<PAGE>
REG NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
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. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock........................ 23,896,962 (1) $30.6875 (2) $733,338,021 (2) $252,877
shares
<FN>
(1) Based upon the exchange of one share of common stock of WPS Resources
Corporation for each share of common stock of Wisconsin Public Service
Corporation pursuant to the Plan of Share Exchange described herein.
(2) Estimated solely for the purpose of calculating the filing fee pursuant to
Rule 457(f)(1) and based on the average of the high and low prices on the
composite tape, as reported in THE WALL STREET JOURNAL on February 7, 1994,
of the shares of common stock of Wisconsin Public Service Corporation to be
exchanged for the common stock of WPS Resources Corporation.
</TABLE>
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
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
GENERAL INFORMATION........................................................................................ 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................................. 9
NOMINEES FOR ELECTION AS DIRECTORS......................................................................... 11
EXECUTIVE COMPENSATION..................................................................................... 14
PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING........................................................ 19
General.................................................................................................. 19
Reasons for Share Exchange and Corporate Restructuring................................................... 20
Terms of Share Exchange and Corporate Restructuring...................................................... 23
Preferred Stock and Debt Securities of the Company....................................................... 23
Dividends on WPS Resources Common Stock.................................................................. 24
Certain Federal Income Tax Consequences.................................................................. 24
New York and Chicago Stock Exchange Listings............................................................. 25
Dividend Reinvestment and Employee Benefit Plans......................................................... 25
Vote Required............................................................................................ 25
Appraisal Rights......................................................................................... 25
Conditions to Consummation of Share Exchange and Corporate Restructuring................................. 26
Amendment or Termination of Plan......................................................................... 26
Effective Time........................................................................................... 26
Exchange of Stock Certificates Not Required.............................................................. 26
Directors and Executive Officers of WPS Resources........................................................ 27
Business of the Company.................................................................................. 27
Regulation............................................................................................... 27
Market Prices of Wisconsin Public Service Corporation Common Stock....................................... 30
Financial Statements..................................................................................... 30
Pro Forma Financial Statements (unaudited)............................................................... 31
Restated Articles of Incorporation and By-Laws of WPS Resources.......................................... 31
Description of WPS Resources Common Stock................................................................ 33
Transfer Agent and Registrar............................................................................. 35
Legal Opinions........................................................................................... 35
Experts.................................................................................................. 35
OTHER BUSINESS............................................................................................. 36
ANNUAL REPORTS............................................................................................. 36
FUTURE SHAREHOLDER PROPOSALS............................................................................... 36
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 Cor-
porate 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 Restructur-
ing............................... 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."
</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>
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
9
<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>
10
<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.
11
<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.
12
<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.
13
<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
$100,000.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------------
ANNUAL COMPENSATION (1) AWARDS PAYOUTS
--------------------------------- --------------------------- ------------
(E) (G)
(A) OTHER (F) SECURITIES (I)
NAME AND ANNUAL RESTRICTED UNDERLYING (H) ALL OTHER
PRINCIPAL (B) (C) (D) COMPENSATION STOCK OPTIONS/ LTIP COMPENSATION
POSITION YEAR SALARY ($) 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
<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>
14
<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
15
<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
16
<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:
17
<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.
18
<PAGE>
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]
19
<PAGE>
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. 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
20
<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 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.
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 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
21
<PAGE>
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 security holders of the Company (I.E., the
owners of the Company's preferred stock and debt securities). 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 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.
22
<PAGE>
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.
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.
23
<PAGE>
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;
(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
24
<PAGE>
(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.
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
25
<PAGE>
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."
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
26
<PAGE>
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.
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."
27
<PAGE>
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 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
28
<PAGE>
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.
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
29
<PAGE>
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.
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
30
<PAGE>
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>
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.
31
<PAGE>
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.
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.
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
32
<PAGE>
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."
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.
