<PAGE>
REG NO. 33-52199
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
WPS RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
WISCONSIN 39-1775292
<S> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
700 NORTH ADAMS STREET
P. O. BOX 19001
GREEN BAY, WISCONSIN 54307
414-433-1598
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
<TABLE>
<S> <C>
DANIEL A. BOLLOM, President MICHAEL S. NOLAN
and Chief Executive Officer Foley & Lardner
WPS Resources Corporation 777 East Wisconsin Avenue
700 North Adams Street, P.O. Box 19001 Milwaukee, Wisconsin 53202
Green Bay, Wisconsin 54307 Telephone Number: 414-289-3608
Telephone Number: 414-433-1464
</TABLE>
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THE PROSPECTUS/PROXY STATEMENT CONTAINED IN THE
REGISTRATION STATEMENT TO READ AS SET FORTH HEREIN.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
WPS RESOURCES CORPORATION
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND HEADING CAPTION OR LOCATION IN PROXY STATEMENT AND PROSPECTUS
- -------------------------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C>
A. Information About the Transaction
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus............... Facing page of Registration Statement; Cross Reference
Sheet; Cover Page of Prospectus/Proxy Statement
2. Inside Front and Outside Back Cover Pages of
Prospectus................................... Inside Front Cover of Prospectus/Proxy Statement; Table
of Contents; Available Information
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information................ Prospectus/Proxy Statement Summary; General Information;
Proposed Share Exchange and Corporate Restructuring --
Vote Required; -- General; -- Businesses; -- Terms of
Share Exchange and Corporate Restructuring; --
Conditions to Consummation of Share Exchange of the
Company; -- Appraisal Rights; -- Market Prices of
Wisconsin Public Service Corporation Common Stock; --
Financial Statements; -- Pro Forma Financial
Statements; -- Certain Federal Income Tax Consequences
4. Terms of Transaction.......................... Proposed Share Exchange and Corporate Restructuring --
Vote Required; -- General; -- Reasons for Share
Exchange and Corporate Restructuring; -- Terms of Share
Exchange and Corporate Restructuring; -- Restated
Articles of Incorporation and By-Laws of WPS Resources;
-- Description of WPS Resources Common Stock; --
Certain Federal Income Tax Consequences
5. Pro Forma Financial Information............... Proposed Share Exchange and Corporate Restructuring --
Pro Forma Financial Statements
6. Material Contacts with the Company Being
Acquired..................................... Not Applicable
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to Be
Underwriters................................. Not Applicable
8. Interests of Named Experts and Counsel........ Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................. Not Applicable
B. Information About the Registrant
10. Information With Respect to S-3 Registrants... Not Applicable
11. Incorporation of Certain Information by
Reference.................................... Not Applicable
12. Information With Respect to S-2 or S-3
Registrants.................................. Not Applicable
13. Incorporation of Certain Information by
Reference.................................... Not Applicable
14. Information With Respect to Registrants Other
Than S-3 or S-2 Registrants.................. Prospectus/Proxy Statement Summary; -- Proposed Share
Exchange and Corporate Restructuring -- General; --
Financial Statements
C. Information About the Company Being Acquired
15. Information With Respect to S-3 Companies..... Incorporation of Certain Documents by Reference; --
Available Information; -- Proposed Share Exchange and
Corporate Restructuring -- Business of the Company
16. Information With Respect to S-2 or S-3
Companies.................................... Not Applicable
17. Information With Respect to Companies Other
Than S-3 or S-2 Companies.................... Not Applicable
D. Voting and Management Information
18. Information if Proxies, Consents or
Authorizations are to be Solicited........... Incorporation of Certain Documents by Reference; --
General Information; Securities Ownership of Certain
Beneficial Owners and Management; Nominees for
Directors; Executive Compensation; Voting Rights and
Vote Required; Proposed Share Exchange and Corporate
Restructuring -- Appraisal Rights; -- Vote Required; --
Other Business
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or in
an Exchange Offer............................ Not Applicable
</TABLE>
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION
700 NORTH ADAMS STREET, P.O. BOX 19001, GREEN BAY, WISCONSIN 54307
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1994
------------------------
TO THE SHAREHOLDERS OF WISCONSIN PUBLIC SERVICE CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Wisconsin
Public Service Corporation, a Wisconsin corporation (the "Company"), will be
held on Thursday, May 5, 1994, at 10:30 A.M., Green Bay Time, at the Midway
Motor Hotel, 780 Packer Drive, Green Bay, Wisconsin for the following purposes:
1. To elect three directors of Class C to hold office until the Annual
Meeting of Shareholders in 1997 or until their successors have been elected
and qualified.
2. To approve an Agreement and Plan of Share Exchange upon the
effectiveness of which (a) the Company will become a subsidiary of WPS
Resources Corporation ("WPS Resources"), (b) each outstanding share of
common stock of the Company, $4 par value per share ("Company Common Stock")
will be exchanged for one share of Common Stock, $1 par value, of WPS
Resources ("WPS Resources Common Stock") and holders of Company Common Stock
will become owners of all of the outstanding WPS Resources Common Stock, and
(c) the affairs of WPS Resources Corporation will be governed by Restated
Articles of Incorporation and By-Laws that are substantially identical to
those of the Company except that the WPS Resources Restated Articles of
Incorporation authorize the issuance of a greater number of shares of common
stock, do not authorize the issuance of WPS Resources preferred stock, and
may with certain exceptions be amended by the affirmative vote of a majority
of the votes cast by holders of WPS Resources Common Stock at a meeting at
which a quorum exists (rather than two-thirds of outstanding common stock)
as provided by the Wisconsin Business Corporation Law.
3. To consider and act upon such other business as may properly come
before the Annual Meeting or any adjournment thereof.
Holders of Company Common Stock of record at the close of business on March
17, 1994, will be entitled to notice of, and to vote at, the Annual Meeting and
at any adjournment thereof.
Even if you plan to attend the Annual Meeting, please complete, date and
sign the enclosed proxy and mail it promptly in the enclosed envelope. If you
attend the Annual Meeting, you may revoke your proxy and vote your shares in
person. Your attention is directed to the attached Proxy Statement.
WISCONSIN PUBLIC SERVICE CORPORATION
Robert H. Knuth
ASSISTANT VICE PRESIDENT -- SECRETARY
Green Bay, Wisconsin
March 25, 1994
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. TO
ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE FILL IN AND DATE THE ENCLOSED
PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, SIGN EXACTLY AS YOUR NAME
APPEARS AND RETURN IMMEDIATELY.
<PAGE>
PROXY STATEMENT
------------------
WISCONSIN PUBLIC SERVICE CORPORATION
PROSPECTUS FOR 23,896,962 SHARES OF COMMON STOCK
OF WPS RESOURCES CORPORATION
700 North Adams Street
P.O. Box 19001
Green Bay, Wisconsin 54307
(414) 433-1050 or 1-800-236-1551
This Prospectus/Proxy Statement is first being mailed to the holders of
Company Common Stock on or about March 25, 1994 in connection with the
solicitation of proxies by the Company's Board of Directors ("Board") for use at
the Annual Meeting of Shareholders.
At the Annual Meeting of Shareholders, the holders of the Company's common
stock, $4 par value per share ("Company Common Stock"), will be asked to approve
the Agreement and Plan of Share Exchange attached as Exhibit A hereto (the
"Plan").
Upon the effectiveness of the Plan, each outstanding share of Company Common
Stock, will be exchanged for one share of WPS Resources Corporation ("WPS
Resources") Common Stock, $1 par value per share ("WPS Resources Common Stock")
and the Company will become a subsidiary of WPS Resources (the "Corporate
Restructuring"). Consummation of the Corporate Restructuring will not result in
any change in the Company's Preferred Stock or debt securities.
The Plan will not become effective and the Share Exchange will not take
place unless the Plan is approved by the requisite vote of holders of shares of
Company Common Stock. See "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING
- -- Vote Required." The Board believes the Corporate Restructuring will provide
substantial benefit to the Company and its shareholders by providing flexibility
for the Company to deal with increased competition, facilitating initiatives
into new areas of business and providing additional flexibility for financing.
The Board recommends approval of the Plan.
The Company Common Stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange. On February 4, 1994, the closing price per share of
Company Common Stock was $30 3/8 on the New York Stock Exchange Composite Tape.
Application will be made to list the shares of WPS Resources Common Stock being
offered hereby on the New York Stock Exchange and the Chicago Stock Exchange.
