the
holders of record of one-third of all outstanding Preferred Stock shall then be
sufficient to constitute a quorum for the election of the Directors whom the
holders of the Preferred Stock are then entitled to elect. The absence of a
quorum of the holders of stock of either class shall not prevent or invalidate
the election by the other class of shareholders of the Directors whom they are
entitled to elect, if the necessary quorum of the shareholders of such other
class is present in person or represented by proxy at any such meeting or
adjournment thereof; provided, however, that at the first meeting for the
election of Directors after any accrual of the right of the Preferred Stock to
elect a majority of the Board of Directors, the absence of a quorum of the
holders of the Preferred Stock shall prevent the election of Directors by the
holders of the Common Stock, until a quorum of the holders of the Preferred
Stock shall be obtained.
(d) Filling Vacancies. Whenever the holders of the Preferred Stock
are entitled to elect a majority of the Board of Directors, and a vacancy
occurs among the Directors elected by or on behalf of the holders of the
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<PAGE>
Preferred Stock, the Board of Directors shall fill any such vacancy by electing
the candidate nominated by a majority of the remaining Directors elected by or
on behalf of the holders of the Preferred Stock. The Board of Directors shall
fill any vacancy occurring among the other Directors at any such time by
electing the candidate nominated by a majority of the remaining Directors
elected by or on behalf of the holders of the Common Stock.
(7) VOTING RIGHTS ON CERTAIN CHANGES IN AUTHORIZED SHARES
So long as any shares of the Preferred Stock of any series are outstanding
the corporation shall not without the affirmative vote of the holders of record
of two-thirds of the total number of the shares of the Preferred Stock of all
series then outstanding:
(a) Amend, alter, change or repeal any of the express terms of Preferred
Stock or of any shares of the Preferred Stock then outstanding in a manner
prejudicial to the holders thereof; provided, however, that if any such
amendment, alteration, change or repeal shall be prejudicial to the holders of
one or more but not all of the series of the Preferred Stock at the time
outstanding, only such consent of the holders of two-thirds of the total number
of shares of all series so affected shall be required.
(b) Create or authorize any class of stock ranking prior to the Preferred
Stock, or create or authorize any obligation or security convertible into shares
of stock of any such class.
(c) Create or authorize any class of stock (other than a series of the
Preferred Stock) ranking on a parity with the Preferred Stock or create or
authorize any obligation or security convertible into shares of stock of any
such class.
(8) SPECIAL VOTING RIGHTS ON CERTAIN ADDITIONAL ISSUES AND MERGER OR
CONSOLIDATION
So long as any shares of the Preferred Stock of any series are outstanding
the corporation shall not without the affirmative vote of the holders of record
of a majority of the total number of shares of Preferred Stock of all series
then outstanding:
(a) Issue any additional shares of any series of the Preferred Stock
(including the reissue, resale or other disposition of redeemed or reacquired
shares of Preferred Stock, whether or not cancelled or retired prior to reissue,
resale or other disposition), unless the net earnings of the corporation
applicable to the payment of dividends on the Preferred Stock for any twelve
(12) consecutive calendar months within the fifteen (15) calendar months
immediately preceding the first day of the calendar month within which such
additional shares of stock shall be issued, shall have been at least twice the
dividend requirements for a twelve (12) months' period upon the entire amount
of the Preferred Stock to be outstanding immediately after the issue of such
additional shares.
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(b) Merge or consolidate with or into any corporation unless such merger
or consolidation or the issuance or assumption of all securities to be issued or
assumed in connection therewith shall have been ordered, approved or permitted
by the Securities and Exchange Commission under the Public Utility Holding
Company Act of 1935, or by the Federal Power commission under the Federal Power
Act, or by any successor commission or regulatory authority of the United States
of America having jurisdiction in the premises; provided that the provisions of
this subdivision (b) shall not apply to a purchase or other acquisition by the
corporation of the franchises or assets of another company or otherwise apply in
any manner which does not involve a merger or consolidation.
(9) SPECIAL VOTING RIGHTS ON INCURRING CERTAIN UNSECURED INDEBTEDNESS
So long as any shares of the Preferred Stock of any series are outstanding
the corporation shall not without the affirmative vote of the holders of record
of a majority of the total number of shares of Preferred Stock present in person
or by proxy at a meeting duly called for the purpose:
Issue or assume any unsecured notes, debentures or other securities
representing unsecured indebtedness for any purpose other than (1) the refunding
of outstanding unsecured securities theretofore issued or assumed by the
corporation or (2) the redemption or other retirement of outstanding shares of
one or more series of the Preferred Stock, if, immediately after such issue or
assumption the total principal amount of all unsecured notes, debentures or
other unsecured securities representing unsecured indebtedness issued or assumed
by the corporation and then outstanding (including unsecured securities then to
be issued or assumed but excluding unsecured securities theretofore so consented
to by the holders of Preferred Stock) will exceed twenty percent (20%) of the
total principal amount of all bonds or other securities representing secured
indebtedness issued or assumed by the corporation and then to be outstanding and
the capital and surplus of the corporation as then to be stated on the books of
account of the corporation.
For the purpose of the foregoing subparagraph the presence in person or by
proxy of the holders of record of a majority of all outstanding Preferred Stock
shall be necessary to constitute a quorum; provided that if such quorum shall
not have been obtained at such meeting or any adjournment thereof within thirty
(30) days of the date of such meeting as originally called the presence in
person or by proxy of the holders of record of one-third of all outstanding
Preferred Stock shall constitute a quorum; provided further that in the absence
of a quorum such meeting or any adjournment thereof may be adjourned from time
to time by an officer of the corporation who shall have called the meeting
without notice other than announcement at the meeting.
(10) PERMITTED DENIAL OR LIMITATION OF VOTING RIGHTS OF SERIES OF NEW
PREFERRED STOCK
Any or all of the voting rights provided under paragraphs C(6), C(8) and
C(9) may be denied or limited in respect to the shares of any one or more series
of the New Preferred Stock, and the shares of any such series may thereafter be
disregarded or given limited effect in any computation of the requisite quorum
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or the requisite affirmative vote of shares of Preferred Stock, to the extent or
upon the conditions so provided in the resolution or resolutions of the Board of
Directors creating such series.
(11) REDEMPTION PROCEDURE
The following provisions of this paragraph C(11) shall be applicable to all
redemptions of shares of Old Preferred Stock and, unless and to the extent that
the Board of Directors shall otherwise determine in respect to any one or more
series of New Preferred Stock, shall also be applicable to redemptions of shares
of each series of New Preferred Stock which shall be redeemable by its terms:
(a) The Preferred Stock, or the whole or any part of any series thereof,
to be selected by the Board of Directors, shall be subject to redemption at the
option of the corporation at the respective dates and redemption prices, and
upon the conditions as specified in Part E of this Article III in respect to
each series of the Old Preferred Stock or as specified by the Board of Directors
pursuant to paragraph D(l) in respect to each series of the New Preferred Stock.
If less than all the shares of a series shall be red series so to be redeemed
shall be selected by lot in any fair and customary manner as the Board of
Directors may direct.
(b) Notice of every such redemption shall be given by publication at least
once in each of two (2) calendar weeks in a daily newspaper of general
circulation published in the City of Milwaukee, Wisconsin, the first such
publication to be at least thirty (30) days prior to the date fixed for
redemption. Notice of every such redemption shall also be mailed to the holders
of the shares to be redeemed, at their respective addresses as the same shall
appear on the books of the corporation, at least thirty (30) days prior to the
date fixed for redemption, but failure to mail such notice or any defect in such
notice or in the mailing thereof shall not affect the validity of the redemption
or the proceedings for the redemption of any shares of the Preferred Stock so to
be redeemed.
(c) Upon the giving of such notice by publication, the shares to be
redeemed shall be entitled to no dividends beyond those accumulated and unpaid
at the date fixed for redemption, and shall not be transferrable on the books of
the corporation except to the corporation, and after the date fixed for
redemption all such shares shall no longer be deemed to be outstanding, and the
holders of such shares shall have no right in or in respect to the corporation
other than the right to receive the redemption price and dividends accumulated
and unpaid to the date fixed for such redemption, without interest, upon
surrender of the certificate or certificates for such shares; provided, however,
that after giving notice by publication of any such redemption as aforesaid or
after giving to the bank or trust company hereinafter referred to irrevocable
authorization to give or complete such notice by publication, the corporation,
prior to the redemption date specified in such notice, may deposit funds for
such redemption, in trust for the account of the holders of the Preferred Stock
to be redeemed, with a bank or trust company organized under the laws of the
United States of America or the State of Wisconsin doing business in Wisconsin,
and
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having capital, surplus and undivided profits aggregating at least One Million
Dollars ($1,000,000) designated in such notice of redemption, and thereupon all
shares of the Preferred Stock with respect to which such deposit shall have been
made shall no longer be deemed to be outstanding, and the holders of such shares
forthwith upon such deposit shall have no right in or in respect to the
corporation, other than the right to receive out of or from said deposit the
redemption price and dividends accumulated and unpaid to the date fixed for such
redemption, without interest, upon surrender of the certificate or certificates
for such shares.
D. NEW PREFERRED STOCK
(1) SERIES OF NEW PREFERRED STOCK
The Board of Directors shall have authority, by resolution or resolutions,
to divide the New Preferred Stock into series, to establish and fix the
distinguishing designation of each such series and the number of shares thereof
(which number, by like action of the Board of Directors from time to time
thereafter, may be increased except when otherwise provided by the Board of
Directors in creating such series, or may be decreased but not below the number
of shares thereof then outstanding) and, within the limitations of applicable
law of the State of Wisconsin or as otherwise set forth in this Article III, to
fix and determine the relative rights and preferences of the shares of each
series so established prior to the issuance thereof, and particularly with
respect to:
(a) The rate of dividend and the initial original issue date or other date
from which such dividends shall be cumulative;
(b) The price or prices at, the period or periods within, and the terms
and conditions on, which shares may or shall be redeemed;
(c) The amounts payable upon shares in the event of voluntary liquidation
or of involuntary liquidation;
(d) The terms of the sinking fund provisions or redemption or purchase
account, if any, for the redemption or purchase of shares;
(e) The terms and conditions on which shares may be converted into shares
of Common Stock, or of authorized shares of any other class or series, if the
shares of any series are issued with the privilege of conversion; and
(f) Whether or not shares shall have voting rights, and the terms and
conditions upon which any voting rights may be exercised.
(2) INCORPORATION, EXCLUSION OR LIMITATION OF TERMS BY REFERENCE
The Board of Directors, in fixing and determining any terms of any series
of New Preferred Stock as permitted under paragraph D(l), may incorporate by
specific reference (with or without any permissible variations, exclusions or
limitations then determined by the Board of Directors) any or all of the terms
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set forth in this Article III or set forth in any other resolution fixing the
terms of the same or another series of New Preferred Stock, provided that such
other resolution has been duly filed and recorded so as to constitute an
amendment to the Articles of Incorporation of this corporation.
(3) TERMS OF NEW SERIES DEEMED AN ADDITION TO THIS PART D
Upon completion of any filing and recording of a resolution of the Board of
Directors adopted pursuant to paragraph D(l), which may be required in order
that the same shall constitute an amendment to these Articles of Incorporation,
the terms of the new series as set forth therein shall be deemed to become an
appropriately numbered additional paragraph to this Part D, and may be so
certified by any officer of this corporation or by any public official whose
duty it may be to certify copies of these Restated Articles of Incorporation or
amendments thereto.
(4) VARIABLE TERMS OF 7.72% SERIES (Effective August 30, 1972)
(a) The number of authorized shares of the Preferred Stock, 7.72% Series,
is One Hundred Fifty Thousand (150,000) shares.
(b) The dividend rate applicable to the Preferred Stock, 7.72% Series,
shall be seven and seventy-two one-hundredths percent (7.72%) per annum, and the
date from which such dividends shall be cumulative shall be the date of first
original issue of shares of the 7.72% Series.
(c) The Preferred Stock, 7.72% Series, shall be redeemable, in whole or in
part, on any date, in the manner provided in paragraph C(11), at a redemption
price equal to the par value thereof and the amount of dividends accumulated and
unpaid thereon at the date of redemption and a redemption premium per share as
follows: $8.00 if redeemed prior to November 1, 1977; $6.00 if redeemed on or
after November 1, 1977, and prior to November 1, 1982; $3.00 if redeemed on or
after November 1, 1982, and prior to November 1, 1985; and $1.00 if redeemed on
or after November 1, 1985; provided, however, that the shares of the 7.72%
Series shall not be redeemable prior to November 1, 1977 from the proceeds of
any refunding of shares of the 7.72% Series through the incurring of debt, or
through the issuance of any preferred stock of this corporation, whether now or
hereafter authorized, ranking equally with or prior to the shares of the 7.72%
Series as to dividends or on liquidation, if such debt has an effective interest
cost or such preferred stock has an effective dividend cost to this corporation
of less than 7.81% (effective interest cost and effective dividend cost to be
determined in each case in accordance with accepted financial practice).
(d) The preferential amount payable with respect to shares of the
Preferred Stock, 7.72% Series, in the event of voluntary liquidation,
dissolution or winding up, as generally provided in paragraph C(2), shall be an
amount equal to the redemption price applicable at the date of distribution, as
set forth in the preceding subdivision (c); and the preferential amount payable
with respect to shares of the Preferred Stock, 7.72% Series, in the event of
involuntary
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liquidation, dissolution or winding up, as generally provided in paragraph C(2),
shall be an amount equal to the par value thereof and accumulated unpaid
dividends (whether or not earned or declared) to the date of distribution, and
without premium.
(e) No sinking fund or redemption or purchase account, and no privilege of
conversion, is established hereby in respect to the shares of the Preferred
Stock, 7.72% Series.
(f) The shares of Preferred Stock, 7.72% Series, shall have the same
voting rights, and shall be subject to the same limitations of voting rights,
as are set forth in paragraphs (6), (7), (8) and (9) of Part C of this Article
III, which paragraphs are hereby incorporated herein by reference.
(5) VARIABLE TERMS OF 10.50% SERIES (Effective December 11, 1974)
(a) The number of authorized shares of the Preferred Stock, 10.50% Series,
is One Hundred Fifty Thousand (150,000) shares.
(b) The dividend rate applicable to the Preferred Stock, 10.50% Series,
shall be ten and fifty one-hundredths percent (10.50%) per annum, and the date
from which such dividends shall be cumulative shall be: The date of first
original issue of shares of the 10.50% Series in the case of shares originally
issued on such date; February 1, 1975 in the case of shares originally issued on
or after February 1, 1975 and prior to May 1, 1975; and May 1, 1975 in the case
of shares originally issued on or after May 1, 1975.
(c) The Preferred Stock, 10.50% Series, shall be redeemable (other than
through the operation of the sinking fund), in whole or in part, on any date, in
the manner provided in paragraph C(11), at a regular redemption price equal to
the sum of the par value thereof, the amount of dividends accumulated and unpaid
thereon at the date of redemption and a regular redemption premium per share as
follows: $15.00 if redeemed prior to November 1, 1984; $6.00 if redeemed on or
after November 1, 1984, and prior to November 1, 1989; and $1.00 if redeemed on
or after November 1, 1989; provided, however, that the shares of the 10.50%
Series shall not be redeemable prior to November 1, 1979 from the proceeds of
any refunding of shares of the 10.50% Series through the incurring of debt, or
through the issuance of any preferred stock of this corporation, whether now or
hereafter authorized, ranking equally with or prior to the shares of the 10.50%
Series as to dividends or on liquidation, if such debt has an effective interest
cost or such preferred stock has an effective dividend cost to this corporation
of less than 10.62% (effective interest cost and effective dividend cost to be
determined in each case in accordance with accepted financial practice).
(d) The preferential amount payable with respect to shares of the Preferred
Stock, 10.50% Series in the event of voluntary liquidation, dissolution or
winding up, as generally provided in paragraph C(2), shall be an amount equal to
the regular redemption price applicable at the date of distribution, as set
forth in subdivision (c) above; and the preferential amount payable with respect
to shares of the Preferred Stock, 10.50% Series, in the event of involuntary
liquidation, dissolution or winding up, as generally provided in paragraph
C(2),
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shall be an amount equal to the par value thereof and accumulated unpaid
dividends (whether or not earned or declared) to the date of distribution, and
without premium.
(e) (i) As a sinking fund, the corporation will redeem on November 1 of
each year, beginning with 1979, not less than 7,500 shares (mandatory) or more
than 15,000 shares of the 10.50% Series, at a sinking fund redemption price
equal to the sum of the par value thereof and the amount of dividends
accumulated and unpaid thereon at the date of redemption, and without premium.
The option to redeem in excess of 7,500 shares of the Series at the sinking fund
redemption price on any November 1 will not be cumulative.
(ii) Upon any redemption of shares of the 10.50% Series pursuant to
this subdivision (e), the following shall be deemed substituted for subparagraph
C(11)(b):
Notice of every such redemption shall be mailed to the
holders of the shares intended to be redeemed, at their
respective addresses as the same shall appear on the
books of the corporation, at least thirty (30) days
prior to the date fixed for redemption, but failure to
mail such notice or any defect in such notice or in the
mailing thereof as to less than all of the shares
intended to be redeemed shall not affect the validity of
the redemption or the proceedings for the redemption of
any other shares of the Preferred Stock so to be
redeemed. The reference to "notice by publication" in
subparagraph C(11)(c) shall be deemed to refer to
"notice by mailing." An affidavit of mailing by the
Secretary or any Assistant Secretary of the corporation
or by an officer of any bank or trust company shall be
conclusive that such notice by mailing was given.
(iii) Shares of the 10.50% Series acquired or redeemed by the
corporation otherwise than pursuant to this subdivision (e) may, at the option
of the corporation, be credited against subsequent mandatory sinking fund
requirements.
(iv) If the corporation shall be prevented, because of statutory or
regulatory restriction or the provisions of paragraph C(5) of Article III of its
Articles of Incorporation or for any other reason sufficient in law, from
acquiring or redeeming the number of shares of the 10.50% Series which in the
absence of such restriction or reason it would be required to acquire or redeem,
the deficit shall be made good no later than the first succeeding November 1 at
which the corporation shall not be prevented by such restriction or reason from
acquiring or redeeming shares of the 10.50% Series. Failure to make a mandatory
sinking fund redemption because of any such restriction or reason shall not
impair any power of the corporation to purchase, redeem or otherwise acquire for
value, or pay dividends on, any class of its shares.
(v) Whenever the corporation shall be in arrears in the mandatory
sinking fund requirement, otherwise than because of a restriction or reason for
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which provision is made under (iv) above, and shall fail to remedy such arrears
by a sufficient redemption made or credit taken within sixty (60) days after it
has knowledge of such arrears, the corporation shall not, after the expiration
of such sixty-day period, purchase, redeem or otherwise acquire for value, or
pay dividends on, any stock subordinate to the Preferred Stock, until such
arrears shall have been satisfied in full. For this purpose only, a mandatory
sinking fund redemption may be made on a date other than November 1, but
otherwise shall be at the sinking fund redemption price and upon notice by
mailing as provided in (i) and (ii) above.
(vi) Shares of the 10.50% Series redeemed, or for which credit is
taken, under the provisions of this subparagraph (e) shall be deemed immediately
cancelled and shall not be reissued as shares of the 10.50% Series, but may be
reclassified into authorized but unissued shares of Preferred Stock undesignated
as to series or into shares of any other series hereafter created. The Board of
Directors shall not hereafter enlarge the authorized number of shares of the
10.50% Series.
(f) No privilege of conversion is established hereby in respect to the
shares of the Preferred Stock, 10.50% Series.
(g) The shares of Preferred Stock, 10.50% Series, shall have the same
voting rights, and shall be subject to the same limitations of voting rights, as
are set forth in paragraphs (6), (7), (8) and (9) of Part C of this Article III,
which paragraphs are hereby incorporated herein by reference.
E. OLD PREFERRED STOCK
(1) FIXED LIQUIDATION PREFERENCES -- ALL OLD PREFERRED STOCK
The preferential amount payable with respect to all shares of Old Preferred
Stock in case of voluntary or involuntary liquidation, dissolution or winding
up, as generally provided in paragraph C(2), shall be an amount equal to the
par value thereof and accumulated unpaid dividends (whether or not earned or
declared) to the date of distribution, and without premium.
(2) OTHER VARIABLE TERMS OF 5% SERIES
(a) The number of authorized shares of the Preferred Stock, 5% Series, is
One Hundred Thirty-Two Thousand (132,000) shares.
(b) The dividend rate applicable to the Preferred Stock, 5% Series, shall
be five percent (5%) per annum.
(c) The Preferred Stock, 5% Series, shall be redeemable, in whole or in
part, on any date, in the manner provided in paragraph C(11), at a redemption
price equal to the par value thereof and the amount of dividends accumulated and
unpaid thereon at the date of redemption, and a redemption premium of $7.50 per
share.
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(3) OTHER VARIABLE TERMS OF 5.04% SERIES
(a) The number of authorized shares of the Preferred Stock, 5.04% Series,
is Thirty Thousand (30,000) shares.
(b) The dividend rate applicable to the Preferred Stock, 5.04% Series,
shall be five and four one-hundredths percent (5.04%) per annum.
(c) The Preferred Stock, 5.04% Series, shall be redeemable, in whole or in
part, on any date, in the manner provided in paragraph C(1l), at a redemption
price equal to the par value thereof and the amount of dividends accumulated and
unpaid thereon at the date of redemption, and a redemption premium of $2.81 per
share.
(4) OTHER VARIABLE TERMS OF 5.08% SERIES
(a) The number of authorized shares of the Preferred Stock, 5.08% Series,
is Fifty Thousand (50,000) shares.
(b) The dividend rate applicable to the Preferred Stock, 5.08% Series,
shall be five and eight one-hundredths percent (5.08%) per annum.
(c) The Preferred Stock, 5.08% Series, shall be redeemable, in whole or in
part, on any date, in the manner provided in paragraph C(11), at a redemption
price equal to the par value thereof and the amount of dividends accumulated and
unpaid thereon at the date of redemption, and a redemption premium per share as
follows: $2.00 if redeemed before November 1, 1973; and $1.00 if redeemed on or
after November 1, 1973.
(5) OTHER VARIABLE TERMS OF 6.76% SERIES
(a) The number of authorized shares of the Preferred Stock, 6.76% Series,
is One Hundred Fifty Thousand (150,000) shares.
(b) The dividend rate applicable to the Preferred Stock, 6.76% Series,
shall be six and seventy-six one-hundredths percent (6.76%) per annum.
(c) The Preferred Stock, 6.76% Series, shall be redeemable, in whole or in
part, on any date, in the manner provided in paragraph C(ll), at a redemption
price equal to the par value thereof and the amount of dividends accumulated and
unpaid thereon at the date of redemption, and a redemption premium per share as
follows: $8.42 if redeemed prior to November 1, 1973; $6.73 if redeemed on or
after November 1, 1973, and prior to November 1, 1978; $5.04 if redeemed on or
after November 1, 1978, and prior to November 1, 1983; and $3.35 if redeemed on
or after November 1, 1983; provided, however, that the shares of the 6.76%
Series shall not be redeemable prior to November 1, 1973 from the proceeds of
any refunding of shares of the 6.76% Series through the incurring of debt, or
through the issuance of any preferred stock of this corporation, whether now or
hereafter authorized, ranking equally with or prior to the shares of the 6.76%
Series as to dividends or on liquidation, if such debt has an effective interest
cost or such preferred stock has an effective dividend cost to this corporation
of less
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than the effective dividend cost to this corporation of shares of the 6.76%
Series (effective interest cost and effective dividend cost to be determined in
each case in accordance with accepted financial practice).
F. PREEMPTIVE RIGHTS
No holder of shares of any class of stock of this corporation shall have
any preemptive right or other right to subscribe for, purchase or receive any
stock or securities convertible into stock of this corporation which may be
authorized, issued or acquired from time to time hereafter; and the Board of
Directors, as and when it may deem advisable, may dispose of all or any portion
of such stock or securities convertible into stock, free from any such right,
for money or other lawful consideration, whether by sale, exchange, offering to
shareholders, or any other lawful means. The provisions of this Part F shall
not impair any conversion right of any such convertible securities or any other
right authorized by the Board of Directors to purchase or exchange, or to
receive any distribution of, any securities of the corporation.
G. REQUISITE VOTES ON AMENDMENTS TO ARTICLES, MERGER AND CONSOLIDATION
(1) AMENDMENTS TO ARTICLES OF INCORPORATION
Subject to any applicable voting rights of the holders of Preferred Stock
or any series thereof pursuant to the provisions of paragraphs C(6)(a), C(7) or
D(l), or mandatory provision of law, the requisite affirmative vote for adoption
of amendments to the Articles of Incorporation of the corporation is the
affirmative vote of the holders of two-thirds of all shares of Common Stock then
outstanding and entitled to vote.
(2) MERGER OR CONSOLIDATION
Subject to any applicable voting rights of the holders of Preferred Stock
or any series thereof pursuant to the provisions of paragraphs C(6)(a), C(8)(b)
or D(l), or mandatory provision of law, the requisite affirmative vote for
approval of any plan of merger or consolidation of the corporation with or into
any other corporation, or for authorization of the sale, lease, exchange or
other disposition of all or substantially all of the assets of the corporation,
is the affirmative vote of the holders of two-thirds of all shares of Common
Stock then outstanding and entitled to vote; provided, that no vote of the
shareholders shall be required for the merger into the corporation of a company
if at least ninety percent (90%) of such company's outstanding shares of each
class are owned by the corporation prior to the merger.
(3) NO ELECTION TO REDUCE REQUISITE VOTE IN EFFECT UNDER 1969 WISCONSIN
STATUTES
The adoption of these Restated Articles of Incorporation is not intended and
shall not be construed as an election of any smaller affirmative voting
requirements in respect to amendments to the Articles of Incorporation of this
corporation or in respect to merger or consolidation, than the affirmative
voting
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requirements in effect at December 31, 1970 under the provisions of the
Wisconsin Business Corporation Law, Chapter 180 of the 1969 Wisconsin Statutes,
except as permitted in the proviso to paragraph G(2).
IV. QUORUM
Except as otherwise provided by law or in or pursuant to the provisions of
Article III, the holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. If, for any reason, such quorum shall not be represented at any
meeting, the meeting may be adjourned from time to time by the shareholders
represented at such meeting. At any adjourned meeting at which the requisite
amount of shares shall be present in person or by proxy, any business may be
transacted which might have been transacted at the meeting as originally called.
V. CLASSIFICATION OF DIRECTORS
The general powers, number and classification of Directors shall be as set
forth in Article III, Sections 1, 2, 3 and 4 of the By-Laws (and as such
Sections shall exist from time to time) and such Article III, Sections 1, 2, 3
and 4 of the By-Laws, or any provision thereof, shall be amended, altered,
changed or repealed only by the affirmative vote of shareholders possessing at
least three-fourths of the voting power of the then outstanding shares of all
classes of stock of the corporation generally possessing voting rights in
elections for Directors, considered for this purpose as one class; provided,
however, that the Board of Directors, by a resolution adopted by the Requisite
Vote (as defined herein), may amend, alter, change or repeal Sections 1, 2, 3
and 4 of Article III of the By-Laws, or any provision thereof, without the vote
of the shareholders.
As used herein, the term "Requisite Vote" shall mean the affirmative vote of at
least two-thirds of the Directors then in office plus one Director.
Any Director may be removed from office, but only for cause as hereinafter
defined, by the affirmative vote of shareholders possessing at least a majority
of the voting power of the then outstanding shares of all classes of stock of
the corporation generally possessing voting rights in elections for Directors,
considered for this purpose as one class; provided, however, that if the Board
of Directors by a resolution adopted by the Requisite Vote shall have
recommended removal of a Director, then the shareholders may remove such
Director from office by the foregoing vote without cause. As used herein, the
meaning of "cause" shall be construed to exist only if the Director whose
removal is proposed has been convicted of a felony by a court of competent
jurisdiction and such conviction is no longer subject to direct appeal or has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation in a matter which has a materially adverse effect on
the business of the corporation, and such adjudication is no longer subject to
direct appeal.
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Any vacancy occurring in the Board of Directors, including a vacancy created
by an increase in the number of Directors, may be filled by the affirmative vote
of a majority of the Directors then in office, though less than a quorum of the
Board of Directors, or by a sole remaining Director. Any Director so elected
shall serve until the next election of the class for which such Director shall
have been chosen and until his successor shall be elected and qualified.
The provisions of this Article V, notwithstanding any other provisions of
these Restated Articles of Incorporation, shall be amended, altered, changed or
repealed only by the affirmative vote of shareholders possessing at least three-
fourths of the voting power of the then outstanding shares of all classes of
stock of the corporation generally possessing voting rights in elections for
Directors, considered for this purpose as one class.
Notwithstanding the foregoing and the provisions of the By-Laws of the
corporation, whenever the holders of any one or more series of Preferred Stock
issued by the corporation, pursuant to Article III hereof, shall have the right,
voting separately as a class or by series, to elect Directors at an annual or
special meeting of shareholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of the series of Preferred Stock applicable thereto, and such Directors
so elected shall not be divided into classes unless expressly provided by the
terms of the applicable series.
VI. EFFECT OF HEADINGS
The descriptive headings of the several articles, parts, paragraphs and
subdivisions in these Restated Articles of Incorporation were formulated,
used and inserted herein for convenience only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
VII. REGISTERED HOLDERS
The corporation shall be entitled to treat the holder of record of any share
or shares of stock as the owner thereof for all purposes, and shall not be bound
to recognize any equitable or other claim to or interest in any such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof.
VIII. REGISTERED OFFICE AND AGENT
The address of the registered office of the corporation is 700 North
Adams Street, P. 0. Box 19001, Green Bay, Wisconsin 54307 and the name of its
registered agent at such address is J. H. Liethen. (R. H. Knuth became
registered agent on July 2, 1979.)
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<PAGE>
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
OF
WISCONSIN PUBLIC SERVICE CORPORATION
Pursuant to Sections 180.0602 and 180.1002
of the Wisconsin Business Corporation Law.
The undersigned officer of Wisconsin Public Service Corporation, a
corporation organized and existing under and by virtue of the laws of the State
of Wisconsin, does hereby certify:
FIRST: The name of the corporation is WISCONSIN PUBLIC
SERVICE CORPORATION (the "Corporation").
SECOND: The Board of Directors of the Corporation, at a meeting duly
called, held and convened on June 9, 1993, at which a quorum was present and
voting, did adopt a resolution authorizing the creation of a series of Preferred
Stock to be known as Preferred Stock, 6.88% Series, and the following is a true
copy of the original of said resolutions:
RESOLVED, that a new series, the distinguishing designation of which
new series is "6.88% Series" of the presently authorized but unissued Preferred
Stock, of the par value of One Hundred Dollars ($100.00) per share, of this
Corporation be and it hereby is established upon the terms as set forth in the
following paragraph (6) which, pursuant to paragraph D(3) of Article III of the
Restated Articles of Incorporation of this Corporation, as amended, shall be
deemed added to Part D of said Article III:
----------------
(6) Variable Terms of 6.88% Series
------------------------------
(a) The number of authorized shares of the Preferred Stock, 6.88%
Series, is One Hundred Fifty Thousand (150,000) shares.
(b) The dividend rate applicable to the Preferred Stock, 6.88% Series,
shall be six and eighty-eight one-hundredths percent (6.88%), as a percentage of
the $100.00 par value thereof, per annum or $6.88 per share per annum, and the
date from which such dividends shall be cumulative shall be the date of first
original issue of shares of the 6.88% Series. The first dividend payment date
shall be August 1, 1993.
(c) The Preferred Stock, 6.88% Series, shall not be redeemable prior
to June 1, 2003. On or after June 1, 2003, the Preferred Stock, 6.88% Series,
shall be redeemable, in whole or in part, on any date in the manner provided in
<PAGE>
paragraph C(11), at a redemption price equal to $100 per share and the amount of
dividends accumulated and unpaid thereon at the date of redemption and a
redemption premium per share as follows:
Redemption
Redemption Date Premium
--------------- ----------
On or after June 1, 2003 and prior to June 1, 2004 $ 3.44
On or after June 1, 2004 and prior to June 1, 2005 $ 3.10
On or after June 1, 2005 and prior to June 1, 2006 $ 2.75
On or after June 1, 2006 and prior to June 1, 2007 $ 2.41
On or after June 1, 2007 and prior to June 1, 2008 $ 2.06
On or after June 1, 2008 and prior to June 1, 2009 $ 1.72
On or after June 1, 2009 and prior to June 1, 2010 $ 1.38
On or after June 1, 2010 and prior to June 1, 2011 $ 1.03
On or after June 1, 2011 and prior to June 1, 2012 $ 0.69
On or after June 1, 2012 and prior to June 1, 2013 $ 0.34
On June 1, 2013 and thereafter None
(d) The preferential amount payable with respect to shares of the
Preferred Stock, 6.88% Series, in the event of voluntary liquidation,
dissolution or winding up, as generally provided in paragraph C(2), shall be an
amount equal to the redemption price applicable at the date of distribution, as
set forth in the preceding subdivision (c); and the preferential amount payable
with respect to shares of the Preferred Stock, 6.88% Series, in the event of
involuntary liquidation, dissolution or winding-up, as generally provided in
paragraph C(2), shall be an amount equal to $100 per share and accumulated
unpaid dividends (whether or not earned or declared) to the date of
distribution.
(e) No sinking fund or redemption or purchase account, and no
privilege of conversion, is established hereby in respect to the shares of the
Preferred Stock, 6.88% Series.
(f) The shares of Preferred Stock, 6.88% Series, shall have the same
voting rights, and shall be subject to the same limitations of voting rights, as
are set forth in paragraphs (6), (7), (8) and (9) of Part C of this Article III,
which paragraphs are hereby incorporated herein by reference. The shares of
Preferred Stock, 6.88% Series, shall not be subject to the provisions of Section
180.1150 of the Wisconsin Business Corporation Law.
THIRD: The number of shares of Preferred Stock, 6.88% Series,
created is 150,000.
FOURTH: None of the shares of Preferred Stock, 6.88% Series, have
been issued.
2
<PAGE>
FIFTH: The amendment set forth above was adopted on June 9, 1993.
SIXTH: The aforementioned amendment of the restated Articles of
Incorporation of the Corporation, as previously amended, was adopted by the
Board of Directors of the Corporation in accordance with Section 180.1002 of
this Wisconsin Business Corporation Law, and shareholder action was not
required.
IN WITNESS WHEREOF, these Articles of Amendment are made under the seal
of said Wisconsin Public Service Corporation, and signed by Robert D. Valesano,
its Vice President this 9th day of June, 1993.
/s/ Robert D. Valesano
----------------------------------
[Corporate Seal] Robert D. Valesano, Vice President
/s/ Robert H. Knuth
Attest: ----------------------------------
Robert H. Knuth, Secretary
This document was drafted by Michael S. Nolan of Foley & Lardner, 777 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202.
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION
BY-LAWS
As In Effect February 14, 1991
ARTICLE I. OFFICES
1. The principal office of the Corporation in the State of Wisconsin
shall be in the City of Green Bay. The Corporation may also have offices at
such other places, within and outside of the State of Wisconsin, as the Board
of Directors may designate or as the business of the Corporation may require.
2. Registered Office. The Board of Directors shall designate the
registered office of the Corporation and may change such registered office by
resolution.
ARTICLE II. SHAREHOLDERS
1. The annual meeting of the shareholders for the election of directors
and for the transaction of such other business as may properly be brought
before the meeting shall be held each year not later than the fourth Tuesday
in May, on the date designated by the Board of Directors and specified in the
notice of meeting. If the election of directors shall not be held on the day
designated for any annual meeting of the shareholders, or at any adjournment
thereof, the Board of Directors shall cause the election to be held at a
special meeting of the shareholders as soon thereafter as convenient.
2. Special meetings of the shareholders may be called by the Chairman
of the Board of Directors or the President or the Secretary, or by resolution
of the Board of Directors. The Corporation shall call a special meeting of
shareholders in the event that the holders of at least 10% of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting sign, date and deliver to the Corporation one or more written
demands for the meeting describing one or more purposes for which it is to be
held. The Corporation shall give notice of such a special meeting within
thirty days after the date that the demand is delivered to the Corporation.
If the holders of the Preferred Stock shall become entitled, as provided by
<PAGE>
Article II of the Articles of Incorporation, to elect members of the Board of
Directors, special meetings of the shareholders shall be held upon call as
provided in said Article III.
3. Place of Meeting. Each meeting of shareholders, annual or special,
shall be held at the principal office of the Corporation unless another place,
either within or without the State of Wisconsin, has been designated by the
Board of Directors and specified in the notice of such meeting, but any
meeting of shareholders may be adjourned to reconvene at any place designated
by a majority of the shares represented at such meeting.
4. Notice of Meetings. Written notice stating the date, time and place
of the meeting and, in case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more
than sixty days before the date of the meeting (unless a different time is
provided by the Wisconsin Business Corporation Law or the Articles of
Incorporation) to each shareholder of record entitled to vote at such meeting
and to such other persons as required by the Wisconsin Business Corporation
Law. Such notice shall be given by or at the direction of the officer or
persons calling the meeting and shall be deemed to be delivered when deposited
in the United States mail, postage prepaid, addressed to the shareholder of
record at his address as it appears in the records of the Corporation.
a. If any meeting of the shareholders is adjourned to another time
or place, no notice of such adjourned meeting need be given other than by
announcement thereof at the meeting at which such adjournment is taken; pro-
vided, however, that if a new record date for an adjourned meeting is or must
be fixed, the Corporation shall give notice of the adjourned meeting to
persons who are shareholders as of the new record date.
b. In connection with the election of members of the Board of
Directors by the holders of the Preferred Stock pursuant to Article III of the
Articles of Incorporation, the Corporation shall prepare and mail to the
holders of record of Preferred Stock such proxy forms, communications and
documents as may be deemed appropriate and as may be required by any
governmental authority having jurisdiction thereof.
5. Waiver of Notice. A shareholder may waive any notice required by
the Wisconsin Business Corporation Law, the Articles of Incorporation or these
By-laws before or after the date and time stated in the notice. The waiver
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<PAGE>
shall be in writing and signed by the shareholder entitled to the notice,
contain the same information that would have been required in the notice under
applicable provisions of the Wisconsin Business Corporation Law (except that
the time and place of meeting need not be stated) and be delivered to the
Corporation for inclusion in the corporate records. A shareholder's
attendance at a meeting, in person or by proxy, waives objection to all of the
following: (a) lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting or promptly upon arrival objects
to holding the meeting or transacting business at the meeting; and (b)
consideration of a particular matter at the meeting that is not within the
purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
6. Fixing of Record Date. The Board of Directors may fix in advance a
date as the record date for the purpose of determining shareholders entitled
to notice of and to vote at any meeting of shareholders, shareholders entitled
to demand a special meeting as contemplated by Section 2 of this Article II,
shareholders entitled to take any other action, or shareholders for any other
purpose. Such record date shall not be more than seventy days prior to the
date on which the particular action, requiring such determination of
shareholders, is to be taken. If no record date is fixed by the Board of
Directors or by the Wisconsin Business Corporation Law for the determination
of shareholders entitled to notice of and to vote at a meeting of
shareholders, the record date shall be the close of business on the day before
the first notice is given to shareholders. If no record date is fixed by the
Board of Directors or by the Wisconsin Business Corporation Law for the
determination of shareholders entitled to demand a special meeting as
contemplated in Section 2 of this Article II, the record date shall be the
date that the first shareholder signs the demand. Except as provided by the
Wisconsin Business Corporation Law for a court-ordered adjournment, a
determination of shareholders entitled to notice of and to vote at a meeting
of shareholders is effective for any adjournment of such meeting unless the
Board of Directors fixes a new record date, which it shall do if the meeting
is adjourned to a date more than 120 days after the date fixed for the
original meeting. The record date for determining shareholders entitled to a
distribution (other than a distribution involving a purchase, redemption or
other acquisition of the Corporation's shares) or a share dividend is the date
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<PAGE>
on which the Board of Directors authorized the distribution or share dividend,
as the case may be, unless the Board of Directors fixes a different record
date.
7. Shareholders' List for Meetings. After a record date for a special
or annual meeting of shareholders has been fixed, the Corporation shall
prepare a list of the names of all of the shareholders entitled to notice of
the meeting. The list shall be arranged by class or series of shares, if any,
and show the address of and number of shares held by each shareholder. Such
list shall be available for inspection by any shareholder, beginning two
business days after notice of the meeting is given for which the list was
prepared and continuing to the date of the meeting, at the Corporation's
principal office or at a place identified in the meeting notice in the city
where the meeting will be held. A shareholder or his or her agent may, on
written demand, inspect and, subject to the limitations imposed by the
Wisconsin Business Corporation Law, copy the list, during regular business
hours and at his or her expense, during the period that it is available for
inspection pursuant to this Section. The Corporation shall make the
shareholders' list available at the meeting and any shareholder or his or her
agent or attorney may inspect the list at any time during the meeting or any
adjournment thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken at a
meeting of shareholders.
8. Quorum and Voting Requirements. Shares entitled to vote as a
separate voting group may take action on a matter at a meeting only if a
quorum of those shares exists with respect to that matter. Pursuant to
Article IV of the Articles of Incorporation, except as otherwise provided by
law or in or pursuant to the provisions of Article III of the Articles of
Incorporation, the holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Once a share is represented for any purpose at a meeting, other
than for the purpose of objecting to holding the meeting or transacting
business at the meeting, it is considered present for purposes of determining
whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for the
adjourned meeting. If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast within the
voting group favoring the action exceed the votes cast opposing the action,
unless the Articles of Incorporation or the Wisconsin Business Corporation Law
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<PAGE>
requires a greater number of affirmative votes. Unless otherwise provided in
the Articles of Incorporation, each director shall be elected by a plurality
of the votes cast by the shares entitled to vote in the election of directors
at a meeting at which a quorum is present. Though less than a quorum of the
outstanding votes of a voting group are represented at a meeting, a majority
of the votes so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
9. Proxies. At all meetings of shareholders, a shareholder may vote
his or her shares in person or by proxy. A shareholder may appoint a proxy to
vote or otherwise act for the shareholder by signing an appointment form,
either personally or by his or her attorney-in-fact. An appointment of a
proxy is effective when received by the Secretary or other officer or agent of
the Corporation authorized to tabulate votes. An appointment is valid for
eleven months from the date of its signing unless a different period is
expressly provided in the appointment form.
10. Acceptance of Instruments Showing Shareholder Action. If the name
signed on a vote, consent, waiver or proxy appointment corresponds to the name
of a shareholder, the Corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act of a
shareholder. If the name signed on a vote, consent, waiver or proxy
appointment does not correspond to the name of a shareholder, the Corporation,
if acting in good faith, may accept the vote, consent, waiver or proxy
appointment and give it effect as the act of the shareholder if any of the
following apply:
a. The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity.
b. The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the shareholder
and, if the Corporation requests, evidence of fiduciary status acceptable to
the Corporation is presented with respect to the vote, consent, waiver or
proxy appointment.
c. The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the Corporation requests, evidence of
this status acceptable to the Corporation is presented with respect to the
vote, consent, waiver or proxy appointment.
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<PAGE>
d. The name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the Corporation
requests, evidence acceptable to the Corporation of the signatory's authority
to sign for the shareholder is presented with respect to the vote, consent,
waiver or proxy appointment.
e. Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all co-
owners.
The Corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the Corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
ARTICLE III. BOARD OF DIRECTORS
1. General Powers. The business and affairs of the Corporation shall
be managed by its Board of Directors. The Board shall determine the nature
and character of the business to be conducted by the Corporation and the
method of doing so; what employees, agents and officers shall be employed and
their compensation; and what purchases or contracts for purchase shall be
made. The Board may delegate any of its aforesaid powers to committees or to
officers, agents or employees as it may from time to time determine.
2. Number of Directors. The number of directors of the Corporation
shall be nine (9), divided into three (3) classes of three (3) directors each
(Class A, Class B and Class C).
3. Term. At the 1988 annual meeting of shareholders, the directors of
Class A shall be elected for a term to expire at the first annual meeting of
shareholders after their election, and until their successors are elected and
qualify, the directors of Class B shall be elected for a term to expire at the
second annual meeting of shareholders after their election, and until their
successors are elected and qualify, and the directors of Class C shall be
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<PAGE>
elected for a term to expire at the third annual meeting of shareholders after
their election and until their successors are elected and qualify. At each
annual meeting of shareholders after the 1988 annual meeting of shareholders
the successors to the class of directors whose terms shall expire at the time
of such annual meeting shall be elected to hold office until the third
succeeding annual meeting of shareholders, and until their successors are
elected and qualify.
4. Qualifications. No director elected to such office for the first
time after January 1, 1972 shall be eligible for re-election after attaining
the age of seventy (70) years. Directors need not be shareholders of the
Corporation or residents of the State of Wisconsin.
5. Meetings. The Board of Directors shall hold its meetings at such
place or places, within or without the State of Wisconsin, as the Board may
from time to time determine.
a. A meeting of the Board of Directors, to be known as the annual
meeting, may be held, without notice, immediately after and at the same place
as the annual meeting of the shareholders at which such Board is elected, for
the purpose of electing the officers of the Corporation and to transact such
other business as may come before the Board. Such annual meeting may be held
at a different place than the annual meeting of shareholders and/or on a date
subsequent to the annual meeting of shareholders, if notice of such different
place and/or date has been given to or waived by all the directors.
b. Regular meetings of the Board of Directors may be held without
call and without notice, at such times and in such places as the Board may by
resolution from time to time determine.
c. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board or the Chief Executive Officer and shall be
called by the Secretary of the Corporation upon the written request of three
or more directors.
6. Notice; Waiver. Notice of each special meeting of the Board of
Directors shall be given by written notice delivered or communicated in
person, by telegraph, teletype, facsimile or other form of wire or wireless
communication, or by mail or private carrier, to each director at his business
address or at such other address as such director shall have designated in
writing filed with the Secretary, in each case not less than forty-eight hours
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prior to the meeting. The notice need not prescribe the purpose of the
special meeting of the Board of Directors or the business to be transacted at
such meeting. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice is given by telegram, such notice shall be deemed to be
effective when the telegram is delivered to the telegraph company. If notice
is given by private carrier, such notice shall be deemed to be effective when
delivered to the private carrier. Whenever any notice whatever is required to
be given to any director of the Corporation under the Articles of
Incorporation or these By-laws or any provision of the Wisconsin Business
Corporation Law, a waiver thereof in writing, signed at any time, whether
before or after the date and time of meeting, by the director entitled to such
notice shall be deemed equivalent to the giving of such notice. The
Corporation shall retain any such waiver as part of the permanent corporate
records. A director's attendance at or participation in a meeting waives any
required notice to him or her of the meeting unless the director at the
beginning of the meeting or promptly upon his or her arrival objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
7. Quorum. Except as otherwise provided by the Wisconsin Business
Corporation Law or by the Articles of Incorporation or these By-laws, a
majority of the number of directors specified in Section 2 of Article III of
these By-laws shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors. Except as otherwise provided by the
Wisconsin Business Corporation Law or by the Articles of Incorporation or by
these By-laws, a quorum of any committee of the Board of Directors created
pursuant to Section 3 hereof shall consist of a majority of the number of
directors appointed to serve on the committee. A majority of the directors
present (though less than such quorum) may adjourn any meeting of the Board of
Directors or any committee thereof, as the case may be, from time to time
without further notice.
8. Manner of Acting. The affirmative vote of a majority of the
directors present at a meeting of the Board of Directors or a committee
thereof at which a quorum is present shall be the act of the Board of
Directors or such committee, as the case may be, unless the Wisconsin Business
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<PAGE>
Corporation Law, the Articles of Incorporation or these By-laws require the
vote of a greater number of directors.
9. Minutes of Meetings. Minutes of any regular or special meeting of
the Board of Directors shall be prepared and distributed to each director.
10. Vacancies. Vacancies occurring in the Board of Directors shall be
filled in the manner provided in Article V of the Articles of Incorporation.
11. Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the Corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or delegate authority to an
appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and employees
and to their estates, families, dependents or beneficiaries on account of
prior services rendered by such directors, officers and employees to the
Corporation.
12. Presumption of Assent. A director who is present and is announced
as present at a meeting of the Board of Directors or any committee thereof
created in accordance with Section 13 of this Article III, when corporate
action is taken, assents to the action taken unless any of the following
occurs: (a) the director objects at the beginning of the meeting or promptly
upon his or her arrival to holding the meeting or transacting business at the
meeting; (b) the director's dissent or abstention from the action taken is
entered in the minutes of the meeting; or (c) the director delivers written
notice that complies with the Wisconsin Business Corporation Law of his or her
dissent or abstention to the presiding officer of the meeting before its
adjournment or to the Corporation immediately after adjournment of the
meeting. Such right of dissent or abstention shall not apply to a director
who votes in favor of the action taken.
13. Committees. The Board of Directors by resolution adopted by the
affirmative vote of a majority of all of the directors then in office may
create one or more committees, appoint members of the Board of Directors to
serve on the committees and designate other members of the Board of Directors
to serve as alternates. Each committee shall have two or more members who
shall, unless otherwise provided by the Board of Directors, serve at the
pleasure of the Board of Directors. A committee may be authorized to exercise
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the authority of the Board of Directors, except that a committee may not do
any of the following: (a) authorize distributions; (b) approve or propose to
shareholders action that the Wisconsin Business Corporation Law requires to be
approved by shareholders; (c) fill vacancies on the Board of Directors or,
unless the Board of Directors provides by resolution that vacancies on a
committee shall be filled by the affirmative vote of the remaining committee
members, on any Board committee; (d) amend the Corporation's Articles of
Incorporation; (e) adopt, amend or repeal By-laws; (f) approve a plan of
merger not requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method prescribed by
the Board of Directors; and (h) authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares, except that the
Board of Directors may authorize a committee to do so within limits prescribed
by the Board of Directors. Unless otherwise provided by the Board of Direc-
tors in creating the committee, a committee may employ counsel, accountants
and other consultants to assist it in the exercise of its authority.
14. Telephonic Meetings. Except as herein provided and notwithstanding
any place set forth in the notice of the meeting or these By-laws, members of
the Board of Directors (and any committees thereof created pursuant to Section
13 of this Article III) may participate in regular or special meetings by, or
through the use of, any means of communication by which all participants may
simultaneously hear each other, such as by conference telephone. If a meeting
is conducted by such means, then at the commencement of such meeting the
presiding officer shall inform the participating directors that a meeting is
taking place at which official business may be transacted. Any participant in
a meeting by such means shall be deemed present in person at such meeting. If
action is to be taken at any meeting held by such means on any of the
following: (a) a plan of merger or share exchange; (b) a sale, lease, exchange
or other disposition of substantial property or assets of the Corporation; (c)
a voluntary dissolution or the revocation of voluntary dissolution pro-
ceedings; or (d) a filing for bankruptcy, then the identity of each director
participating in such meeting must be verified by the disclosure at such
meeting by each such director of each such director's social security number
to the secretary of the meeting before a vote may be taken on any of the
foregoing matters. For purposes of the preceding clause (b), the phrase
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"sale, lease, exchange or other disposition of substantial property or assets"
shall mean any sale, lease, exchange or other disposition of property or
assets of the Corporation having a net book value equal to 10% or more of the
net book value of the total assets of the Corporation on and as of the close
of the fiscal year last ended prior to the date of such meeting and as to
which financial statements of the Corporation have been prepared but shall
exclude any mortgage, pledge or encumbering of property or assets or the
dedication thereof to the repayment of indebtedness, whether with or without
recourse, and whether or not in the usual and regular course of business.
Notwithstanding the foregoing, no action may be taken at any meeting held by
such means on any particular matter which the presiding officer determines, in
his or her sole discretion, to be inappropriate under the circumstances for
action at a meeting held by such means. Such determination shall be made and
announced in advance of such meeting.
15. Action without Meeting. Any action required or permitted by the
Wisconsin Business Corporation Law to be taken at a meeting of the Board of
Directors or a committee thereof created pursuant to Section 13 of this
Article III may be taken without a meeting if the action is taken by all
members of the Board or of the committee. The action shall be evidenced by
one or more written consents describing the action taken, signed by each
director or committee member and retained by the Corporation. Such action
shall be effective when the last director or committee member signs the
consent, unless the consent specifies a different effective date.
ARTICLE IV. OFFICERS
1. The principal officers of the Corporation required by statute shall
be a President, such number of Vice Presidents as may be elected by the Board
of Directors, a Secretary, and a Treasurer. The Board of Directors may elect
from among the directors a Chairman of the Board of Directors and a Vice
Chairman of the Board of Directors, may designate such Chairman, Vice Chairman
or any principal officer as the Chief Executive Officer, may elect such assis-
tant secretaries and assistant treasurers and other officers as it shall deem
necessary, and may prescribe by resolution their respective powers and duties.
2. The President shall be elected by the directors. Unless the Board
of Directors otherwise prescribes, he shall be the Chief Executive Officer of
the Corporation. In the event that the President is not the Chief Executive
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Officer, he shall have such powers and duties as the Board of Directors may
prescribe.
3. If a Chairman of the Board of Directors shall be elected, he shall
preside as Chairman of all meetings of the shareholders and of the Board of
Directors. He shall have such other authority as the Board may from time to
time prescribe. If there is no Chairman of the Board, or in the absence of
the Chairman, the presiding officer at meetings of the shareholders, and of
the Board of Directors shall be another officer in the following order of
priority: Vice Chairman of the Board of Directors, President and Vice Presi-
dents (subject, however, to Section 5 of this Article).
4. The Chief Executive Officer shall exercise active supervision over
the business, property and affairs of the Corporation.
a. The Chief Executive Officer shall have authority, subject to
such rules as may be prescribed from time to time by the Board or its
committees, to appoint agents or employees other than those elected by the
Board, to prescribe their powers and duties, and to delegate such authority as
he may see fit. Any agent or employee not elected by the Board shall hold
office at the discretion of the Chief Executive Officer or other officer
employing him.
b. The Chief Executive Officer is authorized to sign, execute and
acknowledge, on behalf of the Corporation, all deeds, mortgages, bonds, notes,
debentures, contracts, leases, reports and other documents and instruments,
except where the signing and execution thereof by some other officer or agent
shall be expressly authorized and directed by law or by the Board or by these
By-laws. Unless otherwise provided by law or by the Board, the Chief
Executive Officer may authorize any officer, employee or agent to sign,
execute and acknowledge, on behalf of the Corporation, and in his place and
stead, all such documents and instruments.
c. Unless otherwise ordered by the Board of Directors, the Chief
Executive Officer, or a proxy appointed by him, shall have full power and
authority, in the name of and on behalf of the Corporation, to attend, act,
and vote at any meeting of the shareholders of any other corporation in which
the Corporation may hold shares of stock. At any such meeting, he shall
possess and may exercise any and all rights and powers incident to the
ownership of shares of stock.
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d. The Chief Executive Officer shall have such other powers and
perform such other duties as are incident to the office of Chief Executive
Officer and as may be prescribed by the Board.
5. Vice Presidents. In the absence of the President or during his
inability or refusal to act, his powers and duties shall temporarily devolve
upon such Vice Presidents or other officers as shall be designated by the
Board of Directors or, if not designated by the Board, by the Chief Executive
officer or other officer to whom such power may be delegated by the Board;
provided, that no Vice President or other officer shall act as a member or
chairman of any committee of the Board of Directors of which the President is
a member or chairman, except at the direction of the Board.
a. Each Vice President shall have such powers and perform such
other duties as may be assigned to him by the Board or by the President,
including the power to sign, execute and acknowledge all documents and
instruments referred to in Section 4 of this Article.
b. The Board may assign to any Vice President, general supervision
and charge over any branch of the business and affairs of the Corporation,
subject to such limitations as it may elect to impose.
c. The Board of Directors may, if it chooses, designate one or more
of the Vice Presidents "Executive Vice President" with such powers and duties
as the Board shall prescribe.
6. The Secretary shall attend, and keep the minutes of, meetings of the
shareholders, of the Board of Directors and, unless otherwise directed by any
such committee, of all committees, in books provided for that purpose; shall
have custody of the corporate records and seal; shall see that notices are
given and records and reports properly kept and filed as required by law or by
these By-laws; and, in general, shall have such other powers and perform such
other duties as are incident to the office of Secretary and as may be assigned
to him by the Board of Directors or the Chief Executive Officer.
7. Assistant Secretaries. In the absence of the Secretary, or during
his inability or refusal to act, his powers and duties shall temporarily
devolve upon such one of the Assistant Secretaries as the President or the
Board of Directors may direct. The Assistant Secretaries shall have such
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other powers and perform such other duties as may be assigned to them by the
Board, the Chief Executive Officer or the Secretary.
8. The Treasurer shall have charge and custody of the funds, securities
and other evidences of value of the Corporation, and shall keep and deposit
them as required by the Board of Directors. He shall keep proper accounts of
all receipts and disbursements and of the financial transactions of the
Corporation. He shall render statements of such accounts and of money
received and disbursed by him and of property and money belonging to the
Corporation as required by the Board. The Treasurer shall have such other
powers and perform such other duties as are incident to the office of
Treasurer and as from time to time may be prescribed by the Board or the Chief
Executive Officer.
9. Assistant Treasurers. In the absence of the Treasurer, or during
his inability or refusal to act, his powers and duties shall temporarily
devolve upon such one of the Assistant Treasurers as the President or the
Board of Directors may direct. The Assistant Treasurers shall have such other
powers and perform such other duties as from time to time may be assigned to
them, respectively, by the Board, the Chief Executive Officer or the
Treasurer.
10. Other Assistants and Acting Officers. The Board of Directors shall
have the power to appoint any person to act as assistant to any officer, or as
agent for the Corporation in his or her stead, or to perform the duties of
such officer whenever for any reason it is impracticable for such officer to
act personally, and such assistant or acting officer or other agent so
appointed by the Board of Directors or an authorized officer shall have the
power to perform all the duties of the office to which he or she is so
appointed to be an assistant, or as to which he or she is so appointed to act,
except as such power may be otherwise defined or restricted by the Board of
Directors.
11. Compensation. The salaries or other compensation of all officers
elected as provided under Section 1 of this Article (other than assistant
officers) shall be fixed from time to time by the Board of Directors. The
salaries or other compensation of all other agents and employees of the
Corporation shall be fixed from time to time by the Chief Executive Officer,
but only within such limits as to amount, and in accordance with such other
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conditions as may be prescribed by or under the authority of the Board of
Directors.
12. Tenure. Each officer shall hold office until his successor shall
have been duly elected and qualified, or until his death, resignation,
disqualification or removal. Any officer, agent or employee may be removed,
with or without cause, at any time by the Board of Directors notwithstanding
the contract rights, if any, of the officer removed. The appointment of an
officer does not of itself create contract rights.
13. Resignation. An officer may resign at any time by delivering notice
to the Corporation that complies with the Wisconsin Business Corporation Law.
The resignation shall be effective when the notice is delivered, unless the
notice specifies a later effective date and the Corporation accepts the later
effective date.
14. Vacancies. Any vacancy in any office may be filled by the Board of
Directors for the unexpired portion of the term. If a resignation of an
officer is effective at a later date as contemplated by Section 13 of this
Article IV, the Board of Directors may fill the pending vacancy before the
effective date if the Board provides that the successor may not take office
until the effective date.
15. Reassignment of Duties. In case of the absence or disability of any
officer of the Corporation, or for any other reason deemed sufficient by the
Board of Directors, the Board may reassign or delegate the powers and duties,
or any of them, to any other officer, director, or person it may select.
ARTICLE V. CERTIFICATES FOR AND TRANSFER OF SHARES
1. Form. Certificates representing shares of the Corporation shall be
in such form as shall be determined by the Board of Directors. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the Corporation. All certificates
surrendered for the transfer shall be cancelled and no new certificate shall
be issued until the former certificate for a like number of shares shall have
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been surrendered and cancelled, except in case of a lost or destroyed
certificate provided for in Section 4 of this Article V or a certificate for
shares transferred in compliance with the escheat laws of any state.
2. Signatures. Certificates representing shares of the Corporation
shall be signed by the President or a Vice President and by the Secretary or
an Assistant Secretary; and may be sealed with the seal of the Corporation
(which may be a facsimile) and countersigned and registered in such manner, if
any, as the Board of Directors may prescribe. Whenever any certificate is
manually signed on behalf of a transfer agent, or a registrar, other than the
Corporation itself or an employee of the Corporation, the signatures of the
President, Vice President, Secretary or Assistant Secretary, upon such
certificate may be facsimiles. In case any officer who has signed, or whose
facsimile signature has been placed upon such certificate, ceases to be such
officer before such certificate is issued, it may be issued with the same
effect as if he were such officer at the date of its issue.
3. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the Corporation upon the transfer of such shares.
4. Lost, Destroyed or Stolen Certificates. Where the owner claims that
his certificate for shares has been lost, destroyed or wrongfully taken, a new
certificate shall be issued in place thereof if the owner (a) so requests
before the Corporation has notice that such shares have been acquired by a
bona fide purchaser, (b) files with the Corporation a sufficient indemnity
bond, and (c) satisfies such other reasonable requirements as may be
prescribed by or under the authority of the Board of Directors.
5. Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer the Corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications and otherwise to have and exercise all the rights and powers of
an owner. Where a certificate for shares is presented to the Corporation with
a request to register for transfer, the Corporation shall not be liable to the
owner or any other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the necessary
endorsements, and (b) the Corporation had no duty to inquire into adverse
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claims or has discharged any such duty. The Corporation may require
reasonable assurance that said endorsements are genuine and effective and
compliance with such other regulations as may be prescribed by or under the
authority of the Board of Directors.
6. Consideration for Shares. The Board of Directors may authorize
shares to be issued for consideration consisting of any tangible or intangible
property or benefit to the Corporation, including cash, promissory notes,
services performed, contracts for services to be performed or other securities
of the Corporation. Before the Corporation issues shares, the Board of
Directors shall determine that the consideration received or to be received
for the shares to be issued is adequate. The determination of the Board of
Directors is conclusive insofar as the adequacy of consideration for the
issuance of shares relates to whether the shares are validly issued, fully
paid and nonassessable. The Corporation may place in escrow shares issued in
whole or in part for a contract for future services or benefits, a promissory
note, or otherwise for property to be issued in the future, or make other
arrangements to restrict the transfer of the shares, and may credit
distributions in respect of the shares against their purchase price, until the
services are performed, the benefits or property are received or the
promissory note is paid. If the services are not performed, the benefits or
property are not received or the promissory note is not paid, the Corporation
may cancel, in whole or in part, the shares escrowed or restricted and the
distributions credited.
7. Other Rules. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
the statutes of the State of Wisconsin as it may deem expedient concerning the
issue, transfer and registration of certificates representing shares of the
Corporation, including the appointment and designation of Transfer Agents and
Registrars.
ARTICLE VI. INDEMNIFICATION OF OFFICERS AND DIRECTORS
1. Mandatory Indemnification.
a. In all cases other than those set forth in Section 1b hereof,
subject to the conditions and limitations set forth hereinafter in this
Article VI, the Corporation shall indemnify and hold harmless any person who
is or was a party, or is threatened to be made a party, to any Action (see
Section 16 of this Article VI for definitions of capitalized terms used
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herein) by reason of his or her status as an Executive, and/or as to acts
performed in the course of such Executive's duties to the Corporation and/or
an Affiliate, against Liabilities and reasonable Expenses incurred by or on
behalf of an Executive in connection with any Action, including, without
limitation, in connection with the investigation, defense, settlement or
appeal of any Action; provided, pursuant to Section 3, that it is not
determined by the Authority, or by a court, that the Executive engaged in
misconduct which constitutes a Breach of Duty.
b. To the extent an Executive has been successful on the merits or
otherwise in connection with any Action, including, without limitation, the
settlement, dismissal, abandonment or withdrawal of any such Action where the
Executive does not pay, incur or assume any material Liabilities, or in
connection with any claim, issue or matter therein, he or she shall be
indemnified by the Corporation against reasonable Expenses incurred by or on
behalf of him or her in connection therewith. The Corporation shall pay such
Expenses to the Executive (net of all Expenses, if any, previously advanced to
the Executive pursuant to Section 2), or to such other person or entity as the
Executive may designate in writing to the Corporation, within ten (10) days
after the receipt of the Executive's written request therefor, without regard
to the provisions of Section 3. In the event the Corporation refuses to pay
such requested Expenses, the Executive may petition a court to order the
Corporation to make such payment pursuant to Section 4.
c. Notwithstanding any other provision contained in this Article VI
to the contrary, the Corporation shall not:
(i) indemnify, contribute or advance Expenses to an Executive
with respect to any Action initiated or brought voluntarily by the
Executive and not by way of defense, except with respect to Actions:
(a) brought to establish or enforce a right to
indemnification, contribution and/or an advance of Expenses
under Section 4 of this Article VI, under the Statute as it may
then be in effect or under any other statute or law or otherwise
as required;
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(b) initiated or brought voluntarily by an Executive to
the extent such Executive is successful on the merits or
otherwise in connection with such an Action in accordance with
and pursuant to Section 1b of this Article VI; or
(c) as to which the Board determines it to be
appropriate.
(ii) indemnify the Executive under this Article VI for any
amounts paid in settlement of any Action effected without the
Corporation's written consent.
The Corporation shall not settle in any manner which would
impose any Liabilities or other type of limitation on the Executive
without the Executive's written consent. Neither the Corporation
nor the Executive shall unreasonably withhold their consent to any
proposed settlement.
d. An Executive's conduct with respect to an employee benefit plan
sponsored by or otherwise associated with the Corporation and/or an Affiliate
for a purpose he or she reasonably believes to be in the interests of the
participants in and beneficiaries of such plan is conduct that does not
constitute a breach or failure to perform his or her duties to the Corporation
or an Affiliate, as the case may be.
2. Advance for Expenses.
a. The Corporation shall pay to an Executive, or to such other
person or entity as the Executive may designate in writing to the Corporation,
his or her reasonable Expenses incurred by or on behalf of such Executive in
connection with any Action, or claim, issue or matter associated with any such
Action, in advance of the final disposition or conclusion of any such Action
(or claim, issue or matter associated with any such Action), within ten (10)
days after the receipt of the Executive's written request therefor; provided,
the following conditions are satisfied:
(i) the Executive has first requested an advance of such
Expenses in writing (and delivered a copy of such request to the
Corporation) from the insurance carrier(s), if any, to whom a claim
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has been reported under an applicable insurance policy purchased by
the Corporation and each such insurance carrier, if any, has
declined to make such an advance;
(ii) the Executive furnishes to the Corporation an executed
written certificate affirming his or her good faith belief that he
or she has not engaged in misconduct which constitutes a Breach of
Duty; and
(iii) the Executive furnishes to the Corporation an executed
written agreement to repay any advances made under this Section 2 if
it is ultimately determined that he or she is not entitled to be
indemnified by the Corporation for such Expenses pursuant to this
Article VI.
b. If the Corporation makes an advance of Expenses to an Executive
pursuant to this Section 2, the Corporation shall be subrogated to every right
of recovery the Executive may have against any insurance carrier from whom the
Corporation has purchased insurance for such purpose.
3. Determination of Right to Indemnification.
a. Except as otherwise set forth in this Section 3
or in Section 1c, any indemnification to be provided to an Executive by the
Corporation under Section 1a of this Article VI upon the final disposition or
conclusion of any Action, or any claim, issue or matter associated with any
such Action, unless otherwise ordered by a court, shall be paid by the
Corporation to the Executive (net of all Expenses, if any, previously advanced
to the Executive pursuant to Section 2), or to such other person or entity as
the Executive may designate in writing to the Corporation, within sixty (60)
days after the receipt of the Executive's written request therefore. Such
request shall include an accounting of all amounts for which indemnification
is being sought. No further corporate authorization for such payment shall be
required other than this Section 3.
b. Notwithstanding the foregoing, the payment of such requested
indemnifiable amounts pursuant to Section 1a may be denied by the Corporation
if:
(i) the Board by a majority vote thereof determines that the
Executive has engaged in misconduct which constitutes a Breach of
Duty; or
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(ii) a majority of the directors of the Corporation are a party
in interest to such Action.
c. In either event of nonpayment pursuant to Section 3b, the Board
shall immediately authorize and direct, by resolution, that an independent
determination be made as to whether the Executive has engaged in misconduct
which constitutes a Breach of Duty and, therefore, whether indemnification of
the Executive is proper pursuant to this Article VI.
d. Such independent determination shall be made, at the option of
the Executive(s) seeking indemnification, by (i) a panel of three arbitrators
(selected as set forth below in Section 3f from the panels of arbitrators of
the American Arbitration Association) in Milwaukee, Wisconsin, in accordance
with the Commercial Arbitration Rules then prevailing of the American
Arbitration Association; (ii) an independent legal counsel mutually selected
by the Executive(s) seeking indemnification and the Board by a majority vote
of a quorum thereof consisting of directors who were not parties in interest
to such Action (or, if such quorum is not obtainable, by the majority vote of
the entire Board); or (iii) a court in accordance with Section 4 of this
Article VI.
e. In any such determination there shall exist a rebuttable
presumption that the Executive has not engaged in misconduct which constitutes
a Breach of Duty and is, therefore, entitled to indemnification hereunder.
The burden of rebutting such presumption by clear and convincing evidence
shall be on the Corporation.
f. If a panel of arbitrators is to be employed hereunder, one of
such arbitrators shall be selected by the Board by a majority vote of a quorum
thereof consisting of directors who were not parties in interest to such
Action or, if such quorum is not obtainable, by an independent legal counsel
chosen by the majority vote of the entire Board, the second by the
Executive(s) seeking indemnification and the third by the previous two
arbitrators.
g. The Authority shall make its independent determination hereunder
within sixty (60) days of being selected and shall simultaneously submit a
written opinion of its conclusions to both the Corporation and the Executive.
h. If the Authority determines that an Executive is entitled to be
indemnified for any amounts pursuant to this Article VI, the Corporation shall
pay such amounts to the Executive (net of all Expenses, if any, previously
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advanced to the Executive pursuant to Section 2), including interest thereon
as provided in Section 6c, or such other person or entity as the Executive may
designate in writing to the Corporation, within ten (10) days of receipt of
such opinion.
i. Except with respect to any judicial determination pursuant to
Section 4, the Expenses associated with the indemnification process set forth
in this Section 3, including, without limitation, the Expenses of the
Authority selected hereunder, shall be paid by the Corporation.
4. Court-Ordered Indemnification and Advance for Expenses.
a. An Executive may, either before or within two years after a
determination, if any, has been made by the Authority, petition the court
before which such Action was brought or any other court of competent
jurisdiction to independently determine whether or not he or she has engaged
in misconduct which constitutes a Breach of Duty and is, therefore, entitled
to indemnification under the provisions of this Article VI. Such court shall
thereupon have the exclusive authority to make such determination unless and
until such court dismisses or otherwise terminates such proceeding without
having made such determination. An Executive may petition a court under this
Section 4 either to seek an initial determination by the court as authorized
by Section 3d or to seek review by the court of a previous adverse
determination by the Authority.
b. The court shall make its independent determination irrespective
of any prior determination made by the Authority; provided, however, that
there shall exist a rebuttable presumption that the Executive has not engaged
in misconduct which constitutes a Breach of Duty and is, therefore, entitled
to indemnification hereunder. The burden of rebutting such presumption by
clear and convincing evidence shall be on the Corporation.
c. In the event the court determines that an Executive has engaged
in misconduct which constitutes a Breach of Duty, it may nonetheless order
indemnification to be paid by the Corporation if it determines that the
Executive is fairly and reasonably entitled to indemnification in view of all
of the circumstances of such Action.
d. In the event the Corporation does not (i) advance Expenses to
the Executive within ten (10) days of such Executive's compliance with Section
2; or (ii) indemnify an Executive with respect to requested Expenses under
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Section 1b within ten (10) days of such Executive's written request therefore,
the Executive may petition the court before which such Action was brought, if
any, or any other court of competent jurisdiction to order the Corporation to
pay such reasonable Expenses immediately. Such court, after giving any notice
it considers necessary, shall order the Corporation to pay such Expenses if it
determines that the Executive has complied with the applicable provisions of
Section 2 or 1b, as the case may be.
e. If the court determines pursuant to this Section 4 that the
Executive is entitled to be indemnified for any Liabilities and/or Expenses,
or to the advance of Expenses, unless otherwise ordered by such court, the
Corporation shall pay such Liabilities and/or Expenses to the Executive (net
of all Expenses, if any, previously advanced to the Executive pursuant to
Section 2), including interest thereon as provided in Section 6c, or to such
other person or entity as the Executive may designate in writing to the
Corporation, within ten (10) days of the rendering of such determination.
f. An Executive shall pay all Expenses incurred by such Executive
in connection with the judicial determination provided in this Section 4,
unless it shall ultimately be determined by the court that he or she is
entitled, in whole or in part, to be indemnified by, or to receive an advance
from, the Corporation as authorized by this Article VI. All Expenses incurred
by an Executive in connection with any subsequent appeal of the judicial
determination provided for in this Section 4 shall be paid by the Executive
regardless of the disposition of such appeal.
5. Termination of an Action is Nonconclusive. The adverse termination
of any Action against an Executive by judgment, order settlement, conviction,
or upon a plea of no contest or its equivalent, shall not, of itself, create a
presumption that the Executive has engaged in misconduct which constitutes a
Breach of Duty.
6. Partial Indemnification; Reasonableness; Interest.
a. If it is determined by the Authority, or by a court, that an
Executive is entitled to indemnification as to some claims, issues or matters,
but not as to other claims, issues or matters, involved in any Action, the
Authority, or the court, shall authorize the proration and payment by the
Corporation of such Liabilities and/or reasonable Expenses with respect to
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which indemnification is sought by the Executive, among such claims, issues or
matters as the Authority, or the court, shall deem appropriate in light of all
of the circumstances of such Action.
b. If it is determined by the Authority, or by a court, that
certain Expenses incurred by or on behalf of an Executive are for whatever
reason unreasonable in amount, the Authority, or the court, shall nonetheless
authorize indemnification to be paid by the Corporation to the Executive for
such Expenses as the Authority, or the court, shall deem reasonable in light
of all of the circumstances of such Action.
c. Interest shall be paid by the Corporation to an Executive, to
the extent deemed appropriate by the Authority, or by a court, at a reasonable
interest rate, for amounts for which the Corporation indemnifies or advances
to the Executive.
7. Insurance; Subrogation.
a. The Corporation may purchase and maintain insurance on behalf
of any person who is or was an Executive of the Corporation, and/or is or was
serving as an Executive of an Affiliate, against Liabilities and/or Expenses
asserted against him or her and/or incurred by or on behalf of him or her in
any such capacity, or arising out of his or her status as such an Executive,
whether or not the Corporation would have the power to indemnify him or her
against such Liabilities and/or Expenses under this Article VI or under the
Statute as it may then be in effect. Except as expressly provided herein, the
purchase and maintenance of such insurance shall not in any way limit or
affect the rights and obligations of the Corporation and/or any Executive
under this Article VI. Such insurance may, but need not, be for the benefit
of all Executives of the Corporation and those serving as an Executive of an
Affiliate.
b. If an Executive shall receive payment from any insurance carrier
or from the plaintiff in any Action against such Executive in respect of
indemnified amounts after payments on account of all or part of such
indemnified amounts have been made by the Corporation pursuant to this Article
VI, such Executive shall promptly reimburse the Corporation for the amount, if
any, by which the sum of such payment by such insurance carrier or such
plaintiff and payments by the Corporation to such Executive exceeds such
indemnified amounts; provided, however, that such portions, if any, of such
insurance proceeds that are required to be reimbursed to the insurance carrier
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under the terms of its insurance policy, such as deductible, retention or co-
insurance amounts, shall not be deemed to be payments to such Executive
hereunder.
c. Upon payment of indemnified amounts under this Article VI, the
Corporation shall be subrogated to such Executive's rights against any
insurance carrier in respect of such indemnified amounts and the Executive
shall execute and deliver any and all instruments and/or documents and perform
any and all other acts or deeds which the Corporation shall deem necessary or
advisable to secure such rights. The Executive shall do nothing to prejudice
such rights of recovery or subrogation.
8. Witness Expenses. The Corporation shall advance or reimburse any
and all reasonable Expenses incurred by or on behalf of an Executive in
connection with his or her appearance as a witness in any Action at a time
when he or she has not been formally named a defendant or respondent to such
an Action, within ten (10) days after the receipt of an Executive's written
request therefore.
9. Contribution.
Subject to the limitations of this Section 9, if the indemnity
provided for in Section 1 of this Article VI is unavailable to an Executive
for any reason whatsoever, the Corporation, in lieu of indemnifying the
Executive, shall contribute to the amount incurred by or on behalf of the
Executive, whether for Liabilities and/or for reasonable Expenses in
connection with any Action in such proportion as deemed fair and reasonable by
the Authority, or by a court, in light of all of the circumstances of any such
Action, in order to reflect:
(i) the relative benefits received by the Corporation and the
Executive as a result of the event(s) and/or transaction(s) giving
cause to such Action; and/or
(ii) the relative fault of the Corporation (and its other
Executives, employees and/or agents) and the Executive in connection
with such event(s) and/or transaction(s).
b. The relative fault of the Corporation (and its other Executives,
employees and/or agents), on the one hand, and of the Executive, on the other
hand, shall be determined by reference to, among other things, the parties'
relative intent, knowledge, access to information and opportunity to correct
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or prevent the circumstances resulting in such Liabilities and/or Expenses.
The Corporation agrees that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation or any other
method of allocation which does not take account of the foregoing equitable
considerations.
c. An Executive shall not be entitled to contribution from the
Corporation under this Section 9 in the event it is determined by the
Authority, or by a court, that the Executive has engaged in misconduct which
constitutes a Breach of Duty.
d. The Corporation's payment of, and an Executive's right to,
contribution under this Section 9 shall be made and determined in accordance
with and pursuant to the provisions in Sections 3 and/or 4 of this Article VI
relating to the Corporation's payment of, and the Executive's right to, indem-
nification under this Article VI.
10. Indemnification of Employees. Unless otherwise specifically set
forth in this Article VI, the Corporation shall indemnify and hold harmless
any person who is or was a party, or is threatened to be made a party to any
Action by reason of his or her status as, or the fact that he or she is or was
an employee or authorized agent or representative of the Corporation and/or an
Affiliate as to acts performed in the course and within the scope of such
employee's, agent's or representative's duties to the Corporation and/or an
Affiliate, in accordance with and to the fullest extent permitted by the
Statute as it may then be in effect.