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
33
<PAGE>
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 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
34
<PAGE>
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 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
35
<PAGE>
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 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
36
<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 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to the Wisconsin Business Corporation Law and Article VI of the
By-Laws of WPS Resources, Directors and Officers of WPS Resources are entitled
to mandatory indemnification from WPS Resources against certain liabilities and
expenses to the extent such officers or directors are successful on the merits
or otherwise in connection with a proceeding, unless it is determined that the
director or officer breached or failed to perform his duties to WPS Resources
and such breach or failure constituted: (a) a willful failure to deal fairly
with WPS Resources or its shareholders in connection with a matter in which the
director or officer had a material conflict of interest; (b) a violation of the
criminal law unless the director or officer had reasonable cause to believe his
or her conduct was lawful or had no reasonable cause to believe his or her
conduct was unlawful; (c) a transaction from which the director or officer
derived an improper personal profit (unless such profit is immaterial under the
circumstances); or (d) willful misconduct. It should also be noted that the
Wisconsin Business Corporation Law specifically states that it is the policy of
Wisconsin to require or permit indemnification in connection with a proceeding
involving securities regulation, as described therein, to the extent required or
permitted as described above. Additionally, under the Wisconsin Business
Corporation Law, directors of WPS Resources are not subject to personal
liability to WPS Resources, its shareholders or any person asserting rights on
behalf thereof for certain breaches or failures to perform any duty resulting
solely from their status except in circumstances paralleling those in
subparagraphs (a) through (d) outlined above.
The indemnification described above may be broad enough to cover liabilities
under the Securities Act of 1933. Wisconsin Public Service Corporation has
purchased insurance permitted by the Wisconsin Business Corporation Law on
behalf of its officers and directors and those of its subsidiaries, including
WPS Resources, which may cover liabilities under the Securities Act of 1933.
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.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- ----------------------------------------------------------------------------------------------------
<C> <S>
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 hereto).
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>
b. Financial Statement Schedules: Not Applicable.
ITEM 22. UNDERTAKINGS.
(1) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
(2) The undersigned registrant undertakes that every prospectus (i) that is
filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(4) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this 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 8th day of February, 1994.
WPS RESOURCES CORPORATION
By: /s/ Daniel A. Bollom
--------------------------------------
Daniel A. Bollom
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on February 8, 1994, by the
following persons in the capacities indicated. Each person whose signature
appears below hereby appoints D. P. Bittner and R. H. Knuth, and each of them,
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and his name, place and stead, in any and all
capacities, to sign any and all amendments to this registration statement and to
file the same, with all exhibits thereto, and other documents in connection
herewith, with the Securities and Exchange Commission, granting unto each said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
NAME CAPACITY
- -------------------------------------------------------- --------------------------------------------------------
<C> <S>
/s/ Daniel A. Bollom
-------------------------------------------- President, Principal Executive Officer and Director
Daniel A. Bollom
/s/ Ralph G. Baeten
-------------------------------------------- Principal Financial and Accounting Officer
Ralph G. Baeten
/s/ A. Dean Arganbright
-------------------------------------------- Director
A. Dean Arganbright
/s/ Michael S. Ariens
-------------------------------------------- Director
Michael S. Ariens
/s/ Richard A. Bemis
-------------------------------------------- Director
Richard A. Bemis
/s/ Sister M. Lois Bush
-------------------------------------------- Director
Sister M. Lois Bush
/s/ Robert C. Gallagher
-------------------------------------------- Director
Robert C. Gallagher
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
NAME CAPACITY
- -------------------------------------------------------- --------------------------------------------------------
<C> <S>
/s/ Kathryn Hasselblad-Pascale
-------------------------------------------- Director
Kathryn Hasselblad-Pascale
/s/ James L. Kemerling
-------------------------------------------- Director
James L. Kemerling
/s/ Linus M. Stoll
-------------------------------------------- Director
Linus M. Stoll
</TABLE>
II-4
<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.
4 None. N/A
5 Opinion of counsel re legality.
6 None. N/A
7 None. N/A
8 Opinion of counsel re tax matters.
9 None. N/A
10 None. N/A
11 Statement re computation of Per Share Earnings.
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).
25 Powers of Attorney (contained on signature pages hereto).
26 None. N/A
27 None. N/A
</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.
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. N/A
</TABLE>
<PAGE>
APPENDIX
Set forth on page 19 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 3B
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 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
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.
<PAGE>
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; 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
2
<PAGE>
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
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
3
<PAGE>
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:
(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.
4
<PAGE>
(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.
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
5
<PAGE>
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
present (though less than such quorum) may adjourn any meeting of the Board of
6
<PAGE>
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,
7
<PAGE>
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 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
8
<PAGE>
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
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,
9
<PAGE>
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.