A Registration Statement on Form S-4 has been filed with the Securities and
Exchange Commission covering the shares of the WPS Resources Common Stock
issuable in connection with the Corporate Restructuring in exchange for Company
Common Stock. This Prospectus/Proxy Statement also constitutes the prospectus
included as part of such Registration Statement.
------------------------
WPS RESOURCES COMMON STOCK HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus/Proxy Statement is March , 1994.
<PAGE>
AVAILABLE INFORMATION
Wisconsin Public Service Corporation (the Company) is subject to the
informational requirements of the Securities Exchange Act of 1934 and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "SEC"). Such reports, proxy statements and other
information can be inspected and copied at the offices of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 75 Park Place, New York, New York 10007, and copies
of such material can be obtained from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition,
reports, proxy statements and other information concerning the Company can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005; and the Chicago Stock Exchange, 440 South LaSalle Street,
Chicago, Illinois 60605.
In addition, WPS Resources has filed with the SEC a registration statement
on Form S-4 (herein, together with all amendments and exhibits, referred to as
the Registration Statement) under the Securities Act of 1933, as amended (the
Act), registering the Common Stock of WPS Resources that will be issued if the
Share Exchange described herein is completed. The Prospectus/Proxy Statement
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. For further information, reference is hereby made to the
Registration Statement.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1993 is incorporated herein by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 subsequent to the date of this
Prospectus/Proxy Statement and prior to the termination of this offering shall
be deemed to be incorporated by reference in this Prospectus/Proxy Statement and
to be a part hereof from the date of filing such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus/Proxy Statement to the extent that a statement contained herein or in
any other subsequently filed document, which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus/Proxy Statement.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus/Proxy Statement has been delivered, on the written or
oral request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated in this Prospectus/Proxy
Statement by reference, other than exhibits to such documents. Requests for such
copies should be directed to Robert H. Knuth, Secretary, Wisconsin Public
Service Corporation, 700 North Adams Street, P.O. Box 19001, Green Bay,
Wisconsin 54307, telephone number (414) 433-1445.
AS DESCRIBED ABOVE, THIS PROSPECTUS/PROXY STATEMENT INCORPORATES DOCUMENTS
BY REFERENCE WHICH ARE NOT INCLUDED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS ARE AVAILABLE UPON WRITTEN OR ORAL REQUEST DIRECTED TO THE COMPANY AT
THE ADDRESS OR TELEPHONE NUMBER SPECIFIED IN THE PRECEDING PARAGRAPH. IN ORDER
TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY APRIL
28, 1994.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS/PROXY STATEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS/PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SHARES OF WPS RESOURCES CORPORATION
COMMON STOCK IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS
PROSPECTUS/ PROXY STATEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
AVAILABLE INFORMATION...................................................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................ 2
PROSPECTUS/PROXY STATEMENT SUMMARY......................................................................... 4
SPECIAL CONSIDERATIONS..................................................................................... 9
GENERAL INFORMATION........................................................................................ 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................................. 10
NOMINEES FOR ELECTION AS DIRECTORS......................................................................... 12
EXECUTIVE COMPENSATION..................................................................................... 15
PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING........................................................ 20
General.................................................................................................. 20
Reasons for Share Exchange and Corporate Restructuring................................................... 21
Terms of Share Exchange and Corporate Restructuring...................................................... 24
Preferred Stock and Debt Securities of the Company....................................................... 24
Dividends on WPS Resources Common Stock.................................................................. 25
Certain Federal Income Tax Consequences.................................................................. 25
New York and Chicago Stock Exchange Listings............................................................. 26
Dividend Reinvestment and Employee Benefit Plans......................................................... 26
Vote Required............................................................................................ 26
Appraisal Rights......................................................................................... 27
Conditions to Consummation of Share Exchange and Corporate Restructuring................................. 27
Amendment or Termination of Plan......................................................................... 27
Effective Time........................................................................................... 27
Exchange of Stock Certificates Not Required.............................................................. 28
Directors and Executive Officers of WPS Resources........................................................ 28
Business of the Company.................................................................................. 28
Regulation............................................................................................... 29
Market Prices of Wisconsin Public Service Corporation Common Stock....................................... 31
Financial Statements..................................................................................... 32
Pro Forma Financial Statements (unaudited)............................................................... 32
Restated Articles of Incorporation and By-Laws of WPS Resources.......................................... 33
Description of WPS Resources Common Stock................................................................ 35
Transfer Agent and Registrar............................................................................. 37
Legal Opinions........................................................................................... 37
Experts.................................................................................................. 37
OTHER BUSINESS............................................................................................. 37
ANNUAL REPORTS............................................................................................. 37
FUTURE SHAREHOLDER PROPOSALS............................................................................... 38
EXHIBITS:
A - AGREEMENT AND PLAN OF SHARE EXCHANGE................................................................. A-1
B - RESTATED ARTICLES OF INCORPORATION OF WPS RESOURCES CORPORATION...................................... B-1
</TABLE>
3
<PAGE>
PROSPECTUS/PROXY STATEMENT SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere, or incorporated by reference, in this
Prospectus/Proxy Statement and Exhibits attached hereto.
<TABLE>
<S> <C>
Date, Time and Place of Meeting... The Annual Meeting of Shareholders of Wisconsin Public
Service Corporation (the "Company") will be held at
10:30 a.m., on May 5, 1994 at the Midway Motor Hotel,
780 Packer Drive, Green Bay, Wisconsin.
Record Date and Eligible Voters... Holders of Common Stock of the Company, par value $4 per
share (the "Company Common Stock") at the close of busi-
ness on March 17, 1994, are entitled to vote at the
Annual Meeting of Shareholders.
Purpose of the Meeting............ The purposes of the meeting are: (i) to elect three
directors of Class C to hold office until 1997 or until
their successors have been elected and qualified, (ii)
to consider the approval of the Agreement and Plan of
Share Exchange, attached as Exhibit A hereto (the
"Plan") upon the effectiveness of which each outstanding
share of Company Common Stock will be exchanged for one
share of common stock of WPS Resources Corporation ("WPS
Resources"), par value $1 per share ("WPS Resources
Common Stock") and the Company will be restructured into
a holding company system (the "Corporate Restructuring")
and (iii) to consider and act upon such other business
as may properly come before the meeting.
Wisconsin Public Service
Corporation....................... The Company is a public utility engaged in the
production, transmission, distribution and sale of
electricity and in the purchase, distribution,
transportation and sale of gas in northeastern Wisconsin
and an adjacent part of Upper Michigan. It was
incorporated under the laws of the State of Wisconsin in
1883. See "PROPOSED SHARE EXCHANGE AND CORPORATE
RESTRUCTURING -- Business of the Company." The Company's
executive offices are located at 700 North Adams Street,
P.O. Box 19001, Green Bay, Wisconsin 54307 (telephone
(414) 433-1445).
WPS Resources Corporation......... WPS Resources, at present an inactive, wholly-owned
subsidiary of the Company, was organized under the laws
of the State of Wisconsin in December 1993 for the
purpose of becoming the new parent holding company in
the Corporate Restructuring if the Plan is approved. Its
executive offices are located at the Company's executive
offices referred to above. See "PROPOSED SHARE EXCHANGE
AND CORPORATE RESTRUCTURING -- General."
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
Proposed Share Exchange and
Corporate Restructuring........... The Board of Directors of the Company (the "Board") has
approved a proposed Corporate Restructuring. Upon the
effectiveness of the Corporate Restructuring, WPS
Resources will become the parent holding company of the
Company, and the outstanding Company Common Stock will
be exchanged for an equal number of shares of WPS
Resources Common Stock (the "Share Exchange"). IT WILL
NOT BE NECESSARY FOR HOLDERS OF COMPANY COMMON STOCK TO
TURN IN THEIR CERTIFICATES FOR STOCK CERTIFICATES OF WPS
RESOURCES. SUCH CERTIFICATES FOR COMPANY COMMON STOCK
WILL AUTOMATICALLY REPRESENT WPS
RESOURCES COMMON STOCK.
The various series of preferred stock of the Company and
the first mortgage bonds and other obligations of the
Company will remain securities and obligations of the
Company after the Corporate Restructuring. See "PROPOSED
SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- General."