11. Severability. If any provision of this Article VI shall be deemed
invalid or inoperative, or if a court of competent jurisdiction determines
that any of the provisions of this Article VI contravene public policy, this
Article VI shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such provisions
which are invalid or inoperative or which contravene public policy shall be
deemed, without further Action or deed by or on behalf of the Corporation, to
be modified, amended and/or limited, but only to the extent necessary to
render the same valid and enforceable, and the Corporation shall indemnify an
Executive as to Liabilities and reasonable Expenses with respect to any Action
to the full extent permitted by any applicable provision of this Article VI
that shall not have been invalidated and to the full extent otherwise
permitted by the Statute as it may then be in effect.
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12. Nonexclusivity of Article VI. The right to indemnification,
contribution and advancement of Expenses provided to an Executive by this
Article VI shall not be deemed exclusive of any other rights to
indemnification, contribution and/or advancement of Expenses which any
Executive or other employee or agent of the Corporation and/or of an Affiliate
may be entitled under any charter provision, written agreement, resolution,
vote of shareholders or disinterested directors of the Corporation or
otherwise, including, without limitation, under the Statute as it may then be
in effect, both as to acts in his or her official capacity as such Executive
or other employee or agent of the Corporation and/or of an Affiliate or as to
acts in any other capacity while holding such office or position, whether or
not the Corporation would have the power to indemnify, contribute and/or
advance Expenses to the Executive under this Article VI or under the Statute;
provided that it is not determined that the Executive or other employee or
agent has engaged in misconduct which constitutes a Breach of Duty.
13. Notice to the Corporation; Defense of Actions.
a. An Executive shall promptly notify the Corporation in writing
upon being served with or having actual knowledge of any citation, summons,
complaint, indictment or any other similar document relating to any Action
which may result in a claim of indemnification, contribution or advancement of
Expenses hereunder, but the omission so to notify the Corporation will not
relieve the Corporation from any liability which it may have to the Executive
otherwise than under this Agreement unless the Corporation shall have been
irreparably prejudiced by such omission.
b. With respect to any such Action as to which an Executive
notifies the Corporation of the commencement thereof:
(i) The Corporation shall be entitled to participate therein
at its own expense; and
(ii) Except as otherwise provided below, to the extent that it
may wish, the Corporation (or any other indemnifying party,
including any insurance carrier, similarly notified by the
Corporation or the Executive) shall be entitled to assume the
defense thereof, with counsel selected by the Corporation (or such
other indemnifying party) and reasonably satisfactory to the Execu-
tive.
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c. After notice from the Corporation (or such other indemnifying
party) to the Executive of its election to assume the defense of an Action,
the Corporation shall not be liable to the Executive under this Article VI for
any Expenses subsequently incurred by the Executive in connection with the
defense thereof other than reasonable costs of investigation or as otherwise
provided below. The Executive shall have the right to employ his or her own
counsel in such Action but the Expenses of such counsel incurred after notice
from the Corporation (or such other indemnifying party) of its assumption of
the defense thereof shall be at the expense of the Executive unless (i) the
employment of counsel by the Executive has been authorized by the Corporation;
(ii) the Executive shall have reasonably concluded that there may be a
conflict of interest between the Corporation (or such other indemnifying
party) and the Executive in the conduct of the defense of such Action; or
(iii) the Corporation (or such other indemnifying party) shall not in fact
have employed counsel to assume the defense of such Action, in each of which
cases the Expenses of counsel shall be at the expense of the Corporation. The
Corporation shall not be entitled to assume the defense of any Derivative
Action or any Action as to which the Executive shall have made the conclusion
provided for in clause (ii) above.
14. Continuity of Rights and obligations. The terms and provisions of
this Article VI shall continue as to an Executive subsequent to the
Termination Date and such terms and provisions shall inure to the benefit of
the heirs, estate, executors and administrators of such Executive and the suc-
cessors and assigns of the Corporation, including, without limitation, any
successor to the Corporation by way of merger, consolidation and/or sale or
disposition of all or substantially all of the assets or capital stock of the
Corporation. Except as provided herein, all rights and obligations of the
Corporation and the Executive hereunder shall continue in full force and
effect despite the subsequent amendment or modification of the Corporation's
Articles of Incorporation, as such are in effect on the date hereof, and such
rights and obligations shall not be affected by any such amendment or
modification, any resolution of directors or shareholders of the Corporation,
or by any other corporate action which conflicts with or purports to amend,
modify, limit or eliminate any of the rights or obligations of the Corporation
and/or of the Executive hereunder.
15. Amendment. This Article VI may only be altered, amended or repealed
by the affirmative vote of a majority of the shareholders of the Corporation
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so entitled to vote; provided, however, that the Board may alter or amend this
Article VI without such shareholder approval if any such alteration or
amendment:
a. is made in order to conform to any amendment or revision of the
Wisconsin Business Corporation Law, including, without limitation, the
Statute, which (i) expands or permits the expansion of an Executive's right to
indemnification thereunder; (ii) limits or eliminates, or permits the
limitation or elimination, of liability of the Executives; or (iii) is
otherwise beneficial to the Executives; or
b. in the sole judgment and discretion of the Board, does not
materially adversely affect the rights and protections of the shareholders of
the Corporation.
Any repeal, modification or amendment of this Article VI shall not
adversely affect any rights or protections of an Executive existing under this
Article VI immediately prior to the time of such repeal, modification or
amendment and any such repeal, modification or amendment shall have a
prospective effect only.
16. Certain Definitions. The following terms as used in this Article VI
shall be defined as follows:
a. "Action(s)" shall include, without limitation, any threatened,
pending or completed action, claim, litigation, suit or proceeding, whether
civil, criminal, administrative, arbitrative, or investigative, whether
predicated on foreign, Federal, state or local law, whether brought under
and/or predicated upon the Securities Act of 1933, as amended, and/or the
Securities Exchange Act of 1934, as amended, and/or their respective state
counterparts and/or any rule or regulation promulgated thereunder, whether a
Derivative Action and whether formal or informal.
b. "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust, or other similar
enterprise that directly or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the
Corporation.
c. "Authority" shall mean the panel of arbitrators or independent
legal counsel selected under Section 3 of the Agreement.
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<PAGE>
d. "Board" shall mean the Board of Directors of the Corporation.
e. "Breach of Duty" shall mean the Executive breached or failed to
perform his or her duties to the Corporation or an Affiliate, as the case may
be, and the Executive's breach of or failure to perform those duties
constituted:
(i) A willful failure to deal fairly with the Corporation (or
an Affiliate) or its shareholders in connection with a matter in
which the Executive has a material conflict of interest;
(ii) A violation of the criminal law, unless the Executive:
(a) Had reasonable cause to believe his or her conduct was lawful;
or
(b) Had no reasonable cause to believe his or her conduct was
unlawful;
(iii) A transaction from which the Executive derived an improper
personal profit (unless such profit is determined to be immaterial
in light of all the circumstances of the Action); or
(iv) Willful misconduct.
f. "Derivative Action" shall mean any Action brought by or in the
right of the Corporation and/or an Affiliate.
g. "Executive(s)" shall mean any individual who is, was or has
agreed to become a director and/or officer of the Corporation and/or an
Affiliate.
h. "Expenses" shall include, without limitation, all expenses,
fees, costs, charges, attorneys' fees and disbursements, other out-of-pocket
costs, reasonable compensation for time spent by the Executive in connection
with the Action for which he or she is not otherwise compensated by the Corpo-
ration, any Affiliate, any third party or other entity and any and all other
direct and indirect costs of any type or nature whatsoever.
i. "Liabilities" shall include, without limitation, judgments,
amounts incurred in settlement, fines, penalties and, with respect to any
employee benefit plan, any excise tax or penalty incurred in connection
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<PAGE>
therewith, and any and all other liabilities of every type or nature
whatsoever.
j. "Statute" shall mean Wisconsin Business Corporation Law Section
180.05 (or any successor provisions).
k. "Termination Date" shall mean the date an Executive ceases, for
whatever reason, to serve in an employment relationship with the Company
and/or any Affiliate.
ARTICLE VII. SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the words "WISCONSIN PUBLIC
SERVICE CORPORATION, GREEN BAY, WIS., CORPORATE SEAL." The continued use for
any purpose of any former corporate seal or facsimile thereof shall have the
same effect as the use of the corporate seal or facsimile thereof in the form
provided by the preceding sentence.
ARTICLE VIII. AMENDMENTS
1. The Board of Directors shall have authority to adopt, amend, or
repeal the By-laws of this Corporation upon affirmative vote of a majority of
the total number of directors at a meeting of the Board, the notice of which
shall have included notice of the proposed amendment; but the Board of
Directors shall have no power to amend any By-law adopted or amended by the
shareholders after May 23, 1972, or to reinstate any By-law repealed by the
shareholders after May 23, 1972, unless the shareholders shall hereafter
confer such authority upon the Board of Directors.
2. The shareholders shall have power to adopt, amend or repeal any of
the By-laws of the Corporation, at any regular or special meeting of the
shareholders, in accordance with the provisions of Article II of these By-
laws. There shall be included in the notice of such regular or special
meeting a statement of the nature of any amendment that is proposed for the
consideration of the shareholders by the holders of at least 5% of the voting
stock of the Corporation in a writing delivered to the Secretary of the
Corporation not less than ninety (90) days prior to the date of such meeting
or by the Board of Directors.
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The following stamp is affixed:
STATE OF WISCONSIN
ARTICLES OF INCORPORATION FILED
OF DEC - 3 1993
WPS RESOURCES CORPORATION DOUGLAS LA FOLLETTE
SECRETARY OF STATE
The undersigned, acting as an incorporator of a corporation under the
Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin Statutes,
adopts the following Articles of Incorporation for such corporation.
ARTICLE 1
---------
The name of the Corporation is WPS Resources Corporation.
ARTICLE 2
---------
The Corporation is organized for the purpose of engaging in any lawful
activity within the purposes for which corporations may be organized under the
Wisconsin Business Corporation Law.
ARTICLE 3
---------
The aggregate number of shares which the Corporation shall have
authority to issue is Ten Thousand (10,000), consisting of one class only,
designated as "Common Stock," with a par value of one dollar ($1) per share.
ARTICLE 4
---------
The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the owner thereof for all purposes, and shall not be
bound to recognize any equitable or other claim to or interest in any such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof.
ARTICLE 5
---------
The number of directors constituting the Board of Directors shall
initially be nine (9) and thereafter such other number as may be designated from
time to time by the Board of Directors. The names and addresses of the initial
directors shall be:
Name Address
---- -------
A. Dean Arganbright 5867 I-Ah-Maytah Road
Oshkosh, WI 54901
Michael S. Ariens 655 West Ryan Street
Brillion, WI 54410
Richard A. Bemis 300 Mill Street
Sheboygan Falls, WI 53085
The following stamp is affixed:
WIS SEC-STATE
FILE ID # WG34422
<PAGE>
Name Address
---- -------
Daniel A. Bollom 700 North Adams Street
P. O. Box 19001
Green Bay, WI 54307
Sister M. Lois Bush 11925 West Lake Park Drive
Milwaukee, WI 53224
Robert C. Gallagher 200 North Adams Street
P. O. Box 19006
Green Bay, WI 54307-9006
Kathryn M. Hasselblad-Pascale 2405 West Mason Street
P. O. Box 11537
Green Bay, WI 54307-1537
James L. Kemerling 333 Main Street
P. O. Box 19730
Green Bay, WI 54307-9730
Linus M. Stoll 4373 Nicolet Drive
Green Bay, WI 54311
ARTICLE 6
---------
The address of the initial registered office of the Corporation is 700
North Adams Street, P.O. Box 19001, Green Bay, Wisconsin, 54307. The name of
the Corporation's initial registered agent at such address is R. H. Knuth.
ARTICLE 7
---------
The Bylaws of the Corporation may provide for a greater or lower
quorum requirement or a greater voting requirement for shareholders or voting
groups of shareholders than is provided by the Wisconsin Business Corporation
Law.
ARTICLE 8
---------
The name and address of the sole incorporator of this Corporation is
Michael S. Nolan, c/o Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202.
Executed on this third day of December, 1993.
/s/ Michael S. Nolan
_______________________________________
Michael S. Nolan
Sole Incorporator
This instrument was drafted by and should be returned to Michael S. Nolan of
Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
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<PAGE>
WPS RESOURCES CORPORATION
BY-LAWS
Effective December 9, 1993
ARTICLE I. OFFICES
1. The principal office of the Corporation in the State of Wisconsin
shall be in the City of Green Say. The Corporation may also have offices at
such other places, within and outside of the State of Wisconsin, as the Board
of Directors may designate or as the business of the Corporation may require.
2. Registered Office. The Board of Directors shall designate the
registered office of the Corporation and may change such registered office by
resolution.
ARTICLE II. SHAREHOLDERS
1. The annual meeting of the shareholders for the election of
directors and for the transaction of such other business as may properly be
brought before the meeting shall be held each year not later than the fourth
Tuesday in May, on the date designated by the Board of Directors and specified
in the notice of meeting. If the election of directors shall not be held on
the day designated for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter as
convenient.
2. Special meetings of the shareholders may be called by the Chairman
of the Board of Directors or the President or the Secretary, or by resolution
of the Board of Directors. The Corporation shall call a special meeting of
shareholders in the event that the holders of at least 10% of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting sign, date and deliver to the Corporation one or more written
demands for the meeting describing one or more purposes for which it is to be
held. The Corporation shall give notice of such a special meeting within
thirty days after the date that the demand is delivered to the Corporation.
If the holders of the Preferred Stock shall become entitled, as provided by
Article II of the Articles of Incorporation, to elect members of the Board of
Directors, special meetings of the shareholders shall be held upon call as
provided in said Article III.
3. Place of Meeting. Each meeting of shareholders, annual or
special, shall be held at the principal office of the Corporation unless
another place, either within or without the State of Wisconsin, has been
designated by the Board of Directors and specified in the notice of such
meeting, but any meeting of shareholders may be adjourned to reconvene at any
place designated by a majority of the shares represented at such meeting.
4. Notice of Meetings. Written notice stating the date, time and
place of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
nor more than sixty days before the date of the meeting (unless a different
time is provided by the Wisconsin Business Corporation Law or the Articles of
Incorporation) to each shareholder of record entitled to vote at such meeting
and to such other persons as required by the Wisconsin Business Corporation
Law. Such notice shall be given by or at the direction of the officer or
persons calling the meeting and shall be deemed to be delivered when deposited
in the United States mail, postage prepaid, addressed to the shareholder of
record at his address as it appears in the records of the Corporation.
<PAGE>
a. If any meeting of the shareholders is adjourned to another
time or place, no notice of such adjourned meeting need be given other
than by announcement thereof at the meeting at which such adjournment is
taken; provided, however, that if a new record date for an adjourned
meeting is or must be fixed, the Corporation shall give notice of the
adjourned meeting to persons who are shareholders as of the new record
date.
b. In connection with the election of members of the Board of
Directors by the holders of the Preferred Stock pursuant to Article III
of the Articles of Incorporation, the Corporation shall prepare and mail
to the holders of record of Preferred Stock such proxy forms,
communications and documents as may be deemed appropriate and as may be
required by any governmental authority having jurisdiction thereof.
5. Waiver of Notice. A shareholder may waive any notice required by
the Wisconsin Business Corporation Law, the Articles of Incorporation or these
By-laws before or after the date and time stated in the notice. The waiver
shall be in writing and signed by the shareholder entitled to the notice,
contain the same information that would have been required in the notice under
applicable provisions of the Wisconsin Business Corporation Law (except that
the time and place of meeting need not be stated) and be delivered to the
Corporation for inclusion in the corporate records. A shareholder's
attendance at a meeting, in person or by proxy, waives objection to all of the
following: (a) lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting or promptly upon arrival objects
to holding the meeting or transacting business at the meeting; and (b)
consideration of a particular matter at the meeting that is not within the
purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
6. Fixing of Record Date. The Board of Directors may fix in advance
a date as the record date for the purpose of determining shareholders entitled
to notice of and to vote at any meeting of shareholders, shareholders entitled
to demand a special meeting as contemplated by Section 2 of this Article II,
shareholders entitled to take any other action, or shareholders for any other
purpose. Such record date shall not be more than seventy days prior to the
date on which the particular action, requiring such determination of
shareholders, is to be taken. If no record date is fixed by the Board of
Directors or by the Wisconsin Business Corporation Law for the determination
of shareholders entitled to notice of and to vote at a meeting of
shareholders, the record date shall be the close of business on the day before
the first notice is given to shareholders. If no record date is fixed by the
Board of Directors or by the Wisconsin Business Corporation Law for the
determination of shareholders entitled to demand a special meeting as
contemplated in Section 2 of this Article II, the record date shall be the
date that the first shareholder signs the demand. Except as provided by the
Wisconsin Business Corporation Law for a court-ordered adjournment, a
determination of shareholders entitled to notice of and to vote at a meeting
of shareholders is effective for any adjournment of such meeting unless the
Board of Directors fixes a new record date, which it shall do if the meeting
is adjourned to a date more than 120 days after the date fixed for the
original meeting. The record date for determining shareholders entitled to a
distribution (other than a distribution involving a purchase, redemption or
other acquisition of the Corporation's shares) or a share dividend is the date
on which the Board of Directors authorized the distribution or share dividend,
as the case may be, unless the Board of Directors fixes a different record
date.
7. Shareholders' List for Meetings. After a record date for a
special or annual meeting of shareholders has been fixed, the Corporation
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<PAGE>
shall prepare a list of the names of all of the shareholders entitled to
notice of the meeting. The list shall be arranged by class or series of
shares, if any, and show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any shareholder,
beginning two business days after notice of the meeting is given for which the
list was prepared and continuing to the date of the meeting, at the
Corporation's principal office or at a place identified in the meeting notice
in the city where the meeting will be held. A shareholder or his or her agent
may, on written demand, inspect and, subject to the limitations imposed by the
Wisconsin Business Corporation Law, copy the list, during regular business
hours and at his or her expense, during the period that it is available for
inspection pursuant to this Section. The Corporation shall make the
shareholders' list available at the meeting and any shareholder or his or her
agent or attorney may inspect the list at any time during the meeting or any
adjournment thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken at a
meeting of shareholders.
8. Quorum and Voting Requirements. Shares entitled to vote as a
separate voting group may take action on a matter at a meeting only if a
quorum of those shares exists with respect to that matter. Pursuant to
Article IV of the Articles of Incorporation, except as otherwise provided by
law or in or pursuant to the provisions of Article III of the Articles of
Incorporation, the holders of a majority of the shares entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. Once a share is represented for any purpose at a meeting, other
than for the purpose of objecting to holding the meeting or transacting
business at the meeting, it is considered present for purposes of determining
whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for the
adjourned meeting. If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast within the
voting group favoring the action exceed the votes cast opposing the action,
unless the Articles of Incorporation or the Wisconsin Business Corporation Law
requires a greater number of affirmative votes. Unless otherwise provided in
the Articles of Incorporation, each director shall be elected by a plurality
of the votes cast by the shares entitled to vote in the election of directors
at a meeting at which a quorum is present. Though less than a quorum of the
outstanding votes of a voting group are represented at a meeting, a majority
of the votes so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
9. Proxies. At all meetings of shareholders, a shareholder may vote
his or her shares in person or by proxy. A shareholder may appoint a proxy to
vote or otherwise act for the shareholder by signing an appointment form,
either personally or by his or her attorney-in-fact. An appointment of a
proxy is effective when received by the Secretary or other officer or agent of
the Corporation authorized to tabulate votes. An appointment is valid for
eleven months from the date of its signing unless a different period is
expressly provided in the appointment form.
10. Acceptance of Instruments Showing Shareholder Action. If the name
signed on a vote, consent, waiver or proxy appointment corresponds to the name
of a shareholder, the Corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act of a
shareholder. If the name signed on a vote, consent, waiver or proxy
appointment does not correspond to the name of a shareholder, the Corporation,
if acting in good faith, may accept the vote, consent, waiver or proxy
appointment and give it effect as the act of the shareholder if any of the
following apply:
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<PAGE>
(a) The shareholder is an entity and the name signed purports to
be that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the
shareholder and, if the Corporation requests, evidence of fiduciary
status acceptable to the Corporation is presented with respect to the
vote, consent, waiver or proxy appointment.
(c) The name signed purports to be that of a receiver or trustee
in bankruptcy of the shareholder and, if the Corporation requests,
evidence of this status acceptable to the Corporation is presented with
respect to the vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the Corporation
requests, evidence acceptable to the Corporation of the signatory's
authority to sign for the shareholder is presented with respect to the
vote, consent, waiver or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one
of the co-owners and the person signing appears to be acting on behalf
of all co-owners.
The Corporation may reject a vote, consent, waiver or proxy appointment
if the Secretary or other officer or agent of the Corporation who is
authorized to tabulate votes, acting in good faith, has reasonable basis
for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
ARTICLE III. BOARD OF DIRECTORS
1. General Powers. The business and affairs of the Corporation shall
be managed by its Board of Directors. The Board shall determine the nature
and character of the business to be conducted by the Corporation and the
method of doing so; what employees, agents and officers shall be employed and
their compensation; and what purchases or contracts for purchase shall be
made. The Board may delegate any of its aforesaid powers to committees or to
officers, agents or employees as it may from time to time determine.
2. Number of Directors. The number of directors of the Corporation
shall be nine (9), divided into three (3) classes of three (3) directors each
(Class A, Class B and Class C).
3. Term. At the 1994 annual meeting of shareholders, the directors
of Class A shall be elected for a term to expire at the first annual meeting
of shareholders after their election, and until their successors are elected
and qualify, the directors of Class B shall be elected for a term to expire at
the second annual meeting of shareholders after their election, and until
their successors are elected and qualify, and the directors of Class C shall
be elected for a term to expire at the third annual meeting of shareholders
after their election and until their successors are elected and qualify. At
each annual meeting of shareholders after the 1988 annual meeting of
shareholders the successors to the class of directors whose terms shall expire
at the time of such annual meeting shall be elected to hold office until the
third succeeding annual meeting of shareholders, and until their successors
are elected and qualify.
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4. Qualifications. No director shall be eligible for re-election
after attaining the age of seventy (70) years. Directors need not be
shareholders of the Corporation or residents of the State of Wisconsin.
5. Meetings. The Board of Directors shall hold its meetings at such
place or places, within or without the State of Wisconsin, as the Board may
from time to time determine.
a. A meeting of the Board of Directors, to be known as the
annual meeting, may be held, without notice, immediately after and at
the same place as the annual meeting of the shareholders at which such
Board is elected, for the purpose of electing the officers of the
Corporation and to transact such other business as may come before the
Board. Such annual meeting may be held at a different place than the
annual meeting of shareholders and/or on a date subsequent to the annual
meeting of shareholders, if notice of such different place and/or date
has been given to or waived by all the directors.
b. Regular meetings of the Board of Directors may be held
without call and without notice, at such times and in such places as the
Board may by resolution from time to time determine.
c. Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board or the Chief Executive Officer and
shall be called by the Secretary of the Corporation upon the written
request of three or more directors.
6. Notice; Waiver. Notice of each special meeting of the Board of
Directors shall be given by written notice delivered or communicated in
person, by telegraph, teletype, facsimile or other form of wire or wireless
communication, or by mail or private carrier, to each director at his business
address or at such other address as such director shall have designated in
writing filed with the Secretary, in each case not less than forty-eight hours
prior to the meeting. The notice need not prescribe the purpose of the
special meeting of the Board of Directors or the business to be transacted at
such meeting. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice is given by telegram, such notice shall be deemed to be
effective when the telegram is delivered to the telegraph company. If notice
is given by private carrier, such notice shall be deemed to be effective when
delivered to the private carrier. Whenever any notice whatever is required to
be given to any director of the Corporation under the Articles of
Incorporation or these By-laws or any provision of the Wisconsin Business
Corporation Law, a waiver thereof in writing, signed at any time, whether
before or after the date and time of meeting, by the director entitled to such
notice shall be deemed equivalent to the giving of such notice. The
Corporation shall retain any such waiver as part of the permanent corporate
records. A director's attendance at or participation in a meeting waives any
required notice to him or her of the meeting unless the director at the
beginning of the meeting or promptly upon his or her arrival objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
7. Quorum. Except as otherwise provided by the Wisconsin Business
Corporation Law or by the Articles of Incorporation or these By-laws, a
majority of the number of directors specified in Section 2 of Article III of
these By-laws shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors. Except as otherwise provided by the
Wisconsin Business Corporation Law or by the Articles of Incorporation or by
these By-laws, a quorum of any committee of the Board of Directors created
pursuant to Section 3 hereof shall consist of a majority of the number of
directors appointed to serve on the committee. A majority of the directors
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present (though less than such quorum) may adjourn any meeting of the Board of
Directors or any committee thereof, as the case may be, from time to time
without further notice.
8. Manner of Acting. The affirmative vote of a majority of the
directors present at a meeting of the Board of Directors or a committee
thereof at which a quorum is present shall be the act of the Board of
Directors or such committee, as the case may be, unless the Wisconsin Business
Corporation Law, the Articles of Incorporation or these By-laws require the
vote of a greater number of directors.
9. Minutes of Meetings. Minutes of any regular or special meeting of
the Board of Directors shall be prepared and distributed to each director.
10. Vacancies. Vacancies occurring in the Board of Directors shall be
filled in the manner provided in Article V of the Articles of Incorporation.
11. Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the Corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or delegate authority to an
appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and employees
and to their estates, families, dependents or beneficiaries on account of
prior services rendered by such directors, officers and employees to the
Corporation.
12. Presumption of Assent. A director who is present and is announced
as present at a meeting of the Board of Directors or any committee thereof
created in accordance with Section 13 of this Article III, when corporate
action is taken, assents to the action taken unless any of the following
occurs: (a) the director objects at the beginning of the meeting or promptly
upon his or her arrival to holding the meeting or transacting business at the
meeting; (b) the director's dissent or abstention from the action taken is
entered in the minutes of the meeting; or (c) the director delivers written
notice that complies with the Wisconsin Business Corporation Law of his or her
dissent or abstention to the presiding officer of the meeting before its
adjournment or to the Corporation immediately after adjournment of the
meeting. Such right of dissent or abstention shall not apply to a director
who votes in favor of the action taken.
13. Committees. The Board of Directors by resolution adopted by the
affirmative vote of a majority of all of the directors then in office may
create one or more committees, appoint members of the Board of Directors to
serve on the committees and designate other members of the Board of Directors
to serve as alternates. Each committee shall have two or more members who
shall, unless otherwise provided by the Board of Directors, serve at the
pleasure of the Board of Directors. A committee may be authorized to exercise
the authority of the Board of Directors, except that a committee may not do
any of the following: (a) authorize distributions; (b) approve or propose to
shareholders action that the Wisconsin Business Corporation Law requires to be
approved by shareholders; (c) fill vacancies on the Board of Directors or,
unless the Board of Directors provides by resolution that vacancies on a
committee shall be filled by the affirmative vote of the remaining committee
members, on any Board committee; (d) amend the Corporation's Articles of
Incorporation; (e) adopt, amend or repeal By-laws; (f) approve a plan of
merger not requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method prescribed by
the Board of Directors; and (h) authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares, except that the
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Board of Directors may authorize a committee to do so within limits prescribed
by the Board of Directors. Unless otherwise provided by the Board of Direc-
tors in creating the committee, a committee may employ counsel, accountants
and other consultants to assist it in the exercise of its authority.
14. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or these By-
laws, members of the Board of Directors (and any committees thereof created
pursuant to Section 13 of this Article III) may participate in regular or
special meetings by, or through the use of, any means of communication by
which all participants may simultaneously hear each other, such as by
conference telephone. If a meeting is conducted by such means, then at the
commencement of such meeting the presiding officer shall inform the
participating directors that a meeting is taking place at which official
business may be transacted. Any participant in a meeting by such means shall
be deemed present in person at such meeting. If action is to be taken at any
meeting held by such means on any of the following: (a) a plan of merger or
share exchange; (b) a sale, lease, exchange or other disposition of substan-
tial property or assets of the Corporation; (c) a voluntary dissolution or the
revocation of voluntary dissolution proceedings; or (d) a filing for
bankruptcy, then the identity of each director participating in such meeting
must be verified by the disclosure at such meeting by each such director of
each such director's social security number to the secretary of the meeting
before a vote may be taken on any of the foregoing matters. For purposes of
the preceding clause (b), the phrase "sale, lease, exchange or other
disposition of substantial property or assets" shall mean any sale, lease,
exchange or other disposition of property or assets of the Corporation having
a net book value equal to 10% or more of the net book value of the total
assets of the Corporation on and as of the close of the fiscal year last ended
prior to the date of such meeting and as to which financial statements of the
Corporation have been prepared but shall exclude any mortgage, pledge or
encumbering of property or assets or the dedication thereof to the repayment
of indebtedness, whether with or without recourse, and whether or not in the
usual and regular course of business. Notwithstanding the foregoing, no
action may be taken at any meeting held by such means on any particular matter
which the presiding officer determines, in his or her sole discretion, to be
inappropriate under the circumstances for action at a meeting held by such
means. Such determination shall be made and announced in advance of such
meeting.
15. Action without Meeting. Any action required or permitted by the
Wisconsin Business Corporation Law to be taken at a meeting of the Board of
Directors or a committee thereof created pursuant to Section 13 of this
Article III may be taken without a meeting if the action is taken by all
members of the Board or of the committee. The action shall be evidenced by
one or more written consents describing the action taken, signed by each
director or committee member and retained by the Corporation. Such action
shall be effective when the last director or committee member signs the
consent, unless the consent specifies a different effective date.
ARTICLE IV. OFFICERS
1. The principal officers of the Corporation required by statute
shall be a President, such number of Vice Presidents as may be elected by the
Board of Directors, a Secretary, and a Treasurer. The Board of Directors may
elect from among the directors a Chairman of the Board of Directors and a Vice
Chairman of the Board of Directors, may designate such Chairman, Vice Chairman
or any principal officer as the Chief Executive Officer, may elect such assis-
tant secretaries and assistant treasurers and other officers as it shall deem
necessary, and may prescribe by resolution their respective powers and duties.
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2. The President shall be elected by the directors. Unless the Board
of Directors otherwise prescribes, he shall be the Chief Executive Officer of
the Corporation. In the event that the President is not the Chief Executive
Officer, he shall have such powers and duties as the Board of Directors may
prescribe.
3. If a Chairman of the Board of Directors shall be elected, he shall
preside as Chairman of all meetings of the shareholders and of the Board of
Directors. He shall have such other authority as the Board may from time to
time prescribe. If there is no Chairman of the Board, or in the absence of
the Chairman, the presiding officer at meetings of the shareholders, and of
the Board of Directors shall be another officer in the following order of
priority: Vice Chairman of the Board of Directors, President and Vice Presi-
dents (subject, however, to Section 5 of this Article).
4. The Chief Executive Officer shall exercise active supervision over
the business, property and affairs of the Corporation.
a. The Chief Executive Officer shall have authority, subject to
such rules as may be prescribed from time to time by the Board or its
committees, to appoint agents or employees other than those elected by
the Board, to prescribe their powers and duties, and to delegate such
authority as he may see fit. Any agent or employee not elected by the
Board shall hold office at the discretion of the Chief Executive Officer
or other officer employing him.
b. The Chief Executive Officer is authorized to sign, execute
and acknowledge, on behalf of the Corporation, all deeds, mortgages,
bonds, notes, debentures, contracts, leases, reports and other documents
and instruments, except where the signing and execution thereof by some
other officer or agent shall be expressly authorized and directed by law
or by the Board or by these By-laws. Unless otherwise provided by law
or by the Board, the Chief Executive Officer may authorize any officer,
employee or agent to sign, execute and acknowledge, on behalf of the
Corporation, and in his place and stead, all such documents and
instruments.
c. Unless otherwise ordered by the Board of Directors, the
Chief Executive Officer, or a proxy appointed by him, shall have full
power and authority, in the name of and on behalf of the Corporation, to
attend, act, and vote at any meeting of the shareholders of any other
corporation in which the Corporation may hold shares of stock. At any
such meeting, he shall possess and may exercise any and all rights and
powers incident to the ownership of shares of stock.
d. The Chief Executive Officer shall have such other powers and
perform such other duties as are incident to the office of Chief
Executive Officer and as may be prescribed by the Board.
5. Vice Presidents. In the absence of the President or during his
inability or refusal to act, his powers and duties shall temporarily devolve
upon such Vice Presidents or other officers as shall be designated by the
Board of Directors or, if not designated by the Board, by the Chief Executive
officer or other officer to whom such power may be delegated by the Board;
provided, that no Vice President or other officer shall act as a member or
chairman of any committee of the Board of Directors of which the President is
a member or chairman, except at the direction of the Board.
a. Each Vice President shall have such powers and perform such
other duties as may be assigned to him by the Board or by the President,
including the power to sign, execute and acknowledge all documents and
instruments referred to in Section 4 of this Article.
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b. The Board may assign to any Vice President, general
supervision and charge over any branch of the business and affairs of
the Corporation, subject to such limitations as it may elect to impose.
c. The Board of Directors may, if it chooses, designate one or
more of the Vice Presidents "Executive Vice President" with such powers
and duties as the Board shall prescribe.
6. The Secretary shall attend, and keep the minutes of, meetings of
the shareholders, of the Board of Directors and, unless otherwise directed by
any such committee, of all committees, in books provided for that purpose;
shall have custody of the corporate records and seal; shall see that notices
are given and records and reports properly kept and filed as required by law
or by these By-laws; and, in general, shall have such other powers and perform
such other duties as are incident to the office of Secretary and as may be
assigned to him by the Board of Directors or the Chief Executive Officer.
7. Assistant Secretaries. In the absence of the Secretary, or during
his inability or refusal to act, his powers and duties shall temporarily
devolve upon such one of the Assistant Secretaries as the President or the
Board of Directors may direct. The Assistant Secretaries shall have such
other powers and perform such other duties as may be assigned to them by the
Board, the Chief Executive Officer or the Secretary.
8. The Treasurer shall have charge and custody of the funds,
securities and other evidences of value of the Corporation, and shall keep and
deposit them as required by the Board of Directors. He shall keep proper
accounts of all receipts and disbursements and of the financial transactions
of the Corporation. He shall render statements of such accounts and of money
received and disbursed by him and of property and money belonging to the
Corporation as required by the Board. The Treasurer shall have such other
powers and perform such other duties as are incident to the office of
Treasurer and as from time to time may be prescribed by the Board or the Chief
Executive officer.
9. Assistant Treasurers. In the absence of the Treasurer, or during
his inability or refusal to act, his powers and duties shall temporarily
devolve upon such one of the Assistant Treasurers as the President or the
Board of Directors may direct. The Assistant Treasurers shall have such other
powers and perform such other duties as from time to time may be assigned to
them, respectively, by the Board, the Chief Executive Officer or the
Treasurer.
10. Other Assistants and Acting Officers. The Board of Directors
shall have the power to appoint any person to act as assistant to any officer,
or as agent for the Corporation in his or her stead, or to perform the duties
of such officer whenever for any reason it is impracticable for such officer
to act personally, and such assistant or acting officer or other agent so
appointed by the Board of Directors or an authorized officer shall have the
power to perform all the duties of the office to which he or she is so
appointed to be an assistant, or as to which he or she is so appointed to act,
except as such power may be otherwise defined or restricted by the Board of
Directors.
11. Compensation. The salaries or other compensation of all officers
elected as provided under Section 1 of this Article (other than assistant
officers) shall be fixed from time to time by the Board of Directors. The
salaries or other compensation of all other agents and employees of the
Corporation shall be fixed from time to time by the Chief Executive Officer,
but only within such limits as to amount, and in accordance with such other
conditions as may be prescribed by or under the authority of the Board of
Directors.
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12. Tenure. Each officer shall hold office until his successor shall
have been duly elected and qualified, or until his death, resignation,
disqualification or removal. Any officer, agent or employee may be removed,
with or without cause, at any time by the Board of Directors notwithstanding
the contract rights, if any, of the officer removed. The appointment of an
officer does not of itself create contract rights.
13. Resignation. An officer may resign at any time by delivering
notice to the Corporation that complies with the Wisconsin Business
Corporation Law. The resignation shall be effective when the notice is
delivered, unless the notice specifies a later effective date and the
Corporation accepts the later effective date.
14. Vacancies. Any vacancy in any office may be filled by the Board
of Directors for the unexpired portion of the term. If a resignation of an
officer is effective at a later date as contemplated by Section 13 of this
Article IV, the Board of Directors may fill the pending vacancy before the
effective date if the Board provides that the successor may not take office
until the effective date.
15. Reassignment of Duties. In case of the absence or disability of
any officer of the Corporation, or for any other reason deemed sufficient by
the Board of Directors, the Board may reassign or delegate the powers and
duties, or any of them, to any other officer, director, or person it may
select.
ARTICLE V. CERTIFICATES FOR AND TRANSFER OF SHARES
1. Form. Certificates representing shares of the Corporation shall be
in such form as shall be determined by the Board of Directors. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the Corporation. All certificates
surrendered for the transfer shall be cancelled and no new certificate shall
be issued until the former certificate for a like number of shares shall have
been surrendered and cancelled, except in case of a lost or destroyed
certificate provided for in Section 4 of this Article V or a certificate for
shares transferred in compliance with the escheat laws of any state.
2. Signatures. Certificates representing shares of the Corporation
shall be signed by the President or a Vice President and by the Secretary or
an Assistant Secretary; and may be sealed with the seal of the Corporation
(which may be a facsimile) and countersigned and registered in such manner, if
any, as the Board of Directors may prescribe. Whenever any certificate is
manually signed on behalf of a transfer agent, or a registrar, other than the
Corporation itself or an employee of the Corporation, the signatures of the
President, Vice President, Secretary or Assistant Secretary, upon such
certificate may be facsimiles. In case any officer who has signed, or whose
facsimile signature has been placed upon such certificate, ceases to be such
officer before such certificate is issued, it may be issued with the same
effect as if he were such officer at the date of its issue.
3. Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the Corporation upon the transfer of such shares.
4. Lost, Destroyed or Stolen Certificates. Where the owner claims
that his certificate for shares has been lost, destroyed or wrongfully taken,
a new certificate shall be issued in place thereof if the owner (a) so
requests before the Corporation has notice that such shares have been acquired
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by a bona fide purchaser, (b) files with the Corporation a sufficient
indemnity bond, and (c) satisfies such other reasonable requirements as may be
prescribed by or under the authority of the Board of Directors.
5. Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer the Corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications and otherwise to have and exercise all the rights and powers of
an owner. Where a certificate for shares is presented to the Corporation with
a request to register for transfer, the Corporation shall not be liable to the
owner or any other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the necessary
endorsements, and (b) the Corporation had no duty to inquire into adverse
claims or has discharged any such duty. The Corporation may require
reasonable assurance that said endorsements are genuine and effective and
compliance with such other regulations as may be prescribed by or under the
authority of the Board of Directors.
6. Consideration for Shares. The Board of Directors may authorize
shares to be issued for consideration consisting of any tangible or intangible
property or benefit to the Corporation, including cash, promissory notes,
services performed, contracts for services to be performed or other securities
of the Corporation. Before the Corporation issues shares, the Board of
Directors shall determine that the consideration received or to be received
for the shares to be issued is adequate. The determination of the Board of
Directors is conclusive insofar as the adequacy of consideration for the
issuance of shares relates to whether the shares are validly issued, fully
paid and nonassessable. The Corporation may place in escrow shares issued in
whole or in part for a contract for future services or benefits, a promissory
note, or otherwise for property to be issued in the future, or make other
arrangements to restrict the transfer of the shares, and may credit
distributions in respect of the shares against their purchase price, until the
services are performed, the benefits or property are received or the
promissory note is paid. If the services are not performed, the benefits or
property are not received or the promissory note is not paid, the Corporation
may cancel, in whole or in part, the shares escrowed or restricted and the
distributions credited.
7. Other Rules. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
the statutes of the State of Wisconsin as it may deem expedient concerning the
issue, transfer and registration of certificates representing shares of the
Corporation, including the appointment and designation of Transfer Agents and
Registrars.
ARTICLE VI. INDEMNIFICATION OF OFFICERS AND DIRECTORS
1. Mandatory Indemnification.
a. In all cases other than those set forth in Section 1b
hereof, subject to the conditions and limitations set forth hereinafter
in this Article VI, the Corporation shall indemnify and hold harmless
any person who is or was a party, or is threatened to be made a party,
to any Action (see Section 16 of this Article VI for definitions of
capitalized terms used herein) by reason of his or her status as an
Executive, and/or as to acts performed in the course of such Executive's
duties to the Corporation and/or an Affiliate, against Liabilities and
reasonable Expenses incurred by or on behalf of an Executive in
connection with any Action, including, without limitation, in connection
with the investigation, defense, settlement or appeal of any Action;
provided, pursuant to Section 3, that it is not determined by the
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Authority, or by a court, that the Executive engaged in misconduct which
constitutes a Breach of Duty.
b. To the extent an Executive has been successful on the merits
or otherwise in connection with any Action, including, without
limitation, the settlement, dismissal, abandonment or withdrawal of any
such Action where the Executive does not pay, incur or assume any
material Liabilities, or in connection with any claim, issue or matter
therein, he or she shall be indemnified by the Corporation against
reasonable Expenses incurred by or on behalf of him or her in connection
therewith. The Corporation shall pay such Expenses to the Executive
(net of all Expenses, if any, previously advanced to the Executive
pursuant to Section 2), or to such other person or entity as the
Executive may designate in writing to the Corporation, within ten (10)
days after the receipt of the Executive's written request therefor,
without regard to the provisions of Section 3. In the event the
Corporation refuses to pay such requested Expenses, the Executive may
petition a court to order the Corporation to make such payment pursuant
to Section 4.
c. Notwithstanding any other provision contained in this
Article VI to the contrary, the Corporation shall not:
(i) indemnify, contribute or advance Expenses to an
Executive with respect to any Action initiated or brought
voluntarily by the Executive and not by way of defense, except
with respect to Actions:
(a) brought to establish or enforce a right to
indemnification, contribution and/or an advance of Expenses
under Section 4 of this Article VI, under the Statute as it
may then be in effect or under any other statute or law or
otherwise as required;
(b) initiated or brought voluntarily by an Executive
to the extent such Executive is successful on the merits or
otherwise in connection with such an Action in accordance
with and pursuant to Section 1b of this Article VI; or
(c) as to which the Board determines it to be
appropriate.
(ii) indemnify the Executive under this Article VI for any
amounts paid in settlement of any Action effected without the
Corporation's written consent.
The Corporation shall not settle in any manner which would
impose any Liabilities or other type of limitation on the
Executive without the Executive's written consent. Neither the
Corporation nor the Executive shall unreasonably withhold their
consent to any proposed settlement.
d. An Executive's conduct with respect to an employee benefit
plan sponsored by or otherwise associated with the Corporation and/or an
Affiliate for a purpose he or she reasonably believes to be in the
interests of the participants in and beneficiaries of such plan is
conduct that does not constitute a breach or failure to perform his or
her duties to the Corporation or an Affiliate, as the case may be.
2. Advance for Expenses.
a. The Corporation shall pay to an Executive, or to such other
person or entity as the Executive may designate in writing to the
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Corporation, his or her reasonable Expenses incurred by or on behalf of
such Executive in connection with any Action, or claim, issue or matter
associated with any such Action, in advance of the final disposition or
conclusion of any such Action (or claim, issue or matter associated with
any such Action), within ten (10) days after the receipt of the
Executive's written request therefor; provided, the following conditions
are satisfied:
(i) the Executive has first requested an advance of such
Expenses in writing (and delivered a copy of such request to the
Corporation) from the insurance carrier(s), if any, to whom a
claim has been reported under an applicable insurance policy
purchased by the Corporation and each such insurance carrier, if
any, has declined to make such an advance;
(ii) the Executive furnishes to the Corporation an executed
written certificate affirming his or her good faith belief that he
or she has not engaged in misconduct which constitutes a Breach of
Duty; and
(iii) the Executive furnishes to the Corporation an executed
written agreement to repay any advances made under this Section 2
if it is ultimately determined that he or she is not entitled to
be indemnified by the Corporation for such Expenses pursuant to
this Article VI.
b. If the Corporation makes an advance of Expenses to an
Executive pursuant to this Section 2, the Corporation shall be
subrogated to every right of recovery the Executive may have against any
insurance carrier from whom the Corporation has purchased insurance for
such purpose.
3. Determination of Right to Indemnification.
a. Except as otherwise set forth in this Section 3
or in Section 1c, any indemnification to be provided to an Executive by the
Corporation under Section 1a of this Article VI upon the final disposition or
conclusion of any Action, or any claim, issue or matter associated with any
such Action, unless otherwise ordered by a court, shall be paid by the
Corporation to the Executive (net of all Expenses, if any, previously advanced
to the Executive pursuant to Section 2), or to such other person or entity as
the Executive may designate in writing to the Corporation, within sixty (60)
days after the receipt of the Executive's written request therefor. Such
request shall include an accounting of all amounts for which indemnification
is being sought. No further corporate authorization for such payment shall be
required other than this Section 3.
b. Notwithstanding the foregoing, the payment of such
requested indemnifiable amounts pursuant to Section 1a may be denied by
the Corporation if:
(i) the Board by a majority vote thereof determines that
the Executive has engaged in misconduct which constitutes a Breach
of Duty; or
(ii) a majority of the directors of the Corporation are a
party in interest to such Action.
c. In either event of nonpayment pursuant to Section 3b, the
Board shall immediately authorize and direct, by resolution, that an
independent determination be made as to whether the Executive has
engaged in misconduct which constitutes a Breach of Duty and, therefore,
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whether indemnification of the Executive is proper pursuant to this
Article VI.
d. Such independent determination shall be made, at the option
of the Executive(s) seeking indemnification, by (i) a panel of three
arbitrators (selected as set forth below in Section 3f from the panels
of arbitrators of the American Arbitration Association) in Milwaukee,
Wisconsin, in accordance with the Commercial Arbitration Rules then
prevailing of the American Arbitration Association; (ii) an independent
legal counsel mutually selected by the Executive(s) seeking indemni-
fication and the Board by a majority vote of a quorum thereof consisting
of directors who were not parties in interest to such Action (or, if
such quorum is not obtainable, by the majority vote of the entire
Board); or (iii) a court in accordance with Section 4 of this Article
VI.
e. In any such determination there shall exist a rebuttable
presumption that the Executive has not engaged in misconduct which
constitutes a Breach of Duty and is, therefore, entitled to
indemnification hereunder. The burden of rebutting such presumption by
clear and convincing evidence shall be on the Corporation.
f. If a panel of arbitrators is to be employed hereunder, one
of such arbitrators shall be selected by the Board by a majority vote of
a quorum thereof consisting of directors who were not parties in
interest to such Action or, if such quorum is not obtainable, by an
independent legal counsel chosen by the majority vote of the entire
Board, the second by the Executive(s) seeking indemnification and the
third by the previous two arbitrators.
g. The Authority shall make its independent determination
hereunder within sixty (60) days of being selected and shall
simultaneously submit a written opinion of its conclusions to both the
Corporation and the Executive.
h. If the Authority determines that an Executive is entitled to
be indemnified for any amounts pursuant to this Article VI, the
Corporation shall pay such amounts to the Executive (net of all
Expenses, if any, previously advanced to the Executive pursuant to
Section 2), including interest thereon as provided in Section 6c, or
such other person or entity as the Executive may designate in writing to
the Corporation, within ten (10) days of receipt of such opinion.
i. Except with respect to any judicial determination pursuant
to Section 4, the Expenses associated with the indemnification process
set forth in this Section 3, including, without limitation, the Expenses
of the Authority selected hereunder, shall be paid by the Corporation.
4. Court-Ordered Indemnification and Advance for Expenses.
a. An Executive may, either before or within two years after a
determination, if any, has been made by the Authority, petition the
court before which such Action was brought or any other court of
competent jurisdiction to independently determine whether or not he or
she has engaged in misconduct which constitutes a Breach of Duty and is,
therefore, entitled to indemnification under the provisions of this
Article VI. Such court shall thereupon have the exclusive authority to
make such determination unless and until such court dismisses or
otherwise terminates such proceeding without having made such
determination. An Executive may petition a court under this Section 4
either to seek an initial determination by the court as authorized by
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Section 3d or to seek review by the court of a previous adverse
determination by the Authority.
b. The court shall make its independent determination
irrespective of any prior determination made by the Authority; provided,
however, that there shall exist a rebuttable presumption that the
Executive has not engaged in misconduct which constitutes a Breach of
Duty and is, therefore, entitled to indemnification hereunder. The
burden of rebutting such presumption by clear and convincing evidence
shall be on the Corporation.
c. In the event the court determines that an Executive has
engaged in misconduct which constitutes a Breach of Duty, it may
nonetheless order indemnification to be paid by the Corporation if it
determines that the Executive is fairly and reasonably entitled to
indemnification in view of all of the circumstances of such Action.
d. In the event the Corporation does not (i) advance Expenses
to the Executive within ten (10) days of such Executive's compliance
with Section 2; or (ii) indemnify an Executive with respect to requested
Expenses under Section 1b within ten (10) days of such Executive's
written request therefor, the Executive may petition the court before
which such Action was brought, if any, or any other court of competent
jurisdiction to order the Corporation to pay such reasonable Expenses
immediately. Such court, after giving any notice it considers
necessary, shall order the Corporation to pay such Expenses if it
determines that the Executive has complied with the applicable
provisions of Section 2 or 1b, as the case may be.
e. If the court determines pursuant to this Section 4 that the
Executive is entitled to be indemnified for any Liabilities and/or
Expenses, or to the advance of Expenses, unless otherwise ordered by
such court, the Corporation shall pay such Liabilities and/or Expenses
to the Executive (net of all Expenses, if any, previously advanced to
the Executive pursuant to Section 2), including interest thereon as
provided in Section 6c, or to such other person or entity as the Execu-
tive may designate in writing to the Corporation, within ten (10) days
of the rendering of such determination.
f. An Executive shall pay all Expenses incurred by such
Executive in connection with the judicial determination provided in this
Section 4, unless it shall ultimately be determined by the court that he
or she is entitled, in whole or in part, to be indemnified by, or to
receive an advance from, the Corporation as authorized by this Article
VI. All Expenses incurred by an Executive in connection with any
subsequent appeal of the judicial determination provided for in this
Section 4 shall be paid by the Executive regardless of the disposition
of such appeal.
5. Termination of an Action is Nonconclusive. The adverse
termination of any Action against an Executive by judgment, order settlement,
conviction, or upon a plea of no contest or its equivalent, shall not, of
itself, create a presumption that the Executive has engaged in misconduct
which constitutes a Breach of Duty.
6. Partial Indemnification; Reasonableness; Interest.
a. If it is determined by the Authority, or by a court, that an
Executive is entitled to indemnification as to some claims, issues or
matters, but not as to other claims, issues or matters, involved in any
Action, the Authority, or the court, shall authorize the proration and
payment by the Corporation of such Liabilities and/or reasonable
15
<PAGE>
Expenses with respect to which indemnification is sought by the Execu-
tive, among such claims, issues or matters as the Authority, or the
court, shall deem appropriate in light of all of the circumstances of
such Action.
b. If it is determined by the Authority, or by a court, that
certain Expenses incurred by or on behalf of an Executive are for
whatever reason unreasonable in amount, the Authority, or the court,
shall nonetheless authorize indemnification to be paid by the
Corporation to the Executive for such Expenses as the Authority, or the
court, shall deem reasonable in light of all of the circumstances of
such Action.
c. Interest shall be paid by the Corporation to an Executive,
to the extent deemed appropriate by the Authority, or by a court, at a
reasonable interest rate, for amounts for which the Corporation
indemnifies or advances to the Executive.
7. Insurance; Subrogation.
a. The Corporation may purchase and maintain insurance on
behalf of any person who is or was an Executive of the Corporation,
and/or is or was serving as an Executive of an Affiliate, against
Liabilities and/or Expenses asserted against him or her and/or incurred
by or on behalf of him or her in any such capacity, or arising out of
his or her status as such an Executive, whether or not the Corporation
would have the power to indemnify him or her against such Liabilities
and/or Expenses under this Article VI or under the Statute as it may
then be in effect. Except as expressly provided herein, the purchase
and maintenance of such insurance shall not in any way limit or affect
the rights and obligations of the Corporation and/or any Executive under
this Article VI. Such insurance may, but need not, be for the benefit
of all Executives of the Corporation and those serving as an Executive
of an Affiliate.
b. If an Executive shall receive payment from any insurance
carrier or from the plaintiff in any Action against such Executive in
respect of indemnified amounts after payments on account of all or part
of such indemnified amounts have been made by the Corporation pursuant
to this Article VI, such Executive shall promptly reimburse the
Corporation for the amount, if any, by which the sum of such payment by
such insurance carrier or such plaintiff and payments by the Corporation
to such Executive exceeds such indemnified amounts; provided, however,
that such portions, if any, of such insurance proceeds that are required
to be reimbursed to the insurance carrier under the terms of its
insurance policy, such as deductible, retention or co-insurance amounts,
shall not be deemed to be payments to such Executive hereunder.
c. Upon payment of indemnified amounts under this Article VI,
the Corporation shall be subrogated to such Executive's rights against
any insurance carrier in respect of such indemnified amounts and the
Executive shall execute and deliver any and all instruments and/or
documents and perform any and all other acts or deeds which the
Corporation shall deem necessary or advisable to secure such rights.
The Executive shall do nothing to prejudice such rights of recovery or
subrogation.
8. Witness Expenses. The Corporation shall advance or reimburse any
and all reasonable Expenses incurred by or on behalf of an Executive in
connection with his or her appearance as a witness in any Action at a time
when he or she has not been formally named a defendant or respondent to such
16
<PAGE>
an Action, within ten (10) days after the receipt of an Executive's written
request therefor.
9. Contribution.
Subject to the limitations of this Section 9, if the indemnity provided
for in Section 1 of this Article VI is unavailable to an Executive for any
reason whatsoever, the Corporation, in lieu of indemnifying the Executive,
shall contribute to the amount incurred by or on behalf of the Executive,
whether for Liabilities and/or for reasonable Expenses in connection with any
Action in such proportion as deemed fair and reasonable by the Authority, or
by a court, in light of all of the circumstances of any such Action, in order
to reflect:
(i) the relative benefits received by the Corporation and
the Executive as a result of the event(s) and/or transaction(s)
giving cause to such Action; and/or
(ii) the relative fault of the Corporation (and its other
Executives, employees and/or agents) and the Executive in
connection with such event(s) and/or transaction(s).
b. The relative fault of the Corporation (and its other
Executives, employees and/or agents), on the one hand, and of the
Executive, on the other hand, shall be determined by reference to, among
other things, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances
resulting in such Liabilities and/or Expenses. The Corporation agrees
that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation or any other method of
allocation which does not take account of the foregoing equitable
considerations.
c. An Executive shall not be entitled to contribution from the
Corporation under this Section 9 in the event it is determined by the
Authority, or by a court, that the Executive has engaged in misconduct
which constitutes a Breach of Duty.
d. The Corporation's payment of, and an Executive's right to,
contribution under this Section 9 shall be made and determined in
accordance with and pursuant to the provisions in Sections 3 and/or 4 of
this Article VI relating to the Corporation's payment of, and the
Executive's right to, indemnification under this Article VI.
10. Indemnification of Employees. Unless otherwise specifically set
forth in this Article VI, the Corporation shall indemnify and hold harmless
any person who is or was a party, or is threatened to be made a party to any
Action by reason of his or her status as, or the fact that he or she is or was
an employee or authorized agent or representative of the Corporation and/or an
Affiliate as to acts performed in the course and within the scope of such
employee's, agent's or representative's duties to the Corporation and/or an
Affiliate, in accordance with and to the fullest extent permitted by the
Statute as it may then be in effect.
11. Severability. If any provision of this Article VI shall be deemed
invalid or inoperative, or if a court of competent jurisdiction determines
that any of the provisions of this Article VI contravene public policy, this
Article VI shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such provisions
which are invalid or inoperative or which contravene public policy shall be
deemed, without further Action or deed by or on behalf of the Corporation, to
be modified, amended and/or limited, but only to the extent necessary to
17
<PAGE>
render the same valid and enforceable, and the Corporation shall indemnify an
Executive as to Liabilities and reasonable Expenses with respect to any Action
to the full extent permitted by any applicable provision of this Article VI
that shall not have been invalidated and to the full extent otherwise
permitted by the Statute as it may then be in effect.
12. Nonexclusivity of Article VI. The right to indemnification,
contribution and advancement of Expenses provided to an Executive by this
Article VI shall not be deemed exclusive of any other rights to
indemnification, contribution and/or advancement of Expenses which any
Executive or other employee or agent of the Corporation and/or of an Affiliate
may be entitled under any charter provision, written agreement, resolution,
vote of shareholders or disinterested directors of the Corporation or
otherwise, including, without limitation, under the Statute as it may then be
in effect, both as to acts in his or her official capacity as such Executive
or other employee or agent of the Corporation and/or of an Affiliate or as to
acts in any other capacity while holding such office or position, whether or
not the Corporation would have the power to indemnify, contribute and/or
advance Expenses to the Executive under this Article VI or under the Statute;
provided that it is not determined that the Executive or other employee or
agent has engaged in misconduct which constitutes a Breach of Duty.
13. Notice to the Corporation; Defense of Actions.
a. An Executive shall promptly notify the Corporation in
writing upon being served with or having actual knowledge of any
citation, summons, complaint, indictment or any other similar document
relating to any Action which may result in a claim of indemnification,
contribution or advancement of Expenses hereunder, but the omission so
to notify the Corporation will not relieve the Corporation from any
liability which it may have to the Executive otherwise than under this
Agreement unless the Corporation shall have been irreparably prejudiced
by such omission.
b. With respect to any such Action as to which an Executive
notifies the Corporation of the commencement thereof:
(i) The Corporation shall be entitled to participate
therein at its own expense; and
(ii) Except as otherwise provided below, to the extent that
it may wish, the Corporation (or any other indemnifying party,
including any insurance carrier, similarly notified by the
Corporation or the Executive) shall be entitled to assume the
defense thereof, with counsel selected by the Corporation (or such
other indemnifying party) and reasonably satisfactory to the
Executive.
c. After notice from the Corporation (or such other
indemnifying party) to the Executive of its election to assume the
defense of an Action, the Corporation shall not be liable to the
Executive under this Article VI for any Expenses subsequently incurred
by the Executive in connection with the defense thereof other than
reasonable costs of investigation or as otherwise provided below. The
Executive shall have the right to employ his or her own counsel in such
Action but the Expenses of such counsel incurred after notice from the
Corporation (or such other indemnifying party) of its assumption of the
defense thereof shall be at the expense of the Executive unless (i) the
employment of counsel by the Executive has been authorized by the
Corporation; (ii) the Executive shall have reasonably concluded that
there may be a conflict of interest between the Corporation (or such
other indemnifying party) and the Executive in the conduct of the
defense of such Action; or (iii) the Corporation (or such other indem-
18
<PAGE>
nifying party) shall not in fact have employed counsel to assume the
defense of such Action, in each of which cases the Expenses of counsel
shall be at the expense of the Corporation. The Corporation shall not
be entitled to assume the defense of any Derivative Action or any Action
as to which the Executive shall have made the conclusion provided for in
clause (ii) above.
14. Continuity of Rights and obligations. The terms and provisions of
this Article VI shall continue as to an Executive subsequent to the
Termination Date and such terms and provisions shall inure to the benefit of
the heirs, estate, executors and administrators of such Executive and the suc-
cessors and assigns of the Corporation, including, without limitation, any
successor to the Corporation by way of merger, consolidation and/or sale or
disposition of all or substantially all of the assets or capital stock of the
Corporation. Except as provided herein, all rights and obligations of the
Corporation and the Executive hereunder shall continue in full force and
effect despite the subsequent amendment or modification of the Corporation's
Articles of Incorporation, as such are in effect on the date hereof, and such
rights and obligations shall not be affected by any such amendment or
modification, any resolution of directors or shareholders of the Corporation,
or by any other corporate action which conflicts with or purports to amend,
modify, limit or eliminate any of the rights or obligations of the Corporation
and/or of the Executive hereunder.
15. Amendment. This Article VI may only be altered, amended or
repealed by the affirmative vote of a majority of the shareholders of the
Corporation so entitled to vote; provided, however, that the Board may alter
or amend this Article VI without such shareholder approval if any such
alteration or amendment:
a. is made in order to conform to any amendment or revision of
the Wisconsin Business Corporation Law, including, without limitation,
the Statute, which (i) expands or permits the expansion of an
Executive's right to indemnification thereunder; (ii) limits or
eliminates, or permits the limitation or elimination, of liability of
the Executives; or (iii) is otherwise beneficial to the Executives; or
b. in the sole judgment and discretion of the Board, does not
materially adversely affect the rights and protections of the
shareholders of the Corporation.
Any repeal, modification or amendment of this Article VI shall not
adversely affect any rights or protections of an Executive existing
under this Article VI immediately prior to the time of such repeal,
modification or amendment and any such repeal, modification or amendment
shall have a prospective effect only.
16. Certain Definitions. The following terms as used in this Article
VI shall be defined as follows:
a. "Action(s)" shall include, without limitation, any
threatened, pending or completed action, claim, litigation, suit or
proceeding, whether civil, criminal, administrative, arbitrative, or
investigative, whether predicated on foreign, Federal, state or local
law, whether brought under and/or predicated upon the Securities Act of
1933, as amended, and/or the Securities Exchange Act of 1934, as
amended, and/or their respective state counterparts and/or any rule or
regulation promulgated thereunder, whether a Derivative Action and
whether formal or informal.
19
<PAGE>
b. "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit plan, trust,
or other similar enterprise that directly or indirectly through one or
more intermediaries, controls or is controlled by, or is under common
control with, the Corporation.
c. "Authority" shall mean the panel of arbitrators or
independent legal counsel selected under Section 3 of the Agreement.
d. "Board" shall mean the Board of Directors of the
Corporation.
e. "Breach of Duty" shall mean the Executive breached or failed
to perform his or her duties to the Corporation or an Affiliate, as the
case may be, and the Executive's breach of or failure to perform those
duties constituted:
(i) A willful failure to deal fairly with the Corporation
(or an Affiliate) or its shareholders in connection with a matter
in which the Executive has a material conflict of interest;
(ii) A violation of the criminal law, unless the Executive:
(a) Had reasonable cause to believe his or her conduct was
lawful; or
(b) Had no reasonable cause to believe his or her conduct was
unlawful;
(iii) A transaction from which the Executive derived an
improper personal profit (unless such profit is determined to be
immaterial in light of all the circumstances of the Action); or
(iv) Willful misconduct.
f. "Derivative Action" shall mean any Action brought by or in
the right of the Corporation and/or an Affiliate.
g. "Executive(s)" shall mean any individual who is, was or has
agreed to become a director and/or officer of the Corporation and/or an
Affiliate.
h. "Expenses" shall include, without limitation, all expenses,
fees, costs, charges, attorneys' fees and disbursements, other out-of-
pocket costs, reasonable compensation for time spent by the Executive in
connection with the Action for which he or she is not otherwise
compensated by the Corporation, any Affiliate, any third party or other
entity and any and all other direct and indirect costs of any type or
nature whatsoever.
i. "Liabilities" shall include, without limitation, judgments,
amounts incurred in settlement, fines, penalties and, with respect to
any employee benefit plan, any excise tax or penalty incurred in
connection therewith, and any and all other liabilities of every type or
nature whatsoever.
j. "Statute" shall mean Wisconsin Business Corporation Law
Section 180.05 (or any successor provisions).
k. "Termination Date" shall mean the date an Executive ceases,
for whatever reason, to serve in an employment relationship with the
Company and/or any Affiliate.
20
<PAGE>
ARTICLE VII. SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the words "WISCONSIN PUBLIC
SERVICE CORPORATION, GREEN BAY, WIS., CORPORATE SEAL." The continued use for
any purpose of any former corporate seal or facsimile thereof shall have the
same effect as the use of the corporate seal or facsimile thereof in the form
provided by the preceding sentence.
ARTICLE VIII. AMENDMENTS
1. The Board of Directors shall have authority to adopt, amend, or
repeal the By-laws of this Corporation upon affirmative vote of a majority of
the total number of directors at a meeting of the Board, the notice of which
shall have included notice of the proposed amendment; but the Board of
Directors shall have no power to amend any By-law or to reinstate any By-law
repealed by the shareholders unless the shareholders shall hereafter confer
such authority upon the Board of Directors.
2. The shareholders shall have power to adopt, amend or repeal any of
the By-laws of the Corporation, at any regular or special meeting of the
shareholders, in accordance with the provisions of Article II of these By-
laws. There shall be included in the notice of such regular or special
meeting a statement of the nature of any amendment that is proposed for the
consideration of the shareholders by the holders of at least 5% of the voting
stock of the Corporation in a writing delivered to the Secretary of the
Corporation not less than ninety (90) days prior to the date of such meeting
or by the Board of Directors.
21
<PAGE>
Form 14&15-1971 UNITED STATES OF AMERICA VOL 1018 PAGE
582
767911 State of Wisconsin-Department of State
TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETING:
The undersigned, as Secretary of State of the State of Wisconsin, certifies that
(X) Articles of Incorporation
( ) Amendment to Articles of Incorporation
( ) Statement of Intent to Dissolve
( ) Articles of Dissolution
( ) Articles of Merger
( ) Name reservation
( ) Articles of Consolidation
( ) Restated Articles
( ) Change of Registered Office and/or Agent OF
WISCONSIN PUBLIC SERVICE NUCLEAR FUEL INC.
of which the attached is a duplicate, was on the date hereof, accepted and filed
in my office.
In Testimony Whereof, I have hereunto
set my hand and affixed my official
seal on APR 5 1973
(State Seal) /s/ Robert C. Zimmerman
--------------------------------------------
ROBERT C. ZIMMERMAN
Secretary of State
THIS MUST BE RECORDED WITH THE REGISTER OF DEEDS
------------------------------------------------
<PAGE>
ARTICLES OF INCORPORATION
Executed by the undersigned for the purpose of forming a Wisconsin corporation
under Chapter 180 of the Wisconsin statutes:
Article 1. The name of the corporation is
WISCONSIN PUBLIC SERVICE NUCLEAR FUEL INC.
Article 2. The period of existence shall be perpetual.
Article 3. The purpose shall be to engage in any lawful
activity within the purposes for which corporations
may be organized under the Wisconsin
Business Corporation Law, Chapter 180 of the
Wisconsin Statutes.
Article 4. The number of shares which it shall have authority
to issue is 2,500 shares of Common Stock all without
par value.
Article 5. Address of initial registered office is
700 North Adams Street
Green Bay, Wisconsin 54305
Article 6. Name of initial registered agent at such address
is J. H. Liethen.
Article 7. The number of directors constituting the initial
board of directors shall be three. Thereafter,
the number of directors shall be such number as
is fixed by or pursuant to the bylaws.
Article 8. The names of the initial directors are:
Paul D. Ziemer
Evan W. James
James H. Liethen
Article 9. These articles may be amended in the manner
authorized by law at the time of amendment.
VOL1018 PAGE583
<PAGE>
767911 VOL1018 PAGE584
Article 10. The name and address of incorporator is:
Theodore C. Bolliger
735 North Water Street
Milwaukee, Wisconsin 53202
Executed in duplicate on the 2nd day of April, 1973.
/s/ Theodore C. Bolliger
---------------------------------------
Theodore C. Bolliger
===============================================================================
STATE OF WISCONSIN )
) SS.
MILWAUKEE COUNTY )
Personally came before me this 2nd day of April,
A. D. 1973, the above named
Theodore C. Bolliger
to me known to be the person who executed the foregoing instrument,
and acknowledged the same.
/s/ Joyce S. Kaestner
---------------------------------------
Joyce Kaestner, Notary Public
(Notary Seal) My commission expires September 9, 1973
==============================================================================
This document was drafted by Theodore C. Bolliger
==============================================================================
REGISTER'S OFFICE )
Brown County, Wis. )
Received for record the 13th day The following stamp is affixed:
of April A.D. 1973 at STATE OF WISCONSIN
9:37 o'clock A.M. and recorded in DEPARTMENT OF STATE
Vol. 1018 of Records on page 582 FILED
APR 5 1973
/s/ Harold P. Loch ROBERT C. ZIMMERMAN
Register of Deeds SECRETARY OF STATE
<PAGE>
ARTICLES OF INCORPORATION
FOR
WISCONSIN PUBLIC SERVICE
NUCLEAR FUEL INC.
[Duplicate Original]
REGISTER'S OFFICE )
Brown Co., Wis. )
Receive for record the 13th day
of April A. D. 1973 at
9:37 o'clock A.M. and recorded in
Vol. 1018 of records on page 582
/s/ Harold P. Loch
Register of Deeds
4.00
.25 Cert
4.25
Robert Knuth
Wisconsin Public Service
700 N. Adams
Green Bay 54305
<PAGE>
1009187 J 7525 I 9
FORM 14 UNITED STATE OF AMERICA
State of Wisconsin
OFFICE OF THE SECRETARY OF STATE
-------------
TO ALL TO WHOM THESE PRESENTS SHALL COME:
The undersigned, as Secretary of State of the State of Wisconsin,
certifies that the attached is a duplicate of a document accepted and
filed in my office.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and affixed
my official seal, at Madison, on
the date of filing of said docu-
ment.
/s/ Douglas La Follette
DOUGLAS LA FOLLETTE
Secretary of State
<PAGE>
(Form 4) - 1982 State of Wisconsin J 7525 I 10
AMENDMENT SECRETARY OF STATE CORPORATION DIVISION
(stock corp) P O Box 7846
Madison WI 53707
Resolved; That Article 1 of the Articles of Incorporation of
Wisconsin Public Service Nuclear Fuel Inc. is amended to read
as follows:
"Article 1. The name of the Corporation is
WISCONSIN PUBLIC SERVICE RESOURCES INC."
-----------------------------------------------------
The undersigned
officers of Wisconsin Public Service Nuclear Fuel Inc. a Wisconsin corpor-
-----------------------------------------------
ation with registered office in Brown County, Wisconsin, CERTIFY:
--------------
1(A) The foregoing amendment of the articles of incorporation of said
corporation was consented to in writing by the holders of all shares
entitled to vote with respect to the subject matter of said
amendment, duly signed by said shareholders or in their names by their
duly authorized attorneys.
OR (PLEASE STRIKE OUT THE ITEM YOU DO NOT USE) - See instruction 1
(This item stricken out)
The following stamp is affixed:
STATE OF WISCONSIN
FILED
SEP 14 1983
DOUGLAS LA FOLLETTE
SECRETARY OF STATE
Executed in duplicate and seal (if any) affixed this 7th day of September, 1983
/s/ P. D. Ziemer
------------------------------------
President P. D. Ziemer
(Affix seal or state that there is none) /s/ R. H. Knuth
------------------------------------
Secretary R. H. Knuth
This document was drafted by Michael S. Nolan, Milwaukee, Wisconsin (Section
14.38(14) Wis Statutes.
<PAGE>
AMENDMENT - STOCK J 7525 I 11
1009187
Mail Returned Copy to:
(FILL IN THE NAME AND ADDRESS HERE) The following stamp is affixed:
REGISTER OF DEEDS
Paul M. Barnes, Esq. BROWN COUNTY
Foley & Lardner SEP 20 1983
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202 AT 8:01 O'CLOCK A.M.
/s/ REGISTER OF DEEDS
INSTRUCTIONS
1. Amendment may be effected either by
A) Vote of the shareholders, at a OR B) Written consent of all shareholders,
shareholder's meeting. Use item without a meeting. Use item 1(a).
1(b).
Ref. sec. 180.25 Wis Stats. For corporations organized on or after 1 Jan 1973,
statutory minimum of votes to adopt resolution is a majority of the shares
entitled to vote. For corporations organized previously, statutory minimum is
2/3 of the shares entitled to vote, unless articles provide for majority vote.
(Minimum vote requirements must be met for each class of stock as well as for
the total shares entitled to vote.)
2. Item 2. If amendment provides for exchange, reclassification or
cancellation of issued shares, or effects a change in the amount of stated
capital, enter a statement of the manner in which the same will be accomplished.
Ref. sec. 180.53(6) & (7) Wisconsin Statutes.
3. Affix CORPORATE SEAL to each copy of the document, or enter the remark "NO
SEAL" if the corporation does not have a seal. The PRESIDENT (or vice-
president) and SECRETARY (or asst secretary) are to sign each copy with original
signatures. Carbon copy, xerox, or rubber stamp signatures are not acceptable.
4. Submit in DUPLICATE ORIGINAL. Furnish Secretary of State two copies of the
document. (Mailing address: Corporation Division, Secretary of State, P O Box
7846, Madison WI, 53707). One copy will be retained (filed) by Secretary of
State and the other copy transmitted directly to the Register of Deeds of the
county named in this document, together with your check for the recording fee.
When the recording has been accomplished, the document will be returned to the
address you furnish on the back of this form.
5. Two SEPARATE REMITTANCES are required.
A) Send a filing fee of $25 (or more), payable to SECRETARY OF STATE.
Additional fee may be due if amendment causes an increase in authorized capital
shares. The rate on shares is $1.25 per $1,000 on par value shares, and/or
2-1/2 cents per share on no par value shares. Compute fee at such rates on the
aggregate number of shares AFTER giving effect to the amendment. Deduct
therefrom the fee applicable to the authorized shares BEFORE amendment. The
remainder, if any, is the additional fee due.
B) Send a RECORDING FEE of $6, payable to REGISTER OF DEEDS of the county named
in this document as the county within which the corporation's registered office
is located. If you append additional pages to this standard form, add $2 more
recording fee for each additional page.
Please furnish the fee for the Register of Deeds in check form with your
document, and we will transmit it to the Register of Deeds with the document for
recording.
<PAGE>
The following stamp is affixed:
RECEIVED
SECRETARY OF STATE
STATE OF WISCONSIN
93 NOV 15 P12:03 ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
WISCONSIN PUBLIC SERVICE RESOURCES INC.
---------------------------------------
The undersigned officers of Wisconsin Public Service Resources Inc.
(the "Corporation"), a Wisconsin corporation with a registered office in the
City of Green Bay, Brown County, State of Wisconsin, hereby certify that on
November 10, 1993, the shareholders authorized an amendment to Article I of the
Articles of Incorporation, so that, as amended, Article I shall read in its
entirety as follows:
ARTICLE I
The name of the corporation is Packerland Energy Services, Inc.
* * * * * *
The undersigned officers of the Corporation certify that:
1. The foregoing amendment of the Articles of Incorporation of said
Corporation was adopted on November 10, 1993 by unanimous written consent
of both the Board of Directors and the sole shareholder of the Corporation
in accordance with Section 180.1003 of the Wisconsin Business Corporation
Law.
2. The foregoing amendment to the Articles of Incorporation neither
provides for the exchange, reclassification or cancellation of issued
shares, nor effects a change in the amount of stated capital.
Executed in duplicate as of this 10th day of November, 1993.
/s/ D. A. Bollom
___________________________________
The following stamp is affixed: D. A. Bollom, President
STATE OF WISCONSIN /s/ R. H. Knuth
FILED ___________________________________
NOV 15 1993 R. H. Knuth, Secretary
DOUGLAS LA FOLLETTE
SECRETARY OF STATE
This instrument was drafted by, and should be returned to, Marc J. Marotta,
Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
<PAGE>
Form 3-Sec. State
Certificate of Incorporation
UNITED STATES OF AMERICA
State of Wisconsin
Department of State
-------------------
TO ALL TO WHOM THESE PRESENTS SHALL COME:
The undersigned, as Secretary of State of the State of Wisconsin, hereby
certifies that, on Apr 5, 1973 Articles of Incorporation were filed in my
office, and the filing fee paid, under the provisions of Chapter 180 of the
Wisconsin Statutes, which Articles provide:
Name: WISCONSIN PUBLIC SERVICE NUCLEAR FUEL INC.
Registered Office: 700 N. Adams St.
Green Bay, Wis. 54305
Capital Stock: 2500 Shares, Common, without Par Value
Purposes for which organized: To engage in any lawful activity within the
purposes for which corporation may be organized under Chapter 180 of the
Wisconsin Statutes.
Period of Existence: Perpetual
I further certify that a certificate has been filed in my office to the effect
that a duplicate of said Articles, bearing my certificate, was recorded in the
office of the Register of Deeds of Brown County, Wisconsin, on Apr 13, 1973
THEREFORE, THE STATE OF WISCONSIN does hereby grant unto the said corporation
the powers and privileges conferred by the Wisconsin Statutes for the purposes
stated and in accordance with said Articles.
In Witness Whereof, I have hereunto set my hand
and affixed my official seal, at the Capital, in
(State Seal) the City of Madison, on May 1, 1973
/s/ Robert C. Zimmerman
------------------------------------------------
ROBERT C. ZIMMERMAN
Secretary of State
SEE REVERSE FOR MORE INFORMATION
<PAGE>
BY-LAWS
OF
Packerland Energy Services, Inc.
--------------------------------
(a Wisconsin Corporation)
INTRODUCTION -
VARIABLE REFERENCES
0.01 Date of annual shareholders' meeting
(See Section 2.01):
10:00 AM
(Local Time) 3rd Tuesday April 1974
- ------------ ------- ------- --------- ------
(Hour) (Week) (Day) (Month) (First Year)
* 0.02. Required notice of shareholders' meeting
(See Section 2.04): not less than 3 days.
* 0.03. Authorized number of directors (See
Section 3.01): 3
* 0.04. Required notice of directors' meetings
(See Section 3.05):
(a) not less than 24 hours if by mail, and
*
(b) not less than 12 hours if by telegram
or personal delivery.
* 0.05. Authorized number of Vice-Presidents (See
Section 4.01): 2
*
* These spaces are reserved for official notation of future amendments
to these sections.
B-0
<PAGE>
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation
may have such principal and other business offices, either within
or without the State of Wisconsin, as the Board of Directors may
designate or as the business of the corporation may require from
time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to
be maintained in the State of Wisconsin may be, but need not be,
identical with the principal office in the State of Wisconsin,
and the address of the registered office may be changed from time
to time by the Board of Directors or by the registered agent.