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
10
<PAGE>
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.
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
11
<PAGE>
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
12
<PAGE>
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
13
<PAGE>
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
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.
14
<PAGE>
(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 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.
15
<PAGE>
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,
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.
16
<PAGE>
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
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
17
<PAGE>
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
Expenses with respect to which indemnification is sought by the Execu-
tive, among such claims, issues or matters as the Authority, or the
18
<PAGE>
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.
19
<PAGE>
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 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.
20
<PAGE>
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.
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.
21
<PAGE>
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-
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.
22
<PAGE>
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 provision 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.
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:
23
<PAGE>
(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
Sections 180.0850 to 180.0859 (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
24
<PAGE>
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 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.
25
<PAGE>
Exhibit 5
(Letterhead of Foley & Lardner)
February 7, 1994
WPS Resources Corporation
700 North Adams Street
P.O. Box 19001
Green Bay, Wisconsin 54307
Dear Sir:
In connection with the proposed corporate restructuring
pursuant to the Agreement and Plan of Share Exchange dated as of
January 17, 1994 (the "Agreement"), between Wisconsin Public
Service Corporation ("WPSC") and WPS Resources Corporation ("WPS
Resources"), both of which are Wisconsin corporations, in which,
among other things, the outstanding shares of Common Stock of WPSC
will be exchanged for an equal number of shares of Common Stock, $1
par value per share, of WPS Resources (the "Shares"), we have
examined copies of the Agreement, the application of WPSC and WPS
Resources to the Public Service Commission of Wisconsin (the
"PSCW") relating to the restructuring, the Application on Form U-1
of WPS Resources to the Securities and Exchange Commission (the
"SEC") under the Public Utility Holding Company Act of 1935 (the
"1935 Act"), relating to the restructuring, the application of WPSC
to the Federal Energy Regulatory Commission ("FERC") under Section
203 of the Federal Power Act relating to the restructuring, the
Registration Statement on Form S-4, as amended (the "Registration
Statement"), filed by WPS Resources with the SEC under the
Securities Act of 1933 (the "1933 Act"), with respect to the
Shares, and such corporate and other records, certificates and
other documents, and such questions of law, as we have deemed
necessary or desirable for the purpose of this opinion, and, on the
basis of the foregoing, advise you as follows.
In our opinion, when (a) the SEC shall have issued its
Order under Section 10 of the 1935 Act as applied for in such
Application on Form U-1, (b) the FERC shall have issued its order
under Section 203 of the Federal Power Act as applied for, (c) the
Registration Statement shall have become effective under the 1933
Act, (d) the Plan of Share Exchange attached to the Agreement shall
have been duly approved by the shareholders of common stock of WPSC
<PAGE>
WPS Resources Corporation
February 7, 1994
Page 2
as contemplated in the Agreement and the Registration Statement and
(e) Articles of Share Exchange shall have been duly filed in the
office of the Wisconsin Secretary of State as provided in such Plan
of Share Exchange, then:
(1) the Shares will be duly authorized and validly
issued, fully paid and non-assessable, and
(2) the holders thereof will not be subject to personal
liability as shareholders, except under Section 180.0622(2)(b)
of the Wisconsin Statutes, as judicially interpreted, for
liability equal to par value of their stock for all debts
which may be due to employees of WPSC for services performed
for WPSC but not to exceed six month's service in any one
case.
This opinion does not relate to State Blue Sky or
securities laws.
We hereby consent to the references to our firm under the
caption "Legal Opinions" in the Registration Statement and to the
filing of this opinion as an exhibit to the Registration Statement.
In giving our consent, we do not admit that we are "experts" within
the meaning of Section 11 of the Securities Act or within the
category of persons whose consent is required by Section 7 of the
Securities Act.
Yours truly,
/s/ Foley & Lardner
FOLEY & LARDNER
<PAGE>
EXHIBIT 8
(Letterhead of Foley & Lardner)
(608) 258-4214
February 8, 1994
Wisconsin Public Service Corporation WPS Resources Corporation
700 North Adams Street 700 North Adams Street
P.O. Box 19001 P.O. Box 19001
Green Bay, WI 54307-9001 Green Bay, WI 54307-9001
Re: FEDERAL INCOME TAX CONSEQUENCES OF FORMATION
OF HOLDING COMPANY STRUCTURE
Gentlemen:
As counsel to Wisconsin Public Service Corporation (the "Company")
and WPS Resources Corporation ("Resources"), we have been asked to advise you
concerning the anticipated federal income tax consequences of a Share Exchange
and corporate restructuring whereby the Company will become a wholly owned
subsidiary of Resources. The facts relating to the proposed transaction are
described in the Registration Statement of the Company dated this date and are
generally summarized below. All defined terms herein have the meaning ascribed
to them in the Registration Statement.