Reasons for Corporate
Restructuring..................... The principal reasons for the proposed Corporate
Restructuring are (1) to provide flexibility for the
Company to deal with increased competition within the
industry, (2) to create a structure which can facilitate
selective diversification into certain non-utility
businesses which are related to the utility business of
the Company or energy conservation or energy resources
or which otherwise benefit the service territory of the
Company and (3) to provide additional flexibility for
financing. See "PROPOSED SHARE EXCHANGE AND CORPORATE
RESTRUCTURING -- Reasons for Share Exchange and
Corporate Restructuring."
Vote Required..................... Directors are elected by a plurality of the votes cast
of the holders of Company Common Stock at a meeting at
which a quorum is present. Shares not voted have no
impact on the election of directors except to the extent
failure to vote for an individual results in another
individual receiving a larger number of votes.
Cumulative voting is not provided for in the Company's
Restated Articles of Incorporation. See "NOMINEES FOR
ELECTION AS DIRECTORS."
Approval of the Plan and Corporate Restructuring will
require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Company Common
Stock. Abstentions and broker non-votes will have the
same effect as a vote against approval of the Plan. See
"PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Vote Required."
Special Considerations............ Certain factors which should be considered in
determining whether or not to vote for approval of the
Plan are discussed under "SPECIAL CONSIDERATIONS"
immediately following this Prospectus/Proxy Statement
Summary.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
WPS Resources Common Stock
Dividends......................... After the effective time of the Plan (the "Effective
Time"), quarterly dividends on WPS Resources Common
Stock are expected to commence at a rate equal to that
currently being paid on Company Common Stock and are
expected to be paid on approximately the same date each
year as dividends on Company Common Stock have been
paid. Future dividends on WPS Resources Common Stock
will depend upon the earnings and financial conditions
of WPS Resources and its subsidiaries. See "PROPOSED
SHARE EXCHANGE AND CORPORATE RESTRUCTURING -- Dividends
on WPS Resources Common Stock."
Effective Time.................... If the requisite shareholder approval and other
approvals are obtained, it is expected that the
restructuring will be effective on or about October 1,
1994. See "PROPOSED SHARE EXCHANGE AND CORPORATE
RESTRUCTURING -- Effective Time."
Federal Tax Consequences.......... No gain or loss will be recognized for federal income
tax purposes by owners of Company Common Stock upon the
exchange of such stock for WPS Resources Common Stock
pursuant to the Plan. The basis of, and in general the
holding period for, WPS Resources Common Stock received
by owners of Company Common Stock pursuant to the Plan
will be the same as the basis in, and holding period
for, Company Common Stock exchanged. See "PROPOSED SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- Certain Federal
Income Tax Consequences."
Appraisal Rights.................. Under the Wisconsin Business Corporation Law (the
"WBCL"), neither the holders of Company Common Stock nor
the holders of the Company's preferred stock are
entitled to appraisal rights in connection with the
Share Exchange and Corporate Restructuring. See
"PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Appraisal Rights."
Regulation........................ The Company, which will continue to operate an electric
and gas utility business, will be subject to regulation
by the Public Service Commission of Wisconsin (the
"PSCW") the Michigan Public Service Commission (the
"MPSC") and to a limited extent by the Federal Energy
Regulatory Commission ("FERC"). So long as WPS Resources
is not a public utility, it will not be subject, under
present law, to regulation by the FERC, the MPSC or the
PSCW, except in certain limited circumstances pursuant
to the Wisconsin Holding Company Act. WPS Resources
believes that it will be entitled to exemption from
registration with the SEC as a holding company under the
Public Utility Holding Company Act of 1935. Both the
Company and WPS Resources will be reporting companies
under the Securities Exchange Act of 1934. See "PROPOSED
SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Regulation."
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Comparison of WPS Resources Common
Stock and Company Common Stock.... Upon the effectiveness of the proposed Share Exchange
and Corporate Restructuring, holders of Company Common
Stock will become holders of WPS Resources Common Stock.
The rights of holders of WPS Resources Common Stock will
differ from the rights of the holders of Company Common
Stock primarily in that the Restated Articles of
Incorporation of WPS Resources may be amended with the
affirmative vote of a majority of the votes cast by
holders of shares of WPS Resources Common Stock at a
meeting at which a quorum exists, whereas an amendment
to the Restated Articles of Incorporation of the Company
generally requires the affirmative vote of the holders
of at least two-thirds of the outstanding shares of
Company Common Stock and may require the approval of the
holders of two-thirds of the outstanding shares of the
Company's preferred stock. Provisions of the Restated
Articles of Incorporation of WPS Resources and of the
Restated Articles of Incorporation of the Company relat-
ing to the classification of the boards of directors
require the affirmative vote of shareholders possessing
at least three-fourths of the voting power of shares
generally possessing voting rights in the election of
directors. In addition, WPS Resources, after the Share
Exchange, will have authority to issue approximately
76,103,000 additional shares of Common Stock, whereas
the Company presently has authority to issue
approximately 9,103,000 additional shares of Company
Common Stock. The Restated Articles of Incorporation of
WPS Resources do not authorize the issuance of any
preferred stock of WPS Resources. See "PROPOSED SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- Restated
Articles of Incorporation and By-Laws of WPS Re-
sources."
Stock Exchange Listing............ Company Common Stock is currently traded on the New York
and Chicago Stock Exchanges under the stock symbol WPS.
It is anticipated that WPS Resources Common Stock will
be traded on the New York and Chicago Stock Exchanges
under the stock symbol WPS. See "PROPOSED SHARE EX-
CHANGE AND CORPORATE RESTRUCTURING -- New York and
Chicago Stock Exchange Listings."
</TABLE>
7
<PAGE>
SELECTED FINANCIAL INFORMATION
The following tables set forth financial information with respect to the
Company. Such financial information is derived from the financial statements
contained in certain documents incorporated herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------------
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenues.................... $ 680,632 $ 634,802 $ 623,499 $ 588,973 $ 585,812
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Operating Income...................... $ 83,744 $ 79,145 $ 75,028 $ 70,773 $ 70,286
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Net Income............................ $ 62,200 $ 58,002 $ 54,172 $ 49,023 $ 49,130
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Earnings on Common Stock.............. $ 58,889 $ 54,765 $ 50,935 $ 45,730 $ 45,694
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Earnings Per Average Share of Common
Stock................................ $ 2.47 $ 2.35 $ 2.23 $ 2.00 $ 1.98
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Dividends Per Share on Common Stock... $ 1.76 $ 1.72 $ 1.68 $ 1.64 $ 1.60
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
<CAPTION>
AS OF DECEMBER 31
-------------------------------------------------------------------------
1993 1992 1991 1990 1989
------------- ------------- ------------- ------------- -------------
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total Assets.......................... $ 1,198,841 $ 1,145,550 $ 1,073,537 $ 1,009,239 $ 1,023,169
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Long-Term Debt........................ $ 314,225 $ 321,498 $ 332,907 $ 273,349 $ 255,275
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Preferred Stock With no mandatory
redemption........................... $ 51,200 $ 51,200 $ 51,200 $ 51,200 $ 51,200
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
With mandatory redemption............ $ -- $ -- $ -- $ -- $ 642
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Common Stock Equity................... $ 434,503 $ 413,226 $ 369,298 $ 372,132 $ 373,125
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Total Capitalization.................. $ 799,928 $ 785,924 $ 753,405 $ 696,681 $ 680,242
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
Book Value per Share of Common
Stock................................ $ 18.18 $ 17.33 $ 16.14 $ 16.26 $ 16.30
------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- -------------
</TABLE>
8
<PAGE>
SPECIAL CONSIDERATIONS
Holders of Company Common Stock should consider the following factors in
determining whether or not to vote for approval of the Plan and Corporate
Restructuring.
1.__DIVERSIFICATION.__The proposed Corporate Restructuring will facilitate
selective diversification into certain nonutility businesses which will not be
subject to regulation by state and federal agencies regulating public utilities
and which may involve competitive and other factors not previously experienced
by the Company. Diversification involves risks and there can be no assurance
that any new businesses will be successful or, if unsuccessful, that they will
not have a direct or indirect adverse effect on WPS Resources. Losses incurred
by any such businesses will not be recoverable in utility rates. Wisconsin law,
however, does limit the amount of assets of all nonutility affiliates in a
holding company system and effectively limits the nonutility businesses which
can be pursued by the proposed holding company system to those which are related
to the utility business of the Company or energy conservation or energy
resources or which otherwise benefit the service territory of the Company. See
"PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING -- Reasons for Share
Exchange and Corporate Restructuring; -- Regulation -- Wisconsin Holding Company
Act."