The business office of the registered agent of the corporation
shall be identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the
shareholders shall be held at the date and hour in each year set
forth in Section 0.01, or at such other time and date within
thirty days before or after said date as may be fixed by or under
the authority of the Board of Directors, for the purpose of
electing directors and for the transaction of such other business
as may come before the meeting. If the day fixed for the annual
meeting shall be a legal holiday in the State of Wisconsin, such
meeting shall be held on the next succeeding business day. If
the election of directors shall not be held on the day designated
herein, or fixed as herein provided, for any annual meeting of
the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as conveniently
may be.
2.02. Special Meeting. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or the
Board of Directors or by the person designated in the written
request of the holders of not less than one-tenth of all shares
of the corporation entitled to vote at the meeting.
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2.03. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of
Wisconsin, as the place of meeting for any annual meeting or for
any special meeting called by the Board of Directors. A waiver
of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within or without the
State of Wisconsin, as the place for the holding of such meeting.
if no designation is made, or if a special meeting be otherwise
called, the place of meeting shall be the principal business
office of the corporation in the State of Wisconsin or such other
suitable place in the county of such principal office as may be
designated by the person calling such meeting, but any meeting
may be adjourned to reconvene at any place designated by vote of
a majority of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than the number of days set forth in
Section 0.02 (unless a longer period is required by law or the
articles of incorporation) nor more than fifty days before the
date of the meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or other officer or
persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall
be deemed to be delivered when deposited in the United States
mail, addressed to the shareholder at his address as it appears
on the stock record books of the corporation, with postage
thereon prepaid.
2.05. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive payment
of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors
may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the
stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be
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closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any
such determination of shareholders, such date in any case to be
not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which
the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the close of business on the date on which notice of
the meeting is mailed or on the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in
this section, such determination shall be applied to any
adjournment thereof except where the determination has been made
through the closing of the stock transfer books and the stated
period of closing has expired.
2.06. Voting Records. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall, before each meeting of shareholders, make a complete
record of the shareholders entitled to vote at such meeting, or
any adjournment thereof, with the address of and the number of
shares held by each. Such record shall be produced and kept open
at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the
meeting for the purposes of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such record or transfer books or
to vote at any meeting of shareholders. Failure to comply with
the requirements of this section shall not affect the validity of
any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the
articles of incorporation, a majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a
quorum at a meeting Of shareholders. If a quorum is present, the
affirmative vote of the majority of the shares represented at the
meeting and entitled to vote on the subject matter shall be the
act of the shareholders unless the vote of a greater
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number or voting by classes is required by law or the articles of
incorporation. Though less than a quorum of the outstanding
shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally
notified.
2.08. Conduct of Meetings. The President, and in his
absence, a Vice-President in the order provided under Section
4.06, and in their absence, any person chosen by the shareholders
present shall call the meeting of the shareholders to order and
shall act as chairman of the meeting, and the Secretary of the
corporation shall act as secretary of all meetings of the
shareholders, but, in the absence of the Secretary, the presiding
officer may appoint any other person to act as secretary of the
meeting.
2.09. Proxies. At all meetings of shareholders, a
shareholder entitled to vote may vote in person or by proxy
appointed in writing by the shareholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary
of the corporation before or at the time of the meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any
time before it is voted, either by written notice filed with the
Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during
the meeting. The presence of a shareholder who has filed his
proxy shall not of itself constitute a revocation. No proxy
shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy. The Board of
Directors shall have the power and authority to make rules
establishing presumptions as to the validity and sufficiency of
proxies.
2.10. Voting of Shares. Each outstanding share shall
be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting
rights of the shares of any class or classes are enlarged,
limited or denied by the articles of incorporation.
2.11. Voting of Shares by Certain Holders.
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(a) Other Corporations. Shares standing in the
name of another corporation may be voted either in
person or by proxy, by the president of such
corporation or any other officer appointed by such
president. A proxy executed by any principal officer
of such other corporation or assistant thereto shall be
conclusive evidence of the signer's authority to act,
in the absence of express notice to this corporation,
given in writing to the Secretary of this corporation,
of the designation of some other person by the board of
directors or the by-laws of such other corporation.
(b) Legal Representatives and Fiduciaries.
Shares held by any administrator, executor, guardian,
conservator, trustee in bankruptcy, receiver, or
assignee for creditors may be voted by him, either in
person or by proxy, without a transfer of such shares
into his name provided that there is filed with the
Secretary before or at the time of meeting proper
evidence of his incumbency and the number of shares
held. Shares standing in the name of a fiduciary may
be voted by him, either in person or by proxy. A proxy
executed by a fiduciary, shall be conclusive evidence
of the signer's authority to act, in the absence of
express notice to this corporation, given in writing to
the Secretary of this corporation, that such manner of
voting is expressly prohibited or otherwise directed by
the document creating the fiduciary relationship.
(c) Pledgees. A shareholder whose shares are
pledged shall be entitled to vote such shares until the
shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither
treasury shares, nor shares held by another corporation
if a majority of the shares entitled to vote for the
election of directors of such other corporation is held
by this corporation, shall be voted at any meeting or
counted in determining the total number of outstanding
shares entitled to vote, but shares of its own issue
held by this corporation in a fiduciary capacity, or
held by such other corporation in a fiduciary capacity,
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may be voted and shall be counted in determining the
total number of outstanding shares entitled to vote.
(e) Minors. Shares held by a minor may be voted
by such minor in person or by proxy and no such vote
shall be subject to disaffirmance or avoidance, unless
prior to such vote the Secretary of the corporation
has received written notice or has actual knowledge
that such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held
by an incompetent or spendthrift may be voted by such
incompetent or spendthrift in person or by proxy and no
such vote shall be subject to disaffirmance or
avoidance, unless prior to such vote the Secretary of
the corporation has actual knowledge that such
shareholder has been adjudicated an incompetent or
spendthrift or actual knowledge of filing of judicial
proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the
names of two or more individuals who are named in the
registration as joint tenants may be voted in person or
by proxy signed by any one or more of such individuals
if either (i) no other such individual or his legal
representative is present and claims the right to
participate in the voting of such shares or prior to
the vote files with the Secretary of the corporation a
contrary written voting authorization or direction or
written denial of authority of the individual present
or signing the proxy proposed to be voted or (ii) all
such other individuals are deceased and the Secretary
of the corporation has no actual knowledge that the
survivor has been adjudicated not to be the successor
to the interests of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any
notice whatever is required to be given to any shareholder of the
corporation under the articles of incorporation or by-laws or any
provision of law, a waiver thereof in writing, signed at any
time, whether before or after the time of meeting, by the
shareholder entitled to such notice, shall be deemed equivalent
to the giving of such notice; provided that such waiver in
respect to any matter of which notice is required under any
provision of the Wisconsin
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Business Corporation Law, shall contain the same information as
would have been required to be included in such notice, except
the time and place of meeting.
2.13. Unanimous Consent without Meeting. Any action
required or permitted by the articles of incorporation or by-
laws or any provision of law to be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
all of the shareholders entitled to vote with respect to the
subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. The business and
affairs of the corporation shall be managed by its Board of
Directors. The number of directors of the corporation shall be
as provided in Section 0.03.
3.02. Tenure and Qualifications. Each director shall
hold office until the next annual meeting of shareholders and
until his successor shall have been elected, or until his prior
death, resignation or removal: A director may be removed from
office by affirmative vote of a majority of the outstanding
shares entitled to vote for the election of such director, taken
at a meeting of shareholders called for that purpose. A director
may resign at any time by filing his written resignation with the
Secretary of the corporation. Directors need not be residents of
the State of Wisconsin or shareholders of the corporation.
3.03. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law
immediately after the annual meeting of shareholders, and each
adjourned session thereof. The place of such regular meeting
shall be the same as the place of the meeting of shareholders
which precedes it, or such other suitable place as may be
announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place, either
within or without the State of Wisconsin, for the holding of
additional regular meetings without other notice than such
resolution.
3.04. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President,
Secretary or any two directors. The President or
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Secretary calling any special meeting of the Board of Directors
may fix any place, either within or without the State of
Wisconsin, as the place for holding any special meeting of the
Board of Directors called by them, and if no other place is fixed
the place of meeting shall be the principal business office of
the corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each meeting of the
Board of Directors (unless otherwise provided in or pursuant to
Section 3.03) shall be given by written notice delivered
personally or mailed or given by telegram to each director at his
business address or at such other address as such director shall
have designated in writing filed with the Secretary, in each case
not less than that number of hours prior thereto as set forth in
Section 0.04. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed,
with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Whenever any notice whatever
is required to be given to any director of the corporation under
the articles of incorporation or by-laws or any provision of law,
a waiver thereof in writing, signed at any time, whether before
or after the time of meeting, by the director entitled to such
notice, shall be deemed equivalent to the giving of such notice.
The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends
a meeting and objects thereat to the transaction of any business
because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting.
3.06. Quorum. Except as otherwise provided by law or
by the articles of incorporation or these by-laws, a majority of
the number of directors as provided in Section 0.03 shall
constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but a majority of the
directors present (though less than such quorum) may adjourn the
meeting from time to time without further notice.
3.07. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, unless
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the act of a greater number is required by law or by the articles
of incorporation or these by-laws.
3.08. Conduct of Meetings. The President, and in his
absence, a Vice-President in the order provided under Section
4.06, and in their absence, any director chosen by the directors
present, shall call meetings of the Board of Directors to order
and shall act as chairman of the meeting. The Secretary of the
corporation shall act as secretary of all meetings of the Board
of Directors, but in the absence of the Secretary, the presiding
officer may appoint any Assistant Secretary or any director or
other person present to act as secretary of the meeting.
3.09. Vacancies. Any vacancy occurring in the Board of
Directors, including a vacancy created by an increase in the
number of directors, may be filled until the next succeeding
annual election by the affirmative vote of a majority of the
directors then in office, though less than a quorum of the Board
of Directors; provided, that in case of a vacancy created by the
removal of a director by vote of the shareholders, the
shareholders shall have the right to fill such vacancy at the
same meeting or any adjournment thereof.
3.10. Compensation. The Board of Directors, by
affirmative vote of a majority of the directors then in office,
and irrespective of any personal interest of any of its members,
may establish reasonable compensation of all directors for
services to the corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The
Board of Directors also shall have authority to provide for or to
delegate authority to an appropriate committee to provide for
reasonable pensions, disability or death benefits, and other
benefits or payments, to directors, officers and employees and to
their estates, families, dependents or beneficiaries on account
of prior services rendered by such directors, officers and
employees to the corporation.
3.11. Presumption of Assent. A director of the
corporation who is present at a meeting of the Board of Directors
or a committee thereof of which he is a member at which action on
any corporate matter is taken shall be
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presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of
the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in
favor of such action.
3.12. Committees. The Board of Directors by
resolution adopted by the affirmative vote of a majority of the
number of directors as provided in Section 0.03 may designate one
or more committees, each committee to consist of three or more
directors elected by the Board of Directors, which to the extent
provided in said resolution as initially adopted, and as
thereafter supplemented or amended by further resolution adopted
by a like vote, shall have and may exercise, when the Board of
Directors is not in session, the powers of the Board of Directors
in the management of the business and affairs of the corporation,
except action in respect to dividends to shareholders, election
of the principal officers or the filling of vacancies in the
Board of Directors or committees created pursuant to this
section. The Board of Directors may elect one or more of its
members as alternate members of any such committee who may take
the place of any absent member or members at any meeting of such
committee, upon request by the President or upon request by the
chairman of such meeting. Each such committee shall fix its own
rules governing the conduct of its activities and shall make such
reports to the Board of Directors of its activities as the Board
of Directors may request.
3.13. Unanimous Consent without Meeting. Any action
required or permitted by the articles of incorporation or by-laws
or any provision of law to be taken by the Board of Directors at
a meeting or by resolution may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be
signed by all of the directors then in office.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the
corporation shall be a President, the number of Vice-Presidents
as
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provided in Section 0.05, a Secretary, and a Treasurer, each of
whom shall be elected by the Board of Directors. Such other
officers and assistant officers as may be deemed necessary may be
elected or appointed by the Board of Directors. Any two or more
offices may be held by the same person, except the offices of
President and Secretary and the offices of President and
Vice-President.
4.02. Election and Term of Office. The officers of
the corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his
successor shall have been duly elected or until his prior death,
resignation or removal.
4.03. Removal. Any officer or agent may be removed by
the Board of Directors whenever in its judgment the best
interests of the corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment shall not
of itself create contract rights.
4.04. Vacancies. A vacancy in any principal office
because of death, resignation, removal, disqualification or
otherwise, shall be filled by the Board of Directors for the
unexpired portion of the term.
4.05. President. The President shall be the principal
executive officer of the corporation and, subject to the control
of the Board of Directors, shall in general supervise and control
all of the business and affairs of the corporation. He shall,
when present, preside at all meetings of the shareholders and of
the Board of Directors. He shall have authority, subject to such
rules as may be prescribed by the Board of Directors, to appoint
such agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation,
and to delegate authority to them. Such agents and employees
shall hold office at the discretion of the President. He shall
have authority to sign, execute and acknowledge, on behalf
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of the corporation, all deeds, mortgages, bonds, stock
certificates, contracts, leases, reports and all other documents
or instruments necessary or proper to be executed in the course
of the corporation's regular business, or which shall be
authorized by resolution of the Board of Directors; and, except
as otherwise provided by law or the Board of Directors, he may
authorize any Vice-President or other officer or agent of the
corporation to sign, execute and acknowledge such documents or
instruments in his place and stead. In general he shall perform
all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time
to time.
4.06. The Vice-Presidents. In the absence of the
President or in the event of his death, inability or refusal to
act, or in the event for any reason it shall be impracticable for
the President to act personally, the Vice-President (or in the
event there be more than one Vice-President, the Vice-Presidents
in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election)
shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice-President may sign,
with the Secretary or Assistant Secretary, certificates for
shares of the corporation; and shall perform such other duties
and have such authority as from time to time may be delegated or
assigned to him by the President or by the Board of Directors.
The execution of any instrument of the corporation by any
Vice-President shall be conclusive evidence, as to third parties,
of his authority to act in the stead of the President.
4.07. The Secretary. The Secretary shall: (a) keep
the minutes of the meetings of the shareholders and of the Board
of Directors in one or more books provided for that purpose; (b)
see that all notices are duly given in accordance with the
provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed
to all documents the execution of which on behalf of the
corporation under its sea is duly authorized; (d) keep or arrange
for the keeping of a register of the post office address of each
shareholder which shall be furnished
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to the Secretary by such shareholder; (e) sign with the
President, or a Vice-President, certificates for shares of the
corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of
the stock transfer books of the corporation; and (g) in general
perform all duties incident to the office of Secretary and have
such other duties and exercise such authority as from time to
time may be delegated or assigned to him by the President or by
the Board of Directors.
4.08. The Treasurer. The Treasury shall: (a) have
charge and custody of and be responsible for all funds and
securities of the corporation; (b) receive and give receipts for
moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of Section
5.04; and (c) in general perform all of the duties incident to
the office of Treasurer and have such other duties and exercise
such other authority as from time to time may be delegated or
assigned to him by the President or by the Board of Directors.
If required by the Board of Directors, the Treasurer shall give a
bond for the faithful discharge of his duties in such sum and
with such surety or sureties as the Board of Directors shall
determine.
4.09. Assistant Secretaries and Assistant Treasurers.
There shall be such number of Assistant Secretaries and Assistant
Treasurers as the Board of Directors may from time to time
authorize. The Assistant Secretaries may sign with the President
or a Vice-President certificates for shares of the corporation
the issuance of which shall have been authorized by a resolution
of the Board of Directors. The Assistant Treasurers shall
respectively, if required by the Board of Directors, give bonds
for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine. The
Assistant Secretaries and Assistant Treasurers, in general, shall
perform such duties and have such authority as shall from time to
time be delegated or assigned to them by the Secretary or the
Treasurer, respectively, or by the President or the Board of
Directors.
4.10. Other Assistants and Acting Officers. The Board
of Directors shall have the power to appoint any person
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to act as assistant to any officer, or as agent for the
corporation in his stead, or to perform the duties of such
officer whenever for any reason it is impracticable for such
officer to act personally, and such assistant or acting officer
or other agent so appointed by the Board of Directors shall have
the power to perform all the duties of the office to which he is
so appointed to be assistant, or as to which he is so appointed
to act, except as such power may be otherwise defined or
restricted by the Board of Directors.
4.11. Salaries. The salaries of the principal
officers shall be fixed from time to time by the Board of
Directors or by a duly authorized committee thereof, and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize
any officer or officers agent or agents, to enter into any
contract or execute or deliver any instrument in the name of and
on behalf of the corporation, and such authorization may be
general or confined to specific instances. In the absence of
other designation, all deeds, mortgages and instruments of
assignment or pledge made by the corporation shall be executed in
the name of the corporation by the President or one of the
Vice-Presidents and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer; the Secretary or an
Assistant Secretary, when necessary or required, shall affix the
corporate seal thereto; and when so executed no other party to
such instrument or any third party shall be required to make any
inquiry into the authority of the signing officer or officers.
5.02. Loans. No indebtedness for borrowed money shall
be contracted on behalf of the corporation and no evidences of
such indebtedness shall be issued in its name unless authorized
by or under the authority of a resolution of the Board of
Directors. Such authorization may be general or confined to
specific instances.
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5.03. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board
of Directors.
5.04. Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies or other
depositaries as may be selected by or under the authority of a
resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation.
Subject always to the specific directions of the Board of
Directors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this corporation may be
voted at any meeting of security holders of such other
corporation by the President of this corporation if he be
present, or in his absence by any Vice-President of this
corporation who may be present, and (b) whenever, in the judgment
of the President, or in his absence, of any Vice-President, it is
desirable for this corporation to execute a proxy or written
consent in respect to any shares or other securities issued by
any other corporation and owned by this corporation, such proxy
or consent shall be executed in the name of this corporation by
the President or one of the Vice-Presidents of this corporation,
without necessity of any authorization by the Board of Directors,
affixation of corporate seal or countersignature or attestation
by another officer. Any person or persons designated in the
manner above stated as the proxy or proxies of this corporation
shall have full right, power and authority to vote the shares or
other securities issued by such other corporation and owned by
this corporation the same as such shares or other securities
might be voted by this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates
representing shares of the corporation shall be in such form,
consistent with law, as shall be determined by the Board of
Directors. Such certificates shall be signed by the President
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or a Vice-President and by the Secretary or an Assistant
Secretary. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. All certificates
surrendered to the corporation for transfer shall be cancelled
and no new certificate shall be issued until the former
certificate for a like number of shares shall have been
surrendered and cancelled, except as provided in Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the
corporation on any certificates for shares may be a facsimile.
The signature of the President or Vice-President and the
Secretary or Assistant Secretary upon a certificate may be
facsimiles if the certificate is manually signed on behalf of a
transfer agent, or a registrar, other than the corporation itself
or an employee of the corporation.
6.03. Signature by Former Officers. In case any
officer, who has signed or whose facsimile signature has been
placed upon any certificate for shares, shall have ceased to be
such officer before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such
officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of
a certificate for shares for registration of transfer the
corporation may treat the registered owner of such shares as the
person exclusively entitled to vote, to receive notifications and
otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the
corporation with a request to register for transfer, the
corporation shall not be liable to the owner or any other person
suffering loss as a result of such registration of transfer if
(a) there were on or with the certificate the necessary
endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The corporation
may require reasonable assurance that said endorsements are
genuine and effective and compliance with such other regulations
as may be prescribed by or under the authority of the Board of
Directors.
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6.05. Restrictions on Transfer. The face or reverse
side of each certificate representing shares shall bear a
conspicuous notation of any restriction imposed by the
corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where
the owner claims that his certificate for shares has been lost,
destroyed or wrongfully taken, a new certificate shall be issued
in place thereof if the owner (a) so requests before the
corporation has notice that such shares have been acquired by a
bona fide purchaser, and (b) files with the corporation a
sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as may be prescribed by or under the
authority of the Board of Directors.
6.07. Consideration for Shares. The shares of the
corporation may be issued for such consideration as shall be
fixed from time to time by the Board of Directors, provided that
any shares having a par value shall not be issued for a
consideration less than the par value thereof. The consideration
to be paid for shares may be paid in whole or in part, in money,
in other property, tangible or intangible, or in labor or
services actually performed for the corporation. When payment of
the consideration for which shares are to be issued shall have
been received by the corporation, such shares shall be deemed to
be fully paid and nonassessable by the corporation. No
certificate shall be issued for any share until such share is
fully paid.
6.08. Stock Regulations. The Board of Directors shall
have the power and authority to make all such further rules and
regulations not inconsistent with the statutes of the State of
Wisconsin as it may deem expedient concerning the issue, transfer
and registration of certificates representing shares of the
corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a corporate
seal which shall be circular in form and shall have inscribed
thereon the name of the corporation and the state of
incorporation and the words, "Corporate Seal."
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ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. These by-laws may be altered,
amended or repealed and new by-laws may be adopted by the
shareholders by affirmative vote of not less than a majority of
the shares present or represented at any annual or special
meeting of the shareholders at which a quorum is in attendance.
8.02. By Directors. These by-laws may also be
altered, amended or repealed and new by-laws may be adopted by
the Board of Directors by affirmative vote of a majority of the
number of directors present at any meeting at which a quorum is
in attendance; but no by-law adopted by the shareholders shall be
amended or repealed by the Board of Directors if the by-law so
adopted so provides.
8.03. Implied Amendments. Any action taken or
authorized by the shareholders or by the Board of Directors,
which would be inconsistent with the by-laws then in effect but
is taken or authorized by affirmative vote of not less than the
number of shares or the number of directors required to amend the
by-laws so that the by-laws would be consistent with such action,
shall be given the same effect as though the by-laws had been
temporarily amended or suspended so far, but only so far, as is
necessary to permit the specific action so taken or authorized.
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BY-LAWS
OF
Wisconsin Public Service Nuclear Fuel Inc.
------------------------------------------
(a Wisconsin Corporation)
INTRODUCTION -
VARIABLE REFERENCES
0.01 Date of annual shareholders' meeting
(See Section 2.01):
10:00 AM
(Local Time) 3rd Tuesday April 1974
- ------------ ------ ------- -------- ---
(Hour) (Week) (Day) (Month) (First Year)
* 0.02. Required notice of shareholders' meeting (See
Section 2.04): not less than 3 days.
------
* 0.03. Authorized number of directors (See Section
3.01): 3
------------
* 0.04. Required notice of directors' meetings (See
Section 3.05):
(a) not less than 24 hours if by mail, and
* -------
(b) not less than 12 hours if by telegram or
------
personal delivery.
*
0.05. Authorized number of Vice-Presidents (See
Section 4.01): 2
---------
*
* These spaces are reserved for official notification of future
amendments to these sections.
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ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation
may have such principal and other business offices, either within
or without the State of Wisconsin, as the Board of Directors may
designate or as the business of the corporation may require from
time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to
be maintained in the State of Wisconsin may be, but need not be,
identical with the principal office in the State of Wisconsin,
and the address of the registered office may be changed from time
to time by the Board of Directors or by the registered agent. The
business office of the registered agent of the corporation shall
be identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the
shareholders shall be held at the date and hour in each year set
forth in Section 0.01, or at such other time and date within
thirty days before or after said date as may be fixed by or under
the authority of the Board of Directors, for the purpose of
electing directors and for the transaction of such other business
as may come before the meeting. If the day fixed for the annual
meeting shall be a legal holiday in the State of Wisconsin, such
meeting shall be held on the next succeeding business day. If
the election of directors shall not be held on the day designated
herein, or fixed as herein provided, for any annual meeting of
the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as conveniently
may be.
2.02. Special Meeting. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or the
Board of Directors or by the person designated in the written
request of the holders of not less than one-tenth of all shares
of the corporation entitled to vote at the meeting.
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2.03. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of
Wisconsin, as the place of meeting for any annual meeting or for
any special meeting called by the Board of Directors. A waiver of
notice signed by all shareholders entitled to vote at a meeting
may designate any place, either within or without the State of
Wisconsin, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be otherwise called,
the place of meeting shall be the principal business office of
the corporation in the State of Wisconsin or such other suitable
place in the county of such principal office as may be designated
by the person calling such meeting, but any meeting may be
adjourned to reconvene at any place designated by vote of a
majority of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than the number of days set forth in
Section 0.02 (unless a longer period is required by law or the
articles of incorporation) nor more than fifty days before the
date of the meeting, either personally or by mail, by or at the
direction of the President, or the Secretary, or other officer or
persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his address as it appears on the
stock record books of the corporation, with postage thereon
prepaid.
2.05. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive payment
of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors
may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the
stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be
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closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any
such determination of shareholders, such date in any case to be
not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which
the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not
closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the close of business on the date on which notice of
the meeting is mailed or on the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in
this section, such determination shall be applied to any
adjournment thereof except where the determination has been made
through the closing of the stock transfer books and the stated
period of closing has expired.
2.06. Voting Records. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall, before each meeting of shareholders, make a complete
record of the shareholders entitled to vote at such meeting, or
any adjournment thereof, with the address of and the number of
shares held by each. Such record shall be produced and kept
open at the time and place of the meeting and shall be subject to
the inspection of any shareholder during the whole time of the
meeting for the purposes of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such record or transfer books or
to vote at any meeting of shareholders. Failure to comply with
the requirements of this section shall not affect the validity of
any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the
articles of incorporation, a majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If a quorum is present,
the affirmative vote of the majority of the shares represented at
the meeting and entitled to vote on the subject matter shall be
the act of the shareholders unless the vote of a greater
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<PAGE>
number or voting by classes is required by law or the articles of
incorporation. Though less than a quorum of the outstanding
shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
2.08. Conduct of Meetings. The President, and in his
absence, a Vice-President in the order provided under Section
4.06, and in their absence, any person chosen by the shareholders
present shall call the meeting of the shareholders to order and
shall act as chairman of the meeting, and the Secretary of the
corporation shall act as secretary of all meetings of the
shareholders, but, in the absence of the Secretary, the presiding
officer may appoint any other person to act as secretary of the
meeting.
2.09. Proxies. At all meetings of shareholders, a
shareholder entitled to vote may vote in person or by proxy
appointed in writing by the shareholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of
the corporation before or at the time of the meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any
time before it is voted, either by written notice filed with the
Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during
the meeting. The presence of a shareholder who has filed his
proxy shall not of itself constitute a revocation. No proxy shall
be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy. The Board of Directors
shall have the power and authority to make rules establishing
presumptions as to the validity and sufficiency of proxies.
2.10. Voting of Shares. Each outstanding share shall be
entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting
rights of the shares of any class or classes are enlarged,
limited or denied by the articles of incorporation.
2.11. Voting of Shares by Certain Holders.
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<PAGE>
(a) Other Corporations. Shares standing in the
name of another corporation may be voted either in
person or by proxy, by the president of such
corporation or any other officer appointed by such
president. A proxy executed by any principal officer of
such other corporation or assistant thereto shall be
conclusive evidence of the signer's authority to act,
in the absence of express notice to this corporation,
given in writing to the Secretary of this corporation,
of the designation of some other person by the board of
directors or the by-laws of such other corporation.
(b) Legal Representatives and Fiduciaries.
Shares held by any administrator, executor, guardian,
conservator, trustee in bankruptcy, receiver, or
assignee for creditors may be voted by him, either in
person or by proxy, without a transfer of such shares
into his name provided that there is filed with the
Secretary before or at the time of meeting proper
evidence of his incumbency and the number of shares
held. Shares standing in the name of a fiduciary may be
voted by him, either in person or by proxy. A proxy
executed by a fiduciary, shall be conclusive evidence
of the signer's authority to act, in the absence of
express notice to this corporation, given in writing to
the Secretary of this corporation, that such manner of
voting is expressly prohibited or otherwise directed by
the document creating the fiduciary relationship.
(c) Pledgees. A shareholder whose shares are
pledged shall be entitled to vote such shares until the
shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither
treasury shares, nor shares held by another corporation
if a majority of the shares entitled to vote for the
election of directors of such other corporation is held
by this corporation, shall be voted at any meeting or
counted in determining the total number of outstanding
shares entitled to vote, but shares of its own issue
held by this corporation in a fiduciary capacity, or
held by such other corporation in a fiduciary capacity,
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<PAGE>
may be voted and shall be counted in determining the
total number of outstanding shares entitled to vote.
(e) Minors. Shares held by a minor may be voted
by such minor in person or by proxy and no such vote
shall be subject to disaffirmance or avoidance, unless
prior to such vote the Secretary of the corporation
has received written notice or has actual knowledge
that such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held
by an incompetent or spendthrift may be voted by such
incompetent or spendthrift in person or by proxy and no
such vote shall be subject to disaffirmance or
avoidance, unless prior to such vote the Secretary of
the corporation has actual knowledge that such
shareholder has been adjudicated an incompetent or
spendthrift or actual knowledge of filing of judicial
proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the names
of two or more individuals who are named in the
registration as joint tenants may be voted in person or
by proxy signed by any one or more of such individuals
if either (i) no other such individual or his legal
representative is present and claims the right to
participate in the voting of such shares or prior to
the vote files with the Secretary of the corporation a
contrary written voting authorization or direction or
written denial of authority of the individual present
or signing the proxy proposed to be voted or (ii) all
such other individuals are deceased and the Secretary
of the corporation has no actual knowledge that the
survivor has been adjudicated not to be the successor
to the interests of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any
notice whatever is required to be given to any shareholder of the
corporation under the articles of incorporation or by-laws or any
provision of law, a waiver thereof in writing, signed at any
time, whether before or after the time of meeting, by the
shareholder entitled to such notice, shall be deemed equivalent
to the giving of such notice; provided that such waiver in
respect to any matter of which notice is required under any
provision of the Wisconsin
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<PAGE>
Business Corporation Law, shall contain the same information as
would have been required to be included in such notice, except
the time and place of meeting.
2.13. Unanimous Consent without Meeting. Any action
required or permitted by the articles of incorporation or by-
laws or any provision of law to be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
all of the shareholders entitled to vote with respect to the
subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. The business and
affairs of the corporation shall be managed by its Board of
Directors. The number of directors of the corporation shall be as
provided in Section 0.03.
3.02. Tenure and Qualifications. Each director shall
hold office until the next annual meeting of shareholders and
until his successor shall have been elected, or until his prior
death, resignation or removal. A director may be removed from
office by affirmative vote of a majority of the outstanding
shares entitled to vote for the election of such director, taken
at a meeting of shareholders called for that purpose. A director
may resign at any time by filing his written resignation with the
Secretary of the corporation. Directors need not be residents of
the State of Wisconsin or shareholders of the corporation.
3.03. Regular Meetings. A regular meeting of the Board
of Directors shall be held without other notice than this by-law
immediately after the annual meeting of shareholders, and each
adjourned session thereof. The place of such regular meeting
shall be the same as the place of the meeting of shareholders
which precedes it, or such other suitable place as may be
announced at such meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or
without the State of Wisconsin, for the holding of additional
regular meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President,
Secretary or any two directors. The President or
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Secretary calling any special meeting of the Board of Directors
may fix any place, either within or without the State of
Wisconsin, as the place for holding any special meeting of the
Board of Directors called by them, and if no other place is fixed
the place of meeting shall be the principal business office of
the corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each meeting of the
Board of Directors (unless otherwise provided in or pursuant to
Section 3.03) shall be given by written notice delivered
personally or mailed or given by telegram to each director at his
business address or at such other address as such director shall
have designated in writing filed with the Secretary, in each case
not less than that number of hours prior thereto as set forth in
Section 0.04. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed,
with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Whenever any notice
whatever is required to be given to any director of the
corporation under the articles of incorporation or by-laws or any
provision of law, a waiver thereof in writing, signed at any
time, whether before or after the time of meeting, by the
director entitled to such notice, shall be deemed equivalent to
the giving of such notice. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting and objects thereat to
the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
3.06. Quorum. Except as otherwise provided by law or
by the articles of incorporation or these by-laws, a majority of
the number of directors as provided in Section 0.03 shall
constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but a majority of the
directors present (though less than such quorum) may adjourn the
meeting from time to time without further notice.
3.07. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors, unless
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the act of a greater number is required by law or by the articles
of incorporation or these by-laws.
3.08. Conduct of Meetings. The President, and in
his absence, a Vice-President in the order provided under
Section 4.06, and in their absence, any director chosen by
the directors present, shall call meetings of the Board of
Directors to order and shall act as chairman of the meeting.
The Secretary of the corporation shall act as secretary
of all meetings of the Board of Directors, but in the absence of
the Secretary, the presiding officer may appoint any Assistant
Secretary or any director or other person present to act as
secretary of the meeting.
3.09. Vacancies. Any vacancy occurring in the
Board of Directors, including a vacancy created by an in-
crease in the number of directors, may be filled until
t he next succeeding annual election by the affirmative vote of a
majority of the directors then in office, though less than a
quorum of the Board of Directors; provided, that in case of a
vacancy created by the removal of a director by vote of the
shareholders, the shareholders shall have the right to fill such
vacancy at the same meeting or any adjournment thereof.
3.10. Compensation. The Board of Directors, by
affirmative vote of a majority of the directors then in office,
and irrespective of any personal interest of any of its members,
may establish reasonable compensation of all directors for services to the
corporation as directors, officers or otherwise, or may delegate
such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or to delegate
authority to an appropriate committee to provide for reasonable
pensions, disability or death benefits, and other benefits or
payments, to directors, officers and employees and to their
estates, families, dependents or beneficiaries on account of
prior services rendered by such directors, officers and
employees to the corporation.
3.11. Presumption of Assent. A director of the
corporation who is present at a meeting of the Board of Directors
or a committee thereof of which he is a member at which action
on any corporate matter is taken shall be
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presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of
the corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in
favor of such action.
3.12. Committees. The Board of Directors by
resolution adopted by the affirmative vote of a majority
of the number of directors as provided in Section 0.03
may designate one or more committees, each committee to consist
of three or more directors elected by the Board of Directors,
which to the extent provided in said resolution as initially
adopted, and as thereafter supplemented or amended by further
resolution adopted by a like vote, shall have and may exercise,
when the Board of Directors is not in session, the powers of the
Board of Directors in the management of the business and affairs
of the corporation, except action in respect to dividends to
shareholders, election of the principal officers or the filling
of vacancies in the Board of Directors or committees created
pursuant to this section. The Board of Directors may elect one or
more of its members as alternate members of any such committee
who may take the place of any absent member or members at any
meeting of such committee, upon request by the President or upon
request by the chairman of such meeting. Each such committee
shall fix its own rules governing the conduct of its activities
and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request.
3.13. Unanimous Consent without Meeting. Any action
required or permitted by the articles of incorporation or by-laws or any
provision of law to be taken by the Board of Directors at a
meeting or by resolution may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be
signed by all of the directors then in office.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation
shall be a President, the number of Vice-Presidents as
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provided in Section 0.05, a Secretary, and a Treasurer, each of
whom shall be elected by the Board of Directors. Such other
officers and assistant officers as may be deemed necessary may be
elected or appointed by the Board of Directors. Any two or more
offices may be held by the same person, except the offices of
President and Secretary and the offices of President and
Vice-President.
4.02. Election and Term of Office. The officers
of the corporation to be elected by the Board of Directors
shall be elected annually by the Board of Directors at
the first meeting of the Board of Directors held after each an-
nual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as
soon thereafter as conveniently may be. Each officer shall hold
office until his successor shall have been duly elected or until
his prior death, resignation or removal.
4.03. Removal. Any officer or agent may be removed
by the Board of Directors whenever in its judgment the best
interests of the corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment shall
not of itself create contract rights.
4.04. Vacancies. A vacancy in any principal office
because of death, resignation, removal, disqualification or
otherwise, shall be filled by the Board of Directors for the
unexpired portion of the term.
4.05. President. The President shall be the
principal executive officer of the corporation and, subject
to the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings
of the shareholders and of the Board of Directors. He shall
have authority, subject to such rules as may be prescribed
by the Board of Directors, to appoint such agents and
employees of the corporation as he shall deem necessary, to
prescribe their powers, duties and compensation, and to delegate
authority to them. Such agents and employees shall hold office at
the discretion of the President. He shall have authority to sign,
execute and acknowledge, on behalf
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of the corporation, all deeds, mortgages, bonds, stock
certificates, contracts, leases, reports and all other docu-
ments or instruments necessary or proper to be executed in the
course of the corporation's regular business, or which shall be
authorized by resolution of the Board of Directors; and, except
as otherwise provided by law or the Board of Directors, he may
authorize any Vice-President or other officer or agent of the
corporation to sign, execute and acknowledge such documents or
instruments in his place and stead. In general he shall perform
all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time
to time.
4.06. The Vice-Presidents. In the absence of the
President or in the event of his death, inability or refusal to
act, or in the event for any reason it shall be impracticable for
the President to act personally, the Vice-President (or in the
event there be more than one Vice-President, the Vice-Presi-
dents in the order designated by the Board of Directors, or in
the absence of any designation, then in the order of their
election) shall perform the duties of the President, and when so
acting, shall have all the power; of and be subject to all the
restrictions upon the President. Any Vice-President may sign,
with the Secretary or Assistant Secretary, certificates for
shares of the corporation; and shall perform such other duties
and have such authority as from time to time may be delegated or
assigned to him by the President or by the Board of Directors.
The execution of any instrument of the corporation by any
Vice-President shall be conclusive evidence, as to third parties,
of his authority to act in the stead of the President.
4.07. The Secretary. The Secretary shall: (a) keep the minutes of
the meetings of the shareholders and of the Board of Directors in
one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of
these by-laws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation and see that
the seal of the corporation is affixed to all documents the
execution of which on behalf of the corporation under its seal is
duly authorized; (d) keep or arrange for the keeping of a
register of the post office address of each shareholder which
shall be furnished
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<PAGE>
to the Secretary by such shareholder; (e) sign with the
President, or a Vice-President, certificates for shares of the
corporation, the issuance of which shall have been authorized
by resolution of the Board of Directors; (f) have general charge
of the stock transfer books of the corporation; and (g) in
general perform all duties incident to the office of Secretary
and have such other duties and exercise such authority as from
time to time may be delegated or assigned to him by the President
or by the Board of Directors.
4.08. The Treasurer. The Treasury shall: (a) have
charge and custody of and be responsible for all funds and
securities of the corporation; (b) receive and give receipts
for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of
the corporation in such banks, trust companies or other
depositaries as shall be selected in accordance with the
provisions of Section 5.04; and (c) in general perform all of
the duties incident to the office of Treasurer and have such
other duties and exercise such other authority as from time to
time ray be delegated or assigned to him by the President or by
the Board of Directors. If required by the Board of Directors,
the Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the Board
of Directors shall determine.
4.09. Assistant Secretaries and Assistant Treasurers.
There shall be such number of Assistant Secretaries and Assistant
Treasurers as the Board of Directors may from time to time authorize.
The Assistant Secretaries may sign with the President or a Vice-President
certificates for shares of the corporation the issuance of which shall have
been authorized by a resolution of the Board of Directors. The
Assistant Treasurers shall respectively, if required by the Board
of Directors, give bonds for the faithful discharge of their
duties in such sums and with such sureties as the Board of
Directors shall determine. The Assistant Secretaries and
Assistant Treasurers, in general, shall perform such duties and
have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively,
or by the President or the Board of Directors.
4.10. Other Assistants and Acting Officers. The
Board of Directors shall have the power to appoint any person
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<PAGE>
to act as assistant to any officer, or as agent for the
corporation in his stead, or to perform the duties of such
officer whenever for any reason it is impracticable for such
officer to act personally, and such assistant or acting officer
or other agent so appointed by the Board of Directors shall have
the power to perform all the duties of the office to which he is
so appointed to be assistant, or as to which he is so appointed
to act, except as such power may be otherwise defined or
restricted by the Board of Directors.
4.11. Salaries. The salaries of the principal
officers shall be fixed from time to time by the Board of
Directors or by a duly authorized committee thereof, and
no officer shall be prevented from receiving such salary
by reason of the fact that he is also a director of the
corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may
authorize any officer or officers agent or agents, to enter
into any contract or execute or deliver any instrument in
the name of and on behalf of the corporation, and such
authorization may be general or confined to specific
instances. In the absence of other designation, all deeds,
mortgages and instruments of assignment or pledge made by the
corporation shall be executed in the name of the corporation by
the President or one of the Vice-Presidents and by the Secretary,
an Assistant Secretary, the Treasurer or an Assistant Treasurer;
the Secretary or an Assistant Secretary, when necessary or
required, shall affix the corporate seal thereto; and when so
executed no other party to such instrument or any third party
shall be required to make any inquiry into the authority of the
signing officer or officers.
5.02. Loans. No indebtedness for borrowed money
shall be contracted on behalf of the corporation and no
evidences of such indebtedness shall be issued
in its name unless authorized by or under the authority of a
resolution of the Board of Directors. Such authorization may be
general or confined to specific instances.
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<PAGE>
5.03. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the corporation, shall
be signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time
be determined by or under the authority of a resolution of
the Board of Directors.
5.04. Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to
the credit of the corporation in such banks, trust companies
or other depositaries as may be selected by or under the
authority of a resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation.
Subject always to the specific directions of the Board of Direc-
tors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this corporation may
be voted at any meeting of security holders of such other corpo-
ration by the President of this corporation if he be present,
or in his absence by any Vice-President of this corporation
who may be present, and (b) whenever, of the judgment of the Presi-
dent, or in his absence, of any Vice-President, it is desirable
for this corporation to execute a proxy or written
consent in respect to any shares or other securities issued by
any other corporation and owned by this corporation, such proxy
or consent shall be executed in the name of this corporation by
the President or one of the Vice-Presidents of this corporation,
without necessity of any authorization by the Board of Direc-
tors, affixation of corporate seal or countersignature or
attestation by another officer. Any person or persons desig-
nated in the manner above stated as the proxy or proxies of this
corporation shall have full right, power and authority to vote
the shares or other securities issued by such other corporation
and owned by this corporation the same as such shares or other
securities might be voted by this corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates rep-
resenting shares of the corporation shall be in such form,
consistent with law, as shall be determined by the Board of
Directors. Such certificates shall be signed by the Presi-
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<PAGE>
dent or a Vice-President and by the Secretary or an Assistant
Secretary. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. All certificates
surrendered to the corporation for transfer shall be cancelled
and no new certificate shall be issued until the former
certificate for a like number of shares shall have been
surrendered and cancelled, except as provided in Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the
corporation on any certificates for shares may be a facsimile.
The signature of the President or Vice-President and the
Secretary or Assistant Secretary upon a certificate may be
facsimiles if the certificate is manually signed on behalf of a
transfer agent, or a registrar, other than the corporation
itself or an employee of the corporation.
6.03. Signature by Former officers. In case any
officer, who has signed or whose facsimile signature has been
placed upon any certificate for shares, shall have ceased to
be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were
such officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment
of a certificate for shares for registration of transfer the
corporation may treat the registered owner of such shares as the
person exclusively entitled to vote, to receive notifications
and otherwise to have and exercise all the rights and cower of an
owner. Where a certificate for shares is presented to the
corporation with a request to register for transfer, the corpo-
ration shall not be liable to the owner or any other person
suffering loss as a result of such registration of transfer if
(a) there were on or with the certificate the necessary
endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The corporation
may require reasonable-assurance that said endorsements are
genuine and effective and compliance with such other regulations
as may be prescribed by or under the authority of the Board of
Directors.
B-16
<PAGE>
6.05. Restrictions on Transfer. The face or reverse side
of each certificate representing shares shall bear a conspicuous
notation of any restriction imposed by the corporation upon the
transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the
owner claims that his certificate for shares has been lost,
destroyed or wrongfully taken, a new certificate shall be
issued in place thereof if the owner (a) so requests before
the corporation has notice that such shares have been acquired
by a bona fide purchaser, and (b) files with the corporation
a sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as may be prescribed by or under
the authority of the Board of Directors.
6.07. Consideration for Shares. The shares of the
corporation may be issued for such consideration as shall be
fixed from time to time by the Board of Directors, provided
that any shares having a par value shall not be issued for
a consideration less than the par value thereof. The con-
sideration to be paid for shares may be paid in whole or in
part, in money, in other property, tangible or intangible, or
in labor or services actually performed for the corpora-
tion. When payment of the consideration for which shares
are to be issued shall have been received by the corporation,
such shares shall be deemed to be fully paid and nonassessable by
the corporation. No certificate shall be issued for any share
until such share is fully paid.
6.08. Stock Regulations. The Board of Directors
shall have the power and authority to make all such further rules
and regulations not inconsistent with the statutes of the
State of Wisconsin as it may deem expedient concerning the
issue, transfer and registration of certificates
representing shares of the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a
corporate seal which shall be circular in form and shall have
inscribed thereon the name of the corporation and the state of
incorporation and the words, "Corporate Seal."
B-17
<PAGE>
ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. These by-laws may be
altered, amended or repealed and new by-laws may
be adopted by the shareholders by affirmative vote of not less
than a majority of the shares present or represented at any
annual or special meeting of the shareholders at which a quorum
is in attendance.
8.02. By Directors. These by-laws may
also be altered, amended or repealed and new by-laws may be
adopted by the Board of Directors by affirmative vote of a
majority of the number of directors present at any meeting at
which a quorum is in attendance; but no by-law adopted by the
shareholders shall be amended or repealed by the Board of
Directors if the by-law so adopted so provides.
8.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be
inconsistent with the by-laws then in effect but is taken or
authorized by affirmative vote of not less than the number of
shares or the number of directors required to amend the by-laws
so that the by-laws would be consistent with such action, shall
be given the same effect as though the by-laws had been
temporarily amended or suspended so far, but only so far, as is
necessary to permit the specific action so taken or authorized.
B-18
<PAGE>
ALLEN W WILLIAMS JR
SUITE 3800
777 E WISCONSIN AVE
MILWAUKEE WI 53202
UNITED STATE OF AMERICA
THE STATE OF WISCONSIN
(State Logo)
DATE: AUGUST 29, 1985
OFFICE OF THE SECRETARY OF STATE
TO ALL TO WHOM THESE PRESENTS SHALL COME:
The undersigned, as Secretary of State of the State of Wisconsin, hereby
certifies that, on the date above written, Articles of Incorporation (or
Association) of
WPS COMMUNICATIONS, INC.
were filed in my officer under the provisions of the Wisconsin
Statutes, and in particular under
CHAPTER 180-WISCONSIN BUSINESS CORPORATION LAW
THE STATE OF WISCONSIN does hereby grant unto said organization
the powers and privileges conferred upon such organization
by the Wisconsin Statutes for the pursuit of any purposes
lawful under the chapter of section, of the Wisconsin
Statutes, of its organization except as such purposes may be
further limited in said Articles. IN TESTIMONY WHEREOF,
I have hereunto set my hand and affixed my official seal, at
Madison, on
08/29/1985
(SEAL) /s/ Douglas La Follette
DOUGLAS LA FOLLETTE
Secretary of State
SEE REVERSE FOR MORE INFORMATION
<PAGE>
1058812 J 9364 I 20
FORM 14
UNITED STATES OF AMERICA
State of Wisconsin
OFFICE OF THE SECRETARY OF STATE
------------
TO ALL TO WHOM THESE PRESENTS SHALL COME:
The undersigned, as Secretary of State of the State of Wisconsin,
certifies that the attached is a duplicate of a document accepted and
filed in my office.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and affixed
my official seal, at Madison, on
the date of filing of said document.
/s/ Douglas La Follette
DOUGLAS LA FOLLETTE
Secretary of State
<PAGE>
HEH 8/6/85 J 9364 I 21
Return to:
Allen W. Williams, Jr.
Suite 3800
777 East Wisconsin Avenue
Milwaukee, WI 53202
ARTICLES OF INCORPORATION
OF
WPS COMMUNICATIONS, INC.
The undersigned, a natural person of the age of eighteen
years or more, acting as the incorporator of a corporation under
the Wisconsin Business Corporation Law, hereby adopts the following
Articles of Incorporation for such corporation:
ARTICLE I
---------
Name
----
The name of the corporation is WPS Communications, Inc.
ARTICLE II
----------
Existence
---------
The period of existence shall be perpetual.
ARTICLE III
-----------
Purposes
--------
The purposes for which the corporation is organized
are to engage in any lawful activity within the purposes for
which a corporation may be organized under Chapter 180 of the
Wisconsin Business Corporation Law.
ARTICLE IV
----------
Stock
-----
The aggregate number of shares which the corporation
<PAGE>
J 9364 I 22
shall have authority to issue is Fifty-Six Thousand (56,000)
shares, consisting of one class of stock, designated as "Common
Stock," of the par value of One Dollar ($1.00) per share.
ARTICLE V
---------
Registered Agent
----------------
The address of the initial registered office of the
corporation is 700 North Adams Street, BROWN COUNTY, Green Bay,
Wisconsin 54307, and the name of its initial registered agent
at such address is R. H. Knuth.
ARTICLE VI
----------
Directors
---------
The number of directors shall be fixed by the By-Laws.
ARTICLE VII
-----------
Incorporator
------------
The name and address of the incorporator is R. H. Knuth,
700 North Adams Street, Green Bay, Wisconsin 54307.
Dated this 23rd day of August, 1985.
/s/ R. H. Knuth
-----------------------------------
R. H. Knuth
STATE OF WISCONSIN )
) SS
BROWN COUNTY )
Personally came before me this 23rd day of August,
1985, the above-named R. H. Knuth, to me known to be the person
-2-
<PAGE>
1058812 J 9364 I 23
who executed the foregoing instrument and acknowledged the same.
/s/ Priscilla Delorit
---------------------------------
Notary Public
State of Wisconsin
My Commission: August 25, 1985
expires:
The following stamp is affixed:
REGISTER OF DEEDS
BROWN COUNTY
SEP 10 1985
AT 8:01 O'CLOCK A.M.
/s/ REGISTER OF DEEDS
The following stamp is affixed:
STATE OF WISCONSIN
FILED
AUG 29 1985
DOUGLAS LA FOLLETTE
SECRETARY OF STATE
(This document was drafted by Allen W. Williams, Jr.)
-3-
<PAGE>
HEH 8/6/85
BY-LAWS
OF
WPS COMMUNICATIONS, INC.
(a Wisconsin corporation)
ARTICLE I. OFFICES
1.01. Principal and Business offices. The corporation
may have such principal and other business offices, either within
or without the State of Wisconsin, as the Board of Directors may
designate or as the business of the corporation may require from
time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to
be maintained in the state of Wisconsin may be, but need not be,
identical with the principal office in the State of Wisconsin,
and the address of the registered office may be changed from time
to time by the Board of Directors or by the registered agent.
The business office of the registered agent of the corporation
shall be identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the
shareholders shall be held on the third Tuesday in April of each
year at 10:00 a.m. or at such other time and date within thirty
days before or after said date as may be fixed by or under the
authority of the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may
come before the meeting. If the day fixed for the annual meeting
shall be a legal holiday in the State of Wisconsin, such meeting
shall be held on the next succeeding business day. If the
election of directors shall not be held on the day designated
herein, or fixed as herein provided, for any annual meeting of
the shareholders,or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as conveniently
may be.
2.02. Special Meeting. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or the
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<PAGE>
Board of Directors or by the person designated in the written
request of the holders of not less than one-tenth of all shares
of the corporation entitled to vote at the meeting.
2.03. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of
Wisconsin, as the place of meeting for any annual meeting or for
any special meeting called by the Board of Directors. A waiver
of notice signed by all shareholders entitled to vote at a
meeting may designate any place,either within or without
the State of Wisconsin, as the place for the holding of such
meeting. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal
business office of the corporation in the State of Wisconsin or
such other suitable place in the county of such principal office
as maybe designated by the person calling such meeting, but any
meeting may be adjourned to reconvene at any place designated by
vote of a majority of the shares represented there at.
2.04. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten days (unless a longer period
is required by law or the articles of incorporation) nor more
than fifty days before the date of the meeting, either personally
or by mail, by or at the direction of the President, or the
Secretary, or other officer or persons calling the meeting, to
each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the
shareholder at his address as it appears on the stock record
books of the corporation, with postage thereon prepaid.
2.05. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive payment
of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors
may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If
the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least
ten days immediately preceding such meeting. In lieu
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<PAGE>
of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not
more than fifty days and, in case of a meeting of shareholders,
not less than ten days prior to the date on which the particular
action, requiring such determination of shareholders, is to be
taken. If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the close
of business on the date on which notice of the meeting is mailed
or on the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall be applied to any adjournment thereof except
where the determination has been made through the closing of the
stock transfer books and the stated period of closing has
expired.
2.06. Voting Records. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall, before each meeting of shareholders,make a complete record
of the shareholders entitled to vote at such meeting, or any
adjournment thereof, with the address of and the number of shares
held by each. Such record shall be produced and kept open at the
time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the
meeting for the purposes of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such record or transfer books or
to vote at any meeting of shareholders. Failure to comply with
the requirements of this section shall not affect the validity of
any action taken at such meeting.
2.07. Quorum. Except as otherwise provided in the
articles of incorporation, a majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a
quorum at a meeting of shareholders. If a quorum is present, the
affirmative vote of the majority of the shares represented at the
meeting and entitled to vote on the subject matter shall be the
act of the shareholders unless the vote of a greater number or
voting by classes is required by law or the articles of
incorporation. Though less than a quorum of the outstanding
shares are represented at a meeting, a majority of the
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<PAGE>
shares so represented may adjourn the meeting from time to time
without further notice. At such adjourned meeting at which a
quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as
originally notified.
2.08. Conduct of Meeting. The President and,in his
absence, the Vice-President and, in their absence,any person
chosen by the shareholders present shall call the meeting of the
shareholders to order and shall act as chairman of the meeting,
and the Secretary of the corporation shall act as secretary of
all meetings of the shareholders, but, in the absence of the
Secretary, the presiding officer may appoint any other person to
act as secretary of the meeting.
2.09. Proxies. At all meetings of shareholders,a
shareholder entitled to vote may vote in person or by proxy
appointed in writing by the shareholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary
of the corporation before or at the time of the meeting. Unless
otherwise provided in the proxy, a proxy may be revoked at any
time before it is voted, either by written notice filed with the
Secretary or the acting secretary of the meeting or by oral
notice given by the shareholder to the presiding officer during
the meeting. The presence of a shareholder who has filed his
proxy shall not of itself constitute a revocation.No proxy shall
be valid after eleven months from the date of its execution,
unless otherwise provided in the proxy.The Board of Directors
shall have the power and authority to make rules establishing
presumptions as to the validity and sufficiency of proxies.
2.10. Voting of Shares. Each outstanding share shall
be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting
rights of the shares of any class or classes are enlarged,
limited or denied by the articles of incorporation.
2.11. Voting of Shares by Certain Holders.
(a) Other Corporations. Shares standing in the
name of another corporation may be voted either in
person or by proxy, by the president of such
corporation or any other officer appointed by such
president. A proxy executed by any principal officer
of such other corporation or assistant
B-4
<PAGE>
thereto shall be conclusive evidence of the signer's
authority to act, in the absence of express notice to
this corporation, given in writing to the Secretary of
this corporation, of the designation of some other
person by the board of directors or the by-laws of such
other corporation.
(b) Legal Representatives and Fiduciaries.
Shares held by any administrator, executor,guardian,
conservator, trustee in bankruptcy,receiver, or
assignee for creditors may be voted by him, either in
person or by proxy, without a transfer of such shares
into his name provided that there is filed with the
Secretary before or at the time of meeting proper
evidence of his incumbency and the number of shares
held. Shares standing in the name of a fiduciary may
be voted by him, either in person or by proxy. A proxy
executed by a fiduciary, shall be conclusive evidence
of the signer's authority to act, in the absence of
express notice to this corporation,given in writing to
the Secretary of this corporation, that such manner of
voting is expressly prohibited or otherwise directed by
the document creating the fiduciary relationship.
(c) Pledgees. A shareholder whose shares are
pledged shall be entitled to vote such shares until the
shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
(d) Treasury Stock and Subsidiaries. Neither
treasury shares, nor shares held by another corporation
if a majority of the shares entitled to vote for the
election of directors of such other corporation is held
by this corporation, shall be voted at any meeting or
counted in determining the total number of outstanding
shares entitled to vote, but shares of its own issue
held by this corporation in a fiduciary capacity, or
held by such other corporation in a fiduciary capacity,
may be voted and shall be counted in determining the
total number of outstanding shares entitled to vote.
(e) Minors. Shares held by a minor maybe voted
by such minor in person or by proxy
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<PAGE>
and no such vote shall be subject to disaffirmance or
avoidance, unless prior to such vote the Secretary of
the corporation has received written notice or has
actual knowledge that such shareholder is a minor.
(f) Incompetents and Spendthrifts. Shares held
by an incompetent or spendthrift may be voted by such
incompetent or spendthrift in person or by proxy and no
such vote shall be subject to disaffirmance or
avoidance, unless prior to such vote the Secretary of
the corporation has actual knowledge that such
shareholder has been adjudicated an incompetent or
spendthrift or actual knowledge of filing of judicial
proceedings for appointment of a guardian.
(g) Joint Tenants. Shares registered in the
names of two or more individuals who are named in the
registration as joint tenants may be voted in person or
by proxy signed by any one or more of such individuals
if either (i) no other such individual or his legal
representative is present and claims the right to
participate in the voting of such shares or prior to
the vote files with the Secretary of the corporation a
contrary written voting authorization or direction or
written denial of authority of the individual present
or signing the proxy proposed to be voted or (ii) all
such other individuals are deceased and the Secretary
of the corporation has no actual knowledge that the
survivor has been adjudicated not to be the successor
to the interests of those deceased.
2.12. Waiver of Notice by Shareholders. Whenever any
notice whatever is required to be given to any shareholder of
the corporation under the articles of incorporation or by-laws or
any provision of law, a waiver thereof in writing, signed at any
time, whether before or after the time of meeting, by the
shareholder entitled to such notice,shall be deemed equivalent to
the giving of such notice; provided that such waiver in respect
to any matter of which notice is required under any provision of
the Wisconsin Business Corporation Law, shall contain the same
information as would have been required to be included in such
notice,except the time and place of meeting.
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<PAGE>
2.13. Unanimous Consent without Meeting. Any action
required or permitted by the articles of incorporation or by-laws
or any provision of law to be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken,shall be signed by all
of the shareholders entitled to vote with respect to the subject
matter thereof.
ARTICLE: III. BOARD OF DIRECTORS
3.01. General Powers and Number. The business and
affairs of the corporation shall be managed by its Board of
Directors. The number of directors of the corporation shall be
three.
3.02. Tenure and Qualifications. Each director shall
hold office until the next annual meeting of share-holders and
until his successor shall have been elected,or until his prior
death, resignation or removal. A director may be removed from
office by affirmative vote of a majority of the outstanding
shares entitled to vote for the election of such director, taken
at a meeting of shareholders called for that purpose. A director
may resign at any time by filing his written resignation with the
Secretary of the corporation. Directors need not be residents of
the State of Wisconsin or shareholders of the corporation.
3.03. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
by-law immediately after the annual meeting of shareholders, and
each adjourned session thereof. The place of such regular
meeting shall be the same as the place of the meeting of
shareholders which precedes it, or such other suitable place as
may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the time and place, either
within or without the State of Wisconsin, for the holding of
additional regular meetings without other notice than such
resolution.
3.04. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President,
Secretary or any two directors. The President or Secretary
calling any special meeting of the Board of Directors may fix any
place, either within or without the State of Wisconsin, as the
place for holding any special meeting of the Board of Directors
called by them, and if no other place is fixed the place of the
meeting shall be the principal business office of the corporation
in the State of Wisconsin.
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<PAGE>
3.05. Notice; Waiver. Notice of each meeting of the
Board of Directors (unless otherwise provided in or pursuant to
Section 3.03) shall be given by written notice delivered
personally or mailed or given by telegram to each director at his
business address or at such other address as such director shall
have designated in writing filed with the Secretary, in each case
not less than seventy-two hours prior thereto. If mailed, such
notice shall be deemed to be delivered when deposited in the
United States mail so addressed, with postage thereon prepaid.
If notice be given by telegram, such notice shall be deemed to be
delivered when the telegram is delivered to the telegraph
company. Whenever any notice whatever is required to be given
to any director of the corporation under the articles of
incorporation or by-laws or any provision of law, a waiver
thereof in writing, signed at any time, whether before or after
the time of meeting, by the director entitled to such notice,
shall be deemed equivalent to the giving of such notice. The
attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a
meeting and objects thereat to the transaction of any business
because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.
3.06. Quorum. Except as otherwise provided bylaw or
by the articles of incorporation or these by-laws, a majority of
the directors shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but a
majority of the directors present (though less than such quorum)
may adjourn the meeting from time to time without further
notice.
3.07. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors,unless the act of a
greater number is required by law or by the articles of
incorporation or these by-laws.
3.08. Conduct of Meetings. The President or, in his
absence, the Vice-President or, in their absence, any director
chosen by the directors present, shall call meetings of the Board
of Directors to order and shall act as chairman of the meeting.
The Secretary of the corporation shall act as secretary of all
meetings of the Board of Directors but in the absence of the
Secretary, the presiding officer may
B-8
<PAGE>
appoint any Assistant Secretary or any director or other person
present to act as secretary of the meeting.
3.09. Vacancies. Any vacancy occurring in the Board
of Directors, including a vacancy created by an increase in the
number of directors, may be filled until the next succeeding
annual election by the affirmative vote of a majority of the
directors then in office, though less than a quorum of the Board
of Directors; provided, that incase of a vacancy created by the
removal of a director by vote of the shareholders, the
shareholders shall have the right to fill such vacancy at the
same meeting or any adjournment thereof.
3.10. Compensation. The Board of Directors,by
affirmative vote of a majority of the directors then in office,
and irrespective of any personal interest of any of its members,
may establish reasonable compensation of all directors for
services to the corporation as directors,officers or otherwise,
or may delegate such authority to an appropriate committee. The
Board of Directors also shall have authority to provide for or
delegate authority to an appropriate committee to provide for
reasonable pensions,disability or death benefits, and other
benefits or payments,to directors, officers and employees and to
their estates, families, dependents or beneficiaries on account
of prior services rendered by such directors, officers and
employees to the corporation.
3.11. Presumption of Assent. A director of the
corporation who is present at a meeting of the Board of Directors
or a committee thereof of which he is a member at which action on
any corporate matter is taken shall be presumed to have assented
to the action taken unless his dissent shall be entered in the
minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the secretary of
the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the corporation
immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such
action.
3.12. Committees. The Board of Directors by
resolution adopted by the affirmative vote of a majority of the
authorized number of directors may designate one or more
committees, each committee to consist of three or more directors
elected by the Board of Directors, which to the extent provided
in said resolution as initially adopted,
B-9
<PAGE>
and as thereafter supplemented or amended by further resolution
adopted by a like vote, shall have and may exercise,when the
Board of Directors is not in session, the powers of the Board of
Directors in the management of the business and affairs of the
corporation, except action in respect to dividends to
shareholders, election of the principal officers or the filling
of vacancies in the Board of Directors or committees created
pursuant to this section. The Board of Directors may elect one
or more of its members as alternate members of any such committee
who may take the place of any absent member or members at any
meeting of such committee,upon request by the President or upon
request by the chairman of such meeting. Each such committee
shall fix its own rules governing the conduct of its activities
and shall make such reports to the Board of Directors of its
activities as the Board of Directors may request.
3.13. Unanimous Consent without Meeting. Any action
required or permitted by the articles of incorporation or by-laws
or any provision of law to be taken by the Board of Directors at
a meeting or by resolution maybe taken without a meeting if a
consent in writing, setting forth the action so taken, shall be
signed by all of the directors then in office.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the
corporation shall be a President, two Vice-Presidents, a
Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers
as may be deemed necessary may be elected or appointed by the
Board of Directors. Any two or more offices may be held by the
same person, except the offices of President and Secretary and
the offices of President and Vice-President.
4.02. Election and Term of Office. The officers of
the corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his
successor shall have been duly elected or until his prior death,
resignation or removal.
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<PAGE>
4.03. Removal. Any officer or agent may be removed by
the Board of Directors whenever in its judgment the best
interests of the corporation will be served thereby,but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment shall not
of itself create contract rights.
4.04. Vacancies. A vacancy in any principal office
because of death, resignation, removal, disqualification or
otherwise, shall be filled by the Board of Directors for the
unexpired portion of the term.
4.05. President. The President shall be the
principal executive officer of the corporation and, subject to
the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings of
the shareholders and of the Board of Directors. He shall have
authority, subject to such rules as may be prescribed by the
Board of Directors, to appoint such agents and employees of the
corporation as he shall deem necessary, to prescribe their
powers, duties and compensation, and to delegate authority to
them. Such agents and employees shall hold office at the
discretion of the President.He shall have authority to sign,
execute and acknowledge, on behalf of the corporation, all deeds,
mortgages, bonds,stock certificates, contracts, leases, reports
and all other documents or instruments necessary or proper to be
executed in the course of the corporation's regular business, or
which shall be authorized by resolution of the Board of
Directors; and, except as otherwise provided bylaw or the Board
of Directors, he may authorize any Vice-President or other
officer or agent of the corporation to sign, execute and
acknowledge such documents or instruments in his place and stead.
In general he shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board
of Directors from time to time.
4.06. Vice-President. In the absence of the President
or in the event of his death, inability or refusal to act, or in
the event for any reason it shall be impracticable for the
President to act personally, the Vice-President (in the order in
which elected) shall perform the duties of the President, and
when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. The Vice-President may
sign, with the Secretary or Assistant Secretary, certificates for
shares of the corporation; and
B-11
<PAGE>
shall perform such other duties and have such authority as from
time to time may be delegated or assigned to him by the President
or by the Board of Directors. The execution of any instrument of
the corporation by the Vice-President shall be conclusive
evidence, as to third parties, of his authority to act in the
stead of the President.
4.07. The Secretary. The Secretary shall: (a) keep
the minutes of the meetings of the shareholders and of the Board
of Directors in one or more books provided for the purpose; (b)
see that all notices are duly given in accordance with the
provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed
to all documents the execution of which on behalf of the
corporation under its seal is duly authorized; (d) keep or
arrange for the keeping of a register of the post office address
of each shareholder which shall be furnished to the Secretary by
such shareholder; (e) sign with the President, or the
Vice-President, certificates for shares of the corporation, the
issuance of which shall have been authorized by resolution of the
Board of Directors; (f) have general charge of the stock transfer
books of the corporation; and (g) in general perform all duties
incident to the office of Secretary and have such other duties
and exercise such authority as from time to time may be
delegated or assigned to him by the President or by the Board of
Directors.
4.08. The Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the corporation; (b) receive and give receipts for
moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of Section
5.04; and (c) in general perform all of the duties incident to
the office of Treasurer and have such other duties and exercise
such other authority as from time to time may be delegated or
assigned to him by the President or by the Board of Directors.
If required by the Board of Directors, the Treasurer shall give a
bond for the faithful discharge of his duties in such sum and
with such surety or sureties as the Board of Directors shall
determine.
4.09. Assistant Secretaries and Assistant Treasurers.
There shall be such number of Assistant Secretaries and Assistant
Treasurers as the Board of Directors may from
B-12
<PAGE>
time to time authorize. The Assistant Secretaries may sign with
the President or a Vice-President certificates for shares of the
corporation the issuance of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Treasurers
shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and
with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general,
shall perform such duties and have such authority as shall from
time to time be delegated or assigned to them by the Secretary or
the Treasurer, respectively, or by the President or the Board of
Directors.
4.10. Other Assistants and Acting Officers. The Board
of Directors shall have the power to appoint any person to act as
assistant to any officer, or as agent for the corporation in his
stead, or to perform the duties of such officer whenever for any
reason it is impracticable for such officer to act personally,
and such assistant or acting officer or other agent so appointed
by the Board of Directors shall have the power to perform all the
duties of the office to which he is so appointed to be an
assistant, or as to which he is so appointed to act, except as
such power maybe otherwise defined or restricted by the Board of
Directors.
4.11. Salaries. The salaries of the principal
officers shall be fixed From time to time by the Board of
Directors or by a duly authorized committee thereof, and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS
AND DEPOSITS; SPECIAL CORPORATE ACTS
5.01. Contracts. The Board of Directors may authorize
any officer or officers, agent or agents, to enter into any
contract or execute or deliver any instrument in the name of and
on behalf of the corporation, and such authorization may be
general or confined to specific instances. In the absence of
other designation, all deeds,mortgages and instruments of
assignment or pledge made by the corporation shall be executed in
the name of the corporation by the President or the
Vice-President and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer; the Secretary or an
Assistant Secretary, when necessary or required, shall affix the
corporate seal thereto; and when so executed no other party
B-13
<PAGE>
to such instrument or any third party shall be required to make
any inquiry into the authority of the signing officer or
officers.
5.02. Loans. No indebtedness for borrowed money shall
be contracted on behalf of the corporation and no evidences of
such indebtedness shall be issued in its name unless authorized
by or under the authority of a resolution of the Board of
Directors. Such authorization may be general or confined to
specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers,agent or agents of the
corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board
of Directors.
5.04. Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies or other
depositaries as may be selected by or under the authority of a
resolution of the Board of Directors.
5.05. Voting of Securities Owned by this Corporation.
Subject always to the specific directions of the Board of
Directors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this corporation may be
voted at any meeting of security holders of such other
corporation by the President of this corporation if he be
present, or in his absence by any Vice-President of this
corporation who may be present, and (b) whenever, in the judgment
of the President,or in his absence, of any Vice-President, it is
desirable for this corporation to execute a proxy or written
consent in respect to any shares or other securities issued by
any other corporation and owned by this corporation, such proxy
or consent shall be executed in the name of this corporation by
the President or one of the Vice-Presidents of this corporation,
without necessity of any authorization by the Board of Directors,
affixation of corporate seal or counter signature or attestation
by another officer. Any person or persons designated in the
manner above stated as the proxy or proxies of this corporation
shall have full right, power and authority to vote the shares or
other securities issued by such other corporation and owned by
this corporation the same as such shares or other securities
might be voted by this corporation.
B-14
<PAGE>
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates
representing shares of the corporation shall be in such form,
consistent with law, as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or
a Vice-President and by the Secretary or an Assistant Secretary.
All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom
the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer
books of the corporation. All certificates surrendered to the
corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificate for a
like number of shares shall have been surrendered and cancelled,
except as provided in Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the
corporation on any certificates for shares may be a facsimile.
The signature of the President or Vice-President and the
Secretary or Assistant Secretary upon a certificate may be
facsimiles if the certificate is manually signed on behalf of a
transfer agent, or a registrar, other than the corporation itself
or an employee of the corporation.
6.03. Signature by Former Officers. In case any
officer, who has signed or whose facsimile signature has been
placed upon any certificate for shares, shall have ceased to be
such officer before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such
officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of
a certificate for shares for registration of transfer the
corporation may treat the registered owner of such shares as the
person exclusively entitled to vote, to receive notifications and
otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the
corporation with a request to register for transfer, the
corporation shall not be liable to the owner or any other person
suffering loss as a result of such registration of transfer if
(a) there were on or with the certificate the necessary
endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The corporation
may require reasonable assurance that said endorsements are
genuine and
B-15
<PAGE>
effective and compliance with such other regulations as maybe
prescribed by or under the authority of the Board of Directors.
6.05. Restrictions on Transfer. The face or reverse
side of each certificate representing shares shall bear a
conspicuous notation of any restriction imposed by the
corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where
the owner claims that his certificates for shares has been lost,
destroyed or wrongfully taken, a new certificate shall be issued
in place thereof if the owner(a) so requests before the
corporation has notice that such shares have been acquired by a
bona fide purchaser,and (b) files with the corporation a
sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as may be prescribed by or under the
authority of the Board of Directors.
6.07. Consideration for Shares. The shares of the
corporation may be issued for such consideration as shall be
fixed from time to time by the Board of Directors, provided that
any shares having a par value shall not be issued for a
consideration less than the par value thereof. The consideration
to be paid for shares may be paid in whole or in part, in money,
in other property, tangible or intangible, or in labor or
services actually performed for the corporation. When payment of
the consideration for which shares are to be issued shall have
been received by the corporation, such shares shall be deemed to
be fully paid and nonassessable by the corporation. No
certificate shall be issued for any share until such share is
fully paid.
6.08. Stock Regulations. The Board of Directors
shall have the power and authority to make all such further rules
and regulations not inconsistent with the statutes of the State
of Wisconsin as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of
the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a corporate
seal which shall be circular in form and shall have inscribed
thereon the name of the corporation and the state of
incorporation and the words, "Corporate Seal".
B-16
<PAGE>
ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. These by-laws may be altered,
amended or repealed and new by-laws may be adopted by the
shareholders by affirmative vote of not less than a majority of
the shares present or represented at any annual or special
meeting of the shareholders at which a quorum is in attendance.
8.02. By Directors. These by-laws may also be
altered, amended or repealed and new by-laws may be adopted by
the Board of Directors by affirmative vote of a majority of the
number of directors present at any meeting at which a quorum is
in attendance; but no by-law adopted by the shareholders shall be
amended or repealed by the Board of Directors if the by-laws so
adopted so provides.
8.03. Implied Amendments. Any action taken or
authorized by the shareholders or by the Board of Directors,
which would be inconsistent with the by-laws then in effect but
is taken or authorized by affirmative vote of not less than the
number of shares or the number of directors required to amend the
by-laws so that the by-laws would be consistent with such action,
shall be given the same effect as though the by-laws had been
temporarily amended or suspended so far, but only so far, as is
necessary to permit the specification so taken or authorized.
ARTICLE IX. INDEMNIFICATION
9.01. Mandatory Indemnification. The corporation
shall, to the full extent permitted by the Wisconsin Business
Corporation Law, indemnify any person who was or is a party or
threatened to be made a party to any threatened,pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is
or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director or
officer of any other corporation or enterprise. Such right of
indemnification shall inure to the benefit of the heirs,
executors, administrators and personal representatives of such a
person.
9.02. Permissive Supplementary Benefits. The
corporation may, but shall not be required to, supplement the
right of indemnification under Section 9.01 by (a)the purchase of
insurance on behalf of any one or more of
B-17
<PAGE>
such persons, whether or not the corporation would be obligated
to indemnify such person under Section 9.01, (b)individual or
group indemnification agreements with any one or more of such
persons, and (c) advances for related expenses of such a person.
9.03. Amendment. This Article IX may be amended or
repealed only by a vote of the shareholders and not by a vote of
the Board of Directors.
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<PAGE>
EXHIBIT C
ESTIMATED COSTS AND FEES ATTRIBUTABLE
TO THE
FORMATION OF HOLDING COMPANY
OUT-OF-POCKET EXPENSES: AMOUNT:
- ----------------------- -------
Registration Fees $270,000
Listing Fees - NYSE and Chicago Stock Exchanges 12,000
Legal 195,000
Accounting and Audit Opinions 25,000
Proxy Printing, Mailing and Solicitation 175,000
Filing Fee - Articles of Incorporation 10,000
Transfer Agent Fees 25,000
Stock Certificate Printing 25,000
Corporate Name Registration 15,000
Employee Benefit Plan Analysis 25,000
Shareowner System Modifications 20,000
Miscellaneous Expenses:
Messenger fees, Federal Express, etc. $10,000
Shareowner Survey and Information Expenses 15,000
Meeting and Travel Expenses 15,000
Communications Expenses for New Corporate 10,000
Identification
Blue Sky Fees 3,000
Unassigned 20,000
Total Miscellaneous Expenses: ------ 73,000
-------
Sub-Total: Out-of-Pocket $870,000
LABOR EXPENSES (By Function):
- -----------------------------
Management 75,000
Corporate Secretary/Shareowner Services 80,000
Accounting 20,000
Communications 10,000
Employee Relations 10,000
Treasury-Financial Management 15,000
All Other Departments 10,000
Clerical, Mail, Printing, etc. 15,000
Overheads 75,000
-------
Sub-Total: Labor 310,000
-------
TOTAL 1,180,000
=========
12/6/93
RHKnuth
<PAGE>
EXHIBIT D - SET FORTH AS APPENDICES A, B AND C TO EXHIBIT E HERETO
<PAGE>
EXHIBIT E
AFFILIATED INTEREST AGREEMENT
THIS AGREEMENT is entered into this day of ,
199 , between Wisconsin Public Service Corporation, a Wisconsin
public utility corporation headquartered at 700 North Adams Street
in Green Bay, Wisconsin ("WPSC") which is a wholly-owned subsidiary
of WPS Resources Corporation ("WPS Resources"); Packerland Energy
Service, Incorporated, headquartered at 2670 Ashland Avenue in
Green Bay, Wisconsin, a wholly-owned subsidiary of WPS Resources;
WPS Communications Inc., a wholly-owned subsidiary of WPS
Resources; all Wisconsin corporations. All of the contracting
parties, other than WPSC, shall be collectively referred to as
"Non-utility Affiliates", and all of the parties to this Agreement
shall be collectively referred to as the "Parties" or "Affiliates".
R E C I T A L S
1. The Non-utility Affiliates are affiliated interests
with WPSC as that term is defined at sec. 196.52, Wis. Stats., and
also are affiliated interests as related corporations within a
utility holding company organization pursuant to Sec. 196.795, Wis.
Stats.
2. It is anticipated from time to time that WPSC and
the Non-utility Affiliates will perform various services for one
another, or transfer property, as that term is used in Section
196.795(j)(5), Wis. Stats., between one another, and the Parties
recognize that the provision of such services or the transfer of
any property or "things" between a public utility affiliate and its
non-utility affiliates are subject to restrictions established at
Secs. 196.52 and 196.795, Wis. Stats., and might require prior
<PAGE>
approval of the Public Service Commission of Wisconsin ("PSCW"),
and otherwise must be done pursuant to a contract which as been
approved by the PSCW.
3. The Parties intend that this Affiliated Interest
Agreement shall establish the terms, conditions and procedures
which shall apply to provisions of non-utility service and other
transfers of assets, property, rights or things of any kind between
WPSC and the Non-utility Affiliates, and also intend to request
that the PSCW approve this Agreement pursuant to Secs. 196.52 and
196.795, Wis. Stats.
4. The Parties contemplate that specific agreements may
be entered into between WPSC and individual Affiliates which, if
and when approved by the PSCW, might by their more specific terms
modify, supplement or supplant the more general terms of this
Agreement. One such Agreement is the WPSC-Packerland Energy
Services, Inc. Affiliated Interest Agreement dated .