The Company and Resources have entered into an Agreement and Plan of
Share Exchange (the "Plan"), pursuant to which one share of Resources Common
Stock will be exchanged for each share of Company Common Stock outstanding at
the Effective Time of the Share Exchange. Resources was organized by the
Company solely for purposes of the proposed transaction and has minimum
capitalization and no significant assets and does not engage in any business.
The outstanding shares of Resources Common Stock held by the Company prior to
the Effective Time of the Share Exchange will be cancelled. As a result of the
foregoing, the Company will continue its business as a wholly owned subsidiary
of Resources, and all of the Resources Common Stock outstanding immediately
after the Effective Time will be owned by the former common shareholders of the
Company. Holders of Company Common Stock will not be required to exchange their
certificates for Resources Common Stock. After the Effective
<PAGE>
Wisconsin Public Service Corporation
WPS Resources Corporation
February 8, 1994
Page 2
Time, stock certificates representing shares of Company Common Stock will be
deemed for all purposes to represent shares of Resources Common Stock.
The outstanding preferred stock, first mortgage bonds and any other
debt securities of the Company will not be altered in the Share Exchange and
corporate restructuring. Such securities will remain outstanding and will
continue to be securities of the Company and will continue to be held by the
same persons as before the transaction. Immediately following the Effective
Time, the Company will transfer to Resources all of the outstanding shares
of common stock of Packerland Energy Services, Inc. ("Packerland") and WPS
Communications, Inc. ("Communications"), wholly owned subsidiaries of the
Company.
In rendering the opinions contained herein, we have relied on the
following representations you have made to us:
(a) The fair market value of the Resources Common Stock to be
received in the Share Exchange by the holders of the Company's Common Stock will
be approximately equal to the fair market value of the shares of the Company
Common Stock exchanged therefor.
(b) Resources has no plan or intention to sell or otherwise dispose
of any of the Company Common Stock it will receive in the Share Exchange or to
liquidate the Company or to cause the Company to be merged into another
corporation or to sell or otherwise dispose of its assets, except in the
ordinary course of business other than the dividend of the shares of Packerland
and Communications.
(c) After the Share Exchange, Resources will operate the Company as
a wholly owned subsidiary and the business of the Company will be continued.
(d) Resources has no plan or intention to purchase or redeem any
shares of its Common Stock issued in the Share Exchange.
(e) Resources will not operate as an investment company as
described in Section 1.351-1(c)(1) of the Treasury Regulations.
(f) Following the Share Exchange, the former holders of Common
Stock of the Company will own all of the outstanding Common Stock of Resources
and will, therefore, be in control of Resources within the meaning of Section
368(c) of the Internal Revenue Code of 1986, as amended (the "Code"). Resources
has no plan or intention of issuing additional shares of Resources Common Stock
or of issuing any other classes of stock which would result in the present
stockholders of the Company losing control of Resources within the meaning of
Section 368(c) of the Code.
<PAGE>
Wisconsin Public Service Corporation
WPS Resources Corporation
February 8, 1994
Page 3
(g) To the best knowledge of the management of the Company, there
is no plan or intention on the part of the present stockholders of the Company
to sell or otherwise dispose of shares of Resources Common Stock to be received
in the Share Exchange in a transaction or series of transactions which would
result in such stockholders losing control of Resources within the meaning of
Section 368(c) of the Code.
(h) Resources will not assume any liabilities of the Company
shareholders in connection with the Share Exchange nor will the Company Common
Stock received by Resources be subject to any liabilities of the Company
shareholders in the hands of Resources.
(i) Resources, the Company and the stockholders of the Company each
will pay their own expenses, if any, incurred in connection with the
transaction.
(j) To the best knowledge of the management of the Company, none of
the Company Common Stock being transferred to Resources in the Share Exchange
was received in the liquidation of another corporation.