2.__RECOURSE TO COMPANY ASSETS.__In the event of liquidation or bankruptcy
of the Company or WPS Resources following the Share Exchange and Corporate
Restructuring, the rights of shareholders of WPS Resources to the assets of the
Company will be subordinate to the rights of creditors and holders of preferred
stock of the Company, as would presently be the case, and also to the rights of
any creditors of WPS Resources to the extent that the obligations to such
creditors were not satisfied out of the assets of WPS Resources or its
nonutility subsidiaries.
3.__ADDITIONAL AUTHORIZED SHARES OF WPS RESOURCES COMMON STOCK.__Following
the Share Exchange, WPS Resources will have approximately 76,103,000 authorized
and unissued shares of Common Stock (68,000,000 shares more than the presently
authorized but unissued Company Common Stock). The authorized but unissued WPS
Resources Common Stock may be issued from time to time upon such terms and for
such consideration as may be determined by the board of directors of WPS
Resources and without further action by the Public Service Commission of
Wisconsin or (except as otherwise required by stock exchange rules) by the
shareholders of WPS Resources. Such shares may be issued for financing
acquisitions, possible future employee benefit plans, stock splits, stock
dividends and other purposes which could include action which may have the
effect of discouraging takeover proposals for WPS Resources. See "PROPOSED SHARE
EXCHANGE AND CORPORATE RESTRUCTURING -- Restated Articles of Incorporation and
By-Laws of WPS Resources."
4.__AMENDMENT OF THE RESTATED ARTICLES OF INCORPORATION OF WPS
RESOURCES.__The shareholder vote requirement for amendment of the Restated
Articles of Incorporation of WPS Resources will, except with respect to Article
5 thereof (see "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Description of WPS Resources Common Stock -- Voting Rights"), be the requirement
generally provided under the current Wisconsin Business Corporation Law -- I.E.,
the affirmative vote of a majority of the votes cast by holders of WPS Resources
Common Stock at a meeting at which a quorum exists. Amendments to the Company's
Restated Articles of Incorporation generally require the affirmative vote of
two-thirds of the Company's Common Stock and in certain instances, of the
Company's preferred stock. The lower voting requirement applicable to WPS
Resources will facilitate the adoption of amendments to its Articles of
Incorporation, including amendments which some of its shareholders may oppose,
such as provisions which may have the effect of discouraging takeover proposals
for WPS Resources. See "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Restated Articles of Incorporation and By-Laws of WPS Resources." The Wisconsin
Business Corporation Law, however, itself contains various provisions which may
have the effect of discouraging hostile takeover attempts, and no amendments to
the Restated
9
<PAGE>
Articles of Incorporation are presently contemplated by the Company's Board or
management. See "PROPOSED SHARE EXCHANGE AND CORPORATE RESTRUCTURING --
Description of WPS Resources Common Stock -- Certain Statutory and Other
Provisions."
5.__POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE ARTICLES OF
INCORPORATION AND BY-LAWS OF WPS RESOURCES.__The Articles of Incorporation and
By-Laws of WPS Resources contain provisions which could have the effect, among
others, of discouraging takeover proposals or impeding a business combination
with a major shareholder -- I.E., provisions providing for a classified board of
directors, limiting the rights of shareholders to remove directors and
permitting the issuance of additional shares of common stock without further
shareholder approval except as required by stock exchange rules. The Articles of
Incorporation and By-Laws of the Company contain identical provisions except
that as noted in paragraph 3 above, WPS Resources has a greater number of
authorized shares than does the Company. See "PROPOSED SHARE EXCHANGE AND
CORPORATE RESTRUCTURING -- Restated Articles of Incorporation and By-Laws of WPS
Resources."
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Company's Board for the Annual Meeting of Shareholders to be held
on Thursday, May 5, 1994 at 10:30 A.M., Green Bay Time, at the Midway Motor
Hotel, 780 Packer Drive, Green Bay, Wisconsin and at any adjournment thereof
("Meeting") for the purposes set forth in the Notice of Annual Meeting of
Shareholders and in this Prospectus/Proxy Statement.
Only shareholders of record as of the close of business on March 17, 1994
("Record Date") are entitled to notice of, and to vote at, the Meeting. As of
the Record Date, the Company's outstanding voting securities consisted of
23,896,962 shares of Common Stock. The record holder of each outstanding share
of Common Stock as of the Record Date is entitled to one vote per share for each
proposal submitted for consideration at the Meeting. The Notice of Annual
Meeting of Shareholders, this Proxy Statement and the accompanying form of proxy
were first mailed to shareholders on or about March 25, 1994.
A proxy, in the enclosed form, which is properly executed, duly returned to
the Company and not revoked will be voted in accordance with the instructions
contained therein. If no specification is indicated on the proxy, the shares
represented thereby will be voted FOR the indicated nominees for directors, FOR
approval of the Agreement and Plan of Share Exchange and on such other business
or matters which may properly come before the Meeting in accordance with the
best judgment of the persons named in the proxy. Execution of a proxy given in
response to this solicitation will not affect a shareholder's right to attend
the Meeting and to vote in person. Presence at the Meeting of a shareholder who
has signed a proxy does not in itself revoke a proxy. Each proxy granted may be
revoked by the person giving it at any time before the exercise thereof by
giving written notice to such effect to the Secretary of the Company, by
execution and delivery of a subsequent proxy or by attendance and voting in
person at the Meeting, except as to any matter upon which, prior to such
revocation, a vote shall have been cast pursuant to the authority conferred by
such proxy.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
No person is known by the Company to be the beneficial owner of more than 5%
of any class of the Company's voting securities. Set forth below is a tabulation
indicating, as of January 1, 1994, the shares of the Company's equity securities
beneficially owned by the five named executives in the
10
<PAGE>
Summary Compensation Table, each nominee and director and all directors and
officers of the Company as a group. No officer or director owns more than 1% of
any class of the Company's equity securities.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP (1)(2)(3)
- ------------------------------- -------------------------------------- -------------------
<S> <C> <C>
Common Stock, $4.00 Par Value Daniel A. Bollom 4,266(4)
per share J. Gus Swoboda 3,381
Richard A. Krueger 2,780(5)
Patrick D. Schrickel 1,538
Clark R. Steinhardt 3,044(6)
A. Dean Arganbright 1,700
Sister M. Lois Bush 200(7)
James L. Kemerling 400
Richard A. Bemis 1,000
Robert C. Gallagher 257
Michael S. Ariens 655(8)
Kathryn M. Hasselblad-Pascale 2,262(9)
Linus M. Stoll 7,738(10)
All directors and officers as a group 47,411(11)(12)
(23)
<FN>
- ------------------------
(1) None of the persons listed beneficially owns shares of any other class of
the Company's equity securities, except Mr. Arganbright's wife owned 10
shares of the Company's Preferred Stock 5% series ($100 par value).
(2) In each case the indicated owner has sole voting power and sole investment
power with respect to the shares shown in this column except as noted.
(3) Includes shares of common stock held in the Company's Employee Stock
Ownership Plan and Trust (ESOP).
(4) Includes 24 shares held in joint tenancy and 385 shares in survivorship
marital property.
(5) Includes 92 shares held in joint tenancy.
(6) Includes 133 shares held as custodian.
(7) Owned by Sisters of the Sorrowful Mother of which Sister M. Lois Bush is a
member.
(8) Includes 170 shares held by M&M Ariens, Inc.
(9) Includes 342 shares owned by spouse.
(10) Includes 2,439 shares owned by spouse.
(11) Includes 2,781 shares owned by spouses; 254 shares held in joint tenancy,
173 shares held as custodian and 385 shares in survivorship marital
property.
(12) Other company shares held include 12 shares of Preferred Stock, 5% series
($100 par value) and 10 shares of Preferred Stock, 5.04% series ($100 par
value).
</TABLE>
11
<PAGE>
NOMINEES FOR ELECTION AS DIRECTORS
Pursuant to the Restated Articles and the By-Laws of the Company the Board
of Directors consists of nine directors and is divided into three classes of
three directors each, with one class being elected each year for a term of three
years. Accordingly, it is proposed that the three nominees listed below be
elected to serve as Class C directors for three-year terms to expire at the 1997
Annual Meeting of Shareholders and upon the election and qualification of their
successors. Kathryn M. Hasselblad-Pascale and Messrs. Ariens and Stoll are
presently Class C directors whose terms expire at this year's Annual Meeting,
and who have been nominated for re-election.