AGREEMENT
WPSC and Affiliates, in consideration of the mutual
promises made in this Agreement, agree as follows:
1.0 Provision of services, property, employees, etc.
------------------------------------------------
1.1 WPSC and Affiliates may request from one another, WPSC
from its Non-utility Affiliates and the Non-utility
Affiliates from WPSC, the furnishing of property,
services, employees, rights, interests or other "things",
or anything of commercial value to the transferee or
recipient.
1.2 WPSC and Affiliates shall have the right, at their sole
discretion, to refuse to provide services, to provide
-2-
<PAGE>
employees or property, or to transfer any right, interest
or other thing if so requested; there shall be no
exclusive right or right of first refusal associated with
the provision of such services, property or things of
value; and receiving a refusal to a request under this
Agreement shall not be a prerequisite for WPSC or an
Affiliate to obtain from an independent third party any
property, service or thing which is subject to this
Agreement.
1.3 Refusals of requests by WPSC or its Affiliates under
Section 1.2 shall not terminate this Agreement.
1.4 Non-utility Affiliates and WPSC understand that WPSC is
subject to the provisions of Sections 196.795(5)(r) and
(s), Wis. Stats., regarding the use of any WPSC
"employee" or "property" and agree that WPSC shall seek
reasonably to minimize the use of any WPSC "employee" or
"property".
2.0 Term of Agreement.
-----------------
2.1 WPSC and Affiliates intend that the provisions of this
Agreement shall continue indefinitely and shall control
until and unless this Agreement, or any portion of it, is
amended by a written agreement which is approved by the
PSCW. The Agreement may be terminated upon 60 days
notice from any party, but such termination shall not be
effective without the approval of the PSCW.
3.0 Types of services provided by WPSC.
-----------------------------------
3.1 As an overriding limitation on the performance of this
Agreement, the parties agree that WPSC shall not be
-3-
<PAGE>
required to take actions which negatively impact the
reliability or quality of utility services available to
customers of WPSC, shall not impede the ability of WPSC
to provide utility services to its customer, nor increase
the costs of its customers of receiving such utility
services.
3.2 The term "services" shall include management,
supervisory, construction, engineering, accounting,
legal, financial, or other services, and shall include
any service covered by Section 196.52(3)(a), Wis. Stats.
3.3 The type of services which WPSC may render to Non-utility
Affiliates are separated into two categories described
below. Different methods of establishing charges for
each category of services are also enumerated.
3.3.1 Category 1: System Services (transactions
-----------------------------------------
limited to WPSC and WPS Resources). Because
-----------------------------------
WPSC has been a publicly traded, tax paying
legal entity, it was, and to some extent will
continue to be, required to incur certain
expenses related to maintenance of shareholder
records, investor relations and
communications, tax return preparation, etc.
These activities continue to be needed at
either the WPSC or WPS Resources levels, and
the total amount of such work to be done
simply as the result of the formation of WPS
Resources should not be materially different
than the level of such activities which were
-4-
<PAGE>
required before the reorganization. Benefits
of these services will accrue to both WPSC and
WPS Resources. From time to time, either WPSC
or WPS Resources may perform these functions
for itself or on behalf of the other. The
future volume of these services will be about
equal to the level that WPSC would experience
as an independent organization. Unless and
until this Agreement shall be amended, and
that amendment approved by the PSCW, Category
1 services will not be performed for any
Affiliate other than WPS Resources and WPSC.
Examples of the types of services falling into this
Category 1 include, but are not necessarily limited
to, the following:
-- Stockholder relations, such as responding to
stockholder inquiries, appearing before
analyst groups and other stockholder
communications;
-- Bondholder services, including administration
of indenture requirements, supervising paying
agents and trustees, and responding to
bondholder inquiries;
-- Maintenance of stockholder records and
performance of stock and other securities
transfers and recordation;
-- Administration of payment of dividends and
interest on securities;
-- Administration of stock plans such as
automatic dividend reinvestment and stock
purchase plans, customer stock ownership plans
and employee stock ownership plans;
-- Preparation and submittal to stockholders, the
Securities and Exchange Commission and any
other appropriate state or federal agency, of
-5-
<PAGE>
required reports relating to WPSC or
Affiliates;
-- Advice and assistance in the solicitation and
tabulation of proxies, the preparation of
proxy solicitation materials and the filing
and distribution of such materials;
-- Advice and assistance in the planning and
conduct of stockholders', directors' and
investor relations' meetings;
-- Listing of securities on appropriate
securities exchanges;
-- Maintenance of corporate records and
documents;
-- Preparation of financing documents, including
indentures, registration statements,
prospectuses, stock certificates, loan
agreements, bonds and any other documents or
instruments required or related to the
issuance, sale or purchase of securities by
federal or state laws or regulations;
3.3.2 Category 2: All Other Services. These
--------------------------------
include administrative services and other
functions that are presently performed by WPSC
employees, but may be provided to Resources or
any Affiliates in the WPS Resources system.
Billings for these services will be paid
directly by each affiliate.
Examples of the types of services falling into this
Category 2 include, but are not necessarily limited
to, the following:
-- Establishment and maintenance of accounting
systems and books of accounts and financial
records;
-- Advice and assistance regarding audits;
-- Advice and assistance regarding accounting,
financial and statistical matters;
-6-
<PAGE>
-- Advice and assistance in connection with tax
payments and accruals, including preparation,
filing, and, where appropriate, prosecution of
federal and state tax returns, reports,
protests and claims and all matters relating
thereto;
-- Advice and assistance regarding the
preparation for and response to tax audits;
-- Advice and assistance in corporate
communications, public relations, and
governmental affairs;
-- Advice and assistance in purchasing services
and materials;
-- Provision of office services such as office
automation, photocopying, photography, mail,
messenger, printing, and telephones;
-- Advice and assistance in Human Resource
management activities such as employment,
training, management development, equal
employment opportunity, labor relations,
compensation and employee benefits; and
-- Advice and assistance regarding engineering
and construction matters, including provision
of drafting services;
-- Advice and assistance regarding environmental
matters, including testing and analysis;
-- Advice and assistance regarding development of
software and use of electronic data processing
equipment and services.
-- Advice and assistance regarding risk
management, including insurance matters;
-- Administration of both qualified and
unqualified employee welfare and pension plans
and related programs;
-- Consolidation of accounting data;
4.0 Types of Services Provided by Affiliates. The services which
-----------------------------------------
Affiliates may perform for WPSC may be substantially the same as
those services identified in Article 3.
-7-
<PAGE>
5.0 Determination and Payment of Costs and Charges Between WPSC
-----------------------------------------------------------
and Affiliates. All services provided between WPSC and Affiliates
- ---------------
shall be at cost or market value, as hereinafter provided.
5.1 Determination of Cost.
5.1.1 Labor Cost.
A. Each employee of WPSC who in any month was
involved in providing any service to any
Affiliates, shall for that month identify the
time spent providing such services and
identify the total time spent providing
services to WPSC or any Affiliates, in
accordance with the established accounting
procedures of WPSC as set forth in the
Subsidiaries Accounting Procedure Section 1.1
- Labor Charges to WPSC Subsidiaries and Non-
utility Activities, a copy of which is
attached as Appendix A and incorporated by
reference.
B. Based on actual compensation and the total of
hours actually worked, a direct labor dollar
hourly rate shall be computed for each such
employee identified pursuant to paragraph
5.1.1A.
C. An overhead shall be established for WPSC
based upon the following rate and shall be
applied to direct labor dollars (product of
Items A and B) as set forth in the WPSC
Subsidiaries Accounting Procedures Section 1.2
-8-
<PAGE>
- Labor Loading Rates for Fringe Benefits and
Overheads attached as Appendix B and
incorporated by reference, including:
1. Costs associated with pensions, social
security taxes, unemployment
compensation, health, dental and life
insurance, training, vacation, sick,
holiday and other benefits;
2. Average cost of administrative and
general costs including, but not limited
to, telephone, office supplies, property
insurance and miscellaneous expenses, and
excluding regulatory commission expense
and other nonrelated expenses;
3. Costs of WPSC-owned office space,
furniture and equipment based upon WPSC's
current weighted cost of capital as
authorized by the Public Service
Commission of Wisconsin.
D. The sum of the number of hours spent by each
employee identified in paragraph 5.1.1A,
above, providing service to any Affiliates
multiplied by each such employee's hourly
compensation as determined in paragraph
5.1.1B, above, shall be determined. The
result will be increased by the overheads
identified in paragraph 5.1.1C, above.
-9-
<PAGE>
5.1.2 Equipment Cost. Costs for equipment, other
---------------
than office furniture and equipment, used in
provision of services for or provided by WPSC
to Affiliates will include all operating
expenses, applicable overheads, maintenance,
depreciation, return on investment and taxes,
income taxes, sales or otherwise. Return on
investment shall be calculated using the
weighted cost of capital authorized in the
most recent rate case order of WPSC by the
Public Service Commission of Wisconsin. WPSC
transportation and vehicle costs used in
providing service or provided to Affiliates
will be determined based on relative total
hours or miles of use or on a vehicle loading
applied to labor costs, as appropriate, and
will include repairs, maintenance, fuel,
depreciation, return on investment and, where
appropriate, rental expense. Return on
investment shall be that as defined in this
paragraph 5.1.2.
5.1.3 Materials and Supplies Cost. Costs of
----------------------------
materials and supplies of WPSC specifically
used in rendering service to Affiliates will
be directly determined and charged. All
appropriate overheads will follow the
assignment of the direct costs. The costs of
material will include relative invoice price,
-10-
<PAGE>
shipping expenses, and net of purchase
discounts. Appropriate overheads added to the
price would include costs of operations of
WPSC which relate to the function of
purchasing, receiving, testing, storing,
dispensing and accounting for items.
Overheads shall also include such items as
operation and maintenance costs, rents,
depreciation of facilities and equipment.
5.1.4 Other Direct Costs. Other direct costs
-------------------
including but not limited to contract labor,
contract services, employee reimbursement for
meals and lodging and other costs not included
in labor, equipment, materials and supplies
will be either accumulated and billed to
Affiliates based on actual charges or
allocated as a loading on labor costs as
appropriate.
5.1.5 Cost to Affiliate. The sum of the direct and
------------------
indirect charges calculated in accordance with
paragraphs 5.1.1, 5.1.2, 5.1.3, and 5.1.4,
above, shall constitute the total costs of
services provided by WPSC to an Affiliate.
5.1.6 Labor, Equipment, and Materials and Supply
------------------------------------------
Cost of Affiliate. Costs of labor, equipment,
------------------
materials and supplies, depreciation, and
other reasonable overheads provided by an
Affiliate to WPSC shall be determined in
-11-
<PAGE>
accordance with accounting standards
customarily used by businesses such as those
in which the Affiliate is engaged. Each
Affiliate shall keep and maintain accounting
and bookkeeping records which are adequate to
enable its actual costs in connection with
transactions hereunder to be audited and
tracked by the Public Service Commission of
Wisconsin.
5.1.7 Determination of Fair Market Value. The fair
-----------------------------------
market value of a service shall mean the cost
determined by making a good faith effort to
identify the resources necessary to perform
the service, and the value of such service
based on a general knowledge of the relevant
market for such or a similar service as well
as, if available, comparison with bids or
quotations for such or a similar service. If,
despite good faith efforts, WPSC is not able
to determine the fair market value of a
service it provides to an Affiliate, the fair
market value shall be deemed to be equal to
WPSC's cost, calculated as described in this
Agreement.
5.1.8 Charges for Category 1 - System Services.
-----------------------------------------
Category 1 services provided by WPSC shall be
charged at the greater of WPSC's cost or fair
market value. However, in the circumstances
-12-
<PAGE>
where a Category 1 service is provided to WPSC
by WPSC Resources, WPSC shall not be charged
more than it would have spent to perform the
same level and volume of service. Charges for
these services shall be allocated to all
companies in the WPS Resources system based
upon their respective individual percentages
of total assets, operating expenses (less
income taxes) and gross payroll compared to
the sum of the percentages of these three
items for the entire WPS Resources system.
Where these are performed by WPSC, WPSC shall
bill WPS Resources for WPS Resources'
allocated portion of the appropriate charge.
5.1.9 Charges for Category 2 - All Other Services.
--------------------------------------------
Where WPSC provides these services to WPS
Resources or Affiliates, WPSC shall charge WPS
Resources or Affiliates the market value or
WPSC's cost, whichever is greater. Where WPS
Resources or Affiliates provide services to
WPSC, unless superseded by specific agreement,
which shall not be effective until approved by
the Commission, WPSC shall reimburse Resources
or Affiliates for the lesser of WPS Resources'
or Affiliates' costs, or the market value of
those services.
5.1.10 Method of Billing. Bills for provision of
------------------
services provided under this Agreement by WPSC
-13-
<PAGE>
will be rendered by the 30th of the month
following the month in which the services were
provided. Bills will specify in detail all
charges and shall include a determination of
the costs underlying same. Bills will be paid
or charged to Affiliates accounts below the
line on WPSC's books of account no later than
thirty (30) days following the date of the
rendered bill (the "Due Date"). Interest
shall accrue on all payments due and unpaid
under this Agreement from the day following
the Due Date until the date of payment at the
rate of one and one-half percent (1.5%) per
month.
5.2 Allocation of Officers' Salaries. Each person who is an
---------------------------------
officer of WPS Resources and Affiliates shall keep a
record of his or her time using the following method:
The annual compensation of such persons shall be
determined by the respective boards of each company.
Actual salary paid by WPSC to such persons will reflect
such person's annualized salary in his/her capacity as an
officer/employee of WPSC multiplied by the percentage
determined by dividing such person's total time devoted
to WPSC business with such person's total time devoted to
all holding company system business including that for
WPSC and all Affiliates. No assumption is made as to the
maximum allocable time between the utility and Affiliate
per year.
-14-
<PAGE>
5.3 Projection of Utility Test Year Costs. For purposes of
--------------------------------------
projecting expenses for the test year utilized for
establishing the utility rates of WPSC, WPSC will utilize
the procedures as set forth in the Subsidiaries
Accounting Procedure Section 1.3 - Reporting of the
Forecasted Labor Hours for the WPSC Subsidiaries and Non-
Utility Activities, a copy of which is attached as
Appendix C and incorporated by reference, to
differentiate between costs projected for utility and
non-utility functions.
6.0 Miscellaneous.
6.1 This Agreement shall become effective upon its execution
by all parties and its approval by the Public Service
Commission of Wisconsin.
6.2 This Agreement may be amended or modified by mutual
agreement of WPSC and its Affiliates at any time. Any
Affiliate not in existence at the inception of this
Agreement may automatically become a party to this
Agreement by filing an election to become such a party
signed by the Affiliate and WPSC. Any such modification
or amendment shall not become effective until approved by
the Public Service Commission of Wisconsin.
6.3 If any governmental or regulatory agency or court of
competent jurisdiction holds that any provision of this
Agreement is rendered invalid or results in the
impossibility or impracticability of performance hereof,
the remainder of this Agreement shall not be affected
thereby and shall continue in full force and effect. In
-15-
<PAGE>
the event any provision of this Agreement is so held
invalid, the parties hereto shall promptly renegotiate in
good faith new provisions to restore this Agreement as
nearly as possible to its original intent and effect.
7.0 Representations and Warranties.
-------------------------------
7.1 Each party hereto has the right, power and authority to
enter into and perform its obligations under this
Agreement.
7.2 Each party has taken all requisite corporate action to
approve execution, delivery and performance of this
Agreement, and this Agreement constitutes a legal, valid
and binding obligation of each party enforceable in
accordance with its terms.
7.3 The fulfillment of obligations hereunder will not
constitute a material violation of any existing
applicable law, rule, regulation or order of any
governmental authority. WPSC and Affiliates acknowledge
that all or portions of this Agreement may be challenged
before regulatory agencies or a court of competent
jurisdiction by other persons or entities not parties
hereto. In such event, WPSC and the Affiliates agree
that each will use its best efforts before such agencies
and courts to support the pursuit and accomplishment of
the parties' mutual endeavors hereunder.
8.0 Events of Default. The following shall be "Events of Default"
------------------
under this Agreement:
-16-
<PAGE>
8.1 Failure by a party to make any payment to the other party
required under this Agreement within forty-five (45) days
after the date on which such payment becomes due; or
8.2 The liability or admission in writing by either party of
its inability to pay its debts generally as they become
due, or the making of an assignment for the benefit of,
or entry into any arrangement with, its creditors; or
8.3 The authorization or filing by either party of a
voluntary petition in bankruptcy or commencement by
either party of proceedings relating thereto under any
bankruptcy, reorganization, readjustment of debts,
insolvency, dissolution, liquidation, or other similar
law or any jurisdiction, or the indication by such party
in any such proceedings of its approval thereof, consent
thereto or acquiescence therein; or
8.4 The adjudication of either party as a bankrupt or as
insolvent, or upon a petition in bankruptcy or insolvency
proceedings being filed against it; or
8.5 The commencement of any proceeding against either party
seeking the appointment of a receiver, trustee or
liquidator for either party of all or substantially all
of its assets, or its dissolution, with or without its
authorization, consent, or application; or
8.6 An order, judgment or decree entered by any court of
competent jurisdiction partitioning between or among any
party and any other person or entity all or any portion
of the assets of such party.
-17-
<PAGE>
9.0 Remedies. Upon the occurrence of an Event of Default by
---------
either party, the remedies available to the party not in default
shall be as follows:
9.1 If an Event of Default described in Subsections 8.1
through 8.6 shall occur, the nondefaulting party may:
9.1.1 Commence an action for equitable relief,
including injunction, declaratory judgment or
specific performance;
9.1.2 Commence an action for money damages; or
9.1.3 Elect to terminate this Agreement pursuant to
Article 10.
9.2 The pursuit by either party of any specific remedy shall
not be deemed to be an election of that remedy to the
exclusion of any other or others, whether provided
hereunder or at law, in equity, by statute, or otherwise.
9.3 If an Event of Default should occur and the party not in
default should employ attorneys or incur other expenses
for the collection of any payment or for the enforcement,
performance, or observation of any condition or
obligation of the defaulting party hereunder, or for the
exercise of any other remedy hereunder, the defaulting
party agrees that it will, on demand therefor, reimburse
the other party for its reasonable expenses of such
attorneys and such other expenses so incurred.
10.0 Termination. If either party shall have the right to
-----------
terminate this Agreement pursuant to Article 9, such party shall
give the other party written notice of its intent to terminate.
Termination as specified in the notice of intent to terminate shall
-18-
<PAGE>
not occur if the party receiving such notice cures such default or
removes the conditions causing such default within thirty (30) days
from receipt of such notice to terminate, which time may be
extended by the party serving the notice.
11.0 Indemnity and Liability. The Affiliates agree to save WPSC
-----------------------
harmless from any and all damages, expenses, costs and attorneys'
fees on account of injury to person, life or property or injury
resulting in the death of any person or persons in any manner
arising out of or in connection with the willful or negligent acts
or omissions of Affiliate or WPS Resources in the performance of
this Agreement or progress of the work to be done hereunder and, in
the event WPSC shall be made a party to any suit or litigation on
account of injury or damage or alleged injury or damage to person,
life or property or on account of any injury or alleged injury
resulting in the death of any person or persons arising out of or
in connection with the performance of this Agreement or progress of
the work to be done hereunder, the appropriate Affiliate or WPS
Resources will defend such action on behalf of WPSC including
claims and causes of action at common law or arising under any
statute or under the Worker's Compensation Act, and, if judgment
shall be obtained or claim allowed in any of said proceedings
against WPSC, the appropriate Affiliate or WPS Resources will pay
and satisfy such judgment or claim in full.
The foregoing indemnity shall apply even though said
injury to person, life or property or injury resulting in the death
of any person or persons is caused by a violation by WPSC of the
Wisconsin Safe Place Statute.
-19-
<PAGE>
In the event that either Party shall be joined as a
defendant in any action brought by a third party against the other
Party and such joinder is based solely upon the relationship of the
Parties (and not upon the acts, errors or omissions of the Party so
joined as a default), then the Party against whom the action is
brought shall indemnify the Party so joined for all costs and
expenses, including reasonable attorneys' fees, incurred in
defending against such action.
Notwithstanding any language to the contrary herein, WPSC
shall have no liability to Affiliate in connection with WPSC's
performance of any professional services (e.g., engineering
malpractice) or, in any event, for any consequential (including
loss of revenue) or other such losses, damages, costs or
liabilities arising from any cause whatsoever, whether occasioned
by the negligent acts or omissions of WPSC's employees or
representatives or otherwise.
Nothing contained in this Agreement is intended or shall
be construed as a waiver, either express or implied, of any
provision of the Worker's Compensation laws of the State of
Wisconsin (Chapter 102, Wis. Stats.) and any successor statutes or
as an assumption by contract, express or implied, of any
responsibility of liability greater than that imposed by said laws
or, in particular, inconsistent with the exclusive remedy provision
of said law.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed on its behalf by its officers
thereunto duly authorized as of the day and year first above
written.
-20-
<PAGE>
WPS RESOURCES, INC. WISCONSIN PUBLIC SERVICE
CORPORATION
By____________________________ By____________________________
PACKERLAND ENERGY SERVICES, INC. WPS COMMUNICATIONS, INC.
By____________________________ By____________________________
-21-
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION SECTION 1.1
OTHER SUBSIDIARIES ACCOUNTING PROCEDURES ISSUED: 12/14/93
SECTION TITLE: LABOR SUPERSEDES: 12/02/93
SUBSECTION TITLE: LABOR CHARGES TO WPS PAGE: 1 OF 2
SUBSIDIARIES AND NON-UTILITY PC: OSA/0101
ACTIVITIES
- ------------------------------------------------------------------------------
AFFILIATED INTEREST AGREEMENT
APPENDIX A
POLICY STATEMENT
- ----------------
The purpose of this policy is to ensure that Wisconsin Public Service
Corporation (WPSC) subsidiaries and non-utility activities are charged for
labor performed by WPSC employees on their behalf, which is representative of
the cost incurred by WPSC. Generally, WPSC subsidiaries will be charged for
each hour expended by WPSC employees for their benefit based on the average
hourly rate paid to those employees. This is an appropriate method for work
that is being performed by wage and hour employees. An exception arises when
work is being done by salaried employees, especially senior management, since
they typically work well in excess of 40 hours a week. To bill the
subsidiaries on an hourly basis would allocate cost disproportionately.
Therefore, under certain conditions, these hours will be adjusted to better
reflect the cost of this labor. Costs will be allocated based on total hours
worked.
APPLICATION
- -----------
Each month the Corporate Accounting Department collects labor hours associated
with work done for the company subsidiaries and non-utility activities. This
information will be analyzed to see if it meets the criteria outlined in the
following procedure. If it does, appropriate adjustments will be made. If it
does not, labor will be billed using the current hourly rate for that employee
as provided by the WPSC Payroll Department.
It should be noted that this policy is only applicable to WPSC subsidiaries
and non-utility activities.
This policy is established to ensure proper accounting for labor which is not
properly chargeable to utility operations. Current tracking is done for:
Coal Resale Activities Acct. 417-30
WPS Communications, Inc. Acct. 123-45
UTECH Acct. 426-70
NorLight Acct. 143-01-00-0172
Lobbying Activities Acct. 426-43
PROCEDURE
- ---------
Hours reported by a salaried employee for a specific subsidiary or non-utility
activities will be adjusted only when the number of hours worked in a given
month exceeds 20 hours for those, the employee works more than 40 hours a
week, and that employee has kept accurate records of the total hours worked
for the month. If all of these conditions are met, the hours will be
converted into equivalent hours. Equivalent hours are defined as hours
adjusted from a 40 hour a week basis to a basis which is equivalent to hours
actually worked.
For example: A salaried employee does 30 hours of work for a subsidiary
over a four week period. In that same time frame, he worked 240 hours in
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION SECTION 1.1
OTHER SUBSIDIARIES ACCOUNTING PROCEDURES ISSUED: 12/14/93
SECTION TITLE: LABOR SUPERSEDES: 12/02/93
SUBSECTION TITLE: LABOR CHARGES TO WPS PAGE: 1 OF 2
SUBSIDIARIES AND NON-UTILITY PC: OSA/0101
ACTIVITIES
- ------------------------------------------------------------------------------
total versus 160 that would have been worked if they had only worked 40
hours weekly. The hours would be adjusted in the following manner:
30 = X
--- ---
240 160 X = Equivalent Hours
240X = 4800
X = 20
Therefore, the subsidiaries would be billed 20 hours times the employee's
hourly rate.
As was stated earlier, Corporate Accounting will make the calculation to
adjust hours to an equivalent amount. However, those reporting time for
subsidiaries will be responsible for providing Corporate Accounting with the
actual hours worked for subsidiaries and the total hours worked for the same
period.
MONTHLY LABOR COLLECTION PROCESS
Several people from throughout the company are involved in providing support
of nonutility or subsidiary activities. When a nonutility or subsidiary
operation is established, Corporate Accounting works with the departments who
will be involved to determine those individuals who must do time reporting.
Once they have been identified as providing services to one of these areas, it
is the responsibility of each person to maintain time reporting records and
details so that labor can be charged appropriately.
Once a month, Corporate Accounting solicits this information from those
identified individuals (Exhibit 1). Based on this information, Corporate
Accounting completes a payroll distribution adjustment form (Exhibit 2)
directing the Payroll Department to charge the appropriate accounts for
nonutility or subsidiary related activities.
For salaried and executive personnel, if total time worked in the reporting
period exceeds 20 hours of overtime, the hours charged to nonutility
activities are converted to equivalent hours as described above. The Payroll
Department calculates an average hourly rate for each individual (salary
divided by hours worked in that period). Payroll then calculates the rate
times the hours worked for each operation listed above to arrive at the salary
amount for each individual to be charged to nonutility and subsidiary
accounts.
For hourly individuals, Payroll recharges their time to the appropriate
nonutility and subsidiary accounts based on their current hourly rate.
In conjunction with adjusting for actual payroll dollars, an entry is made to
record associated fringe benefits and overheads associated with the labor in
the appropriate nonutility or subsidiary accounts. The loading factors to be
used are taken from the annual labor loading letter (Exhibit 3) and are
applied to the total labor dollars worked in a particular month (see
Section 1.2).
<PAGE>
EXHIBIT 1(a)
Return to: M A Orendorff
G6
October 13, 1993
Green Bay
R G Baeten G6 R A Krueger A2
D P Bittner G6 D W Schonke A3
D A Bollom G6 G R Schwalbach A3
D L Ford G6 C R Steinhardt D2
F J Kicsar G2 J G Swoboda G4
R H Knuth G6 L L Weyers A2
Please report the time you spent on the following activities listed below
during the period SEPTEMBER 21 to OCTOBER 20. Also indicate your total hours
worked during this period. If no time was reported, write "none" or "-0-".
Return this form to Maggie Orendorff G6 by OCTOBER 21.
TOTAL HOURS WORKED 253
---------
COAL RESALE
The time you report for the Coal Resale Program should be time that is
billable to the Coal Resale Program. Billable time is defined as:
That time spent working on activities related to the Coal Resale Program
including managing the program, arranging sales, compiling cost
information, preparing reports, answering questions, etc.
In addition to listing the hours pertaining to the Coal Resale Program, please
provide a detailed explanation of how the time was spent.
Employee Hours Explanation
------------------- --------- -------------------------------------
L. L. Weyers 2 Report Review
Figures penciled in here.
Any expense account items you have related to the Coal Resale Program should
be charged directly to the Coal Resale Program (Account 00-417-30-02) by
overriding your normal accounting distribution on your individual expense
account form.
<PAGE>
Page 2
COMMUNICATIONS, INC.
Time spent directly managing Communications, Inc.
Employee Hours Explanation
-------------- ----------- -------------------------------
none
UTECH
Time spent directly managing UTECH
Employee Hours Explanation
-------------- ------------- ---------------------------------
none
LOBBYING
Report on "Wisconsin Lobbying Communications Log" and send to
W G Sandberg (D1).
none
MAOrendorff
TIMERPTOF
<PAGE>
EXHIBIT 1(b)
October 13, 1993
Green Bay
D L Englebert G6 J J Zablocki G6
K J Kollmann D2 G R Wiesner G6
M A Orendorff G6
Please provide me with the amount of time you and the people in your area
spent working on the Coal Resale Program for the period September 21 through
October 20 . This information is needed by 10:00 a.m. on
October 21 .
The time you report for the Coal Resale Program should be time that is
billable to the Coal Resale Program. Billable time is defined as:
That time spent working on activities related to the Coal Resale
Program including managing the program, arranging sales, compiling
cost information, preparing reports, answering questions, etc.
In an effort to accumulate all costs pertaining to the Coal Resale Program,
please advise me if there are employees, other than those listed above,
involved with the project.
In addition to listing the hours pertaining to the Coal Resale Program, please
provide a detailed explanation of how the time was spent.
Employee Hours Explanation
-------- ----- --------------------------------------
M J Treml 3 Bill of Sadings/Invoices
S L Waltman .25 Review
K J Kollman 8.5 Scheduling & Admin.
R. R. Ziemer 6.25 Admin.
Because the Commission has asked that we maintain detailed time reports for
this activity, please be prepared to produce time sheets detailing your
activities listed above.
Any expense account items you have related to the Coal Resale Program should
be charged directly to the Coal Resale Program (Account 00-417-30-02) by
overriding your normal accounting distribution on your individual expense
account form.
<PAGE>
<TABLE>
(A disbursement adjustment form is in original document with the following information:)
EXHIBIT 2(a)
TRANSACTION 66
<CAPTION>
DISTRIBUTION ADJUSTMENTS DEPT.
FORM 159-0864 Rev. 1-80 (6-7) LOCATION Officers' Time Reporting APPROVAL /s/ George Wiesne DATE 10-26-93
------------------------- ------------------- ----------
TIME SLIP PAYROLL DEPT.
DATE LINE NO. EMPLOYEE NAME EMPLOYEE EARN AMOUNT (21-36) ACCT. CHARGED (CREDIT) (37-52) ACCT. TO BE CHARGED (DEBIT)
OR NUMBER HOURS CODE WO NO. YR ACCOUNT EST NO WO NO. YR ACCOUNT EST NO
JOB TICKET 1-5 8-12 13-14 15-20 LOC PRIM SUB LTR VEH/PROJ COST ELE LOC PRIM SUB LTR VEH/PROJ COST ELE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
R A KRUEGER 44347 CA 18.15 771845410 0041730010418
R G BAETEN 02345 CA 12.20 009200114 004173001
L L WYERS 88575 CA 80.31 001845410 0041730010418
J G SWOBODA 81463 CA 798.77 169200114 0042670
- -------------------------------------------------------------------------------------------------------------------------------
FOR ACCOUNTING DEPT USE: TOTAL xxx 909.43 x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
</TABLE>
<PAGE>
<TABLE>
(A disbursement adjustment form is in original document with the following information:)
EXHIBIT 2(b)
TRANSACTION 66
<CAPTION>
DISTRIBUTION ADJUSTMENTS DEPT.
FORM 159-0864 Rev. 1-80 (6-7) LOCATION Coal Resale - Supervisory APPROVAL /s/ George Wiesne DATE 10-26-93
------------------------- ------------------- ----------
TIME SLIP PAYROLL DEPT.
DATE LINE NO. EMPLOYEE NAME EMPLOYEE EARN AMOUNT (21-36) ACCT. CHARGED (CREDIT) (37-52) ACCT. TO BE CHARGED (DEBIT)
OR NUMBER HOURS CODE WO NO. YR ACCOUNT EST NO WO NO. YR ACCOUNT EST NO
JOB TICKET 1-5 8-12 13-14 15-20 LOC PRIM SUB LTR VEH/PROJ COST ELE LOC PRIM SUB LTR VEH/PROJ COST ELE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
K J KOLLMANN 84467 CA 105.33 001845910 0041730010418
84467 CA 86.18 001845950
R R ZIEMER 91272 CA 63.82 001845920 0041730010418
36.47 001845930
63.82 001845935
9.12 001845945
9.12 001845945
J L WALTMAN 87072 CA 2.39 001845920 0041730010418
2.39 001845930
2.39 001845935
.40 001845940
.40 001845945
- -------------------------------------------------------------------------------------------------------------------------------
FOR ACCOUNTING DEPT USE: TOTAL xxx 381.83 x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
</TABLE>
<PAGE>
<TABLE>
1993 LABOR LOADINGS EXHIBT 3
<CAPTION>
28-Dec-92 EXTERNAL BILLINGS
HIGHWAY RELOCATION ALL OTHERS INTERNAL ECONOMIC ANALYSIS NON-UTILITY
DIRECT PAYROLL
- ---------------------------------------------------------------------------------------
RELATED LOADINGS LOADING ACTUAL % OF STRAIGHT OVER SEASONAL/ STRAIGHT OVER SEASONAL/ STRAIGHT OVER SEASONAL/ SEE NOTE
BASE (2) $ BASE TIME TIME TEMP -20 TIME TIME TEMP -20 TIME TIME TEMP -20 (D)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VACATIONS (2) $7,309,218 7.9 X X X X
HOLIDAYS (2) 4,074,256 4.4% X X X X
FICA TAX (CURRENT RATE) (1) 8,097,385 8.6% X X X X X X X X X X
UNEMPLOYMENT TAXES (2) 280,913 0.3% X X X X X X X
GROUP LIFE INSURANCE
& SIB BENEFITS (2) 608,987 0.7% X X X X
MASTER MEDICAL BENEFITS
(ACTIVE EMPLOYEES) (2) 7,103,175 7.7% X X X X
DENTAL BENEFITS (2) 1,132,020 1.2% X X X X
RETIREMENT PLAN BENEFITS(1) 5,579,692 5.9% X X X X X X X X X X
POST-RETIREMENT MEDICAL
BENEFITS (2) 4,836,210 4.4% X X X X
POST-RETIREMENT DENTAL
BENEFITS (2) 307,851 0.3% X X X X
RECREATION (2) 189,571 0.2% X X X
NON-OCCUPATIONAL
ILLNESS OR INJURY (2) 458,146 0.5% X X X X
OCCUPATIONAL ILLNESS
OR INJURY (2) 75,374 0.1% X X X X X X X
OTHER EMPLOYEE
BENEFIT COSTS (2) 1,108,834 1.2% X X X
SCHOOL & SAFETY MEETINGS(3) 1,213,270 2.2% X X X
RELOCATION AND MOVING
PAYMENTS (2) 264,005 0.3% X X X
DEATH BENEFITS IN
EXCESS OF INSURANCE (2) 16,089 0.0% X X X
EDUCATION AND TRAINING (2) 2,210,399 2.4% X X X X
WORKERS COMPENSATION
BENEFITS (2) 625,530 0.7% X X X X X X X
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
DIRECT LOADINGS (INDOOR) 49.0% 49.0% 14.5% 15.6% 49.0% 14.5% 15.6% 49.0% 14.5% 15.5% 45.1%
PAYMENT FOR TIME NOT
WORKED (4) 27,185 0.1% X X X
INCLEMENT WEATHER (4) 279,649 1.0% X X X
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
52.1% 52.3% 14.5% 15.6% 52.3% 14.5% 15.6% 52.3% 14.5% 15.5% 45.1%
CORPORATE OVERHEAD LOADINGS
PROPERTY INSURANCE (2) 1,930,890 2.1% X X X X
INJURIES AND DAMAGES
INSURANCE (2) 1,859,541 2.0% X X X X
PUBLICATIONS FOR
EMPLOYEES (2) 116,500 0.1% X X X
EXECUTIVE (2) 4,332,215 4.7% X X X X SEE NOTE A ACTUAL
SUPERVISION/TECHNICAL
SUPPORT (2) 18,912,155 42.3% X+DIRECT X+DIRECT X+DIRECT X+DIRECT ACTUAL
CLERICAL/ACCOUNTING (2) 17,291,587 18.8% X X X X ACTUAL
OFFICE SUPPLIES &
TELEPHONE (2) 3,525,514 1.8% X X X X X
GENERAL BUILDING AND
EQUIPMENT COST (2) 9,787,414 10.8% X X X X 3.9
COST OF MONEY 2.8% X X 10.6
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
CORPORATE LOADINGS (INDOOR) 87.2% 84.4% 0.0 84.3% 87.2% 0.0 87.1% 0.0 0.0 0.0 14.5%
SMALL TOOLS (4) 561,914 6.1% X X X X SEE NOTE A
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
CORPORATE LOADINGS (OUTDOOR) 93.3 90.5% 0.0 90.4% 93.3% 0.0 93.2% 0.0 0.0 0.0 14.5%
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL LOADINGS (INDOOR) 136.2% 133.4% 14.5% 99.9% 136.7% 14.5% 107.7% 49.0% 14.5% 15.5% 59.6% ACTUAL
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL LOADINGS (OUTDOOR) 145.6% 142.8% 14.5% 106.0% 145.6% 14.5% 108.8% 52.3% 14.5% 15.5% 59.6% ACTUAL
<FN>
NOTES:
(A) ANY COST/BENEFITS IN THESE CATEGORIES SHOULD BE ANALYZED SEPARATELY AS DISTINCT CAPITALIZED OR EXPENSED ITEMS.
(B)DOLLARS ASSOCIATED WITH BASES BASE 1 94,654,867,83 - TOTAL PRODUCTIVE TIME PLUS OVERTIME
BASE 2 92,185,149.48 - TOTAL PRODUCTIVETIME
BASE 3 55,145,891.22 - TOTAL W & H PRODUCTIVE PAYROLL
BASE 4 9,177,192.42 - TOTAL LINE AND STREET CREW PRODUCTIVE PAYROLL
(C) SEASONAL OR TEMPORARY EMPLOYEES WORKING LESS THAN 20 HOURS OR SEASONALEMPLOYEES
(D) USED BY CORPORATE ACCOUNTING ONLY
(E) ACTUALS EQUAL CHARGES DIRECTLY TRACKED TO THE ACTIVITY
</TABLE>
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION SECTION 1.2
OTHER SUBSIDIARIES ACCOUNTING PROCEDURES ISSUED: 12/14/93
SECTION TITLE: LABOR SUPERSEDES: 09/16/87
SUBSECTION TITLE: LABOR LOADING RATES FOR PAGE: 1 OF 2
FRINGE BENEFITS AND OVERHEADS PC: OSA/0102
- ------------------------------------------------------------------------------
AFFILIATED INTEREST AGREEMENT
APPENDIX B
POLICY STATEMENT
- ----------------
Loading rates are charged to ensure that Wisconsin Public Service Corporation
(WPSC) recovers all reasonable fringe benefit, overhead, and miscellaneous
costs associated with labor expended by WPSC for the benefit of its
subsidiaries, non-utility activities, and third parties related to subsidiary
activities. The rates charged reflects the philosophy forwarded by the Public
Service Commission of Wisconsin (PSCW), that full costs should be recovered by
WPSC from its non-utility ventures, and that these costs are recovered in
accordance with holding company policy as defined by the PSCW.
APPLICATION
- -----------
Labor expended for the benefit of WPSC subsidiaries, non-utility activities,
and third parties associated with subsidiary activities (e.g., NorLight) will
be the base to which these loading rates will be applied to.
PROCEDURE
- ---------
The loading rates are computed each year in December for the upcoming year.
These rates are defined as a percentage of productive labor. The
starting point in the determination of these rates is the labor loading
calculations done by Corporate Accounting in December (see attached example).
The rate is comprised of three components. They are fringe benefits for
employees, overheads, and miscellaneous items which are combined to create an
overall rate which will be applied to all direct labor. Currently the rate is
determined in the following manner:
Fringe Benefits *
Vacation XXX%
Holidays XXX
FICA XXX
Unemployment Taxes XXX
Group Life Insurance and SIB Benefits XXX
Master Medical Benefits XXX
Dental Insurance XXX
Retirement Plan Benefits XXX
Post-Retirement Medical Benefits XXX
Post-Retirement Dental Benefits XXX
Recreation XXX
Non-Occupational Illness or Injury XXX
Occupational Illness or Injury XXX
Education and Training XXX
Publications for Employees XXX
Workmen's Compensation Insurance XXX
Total Fringe Benefits XXX%
* Note: If benefits changes are made these will be revised to reflect the
respective changes.
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION SECTION 1.2
OTHER SUBSIDIARIES ACCOUNTING PROCEDURES ISSUED: 12/14/93
SECTION TITLE: LABOR SUPERSEDES: 09/16/87
SUBSECTION TITLE: LABOR LOADING RATES FOR PAGE: 2 OF 2
FRINGE BENEFITS AND OVERHEADS PC: OSA/0102
- ------------------------------------------------------------------------------
Overheads
General Building and Equipment Costs (comprised of
depreciation, O&M costs and return on buildings) XXX%
----
Total Overhead XXX%
Miscellaneous
Office Supplies/Telephones (comprised of office
supplies, telephone and postage) XXX%
----
Total Miscellaneous XXX%
----
Total Loading Rate XXX%
====
In addition to these items, other specific costs are also charged to WPSC non-
utility ventures. They are:
- - Computer charges: Currently only the coal sale program is being charged a
monthly charge of $28. This amount represents a sample of monthly computer
activity run for this program. This sample test is rerun annually. The
other non-utility ventures are not charged this cost since they are manual
systems and do not require computer resources.
- - Check processing: Non-utility ventures are charged $7.68 for each check
processed by the Accounts Payable Department for their benefit. This rate
is computed annually by the Accounts Payable Department. Currently only
the coal sale program is being charged this rate since the rest of WPSC
non-utility ventures have their own checking accounts and process their own
checks.
<PAGE>
<TABLE>
1993 LABOR LOADINGS
<CAPTION>
28-Dec-92 EXTERNAL BILLINGS
HIGHWAY RELOCATION ALL OTHERS INTERNAL ECONOMIC ANALYSIS NON-UTILITY
DIRECT PAYROLL
- -------------------------------------------------------------------------------------------------------------------------------
RELATED LOADINGS LOADING ACTUAL % OF STRAIGHT OVER SEASONAL/ STRAIGHT OVER SEASONAL/ STRAIGHT OVER SEASONAL/ SEE NOTE
BASE (2) $ BASE TIME TIME TEMP -20 TIME TIME TEMP -20 TIME TIME TEMP -20 (D)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VACATIONS (2) $7,309,218 7.9 X X X X
HOLIDAYS (2) 4,074,256 4.4% X X X X
FICA TAX (CURRENT RATE) (1) 8,097,385 8.6% X X X X X X X X X X
UNEMPLOYMENT TAXES (2) 280,913 0.3% X X X X X X X
GROUP LIFE INSURANCE
& SIB BENEFITS (2) 608,987 0.7% X X X X
MASTER MEDICAL BENEFITS
(ACTIVE EMPLOYEES) (2) 7,103,175 7.7% X X X X
DENTAL BENEFITS (2) 1,132,020 1.2% X X X X
RETIREMENT PLAN BENEFITS(1) 5,579,692 5.9% X X X X X X X X X X
POST-RETIREMENT MEDICAL
BENEFITS (2) 4,836,218 4.4% X X X X
POST-RETIREMENT DENTAL
BENEFITS (2) 307,851 0.3% X X X X
RECREATION (2) 189,571 0.2% X X X
NON-OCCUPATIONAL
ILLNESS OR INJURY (2) 458,146 0.5% X X X X
OCCUPATIONAL ILLNESS
OR INJURY (2) 75,374 0.1% X X X X X X X
OTHER EMPLOYEE
BENEFIT COSTS (2) 1,108,834 1.2% X X X
SCHOOL & SAFETY MEETINGS(3) 1,213,270 2.2% X X X
RELOCATION AND MOVING
PAYMENTS (2) 264,005 0.3% X X X
DEATH BENEFITS IN
EXCESS OF INSURANCE (2) 16,089 0.0% X X X
EDUCATION AND TRAINING (2) 2,210,399 2.4% X X X X
WORKERS COMPENSATION
BENEFITS (2) 625,530 0.7% X X X X X X X
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
DIRECT LOADINGS (INDOOR) 49.0% 49.0% 14.5% 15.6% 49.0% 14.5% 15.6% 49.0% 14.5% 15.5% 45.1%
PAYMENT FOR TIME NOT
WORKED (4) 27,185 0.1% X X X
INCLEMENT WEATHER (4) 279,649 1.0% X X X
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
52.1% 52.3% 14.5% 15.6% 52.3% 14.5% 15.6% 52.3% 14.5% 15.5% 45.1%
CORPORATE OVERHEAD LOADINGS
PROPERTY INSURANCE (2) 1,930,890 2.1% X X X X
INJURIES AND DAMAGES
INSURANCE (2) 1,859,541 2.0% X X X X
PUBLICATIONS FOR
EMPLOYEES (2) 116,500 0.1% X X X
EXECUTIVE (2) 4,332,215 4.7% X X X X SEE NOTE A ACTUAL
SUPERVISION/TECHNICAL
SUPPORT (2) 18,912,155 42.3% X+DIRECT X+DIRECT X+DIRECT X+DIRECT ACTUAL
CLERICAL/ACCOUNTING (2) 17,291,587 18.8% X X X X ACTUAL
OFFICE SUPPLIES &
TELEPHONE (2) 3,525,514 1.8% X X X X X
GENERAL BUILDING AND
EQUIPMENT COST (2) 9,787,414 10.8% X X X X 3.9
COST OF MONEY 2.8% X X 10.6
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
CORPORATE LOADINGS (INDOOR) 87.2% 84.4% 0.0 84.3% 87.2% 0.0 87.1% 0.0 0.0 0.0 14.5%
SMALL TOOLS (4) 561,914 6.1% X X X X SEE NOTE A
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
CORPORATE LOADINGS (OUTDOOR) 93.3 90.5% 0.0 90.4% 93.3% 0.0 93.2% 0.0 0.0 0.0 14.5%
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL LOADINGS (INDOOR) 136.2% 133.4% 14.5% 99.9% 136.7% 14.5% 107.7% 49.0% 14.5% 15.5% 59.6% ACTUAL
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL LOADINGS (OUTDOOR) 145.6%| 142.8% 14.5% 106.0% 145.6% 14.5% 108.8% 52.3% 14.5% 15.5% 59.6% ACTUAL
<FN>
NOTES:
(A) ANY COST/BENEFITS IN THESE CATEGORIES SHOULD BE ANALYZED SEPARATELY AS DISTINCT CAPITALIZED OR EXPENSED ITEMS.
(B)DOLLARS ASSOCIATED WITH BASES BASE 1 94,654,867,83 - TOTAL PRODUCTIVE TIME PLUS OVERTIME
BASE 2 92,185,149.48 - TOTAL PRODUCTIVE TIME
BASE 3 55,145,891.22 - TOTAL W & H PRODUCTIVE PAYROLL
BASE 4 9,177,192.42 - TOTAL LINE AND STREET CREW PRODUCTIVE PAYROLL
(C) SEASONAL OR TEMPORARY EMPLOYEES WORKING LESS THAN 20 HOURS OR SEASONAL EMPLOYEES
(D) USED BY CORPORATE ACCOUNTING ONLY
(E) ACTUALS EQUAL CHARGES DIRECTLY TRACKED TO THE ACTIVITY
</TABLE>
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION SECTION 1.3
OTHER SUBSIDIARIES ACCOUNTING PROCEDURES ISSUED: 12/14/93
SECTION TITLE: LABOR SUPERSEDES: 10/21/88
SUBSECTION TITLE: REPORTINGOF THE FORECASTED PAGE: 1 OF 3
LABOR HOURS FOR THE WPSC PC: OSA/0103
SUBSIDIARIES AND NON-
UTILITY ACTIVITIES
- ------------------------------------------------------------------------------
AFFILIATED INTEREST AGREEMENT
APPENDIX C
POLICY STATEMENT
- ----------------
The Corporate Accounting Department is responsible for gathering, reviewing,
and reporting forecasted labor hours and fringe benefit and overhead costs for
each Wisconsin Public Service Corporation (WPSC) subsidiary and other
nonutility activities. This information is then utilized in the preparation
of the budgets and forecasts for these subsidiaries and nonutility ventures,
and making adjustments to the budgets and forecast of WPSC.
APPLICATION
- -----------
On an annual basis, the Corporate Accounting Department gathers, reviews, and
reports the applicable WPSC employee's forecasted labor hours for each WPSC
subsidiary and nonutility venture. Once the forecasted labor hours are
gathered, PC files which provide a record of the WPSC employee forecasted
labor hours, payroll distribution, labor costs, and overhead are updated.
These PC files are reviewed and issued to the Financial Reporting Supervisor.
The Financial Reporting Supervisor then forwards this information to the Rates
and Budgets Department and directs them to adjust the effected O & M budgets.
PROCEDURE
- ---------
1. Annually, usually in August, a request is issued to WPSC employees, who
have in the past charged labor to subsidiaries and nonutility activities,
to provide an estimate of labor hours for each WPSC subsidiary and
nonutility activities (NorLight, UTECH, WPS Communications, and Coal
Resale Program). Department heads are also asked to forecast for new
employees who might charge labor to these activities.
a. A copy of the master PC file, which is kept for use as an original,
for each WPSC subsidiary and nonutility venture should be made and
renamed by replacing the "1" in the file name with an "S." Following
are the WPSC subsidiaries and nonutility ventures and the associated
PC file for each: Coal Resale Program - COALHR1; NorLight - NORLHR1;
WPS Communications - WCOMHR1; and, UTECH -UTECHR1.
b. The renamed PC file for each WPSC subsidiary and nonutility venture
(COALHRS, NORLHRS, WCOMHRS, UTECHRS) is updated to reflect the
current reporting period. The file should report the current year and
two future years of information and requires revisions to the headings
to reflect the proper years.
c. The print macro A should be initiated to print a worksheet from each
PC file which will be issued to the applicable WPSC employees for
completion. These worksheets (Exhibits 1A - 1E) consist of a column
for each month for the three year period and several rows. The
applicable WPSC employees will complete these forms by listing the
estimated labor hours for work involving the WPSC subsidiaries and
nonutility activities by month for themselves and any other WPSC
employee in their area.
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION SECTION 1.3
OTHER SUBSIDIARIES ACCOUNTING PROCEDURES ISSUED: 12/14/93
SECTION TITLE: LABOR SUPERSEDES: 10/21/88
SUBSECTION TITLE: REPORTINGOF THE FORECASTED PAGE: 2 OF 3
LABOR HOURS FOR THE WPSC PC: OSA/0103
SUBSIDIARIES AND NON-
UTILITY ACTIVITIES
- ------------------------------------------------------------------------------
NOTE: The reporting period covered for the current year is August
through December.
d. The applicable WPSC employees are issued a set of worksheets which
consists of a blank form for each WPSC subsidiary and nonutility
activities and a cover letter (Exhibit 2).
e. A request is made to the Payroll Accounting Control Clerk to provide
the payroll distribution and hourly wage rate for each WPSC employee
involved with the WPSC subsidiaries or nonutility activity. A cover
letter and schedule (Exhibit 4) listing the employee's name,
distribution account number, and hourly wage rate is sent to Payroll
to collect this data. Also requested from Payroll is a printout of
the actual dollars charged to nonutility accounts for the first seven
months of the year (Exhibit 6).
Accounts currently being charged are:
00-426-70 UTECH
00-143-01-00-0172 NorLight
00-123-45 WPS Communications, Inc.
00-417-30 Coal Resale Activities
00-426-43 Lobbying Activities
2. The estimated labor hours for the applicable WPSC employees are compiled
and entered into the respective PC file which calculates total payroll
cost and various overhead charges based on those payroll costs. Overhead
rates are taken from the current labor loading calculation (Exhibit 5).
a. Upon receipt of the requested payroll information, a calculation is
performed to adjust the current hourly wage rate for each employee by
the forecasted inflationary percentage for the two future years.
b. Working with the PC file for each WPSC subsidiary and nonutility
activity, enter the necessary information for each WPSC employee into
the worksheets shown in Exhibits 3A - 3C. The areas to be inputted
are unprotected and will appear in light blue. These areas include:
"Employee," estimated labor hours for each month, payroll distribution
account number, "Payroll" (hourly wage rate), and "Inflated Payroll"
(current wage and hour payroll x inflationary percentage for that
year).
(1) Enter the employee's name and estimated labor hours by month,
obtained from the completed worksheets (Exhibits 1A - 1E).
(2) The "Account #" is the payroll distribution account for each WPSC
employee as reported by the Payroll Accounting Control Clerk.
When an employee has more than one payroll distribution account,
the account with the highest percentage of the employee's time
charged will be inputted in the PC file worksheets.
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION SECTION 1.3
OTHER SUBSIDIARIES ACCOUNTING PROCEDURES ISSUED: 12/14/93
SECTION TITLE: LABOR SUPERSEDES: 10/21/88
SUBSECTION TITLE: REPORTINGOF THE FORECASTED PAGE: 3 OF 3
LABOR HOURS FOR THE WPSC PC: OSA/0103
SUBSIDIARIES AND NON-
UTILITY ACTIVITIES
- ------------------------------------------------------------------------------
(3) The "Payroll" column should include the WPSC employee's current
hourly wage rate as reported by the Payroll Accounting Control
Clerk.
(4) The "Inflated Payroll" column consists of the calculated inflated
payroll based on the forecasted rate of inflation obtained from
the Financial Reporting Supervisor. The current year (i.e.,
19X1) will have no rate of inflation attached to the current
hourly wage rate. The upcoming year (i.e., 19X2) will apply the
applicable rate of inflation to the current hourly wage rate.
The second year into the future (i.e., 19X3) will apply the
applicable rate of inflation to the "Inflated Payroll" amount
calculated for the prior year (i.e., 19X2).
(5) The "Total Payroll" column contains formulas to automatically
calculate total payroll charges based on the total estimated
hours and the inflated payroll.
(6) The "Fringe Benefits," Building and Equipment," and "Supplies and
Telephone" columns contain formulas to calculate the overhead
charges. These calculations are based on predetermined, constant
percentages taken from the most recent labor loading study and
applied to the calculated "Total Payroll."
NOTE: To maintain confidentiality of the hourly wage rate for the
employees, the "Payroll" and "Inflated Payroll" columns are hidden
before the worksheet is printed. This command is incorporated in the
print macro and as a result will be carried out automatically when the
macro is initiated.
3. The printed worksheets, a set of three (current year and two years into
the future), for each WPSC subsidiary and nonutility activity should be
reviewed for accuracy.
4. A reduced copy of each set of printed worksheets should be taken and given
to the Financial Reporting Supervisor along with the originals.
5. Once this information has been put together, a letter is sent to the
Budgets Department informing them of the projected labor related costs of
nonutility activities (Exhibit 7). Starting in 1989, a column will be
added to this letter indicating the actual labor dollars for the first
seven months of the current year. Rates and Budgets should also be given
copies of the detailed worksheets (Exhibit 3A) for each nonutility
venture. Once they have made the necessary adjustments, Budgets sends a
letter to Corporate Accounting indicating the adjustments that were made.
<PAGE>
<TABLE>
EXHIBIT 1A
<CAPTION>
WPS COMMUNICATIONS
1988
<S> <C> <C> <C> <C>
EMPLOYEE AUGUST SEPTEMBER NOVEMBER DECEMBER
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WPS COMMUNICATIONS
1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WPS COMMUNICATIONS
1990
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 1B
UTECH
1988
<S> <C> <C> <C> <C>
EMPLOYEE AUGUST SEPTEMBER NOVEMBER DECEMBER
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
UTECH
1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
UTECH
1990
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 1C
NORLIGHT
1988
<S> <C> <C> <C> <C>
EMPLOYEE AUGUST SEPTEMBER NOVEMBER DECEMBER
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NORLIGHT
1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NORLIGHT
1990
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 1D
WPS DEVELOPMENT
1988
<S> <C> <C> <C> <C>
EMPLOYEE AUGUST SEPTEMBER NOVEMBER DECEMBER
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WPS DEVELOPMENT
1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
WPS DEVELOPMENT
1990
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 1E
COAL RESALE PROGRAM
1988
<S> <C> <C> <C> <C>
EMPLOYEE AUGUST SEPTEMBER NOVEMBER DECEMBER
- -----------------------------------------------------------------
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
COAL RESALE PROGRAM
1989
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
COAL RESALE PROGRAM
1990
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EMPLOYEE JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 2
August 17, 1988
Green Bay
D P Bittner G6 J J Myers G6
D A Bollom G6 M I Radtke A3
K A Burg G6 D H Rhode D2
R C Buttke A2 L Rieder G6
S L Carrico D1 W G Sandberg D1
D L Ford G6 W P Sands D1
J V Henderson D1 P D Schrickel A3
T J Huetter A2 D M Sheedy G6
B A Johnson G2 L M Stoll G6
F J Kicsar G2 J W Tomasiak D2
R H Knuth G6 M VanDeLaarschot G2
J H Liethen G6 N A Waterstreet G2
E R Mathews A2 L L Weyers D2
D S Matzke G2 J J Zablocki G6
Forecasts of labor spent by WPSC employees for the benefit of NorLight,
WPS Communications, Inc. (WCOM), WPS Development, Inc. (WDEV), coal
resale program, and UTECH for August 1988 through December 1990 are
needed at this time in order to budget and forecast for these sub-
sidiaries and nonutility ventures. Please provide your estimate of labor
hours on the attached worksheets FOR YOURSELF AND ANYONE ELSE (by name)
in your department expected to expend time for NorLight, WCOM, WDEV, coal
resale, or UTECH activities.
Time estimated for NorLight should be for activities that the NorLight
staff has requested for their behalf, would normally perform, or may be
expected to perform in the future.
Time estimated for WDEV should be for time spent managing and monitoring
WDEV.
Time estimated for the coal resale program should be for time spent
managing, marketing, and financial reporting.
To meet the budget completion schedules, please return your estimates to
me by September 1, 1988. If you have any questions, please call me at
ext. 4921.
/s/ George Wiesner
GRWiesner/krm
<PAGE>
<TABLE>
EXHIBIT 3A
COLALHRS COAL RESALE PROGRAM
KAB 1988
09-19-88
<CAPTION>
FRINGE BUILDING & SUPPLIES &
TOTAL BENEFITS EQUIPMENT TELEPHONE
EMPLOYEE JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL ACOUNT # PAYROLL 42.362% 10.873% 4.101% TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
K A BURG 5 10 10 10 10 45 00-920-02- $424.80 $179.95 $46.19 $17.42 $668.36
24-0161
D L FORD 0.25 0.25 0.25 0.25 0.25 1.25 00-920-02- $31.08 $13.17 $3.38 $1.27 $48.90
24-0161
E R MATHEWS 0.25 0.25 0.25 0.25 0.25 1.25 00-574 $84.74 $35.90 $9.21 $3.48 $133.33
G R WIESNER 0.25 0.25 0.25 0.25 0.25 1.25 00-920-02- $25.23 $10.69 $2.74 $1.03 $39.69
24-0161
L L WEYERS 6 6 6 6 6 30 60-500-01 $1005.30$425.87 $109.31 $41.23 $1581.71
00-0402
J J ZABLOCKI 0.25 0.25 0.25 0.25 0.25 1.25 00-920-02- $22.66 $9.60 $2.46 $0.93 $35.65
24-0161
L M STOLL 0.25 0.25 00-920-01- $27.04 $11.45 $2.94 $1.11 $42.54
14
D M SHEEDY 1 1 1 1 1 5 00-920-02- $67.88 $28.76 $7.38 $2.78 $106.80
14
S A SCULLY 0.5 0.5 1 00-920-02- $10.66 $4.52 $1.16 $0.44 $16.78
14
KW WITTKOPF 13 4 4 5 26 63-506-01- $361.40 $153.10 $39.30 $14.82 $568.62
00-0402
K J KOLLMANN 3 16 12 4 4 39 10-500-01- $640.77 $271.44 $69.67 $26.28 $1008.16
00-0402
R R ZIEMER 5 15 8 8 15 51 60-500-01- $1240.32$525.42 $134.86 $50.87 $1951.47
00-0402
N A WATERSTREET 0.25 0.25 2 0.25 0.25 3 13-920-02- $61.79 $26.18 $6.72 $2.53 $97.22
24
J W TOMASIAK 2 10 2 2 2 18 60-500-01- $460.35 $195.01 $50.05 $18.88 $724.29
00-0402
TOTAL 23.7572.25 46 36.25 45 223.25 $4464.02$1891.06 $485.37 $183.07 $7023.52
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 3B
COLALHRS COAL RESALE PROGRAM
KAB 1989
09-19-88
<CAPTION>
FRINGE BUILDING & SUPPLIES &
TOTAL BENEFITS EQUIPMENT TELEPHONE
EMPLOYEE JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL ACOUNT # PAYROLL 42.362% 10.873% 4.101% TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KA BURG 15 15 10 10 5 5 5 5 10 10 10 10 110 00-920-02- $1085.70$459.92 $118.05 $44.52 $1708.19
24-0161
DL FORD .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-920-02- $78.03 $33.06 $8.48 $3.20 $122.77
24-0161
ER MATHEWS .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-574 $212.73 $90.12 $23.13 $8.72 $334.70
GR WIESNER .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-920-02- $63.33 $26.83 $6.89 $2.60 $99.65
24-0161
LL WEYERS 6 6 6 6 6 6 6 6 6 6 6 6 72 60-500-01 $2523.60$1069.05 $274.39 $103.49 $3970.53
00-0402
LM STOLL 0.25 0.25 0.25 0.25 1 00-920-01- $113.15 $47.93 $12.30 $4.64 $178.02
14
DM SHEEDY 1 1 1 1 1 1 1 1 1 1 1 1 12 00-920-02- $170.40 $72.18 $18.53 $6.99 $268.10
14
SA SCULLY 0.5 0.5 0.5 0.5 2 00-920-02- $22.30 $9.45 $2.42 $0.91 $35.08
14
KW WITTKOPF 4 4 5 2 5 4 4 5 33 63-506-01- $479.82 $203.26 $52.17 $19.68 $754.93
00-0402
KJ KOLLMANN 4 4 4 10 4 4 4 4 38 10-500-01- $653.22 $276.72 $71.02 $26.79 $1027.75
00-0402
JW TOMASIAK 2 2 2 10 10 2 2 2 10 2 2 2 48 60-500-01- $1284.00$543.93 $139.61 $52.66 $2020.20
00-0402
RR ZIEMER 8 8 8 15 4 3 3 15 8 8 8 15 103 60-500-01- $2620.32$1110.02 $284.91 $107.46 $4122.71
00-0402
NA .25 .25 .25 .25 .25 .25 .25 .25 .25 2 .25 .25 4.75 13-920-02- $102.32 $43.34 $11.13 $4.20 $160.99
WATERSTREET 24
JJ ZABLOCKI .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-920-02- $56.88 $24.10 $6.18 $2.33 $89.49
24-0161
TOTAL 41. 41. 37. 43. 27. 18. 18. 42. 45.5 38 36. 44.5 435.75 $9465.80$4009.91 $1029.21 $388.19 $14893.11
25 75 5 25 75 5 25 75 75
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 3B
COALHRS COAL RESALE PROGRAM
KAB 1990
09-19-88
<CAPTION>
FRINGE BUILDING & SUPPLIES &
TOTAL BENEFITS EQUIPMENT TELEPHONE
EMPLOYEE JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL ACOUNT # PAYROLL 42.362% 10.873% 4.101% TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KA BURG 15 15 10 10 5 5 5 5 10 10 10 10 110 00-920-02- $1139.60$482.76 $123.91 $46.73 $1793.00
24-0161
DL FORD .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-920-02- $81.93 $34.71 $8.91 $3.36 $128.91
24-0161
ER MATHEWS .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-574 $223.38 $94.63 $24.29 $9.16 $351.46
GR WIESNER .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-920-02- $66.51 $28.17 $7.23 $2.73 $104.64
24-0161
LL WEYERS 6 6 6 6 6 6 6 6 6 6 6 6 72 60-500-01 $2649.60$1122.42 $288.09 $108.66 $4168.77
00-0402
LM STOLL 0.25 0.25 0.25 0.25 1 00-920-01- $118.81 $50.33 $12.92 $4.87 $186.93
14
DM SHEEDY 1 1 1 1 1 1 1 1 1 1 1 1 12 00-920-02- $178.92 $75.79 $19.45 $7.34 $281.50
14
SA SCULLY 0.5 0.5 0.5 0.5 2 00-920-02- $23.42 $9.92 $2.55 $0.96 $36.85
14
KW WITTKOPF 4 4 5 2 5 4 4 5 33 63-506-01- $503.91 $213.47 $54.79 $20.67 $792.84
00-0402
JJ ZABLOCKI .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 .25 3 00-920-02- $59.73 $25.30 $6.49 $2.45 $93.97
24-0161
KJ KOLLMANN 4 4 4 10 4 4 4 4 38 10-500-01- $685.90 $290.56 $74.58 $28.13 $1079.17
00-0402
JW TOMASIAK 2 2 2 10 10 2 2 2 10 2 2 2 48 60-500-01- $1348.32$571.18 $146.60 $55.29 $2121.39
00-0402
RR ZIEMER 8 8 8 15 4 3 3 15 8 8 8 15 103 60-500-01- $2751.13$1165.43 $299.13 $112.82 $4328.51
00-0402
NA .25 .25 .25 .25 .25 .25 .25 .25 .25 2 .25 .25 4.75 13-920-02- $107.45 $45.52 $11.68 $4.41 $169.06
WATERSTREET 24
TOTAL 41. 41. 37. 43. 27. 18. 18. 42. 45.5 38 36. 44.5 435.75 $9938.61$4210.19 $1080.62 $407.58 $15637.00
25 75 5 25 75 5 25 75 75
</TABLE>
<PAGE>
EXHIBIT 4
1 of 2
August 19, 1988
Green Bay
G J Samuelson D1
Please provide me with the proper payroll account(s) charged and the
current hourly wage rate for the attached listing of WPSC
employees. This information is needed by August 25, 1988 and will
be used for rate case/budgeting purposes.
If you have any questions, feel free to give me a call
(1708).
KABurg/dms
Attach
<PAGE>
EXHIBIT 4
2 of 2
WISCONSIN PUBLIC SERVICE CORPORATION
WPSC SUBSIDIARIES AND NON UTILITY VENTURES BUDGET AND FORECAST INFORMATION
1988
Employee Account Number Hourly Wage Rate
D P Bittner
D A Bollom
K A Burg
R C Buttke
S L Carrico
D L Ford
J V Hendersen
T J Huetter
B A Johnson
F J Kicsar
R H Knuth
J H Liethen
E R Mathews
D S Matzke
J J Myers
M I Radtke
D H Rhode
L Rieder
W G Sandberg
W P Sands
P D Schrickel
D M Sheedy
L M Stoll
J W Tomasiak
M Van De Laarschot
N A Waterstreet
L L Weyers
J J Zablocki
G R Wiesner
S A Scully
K W Wittkopf
K J Kollmann
R R Ziemer
J L Waltman
E H Woller
J O Tews
D E Vine
D M Johnston
<PAGE>
<TABLE>
EXHIBIT 5
1993 LABOR LOADINGS
28-Dec-92 EXTERNAL BILLINGS
<CAPTION>
HIGHWAY RELOCATION ALL OTHERS INTERNAL ECONOMIC ANALYSIS NON-UTILITY
DIRECT PAYROLL
- ------------------------------------------------------------------------------------------------------------------------------
RELATED LOADINGS LOADING ACTUAL % OF STRAIGHT OVER SEASONAL/ STRAIGHT OVER SEASONAL/ STRAIGHT OVER SEASONAL/ SEE NOTE
BASE (2) $ BASE TIME TIME TEMP -20 TIME TIME TEMP -20 TIME TIME TEMP -20 (D)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
VACATIONS (2) $7,309,218 7.9 X X X X
HOLIDAYS (2) 4,074,256 4.4% X X X X
FICA TAX (CURRENT RATE) (1) 8,097,385 8.6% X X X X X X X X X X
UNEMPLOYMENT TAXES (2) 280,913 0.3% X X X X X X X
GROUP LIFE INSURANCE
& SIB BENEFITS (2) 608,987 0.7% X X X X
MASTER MEDICAL BENEFITS
(ACTIVE EMPLOYEES) (2) 7,103,175 7.7% X X X X
DENTAL BENEFITS (2) 1,132,020 1.2% X X X X
RETIREMENT PLAN BENEFITS(1) 5,579,692 5.9% X X X X X X X X X X
POST-RETIREMENT MEDICAL
BENEFITS (2) 4,836,218 4.4% X X X X
POST-RETIREMENT DENTAL
BENEFITS (2) 307,851 0.3% X X X X
RECREATION (2) 189,571 0.2% X X X
NON-OCCUPATIONAL
ILLNESS OR INJURY (2) 458,146 0.5% X X X X
OCCUPATIONAL ILLNESS
OR INJURY (2) 75,374 0.1% X X X X X X X
OTHER EMPLOYEE
BENEFIT COSTS (2) 1,108,834 1.2% X X X
SCHOOL & SAFETY MEETINGS(3) 1,213,270 2.2% X X X
RELOCATION AND MOVING
PAYMENTS (2) 264,005 0.3% X X X
DEATH BENEFITS IN
EXCESS OF INSURANCE (2) 16,089 0.0% X X X
EDUCATION AND TRAINING (2) 2,210,399 2.4% X X X X
WORKERS COMPENSATION
BENEFITS (2) 625,530 0.7% X X X X X X X
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
DIRECT LOADINGS (INDOOR) 49.0% 49.0% 14.5% 15.6% 49.0% 14.5% 15.6% 49.0% 14.5% 15.5% 45.1%
PAYMENT FOR TIME NOT
WORKED (4) 27,185 0.1% X X X
INCLEMENT WEATHER (4) 279,649 1.0% X X X
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
52.1% 52.3% 14.5% 15.6% 52.3% 14.5% 15.6% 52.3% 14.5% 15.5% 45.1%
CORPORATE OVERHEAD LOADINGS
PROPERTY INSURANCE (2) 1,930,890 2.1% X X X X
INJURIES AND DAMAGES
INSURANCE (2) 1,859,541 2.0% X X X X
PUBLICATIONS FOR
EMPLOYEES (2) 116,500 0.1% X X X
EXECUTIVE (2) 4,332,215 4.7% X X X X SEE NOTE A ACTUAL
SUPERVISION/TECHNICAL
SUPPORT (2) 18,912,155 42.3% X+DIRECT X+DIRECT X+DIRECT X+DIRECT ACTUAL
CLERICAL/ACCOUNTING (2) 17,291,587 18.8% X X X X ACTUAL
OFFICE SUPPLIES &
TELEPHONE (2) 3,525,514 1.8% X X X X X
GENERAL BUILDING AND
EQUIPMENT COST (2) 9,787,414 10.8% X X X X 3.9
COST OF MONEY 2.8% X X 10.6
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
CORPORATE LOADINGS (INDOOR) 87.2% 84.4% 0.0 84.3% 87.2% 0.0 87.1% 0.0 0.0 0.0 14.5%
SMALL TOOLS (4) 561,914 6.1% X X X X SEE NOTE A
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
CORPORATE LOADINGS (OUTDOOR) 93.3 90.5% 0.0 90.4% 93.3% 0.0 93.2% 0.0 0.0 0.0 14.5%
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL LOADINGS (INDOOR) 136.2% 133.4% 14.5% 99.9% 136.7% 14.5% 107.7% 49.0% 14.5% 15.5% 59.6% ACTUAL
--------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TOTAL LOADINGS (OUTDOOR) 145.6% 142.8% 14.5% 106.0% 145.6% 14.5% 108.8% 52.3% 14.5% 15.5% 59.6% ACTUAL
<FN>
NOTES:
(A) ANY COST/BENEFITS IN THESE CATEGORIES SHOULD BE ANALYZED SEPARATELY AS DISTINCT CAPITALIZED OR EXPENSED ITEMS.
(B)DOLLARS ASSOCIATED WITH BASES BASE 1 94,654,867,83 - TOTAL PRODUCTIVE TIME PLUS OVERTIME
BASE 2 92,185,149.48 - TOTAL PRODUCTIVE TIME
BASE 3 55,145,891.22 - TOTAL W & H PRODUCTIVE PAYROLL
BASE 4 9,177,192.42 - TOTAL LINE AND STREET CREW PRODUCTIVE PAYROLL
(C) SEASONAL OR TEMPORARY EMPLOYEES WORKING LESS THAN 20 HOURS OR SEASONAL EMPLOYEES
(D) USED BY CORPORATE ACCOUNTING ONLY
(E) ACTUALS EQUAL CHARGES DIRECTLY TRACKED TO THE ACTIVITY
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 6
10/07/88
JULY 1988 CHARGES TO ACCOUNTS 123 THORUGH 123
PP7503 SUPERVISORY HOURS + DOLLARS CHARGED TO SELECTED ACCOUNTS
<CAPTION>
LOC DEPT EMP NO ACCOUNT REG HRS OVTM HRS DBTM HRS CALL HRS TOTAL DOLLARS YTD AMOUNT
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 316 12070 1 0012345000000000 .00 .00 .00 .00 135.18 135.18
10 701 70342 2 0012345000000000 .00 .00 .00 .00 17.27 17.27
10 703 37374 3 0012345000000000 .00 .00 .00 .00 1036.95 1036.95
10 703 84749 4 0012345000000000 .00 .00 .00 .00 200.77 200.77
10 703 87429 5 0012345000000000 .00 .00 .00 .00 1394.25 1394.25
10 704 36129 6 0012345000000000 .00 .00 .00 .00 671.16 671.16
10 750 57497 7 0012345000179000 .00 .00 .00 .00 441.41 441.41
10 755 18416 8 0012336000161000 .00 .00 .00 .00 71.90 71.90
10 755 18416 9 0012345000161000 .00 .00 .00 .00 197.02 197.02
10 755 88971 10 0012345000161000 .00 .00 .00 .00 1184.43 1184.43
10 830 12278 11 0012345000000000 .00 .00 .00 .00 2881.73 2881.73
10 851 37630 12 0012345000000000 .00 .00 .00 .00 134.86 134.86
EMP. COUNT 11 TOTOALS 0.00 0.00 0.00 0.00 8366.93 8366.93
TOTAL HOURS 0.00 TOTAL DOLLARS 8366.93 YTD AMOUNT 8366.93
1 D CARLSON
2 R KNUTH
3 R JOHNSON
4 M VAN DE LAARSCHOT
5 N WATERSTREET
6 R JAMES
7 J MYERS
8 D FORD
9 D FORD
10 G WIESNER
11 S CARRICO
12 J JOHNSON
</TABLE>
<PAGE>
EXHIBIT 7
1 OF 3
October 6, 1988
Green Bay
D G DeBouche G5
cc - D L Ford G6
R H Knuth G6
The following are the adjustments that need to be made to various O&M budgets
to reflect labor being charged to nonutility acitivites.
WPS Development, Inc.
Account 1988 1989 1990
- ---------------------- ---- ---- ----
00-184-09-2 $ 1,120.00 $ 2,928.80 $ 3,294.75
00-574 84.74 212.73 223.38
00-920-01-14 312.97 690.46 725.01
00-920-01-24 51.86 75.95 79.75
00-920-01-34 100.95 -- --
00-920-02-24-0161 31.08 78.03 81.93
00-921-03-14 249.22 583.77 645.13
00-926-12-14 643.78 1,508.04 1,666.52
-------- -------- --------
Total $ 2,594.60 $ 6,077.78 $ 6,716.47
========= ========= =========
WPS Communications, Inc.
Account 1988 1989 1990
- ---------------------- ---- ---- ----
00-574 $ 84.74 $ 212.73 $ 223.38
00-920-01-14 594.69 1,565.98 1,644.33
00-920-01-24 176.33 195.30 205.07
00-920-02-14 84.84 213.00 223.65
00-920-02-24-0161 1,501.06 3,072.53 3,226.63
00-920-02-24-0179 209.44 657.12 345.00
00-921-03-14 1,395.26 3,282.09 3,365.97
00-926-12-14 3,604.27 8,478.44 8,695.10
13-920-02-24 905.72 2,315.07 2,431.05
14-920-01-14 4,274.20 10,730.16 11,266.08
16-920-02-14 46.88 147.12 154.44
17-920-20-14 1,648.62 3,300.59 3,262.56
-------- --------- ---------
Total $14,526.05 $34,170.13 $35,043.26
========= ========= =========
NorLight
Account 1988 1989 1990
- ---------------------- ---- ---- ----
00-184-21-20 $ 988.14 $ -- $ --
00-560-00-70 4,963.20 3,304.00 2,378.88
00-566-02-60 9,704.50 4,686.00 --
00-566-02-70 2,203.12 -- --
00-920-01-14 68.26 142.80 149.96
00-920-02-14 16.97 42.60 44.73
00-920-02-24-0161 786.65 649.72 602.68
00-920-02-44 1,871.60 1,174.56 --
00-921-03-14 3,407.03 1,687.94 465.19
00-926-12-14 8,801.12 4,360.34 1,201.71
17-920-02-14 2,660.03 1,525.23 --
--------- -------- ----------
$35,470.62 $17,573.19 $4,843.15
========= ========= ========
<PAGE>
D G De Bouche
October 7, 1988
Page 2
Coal Resale Program
Account 1988 1989 1990
- ---------------------- ---- ---- ----
00-574 $ 84.74 $ 212.73 $ 223.38
00-920-01-14 27.04 113.15 118.81
00-920-02-14 78.54 192.70 202.34
00-920-02-24-0161 503.77 1,283.94 1,347.77
00-921-03-14 653.81 1,386.36 1,455.62
00-926-12-14 1,688.92 3,581.29 3,760.16
10-500-01-00-0402 640.77 653.22 685.90
13-920-02-24 61.79 102.32 107.45
60-500-01-00-0402 2,705.97 6,427.92 6,749.05
63-506-01-00-0402 361.40 479.82 503.91
-------- --------- ---------
Total $6,806.75 $14,433.45 $15,154.39
======== ========= =========
UTECH
Account 1988 1989 1990
- ---------------------- ---- ---- ----
00-920-01-14 $ 842.52 $ 1,083.73 $ 425.08
00-920-02-14 34.53 72.24 75.84
00-921-03-14 128.46 169.30 73.38
00-926-12-14 331.82 437.35 189.51
-------- --------- ---------
Total $1,337.33 $ 1,762.62 $ 763.81
======== ========= =========
TOTAL
NONUTILITY 1988 1989 1990
- ---------------------- ---- ---- ----
00-184-09-2 $ 1,120.00 $ 2,928.80 $ 3,294.75
00-184-21-20 988.14 -- --
00-560-00-70 4,463.20 3,304.00 2,378.88
00-566-02-60 9,704.50 4,686.00 --
00-566-02-70 2,203.12 -- --
00-574 254.22 638.19 670.14
00-920-01-14 1,845.48 3,596.12 3,063.19
00-920-01-24 228.19 271.25 284.82
00-920-01-34 100.95 -- --
00-920-02-14 214.88 520.54 546.56
00-920-02-24-0161 2,822.56 5,084.22 5,259.01
00-920-02-24-0179 209.44 657.12 345.00
00-920-02-44 1,871.60 1,174.56 --
00-921-03-14 5,833.78 7,109.46 6,005.29
00-926-12-14 15,069.91 18,365.46 15,513.00
10-500-01-00-0402 640.77 653.22 685.90
13-920-02-24 967.51 2,417.39 2,538.50
14-920-01-14 4,274.20 10,730.16 11,266.08
16-920-02-14 46.88 147.12 154.44
17-920-02-14 4,308.65 4,825.82 3,262.56
60-500-01-00-0402 2,705.97 6,427.92 6,749.05
63-506-01-00-0402 361.40 479.82 503.91
-------- --------- ---------
Total $60,735.35 $74,017.17 $62,521.08
======== ========= =========
<PAGE>
D G De Bouche EXHIBIT 7
October 7, 1988 3 of 3
Page 3
I would appreciate a confirmation from you indicating the adjustments that
were made.