(k) Prior to the Share Exchange, there will be no intercorporate
debt between Resources and the Company that was acquired or will be settled at
a discount.
(l) The Company has been filing a consolidated federal income tax
return with Packerland and Communications.
(m) None of the Resources Common Stock to be received by the
stockholders of the Company Common Stock will be issued in consideration for
past or future services.
In connection with the preparation of this opinion, we have examined
such documents concerning the transaction as we deem necessary. We have based
our conclusions on the Code and the Treasury Regulations promulgated pursuant
thereto as well as judicial and administrative interpretations thereof.
Legislation passed, regulations promulgated, administrative interpretations or
judicial decisions issued subsequent to the date of this letter may result in a
different treatment of the proposed transaction than is anticipated by our
opinion herein. We have assumed for all purposes that the Share Exchange and
related transactions will be effected as set forth above and as described in the
Registration Statement.
We have not discussed this opinion with representatives of the
Internal Revenue Service and it is not binding thereon. Although rulings have
been issued by the Internal Revenue Service involving similar transactions,
there can be no assurances that the Internal Revenue Service would reach the
same or similar conclusions in this transaction. The present policy of the
Internal Revenue Service is not to issue rulings in transactions involving the
formation of a holding company under Section 351 of the Code. Further, we have
not considered the application of state income or other tax laws to the Share
Exchange and corporate restructuring and, therefore, limit our opinion to
the federal income tax opinions set forth below.
<PAGE>
Wisconsin Public Service Corporation
WPS Resources Corporation
February 8, 1994
Page 4
Based upon the foregoing, and with due regard to such legal
considerations as we deem necessary, we are of the opinion that:
(a) No gain or loss will be recognized by the owners of Company
Common Stock upon the exchange of such stock for Resources Common Stock.
(b) The basis of 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.
(c) The holding period of 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.
(d) No gain or loss will be recognized by Resources or the Company
in connection with the Share Exchange.
(e) 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 Resources will be the common
parent of such affiliated group after the Share Exchange and corporate
restructuring.
(f) No gain or loss will be recognized by owners of Company
preferred stock as a result of the restructuring and the basis and holding
period of the preferred stock will not change.
This opinion is solely for the benefit of the Company, Resources and
the holders of the Common Stock of the Company immediately prior to the Share
Exchange and may not be relied upon in any manner by any other person. We
hereby consent to the references to our firm in the Registration Statement and
to the filing of this opinion as an exhibit to the Registration Statement. In
giving our consent, we do not admit that we are "experts" within the meaning of
Section 11 of the Securities Act or within the category of persons whose consent
is required by Section 7 of the Securities Act.
Very truly yours,
/s/ Foley & Lardner
FOLEY & LARDNER
<PAGE>
EXHIBIT 11
WISCONSIN PUBLIC SERVICE CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE FISCAL YEARS ENDED DECEMBER 31, 1989,
1990, 1991, 1992 AND 1993
<TABLE>
<CAPTION>
Years Ended December 31
-------------------------------------------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(Thousands, except share data)
<S> <C> <C> <C> <C> <C>
Net Income $ 62,200 $ 58,002 $ 54,172 $ 49,023 $ 49,130
Less:
Preferred Stock (1)
Dividend Requirements 3,311 3,237 3,237 3,293 3,436
---------- ---------- ----------- ----------- -----------
Earnings on Common Stock $ 58,889 $ 54,765 $ 50,935 $ 45,730 $ 45,694
========== ========== =========== =========== ===========
Outstanding Average
Shares 23,888,047 23,350,039 22,888,620 22,888,620 23,086,474
========== ========== =========== =========== ===========
Earnings Per Average
Share of Common Stock $ 2.47 $ 2.35 $ 2.23 $ 2.00 $ 1.98
========== ========== =========== =========== ===========
<FN>
(1) Preferred Stock is not convertible.
</TABLE>
<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.
/s/ Arthur Andersen & Co.
Arthur Andersen & Co.
Milwaukee, Wisconsin,
February 7, 1994.