Directors are elected by a plurality of the votes cast by the holders of the
Company's Common Stock at a meeting at which a quorum is present. "Plurality"
means that the individuals who receive the largest number of votes cast are
elected as directors up to the maximum number of directors to be chosen at the
meeting. Consequently, any shares not voted (whether by abstention, broker
nonvote or otherwise) have no impact in the election of directors except to the
extent the failure to vote for an individual results in another individual
receiving a larger number of votes. Under Wisconsin law, cumulative voting for
directors is permitted but is not presently provided for in the Company's
Restated Articles of Incorporation.
Certain information about the three nominees for such directorships is set
forth below. It is intended that the proxies solicited on behalf of the Board
will be voted for the following nominees, each of whom beneficially owned,
unless otherwise noted, the indicated number of shares of Common Stock on
January 1, 1994. The Board has no reason to believe that any of these nominees
will be unable or unwilling to serve as directors if elected, but if any nominee
should be unable or unwilling to serve, the shares represented by proxies
solicited by the Board will be voted for the election of such other person as
the Board may recommend in place of such nominee.
NOMINEES -- CLASS C -- TERM EXPIRING IN 1997
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------------- --- ---------------------------------------------------------- -----------
<S> <C> <C> <C>
Michael S. Ariens (1)(2)(3) 62 Chairman, Ariens Company, Brillion, WI (manufacturer of 1974
outdoor power equipment)
Kathryn M. Hasselblad-Pascale (1)(3) 46 Partner and General Manager, Hasselblad Machine Company, 1987
Green Bay, WI (manufacturer of automatic screw machine
products)
Linus M. Stoll (1)(2)(3) 68 Retired Chairman and Chief Executive Officer of the 1987
Company, Green Bay, WI
<FN>
- ------------------------
(1) Member of Audit Committee.
(2) Member of Strategic Action Planning Committee.
(3) Member of Nominating Committee.
</TABLE>
Each of the nominees has served in the same or another position with the
employer indicated for at least five years.
12
<PAGE>
The following table sets forth certain information about Class A and Class B
directors who are not standing for election in 1994.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------------- --- ---------------------------------------------------------- -----------
<S> <C> <C> <C>
CLASS A -- TERM EXPIRING IN 1995
Richard A. Bemis (1)(3) 52 President, Bemis Manufacturing Company, Sheboygan, WI 1983
(manufacturer of toilet seats, contract plastics and wood
products)
Daniel A. Bollom 57 President and Chief Executive Officer of the Company 1989
Robert C. Gallagher (1)(4) 55 Chairman and President, Associated Bank, 1992
Green Bay, WI, Executive Vice President, Associated
Banc-Corp
CLASS B -- TERM EXPIRING IN 1996
A. Dean Arganbright (1)(2)(4) 63 Retired Chairman, President and Chief Executive Officer, 1972
Wisconsin National Life Insurance Company, Oshkosh, WI
Sister M. Lois Bush, SSM (1)(2) 49 President and Chief Executive Officer of SSM -- Ministry 1993
Corporation (operator of hospitals and health related
facilities in Wisconsin, Iowa and Minnesota)
James L. Kemerling (1)(4) 54 President and Chief Executive Officer, Shade/ Allied Inc., 1988
Green Bay, WI (manufacturer of business forms)
<FN>
- ------------------------
(1) Member of Audit Committee.
(2) Member of Strategic Action Planning Committee.
(3) Member of Nominating Committee.
(4) Member of Compensation Committee.
</TABLE>
------------------------
Each of the Class A and Class B directors has served in the same or another
position with the employer indicated for at least five years.
Other directorships held by the directors include the following:
Richard A. Bemis -- W. H. Brady Company, Milwaukee, WI
Daniel A. Bollom -- Prime Federal Bank, DePere, WI
Robert C. Gallagher -- Associated Banc-Corp, Green Bay, WI
Michael S. Ariens -- David White, Inc., Germantown, WI
-- Milwaukee Insurance Group, Inc., Milwaukee, WI
During 1993, the Board met 11 times. All directors attended more than 75% of
the total number of meetings, including meetings of committees of which they are
members.
Nonemployee director remuneration consists of a monthly fee of $975, $700
for each Board meeting attended and $200 for each telephonic meeting. Employee
directors receive no compensation for their services as directors.
13
<PAGE>
The Audit Committee, which includes all nonemployee directors, met two times
during 1993. Its duties and responsibilities include, but are not necessarily
limited to, the following:
(1) To recommend annually a firm of independent public accountants.
(2) To approve the services to be performed by the independent public
accountants.
(3) To review the reports and comments of the audit services department
and independent public accountants and to recommend such action as is
appropriate to the Board.
Each member of the Audit Committee receives $600 for each meeting attended.
The Compensation Committee, which is composed of three nonemployee
directors, met two times during 1993. Its function is to recommend to the Board
the compensation to be paid to officers and selected managerial personnel. Each
member receives $600 for each meeting attended.
The Nominating Committee, which consists of four nonemployee directors,
recommends to the Board candidates to be nominated for election as directors at
the annual meeting and to fill any vacancies on the Board. The Nominating
Committee met one time in 1993. Each member receives $600 for each meeting
attended. The Nominating Committee will consider suggestions from all sources,
including shareholders, regarding possible candidates for director. Such
suggestions, together with appropriate biographical information, should be
submitted to the Secretary of the Company no later than November 1, in order to
be considered for the annual meeting in the following year.
The Strategic Action Planning Committee, which consists of four nonemployee
directors, reviews and provides input into the Company's Strategic Plans. The
Strategic Action Planning Committee met one time in 1993. Each member receives
$600 for each meeting attended.
------------------------
Based solely on a review of statements of beneficial ownership and of
changes therein furnished to the Company during and with respect to the 1993
calendar year and written representations made to the Company, the management of
the Company has concluded that no person who at any time during 1993 was a
director or officer of the Company failed to file with the Securities and
Exchange Commission on a timely basis reports of beneficial ownership of the
Company's securities required by Section 16(a) of the Securities and Exchange
Act of 1934, as amended, except that during 1993 three officers of the Company,
Patrick D. Schrickel, Robert H. Knuth and Bernard J. Treml each inadvertently
failed to file one such report on a timely basis. Reports were subsequently
filed by Mr. Schrickel relating to a sale by him of 212 shares of Company common
stock, by Mr. Knuth with respect to the redemption by the Company of 10 shares
of Company preferred stock owned by him and by Mr. Treml who became custodian
for his daughter of 40 shares of Company common stock through the settlement of
an estate.
14
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following tabulation shows the compensation of each of the Company's
five most highly compensated executive officers whose compensation exceeded
$100,000.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------------
ANNUAL COMPENSATION (1) AWARDS PAYOUT
-------------------------------- ----------------------------- ------------
(E) (G)
(A) OTHER (F) SECURITIES (I)
NAME AND ANNUAL RESTRICTED UNDERLYING (H) ALL OTHER
PRINCIPAL (B) (C) (D) COMPENSATION STOCK OPTIONS/ LTIP COMPENSATION
POSITION YEAR SALARY ($) 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>
15
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
WISCONSIN PUBLIC SERVICE CORPORATION (WPSC),
S&P 500 INDEX AND EDISON ELECTRIC INSTITUTE 100 INDEX (EEI INDEX (2))
[GRAPHIC]
Assumes $100 invested on December 30, 1988 in WPSC Common Stock, S&P 500 Index &
EEI Index
(1) Total return assumes reinvestment of dividends.