Please contact me if you have any questions.
/s/ George Wiesner
GRWiesner/krm
<PAGE>
<TABLE>
12/01/93 WISCONSIN PUBLIC SERVICE CORPORATION EXHIBIT F
SOURCES AND USES OF FUNDS
<CAPTION>
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
***************
SOURCES OF CAPITAL
***************
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Internal Funds:
Depreciation & Amortization 67,990 71,696 71,047 72,065 82,090 92,352 93,776 96,554 99,046 104,198
Investment Tax Credit, Net (1,866) (1,848) (1,839) (1,780) (1,744) (1,734) (1,731) (1,728) (1,725) (1,722)
Amortization of Nuclear Fuel 8,104 7,801 8,100 7,801 7,602 6,803 8,500 8,802 9,200 9,740
Retained Earnings 13,388 13,123 14,749 17,518 19,608 20,962 22,488 24,210 25,001 26,664
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Internal 87,616 90,772 92,057 95,604 107,556 118,383 123,033 127,838 131,522 138,880
External Financing:
Long-Term Debt 0 0 75,000 75,000 0 75,000 0 0 75,000 75,000
Short Term Debt, Net 3,197 28,113 8,980 8,054 14,975 (36,363) (3,221) 10,075 (15,824) 3,282
Preferred Stock 0 25,000 0 0 0 0 0 0 30,000 0
Common Stock 0 0 40,011 40,015 0 0 0 0 0 0
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total External, Net 3,197 53,113 123,991 123,069 14,975 38,637 (3,221) 10,075 89,176 78,282
Total Sources 90,813 143,885 216,048 218,673 122,531 157,020 119,812 137,913 220,698 217,162
======== ======= ======= ======= ======= ======= ======= ======= ======= =======
**************
CAPITAL REQUIREMENTS
**************
Construction Expend excl afudc 67,542 103,988 173,550 128,717 80,856 87,433 74,749 84,839 114,446 107,840
AFUDC 477 1,730 2,661 24,447 1,394 727 126 1,315 4,432 3,598
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Construction Exp. 68,019 105,718 176,211 153,164 82,250 88,160 74,875 86,154 118,878 111,438
Nuclear Fuel Expenditures 6,461 5,382 5,676 6,803 5,836 7,898 8,801 8,890 9,584 10,748
Nuclear Decommissioning-Ext.
Fund 5,685 7,788 8,402 8,978 9,655 10,397 11,140 11,945 12,816 13,552
Bond Maturities & Sinking Funds 0 0 0 23,500 0 24,000 0 0 50,000 50,000
Changes in Working Capital
& Other 11,143 23,277 23,908 24,234 22,665 24,305 22,606 28,402 26,752 28,627
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Utility Cap. Reqmts. 91,308 142,165 214,197 216,679 120,406 154,760 117,422 135,391 218,030 214,365
======== ======= ======= ======= ======= ======= ======= ======= ======= =======
Capital Not Required for
Reinvestment in Utility (495) 1,720 1,851 1,994 2,125 2,260 2,390 2,522 2,668 2,797
Utility Capitalization 827,165 891,681 1,028,571 1,143,665 1,176,1231,209,462 1,226,340 1,258,103 1,319,612 1,371,761
Utility Capital Structure:
Short Term Debt 4.2 7.0 7.0 7.0 8.1 4.8 4.5 5.2 3.7 3.8
Long Term Debt 34.3 31.8 34.9 35.9 34.8 38.1 37.6 36.7 36.8 37.3
Preferred Equity 6.2 8.5 7.4 6.7 6.5 6.3 6.2 6.1 8.0 7.7
Common Equity 55.3 52.6 50.8 50.5 50.6 50.7 51.7 52.1 51.4 51.2
</TABLE>
<PAGE>
<TABLE>
12/01/93
WISCONSIN PUBLIC SERVICE CORPORATION
Financial Forecast Scenario Assumptions
---------------------------------------
Major Plant Expenditures ($000):
<CAPTION>
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003*
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Rhinelander 1997 3,576 29,554 90,702 46,503 N/A
2003 Combined Cycle Coal Plant 293 32,678 55,859 N/A
50% CWIP in ratebase.
Return on Equity: $2.36 12% 12% 12% 12% 12% 12% 12% 12% N/A
Dividends: $1.80 $1.84 $1.88 $1.92 $1.96 $2.00 $2.04 $2.08 70% N/A
Market to Book: 1.4 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 N/A
Marginal Interest Rates:
Long Term (%) 8.0 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 N/A
Short Term (%) 4.5 6.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 N/A
Note: Includes 35% federal income tax rate assumption
* 2003 information was developed using least squares trend analysis.
</TABLE>
EXHIBIT D-3
(WPS Letterhead)
March 10, 1994
Ms. Lois D. Cashell, Secretary
Federal Energy Regulatory Commission
825 North Capitol Street, N.E.
Washington, D.C. 20426
Re: Corporate Reorganization involving WPS Resources Corporation
and Wisconsin Public Service Corporation
------------------------------------------------------------
Dear Ms. Cashell:
We enclose herewith for filing:
(a) one executed original with certified exhibits of the application of
Wisconsin Public Service Corporation for an order in connection with a
corporate reorganization;
(b) five copies of the application with exhibits; and
(c) two additional copies of the application and exhibits for the affected
States of Wisconsin and Michigan.
It is our understanding that no filing fee is required in connection with this
filing.
If you have any questions regarding this filing, please contact the
undersigned.
Very truly yours,
/s/ Robert H. Knuth
Robert H. Knuth
Assistant Vice President-Secretary
Enclosures
<PAGE>
UNITED STATES OF AMERICA
BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION
Wisconsin Public Service Corporation Docket No. ___________
---------------------------------------------------
APPLICATION OF WISCONSIN PUBLIC SERVICE CORPORATION
PURSUANT TO SECTION 203 OF THE FEDERAL POWER ACT
FOR AN ORDER GRANTING AUTHORIZATION
FOR PROPOSED CORPORATE RESTRUCTURING
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, WI 53202
ATTORNEYS FOR THE APPLICANT
<PAGE>
UNITED STATES OF AMERICA
BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION
Wisconsin Public Service Corporation Docket No. ___________
---------------------------------------------------
APPLICATION OF WISCONSIN PUBLIC SERVICE CORPORATION
PURSUANT TO SECTION 203 OF THE FEDERAL POWER ACT
FOR AN ORDER GRANTING AUTHORIZATION
FOR PROPOSED CORPORATE RESTRUCTURING
I
INTRODUCTION AND STATEMENT OF POSITION
Wisconsin Public Service Corporation ("WPSC") hereby
applies, pursuant to Section 203 of the Federal Power Act and 18
CFR Part 33, for an order granting authorization to implement a
plan of corporate restructuring which will result in the formation
of a holding company system. WPSC's proposed corporate
restructuring will result in a flexible, responsive business
structure which separates its utility business from non-utility
businesses. As demonstrated in this application, the proposed
corporate restructuring will be consistent with the public
interest.
<PAGE>
A. WPSC'S Current Corporate Structure
----------------------------------
WPSC is a public utility incorporated in 1883 under the
laws of the State of Wisconsin. It is engaged in the production,
transmission, distribution and sale of electricity and in the
purchase, distribution, transportation and sale of gas in
northeastern Wisconsin and an adjacent part of Upper Michigan.
WPSC's operations are subject to regulation by the Federal Energy
Regulatory Commission ("Commission") for borrowings and the
issuance of securities not regulated by the PSCW, the
classification of accounts, rates to wholesale customers,
interconnection agreements and the acquisitions and sales of
certain utility properties.
WPSC presently has three wholly-owned subsidiaries, WPS
Communications, Inc. ("Communications"), Packerland Energy
Services, Inc. ("Packerland") and WPS Resources Corporation ("WPS
Resources"). Communications was organized in 1985 to be a partner
in the NorLight fiber optics telecommunications partnership
("NorLight"). In 1991 the assets of NorLight were sold, and a
portion of the purchase price was set aside to fund an escrow out
of which the purchaser can be reimbursed for certain liabilities.
In December 1994 the escrow will terminate and any funds then held
in the escrow and not payable to the purchaser of the NorLight
assets will be distributed to the former NorLight partners. It is
anticipated that Communications will be dissolved at that time.
WPSC is proposing to utilize Packerland, until recently an inactive
subsidiary of WPSC, as a vehicle to provide energy supply
-2-
<PAGE>
consulting and natural gas supply/transportation procurement
services for commercial and industrial customers within and outside
WPSC's traditional service area. Packerland currently has only
nominal assets. WPS Resources has been organized by WPSC to be the
holding company in its proposed holding company system.
WPSC's current corporate structure is shown in the
following table:
The following graphic is affixed:
The graphic on page three is a box chart showing the current
corporate structure with Packerland Energy Services, Inc., WPS
Resources Corporation and WPS Communications, Inc. as subsidiaries
of Wisconsin Public Service Corporation.
B. The Proposed Corporate Restructuring
------------------------------------
WPSC proposes to carry out a corporate restructuring plan
which will result in the formation of a holding company system in
which WPSC will be a wholly-owned subsidiary of the recently
incorporated WPS Resources. The corporate restructuring into a
holding company system will be implemented as described below.
An agreement and plan of share exchange (the "Plan") has
been entered into between WPSC and WPS Resources and will be
submitted for approval by the holders of WPSC common stock at the
annual meeting of shareholders of WPSC scheduled to be held on
-3-
<PAGE>
May 5, 1994. If approved by the holders of WPSC common stock and
upon satisfaction of various other conditions specified in the
Plan, including the receipt of required regulatory approvals, at
the effective time of the Plan one share of WPS Resources common
stock will be exchanged for each outstanding share of WPSC common
stock. As a consequence of the share exchange, WPSC will become a
wholly-owned subsidiary of WPS Resources and all of the holders of
common stock of WPSC will become shareholders of WPS Resources.
Following the share exchange, WPSC will transfer to WPS Resources
as a dividend all of the shares of common stock of Communications
and Packerland, and all shares of WPS Resources held by WPSC will
be cancelled.
The following table shows the WPS Resources corporate
structure after the corporate restructuring is completed:
The following graphic is affixed:
The graphic on page four is a box chart showing the
proposed corporate structure with Packerland Energy Services, Inc.,
Wisconsin Public Service Corporation and WPS Communications, Inc.,
as subsidiaries of WPS Resources Corporation.
C. Required Showing
----------------
This application is being made in recognition of the
Commission's position first expressed in Central Vermont Public
Service Corporation, Docket No. EL 87-10-000, 39 FERC Sec. 61,295,
-4-
<PAGE>
that Commission approval under Section 203 of the Federal Power Act
is required prior to a utility effecting a reorganization. Section
203(a) provides that Commission approval may be granted only upon
a finding that the proposed transaction would be consistent with
the public interest. The Commission has consistently held that
Section 203(a) does not require a showing of positive benefit to
the public to support a finding that a proposed reorganization is
consistent with the public interest; only a showing of
compatibility is required. Savannah Electric & Power Company, 40
FERC Sec. 61,269; Southern California Edison Company, 42 FERC Sec. 62,054.
In the above-referenced cases, the Commission found the
following safeguards sufficient to prevent any possible detriment
to utility customers or sufficient to show that the proposed
reorganization is consistent with the public interest:
Adoption of accounting and cost allocation
procedures to prevent cross-subsidization
between the utility and the holding company;
Access to the books and records of the
regulated utility and subsidiaries by the
state regulatory agency; and
Continued Commission regulatory authority over
rate-related issues arising after the
reorganization.
In addition, the Commission has found proposed reorganizations
consistent with the public interest where some or all of the
following would result:
Insulate the utility business from risk
inappropriate to its nature and purpose;
-5-
<PAGE>
Allow the holding company to develop new lines
of business and to gain access to new sources
of capital;
Provide better protection for the utility and
its shareholders; and
Allow the utility to better respond to utility
and non-utility business opportunities.
These safeguards and benefits of reorganization are
present in WPSC's corporate restructuring plan. In WPSC's
"Statement of Facts Relied Upon by Applicant to Show that the
Proposed Corporate Restructuring Plan is Consistent with the Public
Interest" set forth as Appendix 1 hereto, WPSC demonstrates that
the books and records of both the holding company and its
subsidiaries as they relate to transactions with the utility will
be available to the appropriate regulatory commissions; the
Commission and the Public Service Commission of Wisconsin
("Wisconsin Commission") will continue to have the ability to
exercise regulatory authority to consider rate-related issues
arising after the Plan and corporate restructuring is implemented;
WPSC will adhere to certain specific policies that are designed to
ensure that ratepayers are protected from any adverse effects as a
result of the proposed corporate restructuring; accounting and cost
allocation procedures will be implemented to prevent
cross-subsidization between WPSC and affiliates; and the direct
control and operation of jurisdictional facilities will be
unaffected by the Plan and corporate restructuring.
The proposed corporate restructuring will not affect the
Commission's exercise of its regulatory authority with respect to
any jurisdictional issues arising after the Plan and corporate
-6-
<PAGE>
restructuring is implemented. Based on the showing contained in
this application, the Commission should find that the proposed Plan
and corporate restructuring is consistent with the public interest
and should be authorized.
II
INFORMATION REQUIRED PURSUANT TO 18 CFR SECTION 33.2
In support of its application and pursuant to the Rules
and Regulations of the Commission set forth in 18 CFR Section 33.2,
WPSC provides the following information:
(a) The exact name and address of the principal business
office.
WISCONSIN PUBLIC SERVICE CORPORATION
700 North Adams Street
P. O. Box 19001
Green Bay, Wisconsin 54307
(b) Name and address of the person authorized to receive
notices and communications in respect to application.
DANIEL A. BOLLOM, President
and Chief Executive Officer
Wisconsin Public Service Corporation
700 North Adams Street
P. O. Box 19001
Green Bay, Wisconsin 54307
(c) Designation of the territories served by counties
and states:
States: WISCONSIN MICHIGAN
Counties: Brown Menominee
Calumet
Clark
Door
Kewaunee
Langlade
Lincoln
Manitowoc
Marathon
Marinette
Oconto
Oneida
Outagamie
Portage
Sheboygan
-7-
<PAGE>
Vilas
Waupaca
Winnebago
(d) A general statement briefly describing the
facilities owned or operated for transmission of electric energy in
interstate commerce or the sale of electric energy at wholesale in
interstate commerce.
WPSC owns and operates electric properties comprising an
integrated system of production, transmission and distribution
facilities throughout the territory it serves. Generating
facilities consist of two steam plants (at Green Bay, and south of
Wausau, Wisconsin) with total rated capacity of 829,100 kw, a 41.2%
share of the Kewaunee Plant (nuclear) at Kewaunee, Wisconsin, which
WPSC operates, with a rated capacity of 535,000 kw (the WPSC share
is 221,000 kw), a 31.8% share of the Columbia Energy Center at
Portage, Wisconsin, owned jointly with Wisconsin Power and Light
Company, the operator, and Madison Gas and Electric Company, with
a rated capacity of 1,054,000 kw (WPSC's share is 335,200 kw), a
31.8% share of the Edgewater Steam Plant Unit #4 at Sheboygan,
Wisconsin, owned jointly with Wisconsin Power and Light Company,
the operator, with a rated capacity of 330,000 kw (WPSC's share is
104,940 kw), combustion turbines of 51,000 kw and 21,500 kw,
respectively, south of Wausau, Wisconsin, two combustion turbines
of 41,850 kw each and a 68% share in a combustion turbine of 83,500
kw owned jointly with Marshfield Electric and Water Department (the
WPSC share is 56,780 kw) all located near Marinette, Wisconsin, 15
hydroelectric plants (14 in Wisconsin and one on the border stream
between Wisconsin and Michigan) with aggregate rated capacity of
64,786 kw, a 4,000 kw diesel plant at Eagle River, Wisconsin, and
a 40 kw wind turbine located near Kewaunee, Wisconsin. Its
transmission and distribution facilities include 52 transmission
-8-
<PAGE>
substations, 91 distribution substations and approximately 21,870
route miles of transmission and distribution lines. WPSC is
interconnected with Wisconsin River Power Company, has 13
interconnections in Wisconsin for purposes of power pooling
(Wisconsin Power and Light Company and Madison Gas and Electric
Company), and 24 interconnections (22 in Wisconsin and two in
Michigan) with nonaffiliated neighboring utilities, principally for
the purpose of sharing reserve capacity and for emergencies. WPSC
also has ten interconnections to serve three neighboring municipal
utilities. Gas facilities include approximately 3,409 miles of
main, 65 gate and city regulator stations and 173,835 services.
Except for electric lines crossing the common border of Wisconsin
and Michigan necessary to interconnect the various parts of its
system, WPSC does not have any electric transmission lines which
deliver or receive electric energy at the borders of such states.
About 99% of utility plant is located in Wisconsin, and the balance
is in Michigan.
(e) Whether the application is for disposition of
facilities by sale, lease or otherwise, a merger or consolidation
of facilities, or for purchase or consolidation of facilities, or
for purchase or acquisition of securities of a public utility, also
a description of the consideration if any, and the method of
arriving at the amount thereof.
WPSC is requesting authorization under Section 203 of the
Federal Power Act to accomplish the proposed corporate
restructuring pursuant to the plan described in Section I B. of
this application. The proposed corporate restructuring plan would
involve the exchange of one share of common stock of WPS Resources
for each outstanding share of common stock of WPSC. After the
-9-
<PAGE>
share exchange is completed, the current holders of common stock of
WPSC will hold common stock of WPS Resources. WPSC will own and
operate the same public utility facilities that it currently owns
and operates but will transfer to WPS Resources all of the common
stock of two non-utility subsidiaries, WPS Communications, Inc. and
Packerland Energy Services, Inc. No consideration will be paid for
the WPSC common stock other than the common stock of WPS Resources.
(f) A statement of facilities to be disposed of,
consolidated or merged, giving a description of their present use
and of their proposed use after disposition, consolidation or
merger. State whether the proposed disposition of facilities or
plan for consolidation or merger includes all the operating
facilities of the parties to the transaction.
As noted in Section (e) above, after the share exchange
and corporate restructuring, WPSC, as a subsidiary of WPS
Resources, will own the same public utility facilities that it
currently owns and operates including the assets described in
section (d) hereof.
(g) A statement (in the form prescribed by the
Commission's Uniform System of Accounts for Public Utilities and
Licenses) of the cost of the facilities involved in the sale, lease
or other disposition or merger of consolidation. If the original
cost is not known, an estimate of original cost and, insofar as
possible, open records or data of the applicant or its predecessors
must be furnished, together with a full explanation of the manner
in which such estimate has been made, and a description and
statement of the present custodian of all existing pertinent data
and records.
A statement of the cost of the facilities involved in the
Corporate Restructuring is set forth in Exhibit C hereto and is
incorporated herein by reference. All existing pertinent data and
records are in the custody of Daniel P. Bittner, vice president-
finance and principal financial officer of WPSC.
-10-
<PAGE>
(h) A statement as to the effect of the proposed
transaction upon any contract for the purchase, sale or interchange
of electric energy.
The share exchange and corporate restructuring will have
no effect on any contract for the purchase, sale or interchange of
electric energy.
(i) A statement as to whether or not any application
with respect to the transaction or any part thereof is required to
be filed with any other Federal or State regulatory body.
In order to implement the proposed share exchange and
corporate restructuring, it will be necessary to secure a
certificate of approval from the Public Service Commission of
Wisconsin. An application for such a certificate of approval has
been filed. WPSC will also request the approval of the Nuclear
Regulatory Commission, due to the WPSC's ownership of a 41.2%
interest in and operation of the Kewaunee Nuclear Power Plant and
of the Securities and Exchange Commission ("SEC") under the Public
Utility Holding Company Act of 1935 inasmuch as the proposed share
exchange will involve the acquisition by WPSC Resources of all of
the common stock of WPSC and indirectly of 33.1% of the capital
stock of Wisconsin River Power Company presently owned by WPSC,
both of which are public utilities. WPS Resources has filed with the
SEC a registration statement on Form S-4 registering the
shares of its common stock to be issued in exchange for WPSC
Common Stock. The registration statement was declared effective
on March 3, 1994. The prospectus contained in the registration
statement also constitutes the proxy statement for WPSC's Annual
Meeting of Shareholders scheduled for May 5, 1994, at which
meeting WPSC will seek to obtain the approval of the share
exchange and corporate restructuring from its holders of common stock.
-11-
<PAGE>
WPS Resources will seek from the SEC an exemption from
the provisions of the Public Utility Holding Company Act of 1935 as
a predominantly intrastate holding company under Section 3(a)(1)
thereof.
(j) The facts relied upon by applicants to show that the
proposed disposition, merger or consolidation of facilities or
acquisition of securities will be consistent with the public
interest.
Section I.C. of this Application and appendix 2 contain
a detailed statement outlining the facts relied upon by WPSC to
show that its proposed corporate restructuring plan is consistent
with the public interest.
(k) A brief statement of franchises held showing date of
expiration if not perpetual.
WISCONSIN
- ---------
WPSC'S electric and gas businesses in cities and villages
in Wisconsin in which it renders either such service to the general
public are conducted under indeterminate permits as provided by the
laws of Wisconsin. Such indeterminate permits are exclusive except
to the extent that the Public Service Commission, after a public
hearing, may determine that public convenience and necessity
require the granting of a competitive permit; and operation
thereunder subjects WPSC's properties to municipal or power
district right of purchase for such just compensation and under
such terms and conditions as may be determined by the Wisconsin
Commission, subject to judicial review. Electric and gas
-12-
<PAGE>
operations in Wisconsin townships, as distinguished from
incorporated cities and villages, are generally authorized by state
statute granting electric and gas utilities the right to maintain
their systems in the highways and by the consent of town boards;
service to existing electric customers in township territory is
protected against competition by other private or municipal
utilities or cooperative associations unless the Commission finds
service to be inadequate or rates unreasonable.
HYDROELECTRIC AUTHORIZATIONS
- ----------------------------
The dams associated with WPSC's hydroelectric plants are
authorized, under state laws or legislative acts or state permits
granted under Chapter 31, Wisconsin Statutes, as set forth in the
following schedule. Under the provisions of said Chapter 31, upon
the expiration of thirty years after the date of each permit
granted thereby, the property of WPSC used and useful under such
permit is subject to acquisition by the State or any municipality
upon payment of cost of reproduction in its then existing
condition, together with the value of the dam site and flowage
rights as determined by the Wisconsin Commission as of the time
such permit was granted, plus the cost of additional flowage rights
subsequently acquired. Such thirty-year period has expired as to
all plants affected thereby.
WPSC holds licenses under the Federal Power Act in
respect to 13 of its 15 dams, with expiration dates ranging up to
2030. The remaining two projects (Merrill and Hat Rapids) which
-13-
<PAGE>
were previously licensed, became exempt from the licensing
requirements of the Federal Power Act by operation of regulations
issued under certain provisions of the Energy Security Act of 1980,
which apply to projects of 5 MW or less. The licenses for these
two projects have been surrendered.
Applications for relicensing under the Federal Power Act
were filed for eight projects in December 1991. The Wausau project
license was filed in June 1993. By virtue of mutual waivers under
"minor project" licenses, regulatory requirements for a new license
or extension may not apply to the Jersey, Peshtigo and Potato
Rapids Projects, the licenses for which expired in 1993.
MICHIGAN
- --------
Approximately 2% of WPSC's total operating revenues are
derived from electric and gas service in Michigan, principally in
the City of Menominee. WPSC claims a vested right to occupy the
streets, alleys and public places of that city for electric
operations, and has a franchise for natural gas service in that
city for a ten year period expiring in 2000. WPSC has franchises
for electric and gas service in Menominee and Ingallston Townships
in Menominee County, Michigan. Electric service in six other
Michigan townships (which account for approximately 1/7 of 1% of
WPSC's total operating revenues) is generally conducted under
expired franchises or without franchise. Continuance of operations
in cities and townships is protected under the Michigan Statutes
against competition by utilities (other than municipal
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<PAGE>
corporations), unless the Michigan Public Service Commission, after
public hearings, determines that public convenience and necessity
requires service by a competing utility.
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<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION
Schedule of Hydroelectric Plants of WPSC
and Authorizations for Dams Associated Therewith
------------------------------------------------
Installed
Name Capacities (Kw) Authorization
---- --------------- -------------
Alexander 4200 (Permit WP-200, June 4, 1924
(Permit WP-343, June 12, 1929
(FPC license dated April 25, 1950-
Project No. 1979, Wisconsin; expired
June 30, 1974. Operated under
annual licenses until April 1, 1985,
when new license (expiring June 30,
2004) was issued
Caldron Falls * 6400 (Permit WP-186, September 20, 1923
(FPC license dated June 11, 1969-
Project No. 2525, Wisconsin; expires
December 31, 1993
Grandfather Falls 17240 (Ch. 464, Laws of 1905
(Ch. 328, Laws of 1907
(Permit 2-WP-256, June 23, 1936
(Permit 2-WP-357, June 14, 1938
(FPC license dated February 26,
1951-Project No. 1966; new license
issued April 14, 1988, expires
March 31, 2018
Hat Rapids 1700 (Ch. 239, Laws of 1903
(Exempt from licensing requirements
of Federal Power Act
High Falls * 7000 (Ch. 261, Laws of 1899
(FPC license dated January 12,
1976-Project No. 2595, Wisconsin;
expires December 31, 1993
Jersey * 512 (Ch. 346, Laws of 1887
(Permit 2-WP-33, December 16, 1931
(FPC license dated August 9, 1966-
Project (Minor) No. 2476, Wisconsin;
expires December 31, 1993
Johnson Falls * 3520 (Permit WP-153, December 16, 1921
(FPC license dated August 21, 1968-
Project No. 2522, Wisconsin; expires
December 31, 1993
Merrill 2340 (Ch. 118, Laws of 1874
(Exempt from licensing requirements
of Federal Power Act
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<PAGE>
Installed
Name Capacities (Kw) Authorization
---- --------------- -------------
Otter Rapids 700 (Ch. 483, Laws of 1905
(FPC license dated January 25, 1951-
Project No. 1957, Wisconsin; expired
June 30, 1970. License (Minor)
dated August 8, 1975; take-over
terms of major license; expired
June 30, 1990. New license
effective July 1, 1990; expires
June 30, 2030
Peshtigo * 584 (General Laws
(FPC license dated August 8, 1968-
Project (Minor) No. 2581, Wisconsin;
expires December 31, 1993
Potato Rapids * 1380 (Permit WP-133, June 9, 1920
(FPC license dated August 22, 1968-
Project (Minor) No. 2560, Wisconsin;
expires December 31, 1993
Sandstone Rapids * 3840 (Permit WP-214, January 7, 1925
(FPC license dated January 14, 1969-
Project No. 2546, Wisconsin; expires
December 31, 1993
Tomahawk 2600 (Ch. 12, laws of 1887
(Permit 2-WP-320, August 26, 1937
(FPC license dated September 29,
1948-Project No. 1940, Wisconsin
and Amendment thereto dated July 20,
1950; expires December 31, 1986.
New license granted, effective
January 1, 1987; expires
December 31, 2016
Wausau** 5400 (Ch. 82, Laws of 1854
(Permit WP-143, October 13, 1920
(Permit WP-342, January 15, 1930
(FPC license dated May 10, 1955-
Project No. 1999, Wisconsin; expired
June 30, 1970. New license dated
April 2, 1975; expires June 30,
1995.
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<PAGE>
Installed
Name Capacities (Kw) Authorization
---- --------------- -------------
Grand Rapids * 7020 (Act. No. 443, Local Acts of
Michigan, 1905
(Grant by Menominee River Boom
Company, April 28, 1905
(Section 1777, Wisconsin Statutes,
1878
(FPC license dated August 20, 1965-
Project No. 2433, Wisconsin and
Michigan; expires December 31, 1993
* Application for relicense was filed in December 1991.
These applications have been accepted by FERC for
filing. At December 31, 1993, the FERC had not acted
on the applications. In January of 1994, the FERC
authorized the continued operation of these projects,
under the terms and conditions of the prior licenses,
on a year-to-year basis until new licenses are issued.
** Application for relicense was filed in June 1993.
Notes: (1) WP permits are water power permit grants evidenced by
orders of the Public Service Commission of Wisconsin
or its predecessor Railroad Commission of Wisconsin.
(2) References to Laws are to Wisconsin Session Laws
unless otherwise indicated.
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<PAGE>
(l) A form of notice suitable for publication in the
Federal Register which will briefly summarize the facts contained
in the application in such a way as to acquaint the public with its
scope and purpose.
A form of notice suitable for publication in the Federal
Register which briefly summarizes the facts contained in the
application is contained in Appendix 2.
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<PAGE>
APPENDIX 1
STATEMENT OF FACTS RELIED UPON BY APPLICANT TO SHOW
THAT THE PROPOSED CORPORATE RESTRUCTURING PLAN
IS CONSISTENT WITH THE PUBLIC INTEREST
Wisconsin Public Service Corporation ("WPSC") has been an
operating public utility for over a century. WPSC serves
approximately 347,000 electric customers and 190,100 gas customers
in a 10,000 square mile service area in northeastern Wisconsin and
an adjacent part of Upper Michigan. The largest cities served are
Green Bay, Sheboygan, Oshkosh and Wausau, with populations ranging
from approximately 58,000 to approximately 138,000.
Today, WPSC faces a changing industry and unprecedented
business challenges. WPSC's proposed corporate restructuring into
a holding company system will place it in a position to meet new
business opportunities while maintaining quality service to its
customers in this new industry environment.
During the past several years the power production
business has been opened to competition from various nontraditional
and less regulated power producers such as cogenerators and
independent power producers. WPSC is meeting new competition in
retaining present customers and in marketing power not presently
needed to reliably serve those customers. WPSC's success in
adapting to this changing environment will determine its ability to
continue to supply reliable electric power at reasonable cost. A
flexible, responsive business structure is needed in order to
remain viable in this business environment.
The proposed share exchange will result in the creation
of a holding company system and will provide such a structure.
This will be consistent with the public interest because:
1. No jurisdictional facilities are being transferred
from Wisconsin Public Service Corporation ("WPSC") to any other
party, and WPSC will continue to operate as a public utility in an
efficient and responsible manner consistent with the public
interest, subject to the jurisdiction of the Federal Energy
Regulatory Commission, the Public Service Commission of Wisconsin
(the "Wisconsin Commission") and the Michigan Public Service
Commission.
2. There will be no change in the capital structure of
WPSC with the exception of the transfer of the outstanding shares
of Packerland Energy Services, Inc. (which has no significant
assets) and WPS Communications, Inc. (which has a net worth of
approximately $1,424,000) to WPS Resources Corporation ("WPS
Resources"). WPS Resources will own all of the outstanding common
stock of WPSC. WPSC's preferred stock, first mortgage bonds and
other obligations will remain outstanding as direct obligations of
WPSC.
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<PAGE>
3. The formation of the holding company system is
subject to regulation by the Public Service Commission of Wisconsin
pursuant to Section 196.795 of the Wisconsin Statutes (the
"Wisconsin Holding Company Act"). Following the formation of the
holding company system WPSC Resources will in certain circumstances
be subject to regulation by the Wisconsin Commission.
Among the provisions of the Wisconsin Holding Company Act
are provisions briefly summarized as follows: (a) prohibition on
any person forming a holding company or acquiring or holding more
than 10% of the outstanding voting securities of a holding company,
without Wisconsin Commission approval; (b) authorization for the
Wisconsin Commission, if it finds the capital of any public utility
affiliate will be impaired by payment of a dividend, to order the
affiliate to limit or cease payment of dividends to the holding
company; (c) provision that, while a holding company or a non-
utility affiliate is not subject to the general regulatory
jurisdiction of the Wisconsin Commission, the Wisconsin Commission
has full access to any document or other information to the extent
relevant to the Wisconsin Commission's performance of its duties in
respect of public utility affiliates; (d) prohibition of various
transactions by a public utility affiliate with others in the
holding company system, including lending money, guaranteeing
obligations, certain combined advertising, providing utility
service on terms different from those for other consumers in the
same class, and without Wisconsin Commission approval after
establishment that the utility affiliate will be paid at fair
market value, certain sales or leases of real property and use of
services of utility employees; (e) prohibitions against (i) any
public utility affiliate providing any non-utility product or
service in a manner or at a price that unfairly discriminates
against any competing provider, (ii) any non-utility activity being
subsidized materially by the customers of any public utility in the
system, (iii) the operation of the system in any way which
materially impairs the credit, ability to acquire capital on
reasonable terms or ability to provide safe, reasonable, reliable
and adequate utility service of any public utility affiliate in the
system, (iv) any transfer by a public utility affiliate to any
other system company of any confidential public utility
information, including customer lists, for use for any non-utility
purpose, unless the Wisconsin Commission has approved the transfer,
and (v) any termination of the system's interest in any public
utility affiliate without Wisconsin Commission approval; and (f)
limitations on the sale, lease, installation or maintenance by non-
utility and utility affiliates of certain appliances without
Wisconsin Commission approval. Other statutory provisions which
existed prior to the Wisconsin Holding Company Act include
requirements for submission to the Wisconsin Commission for
approval of certain contracts or other arrangements for furnishing
property or services between a public utility and an affiliate.
The Wisconsin Holding Company Act limits diversification,
in that (in summary) the net book value of the assets (other than
investments in system affiliates) of all non-utility affiliates may
not exceed the sum of 25% of the net book value of all electric
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<PAGE>
utility affiliates and a percentage, to be determined by the
Wisconsin Commission (but not less than 25%), of the net book value
of all other public utility affiliates, provided that for the first
36 months after the holding company formation non-utility assets
are limited to 40% of the maximum amount allowed under the
foregoing provisions.
Further, the Wisconsin Holding Company Act requires the
Wisconsin Commission, no sooner than 36 months after holding
company formation, and at least once every three years thereafter,
to investigate the impact of the operation of every holding company
system formed after November 28, 1985, on every public utility
affiliate in the system and to determine whether each non-utility
affiliate does, or can reasonably be expected to do, at least one
of the following: (a) substantially retain, attract or promote
business activity or employment or provide capital to businesses
within the service territory of any public utility affiliate or
certain others, (b) increase or promote energy conservation or
develop, produce or sell renewable energy products or equipment,
(c) conduct a business that is functionally related to the
provision of utility service or to the development or acquisition
of energy resources, or (d) develop or operate commercial or
industrial parks in the service territory of any public utility
affiliate.
Following approval of a holding company, the Wisconsin
Commission is authorized under the Wisconsin Holding Company Act to
modify any terms of, or add terms to, the approval. Furthermore,
the Wisconsin Commission is authorized to order a holding company
to terminate its interest in a public utility affiliate if the
Wisconsin Commission finds that, based upon clear and convincing
evidence, termination of the interest is necessary to protect the
interest of utility investors in a financially healthy utility and
the interest of consumers in reasonably adequate utility service at
a just and reasonable price.
4. The Board of Directors of WPSC believes that the
proposed corporate restructuring into a holding company system will
create a structure which can more effectively address the growing
competition in the energy industry, facilitate selective
diversification into non-utility businesses which are related to
the utility business of WPSC or energy conservation or energy
resources or which otherwise benefit the service territory of WPSC,
afford separation between utility and non-utility businesses
thereby minimizing the risks associated with unregulated businesses
to which WPSC customers and security holders may be exposed, and
provide additional flexibility for financing and for maintaining
appropriate utility capital ratios.
5. WPS Resources, as the holding company in the system
plans from time to time through subsidiaries to invest in non-
utility businesses which are related to the utility business of
WPSC or energy conservation or energy resources or which otherwise
benefit the service territory of WPSC. It is presently
contemplated that Packerland Energy Services, Inc., until recently
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<PAGE>
an inactive subsidiary of WPSC, will be utilized to provide energy
supply consulting and natural gas supply/transportation procurement
services for commercial and industrial customers within and outside
WPSC's traditional service area. WPSC may in the future undertake
similar activities with respect to electric energy. WPSC is
currently in the process of pursuing the licensing by the Wisconsin
Commission for a 120 megawatt electric and steam cogenerating plant
to be built on the premises of Rhinelander Paper Company in
Rhinelander, Wisconsin. In conjunction with that proposed project,
WPSC expects to propose establishment of one or more special
purpose corporate subsidiaries of the utility to hold title to and
finance the steam and electric components of the project. WPSC has
not identified any other investment activities for WPS Resources,
but it is anticipated that WPSC will develop or acquire other
businesses which are related to WPSC's core electric and gas
utility businesses.
Diversification into non-utility businesses may produce
future benefits to WPSC's customers and its service area in general
by promoting commerce and employment and increasing sales of gas
and electricity within the service area.
6. The holding company structure is designed generally
to insulate the customers of WPSC and the holders of WPSC's
securities from the risks of the non-utility businesses by
segregating the non-utility businesses into separate corporations
that will be direct or indirect subsidiaries of WPS Resources and
not of WPSC. Because non-utility businesses of WPS Resources will
be conducted through separate subsidiaries, any liabilities
incurred by those subsidiaries will generally not constitute
liabilities of the utility subsidiaries. The corporate separation
also insures that all costs of a particular non-utility subsidiary
will be charged to that subsidiary and not allocated to any utility
subsidiary. This type of cost allocation is in keeping with
requirements of the Wisconsin Holding Company Act as previously
described. Thus, the corporate structure and the regulatory
requirements provide for the insulation of customers of WPSC from
risks of the non-utility businesses. Likewise, the preferred
shareholders and debt security holders of WPSC after the corporate
restructuring will generally be insulated from the risks of the
non-utility businesses.
7. The holding company structure is intended to afford
additional flexibility for maintaining the capital ratios of WPSC
at levels determined to be appropriate by regulatory authorities.
This ability to adjust the components of the capital structure of
WPSC will help WPSC maintain stable utility rates. One component
of utility rates is cost of capital. Equity capital is the most
expensive type of capital and if the equity component of a
utility's capital structure is too high it may result in increasing
pressure to raise rates. If the equity component is too low it may
result in increases in the cost of debt because of increased
leverage and risk which will also tend to increase rates. Under
the holding company structure, capital ratios of the utility would
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<PAGE>
be subject to adjustment from time to time through dividends to, or
equity investments from, the holding company.
8. Financing alternatives are expected to be improved
by the holding company structure in that the planning of financings
best suited to the particular needs and circumstances of the
separate businesses should be facilitated. It is contemplated that
in the normal course WPS Resources, in addition to receiving
dividends from its subsidiaries, will obtain funds through debt or
equity financings, that WPSC will obtain funds through its own
financings (which may include the issuance of additional first
mortgage bonds or preferred stock, as well as the issuance of
additional shares of its common stock to the holding company), and
that the businesses owned by non-utility subsidiaries of WPS
Resources will obtain funds from WPS Resources, from other non-
utility affiliates, or from their own outside financings. Any
financings will depend on the financial and other conditions of the
entities involved and on market conditions.
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<PAGE>
APPENDIX 2
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
WISCONSIN PUBLIC SERVICE CORPORATION : Docket No. ___________
NOTICE OF FILING FOR REORGANIZATION
-----------------------------------
Take notice that on _______________, 1994, Wisconsin
Public Service Corporation ("WPSC") filed an application with the
Federal Energy Regulatory Commission, pursuant to Section 203 of
the Federal Power Act, for authorization for a proposed corporate
reorganization.
WPSC proposes to carry out a reorganization plan which
will result in a holding company structure under which WPSC and its
utility operations will be a wholly-owned subsidiary of the newly
formed WPS Resources Corporation.
Any person desiring to be heard or to protest said
application should file a motion to intervene or protest with the
Federal Energy Regulatory Commission, 825 North Capitol, N.E.,
Washington, DC 20426, in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR Secs. 385.211 and
385.214). All such motions or protests should be filed on or
before _______________, 1994. Protests will be considered by the
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<PAGE>
Commission in determining the appropriate action to be taken but
will not serve to make the protestants parties to the proceeding.
Any persons wishing to become a party must file a motion to
intervene. Copies of this filing are on file with the Commission
and are available for public inspection.
----------------------------
_________________, Secretary
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<PAGE>
III
EXHIBITS REQUIRED
PURSUANT TO 18 CFR SECTION 33.3
Filed with this application as part thereof are Exhibits
A through I, as required by the Commission's rules and regulations
contained in 18 CFR Section 33.3.
Exhibit Description
------- -----------
A Copies of Resolutions adopted by the Boards of
Directors of Wisconsin Public Service Corporation
and WPS Resources Corporation authorizing formation
of holding company system
B Statement as to control over public utility and
other entities
C Balance sheets and supporting plant schedules for
the most recent twelve month period - actual and pro
forma in the form prescribed for Statements A and B
of the FPC Annual Report Form No. 1 prescribed by 18
CFR Section 141.1
D Statement of contingent liabilities
E Income statement for the most recent twelve month
period - actual and pro forma in the form prescribed
for Statement C of the FPC Annual Report Form No. 1
prescribed by 18 CFR Section 141.1
F Analysis of Retained Earnings
G-1 Application of Wisconsin Public Service Corporation
and WPS Resources Corporation for a Certificate of
Approval to Form a Holding Company Under Sec.
196.795, Wis. Stats. and for approval of an
Affiliated Interest Agreement
G-2 Registration statement filed with the Securities and
Exchange Commission on Form S-4.
G-2.1 Amendment No. 1 to registration statement filed with
the Securities and Exchange Commission on Form S-4.
G-3 Letter to the Nuclear Regulatory Commission.
G-4 Application to the Securities and Exchange
Commission under the Public Utility Holding Company
Act of 1935 on Form U-1.
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<PAGE>
Exhibit Description
------- -----------
H Copy of Agreement and Plan of Share Exchange as set
forth as Exhibit A to the Prospectus/Proxy Statement
included within SEC Form S-4 in Exhibit G-2 and of
proposed form of Service Agreement as set forth in
Exhibit E of Application to the Public Service
Commission of Wisconsin as included in Exhibit G-1.
I Map of properties of Wisconsin Public Service
Corporation, interconnections and cities served
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<PAGE>
IV
CONCLUSION
WHEREFORE, WPSC requests the commission to issue an order
granting this application and authorizing WPSC to implement its
plan of share exchange and corporate restructuring resulting in the
formation of a holding company system.
Respectfully submitted, this 10th
day of March, 1994.
WISCONSIN PUBLIC SERVICE CORPORATION
/s/ Daniel P. Bittner
By:___________________________________
Daniel P. Bittner
Senior Vice President
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, WI 53202
Attorneys for the Applicant
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<PAGE>
VERIFICATION PURSUANT TO 18 CFR SEC. 33.7
STATE OF WISCONSIN )
) ss:
COUNTY OF MILWAUKEE )
The undersigned, being first duly sworn, states that he
is the Senior Vice President of the Applicant; that
he has authority to verify the foregoing application on behalf of
the Applicant, that he has read said application and knows the
contents thereof; and that the statements and matters set forth in
said application are true and correct to the best of his knowledge
and belief.
/s/ Daniel P. Bittner
-------------------------------------
Daniel P. Bittner
Senior Vice President
Sworn to and subscribed before me, a notary public in and
for said state, this 10th day of March , 1994.
/s/ Donna M. Sheedy
---------------------------------------
Donna M. Sheedy
Notary Public
My commission expires: February 12, 1995
-30-
<PAGE>
EXHIBIT A
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WISCONSIN PUBLIC SERVICE CORPORATION,
a corporation duly organized and existing under and by virtue of
the laws of the State of Wisconsin; and as such Assistant Vice
President-Secretary I have access to all original records of said
corporation; and that I am duly and properly authorized to make
certified copies of its records in its behalf and I do hereby
certify that the attached is a true and correct copy of the
resolutions adopted by the Board of Directors of said corporation
on December 9, 1993, none of which resolutions have been revoked or
amended and all of which remain in full force and effect.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seal of said corporation this 10th day of March, 1994.
/s/ Robert H. Knuth
------------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
EXHIBIT A
WISCONSIN PUBLIC SERVICE CORPORATION
RESOLUTIONS OF BOARD OF DIRECTORS
December 9, 1993
RESOLVED, that this Corporation undertake a plan of corporate
restructuring to form a holding company system pursuant to which:
1. This Corporation has caused to be incorporated as a Wisconsin
business corporation a wholly-owned subsidiary, WPS Resources Corpo-
ration ("WPS Resources").
2. WPS Resources will issue one share of its common stock in
exchange for each outstanding share of common stock of this Corporation
(the "Share Exchange").
3. Following the Share Exchange, this Corporation will transfer to
WPS Resources as a dividend all of the outstanding common stock of
Packerland Energy Services, Inc.
4. Following the Share Exchange, the shares of WPS Resources
owned by Wisconsin Public Service Corporation will be cancelled.
FURTHER RESOLVED, that the actions of the officers of this Cor-
poration in causing WPS Resources to be incorporated and organized as a
Wisconsin Business Corporation hereby are ratified and approved, and the
officers of this Corporation are authorized to subscribe for and acquire
such number of shares of WPS Resources as the officers may deem
appropriate to carry out the corporate restructuring authorized in the
preceding resolution and to pay such consideration therefor as such
officers may deem to be appropriate.
FURTHER RESOLVED, that the Agreement and Plan of Share Ex-
change in the form presented to this meeting hereby is approved and
adopted, subject to such modification as the President of this Corporation
may deem necessary or appropriate as hereinafter provided (such
Agreement and Plan of Share Exchange with any such modifications being
hereinafter referred to as the "Plan"), and the officers of this Corporation
are authorized and directed to execute and deliver the Plan on behalf of
this Corporation to WPS Resources, execute on behalf of this Corporation
as the sole shareholder of WPS Resources an approval of the Plan and
cause the Plan to be submitted to the shareholders of this Corporation for
approval by the holders of this Corporation's common stock at the 1994
Annual Meeting of Shareholders of this Corporation.
FURTHER RESOLVED, that the President of this Corporation is
authorized to amend, change or modify the aforementioned Plan and
Agreement of Share Exchange (any such amendment, change or modifi-
<PAGE>
cation to be conclusively evidenced by the execution and delivery of the
Plan), provided that no amendment, change or modification shall be
inconsistent with the material terms of the Plan and Agreement of Share
Exchange submitted to this meeting.
FURTHER RESOLVED, that the forms of proxy, notice of 1994
Annual Meeting of Shareholders and registration statement in the form
presented to this meeting hereby are approved subject to completion and
such modification thereof as the officers of this Corporation shall deem
appropriate and the officers of this Corporation are authorized to file
said documents as so completed and modified with the Securities and
Exchange Commission and use said documents as so completed and
modified in connection with the 1994 Annual Meeting of the Shareholders
of this Corporation.
FURTHER RESOLVED, that application be made to the Public Ser-
vice Commission of Wisconsin, the Federal Energy Regulatory Commis-
sion, the Securities and Exchange Commission and all other regulatory
agencies and authorities whose approval or consent is required to con-
summate the Plan and corporate restructuring authorized in the foregoing
resolutions in order to secure all necessary authorizations from said
Commissions and other agencies and authorities to consummate the Plan
and such corporate restructuring and pertaining to all other related
actions or matters which may be subject to the respective jurisdictions of
said Commissions or other agencies or authorities, and that the officers of
this Corporation are hereby authorized and empowered, on behalf of this
Corporation, to execute and file the requisite applications, together with
such documents and statements as may be appropriate in connection
therewith, to execute and file amendments and supplements thereto, and to
do all other acts which may be necessary or appropriate to secure such
authorizations, and upon receipt of any decisions, findings, orders or
certificates of authority evidencing such authorizations the same shall, as
required by the issuing Commission or other agency or authority, be
recorded upon the books of this Corporation by inserting certified copies
thereof in the minute book.
FURTHER RESOLVED, that the officers of this Corporation hereby
are authorized and directed on behalf of this Corporation to execute all
other instruments and documents and to do or cause to be done all such
further acts and things as they may deem necessary or advisable in order
to consummate the Plan and corporate restructuring contemplated thereby
and carry into effect the tenor and purpose of the resolutions previously
adopted at this meeting; that the officers of this Corporation hereby are
authorized and directed to cause WPS Resources to take all action as may
be required to consummate the Plan and the corporate restructuring
contemplated thereby and carry into effect the tenor and purpose of the
resolutions previously adopted at this meeting; and that all actions of the
officers of this Corporation so taken and all actions heretofore taken by
the officers in connection with the Plan and corporate restructuring
previously authorized at this meeting are hereby ratified, approved and
confirmed.
2
<PAGE>
EXHIBIT A
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WPS RESOURCES CORPORATION, a
corporation duly organized and existing under and by virtue of the
laws of the State of Wisconsin; and as such Assistant Vice
President-Secretary I have access to all original records of said
corporation; and that I am duly and properly authorized to make
certified copies of its records in its behalf and I do hereby
certify that the attached is a true and correct copy of the
resolutions adopted by the Board of Directors of said corporation
on December 9, 1993, none of which resolutions have been revoked or
amended and all of which remain in full force and effect.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seal of said corporation this 10th day of March, 1994.
/s/ Robert H. Knuth
-----------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
UNANIMOUS CONSENT ACTION
OF
BOARD OF DIRECTORS
OF
WPS RESOURCES CORPORATION
-------------------------
The undersigned, being the initial directors named in the
Articles of Incorporation of WPS Resources Corporation, a Wisconsin
corporation (hereinafter referred to as this "Corporation", do
hereby unanimously consent to and adopt, pursuant to Section
180.0821 of the Wisconsin Business Corporation Law, the following
resolutions in lieu of the initial meeting of the Board of
Directors of this Corporation.
RESOLVED, that:
1. All the actions of counsel and all the actions of
Michael S. Nolan, as the sole incorporator, including executing and
causing to be filed Articles of Incorporation of this Corporation,
and naming therein the initial directors of this Corporation, are
hereby approved, ratified, and confirmed.
2. The following, each endorsed "Approved, December 9,
1993" by the Secretary are hereby approved and adopted:
(a) By-laws of this Corporation as attached hereto
marked as Exhibit A;
(b) Stock Subscription Agreement from Wisconsin
Public Service Corporation, a Wisconsin corporation,
attached hereto as Exhibit B for One Thousand (1,000)
shares of Common Stock, $1.00 par value, for the total
subscription price of $1,000 payable in cash or by check.
(c) Form of temporary stock certificate for use by
this Corporation, attached hereto as Exhibit C.
3. The Secretary is directed to insert the Articles of
Incorporation, By-laws, Stock Subscription Agreement and approved
temporary form of stock certificate in the minute book immediately
preceding these resolutions.
4. The corporate seal of which an impression is set
forth in the margin, is approved and adopted as the corporate seal
of this Corporation.
5. The following are hereby elected as the officers of
this Corporation to the offices set forth opposite their names
below, to serve until the first meeting of the Board of Directors
held after the first annual meeting of the shareholders and until
their respective successors are elected:
(The WPS Resource Corporation Corporate
Seal is affixed here)
<PAGE>
Daniel A. Bollom President and Chief Executive Officer
Patrick D. Schrickel Vice President
Robert H. Knuth Assistant Vice President - Secretary
Ralph G. Baeten Treasurer
6. This Corporation shall pay any and all legal and
other expenses incurred in connection with its incorporation and
organization.
7. Upon receipt of payment in full of the agreed
consideration provided by any stock subscription agreement
hereinbefore or hereafter approved by this Corporation's Board of
Directors, there shall be issued upon original issue and delivered
to the subscriber a certificate or certificates for the shares of
Common Stock, $1.00 par value, so subscribed and paid for, which
shares shall be deemed fully paid and nonassessable by this
Corporation (except as statutory liability is otherwise provided
for in Section 180.0622(2)(b) of the Wisconsin Business Corporation
Law).
8. The President or the Treasurer is hereby authorized
on behalf of this Corporation to open such bank checking account or
accounts with such bank or banks as either of them may deem
necessary or advisable; the authorized signers of checks or
withdrawal orders in connection with any such account shall be one
of the persons whose names and signatures shall have been certified
to such bank from time to time by the Secretary of this
Corporation, to be the President, Vice President, Treasurer or
Secretary of this Corporation; and any such bank shall be fully
protected in relying upon such certification by the Secretary until
it shall have received written notice of change in such office or
in such signing authority.
9. If any such depository bank shall require a
depository resolution in any form different from, but generally
consistent with the foregoing, such other depository resolution
shall be deemed to have been duly approved and adopted, and may be
so certified by the Secretary, whenever approved by the Secretary
and a copy thereof has been inserted in the minute book on pages
immediately following these resolutions.
10. The fiscal year of this Corporation shall end on
December 31 of each year.
11. The Agreement and Plan of Share Exchange (a copy of
which is attached hereto as Exhibit D) between this Corporation and
Wisconsin Public Service Corporation, a Wisconsin corporation (the
"Agreement and Plan of Share Exchange"), be and hereby is, adopted
and approved together with such changes as the President of this
-2-
<PAGE>
Corporation shall deem necessary or appropriate as hereinafter
provided.
12. The President of this Corporation is authorized to
amend, change or modify the aforementioned Agreement and Plan of
Share Exchange (any such amendment, change or modification to be
conclusively evidenced by the execution and delivery of the
Agreement and Plan of Share Exchange), provided that no amendment,
change or modification shall be inconsistent with the material
terms of the Agreement and Plan of Share Exchange.
13. RESOLVED, that the Articles of Incorporation of this
Corporation shall be amended and restated in their entirety to read
as set forth in Exhibit E attached hereto and that the restated
articles of incorporation of this Corporation in the form set forth
in Exhibit E shall be submitted to the sole shareholder of this
Corporation for its consideration as provided in Section 180.1004
of the Wisconsin Business Corporation Law.
14. RESOLVED, that the officers and directors of this
Corporation be, and they hereby are, authorized, empowered and
directed to prepare, execute and file with the Securities and
Exchange Commission a Registration Statement on Form S-4, including
a Prospectus as part thereof, relating to the registration under
the Securities Act of 1933, as amended, of the 23,896,962 shares of
Common Stock, $1.00 par value ("Common Stock"), of this Corporation
proposed to be issued in connection with the transactions described
in the Agreement and Plan of Share Exchange.
15. RESOLVED, that the Registration Statement on Form
S-4 in the form attached hereto as Exhibit F is hereby approved and
adopted.
16. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed to cause to
be prepared, executed and filed such amendments and post-effective
amendments to said Registration Statement, and the Prospectus
included as a part thereof, as they, or any of them, may deem
necessary, proper or convenient in order that the Registration
Statement may become and remain effective and in order to conform
to or comply with the provisions and the requirements of any
applicable agreement, law, regulations or determination of any
governmental agency, including specifically the Securities and
Exchange Commission.
17. RESOLVED, that Daniel A. Bollom, President of this
Corporation be, and he hereby is, appointed and designated as the
person duly authorized to receive communications and notices from
the Securities and Exchange Commission with respect to the
Registration Statement and with the powers conferred upon him as
such person by the Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission
issued thereunder.
-3-
<PAGE>
18. RESOLVED, that it is desirable and in the best
interest of this Corporation that the shares of Common Stock to be
issued pursuant to the Agreement and Plan of Share Exchange be
qualified or registered for sale in various states, if necessary.
19. RESOLVED, that the President or any Vice President
and the Secretary or an Assistant Secretary be, and they hereby
are, authorized, empowered and directed to determine the states in
which appropriate action shall be taken to qualify or register for
sale all or such part of the Common Stock of this Corporation as
said officers may deem advisable, and said officers are hereby
authorized, empowered and directed to perform on behalf of this
Corporation any and all acts that they, or any of them, may deem
necessary, proper or convenient in order to comply with the
applicable laws of any such states, and in connection therewith to
execute and file all requisite papers and documents, including, but
not limited to, applications, reports, surety bonds, irrevocable
consents and appointments of attorneys for service of process.
20. RESOLVED, that the execution by such officers of any
such paper or document or the doing by them of any act in
connection with the foregoing matters shall conclusively establish
their authority therefor from this Corporation and the approval and
ratification by this Corporation of the papers and documents so
executed and the action so taken.
21. RESOLVED, that the officers and directors of this
Corporation be, and they hereby are, authorized to prepare, execute
and file with the Securities and Exchange Commission a Registration
Statement on Form 10, including any necessary statements, exhibits
or other documents, relating to the registration under the
Securities Exchange Act of 1934, as amended, of the Common Stock of
this Corporation proposed to be issued in connection with the
transactions described in the Agreement and Plan of Share Exchange.
22. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed to prepare
or to cause to be prepared, executed and filed such amendments and
post-effective amendments to the Registration Statement referred to
in the immediately preceding resolution and such supplements
thereto as they, or any of them, may deem necessary, proper or
convenient in order that such Registration Statement may become and
remain effective and in order to conform to or comply with the
provisions and the requirements of any applicable agreement, law,
regulations or determination of any governmental agency, including
specifically the Securities and Exchange Commission.
23. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed to execute
and file with the New York Stock Exchange, Inc. and the Chicago
Stock Exchange any applications or registrations deemed necessary
-4-
<PAGE>
for the listing of the 23,896,962 shares of Common Stock of this
Corporation to be issued pursuant to the terms and conditions of
the Agreement and Plan of Share Exchange.
24. RESOLVED, that the President and each Vice President
be, and they hereby are, authorized, empowered and directed to
execute and deliver such original listing application and all other
documents required by the New York Stock Exchange, Inc. and the
Chicago Stock Exchange in connection therewith and to make such
changes in any such documents as may be necessary to conform to the
requirements for listing and to appear, if requested, before
officials of said New York Stock Exchange, Inc. and Chicago Stock
Exchange.
25. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed to execute
and file with the Securities and Exchange Commission in form
satisfactory to the said Securities and Exchange Commission an
application for (i) exemption from the provisions of the Public
Utility Holding Company Act of 1935, as amended and (ii) approval
by the Securities and Exchange Commission of the acquisition by
this Corporation of the outstanding Common Stock of Wisconsin
Public Service Corporation and of the indirect ownership through
Wisconsin Public Service Corporation of 33.1% of the outstanding
capital stock of Wisconsin River Power Company.
26. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed to prepare,
execute and file such amendments and supplements to the application
referred to in the immediately preceding resolution and such
periodic reports as they, or any of them, may deem necessary,
proper or convenient in order that the exemption may become and
remain effective and the approval may be obtained and in order to
conform to or comply with the provisions and the requirements of
any applicable agreement, law, regulations or determination of any
governmental agency, including specifically the Securities and
Exchange Commission.
27. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed to execute
and file with the Federal Energy Regulatory Commission in form
satisfactory to the said Federal Energy Regulatory Commission of an
application for an order granting authorization pursuant to Section
203 of the Federal Power Act for the proposed corporate
restructuring to be effected pursuant to the Agreement and Plan of
Share Exchange.
28. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed to prepare,
execute and file such amendments and supplements to the application
referred to in the immediately preceding resolution as they, or any
of them, may deem necessary, proper or convenient in order to
comply with the provisions of the Federal Power Act, and the
-5-
<PAGE>
regulations and determinations of the Federal Energy Regulatory
Commission.
29. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized and empowered to execute by
facsimile signatures all stock certificates representing shares of
Corporation Common Stock in the name and on behalf of this
Corporation under facsimile of its corporate seal. If any officer
of this Corporation who signs, or whose facsimile signature appears
upon any of the stock certificates ceases to be such officer prior
to their issuance, the stock certificates so signed or bearing such
facsimile signature shall nevertheless be valid. The officers of
this Corporation are authorized and empowered to execute any
indemnification agreement required by the New York Stock Exchange,
Inc. or the Chicago Stock Exchange in connection with the use of
such facsimile signatures.
30. RESOLVED, that application be made to the Public
Service Commission of Wisconsin and all other regulatory agencies
and authorities whose approval or consent is required to consummate
the Plan and Agreement of Share Exchange and corporate
restructuring contemplated therewith in order to secure all
necessary authorizations from said Commission and other agencies
and authorities to consummate the Plan and Agreement of Share
Exchange and such corporate restructuring and with respect to all
other related actions or matters which may be subject to the
respective jurisdictions of said Commission or other agencies or
authorities, and that the officers of this Corporation are hereby
authorized and empowered, on behalf of this Corporation, to execute
and file the requisite applications, together with such documents
and statements as may be appropriate in connection therewith, to
execute and file amendments and supplements thereto, and to do all
other acts which may be necessary or appropriate to secure such
authorizations, and upon receipt of any decisions, findings, orders
or certificates of authority evidencing such authorizations the
same shall, as required by the issuing Commission or other agency
or authority, be recorded upon the books of this Corporation by
inserting certified copies thereof in the minute book.
31. RESOLVED, that Firstar Trust Company, Milwaukee,
Wisconsin, be, and hereby is, designated as the transfer agent and
registrar for the Common Stock to be issued by this Corporation.
32. RESOLVED, that the officers of this Corporation be,
and they hereby are, authorized, empowered and directed on behalf
of this Corporation to issue, execute and deliver such articles,
certificates, agreements and other documents (including
specifically Articles of Share Exchange) and to do or cause to be
done all such further acts as they shall deem necessary, proper or
convenient in order to carry out the foregoing resolutions and all
actions by officers of this Corporation, or any of them, heretofore
or hereafter taken in connection with the transactions described in
-6-
<PAGE>
the foregoing resolutions are hereby expressly ratified, confirmed
and approved.
Dated and effective this 9th day of December, 1993.
/s/ A. Dean Arganbright
---------------------------------------
A. Dean Arganbright
/s/ Michael S. Ariens
---------------------------------------
Michael S. Ariens
/s/ R. A. Bemis
---------------------------------------
Richard A. Bemis
/s/ Daniel A. Bollom
---------------------------------------
Daniel A. Bollom
/s/ Sister M. Lois Bush
---------------------------------------
Sister M. Lois Bush
/s/ R. C. Gallagher
---------------------------------------
Robert C. Gallagher
/s/ Kathryn M. Hasselblad-Pascale
---------------------------------------
Kathryn M. Hasselblad-Pascale
/s/ James L. Kemerling
---------------------------------------
James L. Kemerling
/s/ Linus M. Stoll
---------------------------------------
Linus M. Stoll
-7-
<PAGE>
EXHIBIT B
STATEMENT OF MEASURE OF CONTROL OR OWNERSHIP
STATE OF WISCONSIN )
) SS:
COUNTY OF BROWN )
The undersigned, having been first duly sworn according
to law, deposes and says the following upon his personal knowledge.
1. My name is Robert H. Knuth and my position is Assistant
Vice President - Secretary of Wisconsin Public Service
Corporation and of WPS Resources Corporation. I am
authorized to make this affidavit on behalf of Wisconsin
Public Service Corporation and of WPS Resources
Corporation.
2. No public utility, bank, trust company, banking
association or firm authorized by law to underwrite or
participate in the marketing of securities of a public
utility, or any company supplying electric equipment to
Wisconsin Public Service Corporation or WPS Resources
Corporation exercises any measure of control by or over
any party to the proposed share exchange between
Wisconsin Public Service Corporation and WPS Resources
Corporation. No party to such transaction exercises
control or ownership over any other utility, bank, trust
company, banking association or firm authorized to
underwrite or participate in the marketing of securities
of a public utility, or any company supplying electric
<PAGE>
equipment to such party except that Wisconsin Public
Service Corporation owns 33.1% of the outstanding common
stock of Wisconsin River Power Company. To the best of
my knowledge, no intercorporate relationships exist among
the parties to the transaction in any such entities
through holding companies, ownership of securities, or
otherwise, except as follows:
Daniel A. Bollom, President and Chief
Executive Officer of Wisconsin Public Service
Corporation and WPS Resources Corporation, is
a director of Prime Federal Bank, Green Bay,
Wisconsin;
Robert C. Gallagher, a director of Wisconsin
Public Service Corporation and WPS Resources
Corporation, is Chairman and President of
Associated Bank, Green Bay and Executive Vice
President and a director of Associated Banc-
Corp, Green Bay, Wisconsin.
With respect to the parties to the transaction, members
of the Boards of Directors of Wisconsin Public Service Corporation
and WPS Resources Corporation are identical and such corporations
have some officers in common. It is anticipated that WPS Resources
-2-
<PAGE>
Corporation will qualify as an exempt utility holding company under
the Public Utility Holding Company Act.
/s/ Robert H. Knuth
--------------------------------------
Assistant Vice President - Secretary
Subscribed and sworn to
before me this 10th day
of March, 1994.
/s/ Donna M. Sheedy
_________________________
Notary Public
-3-
<PAGE>
EXHIBIT C
I, Daniel P. Bittner, Senior Vice President of
WISCONSIN PUBLIC SERVICE CORPORATION, do hereby certify that
the attached are true and correct copies of balance sheets and
supporting plant schedules for the twelve months ended
December 31, 1993, and are based on the books of Wisconsin
Public Service Corporation.
WITNESS my hand and the seal of this corporation this
10th day of March, 1994.
/s/ Daniel P. Bittner
----------------------------------------
Senior Vice President
(SEAL)
<PAGE>
EXHIBIT C
Wisconsin Public Service Corporation
Balance Sheets and Supporting Plant Schedules
As of December 31, 1993
Please note pro forma statements have not been
supplied due to the fact they would reflect no
material change from the statements presented
at the time the holding company would become
effective.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
COMPARATIVE BALANCE SHEET (ASSETS AND OTHER DEBITS)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Line Title of Account Ref. Balance at Balance at
No. Page No. Beginning of Year End of Year
(a) (b) (c) (d)
- -----------------------------------------------------------------------------------------------------------------------
1 UTILITY PLANT
-------------------------------------------------------------------------------------------------------------------
2 Utility Plant (101-106, 114) 200-201 1,500,726,609 1,558,460,539
3 Construction Work in Progress (107) 200-201 26,864,254 11,780,391
-------------------------------------------------------------------------------------------------------------------
4 TOTAL Utility Plant (Enter Total of lines 2 and 3) 1,527,590,863 1,570,240,930
5 (Less) Accum. Prov. for Depr. Amort. Depl. (108, 111, 115) 200-201 748,427,337 801,056,379
-------------------------------------------------------------------------------------------------------------------
6 Net Utility Plant (Enter Total of line 4 less 5) --- 779,163,526 769,184,551
-------------------------------------------------------------------------------------------------------------------
7 Nuclear Fuel (120.1-120.4, 120.6) 202-203 141,274,418 147,992,878
8 (Less) Accum. Prov. for Amort. of Nucl. Fuel Assemblies (120.5) 202-203 124,394,345 130,011,410
-------------------------------------------------------------------------------------------------------------------
9 Net Nuclear Fuel (Enter Total of line 7 less 8) --- 16,880,073 17,981,468
-------------------------------------------------------------------------------------------------------------------
10 Net Utility Plant (Enter Total of lines 6 and 9) --- 796,043,599 787,166,019
-------------------------------------------------------------------------------------------------------------------
11 Utility Plant Adjustments (116) 122 0 0
12 Gas Stored Underground - Noncurrent (117) --- 0 0
-------------------------------------------------------------------------------------------------------------------
13 OTHER PROPERTY AND INVESTMENTS
-------------------------------------------------------------------------------------------------------------------
14 Nonutility Property (121) 221 2,646,785 2,666,044
15 (Less) Accum. Prov. for Depr. and Amort. (122) --- 513,307 544,639
16 Investments in Associated Companies (123) --- 0 0
17 Investment in Subsidiary Companies (123.1) 224-225 6,872,059 6,853,090
18 (For Cost of Account 123.1, See Footnote Page 224, line 42) ---
19 Noncurrent Portion of Allowances 228-228
20 Other Investments (124) 7,563,485 7,186,525
21 Special Funds (125-128) --- 51,022,611 56,699,099
-------------------------------------------------------------------------------------------------------------------
22 TOTAL Other Property and Investments (Total of lines 14 thru 17,19-21) 67,591,633 72,860,119
-------------------------------------------------------------------------------------------------------------------
23 CURRENT AND ACCRUED ASSETS
-------------------------------------------------------------------------------------------------------------------
24 Cash (131) --- 0 2,008,266
25 Special Deposits (132-134) --- 87,000 3,295,750
26 Working Funds (135) --- 91,499 87,282
27 Temporary Cash Investments (136) --- 0 0
28 Notes Receivable (141) 2,288,366 1,428,256
29 Customer Accounts Receivable (142) --- 49,932,510 52,283,819
30 Other Accounts Receivable (143) --- 10,845,891 14,335,296
31 (Less) Accum. Prov. for Uncollectible Acct.- Credit (144) --- 493,325 1,535,878
32 Notes Receivable from Associated Companies (145) --- 0 0
33 Accounts Receivable from Associated Companies (146) --- 0 0
34 Fuel Stock (151) 227 12,687,549 10,078,100
35 Fuel Stock Expenses Undistributed (152) 227 219,431 130,059
36 Residuals (Elec) and Extracted Products 227 0 0
37 Plant Materials and Operating Supplies (154) 227 18,628,641 19,261,616
38 Merchandise (155) 227 0 0
39 Other Materials and Supplies (156) 227 0 0
40 Nuclear Materials Held for Sale (157) 202-203/227 0 0
41 Allowances (158.1 and 158.2) 228-228 0 0
42 (Less) Noncurrent Portion of Allowances --- 0 0
43 Stores Expenses Undistributed (163) 227 93,576 149,747
44 Gas Stored Underground - Current (164.1) --- 11,621,537 19,885,412
45 Liquefied Natural Gas Stored and Held for Processing (164.2-164.3) --- 0 0
46 Prepayments (165) --- 19,928,837 20,594,273
47 Advances for Gas (166-167) --- 0 0
48 Interest and Dividends Receivable (171) --- 268,483 268,483
49 Rents Receivable (172) --- 0 0
50 Accrued Utility Revenues (173) --- 33,879,796 37,314,107
51 Miscellaneous Current and Accrued Assets (174) 251,291 555,692
-------------------------------------------------------------------------------------------------------------------
52 TOTAL Current and Accrued Assets (Enter Total of lines 24 thru 51) 160,331,082 180,140,280
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-93) Page 110
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
COMPARATIVE BALANCE SHEET (ASSETS AND OTHER DEBITS) (Continued)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Line Title of Account Ref. Balance at Balance at
No. Page No. Beginning of Year End of Year
(a) (b) (c) (d)
- -----------------------------------------------------------------------------------------------------------------------
53 DEFERRED DEBITS
-------------------------------------------------------------------------------------------------------------------
54 Unamortized Debt Expenses (181) --- 2,085,614 3,017,672
55 Extraordinary Property Losses (182.1) 230 10,402 0
56 Unrecovered Plant and Regulatory Study Costs (182.2) 230 0 0
57 Other Regulatory Assets (182.3) (1) 232 0 103,025,094
58 Preliminary Survey and Investigation Charges (Electric) (183) --- 0 0
59 Prelim. Sur. and Invest. Charges (Gas) (183.1, 183.2) --- 0 0
60 Clearing Accounts (184) --- 0 0
61 Temporary Facilities (185) --- 0 0
62 Miscellaneous Deferred Debits (186) (1) 233 115,434,366 44,906,493
63 Deferred Losses from Disposition of Utility Plant (187) --- 0 0
64 Research, Development and Demonstration Expenditures (188) 352-353 0 0
65 Unamortized Loss on Reacquired Debt (189) --- 4,053,079 7,725,243
66 Accumulated Deferred Income Taxes (190) 234 25,904,800 66,060,234
67 Unrecovered Purchased Gas Costs (191) --- 0 0
-------------------------------------------------------------------------------------------------------------------
68 TOTAL Deferred Debits (Enter Total of lines 53 thru 66) 147,488,261 224,734,736
-------------------------------------------------------------------------------------------------------------------
TOTAL Assets and Other Debits (Enter Total of lines 10, 11, 12,
69 22, 52, and 68) 1,171,454,575 1,264,901,154
- ---------------------------------------------------------------------------------------------------------------------------
(1) Regulatory Assets were transferred from Account 186 to Account 182.3 per FERC Order 552.
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-93) Page 111
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
COMPARATIVE BALANCE SHEET (LIABILITIES AND OTHER CREDITS)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Line Title of Account Ref. Balance at Balance at
No. Page No. Beginning of Year End of Year
(a) (b) (c) (d)
- -----------------------------------------------------------------------------------------------------------------------
1 PROPRIETARY CAPITAL
-------------------------------------------------------------------------------------------------------------------
2 Common Stock Issued (201) 250-251 95,384,576 95,587,848
3 Preferred Stock Issued (204) 250-251 51,200,000 51,200,000
4 Capital Stock Subscribed (202, 205) 252 0 0
5 Stock Liability for Conversion (203, 206) 252 0 0
6 Premium on Capital Stock (207) 252 73,227,417 74,717,475
7 Other Paid-In Capital (208-211) 253 127,885 127,885
8 Installments Received on Capital Stock (212) 252 0 0
9 (Less) Discount on Capital Stock (213) 254 0 0
10 (Less) Capital Stock Expense (214) 254 (1,035,129) (1,240,435)
11 Retained Earnings (215, 215.1, 216) (1) 118-119 248,527,626 268,314,105
12 Unappropriated Undistributed Subsidiary Earnings (216.1) 118-119 (3,006,412) (3,003,880)
13 (Less) Reacquired Capital Stock (217) 250-251 0 0
-------------------------------------------------------------------------------------------------------------------
14 TOTAL Proprietary Capital (Enter Total of lines 2 thru 13) --- 464,425,963 485,702,998
-------------------------------------------------------------------------------------------------------------------
15 LONG-TERM DEBT
-------------------------------------------------------------------------------------------------------------------
16 Bonds (221) 256-257 304,266,000 292,075,000
17 (Less) Reacquired Bonds (222) 256-257 0 0
18 Advances from Associated Companies (223) 256-257 0 0
19 Other Long-Term Debt (224) (2) 256-257 26,995,658 23,407,176
20 Unamortized Premium on Long-Term Debt (225) --- 0 0
21 (Less) Unamortized Discount on Long-Term Debt - Debit (226) --- (1,037,486) (1,257,345)
-------------------------------------------------------------------------------------------------------------------
22 TOTAL Long-Term Debt (Enter Total of lines 16 thru 21) --- 330,224,172 314,224,831
-------------------------------------------------------------------------------------------------------------------
23 OTHER NONCURRENT LIABILITIES
-------------------------------------------------------------------------------------------------------------------
24 Obligations Under Capital Leases - Noncurrent (227) --- 0 0
25 Accumulated Provision for Property Insurance (228.1) --- 0 0
26 Accumulated Provision for Injuries and Damages (228.2) --- 0 0
27 Accumulated Provision for Pensions and Benefits (228.3) --- 0 0
28 Accumulated Miscellaneous Operating Provisions (228.4) --- 0 5,081,888
29 Accumulated Provision for Rate Refunds (229) --- 0 0
-------------------------------------------------------------------------------------------------------------------
30 TOTAL Other Noncurrent Liabilities (Enter Total of lines 24 thru 29) 0 5,081,888
-------------------------------------------------------------------------------------------------------------------
31 CURRENT AND ACCRUED LIABILITIES
-------------------------------------------------------------------------------------------------------------------
32 Notes Payable (231) --- 20,000,000 21,000,000
33 Accounts Payable (232) --- 51,989,694 61,154,915
34 Notes Payable to Associated Companies (233) --- 0 0
35 Accounts Payable to Associated Companies (234) --- 0 0
36 Customer Deposits (235) --- 749,250 619,701
37 Taxes Accrued (236) 262-263 1,234,468 3,266,199
38 Interest Accrued (237) --- 7,204,016 7,695,061
39 Dividends Declared (238) --- 0 550
40 Matured Long-Term Debt (239) --- 0 0
41 Matured Interest (240) --- 0 0
42 Tax Collections Payable (241) --- 3,309,724 2,957,741
43 Miscellaneous Current and Accrued Liabilities (242) 9,457,788 9,335,300
44 Obligations Under Capital Leases-Current (243) 0 0
-------------------------------------------------------------------------------------------------------------------
45 TOTAL Current and Accrued Liabilities(Enter Total of lines 32 thru 44) 93,944,940 106,029,467
- ---------------------------------------------------------------------------------------------------------------------------
(1) Reduced by $26,498,249 and $23,382,449 at the beginning and end of year, respectively, to reflect guarantee
of loans taken out by the Company's ESOP Trust.
(2) Includes guarantee of loans taken out by the Company's ESOP Trust.
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-89) Page 112
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- --------------------------------------------------------------------------------------------------------------------------
COMPARATIVE BALANCE SHEET (LIABILITIES AND OTHER CREDITS) (Continued)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Line Title of Account Ref. Balance at Balance at
No. Page No. Beginning of Year End of Year
(a) (b) (c) (d)
- -----------------------------------------------------------------------------------------------------------------------
46 DEFERRED CREDITS
-------------------------------------------------------------------------------------------------------------------
47 Customer Advances for Construction (252) 14,488,583 15,529,610
48 Accumulated Deferred Investment Tax Credits (255) 266-267 36,070,789 34,210,275
49 Deferred Gains from Disposition of Utility Plant (256) 0 0
50 Other Deferred Credits (253) (3) 269 37,383,747 37,675,409
51 Other Regulatory Liabilities (254) (3) 278 0 61,433,986
52 Unamortized Gain on Reacquired Debt (257) --- 0 0
53 Accumulated Deferred Income Taxes (281-283) 272-277 194,916,381 205,012,690
-------------------------------------------------------------------------------------------------------------------
54 TOTAL Deferred Credits (Enter Total of lines 47 thru 53) 282,859,500 353,861,970
-------------------------------------------------------------------------------------------------------------------
55
56
57
58
59
60
61
62
63
64
65
66
67
-------------------------------------------------------------------------------------------------------------------
TOTAL Liabilities and Other Credits (Enter Total of lines 14, 22, 30,
68 45 and 54) 1,171,454,575 1,264,901,154
- ---------------------------------------------------------------------------------------------------------------------------
(3) Other Regulatory Liabilities were transferred from Account 253 to Account 254 per FERC Order 552.