<PAGE>
EXHIBIT 28.1
PROXY--WISCONSIN PUBLIC SERVICE CORPORATION
Proxy solicited on behalf of the Board of Directors for the Annual Shareholders
Meeting--May 5, 1994
The undersigned hereby appoints Daniel A. Bollom and Robert H. Knuth as
Proxies, each with the power to appoint a substitute, and hereby authorizes them
to represent and to vote, as designated below and, in their discretion, upon
such other business as may properly come before the meeting, all the shares of
common stock of Wisconsin Public Service Corporation held of record by the
undersigned on March 17, 1994, at the annual meeting of shareholders to be held
on May 5, 1994, at 10:30 A.M. or any adjournment thereof:
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS / / FOR ALL NOMINEES / / WITHHOLD AUTHORITY
listed below (except as to vote for nominees listed
noted to the contrary) below
</TABLE>
Michael S. Ariens, Kathryn M. Hasselblad-Pascale and Linus M. Stoll.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
________________________________________
<TABLE>
<S> <C> <C> <C>
2. / / FOR / / AGAINST / / ABSTAIN approval of Plan and Agreement of Share Exchange
between Wisconsin Public Service Corporation and WPS Resources Corporation.
</TABLE>
(THIS PROXY IS CONTINUED, AND IS TO BE SIGNED AND DATED ON THE REVERSE SIDE.)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES AND FOR PROPOSAL 2.
PLEASE MARK ONE BOX ONLY IN THE ELECTION AND WITH RESPECT TO PROPOSAL 2,
SIGN EXACTLY AS YOUR NAME IS PRINTED ON THIS CARD, DATE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE.
_______________________________
_______________________________
Signature(s) of shareholder(s)
Dated: __________________, 1994
<PAGE>
EXHIBIT 28.2
[LOGO]
700 North Adams Street, P.O. Box 19001, Green Bay, Wisconsin 54307
March 25, 1994
DEAR SHAREHOLDER:
You are cordially invited to attend the 1994 Annual Shareholders Meeting
which will be held at 10:30 A.M., local time, May 5, 1994, at the Midway Motor
Hotel (2 blocks east of Lambeau Field -- Home of the Green Bay Packers), 780
Packer Drive, Green Bay, Wisconsin. Whether or not you plan to attend, we would
greatly appreciate your giving prompt attention to the enclosed proxy materials.
At the meeting, holders of Company common stock will be asked to consider and
vote upon the following proposal in addition to electing members of the Board of
Directors and transacting such other business as may come before the meeting or
any adjournment thereof -- a proposal to approve an Agreement and Plan of Share
Exchange (the "Plan"), pursuant to which the Company would reorganize into a
holding company structure. This proposal is summarized in this brochure and
described in detail in the accompanying Prospectus/Proxy Statement.
Under the proposed corporate restructuring, which has been unanimously
approved by the Board of Directors, the Company will become a subsidiary of WPS
Resources Corporation ("WPS Resources"), a new holding company incorporated in
Wisconsin. If the Plan is approved and the corporate restructuring becomes
effective, the outstanding Company common stock will be exchanged, on a
share-for-share basis, for common stock of WPS Resources. Holders of shares of
Company common stock outstanding at the time the corporate restructuring is
consummated will accordingly become the shareholders of WPS Resources. Shares of
the Company's preferred stock will not be exchanged in the proposed corporate
restructuring and will remain outstanding securities of the Company without any
changes in the powers and relative rights of such shares.
THE BOARD OF DIRECTORS OF THE COMPANY BELIEVES THAT THE APPROVAL OF THE PLAN
IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND UNANIMOUSLY
RECOMMENDS THAT HOLDERS OF COMPANY COMMON STOCK VOTE FOR APPROVAL OF THE PLAN.
WHEN THE HOLDING COMPANY STRUCTURE BECOMES EFFECTIVE, IT WILL NOT BE
NECESSARY FOR HOLDERS OF SHARES OF COMPANY COMMON STOCK TO TURN IN THEIR
CERTIFICATES FOR CERTIFICATES OF WPS RESOURCES. STOCK CERTIFICATES FORMERLY
REPRESENTING SHARES OF COMPANY COMMON STOCK WILL AUTOMATICALLY BE DEEMED TO
REPRESENT WPS RESOURCES COMMON STOCK FOR ALL CORPORATE PURPOSES.
Following the corporate restructuring, the business of the Company will
continue under WPS Resources substantially as it is presently conducted, with
the same assets, capitalization and management. The current directors of the
Company also presently serve as directors of WPS Resources and are expected to
continue to serve as directors of WPS Resources when the Plan is approved and
the corporate restructuring is consummated.