(2) The Companies included in the EEI Index are the following:
Allegheny Power System, Inc
American Electric Power, Inc
Atlantic Energy, Inc
Baltimore Gas & Elec Co
Bangor Hydro-Elec Co
Black Hills Corp
Boston Edison Co
Carolina Power & Light Co
Centerior Energy Corp
Central & South West Corp
Central Hudson Gas & Elec
Central Louisiana Electric Co, Inc
Central Maine Power Co
Central Vermont Pub Serv Corp
Cilcorp Inc
Cincinnati Gas & Elec Co
Cipsco Inc
CMS Energy Corp
Commonwealth Edison Co
Commonwealth Energy System
Consolidated Edison Co of NY
Delmarva Power & Light Co
Detroit Edison Co
Dominion Resources, Inc
DPL Inc
DQE Inc
Duke Power Co
Eastern Utilities Assoc
El Paso Electric Co
Empire District Electric Co
Entergy Corp
Eselco Inc
Florida Progress Corp
FPL Group, Inc
General Public Utilities Corp
Green Mountain Power Corp
Gulf States Utilities Co
Hawaiian Electric Inds, Inc
Houston Industries, Inc
Idaho Power Co
IES Industries Inc
Illinois Power Co
Interstate Power Co
Iowa-Illinois Gas & Elec Co
Ipalco Enterprises Inc
Kansas City Power & Light Co
KU Energy Corp
LG&E Energy Corp
Long Island Lighting Co
Madison Gas & Electric Co
Maine Public Service Co
Midwest Resources Inc
Minnesota Power
Montana Power Co
Nevada Power Co
New England Electric System
New York State Elec & Gas Corp
Niagara Mohawk Power Corp
NIPSCO Industries, Inc
Northeast Utilities
Northern States Power Co
Northwestern Public Service Co
Ohio Edison Co
Oklahoma Gas & Electric Co
Orange & Rockland Utilities, Inc
Otter Tail Power Co
16
<PAGE>
Pacific Gas & Electric Co
Pacificorp
Pennsylvania Power & Light Co
Philadelphia Electric Co
Pinnacle West Capital Corp
Portland General Corp
Potomac Electric Power Corp
PSI Resources, Inc
Public Service Co of Colorado
Public Service Co of New Mexico
Public Service Enterprise Group
Puget Sound Power & Light Co
Rochester Gas & Electric Corp
San Diego Gas & Electric Co
Scana Corp
SCECORP
Sierra Pacific Resources
Southern Company
Southern Indiana Gas & Electric Co
Southwestern Public Service Co
St Joseph Light & Power Co
Teco Energy Inc
Texas Utilities Co
TNP Enterprises Inc
Tucson Electric Power Co
Union Electric Co
United Illuminating Co
Unitil Corp
Upper Peninsula Energy Corp
Utilicorp United
Washington Water Power Co
Western Resources
Wisconsin Energy Corp
Wisconsin Public Service Corp
WPL Holdings Inc
Southwestern Electric Power Company (SEP) was included in the EEI Index for
1992. SEP merged with Southwestern Public Service Company which continues to be
part of the EEI Index.
BOARD COMPENSATION COMMITTEE REPORT
The Board Compensation Committee in 1993 addressed, during one meeting, the
compensation of the President and CEO and the executive officers. In 1993,
management introduced a new pay plan applicable to all executive,
supervisory/professional and administrative employees. The new pay plan is
designed to support the Company's vision and mission statements and its
commitment to a quality management philosophy. The key attributes of the new pay
process are:
- An employee development process which is based on continuous process
improvement replaced an individual performance rating system.
- Pay levels are market driven with the pay advancement based on each
employee's relationship to the average market rate of the assigned pay
grade. The average market rates are based on median base salaries reported
to the Edison Electric Institute by utilities with revenue levels
comparable to that of the Company.
- The formula used to bring executives who are either above or below the
market rate to their market target rate, has a maximum of a 10 year
horizon. Thus those farther below the market target rate receive a larger
salary increase than those closer to the target rate.
The President and CEO is currently at 80% of his market rate. Based on the
new plan formula, an annual salary of $269,220 was approved, as of October 1,
1993. A $269,220 annual salary is 82% of the median base salary of chief
executive officers reported to the Edison Electric Institute, by utilities of
revenue levels comparable to that of the Company. It should be noted that many
of these reporting utilities are members of the EEI Index group listed in Note 2
to the Comparison of Five Year Cumulative Total Return Table set forth above.
The composition of the two groups, however, is not identical.
A. Dean Arganbright
Robert C. Gallagher
James L. Kemerling
17
<PAGE>
BENEFIT PLANS
An unfunded deferred compensation plan of the Company provides a
supplemental retirement benefit for each of the five named senior officers. Each
of these individuals will receive, if employed by the Company at the time of
retirement, as deferred compensation upon retirement, monthly payments equal to
20% of the highest average monthly compensation received during any 36
consecutive months prior to age 65. Such payments are to continue for ten years
after retirement. If the individual dies during the ten year period, the
surviving spouse would receive 50% of such payments for the remainder of the
period. If the individual dies while in the Company's employ the surviving
spouse would receive 50% of similarly calculated deferred compensation for a
ten-year period. The payments terminate if neither the individual or spouse
survives and are forfeited if the individual does anything which reflects
adversely on the Company or refuses to perform advisory or consulting services
when reasonably requested.
The following table indicates various annual benefits payable during the
ten-year period to each of the five named senior officers under his supplemental
retirement benefit agreement:
<TABLE>
<CAPTION>
HIGHEST AVERAGE MONTHLY COMPENSATION
RECEIVED DURING ANY 36 CONSECUTIVE MONTHS
PRIOR TO AGE 65 ANNUAL BENEFITS PAYABLE
- ----------------------------------------- -----------------------------------------
<S> <C>
$ 12,000 $ 28,800
13,000 31,200
14,000 33,600
15,000 36,000
16,000 38,400
17,000 40,800
18,000 43,200
19,000 45,600
20,000 48,000
21,000 50,400
22,000 52,800
23,000 55,200
24,000 57,600
25,000 60,000
26,000 62,400
</TABLE>
The Company's Administrative Employees' Retirement Plan ("Plan"), under
which executive officers are included, is a noncontributory defined benefit plan
under which contributions on behalf of a specified participant cannot be
individually calculated. Since the Plan is in a fully funded position, no
contributions were made to it in 1993. Straight life benefits at normal
retirement age 65 (with a 50% benefit payable to a surviving spouse, actuarily
reduced for any age differences) are determined by the average of the five
highest consecutive years compensation in the last ten years times 55% times
years of service up to 35 divided by 35, plus 1/2% of such average compensation
times years of service exceeding 35, less an offset for a portion of Social
Security benefits. Employees who were employed prior to 1982 would qualify for
the higher of the current pension formula or a grandfathered formula which is
1 1/2% of the final average pay times years of service limited by 50% of final
average pay less a Social Security offset. It should be noted that Social
Security integration rules under Tax Reform Act of 1986 have not affected the
pension formula since nondiscrimination tests have been met. The following table
shows the annual retirement benefits payable at the normal retirement age of 65
for specified remunerations and years of service under the provisions of the
Plan in effect December 31, 1993, and assuming retirement on that date:
18
<PAGE>
PENSION PLAN TABLE
ANNUAL RETIREMENT BENEFITS AT
NORMAL RETIREMENT AGE OF 65 YEARS
FOR YEARS OF SERVICE INDICATED
<TABLE>
<CAPTION>
AVERAGE ANNUAL
REMUNERATION
HIGHEST 5
YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -------------- --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 150,000 $ 33,750 $ 45,000 $ 56,250 $ 67,500 $ 75,732
160,000 36,000 48,000 60,000 72,000 81,232
170,000 38,250 51,000 63,750 76,500 86,732
180,000 40,500 54,000 67,500 81,000 92,232
190,000 42,750 57,000 71,250 85,500 97,732
200,000 45,000 60,000 75,000 90,000 103,232
210,000 47,250 63,000 78,750 94,500 108,732
220,000 49,500 66,000 82,500 99,000 114,232
230,000 51,750 69,000 86,250 103,500 119,732
240,000 54,000 72,000 90,000 108,000 125,232
250,000 56,250 75,000 93,750 112,500 130,732
260,000 58,500 78,000 97,500 117,000 136,232
270,000 60,750 81,000 101,250 121,500 141,732
</TABLE>
Compensation for benefit calculation by the Plan differs from the amounts in
the annual compensation columns of the Summary Compensation Table for all five
executive officers named. Messrs. Bollom, Swoboda, Krueger, Schrickel and
Steinhardt had 1993 pensionable compensation of $276,479, $158,790, $158,496,
$151,101, and $148,228, respectively. (The maximum 1993 compensation that may be
considered for purposes of the Plan is $235,840.) Messrs. Bollom, Swoboda,
Krueger, Schrickel and Steinhardt have credited service under the Plan as of
December 31, 1993 of 36, 35, 33, 28, and 26 years, respectively. Benefit amounts
in the table have been reduced for Social Security offsets.