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-93) Page 113
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
NUCLEAR FUEL MATERIALS (Accounts 120.1 through 120.6 and 157)
- ---------------------------------------------------------------------------------------------------------------------------
1. Report below the costs incurred for nuclear fuel arrangements , attach a statement showing the
materials in process of fabrication, on hand,in reactor, the amount of nuclear fuel leased, the quantity
and in cooling; owned by the respondent. used and quantity on hand, and the costs incurred
2. If the nuclear fuel stock is obtained under leasing under such leasing arrangements.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Changes During Year
Line Balance ---------------------------------------
No. Description of Item Beginning of year Additions
(a) (b) (c)
- ------------------------------------------------------------------------------------------------------------------------
1 Nuclear Fuel in Process of Refinement, Conversion,
Enrichment & Fabrication (120.1)
--------------------------------------------------------------------------------------------------------------------
2 Fabrication 0 1,335,028
3 Nuclear Materials 10,148 6,397,040
4 Allowance for Funds Used during Construction (561) (15,037)
5 Other Overhead Construction Costs
--------------------------------------------------------------------------------------------------------------------
6 SUBTOTAL (Enter Total of lines 2 thru 5) 9,587
--------------------------------------------------------------------------------------------------------------------
7 Nuclear Fuel Materials and Assemblies
8 In Stock (120.2) 11,720,477 7,736,159
9 In Reactor (120.3) 24,222,426 7,840,491
--------------------------------------------------------------------------------------------------------------------
10 SUBTOTAL (Enter Total of lines 8 and 9) 35,942,903
--------------------------------------------------------------------------------------------------------------------
11 Spent Nuclear Fuel (120.4) 105,321,929 11,088,539
12 Nuclear Fuel Under Capital Leases (120.6)
13 (Less) Accum. Prov. for Amortization of
Nuclear Fuel Assemblies (120.5) 124,394,345
--------------------------------------------------------------------------------------------------------------------
14 TOTAL Nuclear Fuel Stock (Enter Total of lines
6, 10, 11, and 12 less line 13) 16,880,074
--------------------------------------------------------------------------------------------------------------------
15 Estimated Net Salvage Value of Nuclear
Materials in line 9
16 Estimated Net Salvage Value of Nuclear
Materials in line 11
17 Estimated Net Salvage Value of Nuclear
Materials in Chemical Processing
18 Nuclear Materials Held for Sale (157)
19 Uranium
20 Plutonium
21 Other
--------------------------------------------------------------------------------------------------------------------
22 TOTAL Nuclear Materials Held for Sale
(Enter Total of lines 19, 20, and 21)
- ---------------------------------------------------------------------------------------------------------------------------
Footnotes:
(1) Transfer from 120.1 to 120.2 ($1,339,868); to 120.3 ($(4,840)).
(2) Transfer from 120.1 to 120.2 ($6,390,333). Transfer from 120.1 to 182.2 ($664) to defer
period costs.
(3) Transfer from 120.1 to 120.2 ($14,956).
(4) Transfer from 120.2 to 120.1 ($1,012,600); Transfer from 120.2 to 120.3 ($7,597,348).
(5) Transfer from 120.3 to 120.4 ($11,088,539).
(6) Transfer from 120.4 to 120.3 ($254,205).
(7) Transfer from 120.5 to 232 ($1,459,508) to pay DOE disposal costs;
Transfer from 120.5 to 186 ($508,813) to fund D&D Enrichment Facility.
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-89) Page 202
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
NUCLEAR FUEL MATERIALS (Accounts 120.1 through 120.6 and 157) (Continued)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Changes During Year
- -------------------------------------------
<S> <C> <C> <C> <C>
Other Reductions Balance Line
Amortization (Explain in a End of Year Description of Item No.
footnote)*
(d) (e) (f) (g)
- -----------------------------------------------------------------------------------------------------------------------
Nuclear Fuel in Process of Refinement, Conversion, 1
Enrichment & Fabrication (120.1)
- -------------------------------------------------------------------------------------------------------------------
1,335,028 (1) 0 Fabrication 2
6,390,997 (2) 16,191 Nuclear Materials 3
(14,956) (3) (642) Allowance for Funds Used during Construction 4
Other Overhead Construction Costs 5
- -------------------------------------------------------------------------------------------------------------------
15,549 SUBTOTAL (Enter Total of lines 2 thru 5) 6
- -------------------------------------------------------------------------------------------------------------------
Nuclear Fuel Materials and Assemblies 7
8,609,948 (4) 10,846,688 In Stock (120.2) 8
11,088,539 (5) 20,974,378 In Reactor (120.3) 9
- -------------------------------------------------------------------------------------------------------------------
31,821,066 SUBTOTAL (Enter Total of lines 8 and 9) 10
- -------------------------------------------------------------------------------------------------------------------
254,205 (6) 116,156,262 Spent Nuclear Fuel (120.4) 11
Nuclear Fuel Under Capital Leases (120.6) 12
Less Accum. Prov. for Amortization of 13
7,585,386 1,968,321 (7) 130,011,410 Nuclear Fuel Assemblies (120.5)
- -------------------------------------------------------------------------------------------------------------------
TOTAL Nuclear Fuel Stock (Enter Total of lines 14
17,981,467 6, 10, 11, and 12 less line 13)
- -------------------------------------------------------------------------------------------------------------------
Estimated Net Salvage Value of Nuclear 15
Materials in line 9
Estimated Net Salvage Value of Nuclear 16
Materials in line 11
Estimated Net Salvage Value of Nuclear 17
Materials in Chemical Processing
Nuclear Materials Held for Sale (157) 18
Uranium 19
Plutonium 20
Other 21
- -------------------------------------------------------------------------------------------------------------------
TOTAL Nuclear Materials Held for Sale 22
(Enter Total of lines 19, 20, and 21)
- ---------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-88) Page 203
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
ELECTRIC PLANT IN SERVICE (Accounts 101, 102, 103, and 106)
- ---------------------------------------------------------------------------------------------------------------------------
1. Report below the original cost of electric plant in counts, on an estimated basis if necessary, and include
service according to the prescribed accounts. the entries in column (c). Also to be included in column
2. In addition to Account 101, Electric Plant in Service (c) are entries for reversals of tentative distributions
(Classified), this page and the next include Account 102, of prior year reported in column (b). Likewise, if the
Electric Plant Purchased or Sold; Account 103, Experi- respondent has a significant amount of plant retirements
mental Electric Plant Unclassified; and Account 106, Com- which have not been classified to primary accounts at the
pleted Construction Not Classified-Electric. end of the year, include in column (d) a tentative
3. Include in column (c) or (d), as appropriate, distribution of such retirements, on an estimated basis,
corrections of additions and retirements for the current with appropriate contra entry to the account for accum-
or preceding year. mulated depreciation provision. Include also in column
4. Enclose in parentheses credit adjustments of plant (d) reversals of tentative distributions of prior year of
accounts to indicate the negative effect of such unclassified retirements. Attach supplemental statement
accounts. showing the account distributions of these tentative
5. Classify Account 106 according to prescribed ac- classifications in columns (c) and (d), including the
reversals
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Line Account Balance at Additions
No. Beginning of Year
(a) (b) (c)
- ------------------------------------------------------------------------------------------------------------------------
1 1. INTANGIBLE PLANT
2 (301) Organization
3 (302) Franchises and Consents
4 (303) Miscellaneous Intangible Plant
--------------------------------------------------------------------------------------------------------------------
5 TOTAL Intangible Plant (Total of lines 2, 3, and 4) 0 0
--------------------------------------------------------------------------------------------------------------------
6 2. PRODUCTION PLANT
7 A. Steam Production Plant
8 (310) Land and Land Rights 3,821,804 331
9 (311) Structures and Improvements 80,444,257 1,174,604
10 (312) Boiler Plant Equipment 320,107,452 5,357,746
11 (313) Engines and Engine-Driven Generators 0
12 (314) Turbogenerator Units 74,647,470 942,223
13 (315) Accessory Electric Equipment 39,472,592 42,765
14 (316) Misc. Power Plant Equipment 11,436,682 2,027,949
--------------------------------------------------------------------------------------------------------------------
15 TOTAL Steam Production Plant (Total of lines 8-14) 529,930,257 9,545,618
--------------------------------------------------------------------------------------------------------------------
16 B. Nuclear Production Plant
17 (320) Land and Land Rights 436,355
18 (321) Structures and Improvements 19,579,421 217,729
19 (322) Reactor Plant Equipment 66,806,732 1,268,484
20 (323) Turbogenerator Units 20,625,794 74,341
21 (324) Accessory Electric Equipment 14,023,540 78,053
22 (325) Misc. Power Plant Equipment 5,597,346 188,332
--------------------------------------------------------------------------------------------------------------------
23 TOTAL Nuclear Production Plant (Total of lines 17-22) 127,069,188 1,826,939
--------------------------------------------------------------------------------------------------------------------
24 C. Hydraulic Production Plant
25 (330) Land and Land Rights 1,818,687
26 (331) Structures and Improvements 3,014,887 61,514
27 (332) Reservoirs, Dams, and Waterways 10,832,429 67,977
28 (333) Water Wheels, Turbines, and Generators 6,601,837 29,116
29 (334) Accessory Electric Equipment 3,313,980 105,241
30 (335) Misc. Power Plant Equipment 132,737 7,349
31 (336) Roads, Railroads, and Bridges 22,444
--------------------------------------------------------------------------------------------------------------------
32 TOTAL Hydraulic Production Plant(Total of lines 25-31) 25,737,001 271,197
--------------------------------------------------------------------------------------------------------------------
33 D. Other Production Plant
34 (340) Land and Land Rights 154,664
35 (341) Structures and Improvements 739,788 7,706,253
36 (342) Fuel Holders, Products and Accessories 437,263 1,823,065
37 (343) Prime Movers 0
38 (344) Generators 11,705,860 12,647,333
39 (345) Accessory Electric Equipment 1,008,177 2,025,490
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-91) Page 204
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
--------------------------------------------------------------------------------------------------------------------------
ELECTRIC PLANT IN SERVICE (Accounts 101, 102, 103, and 106) (Continued)
- ---------------------------------------------------------------------------------------------------------------------------
of the prior years tentative account distributions column (f) only the offset to the debits or credits
of these amounts. Careful observance of the above distributed in column (f) to primary account classifica-
instructions and the texts of Accounts 101 and 106 will tions.
avoid serious omissions of the reported amount of 7. For Account 399, state the nature and use of plant
respondent's plant actually in service at end of year. included in this account and if substantial in amount
6. Show in column (f) reclassifications or transfers submit a supplementary statement showing subaccount
within utility plant accounts. Include also in column classification of such plant conforming to the require-
(f) the additions or reductions of primary account ments of these pages.
classifications arising from distribution of amounts 8. For each amount comprising the reported balance and
initially recorded in Account 102. In showing the changes in Account 102, state the property purchased or
clearance of Account 102, include in column (e) the sold, name of vendor or purchaser, and date of
amounts with respect to accumulated provision for transaction. If proposed journal entries have been filed
depreciation, acquisition adjustments, etc., and show in with the Commission as required by the Uniform System of
Accounts, give also date of such filing.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Retirements Adjustments Transfers Balance at
End of Year Line
(d) (e) (f) (g) No.
- ----------------------------------------------------------------------------------------------------------------------
1
0 (301) 2
0 (302) 3
0 (303) 4
- ------------------------------------------------------------------------------------------------------------------
0 0 0 0 5
- ------------------------------------------------------------------------------------------------------------------
6
7
(92) (3,781) 3,818,262 (310) 8
64,984 (1,939) 3,781 81,555,719 (311) 9
3,425,658 (13,656) (2,934) 322,022,950 (312) 10
0 (313) 11
162,317 (4,091) 75,423,285 (314) 12
(12,878) (11,790) 2,293 39,518,738 (315) 13
258,543 (1,749) (4,444) 13,199,895 (316) 14
- ------------------------------------------------------------------------------------------------------------------
3,898,624 (33,317) (5,085) 535,538,849 15
- ------------------------------------------------------------------------------------------------------------------
16
436,355 (320) 17
177,270 (4,456) 19,615,424 (321) 18
181,768 (12,865) 67,880,583 (322) 19
726 (2,735) 20,696,674 (323) 20
149,064 (2,497) 13,950,032 (324) 21
125,478 (2,341) 5,657,859 (325) 22
- ------------------------------------------------------------------------------------------------------------------
634,306 (24,894) 0 128,236,927 23
- ------------------------------------------------------------------------------------------------------------------
24
1,818,687 (330) 25
(318) 3,076,083 (331) 26
1,985 (1,509) 10,896,912 (332) 27
4,296 (1,248) 6,625,409 (333) 28
28,562 (1,397) 3,389,262 (334) 29
(4) 140,082 (335) 30
22,444 (336) 31
- ------------------------------------------------------------------------------------------------------------------
34,843 (4,476) 0 25,968,879 32
- ------------------------------------------------------------------------------------------------------------------
33
(4) 154,660 (340) 34
2,417,417 6,028,624 (341) 35
445,629 400 1,815,099 (342) 36
0 (343) 37
4,050,489 (78) (400) 20,302,226 (344) 38
635,534 (29) 2,398,104 (345) 39
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-88) Page 205
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
ELECTRIC PLANT IN SERVICE (Accounts 101, 102, 103, and 106) (Continued)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Line Account Balance at Additions
No. Beginning of Year
(a) (b) (c)
- ------------------------------------------------------------------------------------------------------------------------
40 (346) Misc. Power Plant Equipment 32,817 1,490
--------------------------------------------------------------------------------------------------------------------
41 TOTAL Other Production Plant (Total of lines 34-40) 14,078,569 24,203,631
--------------------------------------------------------------------------------------------------------------------
42 TOTAL Production Plant (Tot. of lines 15,23,32,and 41) 696,815,015 35,847,385
--------------------------------------------------------------------------------------------------------------------
43 3. TRANSMISSION PLANT
44 (350) Land and Land Rights 7,659,306 38,155
45 (352) Structures and Improvements
46 (353) Station Equipment 53,392,071 1,286,034
47 (354) Towers and Fixtures 2,881,704
48 (355) Poles and Fixtures 26,985,067 404,755
49 (356) Overhead Conductors and Devices 26,586,775 (12,037)
50 (357) Underground Conduit 34,962
51 (358) Underground Conductors and Devices 297,591
52 (359) Roads and Trails
--------------------------------------------------------------------------------------------------------------------
53 TOTAL Transmission Plant (Total of lines 44 thru 52) 117,837,476 1,716,907
--------------------------------------------------------------------------------------------------------------------
54 4. DISTRIBUTION PLANT
55 (360) Land and Land Rights 1,145,180 70,655
56 (361) Structures and Improvements 3,016
57 (362) Station Equipment 46,993,864 2,896,424
58 (363) Storage Battery Equipment
59 (364) Poles, Towers, and Fixtures 57,357,838 1,709,730
60 (365) Overhead Conductors and Devices 57,110,369 1,344,566
61 (366) Underground Conduit 3,816,936
62 (367) Underground Conductors and Devices 40,801,093 2,735,523
63 (368) Line Transformers 110,711,588 5,995,992
64 (369) Services 56,748,203 4,094,413
65 (370) Meters 17,536,321 1,357,441
66 (371) Installations on Customer Premises 4,718,207 466,264
67 (372) Leased Property on Customer Premises
68 (373) Street Lighting and Signal Systems 5,930,909 846,972
--------------------------------------------------------------------------------------------------------------------
69 TOTAL Distribution Plant (Total of lines 55 thru 68) 402,873,524 21,517,980
--------------------------------------------------------------------------------------------------------------------
70 5. GENERAL PLANT
71 (389) Land and Land Rights 502,011
72 (390) Structures and Improvements 6,758,086 345,292
73 (391) Office Furniture and Equipment 1,283,172 25,936
74 (392) Transportation Equipment 47,138 14,756
75 (393) Stores Equipment
76 (394) Tools, Shop and Garage Equipment 2,320,176 199,119
77 (395) Laboratory Equipment 2,921,576 297,857
78 (396) Power Operated Equipment
79 (397) Communication Equipment 9,515,296 508,037
80 (398) Miscellaneous Equipment
--------------------------------------------------------------------------------------------------------------------
81 SUBTOTAL (Enter Total of lines 71 thru 80) 23,347,455 1,390,997
--------------------------------------------------------------------------------------------------------------------
82 (399) Other Tangible Property 0
--------------------------------------------------------------------------------------------------------------------
83 TOTAL General Plant (Enter Total of lines 81 and 82) 23,347,455 1,390,997
--------------------------------------------------------------------------------------------------------------------
84 TOTAL (Accounts 101 and 106) 1,240,873,470 60,473,269
--------------------------------------------------------------------------------------------------------------------
85 (102) Electric Plant Purchased (See Inst. 8)
86 (Less) (102) Electric Plant Sold (See Inst. 8)
87 (103) Experimental Plant Unclassified
--------------------------------------------------------------------------------------------------------------------
88 TOTAL Electric Plant in Service 1,240,873,470 60,473,269
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-88) Page 206
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
ELECTRIC PLANT IN SERVICE (Accounts 101, 102, 103, and 106) (Continued)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at
Retirements Adjustments Transfers End of Year Line
(d) (e) (f) (g) No.
- ----------------------------------------------------------------------------------------------------------------------
443 33,864 (346) 40
- ------------------------------------------------------------------------------------------------------------------
7,549,512 (111) 0 30,732,577 41
- ------------------------------------------------------------------------------------------------------------------
12,117,285 (62,798) (5,085) 720,477,232 42
- ------------------------------------------------------------------------------------------------------------------
43
3,531 (2,276) (794) 7,690,860 (350) 44
0 (352) 45
177,330 (26,803) 1,827 54,475,799 (353) 46
24 2,881,680 (354) 47
47,394 (17,819) 476,940 27,801,549 (355) 48
23,566 (13,837) (503,726) 26,033,609 (356) 49
34,962 (357) 50
297,591 (358) 51
0 (359) 52
- ------------------------------------------------------------------------------------------------------------------
251,845 (60,735) (25,753) 119,216,050 53
- ------------------------------------------------------------------------------------------------------------------
54
32,478 (421) 1,182,936 (360) 55
3,016 (361) 56
306,533 (7,051) 49,576,704 (362) 57
0 (363) 58
504,876 13,444 58,576,136 (364) 59
289,399 108 58,165,644 (365) 60
11,501 3,805,435 (366) 61
129,565 43,407,051 (367) 62
699,810 (3,248) 116,004,522 (368) 63
411,438 60,431,178 (369) 64
206,140 (4,677) 18,682,945 (370) 65
122,822 5,061,649 (371) 66
0 (372) 67
68,536 6,709,345 (373) 68
- ------------------------------------------------------------------------------------------------------------------
2,783,098 0 (1,845) 421,606,561 69
- ------------------------------------------------------------------------------------------------------------------
70
2,391 499,620 (389) 71
56,823 (59,683) 6,986,872 (390) 72
22,744 2,934 1,289,298 (391) 73
5,521 56,373 (392) 74
0 (393) 75
92,147 16,677 2,443,825 (394) 76
114,518 5,709 3,110,624 (395) 77
0 (396) 78
382,270 2,473 9,643,536 (397) 79
0 (398) 80
- ------------------------------------------------------------------------------------------------------------------
676,414 0 (31,890) 24,030,148 81
- ------------------------------------------------------------------------------------------------------------------
0 (399) 82
- ------------------------------------------------------------------------------------------------------------------
676,414 0 (31,890) 24,030,148 83
- ------------------------------------------------------------------------------------------------------------------
15,828,642 (123,533) (64,573) 1,285,329,991 84
- ------------------------------------------------------------------------------------------------------------------
0 (102) 85
0 86
0 (103) 87
- ------------------------------------------------------------------------------------------------------------------
15,828,642 (123,533) (64,573) 1,285,329,991 88
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-88) Page 207 Next Page is 213
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1992
- --------------------------------------------------------------------------------------------------------------------------------
ELECTRIC PLANT HELD FOR FUTURE USE (Account 105)
--------------------------------------------------------------------------------------------------------------------------------
1. Report separately each property held for future $250,000 or more previously used in utility operations,
use at end of the year having an original cost of now held for future use, give in column (a), in
$250,000 or more. Group other items of property held addition to other required information, the date that
for future use. utility use of such property was discontinued, and the date
2. For property having an original cost of the original cost was transferred to Account 105.
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Description and Location Date Originally Date Expected Balance at
Line of Property Included in to be Used in End of
No. This Account Utility Service Year
(a) (b) (c) (d)
----------------------------------------------------------------------------------------------------------------------------
1 Land and Land Rights:
2
3 Other 170,291
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20 ------------------------------------------------------------
21 Other Property:
22 ------------------------------------------------------------
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
------------------------------------------------------------------------------------------------------------------------
47 Total 170,291
- ----------------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-89) Page 214 Next Page is 216
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
Wisconsin Public Service (1) [X] An Original (Mo, Da, Yr)
Corporation (2) [ ] A Resubmission Dec. 31, 1993
-----------------------------------------------------------------------------------------------------------------------------
COMMON UTILITY PLANT AND EXPENSES
-----------------------------------------------------------------------------------------------------------------------------
1. Describe the property carried in the utility's ac- tion and factors used.
counts as common utility plant and show the book cost of 3. Give for the year the expenses of operation,
such plant at end of year classified by accounts as pro- maintenance, rents, depreciation, and amortization
vided by Plant Instructions 13, Common Utility Plant, of for common utility plant classified by accounts as
the Uniform System of Accounts. Also show the allocation provided by the Uniform Systems of Accounts. Show the
of such plant costs to the respective departments using allocation of such expenses to the departments using
the common utility plant and explain the basis of allo- the common utility plant to which such expenses are
cation used, giving the allocation factors. related. Explain the basis of allocation used and
2. Furnish the accumulated provision for depreciation give the factors of allocation.
and amortization at end of year, showing the amounts and 4. Give date of approval by the Commission for use
classifications of such accumulated provisions, and of the common utility plant classification and refer-
amounts allocated to utility departments using the ence to order of the Commission or other authoriza-
common utility plant to which such accumulated provi- tion.
sions relate, including explanation of basis of alloca-
- ----------------------------------------------------------------------------------------------------------------------------------
Total Electric Gas
<S> <C> <C> <C>
COMMON UTILITY PLANT IN SERVICE
General Plant - Common
Land and Land Rights 1,923,628 1,576,490 347,138
Structures and Improvements 31,032,504 25,422,953 5,609,551
Office Furniture and Equipment 37,002,535 30,333,432 6,669,103
Transportation Equipment 25,549,577 20,934,763 4,614,814
Stores Equipment 1,486,692 1,218,454 268,238
Tools, Shop and Garage Equipment 951,525 779,978 171,547
Laboratory Equipment 306,928 251,614 55,315
Power Operated Equipment 3,648,957 2,990,964 657,993
Communication Equipment 6,703,124 5,491,886 1,211,238
Miscellaneous Equipment 197,088 161,553 35,535
------------ ------------ ------------
Total Common Plant 108,802,557 89,162,085 19,640,472
============ ============ ============
COMMON UTILITY PLANT HELD FOR FUTURE USE -- -- --
============ ============ ============
COMMON UTILITY CONSTRUCTION WORK IN PROGRESS 1,054,021 864,156 189,865
============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-89) Page 356
May not cross-check due to rounding.
</TABLE>
<PAGE>
EXHIBIT D
We, Daniel P. Bittner, Senior Vice President and
Diane L. Ford, Controller for WISCONSIN PUBLIC SERVICE
CORPORATION, having made due inquiries, do hereby affirm that
to the best of our information and belief, the attached is a
true and correct statement of all known contingent
liabilities which could have a material adverse effect on the financial
position or results of operation of Wisconsin Public Service
Corporation.
WITNESS our hands and the seal of this corporation this 10th
day of March, 1994.
/s/ Daniel P. Bittner
---------------------------------
Senior Vice President
/s/ Diane L. Ford
---------------------------------
Controller
(SEAL)
<PAGE>
EXHIBIT D
Wisconsin Public Service Corporation
Statement of Contingent Liabilities
As of December 31, 1993
Coal Contracts -
- --------------
To ensure a reliable, low cost supply of coal the company has entered into
certain long-term contracts that have take-or-pay obligations totaling $319.0
million from 1994 through 2016. The obligations are subject to force majeure
provisions which provide the company other options, if the specified coal will
not meet emission limits and acid rain legislation. In the opinion of
management, any amounts paid under the take-or-pay obligations described above
would be a legitimate cost of service subject to recovery in rates.
Gas Costs -
- ---------
The company also has natural gas supply and transportation contracts that
require total demand payments of $417.4 million through October 2003.
Management believes that these costs will be recoverable in future rates.
ANR Pipeline Company (ANR), the company's primary pipeline supplier, filed
with the FERC for approval to recover a portion of certain take-or-pay costs
it incurred from renegotiating its long-term gas contracts. As a result of
the filing, ANR was allowed to recover a portion of these costs from its
customers. The company began paying its share of these take-or-pay costs to
ANR in 1989 and recovering these costs directly from customers through its
purchased gas adjustment clause. In March 1991, the FERC approved the
settlement under which the company will pay ANR monthly take-or-pay amounts.
Additional take-or-pay claims by ANR may be filed with FERC. To date, the PSCW
has granted the company recovery of all take-or-pay costs.
In April 1992, the FERC issued order No. 636, which requires natural gas
pipelines to restructure their sales and transportation services. As a result
of this order, the company is obligated to pay for a portion of ANR's
transition costs incurred to comply with the order. At December 31, 1993, the
company has an accrued liability with an offsetting regulatory asset in the
amount of $3.7 million for a portion of these transition costs. Though there
may be additional costs, which could be significant, the amount and timing of
these costs are unknown at this time. Management expects to recover these
costs in future rates.
The company will be billed $2.0 million in 1994 for ANR's above-market costs
of gas purchases from the Dakota Gasification Plant. The company is
protesting the legality of these costs, which could total $31.4 million
through 2009.
Nuclear Liability -
- -----------------
The Price-Anderson Act provides for the payment of funds for public liability
claims arising out of a nuclear incident. In the event of a nuclear incident
<PAGE>
involving any of the nation's licensed reactors, the company is subject to a
proportional assessment which is approximately $27.0 million per incident, not
to exceed $4.1 million per incident, per calendar year. These amounts
represent the company's 41.2% ownership share of Kewaunee.
Clean Air Regulations -
- ---------------------
In 1990, the Federal Clean Air Act Amendments (CAAA) were signed into law.
The CAAA requires the company to meet new emission limits for sulphur dioxide
(SO2) and nitrogen oxide (NOx) in 1995 (Phase I) and in the year 2000 (Phase
II). Since Wisconsin had already mandated reduced SO2 emissions by 1993 which
were lower than the Federal levels mandated for 1995, the company was already
working on lowering emissions. Since Federal limits are more stringent than
those mandated by Wisconsin in the year 2000, the company is continuing to
develop compliance plans for Phase II of the CAAA. The company will comply
cost effectively with both the Federal and Wisconsin SO2 laws primarily
through fuel switching. The company was in compliance with the new Wisconsin
SO2 limits in 1993.
The final Federal regulations for NOx are not known at this time; however,
based on draft rules the company expects to make additional capital
expenditures in the range of $15-$25 million between 1994 and 1999 for
Wisconsin and Federal air quality compliance. Management believes that all
costs incurred to comply with these laws will be recoverable in future rates.
Manufactured Gas Plant Remediation -
- ----------------------------------
The company is currently investigating the need for environmental cleanup of
seven manufactured gas plant sites previously operated by the company and has
engaged an environmental consultant who estimated that the cost to remediate
one specific site would be approximately $2.1 million. This estimate is based
upon an investigation of the site and assumes excavation of impacted soils,
disposal of soils to a licensed landfill for such materials, on-site
groundwater extraction and treatment, and post-cleanup and monitoring for 25
years. The consultant has not yet performed phase II investigations of the
remaining six sites and therefore comparable information on these sites is not
available.
<PAGE>
Because the first site is not on a river and the remaining six sites are,
there is no data currently available as to possible contaminated river
sediments. As a result, it is difficult to estimate the cost of cleanup in
the rivers if contamination should be present; however, based on estimates
from the Gas Research Institute for sites with minimal sediment contamination,
and assuming all six sites have river contamination, management estimates the
additional cost for minimum river remediation to be $2.7 million in total.
The company used the estimate on the first site as a basis for making
projections on cleanup costs at the other sites because of certain similar
characteristics at the other sites. Thus for all sites, cleanup costs are
estimated to be in the range of $6.4 to $19.2 million. However, management's
current estimate of cleanup costs for all seven sites, excluding any river
sediment cleanup, is $16.5 million which would be spent over the next 33
years.
The $16.5 million estimate has been recorded as a liability with an offsetting
deferred charge (regulatory asset). Based on discussions with regulatory
authorities and effective with a recent rate order, these costs, less any
insurance recoveries, will be recoverable in future rates, except for carrying
costs.
As additional site specific studies are completed (five are anticipated in
1994), these estimates will be adjusted to reflect specific site data. Other
factors that can impact these estimates are changes in remediation technology
and regulatory requirements. This estimate does not take into consideration
any recovery from insurance carriers or other third parties which the company
is pursuing.
The company is also involved, and has made minor payments for the
investigation and potential cleanup of certain waste disposal sites.
Management believes the company has been a minor contributor to the total
contamination at these known sites, and accordingly, does not believe its
share of cleanup costs to be material.
Long-term Power Supply -
- ----------------------
The company has signed a contract to build a 116 megawatt cogeneration
facility with Rhinelander Paper Company and has filed an application for a
Certificate of Public Convenience and Necessity (CPCN) with the PSCW
requesting approval for the project. Estimated cost for the project is $191
million. In addition, as required by the PSCW's newly developed bidding
process, the company has requested proposals for the same capacity from
electric generating plant project developers and power purchases from other
utilities. The company will compare the bids before proposing a solution to
its capacity and energy needs to the PSCW, which must approve the option
selected. A final decision is expected by late 1994.
<PAGE>
New Construction -
- ----------------
Management estimates 1994 utility plant construction expenditures to be
approximately $77.1 million. DSM expenditures are estimated to be $32.8
million, of which approximately $20.6 million will be deferred and amortized
over the next ten years.
<PAGE>
EXHIBIT E
I, Daniel P. Bittner, Senior Vice President of
WISCONSIN PUBLIC SERVICE CORPORATION, do hereby certify that the
attached is a true and correct copy of an income statement for the
twelve months ended December 31, 1993, and is based on the books of
Wisconsin Public Service Corporation.
WITNESS my hand and the seal of this corporation this 10th
day of March, 1994.
/s/ Daniel P. Bittner
-----------------------------------
Senior Vice President
(SEAL)
<PAGE>
EXHIBIT E
Wisconsin Public Service Corporation
Statements of Income
For the Year Ended December 31, 1993
Please note pro forma statements have not been
supplied due to the fact they would reflect no
material change from the statements presented
at the time the holding company would become
effective.
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INCOME FOR THE YEAR
- ---------------------------------------------------------------------------------------------------------------------------
1. Report amounts for accounts 412 and 413, Revenue and 5. Give concise explanations concerning unsettled rate
Expenses from Utility Plant Leased to Others, in another proceedings where a contingency exists such that refunds
utility column (i, k, m,o) in a similar manner to a utility of a material amount may need to be made to the
department. Spread the amount(s) over lines 02 thru 24 as utility's customers or which may result in a material
appropriate. Include these amounts in columns (c) and (d) refund to the utility with respect to power or gas
totals. purchases. State for each year affected the gross
2. Report amounts in account 414, Other Utility Operating revenues or costs to which the contingency relates and
Income, in the same manner as accounts 412 and 413 above. the tax effects together with an explanation of the
3. Report data for lines 7, 9, and 10 for Natural Gas major factors which affect the rights of the utility to
companies using accounts 404.1, 404.2, 404.3, 407.1, and retain such revenues or recover amounts paid with
407.2. respect to power and gas purchases.
4. Use page 122 for important notes regarding the 6. Give concise explanations concerning significant
statement of income or any account thereof.
- ---------------------------------------------------------------------------------------------------------------------------
(Ref.) TOTAL
Line Account Page -----------------------------------------
No. No. Current Year Previous Year
(a) (b) (c) (d)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 UTILITY OPERATING INCOME
-------------------------------------------------------------------------------------------------------------------
2 Operating Revenues (400) 300-301 680,631,715 634,802,132
-------------------------------------------------------------------------------------------------------------------
3 Operating Expenses
4 Operation Expenses (401) 320-323 426,433,498 397,211,122
5 Maintenance Expenses (402) 320-323 51,597,018 46,435,684
6 Depreciation Expense (403) 336-338 60,609,049 58,591,872
7 Amortization & Depletion of Utility Plant (404-405) 336-338
8 Amortization of Utility Plant Acquisition Adj. (406) 336-338 (73,223) 1,611,466
9 Amortization of Property Losses, Unrecovered Plant
and Regulatory Study Costs (407) 11,493 141,218
10 Amortization of Conversion Expenses (407)
11 Regulatory Debits (407.3)
12 (Less) Regulatory Credits (407.4)
13 Taxes Other Than Income Taxes (408.1) 262-263 25,203,653 24,459,237
14 Income Taxes - Federal (409.1) 262-263 21,755,174 16,536,886
15 - Other (409.1) 262-263 6,191,981 4,360,110
16 Provision for Deferred Income Taxes (410.1) 234, 272-277 27,123,176 22,819,207
17 (Less) Provision for Deferred Income Taxes - Cr. (411.1) 234, 272-277 (20,103,332) (14,488,624)
18 Investment Tax Credit Adjustment - Net (411.4) 266 (1,860,273) (2,021,725)
19 (Less) Gains from Disp. of Utility Plant (411.6)
20 Losses from Disp. of Utility Plant (411.7)
21 (Less) Gains from Disposition of Allowances (411.8)
22 Losses from Disposition of Allowances (411.9)
-------------------------------------------------------------------------------------------------------------------
TOTAL Utility Operating Expenses
23 (Enter Total of lines 4 thru 22) 596,888,214 555,656,453
-------------------------------------------------------------------------------------------------------------------
Net Utility Operating Income (Enter Total of
line 2 less 23) (Carry forward to page 117,
24 line 25) 83,743,501 79,145,679
- ---------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (REVISED 12-93) Page 114
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INCOME FOR THE YEAR (Continued)
- ---------------------------------------------------------------------------------------------------------------------------
amounts of any refunds made or received during the year allocations and apportionments from those used in the
resulting from settlement of any rate proceeding affecting preceding year. Also give the approximate dollar
revenues received or costs incurred for power or gas effect of such changes.
purchases, and a summary of the adjustments made to 9. Explain in a footnote if the previous year's
balance sheet, income, and expense accounts. figures are different from that reported in prior
7. If any notes appearing in the report to stockholders reports.
are applicable to this Statement of Income, such notes may 10. If the columns are insufficient for reporting
be attached at page 122. additional utility departments, supply the appropriate
8. Enter on page 122 a concise explanation of only those account titles, lines 2 to 23, and report the
changes in accounting methods made during the year which information in the blank space on page 122 or in a
had an effect on net income, including the basis of supplemental statement.
- ---------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITY GAS UTILITY OTHER UTILITY
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Current Year Previous Year Current Year Previous Year Current Year Previous Year Line
(e) (f) (g) (h) (i) (j) No.
- -----------------------------------------------------------------------------------------------------------------
1
- -----------------------------------------------------------------------------------------------------------------
493,255,874 477,625,325 187,375,841 157,176,807 2
- -----------------------------------------------------------------------------------------------------------------
3
261,902,900 258,999,619 164,530,598 138,211,503 4
48,693,841 43,634,096 2,903,177 2,801,588 5
54,497,700 52,819,184 6,111,349 5,772,688 6
7
(73,212) 1,572,027 (11) 39,439 8
9
11,493 141,218
10
11
12
21,939,640 21,930,152 3,264,013 2,529,085 13
20,223,932 16,151,279 1,531,242 385,607 14
5,782,544 4,269,701 409,437 90,409 15
20,894,389 19,486,525 6,228,787 3,332,682 16
(14,583,627) (12,307,604) (5,519,705) (2,181,020) 17
(1,718,036) (1,853,837) (142,237) (167,888) 18
19
20
21
22
- -------------------------------------------------------------------------------------------------------------
417,571,564 404,842,360 179,316,650 150,814,093 0 0 23
- -----------------------------------------------------------------------------------------------------------------
75,684,310 72,782,965 8,059,191 6,362,714 0 0 24
- ---------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (REVISED 12-93) Page 115
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
---------------------------------------------------------------------------------------------------------------------------
STATEMENT OF INCOME FOR THE YEAR (Continued)
---------------------------------------------------------------------------------------------------------------------------
Ref. TOTAL
Line Account Page -------------------------------
No. No. Current Year Previous Year
(a) (b) (c) (d)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
25 Net Utility Operating Income (Carried forward from page 114) --- 83,743,501 79,145,679
-------------------------------------------------------------------------------------------------------------------
26 Other Income and Deductions
-------------------------------------------------------------------------------------------------------------------
27 Other Income
28 Nonutility Operating Income
29 Revenues From Merchandising, Jobbing and Contract Work (415)
30 (Less) Costs and Exp.of Merchandising, Job. & Contract Work (416)
31 Revenues From Nonutility Operations (417) 4,285,769 3,785,032
32 (Less) Expenses of Nonutility Operations (417.1) (4,046,656) (3,707,424)
33 Nonoperating Rental Income (418) 26,817 25,425
34 Equity in Earnings of Subsidiary Companies (418.1) 119 (358,096) 1,292,115
35 Interest and Dividend Income (419) 3,990,767 4,206,221
36 Allowance for Other Funds Used During Construction (419.1) 287,389 493,638
37 Miscellaneous Nonoperating Income (421) 811,429 1,044,941
38 Gain on Disposition of Property (421.1) 137,453 4,992
-------------------------------------------------------------------------------------------------------------------
39 TOTAL Other Income (Enter Total of lines 29 thru 38) 5,134,872 7,144,940
-------------------------------------------------------------------------------------------------------------------
40 Other Income Deductions
41 Loss on Disposition of Property (421.2) 18,181 90,999
42 Miscellaneous Amortization (425) 340 648,125
43 Miscellaneous Income Deductions (426.1-426.5) 340 705,247 364,148
-------------------------------------------------------------------------------------------------------------------
44 TOTAL Other Income Deductions (Total of lines 41 thru 43) 1,371,553 455,147
-------------------------------------------------------------------------------------------------------------------
45 Taxes Applicable to Other Income and Deductions
46 Taxes Other Than Income Taxes (408.2) 262-263 120,057 119,735
47 Income Taxes - Federal (409.2) 262-263 196,201 1,052,965
48 Income Taxes - Other (409.2) 262-263 (139,014) 81,692
49 Provision for Deferred Income Taxes (410.2) 234, 272-277 430,095 117,143
50 (Less) Provision for Deferred Income Taxes - Credit (411.2) 234, 272-277 (1,055,161) (135,537)
51 Investment Tax Credit Adjustment - Net (411.5)
52 (Less) Investment Tax Credits (420)
-------------------------------------------------------------------------------------------------------------------
53 TOTAL Taxes on Other Income and Deduct. (Total of 46 thru 52) (447,822) 1,235,998
-------------------------------------------------------------------------------------------------------------------
54 Net Other Income and Deductions (Enter Total of lines 39, 44, 53) 4,211,141 5,453,795
-------------------------------------------------------------------------------------------------------------------
55 Interest Charges
-------------------------------------------------------------------------------------------------------------------
56 Interest on Long-Term Debt (427) 22,002,040 24,193,684
57 Amortization of Debt Discount and Expense (428) 258-259 2,391,255 1,468,186
58 Amortization of Loss on Reacquired Debt (428.1)
59 (Less) Amortization of Premium on Debt - Credit (429) 258-259
60 (Less) Amortization of Gain on Reacquired Debt - Credit (429.1)
61 Interest on Debt to Associated Companies (430) 340
62 Other Interest Expense (431) 340 1,562,114 1,477,365
63 (Less) Allowance for Borrowed Funds Used During Construction-Cr.(432) (200,543) (541,797)
-------------------------------------------------------------------------------------------------------------------
64 Net Interest Charges (Enter Total of lines 56 thru 63) 25,754,866 26,597,438
-------------------------------------------------------------------------------------------------------------------
65 Income Before Extraordinary Items (Total of lines 25, 54 and 63) 62,199,776 58,002,036
-------------------------------------------------------------------------------------------------------------------
66 Extraordinary Items
-------------------------------------------------------------------------------------------------------------------
67 Extraordinary Income (434)
68 (Less) Extraordinary Deductions (435)
-------------------------------------------------------------------------------------------------------------------
69 Net Extraordinary Items (Enter Total of line 67 less line 68)
-------------------------------------------------------------------------------------------------------------------
70 Income Taxes - Federal and Other (409.3) 262-263
-------------------------------------------------------------------------------------------------------------------
71 Extraordinary Items After Taxes (Enter Total of line 69 less line 70)
-------------------------------------------------------------------------------------------------------------------
72 Net Income (Enter Total of lines 65 and 71) 62,199,776 58,002,036
EARNINGS PER SHARE ON COMMON STOCK $2.47 $2.35
-----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (REVISED 12-93) Page 117
May not cross check due to rounding.
</TABLE>
<PAGE>
EXHIBIT F
I, Daniel P. Bittner, Senior Vice President of
WISCONSIN PUBLIC SERVICE CORPORATION, do hereby certify that the attached
is a true and correct copy of an analysis of retained earnings for the twelve
months ended December 31, 1993, and is based on the books of
Wisconsin Public Service Corporation.
WITNESS my hand and the seal of this corporation this 10th
day of March, 1994.
/s/ Daniel P. Bittner
----------------------------------
Senior Vice President
(SEAL)
<PAGE>
EXHIBIT F
Wisconsin Public Service Corporation
Analysis of Retained Earnings
As of December 31, 1993
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
- ---------------------------------------------------------------------------------------------------------------------------
STATEMENT OF RETAINED EARNINGS FOR THE YEAR (1993)
- ---------------------------------------------------------------------------------------------------------------------------
1. Report all changes in appropriated retained 5. Show dividends for each class and series of capital
earnings, unappropriated retained earnings, and stock.
unappropriated undistributed subsidiary earnings 6. Show separately the State and Federal income tax
for the year. effect of items shown in Account 439, Adjustments to
2. Each credit and debit during the year should be Retained Earnings.
identified as to the retained earnings account in 7. Explain in a footnote the basis for determining the
which recorded (Accounts 433, 436-439 inclusive). amount reserved or appropriated. If such reservation or
Show the contra primary account affected in column appropriation is to be recurrent, state the number and
(b). annual amounts to be reserved or appropriated as well as
3. State the purpose and amount for each reserva- the totals eventually to be accumulated.
tion or appropriation of retained earnings. 8. If any notes appearing in the report to stockholders
4. List first account 439, Adjustments to Retained are applicable to this statement, attach them at page
Earnings, reflecting adjustments to the opening 122.
balance of retained earnings. Follow by credit,
then debit items in that order.
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Line Contra
No. Item Primary Amount
Account
(a) Affected (c)
- ------------------------------------------------------------------------------------------------------------------------
UNAPPROPRIATED RETAINED EARNINGS (Account 216)
--------------------------------------------------------------------------------------------------------------------
1 Balance - Beginning of Year 274,275,630
2 Changes (Identify by prescribed retained earnings accounts)
3 Adjustments to Retained Earnings (Account 439)
4 Credit:
5 Credit:
6 Credit:
7 Credit:
8 Credit:
--------------------------------------------------------------------------------------------------------------------
9 TOTAL Credits to Retained Earnings (Account 439) (Total of lines 4 thru 8) 0
--------------------------------------------------------------------------------------------------------------------
10 Debit: 217 149,715
11 Debit:
12 Debit:
13 Debit:
14 Debit:
--------------------------------------------------------------------------------------------------------------------
15 TOTAL Debits to Retained Earnings (Account 439) (Total of lines 10 thru 14) 149,715
--------------------------------------------------------------------------------------------------------------------
16 Balance Transferred from Income (Account 433 less Acct 418.1)(NOTE 2, PAGE 119) 61,990,361
17 Appropriations of Retained Earnings (Account 436)
18 ADDITION TO AMORTIZATION RESERVE - FEDERAL IN ACCORDANCE WITH FEDERAL ENERGY
19 REGULATORY COMMISSION ORDER NO. 387 215.1 181,468
20
21
--------------------------------------------------------------------------------------------------------------------
22 TOTAL Appropriations of Retained Earnings (Account 436)(Total of lines 18-21) 181,468
--------------------------------------------------------------------------------------------------------------------
23 Dividends Declared - Preferred Stock (Account 437)
24 5.00% Series - $5.00 per share 238 660,000
25 5.04% Series - $5.04 per share 238 151,200
26 5.08% Series - $5.08 per share 238 254,000
27 6.76% Series - $6.76 per share 238 1,014,000
28 7.72% Series - $7.72 per share 238 868,500
6.88% Series - $6.88 per share 238 384,000
--------------------------------------------------------------------------------------------------------------------
29 TOTAL Dividends Declared-Preferred Stock (Account 437)(Total of Lines 24-28) 3,331,700
--------------------------------------------------------------------------------------------------------------------
30 Dividends Declared - Common Stock (Account 438)
31 Current Year - $1.76 per share 238 42,045,149
32
33
34
--------------------------------------------------------------------------------------------------------------------
36 TOTAL Dividends Declared - Common Stock (Account 438)(Total of lines 31-35) 42,045,149
--------------------------------------------------------------------------------------------------------------------
37 Transfers from Acct. 216.1, Unappropriated Undistributed Subsidiary Earnings 216.1 206,883
--------------------------------------------------------------------------------------------------------------------
38 Balance - End of Year (Total of lines 01, 09, 15, 16, 22, 29, 36 and 37) 290,764,842
- -----------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-89) Page 118
May not cross-check due to rounding.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Name of Respondent This Report Is: Date of Report Year of Report
(1) [X] An Original (Mo, Da, Yr)
Wisconsin Public Service Corporation (2) [ ] A Resubmission Dec. 31, 1993
-----------------------------------------------------------------------------------------------------------------------
STATEMENT OF RETAINED EARNINGS FOR THE YEAR (Continued) (1993)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Line Item Amount
No. (a) (b)
---------------------------------------------------------------------------------------------------------------------
APPROPRIATED RETAINED EARNINGS (Account 215)
State balance and purpose of each appropriated retained earnings amount at end of year and
give accounting entries for any applications of appropriated retained earnings during the year.
-----------------------------------------------------------------------------------------------------------------
39
40
41
42
43
44
-----------------------------------------------------------------------------------------------------------------
45 TOTAL Appropriated Retained Earnings (Account 215) * (23,382,449)
-----------------------------------------------------------------------------------------------------------------
APPROPRIATED RETAINED EARNINGS - AMORTIZATION RESERVE, FEDERAL (Account 215.1)
State below the total amount set aside through appropriations of retained earnings, as of the
end of the year, in compliance with the provisions of Federally granted hydroelectric project
licenses held by the respondent. If any reductions or changes other than the normal annual
credits hereto have been made during the year, explain such items in a footnote.
-----------------------------------------------------------------------------------------------------------------
46 TOTAL Appropriated Retained Earnings - Amortization Reserve, Federal (Account 215.1) 931,712
-----------------------------------------------------------------------------------------------------------------
47 TOTAL Appropriated Retained Earnings (Account 215, 215.1) (Enter Total of lines 45 and 46) (22,450,737)
-----------------------------------------------------------------------------------------------------------------
48 TOTAL Retained Earnings (Account 215, 215.1, 216) (Enter Total of lines 38 and 47) 268,314,105
-----------------------------------------------------------------------------------------------------------------
UNAPPROPRIATED UNDISTRIBUTED SUBSIDIARY EARNINGS (Account 216.1)
-----------------------------------------------------------------------------------------------------------------
49 Balance - Beginning of Year (Debit or Credit) (3,006,412)
-----------------------------------------------------------------------------------------------------------------
50 Equity in Earnings for Year (Credit) (Account 418.1) ** 209,415
-----------------------------------------------------------------------------------------------------------------
51 (Less) Dividends Received (Debit) 206,883
-----------------------------------------------------------------------------------------------------------------
52 Other Changes (Explain)
-----------------------------------------------------------------------------------------------------------------
53 Balance - End of Year (3,003,880)
-----------------------------------------------------------------------------------------------------------------
* Reduced by $23,382,449 to reflect guarantee of loans by the company's ESOP plan.
The offset to this is other long-term debt. Amount
** This amount consists of the following components: (b)
Equity in gross earnings of subsidiaries (358,096)
Less: Taxes (479,473)
-------------
Net Income in Account 418.1 121,377
Add: Taxes applicable to unconsolidated subsidiary earnings 88,038
-------------
Total 209,415
=============
------------------------------------------------------------------------------------------------------------------------
FERC FORM NO. 1 (ED. 12-89) Page 119
May not cross-check due to rounding.
</TABLE>
<PAGE>
EXHIBIT G-1
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WPS RESOURCES CORPORATION and
WISCONSIN PUBLIC SERVICE CORPORATION, each of which is a
corporation duly organized and existing under and by virtue
of the laws of the State of Wisconsin; and as such Assistant
Vice President-Secretary I have access to all original records
of said corporations; and that I am duly and properly authorized
to make certified copies of their records in their behalf and
I do hereby certify that the attached is a true and correct copy
of the application of said corporation to form a holding company
and for approval of an affiliated interest agreement filed with
the Public Service Commission of Wisconsin.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seals of said corporations this 10th day of March, 1994.
/s/ Robert H. Knuth
----------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
EXHIBIT G-2
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WPS RESOURCES CORPORATION, a
corporation duly organized and existing under and by virtue of
the laws of the State of Wisconsin; and as such Assistant
Vice President-Secretary I have access to all original records
of said corporation; and that I am duly and properly authorized
to make certified copies of its records in its behalf and I do
hereby certify that the attached is a true and correct copy of
the registration statement on Form S-4 filed by said corporation
with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seal of said corporation this 10th day of March, 1994.
/s/ Robert H. Knuth
----------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
EXHIBIT G-2.1
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WPS RESOURCES CORPORATION, a
corporation duly organized and existing under and by virtue of the
laws of the State of Wisconsin; and as such Assistant Vice
President-Secretary I have access to all original records of said
corporation; and that I am duly and properly authorized to make
certified copies of its records in its behalf and I do hereby
certify that the attached is a true and correct copy of Amendment
No. 1 to a registration statement on Form S-4 filed by said
corporation with the Securities and Exchange Commission.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seal of said corporation this 10th day of March, 1994.
/s/ Robert H. Knuth
-------------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
REG NO. 33-52199
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WPS RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
WISCONSIN 39-1775292
<S> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
700 NORTH ADAMS STREET
P. O. BOX 19001
GREEN BAY, WISCONSIN 54307
414-433-1598
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
<TABLE>
<S> <C>
DANIEL A. BOLLOM, President MICHAEL S. NOLAN
and Chief Executive Officer Foley & Lardner
WPS Resources Corporation 777 East Wisconsin Avenue
700 North Adams Street, P.O. Box 19001 Milwaukee, Wisconsin 53202
Green Bay, Wisconsin 54307 Telephone Number: 414-289-3608
Telephone Number: 414-433-1464
</TABLE>
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THE PROSPECTUS/PROXY STATEMENT CONTAINED IN THE
REGISTRATION STATEMENT TO READ AS SET FORTH HEREIN.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
WPS RESOURCES CORPORATION
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROXY STATEMENT AND PROSPECTUS
- -------------------------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C>
A. Information About the Transaction
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus............... Facing page of Registration Statement; Cross Reference
Sheet; Cover Page of Prospectus/Proxy Statement
2. Inside Front and Outside Back Cover Pages of
Prospectus................................... Inside Front Cover of Prospectus/Proxy Statement; Table
of Contents; Available Information
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information................ Prospectus/Proxy Statement Summary; General Information;
Proposed Share Exchange and Corporate Restructuring --
Vote Required; -- General; -- Businesses; -- Terms of
Share Exchange and Corporate Restructuring; --
Conditions to Consummation of Share Exchange of the
Company; -- Appraisal Rights; -- Market Prices of
Wisconsin Public Service Corporation Common Stock; --
Financial Statements; -- Pro Forma Financial
Statements; -- Certain Federal Income Tax Consequences
4. Terms of Transaction.......................... Proposed Share Exchange and Corporate Restructuring --
Vote Required; -- General; -- Reasons for Share
Exchange and Corporate Restructuring; -- Terms of Share
Exchange and Corporate Restructuring; -- Restated
Articles of Incorporation and By-Laws of WPS Resources;
-- Description of WPS Resources Common Stock; --
Certain Federal Income Tax Consequences
5. Pro Forma Financial Information............... Proposed Share Exchange and Corporate Restructuring --
Pro Forma Financial Statements
6. Material Contacts with the Company Being
Acquired..................................... Not Applicable
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to Be
Underwriters................................. Not Applicable
8. Interests of Named Experts and Counsel........ Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................. Not Applicable
B. Information About the Registrant
10. Information With Respect to S-3 Registrants... Not Applicable
11. Incorporation of Certain Information by
Reference.................................... Not Applicable
12. Information With Respect to S-2 or S-3
Registrants.................................. Not Applicable
13. Incorporation of Certain Information by
Reference.................................... Not Applicable
14. Information With Respect to Registrants Other
Than S-3 or S-2 Registrants.................. Prospectus/Proxy Statement Summary; -- Proposed Share
Exchange and Corporate Restructuring -- General; --
Financial Statements
C. Information About the Company Being Acquired
15. Information With Respect to S-3 Companies..... Incorporation of Certain Documents by Reference; --
Available Information; -- Proposed Share Exchange and
Corporate Restructuring -- Business of the Company
16. Information With Respect to S-2 or S-3
Companies.................................... Not Applicable
17. Information With Respect to Companies Other
Than S-3 or S-2 Companies.................... Not Applicable
D. Voting and Management Information
18. Information if Proxies, Consents or
Authorizations are to be Solicited........... Incorporation of Certain Documents by Reference; --
General Information; Securities Ownership of Certain
Beneficial Owners and Management; Nominees for
Directors; Executive Compensation; Voting Rights and
Vote Required; Proposed Share Exchange and Corporate
Restructuring -- Appraisal Rights; -- Vote Required; --
Other Business
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or in
an Exchange Offer............................ Not Applicable
</TABLE>
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION
700 NORTH ADAMS STREET, P.O. BOX 19001, GREEN BAY, WISCONSIN 54307
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1994
------------------------
TO THE SHAREHOLDERS OF WISCONSIN PUBLIC SERVICE CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Wisconsin
Public Service Corporation, a Wisconsin corporation (the "Company"), will be
held on Thursday, May 5, 1994, at 10:30 A.M., Green Bay Time, at the Midway
Motor Hotel, 780 Packer Drive, Green Bay, Wisconsin for the following purposes:
1. To elect three directors of Class C to hold office until the Annual
Meeting of Shareholders in 1997 or until their successors have been elected
and qualified.
2. To approve an Agreement and Plan of Share Exchange upon the
effectiveness of which (a) the Company will become a subsidiary of WPS
Resources Corporation ("WPS Resources"), (b) each outstanding share of
common stock of the Company, $4 par value per share ("Company Common Stock")
will be exchanged for one share of Common Stock, $1 par value, of WPS
Resources ("WPS Resources Common Stock") and holders of Company Common Stock
will become owners of all of the outstanding WPS Resources Common Stock, and
(c) the affairs of WPS Resources Corporation will be governed by Restated
Articles of Incorporation and By-Laws that are substantially identical to
those of the Company except that the WPS Resources Restated Articles of
Incorporation authorize the issuance of a greater number of shares of common
stock, do not authorize the issuance of WPS Resources preferred stock, and
may with certain exceptions be amended by the affirmative vote of a majority
of the votes cast by holders of WPS Resources Common Stock at a meeting at
which a quorum exists (rather than two-thirds of outstanding common stock)
as provided by the Wisconsin Business Corporation Law.
3. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.
Holders of Company Common Stock of record at the close of business on March
17, 1994, will be entitled to notice of, and to vote at, the Annual Meeting and
at any adjournment thereof.
Even if you plan to attend the Annual Meeting, please complete, date and
sign the enclosed proxy and mail it promptly in the enclosed envelope. If you
attend the Annual Meeting, you may revoke your proxy and vote your shares in
person. Your attention is directed to the attached Proxy Statement.
WISCONSIN PUBLIC SERVICE CORPORATION
Robert H. Knuth
ASSISTANT VICE PRESIDENT -- SECRETARY
Green Bay, Wisconsin
March 25, 1994
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. TO
ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE FILL IN AND DATE THE ENCLOSED
PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY AS YOUR NAME
APPEARS AND RETURN IMMEDIATELY.
<PAGE>
PROXY STATEMENT
------------------
WISCONSIN PUBLIC SERVICE CORPORATION
PROSPECTUS FOR 23,896,962 SHARES OF COMMON STOCK
OF WPS RESOURCES CORPORATION
700 North Adams Street
P.O. Box 19001
Green Bay, Wisconsin 54307
(414) 433-1050 or 1-800-236-1551
This Prospectus/Proxy Statement is first being mailed to the holders of
Company Common Stock on or about March 25, 1994 in connection with the
solicitation of proxies by the Company's Board of Directors ("Board") for use at
the Annual Meeting of Shareholders.
At the Annual Meeting of Shareholders, the holders of the Company's common
stock, $4 par value per share ("Company Common Stock"), will be asked to approve
the Agreement and Plan of Share Exchange attached as Exhibit A hereto (the
"Plan").
Upon the effectiveness of the Plan, each outstanding share of Company Common
Stock, will be exchanged for one share of WPS Resources Corporation ("WPS
Resources") Common Stock, $1 par value per share ("WPS Resources Common Stock")
and the Company will become a subsidiary of WPS Resources (the "Corporate
Restructuring"). Consummation of the Corporate Restructuring will not result in
any change in the Company's Preferred Stock or debt securities.
The Plan will not become effective and the Share Exchange will not take
place unless the Plan is approved by the requisite vote of holders of shares of
Company Common Stock. See "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING
- -- Vote Required." The Board believes the Corporate Restructuring will provide
substantial benefit to the Company and its shareholders by providing flexibility
for the Company to deal with increased competition, facilitating initiatives
into new areas of business and providing additional flexibility for financing.
The Board recommends approval of the Plan.
The Company Common Stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange. On February 4, 1994, the closing price per share of
Company Common Stock was $30 3/8 on the New York Stock Exchange Composite Tape.
Application will be made to list the shares of WPS Resources Common Stock being
offered hereby on the New York Stock Exchange and the Chicago Stock Exchange.
A Registration Statement on Form S-4 has been filed with the Securities and
Exchange Commission covering the shares of the WPS Resources Common Stock
issuable in connection with the Corporate Restructuring in exchange for Company
Common Stock. This Prospectus/Proxy Statement also constitutes the prospectus
included as part of such Registration Statement.
------------------------
WPS RESOURCES COMMON STOCK HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus/Proxy Statement is March , 1994.
<PAGE>
AVAILABLE INFORMATION
Wisconsin Public Service Corporation (the Company) is subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "SEC"). Such reports, proxy statements and other
information can be inspected and copied at the offices of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 75 Park Place, New York, New York 10007, and copies
of such material can be obtained from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition,
reports, proxy statements and other information concerning the Company can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005; and the Chicago Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60605.
In addition, WPS Resources has filed with the SEC a registration statement
on Form S-4 (herein, together with all amendments and exhibits, referred to as
the Registration Statement) under the Securities Act of 1933, as amended (the
Act), registering the Common Stock of WPS Resources that will be issued if the
Share Exchange described herein is completed. The Prospectus/Proxy Statement
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. For further information, reference is hereby made to the
Registration Statement.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1993 is incorporated herein by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Prospectus/Proxy Statement and prior to the termination of this offering shall
be deemed to be incorporated by reference in this Prospectus/Proxy Statement and
to be a part hereof from the date of filing such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus/Proxy Statement to the extent that a statement contained herein or in
any other subsequently filed document, which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus/Proxy Statement.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus/Proxy Statement has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated in this Prospectus/Proxy
Statement by reference, other than exhibits to such documents. Requests for such
copies should be directed to Robert H. Knuth, Secretary, Wisconsin Public
Service Corporation, 700 North Adams Street, P.O. Box 19001, Green Bay,
Wisconsin 54307, telephone number (414) 433-1445.
AS DESCRIBED ABOVE, THIS PROSPECTUS/PROXY STATEMENT INCORPORATES DOCUMENTS
BY REFERENCE WHICH ARE NOT INCLUDED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS ARE AVAILABLE UPON WRITTEN OR ORAL REQUEST DIRECTED TO THE COMPANY AT
THE ADDRESS OR TELEPHONE NUMBER SPECIFIED IN THE PRECEDING PARAGRAPH. IN ORDER
TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY APRIL
28, 1994.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS/PROXY STATEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS/PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SHARES OF WPS RESOURCES CORPORATION
COMMON STOCK IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS
PROSPECTUS/ PROXY STATEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
AVAILABLE INFORMATION...................................................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................ 2
PROSPECTUS/PROXY STATEMENT SUMMARY......................................................................... 4
SPECIAL CONSIDERATIONS..................................................................................... 9
GENERAL INFORMATION........................................................................................ 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................................. 10
NOMINEES FOR ELECTION AS DIRECTORS......................................................................... 12
EXECUTIVE COMPENSATION..................................................................................... 15
PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING........................................................ 20
General.................................................................................................. 20
Reasons for Share Exchange and Corporate Restructuring................................................... 21
Terms of Share Exchange and Corporate Restructuring...................................................... 24
Preferred Stock and Debt Securities of the Company....................................................... 24
Dividends on WPS Resources Common Stock.................................................................. 25
Certain Federal Income Tax Consequences.................................................................. 25
New York and Chicago Stock Exchange Listings............................................................. 26
Dividend Reinvestment and Employee Benefit Plans......................................................... 26
Vote Required............................................................................................ 26
Appraisal Rights......................................................................................... 27
Conditions to Consummation of Share Exchange and Corporate Restructuring................................. 27
Amendment or Termination of Plan......................................................................... 27
Effective Time........................................................................................... 27
Exchange of Stock Certificates Not Required.............................................................. 28
Directors and Executive Officers of WPS Resources........................................................ 28
Business of the Company.................................................................................. 28
Regulation............................................................................................... 29
Market Prices of Wisconsin Public Service Corporation Common Stock....................................... 31
Financial Statements..................................................................................... 32
Pro Forma Financial Statements (unaudited)............................................................... 32
Restated Articles of Incorporation and By-Laws of WPS Resources.......................................... 33
Description of WPS Resources Common Stock................................................................ 35
Transfer Agent and Registrar............................................................................. 37
Legal Opinions........................................................................................... 37
Experts.................................................................................................. 37
OTHER BUSINESS............................................................................................. 37
ANNUAL REPORTS............................................................................................. 37
FUTURE SHAREHOLDER PROPOSALS............................................................................... 38
EXHIBITS:
A - AGREEMENT AND PLAN OF SHARE EXCHANGE................................................................. A-1
B - RESTATED ARTICLES OF INCORPORATION OF WPS RESOURCES CORPORATION...................................... B-1
</TABLE>
3
<PAGE>
PROSPECTUS/PROXY STATEMENT SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere, or incorporated by reference, in this
Prospectus/Proxy Statement and Exhibits attached hereto.
<TABLE>
<S> <C>
Date, Time and Place of Meeting... The Annual Meeting of Shareholders of Wisconsin Public
Service Corporation (the "Company") will be held at
10:30 a.m., on May 5, 1994 at the Midway Motor Hotel,
780 Packer Drive, Green Bay, Wisconsin.
Record Date and Eligible Voters... Holders of Common Stock of the Company, par value $4 per
share (the "Company Common Stock") at the close of busi-
ness on March 17, 1994, are entitled to vote at the
Annual Meeting of Shareholders.
Purpose of the Meeting............ The purposes of the meeting are: (i) to elect three
directors of Class C to hold office until 1997 or until
their successors have been elected and qualified, (ii)
to consider the approval of the Agreement and Plan of
Share Exchange, attached as Exhibit A hereto (the
"Plan") upon the effectiveness of which each outstanding
share of Company Common Stock will be exchanged for one
share of common stock of WPS Resources Corporation ("WPS
Resources"), par value $1 per share ("WPS Resources
Common Stock") and the Company will be restructured into
a holding company system (the "Corporate Restructuring")
and (iii) to consider and act upon such other business
as may properly come before the meeting.
Wisconsin Public Service
Corporation....................... The Company is a public utility engaged in the
production, transmission, distribution and sale of
electricity and in the purchase, distribution,
transportation and sale of gas in northeastern Wisconsin
and an adjacent part of Upper Michigan. It was
incorporated under the laws of the State of Wisconsin in
1883. See "PROPOSED SHARE EXCHANGE AND CORPORATE
RESTRUCTURING -- Business of the Company." The Company's
executive offices are located at 700 North Adams Street,
P.O. Box 19001, Green Bay, Wisconsin 54307 (telephone
(414) 433-1445).
WPS Resources Corporation......... WPS Resources, at present an inactive, wholly-owned
subsidiary of the Company, was organized under the laws
of the State of Wisconsin in December 1993 for the
purpose of becoming the new parent holding company in
the Corporate Restructuring if the Plan is approved. Its
executive offices are located at the Company's executive
offices referred to above. See "PROPOSED SHARE EXCHANGE
AND CORPORATE RESTRUCTURING -- General."
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
Proposed Share Exchange and
Corporate Restructuring........... The Board of Directors of the Company (the "Board") has
approved a proposed Corporate Restructuring. Upon the
effectiveness of the Corporate Restructuring, WPS
Resources will become the parent holding company of the
Company, and the outstanding Company Common Stock will
be exchanged for an equal number of shares of WPS
Resources Common Stock (the "Share Exchange"). IT WILL
NOT BE NECESSARY FOR HOLDERS OF COMPANY COMMON STOCK TO
TURN IN THEIR CERTIFICATES FOR STOCK CERTIFICATES OF WPS
RESOURCES. SUCH CERTIFICATES FOR COMPANY COMMON STOCK
WILL AUTOMATICALLY REPRESENT WPS
RESOURCES COMMON STOCK.
The various series of preferred stock of the Company and
the first mortgage bonds and other obligations of the
Company will remain securities and obligations of the
Company after the Corporate Restructuring. See "PROPOSED
SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- General."
Reasons for Corporate
Restructuring..................... The principal reasons for the proposed Corporate
Restructuring are (1) to provide flexibility for the
Company to deal with increased competition within the
industry, (2) to create a structure which can facilitate
selective diversification into certain non-utility
businesses which are related to the utility business of
the Company or energy conservation or energy resources
or which otherwise benefit the service territory of the
Company and (3) to provide additional flexibility for
financing. See "PROPOSED SHARE EXCHANGE AND CORPORATE
RESTRUCTURING -- Reasons for Share Exchange and
Corporate Restructuring."
Vote Required..................... Directors are elected by a plurality of the votes cast
of the holders of Company Common Stock at a meeting at
which a quorum is present. Shares not voted have no
impact on the election of directors except to the extent
failure to vote for an individual results in another
individual receiving a larger number of votes.
Cumulative voting is not provided for in the Company's
Restated Articles of Incorporation. See "NOMINEES FOR
ELECTION AS DIRECTORS."
Approval of the Plan and Corporate Restructuring will
require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Company Common
Stock. Abstentions and broker non-votes will have the
same effect as a vote against approval of the Plan. See
"PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Vote Required."
Special Considerations............ Certain factors which should be considered in
determining whether or not to vote for approval of the
Plan are discussed under "SPECIAL CONSIDERATIONS"
immediately following this Prospectus/Proxy Statement
Summary.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
WPS Resources Common Stock
Dividends......................... After the effective time of the Plan (the "Effective
Time"), quarterly dividends on WPS Resources Common
Stock are expected to commence at a rate equal to that
currently being paid on Company Common Stock and are
expected to be paid on approximately the same date each
year as dividends on Company Common Stock have been
paid. Future dividends on WPS Resources Common Stock
will depend upon the earnings and financial conditions
of WPS Resources and its subsidiaries. See "PROPOSED
SHARE EXCHANGE AND CORPORATE RESTRUCTURING -- Dividends
on WPS Resources Common Stock."
Effective Time.................... If the requisite shareholder approval and other
approvals are obtained, it is expected that the
restructuring will be effective on or about October 1,
1994. See "PROPOSED SHARE EXCHANGE AND CORPORATE
RESTRUCTURING -- Effective Time."
Federal Tax Consequences.......... No gain or loss will be recognized for federal income
tax purposes by owners of Company Common Stock upon the
exchange of such stock for WPS Resources Common Stock
pursuant to the Plan. The basis of, and in general the
holding period for, WPS Resources Common Stock received
by owners of Company Common Stock pursuant to the Plan
will be the same as the basis in, and holding period
for, Company Common Stock exchanged. See "PROPOSED SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- Certain Federal
Income Tax Consequences."
Appraisal Rights.................. Under the Wisconsin Business Corporation Law (the
"WBCL"), neither the holders of Company Common Stock nor
the holders of the Company's preferred stock are
entitled to appraisal rights in connection with the
Share Exchange and Corporate Restructuring. See
"PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Appraisal Rights."
Regulation........................ The Company, which will continue to operate an electric
and gas utility business, will be subject to regulation
by the Public Service Commission of Wisconsin (the
"PSCW") the Michigan Public Service Commission (the
"MPSC") and to a limited extent by the Federal Energy
Regulatory Commission ("FERC"). So long as WPS Resources
is not a public utility, it will not be subject, under
present law, to regulation by the FERC, the MPSC or the
PSCW, except in certain limited circumstances pursuant
to the Wisconsin Holding Company Act. WPS Resources
believes that it will be entitled to exemption from
registration with the SEC as a holding company under the
Public Utility Holding Company Act of 1935. Both the
Company and WPS Resources will be reporting companies
under the Securities Exchange Act of 1934. See "PROPOSED
SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Regulation."
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Comparison of WPS Resources Common
Stock and Company Common Stock.... Upon the effectiveness of the proposed Share Exchange
and Corporate Restructuring, holders of Company Common
Stock will become holders of WPS Resources Common Stock.
The rights of holders of WPS Resources Common Stock will
differ from the rights of the holders of Company Common
Stock primarily in that the Restated Articles of
Incorporation of WPS Resources may be amended with the
affirmative vote of a majority of the votes cast by
holders of shares of WPS Resources Common Stock at a
meeting at which a quorum exists, whereas an amendment
to the Restated Articles of Incorporation of the Company
generally requires the affirmative vote of the holders
of at least two-thirds of the outstanding shares of
Company Common Stock and may require the approval of the
holders of two-thirds of the outstanding shares of the
Company's preferred stock. Provisions of the Restated
Articles of Incorporation of WPS Resources and of the
Restated Articles of Incorporation of the Company relat-
ing to the classification of the boards of directors
require the affirmative vote of shareholders possessing
at least three-fourths of the voting power of shares
generally possessing voting rights in the election of
directors. In addition, WPS Resources, after the Share
Exchange, will have authority to issue approximately
76,103,000 additional shares of Common Stock, whereas
the Company presently has authority to issue
approximately 9,103,000 additional shares of Company
Common Stock. The Restated Articles of Incorporation of
WPS Resources do not authorize the issuance of any
preferred stock of WPS Resources. See "PROPOSED SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- Restated
Articles of Incorporation and By-Laws of WPS Re-
sources."
Stock Exchange Listing............ Company Common Stock is currently traded on the New York
and Chicago Stock Exchanges under the stock symbol WPS.
It is anticipated that WPS Resources Common Stock will
be traded on the New York and Chicago Stock Exchanges
under the stock symbol WPS. See "PROPOSED SHARE EX-
CHANGE AND CORPORATE RESTRUCTURING -- New York and
Chicago Stock Exchange Listings."
</TABLE>
7
<PAGE>
SELECTED FINANCIAL INFORMATION
The following tables set forth financial information with respect to the
Company. Such financial information is derived from the financial statements
contained in certain documents incorporated herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------------
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues.................... $ 680,632 $ 634,802 $ 623,499 $ 588,973 $ 585,812
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Operating Income...................... $ 83,744 $ 79,145 $ 75,028 $ 70,773 $ 70,286
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Net Income............................ $ 62,200 $ 58,002 $ 54,172 $ 49,023 $ 49,130
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Earnings on Common Stock.............. $ 58,889 $ 54,765 $ 50,935 $ 45,730 $ 45,694
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Earnings Per Average Share of Common
Stock................................ $ 2.47 $ 2.35 $ 2.23 $ 2.00 $ 1.98
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Dividends Per Share on Common Stock... $ 1.76 $ 1.72 $ 1.68 $ 1.64 $ 1.60
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
<CAPTION>
AS OF DECEMBER 31
-------------------------------------------------------------------------
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets.......................... $ 1,198,841 $ 1,145,550 $ 1,073,537 $ 1,009,239 $ 1,023,169
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Long-Term Debt........................ $ 314,225 $ 321,498 $ 332,907 $ 273,349 $ 255,275
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Preferred Stock With no mandatory
redemption........................... $ 51,200 $ 51,200 $ 51,200 $ 51,200 $ 51,200
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
With mandatory redemption............ $ -- $ -- $ -- $ -- $ 642
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Common Stock Equity................... $ 434,503 $ 413,226 $ 369,298 $ 372,132 $ 373,125
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Total Capitalization.................. $ 799,928 $ 785,924 $ 753,405 $ 696,681 $ 680,242
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Book Value per Share of Common
Stock................................ $ 18.18 $ 17.33 $ 16.14 $ 16.26 $ 16.30
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
</TABLE>
8
<PAGE>
SPECIAL CONSIDERATIONS
Holders of Company Common Stock should consider the following factors in
determining whether or not to vote for approval of the Plan and Corporate
Restructuring.
1.__DIVERSIFICATION.__The proposed Corporate Restructuring will facilitate
selective diversification into certain nonutility businesses which will not be
subject to regulation by state and federal agencies regulating public utilities
and which may involve competitive and other factors not previously experienced
by the Company. Diversification involves risks and there can be no assurance
that any new businesses will be successful or, if unsuccessful, that they will
not have a direct or indirect adverse effect on WPS Resources. Losses incurred
by any such businesses will not be recoverable in utility rates. Wisconsin law,
however, does limit the amount of assets of all nonutility affiliates in a
holding company system and effectively limits the nonutility businesses which
can be pursued by the proposed holding company system to those which are related
to the utility business of the Company or energy conservation or energy
resources or which otherwise benefit the service territory of the Company. See
"PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING -- Reasons for Share
Exchange and Corporate Restructuring; -- Regulation -- Wisconsin Holding Company
Act."
2.__RECOURSE TO COMPANY ASSETS.__In the event of liquidation or bankruptcy
of the Company or WPS Resources following the Share Exchange and Corporate
Restructuring, the rights of shareholders of WPS Resources to the assets of the
Company will be subordinate to the rights of creditors and holders of preferred
stock of the Company, as would presently be the case, and also to the rights of
any creditors of WPS Resources to the extent that the obligations to such
creditors were not satisfied out of the assets of WPS Resources or its
nonutility subsidiaries.
3.__ADDITIONAL AUTHORIZED SHARES OF WPS RESOURCES COMMON STOCK.__Following
the Share Exchange, WPS Resources will have approximately 76,103,000 authorized
and unissued shares of Common Stock (68,000,000 shares more than the presently
authorized but unissued Company Common Stock). The authorized but unissued WPS
Resources Common Stock may be issued from time to time upon such terms and for
such consideration as may be determined by the board of directors of WPS
Resources and without further action by the Public Service Commission of
Wisconsin or (except as otherwise required by stock exchange rules) by the
shareholders of WPS Resources. Such shares may be issued for financing
acquisitions, possible future employee benefit plans, stock splits, stock
dividends and other purposes which could include action which may have the
effect of discouraging takeover proposals for WPS Resources. See "PROPOSED SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- Restated Articles of Incorporation and
By-Laws of WPS Resources."
4.__AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION OF WPS
RESOURCES.__The shareholder vote requirement for amendment of the Restated
Articles of Incorporation of WPS Resources will, except with respect to Article
5 thereof (see "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Description of WPS Resources Common Stock -- Voting Rights"), be the requirement
generally provided under the current Wisconsin Business Corporation Law -- I.E.,
the affirmative vote of a majority of the votes cast by holders of WPS Resources
Common Stock at a meeting at which a quorum exists. Amendments to the Company's
Restated Articles of Incorporation generally require the affirmative vote of
two-thirds of the Company's Common Stock and in certain instances, of the
Company's preferred stock. The lower voting requirement applicable to WPS
Resources will facilitate the adoption of amendments to its Articles of
Incorporation, including amendments which some of its shareholders may oppose,
such as provisions which may have the effect of discouraging takeover proposals
for WPS Resources. See "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Restated Articles of Incorporation and By-Laws of WPS Resources." The Wisconsin
Business Corporation Law, however, itself contains various provisions which may
have the effect of discouraging hostile takeover attempts, and no amendments to
the Restated
9
<PAGE>
Articles of Incorporation are presently contemplated by the Company's Board or
management. See "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Description of WPS Resources Common Stock -- Certain Statutory and Other
Provisions."
5.__POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE ARTICLES OF
INCORPORATION AND BY-LAWS OF WPS RESOURCES.__The Articles of Incorporation and
By-Laws of WPS Resources contain provisions which could have the effect, among
others, of discouraging takeover proposals or impeding a business combination
with a major shareholder -- I.E., provisions providing for a classified board of
directors, limiting the rights of shareholders to remove directors and
permitting the issuance of additional shares of common stock without further
shareholder approval except as required by stock exchange rules. The Articles of
Incorporation and By-Laws of the Company contain identical provisions except
that as noted in paragraph 3 above, WPS Resources has a greater number of
authorized shares than does the Company. See "PROPOSED SHARE EXCHANGE AND
CORPORATE RESTRUCTURING -- Restated Articles of Incorporation and By-Laws of WPS
Resources."