A number of companies with both utility and non-utility operations, as well
as other large corporations, have recently adopted holding company structures.
The Board of Directors and management of the Company believe that the corporate
restructuring will provide the Holding Company with improved ability to compete
more effectively in the changing environment facing utilities.
The formal Notice of Annual Meeting of Shareholders and Prospectus/Proxy
Statement provide additional information concerning matters to be considered. At
the meeting we will report on the Company's progress, plans and prospects, and
respond to your questions and comments.
We hope for a large attendance either in person or by proxy. Whether you own
many shares or only a few, your presence or your proxy is important in making up
the total number of shares necessary to transact business at the meeting.
If you are unable to attend, we would appreciate YOUR FILLING IN, SIGNING
AND PROMPTLY MAILING THE ENCLOSED PROXY IN THE POSTAGE PAID ENVELOPE PROVIDED.
Sincerely,
Daniel A. Bollom
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
FACTS ABOUT THE PROPOSED HOLDING COMPANY:
WPS RESOURCES CORPORATION
1. WHY IS WISCONSIN PUBLIC SERVICE CORPORATION PROPOSING TO FORM A PARENT
HOLDING COMPANY?
The principal reasons for the proposed corporate restructuring are to 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 Wisconsin Public Service
Corporation or energy conservation or energy resources or which otherwise
benefit the service territory of Wisconsin Public Service Corporation, afford
separation between utility and non-utility businesses, and provide additional
flexibility for financing and for maintaining appropriate utility capital
ratios. For the foregoing reasons, the Board of Directors of Wisconsin Public
Service Corporation believes that the formation of a Holding Company System will
be beneficial to Wisconsin Public Service Corporation and its shareholders.
2. WHAT WILL THE NEW COMPANY STRUCTURE LOOK LIKE?
Upon completion of the proposed restructuring, WPS Resources Corporation
will become the parent company of Wisconsin Public Service Corporation and two
nonutility subsidiaries: WPS Communications, Inc. and Packerland Energy
Services, Inc.
Wisconsin Public Service Corporation will remain a public utility and its
assets will initially constitute nearly all of the assets of the holding company
group.
<TABLE>
<S> <C> <C>
WPS Resources Corporation
Packerland Energy Wisconsin Public WPS Communications,
Services, Inc. Service Corporation Inc.
</TABLE>
WPS Communications, Inc. ("Communications") was a partner in the NorLight
fiber optics telecommunications partnership ("NorLight"), the assets of which
were sold in 1991. It is anticipated that Communications will be dissolved after
December 1994 when certain matters related to the sale of the NorLight assets
will be completed. Packerland Energy Services, Inc. ("Packerland") will provide
energy supply consulting and natural gas supply/ transportation procurement
services for commercial and industrial customers.
3. WILL SHAREHOLDERS HAVE TO EXCHANGE THEIR COMMON STOCK CERTIFICATES?
As part of the restructuring, Wisconsin Public Service Corporation Common
Stock will automatically become WPS Resources Corporation Common Stock on a
share-for-share basis. IT WILL NOT BE NECESSARY IN THE RESTRUCTURING FOR HOLDERS
OF COMMON STOCK OF WISCONSIN PUBLIC SERVICE CORPORATION TO EXCHANGE THEIR STOCK
CERTIFICATES.
4. WHO MUST APPROVE THE RESTRUCTURING?
The restructuring requires the approval of the Public Service Commission of
Wisconsin ("PSCW"), the Securities and Exchange Commission ("SEC"), the Federal
Energy Regulatory Commission ("FERC") and the Nuclear Regulatory Commission
("NRC"). Applications have been filed with the PSCW, the SEC under the Public
Utility Holding Company Act, the FERC and with the NRC. Their decisions are
pending.
<PAGE>
Holders of Wisconsin Public Service Corporation Common Stock will vote on
the restructuring at the annual meeting of shareholders on May 5, 1994. Approval
will require a favorable vote of two-thirds of the outstanding shares of
Wisconsin Public Service Corporation Common Stock.
5. WHAT WILL BE THE EFFECTIVE DATE OF THE RESTRUCTURING?
If the shareholders approve the restructuring, it is anticipated that it
will become effective on or about October 1, 1994.