The annual benefits payable from the Plan are subject to a maximum
limitation (for 1993 $115,641) under Internal Revenue Code Section 415. In
addition, the amount of compensation considered for purposes of the Plan is
limited (for 1993, $235,840) under Internal Revenue Code Section 401(a)(17). The
Company has unfunded retirement benefit supplement agreements with the five
executives named in the Summary Compensation Table, which provide for additional
monthly payments equal to any loss of benefit payments under the Plan caused by
the maximum benefit or compensation limitations and/or the election of deferral
of compensation under the unfunded deferred compensation plan referred to above.
Amounts were accrued during 1993 for the unfunded future payment provided for by
the retirement plan supplement agreements. These additional payments are to be
made only while the employee or surviving spouse receives a monthly benefit from
the Plan. Benefit amounts shown in the table include payments to the employee
under the Plan and the additional payments for loss of Plan benefits as
described in this paragraph.
19
<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]
20
<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 and may
in the future undertake similar activities with respect to electric energy. The
Company is currently in the process of pursuing the licensing for a 120 megawatt
electric and steam cogenerating plant to be built on the premises of Rhinelander
Paper Company in Rhinelander, Wisconsin. In conjunction with that proposed
project, the Company expects to propose establishment
21
<PAGE>
of one or more special purpose corporate subsidiaries of the utility to hold
title to and finance the steam and electric components of the project. The
affiliate owning the steam facilities will be a non-utility, unregulated
business, while the utility or non-utility status of the affiliate owning the
electric facilities is uncertain. Although the Company currently has no specific
plans to establish other non-utility, unregulated business, such business when
developed would also primarily be carried out by corporate affiliates separate
from the Company.
Under Wisconsin law and PSCW regulations, the Company as a utility may
transfer funds to an affiliate only so long as the transfer leaves the utility's
equity within an acceptable range, currently set by the PSCW to between 47% and
52%. The Company's equity currently constitutes approximately 54% of its total
capitalization as measured in a rate proceeding. All transfers by the utility to
the affiliate are deemed to be transfers of equity. A utility is not permitted
by the PSCW to issue securities to raise capital for any non-utility purposes.
If new non-utility business opportunities develop which require anything more
than nominal equity investments, the Company with its current corporate
structure would not have access to the security markets to raise additional
capital which may be necessary to pursue non-utility investments.
As noted above, except for the proposed energy consulting and gas brokerage
business of Packerland, possible future electric energy consulting and brokerage
activities and the Rhinelander electric and steam cogeneration plant proposal
presently under consideration, the Company has no current specific plans to
establish new non-utility affiliates. Any investments in non-utility businesses
would be subject to prior approval of the WPS Resources Board, would be pursued
only if perceived rewards were projected to exceed perceived risks and would be
subject to restrictions on size and economic impact by Wisconsin law. See
"Regulation -- Wisconsin Holding Company Act." The Board believes, however, that
changes in the industry and investment opportunities requiring the proposed
Corporate Restructuring will occur without sufficient advance notice to permit a
reorganization initiated at that time and a timely response to the opportunity.
The Board is of the view that a holding company structure will better
facilitate the deployment of any portion of the Company's earnings which are not
required for reinvestment in the utility business, as well as the deployment of
capital which might be raised by a non-utility holding company for non-utility
purposes.
In the Board's view, Corporate Restructuring will increase opportunities to
diversify into businesses which are related to the utility business of the
Company or energy conservation or energy resources or which otherwise benefit
the service territory of the company that will develop with the changing utility
industry but which will not be regulated as public utilities. Financing
alternatives may also be enhanced as a result of engaging in a greater number of
businesses. Diversification that succeeds in promoting employment and commerce
in the areas served by the Company may benefit the Company and its customers, as
well as the shareholders, in other ways. Diversification does, however, involve
risks, and there can be no assurance that any new businesses will be successful
or, if unsuccessful, that they will not have a direct or indirect adverse effect
on the holding company system as a whole despite the separations afforded by the
holding company structure. See "SPECIAL CONSIDERATIONS -- Diversification"
above.
The holding company structure is designed generally to insulate the
customers of the Company and the public holders of the Company's securities from
the risks of the non-utility businesses by segregating the non-utility
businesses into separate corporations that will be direct or indirect
subsidiaries of the holding company and not of the Company. Because non-utility
businesses of the holding company will be conducted through separate
subsidiaries, any liabilities incurred by those subsidiaries will generally not
constitute liabilities of the utility subsidiaries. The corporate separation
also insures that all costs of a particular non-utility subsidiary will be
charged to that subsidiary and not allocated to any utility subsidiary. This
type of cost allocation is in keeping with requirements of the Wisconsin Holding
Company Act as described under "Regulation -- Wisconsin Holding Company Act."
Thus, the corporate structure and the regulatory requirements provide for the
insulation of
22
<PAGE>
customers of the Company from risks of the non-utility businesses. Likewise, the
preferred shareholders and debt security holders of the Company after the
Corporate Restructuring will generally be insulated from the risks of the
non-utility businesses. Any benefits or detriments which result from the
Corporate Restructuring and consequent segregation of the utility and
non-utility businesses will flow to the security holders of WPS Resources and
not to the public security holders of the Company (I.E., the owners of the
Company's preferred stock and debt securities). See "SPECIAL CONSIDERATIONS --
Recourse to Company Assets" above. After the Corporate Restructuring, the
separate financial statements prepared for the Company will not reflect the
non-utility businesses which may be owned by non-utility subsidiaries of WPS
Resources. The consolidated financial statements of WPS Resources will not
reflect the financial condition of any group of subsidiaries taken separately
but will reflect the overall operations of all subsidiaries, including the
Company.
The holding company structure is intended to afford additional flexibility
for maintaining the capital ratios of the Company at levels determined to be
appropriate by regulatory authorities. This ability to adjust the components of
the capital structure of the Company will help the Company maintain stable
utility rates. One component of utility rates is cost of capital. Equity capital
is the most expensive type of capital and if the equity component of a utility's
capital structure is too high it may result in increasing pressure to raise
rates. If the equity component is too low it may result in increases in the cost
of debt because of increased leverage and risk which will also tend to increase
rates. Under the holding company structure, capital ratios of the utility would
be subject to adjustment from time to time through dividends to, or equity
investments from, the holding company.
Financing alternatives are expected to be improved by the holding company
structure in that the planning of financings best suited to the particular needs
and circumstances of the separate businesses should be facilitated. It is
contemplated that in the normal course WPS Resources, in addition to receiving
dividends from its subsidiaries, will obtain funds through debt or equity
financings, that the Company will obtain funds through its own financings (which
may include the issuance of additional debt such as first mortgage bonds or
preferred stock, as well as the issuance of additional shares of its common
stock to WPS Resources), and that the businesses owned by non-utility
subsidiaries of WPS Resources will obtain funds from WPS Resources, from other
non-utility affiliates, or from their own outside financings. Any financings
will depend on the financial and other conditions of the entities involved and
on market conditions.
The Wisconsin Holding Company Act (Section 196.795, Wisconsin Statutes),
under which the PSCW must approve the proposed Corporate Restructuring, provides
that the maintenance of a financially healthy utility is contingent upon the
maintenance of an economically healthy service area and that the public interest
and the interest of investors and consumers can be benefitted if public utility
holding companies, in the service territories of their public utility affiliates
or in Wisconsin, conduct substantial business activities, attract new
businesses, expand existing businesses, provide investment capital for new
business ventures, and otherwise directly or indirectly promote employment and
commerce. The Corporate Restructuring is proposed by the Board with a view
toward implementation of those goals and the other purposes indicated above.
The Board intends that the utility operations of the Company will continue
to constitute the predominant activity of the holding company system for the
foreseeable future and that there be no capital impairment of the Company and no
adverse effect on the Company's levels of service as a result of the Corporate
Restructuring. This intention accords with the limitations and other provisions
in the Wisconsin Holding Company Act. See "Regulation -- Wisconsin Holding
Company Act."
THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST TWO-THIRDS OF THE
OUTSTANDING COMMON STOCK OF THE COMPANY IS REQUIRED FOR THE APPROVAL OF THE
PLAN. THE PLAN WILL NOT BECOME EFFECTIVE, AND THE SHARE EXCHANGE WILL NOT TAKE
PLACE UNLESS SUCH APPROVAL IS OBTAINED. APPROVAL OF THE PLAN BY THE
23
<PAGE>
HOLDERS OF THE COMPANY'S PREFERRED STOCK IS NOT REQUIRED. ABSTENTIONS AND BROKER
NON-VOTES WILL HAVE THE SAME EFFECT AS VOTES AGAINST APPROVAL OF THE PLAN.