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Company's Board for the Annual Meeting of Shareholders to be held
on Thursday, May 5, 1994 at 10:30 A.M., Green Bay Time, at the Midway Motor
Hotel, 780 Packer Drive, Green Bay, Wisconsin and at any adjournment thereof
("Meeting") for the purposes set forth in the Notice of Annual Meeting of
Shareholders and in this Prospectus/Proxy Statement.
Only shareholders of record as of the close of business on March 17, 1994
("Record Date") are entitled to notice of, and to vote at, the Meeting. As of
the Record Date, the Company's outstanding voting securities consisted of
23,896,962 shares of Common Stock. The record holder of each outstanding share
of Common Stock as of the Record Date is entitled to one vote per share for each
proposal submitted for consideration at the Meeting. The Notice of Annual
Meeting of Shareholders, this Proxy Statement and the accompanying form of proxy
were first mailed to shareholders on or about March 25, 1994.
A proxy, in the enclosed form, which is properly executed, duly returned to
the Company and not revoked will be voted in accordance with the instructions
contained therein. If no specification is indicated on the proxy, the shares
represented thereby will be voted FOR the indicated nominees for directors, FOR
approval of the Agreement and Plan of Share Exchange and on such other business
or matters which may properly come before the Meeting in accordance with the
best judgment of the persons named in the proxy. Execution of a proxy given in
response to this solicitation will not affect a shareholder's right to attend
the Meeting and to vote in person. Presence at the Meeting of a shareholder who
has signed a proxy does not in itself revoke a proxy. Each proxy granted may be
revoked by the person giving it at any time before the exercise thereof by
giving written notice to such effect to the Secretary of the Company, by
execution and delivery of a subsequent proxy or by attendance and voting in
person at the Meeting, except as to any matter upon which, prior to such
revocation, a vote shall have been cast pursuant to the authority conferred by
such proxy.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
No person is known by the Company to be the beneficial owner of more than 5%
of any class of the Company's voting securities. Set forth below is a tabulation
indicating, as of January 1, 1994, the shares of the Company's equity securities
beneficially owned by the five named executives in the
10
<PAGE>
Summary Compensation Table, each nominee and director and all directors and
officers of the Company as a group. No officer or director owns more than 1% of
any class of the Company's equity securities.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP (1)(2)(3)
- ------------------------------- -------------------------------------- -------------------
<S> <C> <C>
Common Stock, $4.00 Par Value Daniel A. Bollom 4,266(4)
per share J. Gus Swoboda 3,381
Richard A. Krueger 2,780(5)
Patrick D. Schrickel 1,538
Clark R. Steinhardt 3,044(6)
A. Dean Arganbright 1,700
Sister M. Lois Bush 200(7)
James L. Kemerling 400
Richard A. Bemis 1,000
Robert C. Gallagher 257
Michael S. Ariens 655(8)
Kathryn M. Hasselblad-Pascale 2,262(9)
Linus M. Stoll 7,738(10)
All directors and officers as a group 47,411(11)(12)
(23)
<FN>
- ------------------------
(1) None of the persons listed beneficially owns shares of any other class of
the Company's equity securities, except Mr. Arganbright's wife owned 10
shares of the Company's Preferred Stock 5% series ($100 par value).
(2) In each case the indicated owner has sole voting power and sole investment
power with respect to the shares shown in this column except as noted.
(3) Includes shares of common stock held in the Company's Employee Stock
Ownership Plan and Trust (ESOP).
(4) Includes 24 shares held in joint tenancy and 385 shares in survivorship
marital property.
(5) Includes 92 shares held in joint tenancy.
(6) Includes 133 shares held as custodian.
(7) Owned by Sisters of the Sorrowful Mother of which Sister M. Lois Bush is a
member.
(8) Includes 170 shares held by M&M Ariens, Inc.
(9) Includes 342 shares owned by spouse.
(10) Includes 2,439 shares owned by spouse.
(11) Includes 2,781 shares owned by spouses; 254 shares held in joint tenancy,
173 shares held as custodian and 385 shares in survivorship marital
property.
(12) Other company shares held include 12 shares of Preferred Stock, 5% series
($100 par value) and 10 shares of Preferred Stock, 5.04% series ($100 par
value).
</TABLE>
11
<PAGE>
NOMINEES FOR ELECTION AS DIRECTORS
Pursuant to the Restated Articles and the By-Laws of the Company the Board
of Directors consists of nine directors and is divided into three classes of
three directors each, with one class being elected each year for a term of three
years. Accordingly, it is proposed that the three nominees listed below be
elected to serve as Class C directors for three-year terms to expire at the 1997
Annual Meeting of Shareholders and upon the election and qualification of their
successors. Kathryn M. Hasselblad-Pascale and Messrs. Ariens and Stoll are
presently Class C directors whose terms expire at this year's Annual Meeting,
and who have been nominated for re-election.
Directors are elected by a plurality of the votes cast by the holders of the
Company's Common Stock at a meeting at which a quorum is present. "Plurality"
means that the individuals who receive the largest number of votes cast are
elected as directors up to the maximum number of directors to be chosen at the
meeting. Consequently, any shares not voted (whether by abstention, broker
nonvote or otherwise) have no impact in the election of directors except to the
extent the failure to vote for an individual results in another individual
receiving a larger number of votes. Under Wisconsin law, cumulative voting for
directors is permitted but is not presently provided for in the Company's
Restated Articles of Incorporation.
Certain information about the three nominees for such directorships is set
forth below. It is intended that the proxies solicited on behalf of the Board
will be voted for the following nominees, each of whom beneficially owned,
unless otherwise noted, the indicated number of shares of Common Stock on
January 1, 1994. The Board has no reason to believe that any of these nominees
will be unable or unwilling to serve as directors if elected, but if any nominee
should be unable or unwilling to serve, the shares represented by proxies
solicited by the Board will be voted for the election of such other person as
the Board may recommend in place of such nominee.
NOMINEES -- CLASS C -- TERM EXPIRING IN 1997
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------------- --- ---------------------------------------------------------- -----------
<S> <C> <C> <C>
Michael S. Ariens (1)(2)(3) 62 Chairman, Ariens Company, Brillion, WI (manufacturer of 1974
outdoor power equipment)
Kathryn M. Hasselblad-Pascale (1)(3) 46 Partner and General Manager, Hasselblad Machine Company, 1987
Green Bay, WI (manufacturer of automatic screw machine
products)
Linus M. Stoll (1)(2)(3) 68 Retired Chairman and Chief Executive Officer of the 1987
Company, Green Bay, WI
<FN>
- ------------------------
(1) Member of Audit Committee.
(2) Member of Strategic Action Planning Committee.
(3) Member of Nominating Committee.
</TABLE>
Each of the nominees has served in the same or another position with the
employer indicated for at least five years.
12
<PAGE>
The following table sets forth certain information about Class A and Class B
directors who are not standing for election in 1994.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------------- --- ---------------------------------------------------------- -----------
<S> <C> <C> <C>
CLASS A -- TERM EXPIRING IN 1995
Richard A. Bemis (1)(3) 52 President, Bemis Manufacturing Company, Sheboygan, WI 1983
(manufacturer of toilet seats, contract plastics and wood
products)
Daniel A. Bollom 57 President and Chief Executive Officer of the Company 1989
Robert C. Gallagher (1)(4) 55 Chairman and President, Associated Bank, 1992
Green Bay, WI, Executive Vice President, Associated
Banc-Corp
CLASS B -- TERM EXPIRING IN 1996
A. Dean Arganbright (1)(2)(4) 63 Retired Chairman, President and Chief Executive Officer, 1972
Wisconsin National Life Insurance Company, Oshkosh, WI
Sister M. Lois Bush, SSM (1)(2) 49 President and Chief Executive Officer of SSM -- Ministry 1993
Corporation (operator of hospitals and health related
facilities in Wisconsin, Iowa and Minnesota)
James L. Kemerling (1)(4) 54 President and Chief Executive Officer, Shade/ Allied Inc., 1988
Green Bay, WI (manufacturer of business forms)
<FN>
- ------------------------
(1) Member of Audit Committee.
(2) Member of Strategic Action Planning Committee.
(3) Member of Nominating Committee.
(4) Member of Compensation Committee.
</TABLE>
------------------------
Each of the Class A and Class B directors has served in the same or another
position with the employer indicated for at least five years.
Other directorships held by the directors include the following:
Richard A. Bemis -- W. H. Brady Company, Milwaukee, WI
Daniel A. Bollom -- Prime Federal Bank, DePere, WI
Robert C. Gallagher -- Associated Banc-Corp, Green Bay, WI
Michael S. Ariens -- David White, Inc., Germantown, WI
-- Milwaukee Insurance Group, Inc., Milwaukee, WI
During 1993, the Board met 11 times. All directors attended more than 75% of
the total number of meetings, including meetings of committees of which they are
members.
Nonemployee director remuneration consists of a monthly fee of $975, $700
for each Board meeting attended and $200 for each telephonic meeting. Employee
directors receive no compensation for their services as directors.
13
<PAGE>
The Audit Committee, which includes all nonemployee directors, met two times
during 1993. Its duties and responsibilities include, but are not necessarily
limited to, the following:
(1) To recommend annually a firm of independent public accountants.
(2) To approve the services to be performed by the independent public
accountants.
(3) To review the reports and comments of the audit services department
and independent public accountants and to recommend such action as is
appropriate to the Board.
Each member of the Audit Committee receives $600 for each meeting attended.
The Compensation Committee, which is composed of three nonemployee
directors, met two times during 1993. Its function is to recommend to the Board
the compensation to be paid to officers and selected managerial personnel. Each
member receives $600 for each meeting attended.
The Nominating Committee, which consists of four nonemployee directors,
recommends to the Board candidates to be nominated for election as directors at
the annual meeting and to fill any vacancies on the Board. The Nominating
Committee met one time in 1993. Each member receives $600 for each meeting
attended. The Nominating Committee will consider suggestions from all sources,
including shareholders, regarding possible candidates for director. Such
suggestions, together with appropriate biographical information, should be
submitted to the Secretary of the Company no later than November 1, in order to
be considered for the annual meeting in the following year.
The Strategic Action Planning Committee, which consists of four nonemployee
directors, reviews and provides input into the Company's Strategic Plans. The
Strategic Action Planning Committee met one time in 1993. Each member receives
$600 for each meeting attended.
------------------------
Based solely on a review of statements of beneficial ownership and of
changes therein furnished to the Company during and with respect to the 1993
calendar year and written representations made to the Company, the management of
the Company has concluded that no person who at any time during 1993 was a
director or officer of the Company failed to file with the Securities and
Exchange Commission on a timely basis reports of beneficial ownership of the
Company's securities required by Section 16(a) of the Securities and Exchange
Act of 1934, as amended, except that during 1993 three officers of the Company,
Patrick D. Schrickel, Robert H. Knuth and Bernard J. Treml each inadvertently
failed to file one such report on a timely basis. Reports were subsequently
filed by Mr. Schrickel relating to a sale by him of 212 shares of Company common
stock, by Mr. Knuth with respect to the redemption by the Company of 10 shares
of Company preferred stock owned by him and by Mr. Treml who became custodian
for his daughter of 40 shares of Company common stock through the settlement of
an estate.
14
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following tabulation shows the compensation of each of the Company's
five most highly compensated executive officers whose compensation exceeded
<TABLE>
<CAPTION>
$100,000.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LONG TERM COMPENSATION
<CAPTION>
ANNUAL COMPENSATION (1) AWARDS PAYOUTS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
(E) (G)
(A) OTHER (F) SECURITIES (I)
NAME AND ANNUAL RESTRICTED UNDERLYING (H) ALL OTHER
PRINCIPAL (B) (C) (D) COMPENSATION STOCK OPTIONS/ LTIP COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) ($)(2) AWARD(S) ($) SARS (#) PAYOUTS ($) ($)(3)
- ----------------- --------- --------- --------- ----------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
D. A. Bollom 1993 253,553.90 0.00 26,106.24 0.00 0.00 0.00 26,503.47
President & CEO 1992 235,160.04 0.00 24,079.21 0.00 0.00 0.00 14,306.90
1991 213,661.70 0.00 28,385.61 0.00 0.00 0.00 6,229.76
J. G. Swoboda 1993 144,059.14 0.00 18,515.29 0.00 0.00 0.00 11,581.38
Senior Vice 1992 136,809.99 0.00 17,208.12 0.00 0.00 0.00 6,902.50
President 1991 126,020.03 0.00 16,232.19 0.00 0.00 0.00 3,205.60
R. A. Krueger 1993 144,054.98 0.00 15,290.27 0.00 0.00 0.00 12,118.62
Senior Vice 1992 136,809.99 0.00 18,000.54 0.00 0.00 0.00 6,961.35
President 1991 126,020.03 0.00 14,378.20 0.00 0.00 0.00 3,064.07
P. D. Schrickel 1993 141,215.90 0.00 12,069.61 0.00 0.00 0.00 11,461.95
Senior Vice 1992 133,909.98 0.00 12,426.17 0.00 0.00 0.00 6,947.49
President 1991 123,270.02 0.00 11,685.58 0.00 0.00 0.00 3,140.08
C. R. Steinhardt 1993 138,531.27 0.00 12,901.20 0.00 0.00 0.00 15,760.87
Senior Vice 1992 131,209.98 0.00 13,423.46 0.00 0.00 0.00 9,022.86
President 1991 114,720.02 17,300.00 9,049.18 0.00 0.00 0.00 4,044.81
<CAPTION>
<FN>
- ------------------------------
(1) Compensation deferred at election of executive includable under Salary for
year earned.
(2) These amounts reflect perquisites deferred compensation not deferred at the
election of the officer and the following: spouse expense, flex refunds,
taxable meals, moving expense, imputed lodge income, insurance
reimbursement, vacation pay and holiday pay. No perquisites exceed 25% of
the total perquisites except for Vacation/Holiday payments as shown below
and Moving Expenses for Steinhardt of $3,513.65 in 1992. Deferred
Compensation for Bollom, Swoboda, Krueger, Schrickel and Steinhardt was
$17,747.83, $10,083.83, $10,083.83, $9,884.81 and $9,697.23, respectively
for 1993; $16,461.24, $9,576.69, $9,576.69, $9,373.68 and $9,184.68,
respectively for 1992 and $14,956.35, $8,821.43, $8,821.43, $8,628.92 and
$8,030.42, for 1991. Vacation/Holiday payments for Bollom, Swoboda, Krueger
and Schrickel are $5,177.30, $7,551.98, $4,356.91 and $1,141.26,
respectively for 1993; $6,685.00, $7,084.96, $3,269.97 and $2,135.38,
respectively for 1992 and $10,651.37, $6,239.06, $4,679.30 and $2,035.07,
for 1991.
(3) These amounts reflect Company contributions under Employee Stock Ownership
Plan and Trust for Bollom, Swoboda, Krueger, Schrickel and Steinhardt of
$1,819.31 for each for 1993, $1,461.13 for each for 1992 and $777.89 for
each for 1991. Above Market Deferred Compensation Interest for Bollom,
Swoboda, Krueger, Schrickel and Steinhardt was $23,553.16, $9,372.07,
$9,808.31, $9,317.64 and $13,514.56, respectively for 1993; $10,964.77,
$4,581.37, $4,549.22, $4,638.36 and $6,611.73, respectively for 1992 and
$4,509.87, $2,151.71, $1,829.18, $2,033.19 and $2,841.92, for 1991.
Supplemental Retirement Benefits for Bollom, Swoboda, Krueger, Schrickel and
Steinhardt were $468, $172, $166, $187 and $214, respectively for 1993;
$1,327, $733, $729, $732 and $704, respectively for 1992 and $411, $167,
$205, $196 and $175, for 1991. Retirement Plan Supplement for Bollom,
Swoboda, Krueger, Schrickel and Steinhardt was $663, $218, $325, $138, and
$213, respectively for 1993; $554, $127, $222, $116 and $246, respectively
for 1992 and $531, $109, $252, $133 and $250 for 1991.
</TABLE>
15
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
WISCONSIN PUBLIC SERVICE CORPORATION (WPSC),
S&P 500 INDEX AND EDISON ELECTRIC INSTITUTE 100 INDEX (EEI INDEX (2))
[GRAPHIC]
Assumes $100 invested on December 30, 1988 in WPSC Common Stock, S&P 500 Index &
EEI Index
(1) Total return assumes reinvestment of dividends.
(2) The Companies included in the EEI Index are the following:
Allegheny Power System, Inc
American Electric Power, Inc
Atlantic Energy, Inc
Baltimore Gas & Elec Co
Bangor Hydro-Elec Co
Black Hills Corp
Boston Edison Co
Carolina Power & Light Co
Centerior Energy Corp
Central & South West Corp
Central Hudson Gas & Elec
Central Louisiana Electric Co, Inc
Central Maine Power Co
Central Vermont Pub Serv Corp
Cilcorp Inc
Cincinnati Gas & Elec Co
Cipsco Inc
CMS Energy Corp
Commonwealth Edison Co
Commonwealth Energy System
Consolidated Edison Co of NY
Delmarva Power & Light Co
Detroit Edison Co
Dominion Resources, Inc
DPL Inc
DQE Inc
Duke Power Co
Eastern Utilities Assoc
El Paso Electric Co
Empire District Electric Co
Entergy Corp
Eselco Inc
Florida Progress Corp
FPL Group, Inc
General Public Utilities Corp
Green Mountain Power Corp
Gulf States Utilities Co
Hawaiian Electric Inds, Inc
Houston Industries, Inc
Idaho Power Co
IES Industries Inc
Illinois Power Co
Interstate Power Co
Iowa-Illinois Gas & Elec Co
Ipalco Enterprises Inc
Kansas City Power & Light Co
KU Energy Corp
LG&E Energy Corp
Long Island Lighting Co
Madison Gas & Electric Co
Maine Public Service Co
Midwest Resources Inc
Minnesota Power
Montana Power Co
Nevada Power Co
New England Electric System
New York State Elec & Gas Corp
Niagara Mohawk Power Corp
NIPSCO Industries, Inc
Northeast Utilities
Northern States Power Co
Northwestern Public Service Co
Ohio Edison Co
Oklahoma Gas & Electric Co
Orange & Rockland Utilities, Inc
Otter Tail Power Co
16
<PAGE>
Pacific Gas & Electric Co
Pacificorp
Pennsylvania Power & Light Co
Philadelphia Electric Co
Pinnacle West Capital Corp
Portland General Corp
Potomac Electric Power Corp
PSI Resources, Inc
Public Service Co of Colorado
Public Service Co of New Mexico
Public Service Enterprise Group
Puget Sound Power & Light Co
Rochester Gas & Electric Corp
San Diego Gas & Electric Co
Scana Corp
SCECORP
Sierra Pacific Resources
Southern Company
Southern Indiana Gas & Electric Co
Southwestern Public Service Co
St Joseph Light & Power Co
Teco Energy Inc
Texas Utilities Co
TNP Enterprises Inc
Tucson Electric Power Co
Union Electric Co
United Illuminating Co
Unitil Corp
Upper Peninsula Energy Corp
Utilicorp United
Washington Water Power Co
Western Resources
Wisconsin Energy Corp
Wisconsin Public Service Corp
WPL Holdings Inc
Southwestern Electric Power Company (SEP) was included in the EEI Index for
1992. SEP merged with Southwestern Public Service Company which continues to be
part of the EEI Index.
BOARD COMPENSATION COMMITTEE REPORT
The Board Compensation Committee in 1993 addressed, during one meeting, the
compensation of the President and CEO and the executive officers. In 1993,
management introduced a new pay plan applicable to all executive,
supervisory/professional and administrative employees. The new pay plan is
designed to support the Company's vision and mission statements and its
commitment to a quality management philosophy. The key attributes of the new pay
process are:
- An employee development process which is based on continuous process
improvement replaced an individual performance rating system.
- Pay levels are market driven with the pay advancement based on each
employee's relationship to the average market rate of the assigned pay
grade. The average market rates are based on median base salaries reported
to the Edison Electric Institute by utilities with revenue levels
comparable to that of the Company.
- The formula used to bring executives who are either above or below the
market rate to their market target rate, has a maximum of a 10 year
horizon. Thus those farther below the market target rate receive a larger
salary increase than those closer to the target rate.
The President and CEO is currently at 80% of his market rate. Based on the
new plan formula, an annual salary of $269,220 was approved, as of October 1,
1993. A $269,220 annual salary is 82% of the median base salary of chief
executive officers reported to the Edison Electric Institute, by utilities of
revenue levels comparable to that of the Company. It should be noted that many
of these reporting utilities are members of the EEI Index group listed in Note 2
to the Comparison of Five Year Cumulative Total Return Table set forth above.
The composition of the two groups, however, is not identical.
A. Dean Arganbright
Robert C. Gallagher
James L. Kemerling
17
<PAGE>
BENEFIT PLANS
An unfunded deferred compensation plan of the Company provides a
supplemental retirement benefit for each of the five named senior officers. Each
of these individuals will receive, if employed by the Company at the time of
retirement, as deferred compensation upon retirement, monthly payments equal to
20% of the highest average monthly compensation received during any 36
consecutive months prior to age 65. Such payments are to continue for ten years
after retirement. If the individual dies during the ten year period, the
surviving spouse would receive 50% of such payments for the remainder of the
period. If the individual dies while in the Company's employ the surviving
spouse would receive 50% of similarly calculated deferred compensation for a
ten-year period. The payments terminate if neither the individual or spouse
survives and are forfeited if the individual does anything which reflects
adversely on the Company or refuses to perform advisory or consulting services
when reasonably requested.
The following table indicates various annual benefits payable during the
ten-year period to each of the five named senior officers under his supplemental
retirement benefit agreement:
<TABLE>
<CAPTION>
HIGHEST AVERAGE MONTHLY COMPENSATION
RECEIVED DURING ANY 36 CONSECUTIVE MONTHS
PRIOR TO AGE 65 ANNUAL BENEFITS PAYABLE
- ----------------------------------------- -----------------------------------------
<S> <C>
$ 12,000 $ 28,800
13,000 31,200
14,000 33,600
15,000 36,000
16,000 38,400
17,000 40,800
18,000 43,200
19,000 45,600
20,000 48,000
21,000 50,400
22,000 52,800
23,000 55,200
24,000 57,600
25,000 60,000
26,000 62,400
</TABLE>
The Company's Administrative Employees' Retirement Plan ("Plan"), under
which executive officers are included, is a noncontributory defined benefit plan
under which contributions on behalf of a specified participant cannot be
individually calculated. Since the Plan is in a fully funded position, no
contributions were made to it in 1993. Straight life benefits at normal
retirement age 65 (with a 50% benefit payable to a surviving spouse, actuarily
reduced for any age differences) are determined by the average of the five
highest consecutive years compensation in the last ten years times 55% times
years of service up to 35 divided by 35, plus 1/2% of such average compensation
times years of service exceeding 35, less an offset for a portion of Social
Security benefits. Employees who were employed prior to 1982 would qualify for
the higher of the current pension formula or a grandfathered formula which is
1 1/2% of the final average pay times years of service limited by 50% of final
average pay less a Social Security offset. It should be noted that Social
Security integration rules under Tax Reform Act of 1986 have not affected the
pension formula since nondiscrimination tests have been met. The following table
shows the annual retirement benefits payable at the normal retirement age of 65
for specified remunerations and years of service under the provisions of the
Plan in effect December 31, 1993, and assuming retirement on that date:
18
<PAGE>
PENSION PLAN TABLE
ANNUAL RETIREMENT BENEFITS AT
NORMAL RETIREMENT AGE OF 65 YEARS
FOR YEARS OF SERVICE INDICATED
<TABLE>
<CAPTION>
AVERAGE ANNUAL
REMUNERATION
HIGHEST 5
YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -------------- --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 150,000 $ 33,750 $ 45,000 $ 56,250 $ 67,500 $ 75,732
160,000 36,000 48,000 60,000 72,000 81,232
170,000 38,250 51,000 63,750 76,500 86,732
180,000 40,500 54,000 67,500 81,000 92,232
190,000 42,750 57,000 71,250 85,500 97,732
200,000 45,000 60,000 75,000 90,000 103,232
210,000 47,250 63,000 78,750 94,500 108,732
220,000 49,500 66,000 82,500 99,000 114,232
230,000 51,750 69,000 86,250 103,500 119,732
240,000 54,000 72,000 90,000 108,000 125,232
250,000 56,250 75,000 93,750 112,500 130,732
260,000 58,500 78,000 97,500 117,000 136,232
270,000 60,750 81,000 101,250 121,500 141,732
</TABLE>
Compensation for benefit calculation by the Plan differs from the amounts in
the annual compensation columns of the Summary Compensation Table for all five
executive officers named. Messrs. Bollom, Swoboda, Krueger, Schrickel and
Steinhardt had 1993 pensionable compensation of $276,479, $158,790, $158,496,
$151,101, and $148,228, respectively. (The maximum 1993 compensation that may be
considered for purposes of the Plan is $235,840.) Messrs. Bollom, Swoboda,
Krueger, Schrickel and Steinhardt have credited service under the Plan as of
December 31, 1993 of 36, 35, 33, 28, and 26 years, respectively. Benefit amounts
in the table have been reduced for Social Security offsets.
The annual benefits payable from the Plan are subject to a maximum
limitation (for 1993 $115,641) under Internal Revenue Code Section 415. In
addition, the amount of compensation considered for purposes of the Plan is
limited (for 1993, $235,840) under Internal Revenue Code Section 401(a)(17). The
Company has unfunded retirement benefit supplement agreements with the five
executives named in the Summary Compensation Table, which provide for additional
monthly payments equal to any loss of benefit payments under the Plan caused by
the maximum benefit or compensation limitations and/or the election of deferral
of compensation under the unfunded deferred compensation plan referred to above.
Amounts were accrued during 1993 for the unfunded future payment provided for by
the retirement plan supplement agreements. These additional payments are to be
made only while the employee or surviving spouse receives a monthly benefit from
the Plan. Benefit amounts shown in the table include payments to the employee
under the Plan and the additional payments for loss of Plan benefits as
described in this paragraph.
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PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING
GENERAL
The Company and WPS Resources have entered into the Plan, subject to
shareholder and regulatory approval. The Plan and Corporate Restructuring, when
effective, will create a parent holding company and provide for the exchange of
outstanding Company Common Stock for WPS Resources Common Stock on a
share-for-share basis (the "Share Exchange"). The Plan is attached hereto as
Exhibit A and is incorporated herein by reference.
The Board and the management of the Company believe that creation of a
parent holding company having the Company as its principal subsidiary would
result in substantial benefits to the Company and its shareholders. See "Reasons
for Share Exchange and Corporate Restructuring."
To carry out the Corporate Restructuring, the Company in December 1993
organized a wholly-owned subsidiary, WPS Resources. WPS Resources has minimal
capitalization and no significant assets and does not engage in any business. In
order to accomplish the Corporate Restructuring, the holders of Company Common
Stock must approve the Plan, which provides for the exchange of one share of WPS
Resources Common Stock for each share of Company Common Stock. It is intended
that the Share Exchange will not constitute a taxable event or otherwise affect
the present shareholders of the Company for certain federal income tax purposes.
See "Federal Income Tax Consequences."
None of the other securities of the Company, including its preferred stock
and first mortgage bonds, will be included in, or directly affected by, the
Share Exchange. Following the Share Exchange, the Company's preferred stock will
continue as its outstanding preferred stock and the Company's first mortgage
bonds and any other debt obligations will continue to be direct obligations of
the Company. See "Preferred Stock and Debt Securities."
At present, the corporate structure is as follows:
[GRAPHIC]
Immediately following the Share Exchange, the Company will transfer to WPS
Resources all of the outstanding shares of common stock of Packerland Energy
Services, Inc. ("Packerland") and WPS Communications, Inc. ("Communications"),
which will result in Packerland and Communications becoming direct subsidiaries
of WPS Resources. Upon completion of the Corporate Restructuring, the corporate
structure will be as follows:
[GRAPHIC]
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The Company is proposing to utilize Packerland Energy Services, Inc., until
recently an inactive subsidiary of the Company, as a vehicle to provide energy
supply consulting and natural gas supply/ transportation procurement services
for commercial and industrial customers within and outside the Company's
traditional service area.
WPS Communications, Inc. ("Communications") was organized in 1985 to be a
partner in the NorLight fiber optics telecommunications partnership
("NorLight"). In 1991 the assets of NorLight were sold, and a portion of the
purchase price was set aside to fund an escrow out of which the purchaser can be
reimbursed for certain liabilities. In December 1994 the escrow will terminate
and any funds then held in the escrow and not payable to the purchaser of the
NorLight assets will be distributed to the NorLight partners. It is anticipated
that Communications will be dissolved at that time.
REASONS FOR SHARE EXCHANGE AND CORPORATE RESTRUCTURING
The principal reasons for the proposed Corporate Restructuring are (1) to
provide flexibility for the Company to deal with increased competition within
the industry, (2) to create a structure which can facilitate selective
diversification into certain non-utility businesses which are related to the
utility business of the Company or energy conservation or energy resources or
which otherwise benefit the service territory of the Company and (3) to provide
additional flexibility for financing.
The regulatory and business climate in which the Company is operating has
undergone substantial change in the past several years. Additional material
changes can be anticipated. These industry changes have included or may include:
(i) increased competition experienced by the Company for service of large
industrial customers, wholesale customers and municipalities, including the
introduction of competition from non-utility developers for the construction,
ownership and operation of electric generating plants under the federal Public
Utility Regulatory Policy Act of 1978; (ii) the demand for construction and
financing of electric/steam cogeneration projects for retail utility customers
and the fact that the Public Service Commission of Wisconsin (the "PSCW") has
established a bidding process for construction approvals of new generating
facilities, which could dictate that utilities establish separate affiliates to
develop exempt wholesale generating facilities ("EWG's") under the federal
Energy Policy Act of 1992 ("Energy Policy Act") for facilities constructed
within the utility service area; (iii) the possible implementation by the PSCW
of retail wheeling of electricity under the Energy Policy Act (I.E., the PSCW
may under the Act enable end users of electricity to have access to and make use
of transmission facilities owned by utilities to transport electricity from
generating sources other than their local utility) which could encourage
utilities to provide electric brokering or agency services outside of utility
operations; (iv) the substantial development of electric and gas conservation or
"demand side management" as alternatives to the use of electricity and, the
potential for obtaining attractive investment returns from non-utility
businesses servicing these developing markets; (v) deregulation of the supply of
natural gas which has allowed large industrial customers to seek alternate
natural gas suppliers and the need for gas pipeline construction and financing
for gas utility retail customers, if the Federal Energy Regulatory Commission
("FERC") continues to permit retail gas utility by-pass pipeline extensions; and
(vi) the potential for other gas service and supply businesses.
The Board believes that the Company must protect its competitive position
and enhance its ability to pursue investment opportunities associated with the
gas and electric utility industries by establishing a corporate structure able
to adapt to the changing competitive environment. The Board believes that
industry changes may require development of non-utility, unregulated businesses
which are related to the utility business of the Company or energy conservation
or energy resources or which otherwise benefit the service territory of the
Company. The Company is presently developing plans to provide energy supply
consulting and gas brokerage services through its subsidiary Packerland and may
in the future undertake similar activities with respect to electric energy. The
Company is currently in the process of pursuing the licensing for a 120 megawatt
electric and steam cogenerating plant to be built on the premises of Rhinelander
Paper Company in Rhinelander, Wisconsin. In conjunction with that proposed
project, the Company expects to propose establishment
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<PAGE>
of one or more special purpose corporate subsidiaries of the utility to hold
title to and finance the steam and electric components of the project. The
affiliate owning the steam facilities will be a non-utility, unregulated
business, while the utility or non-utility status of the affiliate owning the
electric facilities is uncertain. Although the Company currently has no specific
plans to establish other non-utility, unregulated business, such business when
developed would also primarily be carried out by corporate affiliates separate
from the Company.
Under Wisconsin law and PSCW regulations, the Company as a utility may
transfer funds to an affiliate only so long as the transfer leaves the utility's
equity within an acceptable range, currently set by the PSCW to between 47% and
52%. The Company's equity currently constitutes approximately 54% of its total
capitalization as measured in a rate proceeding. All transfers by the utility to
the affiliate are deemed to be transfers of equity. A utility is not permitted
by the PSCW to issue securities to raise capital for any non-utility purposes.
If new non-utility business opportunities develop which require anything more
than nominal equity investments, the Company with its current corporate
structure would not have access to the security markets to raise additional
capital which may be necessary to pursue non-utility investments.
As noted above, except for the proposed energy consulting and gas brokerage
business of Packerland, possible future electric energy consulting and brokerage
activities and the Rhinelander electric and steam cogeneration plant proposal
presently under consideration, the Company has no current specific plans to
establish new non-utility affiliates. Any investments in non-utility businesses
would be subject to prior approval of the WPS Resources Board, would be pursued
only if perceived rewards were projected to exceed perceived risks and would be
subject to restrictions on size and economic impact by Wisconsin law. See
"Regulation -- Wisconsin Holding Company Act." The Board believes, however, that
changes in the industry and investment opportunities requiring the proposed
Corporate Restructuring will occur without sufficient advance notice to permit a
reorganization initiated at that time and a timely response to the opportunity.
The Board is of the view that a holding company structure will better
facilitate the deployment of any portion of the Company's earnings which are not
required for reinvestment in the utility business, as well as the deployment of
capital which might be raised by a non-utility holding company for non-utility
purposes.
In the Board's view, Corporate Restructuring will increase opportunities to
diversify into businesses which are related to the utility business of the
Company or energy conservation or energy resources or which otherwise benefit
the service territory of the company that will develop with the changing utility
industry but which will not be regulated as public utilities. Financing
alternatives may also be enhanced as a result of engaging in a greater number of
businesses. Diversification that succeeds in promoting employment and commerce
in the areas served by the Company may benefit the Company and its customers, as
well as the shareholders, in other ways. Diversification does, however, involve
risks, and there can be no assurance that any new businesses will be successful
or, if unsuccessful, that they will not have a direct or indirect adverse effect
on the holding company system as a whole despite the separations afforded by the
holding company structure. See "SPECIAL CONSIDERATIONS -- Diversification"
above.
The holding company structure is designed generally to insulate the
customers of the Company and the public holders of the Company's securities from
the risks of the non-utility businesses by segregating the non-utility
businesses into separate corporations that will be direct or indirect
subsidiaries of the holding company and not of the Company. Because non-utility
businesses of the holding company will be conducted through separate
subsidiaries, any liabilities incurred by those subsidiaries will generally not
constitute liabilities of the utility subsidiaries. The corporate separation
also insures that all costs of a particular non-utility subsidiary will be
charged to that subsidiary and not allocated to any utility subsidiary. This
type of cost allocation is in keeping with requirements of the Wisconsin Holding
Company Act as described under "Regulation -- Wisconsin Holding Company Act."
Thus, the corporate structure and the regulatory requirements provide for the
insulation of
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<PAGE>
customers of the Company from risks of the non-utility businesses. Likewise, the
preferred shareholders and debt security holders of the Company after the
Corporate Restructuring will generally be insulated from the risks of the
non-utility businesses. Any benefits or detriments which result from the
Corporate Restructuring and consequent segregation of the utility and
non-utility businesses will flow to the security holders of WPS Resources and
not to the public security holders of the Company (I.E., the owners of the
Company's preferred stock and debt securities). See "SPECIAL CONSIDERATIONS --
Recourse to Company Assets" above. After the Corporate Restructuring, the
separate financial statements prepared for the Company will not reflect the
non-utility businesses which may be owned by non-utility subsidiaries of WPS
Resources. The consolidated financial statements of WPS Resources will not
reflect the financial condition of any group of subsidiaries taken separately
but will reflect the overall operations of all subsidiaries, including the
Company.
The holding company structure is intended to afford additional flexibility
for maintaining the capital ratios of the Company at levels determined to be
appropriate by regulatory authorities. This ability to adjust the components of
the capital structure of the Company will help the Company maintain stable
utility rates. One component of utility rates is cost of capital. Equity capital
is the most expensive type of capital and if the equity component of a utility's
capital structure is too high it may result in increasing pressure to raise
rates. If the equity component is too low it may result in increases in the cost
of debt because of increased leverage and risk which will also tend to increase
rates. Under the holding company structure, capital ratios of the utility would
be subject to adjustment from time to time through dividends to, or equity
investments from, the holding company.
Financing alternatives are expected to be improved by the holding company
structure in that the planning of financings best suited to the particular needs
and circumstances of the separate businesses should be facilitated. It is
contemplated that in the normal course WPS Resources, in addition to receiving
dividends from its subsidiaries, will obtain funds through debt or equity
financings, that the Company will obtain funds through its own financings (which
may include the issuance of additional debt such as first mortgage bonds or
preferred stock, as well as the issuance of additional shares of its common
stock to WPS Resources), and that the businesses owned by non-utility
subsidiaries of WPS Resources will obtain funds from WPS Resources, from other
non-utility affiliates, or from their own outside financings. Any financings
will depend on the financial and other conditions of the entities involved and
on market conditions.
The Wisconsin Holding Company Act (Section 196.795, Wisconsin Statutes),
under which the PSCW must approve the proposed Corporate Restructuring, provides
that the maintenance of a financially healthy utility is contingent upon the
maintenance of an economically healthy service area and that the public interest
and the interest of investors and consumers can be benefitted if public utility
holding companies, in the service territories of their public utility affiliates
or in Wisconsin, conduct substantial business activities, attract new
businesses, expand existing businesses, provide investment capital for new
business ventures, and otherwise directly or indirectly promote employment and
commerce. The Corporate Restructuring is proposed by the Board with a view
toward implementation of those goals and the other purposes indicated above.
The Board intends that the utility operations of the Company will continue
to constitute the predominant activity of the holding company system for the
foreseeable future and that there be no capital impairment of the Company and no
adverse effect on the Company's levels of service as a result of the Corporate
Restructuring. This intention accords with the limitations and other provisions
in the Wisconsin Holding Company Act. See "Regulation -- Wisconsin Holding
Company Act."
THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST TWO-THIRDS OF THE
OUTSTANDING COMMON STOCK OF THE COMPANY IS REQUIRED FOR THE APPROVAL OF THE
PLAN. THE PLAN WILL NOT BECOME EFFECTIVE, AND THE SHARE EXCHANGE WILL NOT TAKE
PLACE UNLESS SUCH APPROVAL IS OBTAINED. APPROVAL OF THE PLAN BY THE
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<PAGE>
HOLDERS OF THE COMPANY'S PREFERRED STOCK IS NOT REQUIRED. ABSTENTIONS AND BROKER
NON-VOTES WILL HAVE THE SAME EFFECT AS VOTES AGAINST APPROVAL OF THE PLAN.
THE BOARD RECOMMENDS APPROVAL OF THE PLAN AND URGES EACH HOLDER OF COMPANY
COMMON STOCK TO VOTE "FOR" APPROVAL OF THE PLAN. PROXIES WHICH ARE EXECUTED BUT
DO NOT INDICATE HOW THE PROXIES ARE TO BE VOTED ON THE PLAN WILL BE VOTED "FOR"
APPROVAL OF THE PLAN.
TERMS OF SHARE EXCHANGE AND CORPORATE RESTRUCTURING
The Plan has been unanimously approved by the Boards of the Company and WPS
Resources. Pursuant to the Plan:
(1) One share of WPS Resources Common Stock will be exchanged for each
share of Company Common Stock outstanding at the effective time.
(2) The outstanding shares of WPS Resources Common Stock held by the
Company prior to the effective time of the Share Exchange (the "Effective
Time") will be cancelled.
As a result of the foregoing, the Company will become a subsidiary of WPS
Resources, and all of the WPS Resources Common Stock outstanding immediately
after the Effective Time will be owned by the former common shareholders of the
Company. Immediately following the Effective Time, the Company will transfer to
WPS Resources, all of the outstanding shares of common stock of Packerland and
Communications.
Holders of Company Common Stock will not be required to exchange their
certificates for Company Common Stock. After the Effective Time, stock
certificates representing shares of Company Common Stock will be deemed for all
purposes to represent shares of WPS Resources Common Stock. See "Exchange of
Stock Certificates Not Required."
PREFERRED STOCK AND DEBT SECURITIES OF THE COMPANY
The outstanding preferred stock, first mortgage bonds and any other debt
securities of the Company will not be included in, or altered by, the Share
Exchange and Corporate Restructuring. Such securities will remain outstanding
and will continue to be securities of the Company. The first mortgage bonds will
continue to be secured by a first mortgage lien on substantially all of the
fixed properties of the Company.
The Board's decision that the preferred stock should continue as securities
of the Company is based upon, among other factors, a desire to avoid changing
the nature of the investment represented by such stock. The utility operations
of the Company presently constitute, and are expected to constitute for the
foreseeable future, substantially all of WPS Resources' consolidated assets and
earning power. Accordingly, it is believed that the preferred stock will retain
its investment rating, as well as its qualification for legal investment, by
remaining a security of the Company.
Preferred stock of the Company will continue to rank senior to the common
stock of the Company as to dividends and as to assets of the Company in the
event of any liquidation of the Company. The preferred stock of the Company is
and will be unrelated in rank to the common stock of WPS Resources. Payment of
dividends on common stock of WPS Resources will in large part depend on earnings
of the Company and payment of dividends on Company Common Stock to WPS Resources
as the sole holder thereof. The Company's Restated Articles of Incorporation
provide that no dividends may be paid on Company Common Stock unless dividends
on the preferred stock of the Company for all past quarterly dividend periods
have been paid or funds for the payment thereof set aside. Payment of any
dividends on the common stock of any other subsidiary of WPS Resources will be
unaffected by any dividend payment or non-payment on either Company Common Stock
or preferred stock.
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<PAGE>
Following the Corporate Restructuring, the Company will continue to be a
reporting company under the Securities Exchange Act of 1934. After the Corporate
Restructuring, the Company will solicit proxies from holders of preferred stock
only in connection with matters requiring a class vote of holders of preferred
stock.
DIVIDENDS ON WPS RESOURCES COMMON STOCK
Subject to the availability of earnings and the needs of its utility
business, the Company intends to make regular cash payments to WPS Resources in
the form of dividends on then outstanding shares of Company Common Stock in
amounts which, to the extent not otherwise provided by other subsidiaries of WPS
Resources, will provide WPS Resources with moneys sufficient to enable it to pay
cash dividends on WPS Resources Common Stock and to meet operating and other
expenses. Except for such cash dividend payments, it is not anticipated that the
Company will, without consideration, make transfers of assets to WPS Resources
or to the other subsidiaries of WPS Resources, following completion of the
Corporate Restructuring. Initially, it is expected that substantially all of the
funds required by WPS Resources to pay dividends on its common stock will be
derived from dividends paid by the Company on its common stock. The quarterly
dividend most recently declared by the Board was $.44 1/2 per common share
payable March 19, 1994 to holders of record of Company Common Stock on February
28, 1994.
Future dividends on WPS Resources Common Stock and on equity securities of
its subsidiaries will depend upon the respective earnings, financial conditions
and other factors of such companies. Quarterly dividends on WPS Resources Common
Stock are expected to commence at a rate equal to that currently being paid on
Company Common Stock and are expected to be paid on approximately the same dates
in each year as dividends on Company Common Stock have been paid.
The payment of dividends on the Company's preferred stock is expected to
continue at the specified rates without interruption or change. The Company's
Restated Articles of Incorporation contain covenants which could, in the future,
affect the Company's ability to pay cash dividends on, or to acquire, its common
stock. As previously described, dividends on Company Common Stock may be paid
only when all cumulative dividends on the preferred stock have been paid or
funds for the payment set aside. The Company's Restated Articles of
Incorporation also contain limitations on dividends payable on Company Common
Stock tied to current earnings and capitalization if the portion of the
Company's total capital represented by Company Common Stock and surplus is less
than 25% (the "capitalization ratio"). The Company's current capitalization
ratio is approximately 54% and therefore these limitations are not currently
operative.
These limitations will not be altered by the proposed Share Exchange and
Corporate Restructuring. See "Regulation -- Wisconsin Holding Company Act"
regarding statutory limitations on payment of dividends by Wisconsin utility
companies to their holding company parents.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Company and WPS Resources have been advised by their counsel Foley &
Lardner, Milwaukee, Wisconsin that, in the opinion of Foley & Lardner, for
federal income tax purposes:
(i) No gain or loss will be recognized by the owners of Company Common
Stock upon the exchange of such stock for WPS Resources Common Stock
pursuant to the Plan;
(ii) The basis of WPS Resources Common Stock to be received by the
owners of Company Common Stock pursuant to the Plan will be the same as
their basis in Company Common Stock exchanged;
(iii) The holding period of WPS Resources Common Stock to be received by
the owners of Company Common Stock in connection with the Plan will include
the period during which Company Common Stock being exchanged was held,
provided that Company Common Stock is held as a capital asset in the hands
of the shareholder at the Effective Time;
(iv) No gain or loss will be recognized by WPS Resources or the Company
in connection with the Share Exchange;
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<PAGE>
(v) The affiliated group of corporations of which the Company is the
common parent immediately before the Share Exchange will continue in
existence for consolidated tax return purposes, and WPS Resources will be
the common parent of such affiliated group after the Share Exchange and
Corporate Restructuring; and
(vi) No gain or loss will be recognized by the holders of Company
preferred stock as a result of the Corporate Restructuring, and the basis
and holding period of the Company preferred stock will not change.
The Company understands that it is the present policy of the Internal
Revenue Service not to issue rulings to the foregoing effect in transactions
involving the formation of a holding company. Accordingly, rulings will not be
requested from the Internal Revenue Service in connection with Corporate
Restructuring.
The foregoing discussion does not cover the tax consequences of the Share
Exchange under state income or other tax laws. Each shareholder of the Company
is urged to consult with his own tax advisor with respect to the effects of such
laws.
NEW YORK AND CHICAGO STOCK EXCHANGE LISTINGS
At the Effective Time of the Share Exchange, Company Common Stock will no
longer meet the requirements for listing on the New York Stock Exchange because
all Company Common Stock will be held by one shareholder, WPS Resources. WPS
Resources will apply to list WPS Resources Common Stock on the New York Stock
Exchange and Chicago Stock Exchange. It is expected that the listing will be
effective as of the Effective Time. As a practical matter, current owners of
Company Common Stock will continue to be able to sell their shares of Company
Common Stock (or, after the Effective Time, WPS Resources Common Stock) on the
New York Stock Exchange and Chicago Stock Exchange without interruption. Stock
certificates representing shares of Company Common Stock will at the Effective
Time be deemed for all purposes to represent shares of WPS Resources Common
Stock. Holders of Company Common Stock will not be required to exchange their
stock certificates. See "Exchange of Stock Certificates Not Required."
DIVIDEND REINVESTMENT AND EMPLOYEE BENEFIT PLANS
If the Share Exchange is consummated, no shares of Company Common Stock will
thereafter be available for issuance under the Company's Dividend Reinvestment
and Stock Purchase Plan, or under the Company's Employee Stock Ownership Plan
("ESOP"). Shares of Company Common Stock held by the ESOP at the Effective Time
will automatically be exchanged for WPS Resources Common Stock.
Accordingly, WPS Resources will adopt a plan (the "Reinvestment Plan") which
will provide for purchases of WPS Resources Common Stock with reinvested
dividends on WPS Resources Common Stock and with optional cash payments. The
Reinvestment Plan will be similar to the Company's existing Dividend
Reinvestment and Stock Purchase Plan. All participants in the Company's Dividend
Reinvestment and Stock Purchase Plan will be provided with appropriate
information relating to the Reinvestment Plan prior to consummation of the Share
Exchange.
The Company's existing ESOP will be amended to allow coverage of any
eligible employees of WPS Resources and its subsidiaries and to provide for the
acquisition of WPS Resources Common Stock. The retirement and other employee
benefit plans of the Company will be revised or amended as appropriate to allow
for inclusion of any eligible employees of WPS Resources and its subsidiaries.
VOTE REQUIRED
The Plan will not become effective and the Share Exchange will not take
place unless the Plan is approved by the requisite vote of the holders of shares
of Company Common Stock. In order for the Plan to be approved under the
Wisconsin Business Corporation Law (the "WBCL"), it must receive the favorable
vote of the owners of at least two-thirds of the outstanding shares of Company
Common Stock. Accordingly, abstentions and broker non-votes will have the same
effect as votes against approval of the Plan. Approval of the Plan by the
holders of the Company's preferred stock is not required under the provisions of
Company's Restated Articles of Incorporation or the WBCL.
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APPRAISAL RIGHTS
Under the WBCL, neither the holders of Company Common Stock nor the holders
of the Company's preferred stock are entitled to appraisal rights in connection
with the Share Exchange and Corporate Restructuring (I.E., the statutory right
of a shareholder to dissent and receive payment of the fair value of his or her
shares). The Company's preferred stock is not subject to the Share Exchange and
the holders of the Company's preferred stock are not entitled under the WBCL or
under provisions of the Company's Restated Articles of Incorporation relating to
approval of certain mergers and consolidations to vote on the Plan. Although
holders of Company Common Stock are entitled to vote on the Plan, the WBCL does
not provide appraisal rights to the holders of Company Common Stock because the
Share Exchange does not constitute a business combination under the WBCL, and
appraisal rights are not provided by the WBCL for shares which on the record
date for voting on a plan of share exchange were traded on a national securities
exchange. On the Record Date for the 1994 Annual Meeting of Shareholders of the
Company, Company Common Stock was traded on the New York and Chicago Stock
Exchanges.
CONDITIONS TO CONSUMMATION OF SHARE EXCHANGE AND CORPORATE RESTRUCTURING
The Share Exchange and Corporate Restructuring will not be consummated
unless certain conditions are satisfied, including: (i) approval of the Plan by
the requisite vote of the holders of Company Common Stock; (ii) receipt of an
order from the SEC under the Public Utility Holding Company Act of 1935 (the
"Public Utility Holding Company Act"), in form and substance satisfactory to the
Company and WPS Resources, approving the acquisition either directly or
indirectly by WPS Resources of Company Common Stock and common stock of
Wisconsin River Power Company; (iii) receipt of all orders, authorizations,
consents and approvals from all regulatory bodies, boards or agencies
(including, without limitation, the FERC, and the PSCW) in form and substance
satisfactory to the Company and WPS Resources which are necessary or appropriate
for the consummation of the Share Exchange; (iv) approval for listing, upon
official notice of issuance, of WPS Resources Common Stock by the New York Stock
Exchange and the Chicago Stock Exchange; and (v) receipt of an opinion from
Foley & Lardner as to the validity of WPS Resources Common Stock to be issued in
the Exchange.
AMENDMENT OR TERMINATION OF PLAN
The Company and WPS Resources, by action of their respective Boards, may
amend, modify or supplement the Plan or waive any of the conditions described
above at any time before or after approval of the Plan by the shareholders of
the Company. No such amendment, modification, supplement or waiver may be made
or effected which, in the sole discretion of the Board, materially and adversely
affects the rights of the shareholders of the Company.
The Plan provides that it may be terminated before the Effective Time, and
the transaction abandoned, at any time, whether before or after shareholder
approval of the Plan, by action of the Boards of the Company and WPS Resources,
if the Boards determine that the consummation of the Corporate Restructuring
would be inadvisable or that any regulatory or other consents or approvals
deemed necessary or advisable by such Boards have not been obtained within a
reasonable time after approval by holders of Company Common Stock.
EFFECTIVE TIME
The Share Exchange will become effective at the time to be specified in the
Articles of Share Exchange (the "Effective Time"). The form of the Articles of
Share Exchange is attached as Schedule I to the Plan. The Effective Time will be
the close of business on the date that the Articles of Share Exchange are duly
filed in the office of the Secretary of State of the State of Wisconsin or such
later time as may be designated in the Articles of Share Exchange. The Effective
Time is expected to be on or about October 1, 1994. The filing of the Articles
of Share Exchange will be made only upon satisfaction of all the terms and
conditions in the Plan. See "Conditions to Consummation of Share Exchange and
Corporate Restructuring."
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EXCHANGE OF STOCK CERTIFICATES NOT REQUIRED
If the Share Exchange becomes effective, the holders of Company Common Stock
immediately prior to the Effective Time will automatically become owners of WPS
Resources Common Stock and, as of the Effective Time, will cease to be owners of
Company Common Stock. Stock certificates representing shares of Company Common
Stock will, at the Effective Time, be deemed for all purposes to represent
shares of WPS Resources Common Stock. Holders of Company Common Stock will not
be required to exchange their stock certificates as a result of the Share
Exchange. Should a shareholder desire to sell WPS Resources Common Stock after
the Effective Time, delivery of the stock certificate or certificates which
previously represented shares of Company Common Stock will be sufficient.
Following the Share Exchange, certificates bearing the name of WPS Resources
will be issued in the normal course upon surrender of outstanding Company Common
Stock certificates for transfer or exchange. If any shareholder surrenders a
certificate representing shares of Company Common Stock for exchange or transfer
and the new certificate to be issued is to be issued in a name other than that
appearing on the surrendered certificate theretofore representing Company Common
Stock, it will be a condition to such exchange or transfer that the surrendered
certificate be properly endorsed and otherwise be in proper form for transfer
and that the person requesting such exchange or transfer either (i) pay to WPS
Resources' transfer agent any transfer or other taxes required by reason of the
issuance of a certificate registered in a name other than that appearing on the
surrendered certificate or (ii) establish to the satisfaction of WPS Resources
or its transfer agent that such taxes have been paid or are not applicable.
DIRECTORS AND EXECUTIVE OFFICERS OF WPS RESOURCES
The WPS Resources Board of Directors (the "WPS Resources Board") consists of
nine directors divided into three classes, with one class (or one-third of the
Board) to be elected each year for a three-year term. The WPS Resources Board
consists of the same persons who are serving as directors of the Company, each
having the same term of office for which he or she was elected or appointed to
the Company Board. See "NOMINEES FOR ELECTION OF DIRECTORS."
WPS Resources executive officers are now, and upon the effectiveness of the
Corporate Restructuring are expected to be:
<TABLE>
<CAPTION>
NAME OFFICE AGE
- ---------------------- --------------------------------------- ---
<S> <C> <C>
Daniel A. Bollom President and Chief Executive Officer 57
Patrick D. Schrickel Vice President 49
Robert H. Knuth Assistant Vice President -- Secretary 60
Ralph G. Baeten Treasurer 50
</TABLE>
See "NOMINEES FOR ELECTION AS DIRECTORS" and "EXECUTIVE COMPENSATION" for
information with respect to Mr. Bollom. For information with respect to the
executive officers of the Company, see the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, which is incorporated by reference to this
Prospectus/Proxy Statement.
WPS Resources presently has no employees. Upon completion of the Share
Exchange and Corporate Restructuring, WPS Resources may hire its own employees
or utilize employees of the Company, in which case the Company will be
reimbursed by WPS Resources for any time expended by the Company's officers and
employees on the affairs of WPS Resources and its other subsidiaries. The
offices of WPS Resources will be located at the principal office of the Company,
and WPS Resources will reimburse the Company for use of office space.
Transactions between the Company and WPS Resources will be pursuant to an
affiliated interest agreement which must be approved by the PSCW.
BUSINESS OF THE COMPANY
The Company is a public utility engaged in the production, transmission,
distribution and sale of electricity and in the purchase, distribution,
transportation and sale of gas in northeastern Wisconsin and an adjacent part of
upper Michigan.
28
<PAGE>
REGULATION
GENERAL. The Company and WPS Resources have been advised by Foley &
Lardner, counsel to the Company, that, so long as WPS Resources is not a public
utility, it will not be subject, under present law, to regulation by the FERC or
the PSCW, except, to the extent described below under "Wisconsin Holding Company
Act." Following the Share Exchange and Corporate Restructuring changes in
control of WPS Resources or the Company would be subject to the jurisdiction of
the PSCW. See "Wisconsin Holding Company Act."
The Company and WPS Resources have further been advised by Foley & Lardner
that, based upon the facts and circumstances existing at the Effective Time and
subject to the terms of the Public Utility Holding Company Act and the filing of
an appropriate exemption statement, WPS Resources will be entitled to exemption
from registration and regulation as a registered public utility holding company
under the Public Utility Holding Company Act upon consummation of the Share
Exchange and Corporate Restructuring. The exemption from the registration
requirements of the Public Utility Holding Company Act is available only if the
businesses of WPS Resources and its utility subsidiary remain primarily
intrastate in nature, and such exemption may be revoked on a finding by the SEC
that exemption "may be detrimental to the public interest or the interest of
investors or consumers." Notwithstanding the availability of such exemption, the
approval of the SEC generally will be required if WPS Resources proposed to
acquire, directly or indirectly, the securities of a public utility other than
the Company. SEC approval under the Public Utility Holding Company Act of the
Share Exchange will in fact be required because the Share Exchange will result
in WPS Resources indirectly acquiring the 33.1% interest in Wisconsin River
Power Company owned by the Company. There also may be limits on the extent to
which WPS Resources and its subsidiaries could diversify without raising the
possibility that the SEC could find that such diversification was detrimental to
the public interest or the interests of investors or consumers. Although current
SEC policies allow a reasonable amount of freedom for non-utility
diversification, criteria for determining the availability of an exemption from
the Public Utility Holding Company Act are subject to change as a result of
legislation, SEC policy, rule changes and judicial and SEC decisions. There is
no present intention, however, of having WPS Resources become a registered
holding company subject to regulatory constraints imposed on such companies by
the SEC under the Public Utility Holding Company Act.
The Company will continue to be subject to the jurisdiction of the PSCW and
the Michigan Public Service Commission (the "MPSC") as to electric and gas
rates, standards of service, issuance of securities, construction of new
facilities, levels of short-term debt obligations, accounting, billing
practices, certain transactions with non-utility affiliates (including WPS
Resources), and various other matters. In addition, the Company will continue to
be subject to FERC jurisdiction with respect to borrowings and the issuance of
securities not regulated by the PSCW, the classification of accounts, rates to
wholesale customers, interconnection agreements and the acquisitions and sales
of certain utility properties. With respect to construction and operation of
nuclear facilities, the Company will continue to be subject to regulation by the
Nuclear Regulatory Commission. Also, in respect of environmental and related
matters, the Company will continue to be subject to regulation by the United
States Environmental Protection Agency and the Wisconsin Department of Natural
Resources. As a result of filing annual exemption statements with the SEC, the
Company is presently exempt from all provisions of the Public Utility Holding
Company Act of 1935, except provisions thereof relating to the acquisition of
securities of other public utility companies. See "Federal Public Utility
Holding Company Act."
WISCONSIN HOLDING COMPANY ACT. Section 196.795 of the Wisconsin Statutes
(the "Wisconsin Holding Company Act") provides for the regulation by the PSCW of
the formation of holding companies, and of various matters with respect to
resulting holding company systems. "Holding company" is defined as including, in
general, any company, directly or indirectly, as beneficial owner, owning,
controlling or holding 5% or more of the outstanding voting securities of a
public utility, with the
29
<PAGE>
unconditional power to vote such securities. "Form a holding company" is defined
to include "as a beneficial owner, to take, hold or acquire 5% or more of the
outstanding voting securities of a public utility with the unconditional power
to vote those securities."
Among the provisions of the Wisconsin Holding Company Act are provisions
briefly summarized as follows: (a) prohibition on any person forming a holding
company or acquiring or holding more than 10% of the outstanding voting
securities of a holding company, without PSCW approval; (b) authorization for
the PSCW, if it finds the capital of any public utility affiliate will be
impaired by payment of a dividend, to order the affiliate to limit or cease
payment of dividends to the holding company; (c) provision that, while a holding
company or a non-utility affiliate is not subject to the general regulatory
jurisdiction of the PSCW, the PSCW has full access to any document or other
information to the extent relevant to the PSCW's performance of its duties in
respect of public utility affiliates; (d) prohibition of various transactions by
a public utility affiliate with others in the holding company system, including
lending money, guaranteeing obligations, certain combined advertising, providing
utility service on terms different from those for other consumers in the same
class, and without PSCW approval after establishment that the utility affiliate
will be paid at fair market value, certain sales or leases of real property and
use of services of utility employees; (e) prohibitions against (i) any public
utility affiliate providing any non-utility product or service in a manner or at
a price that unfairly discriminates against any competing provider, (ii) any
non-utility activity being subsidized materially by the customers of any public
utility in the system, (iii) the operation of the system in any way which
materially impairs the credit, ability to acquire capital on reasonable terms or
ability to provide safe, reasonable, reliable and adequate utility service of
any public utility affiliate in the system, (iv) any transfer by a public
utility affiliate to any other system company of any confidential public utility
information, including customer lists, for use for any non-utility purpose,
unless the PSCW has approved the transfer, and (v) any termination of the
system's interest in any public utility affiliate without PSCW approval; and (f)
limitations on the sale, lease, installation or maintenance by non-utility and
utility affiliates of certain appliances without PSCW approval. Other statutory
provisions which existed prior to the Wisconsin Holding Company Act include
requirements for submission to the PSCW for approval of certain contracts or
other arrangements for furnishing property or services between a public utility
and an affiliate.
The Wisconsin Holding Company Act limits diversification, in that (in
summary) the net book value of the assets (other than investments in system
affiliates) of all non-utility affiliates may not exceed the sum of 25% of the
net book value of all electric utility affiliates and a percentage, to be
determined by the PSCW (but not less than 25%), of the net book value of all
other public utility affiliates, provided that for the first 36 months after the
holding company formation non-utility assets are limited to 40% of the maximum
amount allowed under the foregoing provisions.
Further, the Wisconsin Holding Company Act requires the PSCW, no sooner than
36 months after holding company formation, and at least once every three years
thereafter, to investigate the impact of the operation of every holding company
system formed after November 28, 1985 on every public utility affiliate in the
system and to determine whether each non-utility affiliate does, or can
reasonably be expected to do, at least one of the following: (a) substantially
retain, attract or promote business activity or employment or provide capital to
businesses within the service territory of any public utility affiliate or
certain others, (b) increase or promote energy conservation or develop, produce
or sell renewable energy products or equipment, (c) conduct a business that is
functionally related to the provision of utility service or to the development
or acquisition of energy resources, or (d) develop or operate commercial or
industrial parks in the service territory of any public utility affiliate.
Following approval of a holding company, the PSCW is authorized under the
Wisconsin Holding Company Act to modify any terms of, or add terms to, the
approval. Furthermore, the PSCW is authorized to order a holding company to
terminate its interest in a public utility affiliate if the PSCW finds that,
based upon clear and convincing evidence, termination of the interest is
necessary to protect the interest of utility investors in a financially healthy
utility and the interest of consumers in reasonably adequate utility service at
a just and reasonable price.
30
<PAGE>
The Company filed an application with the PSCW to form the holding company
provided for in the Plan on December 22, 1993.
The PSCW, acting under the Wisconsin Holding Company Act, has previously
approved the formation of holding companies by other electric and gas public
utility systems operating in Wisconsin. Such approvals were granted subject to
various conditions, including the following: that no affiliated interest
transaction (including the sharing of officers, directors or employees or the
transfer of any item of value) could occur prior to approval by the PSCW of an
affiliated interest agreement; that each of the public utilities involved
maintain a balanced capital structure within a reasonable range to be
established by the PSCW in appropriate proceedings; that the directors of each
public utility involved set a dividend policy based upon the financial health of
such utility as if it were not part of a holding company system, that the public
utilities involved submit specified forecasts in rate cases and other
appropriate proceedings; that the holding company provide full access to the
records of the holding company and non-utility affiliates for any document which
the PSCW staff determines is relevant to fulfill its statutory duties, with the
burden to be on the holding company to prove that a document is not relevant or
is protected by confidentiality; that the holding company submit for PSCW staff
review specific procedures for accounting for affiliated transactions; that the
utility company and holding company submit management plans for maximum possible
separation of officers and employees between utility and non-utility affiliates;
that certain reports be submitted; and that jurisdiction be retained by the
PSCW. The Company is unable to determine whether similar or other conditions
will be imposed by the PSCW in connection with the Company's application.
MICHIGAN UTILITY REGULATORY STATUTES. The Company will, after the
restructuring, continue to be subject to the regulatory jurisdiction of the
MPSC. Although the MPSC does not have jurisdiction to regulate WPS Resources,
the MPSC, in the course of regulating the Company, may take action which impacts
WPS Resources and its relationship to the Company.
FEDERAL PUBLIC UTILITY HOLDING COMPANY ACT. WPS Resources will apply to the
SEC under the Public Utility Holding Company Act for an approval necessary for
the Corporate Restructuring. The Company's application will also request an
exemption under Section 3(a)(1) of the Public Utility Holding Company Act. That
exemption would exempt WPS Resources and its subsidiaries, upon completion of
the Corporate Restructuring, from all the provisions of the Public Utility
Holding Company Act except Section 9(a)(2) thereof, which relates to the
acquisition of securities of other public utility companies. The granting of an
exemption is not a condition precedent to consummation of the Corporate
Restructuring. The basis for the exemption would be that WPS Resources and every
public utility subsidiary from which WPS Resources derives a material amount of
its income are predominantly intrastate in character and carry on their
businesses substantially in a single state (Wisconsin) in which they are
organized. Such exemption, if granted, may be revoked on a finding by the SEC
that the circumstances which gave rise to the exemption no longer exist or if
such exemption "may be detrimental to the public interest or the interest of
investors or consumers." There may be limits on the extent to which WPS
Resources and its subsidiaries could diversify without raising a possibility
that the SEC might find that such diversification may be detrimental to the
public interest or the interest of investors or consumers. WPS Resources has no
present intention, however, of becoming a registered holding company subject to
the regulation of the SEC under the Public Utility Holding Company Act.
MARKET PRICES OF WISCONSIN PUBLIC SERVICE CORPORATION COMMON STOCK
Company Common Stock is traded on the New York Stock Exchange. As of
February 4, 1994, there were 25,222 holders of record of Company Common Stock.
The closing price of the common stock on December 8, 1993 (the trading day next
preceding the public announcement by the Company of its intention to proceed
with the Share Exchange), was $33 1/8 and the closing price of the common stock
on February 4 was $30 3/8.
31
<PAGE>
The Company's Annual Report on Form 10-K for the year ended December 31,
1993, incorporated herein by reference and the Company's 1993 Annual Report to
Shareholders includes market information with respect to Company Common Stock
for each quarter of 1993 and 1992. The high and low sales prices of Company
Common Stock as reported on the New York Stock Exchange consolidated tape during
1994 (through February 4) were $33 5/8 and $30 1/4, respectively.
FINANCIAL STATEMENTS
The Company's Annual Report on Form 10-K for the year ended December 31,
1993, incorporated by reference in this Prospectus/Proxy Statement, contains the
following: balance sheets and statements of capitalization of the Company as of
December 31, 1993, 1992 and 1991, and the related statements of income, retained
earnings and cash flow for each of the three years in the period ended December
31, 1993, the report of Arthur Andersen & Co., independent public accountants,
and Management's Discussion and Analysis of Financial Condition and Results of
Operations. Comparable financial information was included in the Company's 1993
Annual Report to Shareholders. Copies of such Annual Report to Shareholders were
mailed to shareholders of record as of the close of business on February 25,
1994, and will be mailed to all new shareholders up to the March 17, 1994,
record date for the Annual Shareholders' Meeting. Additional copies of the
Annual Report may be obtained without charge upon request as provided under
"Information Incorporated by Reference."
Financial statements of WPS Resources are not presented in this
Prospectus/Proxy Statement because WPS Resources is an inactive company without
material assets or liabilities or operating history.
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
The following table sets forth the capitalization of the Company at December
31, 1993, and the pro forma capitalization and the pro forma consolidated
capitalization of WPS Resources assuming the effectiveness of the Share Exchange
and Corporate Restructuring as of that date. No other pro forma consolidated
statements of WPS Resources and subsidiary following the effectiveness of the
Share Exchange and Corporate Restructuring are included herein, since such pro
forma consolidated financial statements would reflect no change from the
financial statements of the Company at the time of such effectiveness. The Share
Exchange and Corporate Restructuring will not result in any change in accounting
treatment for the Company. After the Share Exchange the accounts of the Company
will be included in the consolidated financial statements of WPS Resources.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1993
-------------------------------------------------------
WPS
RESOURCES
WISCONSIN WPS CORPORATION
PUBLIC RESOURCES AND
SERVICE CORPORATION SUBSIDIARIES
CORPORATION PRO FORMA ADJUSTMENTS (1) PRO FORMA
----------- ----------- ---------------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CAPITALIZATION
Common Stock Equity
Common Stock......................................... $ 95,588 $ 23,897 $ (95,588) $ 23,897
Premium on Capital Stock............................. 73,605 145,296 (73,605) 145,296
Retained Earnings.................................... 288,693 288,693 (288,693) 288,693
ESOP Loan Guarantees................................. (23,383) -- -- (23,383)
----------- ----------- ---------------- -----------
Total Common Stock Equity.......................... 434,503 457,886 (457,886) 434,503
----------- ----------- ---------------- -----------
Cumulative Preferred Stock
With No Mandatory Redemption......................... 51,200 -- -- 51,200
----------- ----------- ---------------- -----------
Long-Term Debt......................................... 314,225 -- -- 314,225
----------- ----------- ---------------- -----------
Total Capitalization............................... $ 799,928 $ 457,886 $ (457,886) $ 799,928
----------- ----------- ---------------- -----------
----------- ----------- ---------------- -----------
<FN>
- ------------------------
(1) To eliminate the equity of the Company after the effectiveness of the
Corporate Restructuring.
</TABLE>
32
<PAGE>
RESTATED ARTICLES OF INCORPORATION AND BY-LAWS OF WPS RESOURCES
The Restated Articles of Incorporation of WPS Resources (the "WPS Resources'
Articles") have been prepared in accordance with the WBCL. A copy of WPS
Resources' Articles is attached hereto as Exhibit B. Set forth below is a
summary of certain differences and similarities between the WPS Resources'
Articles and the Company's Restated Articles of Incorporation as amended (the
"Company's Articles"), including differences arising under the WBCL. The
Company's Articles and By-Laws and WPS Resources' By-Laws are included in the
materials incorporated by reference in this Prospectus/Proxy Statement. The
following discussion is qualified by reference to the information included in
the exhibits hereto or such materials incorporated by reference.
COMMON STOCK. The WPS Resources' Articles authorize the issuance of
100,000,000 shares of common stock, $1 par value. The Company's Articles
authorize the issuance of 32,000,000 shares of common stock, $4 par value. There
are presently outstanding 23,896,962 shares of Company Common Stock and assuming
no change in the number of shares of Company Common Stock outstanding prior to
the Effective Time, the same number of shares of WPS Resources Common Stock will
be outstanding immediately following completion of the Corporate Restructuring.
Accordingly, upon consummation of the Corporate Restructuring, WPS Resources
will have approximately 76,103,000 authorized and unissued shares (68,000,000
shares more than the Company). Under the WBCL, shares of WPS Resources Common
Stock or Company Common Stock or preferred stock may be issued from time to time
upon such terms and for such consideration as may be determined by their
respective boards of directors. Any such issuance of Company Common Stock or
preferred stock of the Company will be subject to the jurisdiction of the PSCW;
but any such issuance of WPS Resources Common Stock will not. Although there are
no plans for WPS Resources to issue additional WPS Resources Common Stock
subsequent to the completion of the Corporate Restructuring (other than shares
of WPS Resources Common Stock which may be issued pursuant to the Dividend
Reinvestment Plan), the Board believes that it is in the best interest of WPS
Resources and the Company to have additional shares of WPS Resources Common
Stock available to be issued without further shareholder action, if, at some
time in the future, it is deemed to be desirable to issue additional shares for
financing, acquisitions, possible future employee benefit plans, stock splits,
stock dividends and other purposes. See "SPECIAL CONSIDERATIONS -- Additional
Authorized Shares of WPS Resources Common Stock" above.
PREFERRED STOCK. The WPS Resources' Articles make no provision for
preferred stock. The Company's Articles authorize the issuance of 1,000,000
shares of preferred stock, $100 par value, which may be issued in series from
time to time as authorized by the Board. A total of 512,000 shares of preferred
stock are outstanding.
PREEMPTIVE RIGHTS. Holders of WPS Resources Common Stock and holders of
capital stock of the Company have no preemptive rights of subscription or
purchase in respect of shares of any class of stock or other securities.
AMENDMENTS AND CERTAIN OTHER TRANSACTIONS. Under the WBCL, WPS Resources'
Articles may be amended upon the affirmative vote of a majority of the votes
cast by the holders of WPS Resources Common Stock at a meeting at which a quorum
exists. The Company's Articles specifically provide for amendments upon the
affirmative vote of holders of two-thirds of the Company's outstanding common
stock with a two-thirds class (or series) vote of the preferred stock in certain
limited circumstances.
Under the WBCL, certain corporate transactions involving WPS Resources, such
as mergers, consolidations, share exchanges, sales, leases, exchanges or other
dispositions of all or substantially all assets, and dissolutions, require the
approval of a majority of the outstanding voting securities. In the case of
similar transactions involving the Company, the affirmative vote of the holders
of two-thirds of Company Common Stock is presently required with a majority or
two-thirds class (or series) vote of the preferred stock in certain limited
circumstances.
33
<PAGE>
The higher vote requirements respecting amendments and certain transactions
contained in the Company's Articles were not added to WPS Resources' Articles
because the Company desired to have these requirements conform to those now
generally applicable to Wisconsin corporations under the WBCL. Adoption of the
WBCL requirements as compared to the requirements contained in the Company's
Articles will facilitate the future adoption of amendments to WPS Resources'
Articles. The Company is not presently considering any amendments to the WPS
Resources Articles. See "SPECIAL CONSIDERATIONS -- Amendment of the Restated
Articles of Incorporation of WPS Resources" above.
ELECTION OF DIRECTORS. The Company's Articles and WPS Resources' Articles
require the classification of directors, with directors elected for staggered,
three-year terms. The initial directors of WPS Resources are the same persons
who are serving as directors of the Company, each holding office for the term
for which such person was elected a director of the Company.
VOTING RIGHTS. Each share of WPS Resources Common Stock and of Company
Common Stock has one vote on all matters submitted to shareholders, except as
otherwise provided by the WBCL.
Under the Company's Articles, holders of preferred stock are granted certain
special voting rights designed to protect their interests with respect to
specified corporate actions by the Company, including certain amendments to the
Company's Articles, the authorization of preferred stock, parity stock or stock
ranking prior to the preferred stock, the issuance or assumption of certain
unsecured indebtedness, and certain mergers or consolidations. Holders of
preferred stock of the Company will not, as such, be holders of securities of
WPS Resources. Accordingly, holders of preferred stock of the Company will not
have any voting rights with respect to matters submitted to a vote of WPS
Resources shareholders or with respect to corporate transactions effected by WPS
Resources.
DIVIDENDS. WPS Resources' Articles do not contain any limitations on the
declaration or payment of dividends or other distributions on WPS Resources
Common Stock. The Company's Articles contain certain capitalization and net
income tests which limit the declaration, payment and amount of dividends or
other distributions on its common stock in addition to requiring that dividends
on all outstanding shares of its preferred stock for all past dividend periods
be declared and paid or set apart for payment before any dividend may be paid on
its common stock. See "Dividends on WPS Resources Common Stock".
BY-LAWS. The By-Laws of WPS Resources have been prepared in accordance with
the WBCL and are substantially identical to the By-Laws of the Company.
POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE ARTICLES OF
INCORPORATION AND BY-LAWS. Provisions of the Articles of Incorporation and
By-Laws of WPS Resources providing for a classified Board of Directors, limiting
the rights of shareholders to remove directors and permitting the Company to
issue additional shares of common stock without further shareholder approval
(which, except for authority to issue a greater number of shares of common
stock, are identical to provisions presently contained in the Restated Articles
of Incorporation and By-Laws of the Company) except as required under rules of
the New York Stock Exchange and the Chicago Stock Exchange. Such provisions
could have the effect, among others, of discouraging takeover proposals for WPS
Resources or impeding a business combination between WPS Resources and a major
shareholder of WPS Resources. See "Description of WPS Resources Common Stock --
Voting Rights; -- Certain Statutory and Other Provisions." See "SPECIAL
CONSIDERATIONS -- Possible Anti-Takeover Effects of Certain Provisions of the
Articles of Incorporation and By-Laws of WPS Resources" above.
The Wisconsin Holding Company Act provides that no person may take, hold or
acquire, directly or indirectly, more than 10% of the outstanding voting
securities of a holding company unless the PSCW determines that such action is
in the best interest of utility consumers, investors and the public.
34
<PAGE>
DESCRIPTION OF WPS RESOURCES COMMON STOCK
After the Effective Time, the number of shares of WPS Resources Common Stock
outstanding will equal the number of shares of Company Common Stock outstanding
at the Effective Time.
DIVIDEND AND LIQUIDATION RIGHTS. All shares of WPS Resources Common Stock
will participate equally with respect to dividends and rank equally upon
liquidation subject to the rights of holders of any prior ranking stock which
may be subsequently authorized and issued. In the event of liquidation,
dissolution or winding up of WPS Resources, the owners of WPS Resources Common
Stock are entitled to receive pro rata the assets and funds of WPS Resources
remaining after satisfaction of all creditors of WPS Resources and payment of
all amounts to which owners of prior ranking stock, if any, then outstanding may
be entitled.
VOTING RIGHTS. Except as hereinafter set forth and subject to Section
180.1150 of the WBCL (described under "Certain Statutory and Other Provisions"
below), every holder of common stock of WPS Resources has one vote for each
share.
No shareholder of WPS Resources has cumulative voting rights which means
that the holders of shares entitled to exercise more than 50% of the voting
power of shares entitled to vote, represented in person or by proxy at a meeting
at which a quorum (a majority of the shares entitled to vote) is represented,
are entitled to elect all of the directors to be elected. Under the WPS
Resources Articles and By-Laws, the WPS Resources Board is divided into three
classes of three directors each. One class is elected each year for a three-year
term.