6. WHAT FEDERAL TAX CONSEQUENCES WILL THE RESTRUCTURING HAVE ON HOLDERS OF
WISCONSIN PUBLIC SERVICE CORPORATION COMMON STOCK?
Wisconsin Public Service Corporation has received an opinion from its
counsel, Foley & Lardner, Milwaukee, Wisconsin, regarding Federal income tax
consequences of the restructuring, I.E., that (i) no gain or loss will be
recognized by holders of shares of Wisconsin Public Service Corporation Common
Stock as a result of the exchange for shares of WPS Resources Corporation Common
Stock; (ii) the cost basis of WPS Resources Corporation shares will be the same
as the cost basis of Wisconsin Public Service Corporation shares; and (iii) the
holding period of WPS Resources Corporation shares will be the same as the
holding period of Wisconsin Public Service Corporation shares if the Wisconsin
Public Service Corporation shares are held as capital assets at the date of the
restructuring.
7. WHERE WILL THE STOCK BE TRADED AND WHAT IS THE TICKER SYMBOL?
WPS Resources Corporation Common Stock is expected to be traded on the New
York Stock Exchange and the Chicago Stock Exchange under ticker symbol "WPS"
which is the same as the current symbol for Wisconsin Public Service
Corporation.
8. HOW WILL DIVIDENDS BE AFFECTED?
It is expected that quarterly dividends on WPS Resources Corporation Common
Stock will commence after the restructuring at a rate at least equal to the rate
most recently paid on Wisconsin Public Service Corporation Common Stock.
Dividends on WPS Resources Corporation Common Stock will depend upon earnings,
financial conditions and other factors.
9. WILL THE RESTRUCTURING AFFECT THE PREFERRED STOCK AND DEBT SECURITIES?
The Preferred Stock and debt securities of Wisconsin Public Service
Corporation will not be changed in the restructuring. They will remain as
Preferred Stock or debt securities of Wisconsin Public Service Corporation.
10. HOW WILL THE DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN BE AFFECTED?
Wisconsin Public Service Corporation's Automatic Dividend Reinvestment and
Stock Purchase Plan will be assumed by WPS Resources Corporation. The
participants in the Wisconsin Public Service Corporation plan will automatically
become participants in the corresponding WPS Resources Corporation plan.
11. WHO WILL MANAGE THE HOLDING COMPANY AFTER THE RESTRUCTURING?
The principal executive officers and the Board of Directors of Wisconsin
Public Service Corporation are also the principal executive officers and the
Board of Directors of WPS Resources Corporation. However, the day-to-day
management of any new nonutility businesses will be carried out by persons hired
for their experience and expertise. Those persons will not be involved in
utility operations.
<PAGE>
12. WILL THERE BE A LIMIT TO THE INVESTMENT IN NONUTILITY BUSINESSES BY THE
PROPOSED HOLDING COMPANY?
The legislation allowing Wisconsin utilities to diversify into nonutility
businesses under a holding company structure generally limits the amount of
nonutility business assets to an ultimate maximum of 25 percent of the assets of
the public utilities in the holding company system. The principal business of
the holding company system will continue to be providing safe and reliable
electric and gas service to utility customers.
13. WILL THE RIGHTS OF HOLDERS OF COMMON STOCK OF WPS RESOURCES CORPORATION BE
THE SAME AS THE RIGHTS OF HOLDERS OF COMMON STOCK OF WISCONSIN PUBLIC
SERVICE CORPORATION?
The rights of holders of Common Stock of WPS Resources Corporation will
generally be the same as the rights of holders of Common Stock of Wisconsin
Public Service Corporation. The affairs of WPS Resources Corporation will be
governed by Restated Articles of Incorporation and By-laws that are
substantially identical to those of Wisconsin Public Service Corporation except
that the WPS Resources Corporation Restated Articles of Incorporation will
authorize the issuance of a greater number of shares of common stock, will not
authorize the issuance of WPS Resources Corporation 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 Corporation Common Stock at a meeting at
which a quorum exists, whereas amendment of the Articles of Incorporation of
Wisconsin Public Service Corporation requires the affirmative vote of the
holders of two-thirds of its outstanding common stock and in some cases the
approval of holders of its preferred stock.
<PAGE>
APPENDIX
Set forth on page 2 of Exhibit 28.2 is a graphic consisting of
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.