Article 5 of WPS Resources' Articles (which is essentially identical to
Article V of the Company's Articles) provides that, subject to the exception
discussed below, a director may be removed only for cause by the affirmative
vote of shareholders possessing a majority of the voting power of the then
outstanding shares of voting stock. As defined in Article 5, "cause" exists only
if the director whose removal is proposed has been convicted of a felony by a
court of competent jurisdiction and such conviction is no longer subject to
direct appeal or such director has been adjudged to be liable for negligence or
misconduct in the performance of his duty to WPS Resources in a matter which has
a materially adverse effect on the business of WPS Resources, and such
adjudication is no longer subject to direct appeal. Article 5 also provides for
the removal of a director by the shareholders without cause when such removal is
recommended by the "Requisite Vote" of the directors and approved by the
affirmative vote of shareholders possessing a majority of the voting power of
the then outstanding shares of voting stock. The term "Requisite Vote" is
defined as the affirmative vote of at least two-thirds of the directors then in
office plus one director. Unless "cause" is established or removal is
recommended by the Requisite Vote of the directors, a director may not be
removed from office even if shareholders possessing a majority of the voting
power favor such action. Additionally, pursuant to Article 5, vacancies on the
Board, including those resulting from the removal of a director, may be filled
for the unexpired portion of the director's term by the majority vote of the
remaining members of the Board.
Article 5 of WPS Resources' Articles provides that those sections of Article
III of WPS Resources' By-Laws which set forth the general powers, number,
qualifications and classification of directors may be amended, altered, changed
or repealed only by the affirmative vote of shareholders possessing at least 75%
of the voting power of the then outstanding shares of stock generally possessing
voting rights in the election of directors, or by the Requisite Vote of the
directors. Article 5 of WPS Resources' Articles provides that Article 5 may
itself be amended, altered, changed or repealed only by the affirmative vote of
shareholders possessing at least 75% of the voting power of the then outstanding
shares of stock generally possessing voting rights in the election of directors.
CERTAIN STATUTORY AND OTHER PROVISIONS. Section 180.1150 of the WBCL
provides that the voting power of shares of an "issuing public corporation,"
which includes the Company and will include WPS Resources after the Effective
Time, which are held by any person holding in excess of 20% of the voting power
in the election of directors of the issuing public corporation's shares shall be
limited to 10% of
35
<PAGE>
the full voting power of such excess shares. This statutory voting restriction
will not be applicable to shares acquired directly from WPS Resources, to shares
acquired in a transaction incident to which shareholders of WPS Resources vote
to restore the full voting power of such shares (either before or after the
acquisition of the shares) and under certain other circumstances.
Except as may otherwise be provided by law, the requisite affirmative vote
of shareholders for certain significant corporate actions, including a merger or
share exchange with another corporation, sale of all or substantially all of the
corporate property and assets, or voluntary liquidation, is a majority of all
the votes entitled to be cast on the transaction by each voting group of
outstanding shares entitled to vote thereon. Sections 180.1130 through 180.1134
of the WBCL provide generally that, in addition to the vote otherwise required
by law or the articles of incorporation of an "issuing public corporation,"
certain business combinations not meeting certain adequacy-of-price standards
specified in the statute must be approved by (a) the holders of at least 80% of
the votes entitled to be cast and (b) two-thirds of the votes entitled to be
cast by the corporation's outstanding voting shares owned by persons other than
a "significant shareholder" who is a party to the transaction or an affiliate or
associate thereof. Section 180.1130 defines "business combination" to include,
subject to certain exceptions, a merger or share exchange of the issuing public
corporation (or any subsidiary thereof) with, or the sale or other disposition
of substantially all assets of the issuing public corporation to, any
significant shareholder or affiliate thereof. "Significant shareholder" is
defined generally to mean a person that is the beneficial owner of 10% or more
of the voting power of the outstanding voting shares of the issuing public
corporation.
Sections 180.1140 through 180.1145 of the WBCL provide that a "resident
domestic corporation," such as WPS Resources, may not engage in a "business
combination" with an "interested stockholder" (E.G., a person beneficially
owning 10% or more of the aggregate voting power of the stock of such
corporation) within three years after the date (the "stock acquisition date") on
which the interested stockholder acquired his or her 10% or greater interest,
unless the business combination (or the acquisition of the 10% or greater
interest) was approved before the stock acquisition date by the corporation's
board of directors. If the interested stockholder fails to obtain such approval
by the board of directors, then even after such three-year period, a business
combination with the interested stockholder may be consummated only with the
approval of the holders of a majority of the voting stock not beneficially owned
by such interested stockholder, unless the combination satisfies certain
adequacy-of-price standards intended to provide a fair price for shares held by
non-interested shareholders.
The above sections of the WBCL and the provisions of the WPS Articles and
By-Laws, previously described under "Articles of Incorporation and By-Laws of
WPS Resources -- Possible Anti-Takeover Effects of Certain Provisions of the
Articles of Incorporation and By-Laws", could have the effect, among others, of
discouraging takeover proposals for WPS Resources or impeding a business
combination between WPS Resources and a major shareholder of WPS Resources.
Section 196.795 of the Wisconsin Statutes states that no person may hold or
acquire more than 10% of the outstanding voting securities of a public utility
holding company with the unconditional power to vote such securities unless the
PSCW determines, after investigation and an opportunity for hearing, that such
holding or acquisition is in the best interests of utility consumers, investors
and the public.
PREEMPTIVE RIGHTS. No holder of WPS Resources Common Stock has any
preemptive or subscription rights.
CONVERSION RIGHTS, REDEMPTION PROVISIONS, AND SINKING FUND PROVISIONS. WPS
Resources Common Stock is not convertible, is not redeemable and has no sinking
fund.
LIABILITY TO FURTHER CALLS OR TO ASSESSMENT. The shares of WPS Resources
Common Stock issued pursuant to the Share Exchange will be fully-paid and
non-assessable by WPS Resources, except for certain statutory personal liability
which may be imposed upon shareholders under Section
36
<PAGE>
180.0622(2)(b) of the WBCL. The substantially identical predecessor to such
statute has been judicially interpreted to mean that shareholders of a Wisconsin
corporation are subject to personal liability, up to an amount equal to the
consideration for which their shares were issued (instead of the aggregate par
value in the case of shares with par value, as the statute states), for all
debts owing to employees of the corporation for services performed for the
corporation, but not exceeding six months service in any one case. The
provisions of this Section of the WBCL are presently applicable to the shares of
capital stock of the Company.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock of WPS Resources is
Firstar Trust Company, P.O. Box 2077, Milwaukee, Wisconsin 53201.
LEGAL OPINIONS
The validity of the shares of common stock of WPS Resources being issued in
the Share Exchange will be passed upon by Foley & Lardner, 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202, counsel for the Company.
EXPERTS
The financial statements and schedules which are incorporated by reference
into this Prospectus/ Proxy Statement by reference to the Company's Annual
Report on Form 10-K for the years ended December 31, 1993, 1992 and 1991, have
been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
Reference is made to said report, which includes an explanatory paragraph with
respect to the changes in the methods of accounting for income taxes, pension
expense and post-retirement benefits other than pensions as discussed in Note 1
to the financial statements.
OTHER BUSINESS
At the time this Proxy Statement went to press, the Company knew of no
matters constituting a proper subject for action by the shareholders which would
be presented at the Meeting, other than the election of directors and approval
of the Plan. If any other matters are properly presented at the Meeting, the
persons named in the proxies will vote upon them in accordance with their best
judgment.
Certain of the officers, directors and employees of the Company may solicit
proxies by correspondence, telephone, telegraph or in person, but without extra
compensation. The Company may reimburse banks, brokers, nominees and other
fiduciaries their reasonable charges and expenses incurred in forwarding the
proxy soliciting material to and receiving proxies from the beneficial owners.
In addition, the Company has retained Morrow & Co., Inc. to assist in the
solicitation of proxies. Such solicitation may be made by mail, telephone,
telegraph or in person. It is estimated that the cost of the services of Morrow
& Co., Inc. will not exceed $20,000 plus out of pocket expenses. The cost of the
solicitation will be paid by the Company.
ANNUAL REPORTS
The annual report of the Company for the year 1993, including financial
statements and the report of independent public accountants, Arthur Andersen &
Co. (which firm has been selected to continue to act in that capacity for the
year 1994), was mailed to all shareholders in March, 1994, and to all persons
who subsequently became shareholders of record prior to the close of business on
the Record Date. A representative of Arthur Andersen & Co. will be present at
the annual meeting, available to respond to appropriate questions and will have
an opportunity to make a statement if such representative desires to do so.
THE COMPANY FILES A SEPARATE ANNUAL REPORT WITH THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K. A COPY OF THE FORM 10-K FOR THE YEAR 1993 (NOT
INCLUDING EXHIBITS THERETO) WILL BE PROVIDED
37
<PAGE>
WITHOUT CHARGE TO ANY PERSON WHO IS A RECORD OR BENEFICIAL HOLDER OF SHARES OF
THE COMMON STOCK AS OF THE RECORD DATE FOR THIS ANNUAL MEETING AND WHO MAKES
WRITTEN REQUEST FOR IT, ADDRESSED TO THE ATTENTION OF ROBERT H. KNUTH, ASSISTANT
VICE PRESIDENT -- SECRETARY, 700 NORTH ADAMS STREET, P. O. BOX 19001, GREEN BAY,
WISCONSIN 54307.
FUTURE SHAREHOLDER PROPOSALS
Any shareholder proposals intended for consideration at the 1995 annual
meeting of shareholders must be received by the Company (or, if the Share
Exchange shall have previously become effective, by WPS Resources) by November
28, 1994.
WISCONSIN PUBLIC SERVICE CORPORATION
Robert H. Knuth
ASSISTANT VICE PRESIDENT-SECRETARY
38
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF SHARE EXCHANGE
AGREEMENT AND PLAN OF SHARE EXCHANGE, dated January 17, 1994, (this
"Agreement"), between WISCONSIN PUBLIC SERVICE CORPORATION, a Wisconsin
corporation ("WPS"), and WPS RESOURCES CORPORATION, a Wisconsin corporation
("WPS Resources").
WHEREAS, WPS has authority to issue 33,000,000 shares, consisting of
1,000,000 shares of Preferred Stock, par value $100 per share (the "WPS
Preferred Stock"), of which 512,000 shares were issued and outstanding on
January 17, 1994; and 32,000,000 shares of Common Stock, par value $4 per share
(the "WPS Common Stock"), of which 23,896,962 shares were issued and outstanding
on January 17, 1994;
WHEREAS, WPS Resources has authority to issue 100,000,000 shares of Common
Stock, par value $1 per share (the "WPS Resources Common Stock"), of which 100
shares are issued and outstanding and owned beneficially and of record of WPS;
WHEREAS, the respective Boards of Directors of WPS and WPS Resources have
determined that it is advisable and in the best interests of each of such
corporations to effect an exchange of the issued and outstanding shares of WPS
Common Stock for shares of WPS Resources Common Stock upon the terms and subject
to the conditions herein provided (the "Exchange") for the purpose of
reorganizing WPS into a holding company structure; and
WHEREAS, the respective Boards of Directors of WPS and WPS Resources have,
by resolutions duly adopted, approved this Agreement and directed that it be
executed by the undersigned officers and that it be submitted to a vote of their
respective shareholders.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE 1
NAMES OF ACQUIRED CORPORATION AND
ACQUIRING CORPORATION
Section 1.1 THE ACQUIRED CORPORATION. The name of the corporation the
shares of which are proposed to be acquired by WPS Resources in the Exchange is
WISCONSIN PUBLIC SERVICE CORPORATION.
Section 1.2 THE ACQUIRING CORPORATION. The name of the corporation
proposing to acquire shares of WPS in the Exchange is WPS RESOURCES CORPORATION.
ARTICLE 2
TERMS AND CONDITIONS OF PROPOSED EXCHANGE
Section 2.1 GENERAL. At the Effective Time (as hereinafter defined): (a)
the shares of WPS Common Stock then issued and outstanding shall be exchanged
for shares of WPS Resources Common Stock, and (b) the shares of WPS Preferred
Stock then issued and outstanding shall be and remain issued and outstanding
shares of WPS Preferred Stock in accordance with their terms.
Section 2.2 EFFECTIVE TIME. The "Effective Time" of the Exchange shall be
the close of business on the day on which Articles of Share Exchange with
respect thereto substantially in the form attached hereto as Exhibit I are filed
with the Secretary of State of Wisconsin in accordance with the Wisconsin
Business Corporation Law (the "WBCL") or such later time as may be designated in
the Articles of Share Exchange.
A-1
<PAGE>
ARTICLE 3
MANNER AND BASIS OF EXCHANGING SHARES
OF CAPITAL STOCK IN THE EXCHANGE
Section 3.1 EXCHANGE OF WPS COMMON STOCK FOR WPS RESOURCES COMMON
STOCK. At the Effective Time, automatically by virtue of the Exchange and
without further action on the part of the holder thereof, each share of WPS
Common Stock outstanding immediately prior to the Effective Time shall be
exchanged for one share of WPS Resources Common Stock, which shall thereupon be
validly issued, fully paid and nonassessable except for liability which may be
imposed on the holders thereof under Section 180.0622(2)(b) of the WBCL.
Section 3.2 CANCELLATION OF WPS RESOURCES COMMON STOCK. Each share of WPS
Resources Common Stock issued and outstanding immediately prior to the Effective
Time shall be cancelled and restored to the status of authorized and unissued
WPS Resources Common Stock.
Section 3.3 WPS PREFERRED STOCK. The Exchange shall not affect, or cause
any change in, WPS Preferred Stock. Each share of WPS Preferred Stock issued and
outstanding immediately prior to the Effective Time shall, immediately following
the Effective Time, be issued and outstanding as a validly issued, fully paid
and nonassessable share of WPS Preferred Stock.
Section 3.4 FRACTIONAL SHARES. No fractional shares of WPS Resources
Common Stock shall be issued in the Exchange.
Section 3.5 STOCK CERTIFICATES. (a) Following the Effective Time, each
holder of a certificate or certificates theretofore representing outstanding
shares of WPS Common Stock may, but shall not be required to, surrender the same
to WPS Resources or its transfer agent for cancellation or transfer, and each
such holder or transferee will be entitled to receive a certificate or
certificates representing the same number of shares of WPS Resources Common
Stock as the number of shares of WPS Common Stock previously represented by such
stock certificates so surrendered. Until so surrendered or presented for
transfer, each outstanding certificate which prior to the Effective Time
represented shares of WPS Common Stock shall be deemed for all corporate
purposes to represent the ownership of the same number of shares of WPS
Resources Common Stock as though such surrender and transfer had taken place. If
any certificate representing shares of WPS Resources Common Stock is to be
issued in a name other than that of the registered holder of the certificate
formerly representing shares of WPS Common Stock presented for transfer, it
shall be a condition of issuance that (i) the certificate so surrendered shall
be properly endorsed or accompanied by a stock power and shall otherwise be in
proper form for transfer and (ii) the person requesting such issuance shall pay
to WPS Resources' transfer agent any transfer or other taxes required by reason
of issuance of certificates representing WPS Resources Common Stock in a name
other than that of the registered holder of the certificate presented, or
establish to the satisfaction of WPS Resources or its transfer agent that such
taxes have been paid or are not applicable; (b) immediately following the
Effective Time, WPS shall cause to be delivered to WPS Resources, a certificate
registered in the name of WPS Resources for the number of shares of WPS Common
Stock issued and outstanding at the Effective Time.
ARTICLE 4
OTHER PROVISIONS WITH RESPECT TO THE EXCHANGE
Section 4.1 FURTHER ASSURANCES. WPS and WPS Resources, respectively, shall
take all such action as may be necessary or appropriate in order to effectuate
the Exchange. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the officers
and directors of each of WPS and WPS Resources shall take all such further
action.
A-2
<PAGE>
Section 4.2 CONDITIONS TO THE EXCHANGE. The consummation of the Exchange
is subject to the satisfaction of the following conditions prior to the
Effective Time:
(a) The Exchange shall have received the approval of the holders of Common
Stock of each of WPS and WPS Resources to the extent required by the WBCL
and the respective Articles of Incorporation and By-laws of WPS and WPS
Resources;
(b) A registration statement or registration statements relating to the
shares of WPS Resources Company Common Stock to be issued as a result of
the Exchange shall be effective under the Securities Act of 1933, as
amended, and shall not be the subject of any "stop order";
(c) There shall have been obtained an order from the Securities and Exchange
Commission under the Public Utility Holding Company Act of 1935 in form
and substance satisfactory to WPS and WPS Resources, and their counsel
approving the acquisition, either directly or indirectly, by WPS
Resources of securities of WPS and Wisconsin River Power Company in
connection with the Exchange;
(d) The shares of WPS Resources Common Stock to be issued as a result of the
Exchange shall have been approved for listing, upon official notice of
issuance, by the New York Stock Exchange and the Chicago Stock Exchange;
(e) WPS shall have received an opinion from Foley & Lardner, counsel to WPS,
substantially to the effect that, on the basis of the facts, assumptions
and qualifications set forth in such opinion, for Federal income tax
purposes: (1) no gain or loss will be recognized by WPS Resources or the
holders of WPS Common Stock who receive WPS Resources Common Stock by
reason of the consummation of the Exchange; (2) the basis of WPS
Resources Common Stock received by a holder of WPS Common Stock in the
Exchange will be the same as the basis of the WPS Common Stock exchanged
for such WPS Resources Common Stock; and (3) each holder who holds WPS
Common Stock as a capital asset will include in his holding period for
WPS Resources Common Stock which he receives in the Exchange his holding
period for such WPS Common Stock exchanged for such WPS Resources Common
Stock;
(f) WPS shall have received an opinion, in form and substance satisfactory
to WPS from Foley & Lardner, counsel to WPS, as to the validity of WPS
Resources Common Stock to be issued in the Exchange; and
(g) WPS shall have received all orders, authorizations, consents and
approvals from all regulatory bodies, boards or agencies, (including,
without limitation, the Federal Energy Regulatory Commission, the Public
Service Commission of Wisconsin and the Michigan Public Service
Commission) in form and substance satisfactory to WPS and WPS Resources,
which are necessary or appropriate for the consummation of the Exchange
and all other transactions contemplated hereby.
Section 4.3 AMENDMENT; WAIVER. The parties hereto, to the extent permitted
by law, by mutual consent of their respective Boards of Directors, may amend,
modify or supplement this Agreement or waive any condition set forth in Section
4.2 hereof in such manner as may be agreed upon by them in writing, at any time
before or after approval of this Agreement by the shareholders of WPS; provided,
however, that no such amendment, modification, supplement or waiver shall, in
the sole judgment of the Board of Directors of WPS, materially and adversely
affect the rights of the shareholders of WPS.
Section 4.4 DEFERRAL. Consummation of the transactions herein provided for
may be deferred by the Boards of Directors of WPS and WPS Resources for a
reasonable period of time if said Boards determine that such deferral would be
in the best interests of WPS and its shareholders.
Section 4.5 TERMINATION. This Agreement may be terminated and the Exchange
and other transactions herein provided for abandoned at any time before the
Effective Time, whether before or after approval of this Agreement by the
shareholders of WPS, by the parties hereto, by mutual consent of their
respective Boards of Directors, if such Boards of Directors determine for any
reason that the
A-3
<PAGE>
consummation of the transactions provided for herein would for any reason be
inadvisable, or that any regulatory or other consents or approvals deemed
necessary or advisable by such Boards of Directors have not been obtained within
a reasonable time after approval by the shareholders of WPS.
Section 4.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
Section 4.7 HEADINGS. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
Section 4.8 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin.
IN WITNESS WHEREOF, WPS and WPS Resources have executed this Agreement by
their respective duly authorized officers as of the date first written above.
<TABLE>
<S> <C>
WISCONSIN PUBLIC SERVICE CORPORATION
By: /s/ Daniel A. Bollom
Attest: -----------------------------------------
Name: Daniel A. Bollom
Title: President and Chief
Executive Officer
/s/ Robert H. Knuth
-------------------------------------------
Robert H. Knuth, Secretary
WPS RESOURCES CORPORATION
By: /s/ Daniel A. Bollom
Attest: -----------------------------------------
Name: Daniel A. Bollom
Title: President and Chief
Executive Officer
/s/ Robert H. Knuth
-------------------------------------------
Robert H. Knuth, Secretary
</TABLE>
A-4
<PAGE>
EXHIBIT I
ARTICLES OF SHARE EXCHANGE
WPS RESOURCES CORPORATION
(A WISCONSIN CORPORATION)
THE ACQUIRING CORPORATION
AND
WISCONSIN PUBLIC SERVICE CORPORATION
(A WISCONSIN CORPORATION)
THE ACQUIRED CORPORATION
------------------------
In accordance with and pursuant to Section 180.1105 of the Wisconsin
Business Corporation Law ("WBCL"), WPS Resources Corporation, a Wisconsin
corporation ("Acquiring Corporation"), as of the day of , 1994, DOES
HEREBY EXECUTE the following ARTICLES OF SHARE EXCHANGE:
ARTICLE 1
The Agreement and Plan of Share Exchange by and between the Acquiring
Corporation and Wisconsin Public Service Corporation, a Wisconsin corporation
(the "Acquired Corporation"), dated as of January 17, 1994 ("Plan of Share
Exchange"), a true and correct copy of which is attached hereto as Exhibit A and
hereby incorporated by referenced herein, was approved in accordance with
Section 180.1103 of the WBCL.
ARTICLE 2
The Board of Directors of Acquired Corporation, in accordance with its
Restated Articles of Incorporation and By-Laws and the WBCL, approved and
adopted the Plan of Share Exchange and the transactions contemplated thereby on
December 9, 1993.
ARTICLE 3
The stockholders of Acquired Corporation, in accordance with Acquired
Corporation's Restated Articles of Incorporation and By-Laws and the WBCL,
approved and adopted the Plan of Share Exchange and the transactions
contemplated thereby on May 5, 1994.
ARTICLE 4
The Board of Directors of the Acquiring Corporation, in accordance with the
Acquiring Corporation's Articles of Incorporation and By-Laws and the WBCL,
approved and adopted the Plan of Share Exchange and the transactions
contemplated thereby and directed the submission of the Plan of Share Exchange
to the sole shareholder of the Acquiring Corporation on December 9, 1993.
ARTICLE 5
Acquired Corporation, as the then sole shareholder of the Acquiring
Corporation, in accordance with the Acquiring Corporation's Articles of
Incorporation and By-Laws and the WBCL, approved and adopted the Plan of Share
Exchange and the transactions contemplated thereby on December 9, 1993.
A-5
<PAGE>
ARTICLE 6
These Articles of Share Exchange shall be effective, and the exchange of
shares provided for under the Plan of Share Exchange shall take effect, upon the
filing of these Articles of Share Exchange with the office of the Wisconsin
Secretary of State.
IN WITNESS WHEREOF, the Acquiring Corporation has caused these Articles of
Share Exchange to be executed by its duly authorized officers as of the day and
year first above written.
WPS RESOURCES CORPORATION
By: __________________________________
Daniel A. Bollom
President and Chief Executive
Officer
Attest: ______________________________
Robert H. Knuth
Secretary
These Articles of Share Exchange have been drafted by, and should be
returned to, Michael S. Nolan, Esq., Foley & Lardner, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202.
A-6
<PAGE>
EXHIBIT B
RESTATED ARTICLES OF INCORPORATION
OF
WPS RESOURCES CORPORATION
WPS Resources Corporation, a corporation organized under the laws of the
State of Wisconsin and being subject to the provisions of the Wisconsin Business
Corporation Law, hereby amends its Articles of Incorporation in their entirety
and as so amended adopts the following Restated Articles of Incorporation of
said Corporation, which supersede and take the place of the existing Articles of
Incorporation of said Corporation and any amendments to the Articles of
Incorporation of said Corporation.
ARTICLE 1
The name of the Corporation is WPS Resources Corporation.
ARTICLE 2
The Corporation is organized for the purpose of engaging in any lawful
activity within the purposes for which corporations may be organized under the
Wisconsin Business Corporation Law.
ARTICLE 3
The aggregate number of shares which the Corporation shall have authority to
issue is One Hundred Million (100,000,000), consisting of one class only,
designated as "Common Stock," with a par value of one dollar ($1) per share.
ARTICLE 4
The Corporation shall be entitled to treat the holder of record of any share
or shares of stock as the owner thereof for all purposes, and shall not be bound
to recognize any equitable or other claim to or interest in any such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof.
ARTICLE 5
The general powers, number and classification of Directors shall be as set
forth in Article III, Sections 1, 2, 3 and 4 of the By-Laws (and as such
Sections shall exist from time to time) and such Article III, Sections 1, 2, 3
and 4 of the By-Laws, or any provision thereof, shall be amended, altered,
changed or repealed only by the affirmative vote of shareholders possessing at
least three-fourths of the voting power of the then outstanding shares of all
classes of stock of the corporation generally possessing voting rights in
elections for Directors, considered for this purpose as one class; provided,
however, that the Board of Directors, by a resolution adopted by the Requisite
Vote (as defined herein), may amend, alter, change or repeal Sections 1, 2, 3
and 4 of Article III of the By-Laws, or any provision thereof, without the vote
of the shareholders. As used herein, the term "Requisite Vote" shall mean the
affirmative vote of at least two-thirds of the Directors then in office plus one
Director.
Any Director may be removed from office, but only for cause as hereinafter
defined, by the affirmative vote of shareholders possessing at least a majority
of the voting power of the then outstanding shares of all classes of stock of
the corporation generally possessing voting rights in elections for Directors,
considered for this purpose as one class; provided, however, that if the Board
of Directors by a resolution adopted by the Requisite Vote shall have
recommended removal of a Director, then the shareholders may remove such
Director from office by the foregoing vote without cause. As used herein, the
meaning of "cause" shall be construed to exist only if the Director whose
removal is
B-1
<PAGE>
proposed has been convicted of a felony by a court of competent jurisdiction and
such conviction is no longer subject to direct appeal or has been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation in a matter which has a materially adverse effect on the business of
the corporation, and such adjudication is no longer subject to direct appeal.
Any vacancy occurring in the Board of Directors, including a vacancy created
by an increase in the number of Directors, may be filled by the affirmative vote
of a majority of the Directors then in office, though less than a quorum of the
Board of Directors, or by a sole remaining Director. Any Director so elected
shall serve until the next election of the class for which such Director shall
have been chosen and until his successor shall be elected and qualified.
The provisions of this Article 5 shall be amended, altered, changed or
repealed only by the affirmative vote of shareholders possessing at least
three-fourths of the voting power of the then outstanding shares of all classes
of stock of the corporation generally possessing voting rights in elections for
Directors, considered for this purpose as one class.
ARTICLE 6
The address of the registered office of the Corporation is 700 North Adams
Street, P.O. Box 19001, Green Bay, Wisconsin, 54307. The name of the
Corporation's registered agent at such address is R. H. Knuth.
ARTICLE 7
The Bylaws of the Corporation may provide for a greater or lower quorum
requirement or a greater voting requirement for shareholders or voting groups of
shareholders than is provided by the Wisconsin Business Corporation Law.
B-2
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
a. List of Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- ----------------------------------------------------------------------------------------------------
<C> <S>
1 None.
2 Agreement and Plan of Share Exchange (set forth as Exhibit A to the Prospectus/Proxy Statement
herein).
3A Restated Articles of Incorporation of WPS Resources Corporation (set forth as Exhibit B to the
Prospectus/Proxy Statement herein).
3B By-Laws of WPS Resources Corporation.*
4 None.
5 Opinion of counsel re legality.*
6 None.
7 None.
8 Opinion of counsel re tax matters.*
9 None.
10 None.
11 Statement re computation of Per Share Earnings.*
12 None.
13 None.
14 None.
15 None.
16 None.
22 None.
24.1 Consent of Experts.
24.2 Consents of Counsel (contained in Exhibit 5 and 8 hereto).*
25 Powers of Attorney (contained on signature pages of original Registration Statement).*
26 None.
27 None.
28.1 Form of proxy for annual meeting of Wisconsin Public Service Corporation shareholders to be held May
5, 1994.*
28.2 Form of brochure accompanying proxy statement containing a letter of the President of Wisconsin
Public Service Corporation and questions and answers.*
29 None.
</TABLE>
*_Previously filed with original Registration Statement.
b. Financial Statement Schedules: Not Applicable.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Green Bay,
State of Wisconsin, on this 28th day of February, 1994.
WPS RESOURCES CORPORATION
By: /s/ Robert H. Knuth
--------------------------------------
Robert H. Knuth
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below on February 28, 1994, by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
NAME CAPACITY
- -------------------------------------------------------- --------------------------------------------------------
<C> <S>
Daniel A. Bollom President, Principal Executive Officer and Director
Ralph G. Baeten Principal Financial and Accounting Officer
A. Dean Arganbright Director
Michael S. Ariens Director
Richard A. Bemis Director
Sister M. Lois Bush Director
Robert C. Gallagher Director
Kathryn Hasselblad-Pascale Director
James L. Kemerling Director
Linus M. Stoll Director
By:/s/ R. H. Knuth
------------------------------------------
R. H. Knuth
Attorney-in-Fact
</TABLE>
The required Powers of Attorney to R. H. Knuth were included on the
signature pages of the original Registration Statement (Reg. No. 33-52199) dated
February 8, 1994.
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document Page
- ------- ----------------------- ----
<S> <C> <C>
1 None. N/A
2 Agreement and Plan of Share Exchange (set forth as Exhibit A to the
Prospectus/Proxy Statement herein).
3A Restated Articles of Incorporation of WPS Resources Corporation (set
forth as Exhibit B to the Prospectus/Proxy Statement herein).
3B By-Laws of WPS Resources Corporation.* N/A
4 None. N/A
5 Opinion of counsel re legality.* N/A
6 None. N/A
7 None. N/A
8 Opinion of counsel re tax matters.* N/A
9 None. N/A
10 None. N/A
11 Statement re computation of Per Share Earnings.* N/A
12 None. N/A
13 None. N/A
14 None. N/A
15 None. N/A
16 None. N/A
22 None. N/A
24.1 Consent of Experts.
24.2 Consents of Counsel (contained in Exhibit 5 and 8 hereto).* N/A
25 Powers of Attorney (contained on signature pages hereto).* N/A
26 None. N/A
27 None. N/A
<FN>
* Previously filed.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document Page
- ------- ----------------------- ----
<S> <C> <C>
28.1 Form of proxy for annual meeting of Wisconsin Public Service
Corporation shareholders to be held May 5, 1994.* N/A
28.2 Form of brochure accompanying proxy statement containing a
letter of the President of Wisconsin Public Service Corporation
and questions and answers.* N/A
29 None. N/A
<FN>
* Previously filed.
</TABLE>
<PAGE>
APPENDIX
Set forth on page 20 are two graphics. The first graphic is a box
chart showing the present corporate structure with Packerland Energy
Services, Inc., WPS Resources Corporation and WPS Communications, Inc.
as subsidiaries of Wisconsin Public Service Corporation. The second
graphic is a box chart showing the proposed corporate structure with
Packerland Energy Services, Inc., Wisconsin Public Service Corporation and
WPS Communications, Inc., as subsidiaries of WPS Resources Corporation.
<PAGE>
EXHIBIT 24.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 26, 1994,
included in Wisconsin Public Service Corporation's Form 10-K for the year ended
December 31, 1993 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN & CO.
Milwaukee, Wisconsin,
February 25, 1994.
<PAGE>
WPS RESOURCES CORPORATION
February 28, 1994
Securities and Exchange Commission
ATTN: Mr. Charles C. Leber, Branch Chief
Division of Corporate Finance
Stop 7-5
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: WPS RESOURCES CORPORATION: FORM S-4; FILE NO. 33-52199
Dear Mr. Leber:
Filed herewith is Amendment No. 1 to the above Registration Statement. Pursuant
to Regulation 232.901(d), a paper copy of this filing is being forwarded to the
Commission. Set forth below are the registrant's responses to the comments
contained in your letter of February 22, 1994. Pursuant to Regulation
232.304(d)(1), a paper copy of the performance graph contained in the amendment
was previously filed today. The graph was revised slightly to reflect a
correction in the Edison Electric Institute (EEI") index of which the
registrant was recently notified by the EEI.
1. GENERAL. A Special Considerations Section has been created and inserted
on pages 9 and 10 of the amended Prospectus/Proxy Statement immediately
following the Prospectus/Proxy Statement Summary. The Special Considerations
Section contains five separate paragraphs discussing diversification risks and
the subjects noted in clauses (a) through (d) of the second paragraph of your
letter. Cross references to this material have been added on pages 22 (end of
second last paragraph), page 23 (carryover paragraph), page 33 (second
paragraph), page 34 (carryover and penultimate paragraphs).
2. REASONS FOR SHARE EXCHANGE AND CORPORATE RESTRUCTURING, PAGE 20. In the
last paragraph on page 21 and in the second complete paragraph on page 22 of
the amended Prospectus/Proxy Statement the registrant has noted the only
additional businesses under current consideration (I.E., those related to
Packerland Energy Services, Inc. and the proposed Rhinelander
Cogeneration Facility, neither of which is dependent upon approval of the share
exchange). In each of these paragraphs there has been added reference to
possible electric energy consulting and brokerage activities which have been
discussed preliminarily at the staff level but which have not been considered
by the Wisconsin Public Service Corporation Board of Directors. No specific
plans have been formulated in this regard and further action would in any event
not occur until clarification by the Public Service Commission of Wisconsin of
its policies respecting electric energy brokering. No other businesses have
received even this limited consideration. Wisconsin Public Service
Corporation has terminated its previous limited expansion into
1
<PAGE>
Mr. Charles C. Leber, Branch Chief
February 28, 1994
Page 2
telecommunications with the sale of the NorLight Fiber Optics Network (as noted
in the second paragraph on page 21 of the amended Prospectus/Proxy Statement and
entertains no further plans to expand into this business.
3. AMENDMENTS AND CERTAIN OTHER TRANSACTIONS, PAGE 32. A paragraph has been
added as the first paragraph on page 34 of the amended Prospectus/Proxy
Statement (as the third paragraph under the subcaption "Amendments and Certain
Other Transactions") discussing the reasons for conforming to the lower
Wisconsin Business Corporation Law voting requirements for WPS Resources.
A currently dated accountants' consent is included as an exhibit to the filing.
Please call the registrant's counsel, Michael S. Nolan (414-289-3608) with any
comments or questions you may have respecting this filing.
Yours truly,
WPS RESOURCES CORPORATION
By /s/ Robert H. Knuth
Robert H. Knuth
Assistant Vice President-Secretary
cc: Andrew Petillon
EXHIBIT G-3
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WISCONSIN PUBLIC SERVICE CORPORATION,
a corporation duly organized and existing under and by virtue of
the laws of the State of Wisconsin; and as such Assistant Vice
President-Secretary I have access to all original records of said
corporation; and that I am duly and properly authorized to make
certified copies of its records in its behalf and I do hereby
certify that the attached is a true and correct copy of the letter
dated February 11, 1994 from said corporation to the Nuclear
Regulatory Commission.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seal of said corporation this 10th day of March, 1994.
/s/ Robert H. Knuth
-----------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
EXHIBIT G-4
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WPS RESOURCES CORPORATION, a
corporation duly organized and existing under and by virtue of the
laws of the State of Wisconsin; and as such Assistant Vice
President-Secretary I have access to all original records of said
corporation; and that I am duly and properly authorized to make
certified copies of its records in its behalf and I do hereby
certify that the attached is a true and correct copy of the
application under the Public Utility Holding Company Act on Form
U-1 (including exhibits not otherwise filed with this Application)
filed by said corporation with the Securities and Exchange
Commission.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seal of said corporation this 10th day of March, 1994.
/s/ Robert H.Knuth
------------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
EXHIBIT H
I, Robert H. Knuth, do hereby certify that I am Assistant
Vice President-Secretary of WPS RESOURCES CORPORATION and WISCONSIN
PUBLIC SERVICE CORPORATION, each of which is a corporation duly
organized and existing under and by virtue of the laws of the State
of Wisconsin; and as such Assistant Vice President-Secretary I have
access to all original records of said corporations; and that I am
duly and properly authorized to make certified copies of their
records in their behalf and I do hereby certify that attached as
Exhibit A to the prospectus/proxy statement included with the
Registration Statement on Form S-4 of WPS Resources Corporation
filed as Exhibit G-1 to this application is a true and correct copy
of the Agreement and Plan of Share Exchange dated January 17, 1994
between said corporations.
IN WITNESS WHEREOF, I hereunto set my hand and affix the
seals of said corporations this 10th day of March, 1994.
/s/ Robert H. Knuth
-----------------------------------
Assistant Vice President-Secretary
(SEAL)
<PAGE>
EXHIBIT I
I, Robert H. Knuth, Assistant Vice President-Secretary of
WISCONSIN PUBLIC SERVICE CORPORATION, do hereby certify that the
attached map accurately indicates the location of the properties of
said corporation, all interconnections and the principal cities
served by said corporation.
WITNESS my hand and the seal of said corporation this
10th day of March, 1994.
/s/ Robert H. Knuth
------------------------------------
Assistant Vice President-Secretary
(SEAL)
EXHIBIT D-5
[Company Letterhead]
February 11, 1994
U. S. Nuclear Regulatory Commission
Attention: Document Control Desk
Washington, D.C. 20555
Facility Operating License: DPR-43
Docket No. 50-305
Kewaunee Nuclear Power Plant
- ----------------------------------
Dear Sir or Madam:
Wisconsin Public Service Corporation ("WPSC") is in the process of implementing
a corporate restructuring pursuant to which all of the outstanding common stock
of WPSC will be exchanged for outstanding common stock of WPS Resources
Corporation ("WPS Resources"). WPS Resources is currently a wholly-owned
subsidiary of WPSC but after the share exchange will be the parent holding
company of WPSC. WPSC is a 41.2% co-owner and the operator of the Kewaunee
Nuclear Power Plant ("Kewaunee"). Under the restructuring, WPSC will continue
to be a co-owner and the operator of Kewaunee and no transfer of any licenses
or interests in Kewaunee will be effected.
WPSC believes that neither the Atomic Energy Act nor the Nuclear Regulatory
Commission's (NRC) regulations require the NRC's approval of the restructuring.
The formation of a holding company by WPSC will not involve the transfer of the
NRC license for Kewaunee, nor should the corporate restructuring be considered
a transfer of control over the license, since the holders of WPSC's common stock
will become the holders of common stock of the new holding company. WPSC,
however, is aware of various other similar restructurings by utilities holding
licenses for nuclear power plants and the filings with the NRC by such utilities
in conjunction with their restructuring. WPSC is also aware of the NRC's action
on and issuance of its consent to such restructurings. Therefore, to the extent
that NRC requires such consent, WPSC hereby requests consideration and granting
of that consent by May 1, 1994. The NRC has previously authorized a Kewaunee
co-licensee, Wisconsin Power and Light Company, (a 41.0% co-owner) to form a
holding company and enter into corporate restructuring comparable to that
contemplated by WPSC. Similar approval was given to Wisconsin Electric Power
Company, the owner and operator of Point Beach Nuclear Plant. Attached are
copies of letters dated January 29, 1988 to Wisconsin Power and Light Company
and to Wisconsin Electric Power Company dated October 6, 1986.
Please advise us of the amount of any NRC fee for the action requested herein.
The following information is provided to expedite the NRC's approval process.
<PAGE>
U.S. Nuclear Regulatory Commission
February 11, 1994
Page 2
Enclosed is a copy of the registration statement on Form S-4 which was filed
with the Securities and Exchange Commission ("SEC") on February 8, 1994. The
portion of the Form S-4 captioned "PROPOSED SHARE EXCHANGE AND CORPORATE
RESTRUCTURING (pages 19-35) describes the restructuring in detail. The
existing corporate structure of WPSC and its subsidiaries, as well as the
proposed corporate structure under WPS Resources, is described on page 19.
Under the restructuring outstanding shares of WPSC's common stock will be
exchanged on a share-for-share basis for common stock of WPS Resources. WPS
Resources, a holding company, will thereafter own all of the outstanding shares
of WPSC common stock and WPSC will become a subsidiary of WPS Resources. The
restructuring will not result in any change in the outstanding preferred stock
or first mortgage bonds of WPSC, and the terms thereof will not be changed in
the restructuring. As part of the restructuring, WPSC's existing nonutility
subsidiaries will be transferred to WPS Resources.
Following the restructuring, WPSC will remain a public utility subject to the
jurisdiction of the Public Service Commission of Wisconsin and the Michigan
Public Service Commission with respect to its retail rates, provision of
service and facilities and issuance of securities. In addition, transactions
between WPSC and WPS Resources and its other subsidiaries will be subject to
the provisions of the Wisconsin Holding Company Act described in detail on
pages 28 and 29 of the enclosed Form S-4. Control of all of WPSC's interests
in and operation of Kewaunee will remain with WPSC and will not be affected by
the restructuring.
An application was filed on December 22, 1993 with the Public Service Commission
of Wisconsin for its approval of the corporate restructuring and it is
anticipated that such approval will be forthcoming. WPSC believes that WPS
Resources will be entitled to an exemption as a "Registered Holding Company"
under the Public Utility Holding Company Act of 1935 ("PUHCA"). An application
will be filed shortly with the Federal Energy Regulatory Commission seeking its
approval of the restructuring and an application will be filed with the SEC
seeking its approval of the restructuring under PUHCA. Approval of the
restructuring by the holders of WPSC common stock is expected at the annual
meeting of shareholders scheduled for May 5, 1994.
To expedite the NRC review of its request, WPSC is providing information with
respect to the following three specific areas which have been the focus of the
NRC's review in prior cases:
1. Will the proposed restructuring reduce the funds available to WPSC to
carry out activities under its Operating Licenses?
WPSC believes that there will be no impact on the funds available to it to
carry out its activities under its operating licenses. As previously
stated, following the restructuring WPSC will remain subject to the
jurisdiction of the Public Service Commission of Wisconsin and the
Michigan Public Service Commission with respect to, among other things,
its retail rates. There will be no change in WPSC's sources of funds for
<PAGE>
U.S. Nuclear Regulatory Commission
February 11, 1994
Page 3
operating its utility facilities including operating costs and eventual
decommissioning costs of Kewaunee. That source is the utility revenues
derived from the rates charged to its ratepayers.
As for capital costs, including capital improvements or additions to
Kewaunee, they would continue to be financed through a combination of
internally generated funds derived from revenues received from the
ratepayers and security issues. Long-term debt securities and any
preferred stock would continue to be issued by WPSC as they are at
present. In summary, the rate regulatory process to which WPSC will
remain subject provides reasonable assurance that WPSC can obtain the
funds necessary to own and operate a nuclear plant safely.
As described above, the rate regulatory process as it relates to WPSC and
the continued funding of its operating costs will not be affected or
changed by the proposed restructuring. Accordingly, WPSC believes that
there will be no adverse change in its source of funds for the operating,
capital and decommissioning costs of Kewaunee.
2. Will the proposed restructuring adversely affect the management of WPSC's
utility operations?
As for whether the proposed restructuring would adversely affect the
management of WPSC's utility operations, be advised that no WPSC nuclear
management positions will be altered by the restructuring. The Senior
Vice President, Nuclear Power, will retain responsibility for nuclear
operations and will have no assigned WPS Resources responsibilities. WPS
Resources officer responsibilities will be administrative and financial in
nature and will have no direct effect on the management of nuclear
operations.
Furthermore, the reporting channels for the senior management of Kewaunee
will remain as stated in the Operational Quality Assurance Program
Description for the Kewaunee Nuclear Power Plant. The Senior Vice
President, Nuclear Power, will continue to report to the President and
Chief Executive Officer of WPSC.
3. Will the proposed restructuring result in WPSC becoming owned, controlled
or dominated by an alien, a foreign corporation, or a foreign government?
The final area of NRC concern involves the matter of foreign ownership or
control. In this regard, when the restructuring is effective, WPS
Resources, a Wisconsin corporation, will become the sole holder of WPSC's
common stock and the current holders of WPSC's common stock will become
holders of the common stock of WPS Resources on a share-for-share basis.
Therefore, immediately following the restructuring, the common stock of
WPS Resources will be owned by the previous holders of WPSC's common stock
in the same proportions in which they held WPSC's common stock. Based
upon information available to WPSC as of December 31, 1993, shares of
<PAGE>
U.S. Nuclear Regulatory Commission
February 11, 1994
Page 4
WPSC's common stock held by foreign accounts represent less than 1% of the
total outstanding shares of WPSC.
Based on the foregoing, WPSC believes that the restructuring will not result in
WPSC's becoming owned or controlled by foreign interests. In addition, the
Wisconsin Holding Company Act contains a provision requiring an approval by the
Public Service Commission of Wisconsin of the acquisition by any holder of more
than 10% of the outstanding voting securities of a holding company.
WPSC trusts that the information contained in this letter and its attachments
will be sufficient for the NRC to grant its consent, if required, to the
proposed corporate restructuring. If additional information is needed or if
you have questions in this regard, please feel free to contact us.
Sincerely,
/s/ Daniel A. Bollom
Daniel A. Bollom
President and Chief Executive Officer
Attachments
cc: U.S. NRC Region III
U.S. NRC Senior Resident Inspector
<PAGE>
Docket No. 50-305 DISTRIBUTION:
-------------
Docket Files JGiitter
NRC & Local PDRs OGC-WF1
PDIII-3 r/f EJordan
KPerkins JPartlow
GHolahan ACRS(10)
PKreutzer PDIII-3 Gray File
Mr. William D. Harvey
Vice President and
Associate General Counsel
Wisconsin Power and Light Company
P. O. Box 192
222 West Washington Avenue
Madison, Wisconsin 53701
Dear Mr. Harvey:
SUBJECT: CONSENT UNDER 10 CFR 50.80 TO CORPORATE REORGANIZATION OF WISCONSIN
POWER AND LIGHT COMPANY (TAC NO. 66870)
Your letter of December 28, 1987 informed us that Wisconsin Power and Light
Company (WPL), a co-owner of the Kewaunee Nuclear Plant, was in the process of
of implementing a corporate restructuring that would result in the creation of
a holding company, WPL Holdings, Inc. Your letter also provided us a copy of
the Registration Statement (S-4) filed with the Securities and Exchange
Commission (includes Notice of Special Meeting of Stockholders and
Prospectus/Proxy Statement) and the Order of the Public Service Commission of
Wisconsin (PSCW) approving the restructuring of WPL. Under the proposal, WPL
will become a wholly-owned utility subsidiary of WPL Holdings, Inc., with each
WPL common stockholder exchanging shares in WPL for a like number of the
holding company common shares. Concurrently, WPL Holdings, Inc., will become
the sole owner of WPL's common stock. Following the restructuring, WPL will
remain a public utility providing the same utility service as it did prior to
the restructuring. Non-utility activities will be carried out by other
subsidiaries of the holding company. Utility and non-utility businesses will
be more clearly separated than at present. WPL will maintains its focus on the
public utility business. WPL's utility operations will constitute the
predominant activity of WPL Holdings, Inc.
You indicated in your Proxy Statement that the principal reasons for the
proposed restructuring are (1) to provide flexibility for WPL to deal with
increased competition within the energy industry; (2) to create a structure
which can facilitate selective diversification into certain non-utility
businesses; and (3) to provide additional flexibility for financing and for
maintaining appropriate utility capital ratios.
8802120004 880129
PDR ADOCK 05000305
P PDR
<PAGE>
William Harvey -2- January 29, 1988
Your letter states that under recently enacted Wisconsin legislation, the
approval of the Public Service Commission of Wisconsin is required prior to the
formation of a public utility holding company. You further stated that PSC
approval was obtained on April 30, 1987. The PSC order you submitted with your
letter approving the proposed corporate restructuring requires that WPL
maintain a strong and balanced capital structure and that its dividend policy
be based solely on the capital needs and financial health of the utility.
We have reviewed the information in your letter of December 28, 1987 to
ascertain that the proposed action:
(1) will not reduce funds available to WPL to provide its share of
operating costs and decommissioning costs related to its ownership
interests in Kewaunee;
(2) will not adversely affect the management of Kewaunee either by
WPL or Kewaunee's operator, Wisconsin Public Service Corporation
(WPSC);
(3) will not result in WPL becoming owned, controlled, or dominated
by an alien, a foreign corporation, or a foreign government.
Based on our review of the information provided in your letter, we have made
the following determination:
Concerning Item (1):
On January 14, 1988, we discussed the proposed restructuring with Barbara
James, Assistant Chief Staff Counsel of the PSCW. Ms. James indicated
that after the restructuring, WPL would continue to be regulated as to
retail rates by the PSCW as at present. Sales of electric power for
resale would continue to be regulated by the Federal Energy Regulatory
Commission (FERC). Thus, she confirmed that there will be no change in
WPL's source of funds for operating its utility facilities including its
share of operating costs and eventual decommissioning costs of Kewaunee
Nuclear Plant.
That source is utility revenues derived from the regulated rates charged
to utility customers. In a related action, the PSCW is requiring that WPL
utilize an external sinking fund to accumulate money to cover its share of
eventual decommissioning costs for Kewaunee. WPL has accumulated approxi-
mately $20.3 million in the fund to date.
The Wisconsin Holding Company Act, a copy of which you submitted with
your letter, has a number of provisions designed to preserve both the
public utility nature of a utility holding company's business and the
integrity of public utility service. In general the act provides that:
"No holding company system may be operated in any way which materially
impairs the credit, ability to acquire capital on reasonable terms or
ability to provide safe, reasonable, reliable and adequate utility service
of any public utility affiliate in the holding company system." The act
limits the amount of non-utility assets in a holding company system
<PAGE>
William Harvey -3- January 29, 1988
to approximately 20 percent of the total system assets. The PSCW order
you submitted approving the proposed corporate restructuring requires
that WPL maintain a strong and balanced capital structure and that its
dividend policy be based solely on the capital needs and financial health
of the utility. In addition, the PSCW Order indicates that WPL's
financial health must be maintained and that this will be strictly
enforced through PSCW regulation.
Utility capital costs (including WPL's share of any capital improvements
or additions to the nuclear unit) would continue to be financed through a
combination of internally generated funds (derived from customer revenues)
and security issues. WPL will retain the mortgageable assets and earnings
that qualify it to issue securities as it currently does. Accordingly,
long-term debt securities and any preferred stock would be issued by WPL
as at present. Additional issues of common stock to raise outside capital
for WPL, however, would be issued by the holding company. This is the
usual financial relationship between a utility holding company and the
utility subsidiary.
The NRC's explanation of its financial qualifications rule (49 Federal
Register 35747, September 12, 1984), is relevant to this case. NRC stated
that the rate regulatory process conducted by State public utility com-
missions (such as the PSCW in this case) and FERC provides reasonable
assurance that utilities can obtain the funds to operate nuclear plants
safely. As discussed above, the rate regulatory process as it relates to
WPL and the funding of its operating costs will not be disturbed by the
proposed holding company arrangement. In conclusion, there will be no
adverse change (as a result of the proposed restructuring) in WPL's sources
of funds for nuclear plant operating, decommissioning and capital costs.
Concerning Item (2):
Only Wisconsin Public Service Corporation (WPSC) is authorized to operate
Kewaunee. The proposed restructuring will have no effect on the management
of WPL or WPL's utility operations. No WPSC officer or nuclear management
positions will be changed by the restructuring. No responsibility for
nuclear operations within WPL or WPSC will be changed by the restructuring.
WPL officer responsibilities at the holding company level will be adminis-
trative and financial in nature and will have no direct effect on the
management of WPL or the Kewaunee plant. No reporting channels within
WPSC for management of Kewaunee will be affected by WPL's corporate
restructuring.
Therefore, because WPL plays no direct role in the management of
Kewaunee, we conclude that the restructuring will not affect the
management of Kewaunee.
<PAGE>
William Harvey -4-
Concerning Item (3):
On the effective date of the restructuring, WPL Holdings, Inc., a
Wisconsin corporation, will become the sole holder of WPL's common stock
and the current holders of WPL's common stock will become holders of the
common stock of WPL Holdings, Inc., on a share-for-share basis. Thus,
immediately following the restructuring, the common stock of WPL
Holdings, Inc., will be owned by the previous holders of WPL's common
stock in the same proportions in which they held WPL's common stock.
Based upon available information, foreign held shares of WPL represent
less than one-tenth of one percent of the total outstanding shares of
WPL. In addition, the Wisconsin Holding Company Act contains a provision
requiring PSC approval before any person can acquire more than ten
percent of the outstanding voting securities of a holding company.
Therefore, the proposed restructuring will not result in WPL's becoming
owned, controlled or dominated by foreign interests.
Based on the above determinations, we conclude, pursuant to 10 CFR 50.80:
(1) that the proposed action will not affect the qualifications of the
Wisconsin Power and Light Company as a co-owner of Kewaunee.
(2) that the proposed action is otherwise consistent with applicable
provisions of law, regulations, and other requirements issued by
the Commission pursuant thereto.
Accordingly, the Commission hereby consents to the proposed restructuring of
Wisconsin Power and Light Company.
Sincerely,
/s/
Gary M. Holahan, Assistant Director
Division of Reactor Projects - III
IV, V & Special Projects
cc: See next page
*SEE PREVIOUS CONCURRENCE
Office: LA/PDIII-3 PM/PDIII-3 PTSB OGC AD/DRSP
Surname: PKreutzer JGiitter/tg *DNash *CWoodhead KPerkins
Date: 01/29/88 01/29/88 01/29/88 01/28/88 01/29/88
<PAGE>
[U.S Nuclear Regulatory Commission Letterhead]
Docket Nos. 50-266
and 50-301
Mr. C. W. Fay, Vice President
Nuclear Power Department
Wisconsin Electric Power Company
231 W. Michigan Street, Room 302
Milwaukee, Wisconsin 53201
Dear Mr. Fay:
SUBJECT: TRANSFER OF CONTROL OF LICENSE
Re: Point Beach Nuclear Plant Units 1 and 2
By letter dated August 5, 1986 you informed us that the Wisconsin Electric
Power Company (WEPCO) is in the process of implementing a corporate
restructuring which will result in the creation of a holding company, Wisconsin
Energy Corporation (WEC). Under the proposal WEPCO would become a wholly-owned
utility subsidiary of WEC, with each WEPCO common stockholder exchanging shares
in WEPCO for a like number of the holding company (WEC) common shares. WEPCO's
present subsidiaries, including Wisconsin Natural Gas Company, would also
become subsidiaries of WEC. Following the restructuring, WEPCO will remain a
public utility providing the same utility service as it did prior to the
restructuring. Non-utility operations would be carried out by other
subsidiaries. You requested the Commission's consent to the proposed corporate
restructuring.
In accordance with your request, we have reviewed Wisconsin Electric Power
Company's (WEPCO) plan to form a holding company, "Wisconsin Energy
Corporation" (WEC). Our review included the July 9, 1986 S-4 Registration
Statement on WEC holding company filed with the SEC; and the May 27, 1986 Order
of the Public Service Commission of Wisconsin (PSCW). These documents were
included in your August 5, 1986 application to the NRC. The focus of our
review was primarily to ensure that the proposed action:
(1) will not reduce funds available to WEPCO to carry out activities
under its Operating Licenses;
(2) will not adversely affect the management of WEPCO utility operations;
and
(3) will not result in WEPCO becoming owned, controlled, or dominated
by an alien, a foreign corporation, or a foreign government.
<PAGE>
-2-
Under the Wisconsin Holding Company Act, PSCW approval is required prior to
formation of a public utility holding company. The May 27, 1986 PSCW Order
approves the holding company formation. On September 23, 1986 we discussed the
proposed restructuring with Barbara James, Assistant Chief Staff Counsel of the
PSCW. Ms. James indicated that after the restructuring, WEPCO would continue
to be regulated as to retail rates by the PSCW, as at present. (A small
portion of WEPCO's retail sales are regulated by the Michigan Public Service
Commission (MPSC)). Sales of electric power for resale would continue to be
regulated by the Federal Energy Regulatory Commission (FERC). Thus, she
confirmed that there will be no change in WEPCO's sources of funds for
operating its utility facilities including operating costs and eventual
decommissioning costs of Point Beach Nuclear Plant Unit Nos. 1 and 2. That
source is the utility revenues derived from the regulated rates charged to
utility customers. In a related action, the PSCW is requiring that WEPCO's
Point Beach decommissioning fund be converted from an unfunded internal reserve
to a funded external trust.
Approximately $85 million (including the retroactive funding of previously
unfunded amounts) its currently accumulated in the fund.
In order to preserve both the public utility-nature of a utility holding
company's business and the integrity of public utility service, the Wisconsin
Holding Company Act (referred to above) limits diversification on the part of
the parent company. Under that Act WEC's consolidated non-utility assets may
not exceed approximately 20 percent of its consolidated total assets. In
addition, the PSCW Order approving the restructuring indicates that WEPCO's
financial health must be maintained and that this will be strictly enforced
through PSCW regulation.
Utility capital costs (including any capital improvements or additions to the
Point Beach Units) would continue to be financed through a combination of
internally generated funds (derived from customer revenues) and security
issues. Long-term debt securities and any preferred stock would be issued by
WEPCO as at present. Additional issues of common stock to raise outside
capital, however, would be issued by the holding company. This is the usual
financial relationship between a utility holding company and the utility
subsidiary.
The NRC's explanation of its financial qualifications rule (49 Federal Register
35747, September 12, 1984), is relevant to this case. NRC stated that the rate
regulatory process conducted by State Public utility commissions (such as the
PSCW and the MPSC in this case) and FERC provides reasonable assurance that
utilities can obtain the funds to operate nuclear plants safety. As described
above, the rate regulatory process as it relates to WEPCO and the funding of
its operating costs will not be disturbed by the proposed holding company
arrangement. Accordingly, there will be no adverse change (as a result of the
proposed restructuring) in WEPCO's sources of funds for Point Beach operating,
decommissioning and capital costs.
<PAGE>
-3-
The proposed restructuring will have no effect upon the management of the WEPCO
utility operations. Our determination is based upon the fact that no WEPCO
officer or nuclear management positions will be changed by the restructuring.
The Vice President-Nuclear Power will retain responsibility for nuclear
operations and will have no assigned holding company responsibilities. Officer
responsibilities at the holding company level will be administrative and
financial in nature and will have no direct affect on the management of nuclear
operations.
The reporting channels for the senior management of Point Beach will not be
affected by the corporate restructuring and will remain as described in Section
15.6.2 of the Point Beach Technical Specifications. The Vice President of
Nuclear Power will continue to report to Wisconsin Electric's President and
Chief Operating Officer, who in turn, will continue to report to the Chairman
of the Board and Chief Executive Officer. Therefore, the proposed action will
not adversely affect the management of WEPCO utility operation.
The proposed restructuring will not result in WEPCO becoming owned, controlled
or dominated by an alien, a foreign corporation, or a foreign government. Our
determination is based on the fact that on the effective date of the
restructuring, Wisconsin Energy, a Wisconsin Corporation, will become the sole
holder of Wisconsin Electric's common stock and the current holders of
Wisconsin Electric's common stock will become holders of the common stock of
Wisconsin Energy on a share-for-share basis. Thus, immediately following the
restructuring, the common stock of Wisconsin Energy will be owned by the
previous holders of Wisconsin Electric's common stock in the same proportions
in which they held Wisconsin Electric's common stock. Based upon available
information, foreign held shares of Wisconsin Electric represent less than one
tenth of one percent of the total outstanding shares of Wisconsin Electric. In
addition, the Wisconsin Holding Company Act contains a provision requiring PSCW
approval before any person can acquire more than 10 percent of the outstanding
voting securities of a holding company. Therefore, the proposed restructuring
will not result in Wisconsin Electric's becoming owned, controlled or dominated
by foreign interests.
Based upon the above determinations, we conclude:
(1) that the proposed action will not affect the qualification of WEPCO
as holder of the Point Beach Nuclear Plant Units 1 and 2 licenses;
and
(2) that the proposed action is otherwise consistent with applicable
provisions of law, regulations and orders issued by the Commission
pursuant thereto.
<PAGE>
-4-
Accordingly, the Commission hereby consents to the proposed ownership of
Wisconsin Electric Power Company by Wisconsin Energy Corporation.
Sincerely,
Original signed by
Thomas M. Novak
Thomas M. Novak, Acting Director
Division of PWR Licesning-A
Office of Nuclear Reactor Regulation
Exhibit F-1
(Foley & Lardner Letterhead)
March 10, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: WPS Resources Corporation
Form U-1 Application
-------------------------
Gentlemen:
We have examined the Form U-1 Application dated
March 10, 1994 (the "Application"), of WPS Resources
Corporation (the "Company"), to which this opinion is an exhibit,
requesting an order of the Commission under the Public Utility
Holding Company Act of 1935 (the "Act") (i) approving the
acquisition by the Company of all of the outstanding shares of
common stock of Wisconsin Public Service Corporation ("WPSC") in
connection with a proposed exchange of common stock of the Company
for the outstanding common stock of WPSC (the "Share Exchange") and
(ii) granting the Company and its subsidiaries, upon consummation
of such merger and reorganization, exemption under Section 3(a)(1)
of the Act from all provisions of the Act except Section 9(a)(2).
The Share Exchange is to be effected by means of an Agreement and
Plan of Share Exchange (the "Plan") between and among the Company
and WPSC, a copy of which is included as an exhibit to the
Application.
Based upon our examination of such instruments, documents
and matters of law as we have deemed requisite, it is our opinion
that:
1. The Company and WPSC are corporations duly organized and
existing under the laws of the State of Wisconsin.
2. Assuming the proposed Share Exchange is accomplished in
accordance with the Plan and as described in the Application:
(a) All State laws applicable to the Share Exchange will
have been complied with.
<PAGE>
Securities and Exchange Commission
March 10, 1994
Page 2
(b) The Company's common stock, $1 par value, when
issued in accordance with the Plan, will be validly issued, fully
paid and, except as indicated below, non-assessable, and the
holders thereof will be entitled to the rights and privileges
appertaining thereto set forth in the Company's Restated Articles
of Incorporation; and WPSC common stock, $4 par value, when
acquired by the Company in accordance with the Plan, will be
validly issued, fully paid and, except as indicated below, non-
assessable, and the Company, as sole holder thereof, will be
entitled to the rights and privileges appertaining thereto set
forth in WPSC's Restated Articles of Incorporation, as amended.
With respect to the non-assessability of the Company's
common stock and of WPSC's common stock, Section 180.0622(2)(b) of
the Wisconsin Statutes, as judicially interpreted, imposes on the
shareholders of each corporation a liability equal to the par value
of their shares for all debts which may be due to the employees of
that corporation for services performed for the corporation but not
to exceed six months' service in any one case.
(c) The Company will legally acquire all of the
outstanding shares of common stock, $4 par value, of WPSC.
(d) The consummation of the proposed Share Exchange will
not violate the legal rights of the holders of any securities
issued by the Company or WPSC, or of any associate company thereof.
In rendering this opinion we have relied as to matters
governed by Michigan law upon the opinion of Loomis, Ewert, Ederer,
Parsley, Davis & Gotting.
We hereby consent to the filing of this opinion as an
exhibit to the Application.
Yours truly,
/s/ Foley & Lardner
FOLEY & LARDNER
<TABLE>
<CAPTION>
WISCONSIN PUBLIC SERVICE CORPORATION EXHIBIT G-1
BALANCE SHEET 1 of 2
AS OF DECEMBER 31, 1993
(Thousands)
<S> <C>
Assets
Utility Plant:
In service - Electric. . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,374,662
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183,798
------------
1,558,460
Less - Accumulated provision for depreciation. . . . . . . . . . . . . 801,056
------------
757,404
Nuclear decommissioning trusts . . . . . . . . . . . . . . . . . . . . . 56,699
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . 11,781
Nuclear fuel, less accumulated provision for amortization of
$130,011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,981
------------
Net utility plant . . . . . . . . . . . . . . . . . . . . . . . . . . 843,865
------------
Current Assets:
Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 5,391
Customer and other receivables, net of reserves. . . . . . . . . . . . . 66,511
Accrued utility revenues . . . . . . . . . . . . . . . . . . . . . . . . 37,314
Fossil fuel, at average cost . . . . . . . . . . . . . . . . . . . . . . 10,208
Gas in storage, at average cost. . . . . . . . . . . . . . . . . . . . . 19,885
Materials and supplies, at average cost. . . . . . . . . . . . . . . . . 19,411
Prepayments and other. . . . . . . . . . . . . . . . . . . . . . . . . . 21,420
------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 180,140
------------
Deferred Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,128
Investments and Other Assets . . . . . . . . . . . . . . . . . . . . . . . 56,708
------------
$ 1,198,841
============
Capitalization and Liabilities
Capitalization:
Common stock equity. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 434,503
Preferred stock with no mandatory redemption . . . . . . . . . . . . . . 51,200
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314,225
------------
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . 799,928
------------
Current Liabilities:
Note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,113
Accrued taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,266
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,695
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,956
------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . 106,030
------------
Other Long-Term Liabilities and Deferred Credits:
Accumulated deferred income taxes. . . . . . . . . . . . . . . . . . . . 138,952
Accumulated deferred investment credits. . . . . . . . . . . . . . . . . 34,210
Regulatory liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 61,434
Long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 58,287
------------
292,883
------------
Commitments and Contingencies
------------
$ 1,198,841
============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WISCONSIN PUBLIC SERVICE CORPORATION Exhibit G-1
STATEMENT OF INCOME 2 of 2
FOR MONTH ENDED DECEMBER 1993
(Thousands)
<S> <C>
Operating Revenues:
Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,455
Gas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,320
------------
66,775
------------
Operating Expenses:
Operation -
Electric production fuels. . . . . . . . . . . . . . . . . . 9,046
Gas purchased for resale . . . . . . . . . . . . . . . . . . 16,960
Purchased power. . . . . . . . . . . . . . . . . . . . . . . 2,812
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,287
Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . 8,501
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 4,893
Taxes -
Federal income . . . . . . . . . . . . . . . . . . . . . . . 1,448
Investment credit restored . . . . . . . . . . . . . . . . . (92)
State income . . . . . . . . . . . . . . . . . . . . . . . . 300
Gross receipts and other . . . . . . . . . . . . . . . . . . 2,047
------------
61,202
------------
Operating Income . . . . . . . . . . . . . . . . . . . . . . . . 5,573
------------
Other Income and (Deductions):
Allowance for equity funds used during construction. . . . . . 7
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . (328)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . (330)
------------
(651)
------------
Income Before Interest Expense . . . . . . . . . . . . . . . . . 4,922
------------
Interest Expense:
Interest on long-term debt . . . . . . . . . . . . . . . . . . 1,971
Allowance for borrowed funds used during construction. . . . . (15)
Other interest . . . . . . . . . . . . . . . . . . . . . . . . 170
------------
2,126
------------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,796
Preferred Stock Dividend Requirements. . . . . . . . . . . . . . 259
------------
Earnings on Common Stock . . . . . . . . . . . . . . . . . . . . $ 2,537
============
Average Number of Shares of Common Stock Outstanding (Thousands) 23,897
Earnings Per Average Share Of Common Stock . . . . . . . . . . . $0.11
</TABLE>
<TABLE>
<CAPTION>
WPS RESOURCES CORPORATION EXHIBIT G-2
PRO FORMA BALANCE SHEET 1 of 2
AS OF DECEMBER 31, 1993
(Thousands)
<S> <C>
Assets
Utility Plant:
In service - Electric. . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,374,662
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183,798
------------
1,558,460
Less - Accumulated provision for depreciation. . . . . . . . . . . . . 801,056
------------
757,404
Nuclear decommissioning trusts . . . . . . . . . . . . . . . . . . . . . 56,699
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . 11,781
Nuclear fuel, less accumulated provision for amortization of
$130,011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,981
------------
Net utility plant . . . . . . . . . . . . . . . . . . . . . . . . . . 843,865
------------
Current Assets:
Cash and equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . 5,391
Customer and other receivables, net of reserves. . . . . . . . . . . . . 66,511
Accrued utility revenues . . . . . . . . . . . . . . . . . . . . . . . . 37,314
Fossil fuel, at average cost . . . . . . . . . . . . . . . . . . . . . . 10,208
Gas in storage, at average cost. . . . . . . . . . . . . . . . . . . . . 19,885
Materials and supplies, at average cost. . . . . . . . . . . . . . . . . 19,411
Prepayments and other. . . . . . . . . . . . . . . . . . . . . . . . . . 21,420
------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 180,140
------------
Deferred Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,128
Investments and Other Assets . . . . . . . . . . . . . . . . . . . . . . . 56,708
------------
$ 1,198,841
============
Capitalization and Liabilities
Capitalization:
Common stock equity. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 434,503
Preferred stock with no mandatory redemption . . . . . . . . . . . . . . 51,200
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314,225
------------
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . 799,928
------------
Current Liabilities:
Note payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,113
Accrued taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,266
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,695
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,956
------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . 106,030
------------
Other Long-Term Liabilities and Deferred Credits:
Accumulated deferred income taxes. . . . . . . . . . . . . . . . . . . . 138,952
Accumulated deferred investment credits. . . . . . . . . . . . . . . . . 34,210
Regulatory liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 61,434
Long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 58,287
------------
292,883
------------
Commitments and Contingencies
------------
$ 1,198,841
============
<FN>
NOTE: Pro forma balance sheet is the same as the one in Exhibit G-1 due to the fact there
are no material subsidiaries at this time.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WPS RESOURCES CORPORATION Exhibit G-2
PRO FORMA STATEMENT OF INCOME 2 of 2
FOR YEAR ENDED DECEMBER 31, 1993
(Thousands)
<S> <C>
Operating Revenues:
Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 493,256
Gas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187,376
------------
680,632
------------
Operating Expenses:
Operation -
Electric production fuels. . . . . . . . . . . . . . . . . . 114,051
Gas purchased for resale . . . . . . . . . . . . . . . . . . 133,347
Purchased power. . . . . . . . . . . . . . . . . . . . . . . 30,703
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,270
Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . 51,597
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 60,609
Taxes -
Federal income . . . . . . . . . . . . . . . . . . . . . . . 27,654
Investment credit restored . . . . . . . . . . . . . . . . . (1,860)
State income . . . . . . . . . . . . . . . . . . . . . . . . 7,313
Gross receipts and other . . . . . . . . . . . . . . . . . . 25,204
------------
596,888
------------
Operating Income . . . . . . . . . . . . . . . . . . . . . . . . 83,744
------------
Other Income and (Deductions):
Allowance for equity funds used during construction. . . . . . 287
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . 3,356
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . 568
------------
4,211
------------
Income Before Interest Expense and Preferred Dividend. . . . . . 87,955
------------
Interest Expense:
Interest on long-term debt . . . . . . . . . . . . . . . . . . 24,393
Allowance for borrowed funds used during construction. . . . . (200)
Other interest . . . . . . . . . . . . . . . . . . . . . . . . 1,562
------------
25,755
------------
Preferred Stock Dividend Requirements of Subsidiary. . . . . . . 3,311
------------
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 58,889
============
Average Number Of Shares Of Common Stock Outstanding (Thousands) 23,888
Earnings Per Average Share of Common Stock . . . . . . . . . . . $2.47
</TABLE>
EXHIBIT H-1
ESTIMATED COSTS AND FEES ATTRIBUTABLE
TO THE
FORMATION OF HOLDING COMPANY
OUT-OF-POCKET EXPENSES: AMOUNT:
- ---------------------- ------
Registration Fees $270,000
Listing Fees - NYSE and Chicago Stock Exchanges 12,000
Legal 195,000
Accounting and Audit Opinions 25,000
Proxy Printing, Mailing and Solicitation 175,000
Filing Fee - Articles of Incorporation 10,000
Transfer Agent Fees 25,000
Stock Certificate Printing 25,000
Corporate Name Registration 15,000
Employee Benefit Plan Analysis 25,000
Shareowner System Modifications 20,000
Miscellaneous Expenses:
Messenger fees, Federal Express, etc. $10,000
Shareowner Survey and Information Expenses 15,000
Meeting and Travel Expenses 15,000
Communications Expenses for New Corporate 10,000
Identification
Blue Sky Fees 3,000
Unassigned 20,000
Total Miscellaneous Expenses: ------ 73,000
------
Sub-Total: Out-of-Pocket $870,000
LABOR EXPENSES (By Function):
- ----------------------------
Management 75,000
Corporate Secretary/Shareowner Services 80,000
Accounting 20,000
Communications 10,000
Employee Relations 10,000
Treasury-Financial Management 15,000
All Other Departments 10,000
Clerical, Mail, Printing, etc. 15,000
Overheads 75,000
-------
Sub-Total: Labor 310,000
-------
TOTAL 1,180,000
=========
12/6/93
RHKnuth
EXHIBIT I-1
UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Release No.
_____________, 1994
- ------------------------------
)
In the Matter of )
)
WPS Resources Corporation )
700 North Adams Street )
P. O. Box 19001 )
Green Bay, Wisconsin 54307 )
)
(70- ) )
)
)
- -------------------------------
NOTICE OF PROPOSED ACQUISITION OF
ELECTRIC UTILITY COMPANIES
NOTICE IS HEREBY GIVEN that WPS Resources Corporation (the
"Company"), a Wisconsin corporation, has filed with this Commission
an application pursuant to the Public Utility Holding Company Act
of 1935 (the "Act"), designating Section 3(a)(1), Section 9(a)(2)
and Section 10 of the Act as applicable to the proposed
transaction. The application requests an order of the Commission
(i) approving the acquisition by the Company of all the outstanding
shares of common stock of Wisconsin Public Service Corporation
("WPSC"), a Wisconsin corporation, and the indirect acquisition of
33.1% of the outstanding shares of capital stock of Wisconsin River
Power Company ("River Power"), a Wisconsin corporation, through the
ownership by WPSC of said shares and (ii) granting the Company and
its subsidiaries, upon consummation of the proposed transaction,
exemption under Section 3(a)(1) of the Act from all provisions of
the Act except Section 9(a)(2).
The Company was incorporated December 3, 1993, for the
purpose of accomplishing a proposed share exchange and corporate
restructuring pursuant to an Agreement and Plan of Share Exchange
(the "Plan of Share Exchange"). The Company does not own any
utility assets and currently is not a "holding company" under the
Act.
WPSC and the Company propose to accomplish the proposed
share exchange pursuant to the Plan of Share Exchange, whereby (i)
one share of common stock, $1 par value, of the Company will be
exchanged for each share of common stock, $4 par value, of WPSC
outstanding at the effective time of the Plan of Share Exchange and
<PAGE>
the outstanding shares of the Company's common stock held by WPSC
prior to the effective time of the Plan of Share Exchange will be
cancelled. As a result of such share exchange, WPSC will become a
wholly-owned subsidiary of the Company with River Power preserving
its present relationship with WPSC, and (ii) WPSC, by means of a
non-cash dividend to the Company, will transfer to the Company all
the outstanding stock of WPS Communications, Inc.
("Communications") and Packerland Energy Services, Inc.
("Packerland"). Following such share exchange and corporate
restructuring, all of the outstanding common stock of the Company
will be owned by the former WPSC common shareholders.
It is proposed that there will be no exchange of the
outstanding preferred stock or first mortgage bonds of WPSC in
connection with the share exchange and that, immediately following
the share exchange and corporate restructuring, the Company will
have no outstanding securities other than common stock. Holders of
WPSC preferred stock and first mortgage bonds will continue as
security holders of WPSC.
WPSC proposes to submit the Plan of Share Exchange to the
holders of its common stock for approval at its annual meeting of
shareholders scheduled for May 5, 1994.
In connection with the share exchange, the Company's
common stock will be listed on the New York Stock Exchange, Inc.
and the Chicago Stock Exchange and WPSC's common stock will be
delisted from such exchanges.
WPSC has its principal executive office at 700 North
Adams Street, P. O. Box 19001, Green Bay, Wisconsin, 54307. WPSC
is a public utility engaged principally in the production,
transmission, distribution and sale of electricity in 23 counties in
northeastern Wisconsin and in an adjacent county in Upper Michigan.
WPSC furnishes retail electric service to about 347,000 customers
and wholesale service to 11 municipal utilities, and to two
rural electric cooperative customers. WPSC also purchases,
distributes, transports and sells natural gas to about 190,000
customers located in 17 counties in northeastern Wisconsin and one
adjacent county in Upper Michigan. WPSC's total operating revenues
for 1993 were $680.6 million, of which $493.2 million (72%)
was from electric service and $187.4 million (28%) was from
gas service.
WPSC is subject to regulation by the Public Service
Commission of Wisconsin as to formation of a utility holding
company, retail rates, service rules, accounts, issuance of
securities, certain additions and extensions to facilities and in
other respects. WPSC is also subject to regulation by the Michigan
Public Service Commission as to retail rates, issuance of
securities and in other respects. It is also subject to the
jurisdiction of the Federal Energy Regulatory Commission ("FERC")
under the Federal Power Act as to wholesale rates, certain electric
-2-
<PAGE>
utility facilities, accounts and in other respects. Certain of
WPSC's natural gas facilities and operations may also be subject to
the jurisdiction of the FERC under the Natural Gas Act. WPSC has
been declared an exempt holding company pursuant to Section 3(a)(2)
of the Act (See, Wisconsin Public Service Corporation, 1 S.E.C. 512
(1936)).
WPSC owns 33.1% of the outstanding capital stock of River
Power, a Wisconsin corporation, incorporated in 1947. The
remaining capital stock is owned 33.1% by Wisconsin Power and Light
Company and 33.8% by Consolidated Water Power Company. Wisconsin
Power and Light Company is a wholly-owned subsidiary of WPL
Holdings, Inc., and is a public utility company operating in
southern and central Wisconsin. Consolidated Water Power Company
is a wholly-owned subsidiary of Consolidated Papers, Inc., which is
engaged principally in the manufacture and sale of paper, pulp and
paper products. The acquisition of the capital stock of River
Power by WPSC was approved by the Commission by order in File Nos.
70-1656 and 31-551 (27 S.E.C. 539 (1948)). The business of River
Power consists of the ownership and operation of two dams and
relating hydroelectric plants on the Wisconsin River having an
aggregate installed capacity of about 35,000 kw. The output of the
hydroelectric plants is sold, at the sites of such plants, to the
three companies which own its outstanding capital stock,
substantially in proportion to their stock ownership interests. No
electricity is delivered to or received by River Power at or
outside of the borders of Wisconsin. River Power does not own any
transmission or distribution facilities.
The application and any amendments thereto are available
for public inspection through the Commission's Office of Public
Reference. Interested persons wishing to comment or request a
hearing should submit their views in writing by ____________, 1994,
to the Secretary, Securities and Exchange Commission, Washington,
D.C. 20549, and serve a copy on the Company at the address
specified above. Proof of service (by affidavit or, in case of
attorney at law, by certificate) should be filed with the request.
any request for a hearing must identify specifically the issues of
fact or law that are disputed. A person who so requests will be
notified of any hearing, if ordered, and will receive a copy of any
notice or order issued in this matter. After said date, the
application, as filed or as it may be amended, may be authorized.
For the Commission, by the Division of Investment
Management pursuant to delegated authority.
Jonathan G. Katz
Secretary
-3-