THE BOARD RECOMMENDS APPROVAL OF THE PLAN AND URGES EACH HOLDER OF COMPANY
COMMON STOCK TO VOTE "FOR" APPROVAL OF THE PLAN. PROXIES WHICH ARE EXECUTED BUT
DO NOT INDICATE HOW THE PROXIES ARE TO BE VOTED ON THE PLAN WILL BE VOTED "FOR"
APPROVAL OF THE PLAN.
TERMS OF SHARE EXCHANGE AND CORPORATE RESTRUCTURING
The Plan has been unanimously approved by the Boards of the Company and WPS
Resources. Pursuant to the Plan:
(1) One share of WPS Resources Common Stock will be exchanged for each
share of Company Common Stock outstanding at the effective time.
(2) The outstanding shares of WPS Resources Common Stock held by the
Company prior to the effective time of the Share Exchange (the "Effective
Time") will be cancelled.
As a result of the foregoing, the Company will become a subsidiary of WPS
Resources, and all of the WPS Resources Common Stock outstanding immediately
after the Effective Time will be owned by the former common shareholders of the
Company. Immediately following the Effective Time, the Company will transfer to
WPS Resources, all of the outstanding shares of common stock of Packerland and
Communications.
Holders of Company Common Stock will not be required to exchange their
certificates for Company Common Stock. After the Effective Time, stock
certificates representing shares of Company Common Stock will be deemed for all
purposes to represent shares of WPS Resources Common Stock. See "Exchange of
Stock Certificates Not Required."
PREFERRED STOCK AND DEBT SECURITIES OF THE COMPANY
The outstanding preferred stock, first mortgage bonds and any other debt
securities of the Company will not be included in, or altered by, the Share
Exchange and Corporate Restructuring. Such securities will remain outstanding
and will continue to be securities of the Company. The first mortgage bonds will
continue to be secured by a first mortgage lien on substantially all of the
fixed properties of the Company.
The Board's decision that the preferred stock should continue as securities
of the Company is based upon, among other factors, a desire to avoid changing
the nature of the investment represented by such stock. The utility operations
of the Company presently constitute, and are expected to constitute for the
foreseeable future, substantially all of WPS Resources' consolidated assets and
earning power. Accordingly, it is believed that the preferred stock will retain
its investment rating, as well as its qualification for legal investment, by
remaining a security of the Company.
Preferred stock of the Company will continue to rank senior to the common
stock of the Company as to dividends and as to assets of the Company in the
event of any liquidation of the Company. The preferred stock of the Company is
and will be unrelated in rank to the common stock of WPS Resources. Payment of
dividends on common stock of WPS Resources will in large part depend on earnings
of the Company and payment of dividends on Company Common Stock to WPS Resources
as the sole holder thereof. The Company's Restated Articles of Incorporation
provide that no dividends may be paid on Company Common Stock unless dividends
on the preferred stock of the Company for all past quarterly dividend periods
have been paid or funds for the payment thereof set aside. Payment of any
dividends on the common stock of any other subsidiary of WPS Resources will be
unaffected by any dividend payment or non-payment on either Company Common Stock
or preferred stock.
24
<PAGE>
Following the Corporate Restructuring, the Company will continue to be a
reporting company under the Securities Exchange Act of 1934. After the Corporate
Restructuring, the Company will solicit proxies from holders of preferred stock
only in connection with matters requiring a class vote of holders of preferred
stock.
DIVIDENDS ON WPS RESOURCES COMMON STOCK
Subject to the availability of earnings and the needs of its utility
business, the Company intends to make regular cash payments to WPS Resources in
the form of dividends on then outstanding shares of Company Common Stock in
amounts which, to the extent not otherwise provided by other subsidiaries of WPS
Resources, will provide WPS Resources with moneys sufficient to enable it to pay
cash dividends on WPS Resources Common Stock and to meet operating and other
expenses. Except for such cash dividend payments, it is not anticipated that the
Company will, without consideration, make transfers of assets to WPS Resources
or to the other subsidiaries of WPS Resources, following completion of the
Corporate Restructuring. Initially, it is expected that substantially all of the
funds required by WPS Resources to pay dividends on its common stock will be
derived from dividends paid by the Company on its common stock. The quarterly
dividend most recently declared by the Board was $.44 1/2 per common share
payable March 19, 1994 to holders of record of Company Common Stock on February
28, 1994.
Future dividends on WPS Resources Common Stock and on equity securities of
its subsidiaries will depend upon the respective earnings, financial conditions
and other factors of such companies. Quarterly dividends on WPS Resources Common
Stock are expected to commence at a rate equal to that currently being paid on
Company Common Stock and are expected to be paid on approximately the same dates
in each year as dividends on Company Common Stock have been paid.
The payment of dividends on the Company's preferred stock is expected to
continue at the specified rates without interruption or change. The Company's
Restated Articles of Incorporation contain covenants which could, in the future,
affect the Company's ability to pay cash dividends on, or to acquire, its common
stock. As previously described, dividends on Company Common Stock may be paid
only when all cumulative dividends on the preferred stock have been paid or
funds for the payment set aside. The Company's Restated Articles of
Incorporation also contain limitations on dividends payable on Company Common
Stock tied to current earnings and capitalization if the portion of the
Company's total capital represented by Company Common Stock and surplus is less
than 25% (the "capitalization ratio"). The Company's current capitalization
ratio is approximately 54% and therefore these limitations are not currently
operative.
These limitations will not be altered by the proposed Share Exchange and
Corporate Restructuring. See "Regulation -- Wisconsin Holding Company Act"
regarding statutory limitations on payment of dividends by Wisconsin utility
companies to their holding company parents.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Company and WPS Resources have been advised by their counsel Foley &
Lardner, Milwaukee, Wisconsin that, in the opinion of Foley & Lardner, for
federal income tax purposes:
(i) No gain or loss will be recognized by the owners of Company Common
Stock upon the exchange of such stock for WPS Resources Common Stock
pursuant to the Plan;
(ii) The basis of WPS Resources Common Stock to be received by the
owners of Company Common Stock pursuant to the Plan will be the same as
their basis in Company Common Stock exchanged;
(iii) The holding period of WPS Resources Common Stock to be received by
the owners of Company Common Stock in connection with the Plan will include
the period during which Company Common Stock being exchanged was held,
provided that Company Common Stock is held as a capital asset in the hands
of the shareholder at the Effective Time;
(iv) No gain or loss will be recognized by WPS Resources or the Company
in connection with the Share Exchange;
25
<PAGE>
(v) The affiliated group of corporations of which the Company is the
common parent immediately before the Share Exchange will continue in
existence for consolidated tax return purposes, and WPS Resources will be
the common parent of such affiliated group after the Share Exchange and
Corporate Restructuring; and
(vi) No gain or loss will be recognized by the holders of Company
preferred stock as a result of the Corporate Restructuring, and the basis
and holding period of the Company preferred stock will not change.
The Company understands that it is the present policy of the Internal
Revenue Service not to issue rulings to the foregoing effect in transactions
involving the formation of a holding company. Accordingly, rulings will not be
requested from the Internal Revenue Service in connection with Corporate
Restructuring.
The foregoing discussion does not cover the tax consequences of the Share
Exchange under state income or other tax laws. Each shareholder of the Company
is urged to consult with his own tax advisor with respect to the effects of such
laws.
NEW YORK AND CHICAGO STOCK EXCHANGE LISTINGS
At the Effective Time of the Share Exchange, Company Common Stock will no
longer meet the requirements for listing on the New York Stock Exchange because
all Company Common Stock will be held by one shareholder, WPS Resources. WPS
Resources will apply to list WPS Resources Common Stock on the New York Stock
Exchange and Chicago Stock Exchange. It is expected that the listing will be
effective as of the Effective Time. As a practical matter, current owners of
Company Common Stock will continue to be able to sell their shares of Company
Common Stock (or, after the Effective Time, WPS Resources Common Stock) on the
New York Stock Exchange and Chicago Stock Exchange without interruption. Stock
certificates representing shares of Company Common Stock will at the Effective
Time be deemed for all purposes to represent shares of WPS Resources Common
Stock. Holders of Company Common Stock will not be required to exchange their
stock certificates. See "Exchange of Stock Certificates Not Required."
DIVIDEND REINVESTMENT AND EMPLOYEE BENEFIT PLANS
If the Share Exchange is consummated, no shares of Company Common Stock will
thereafter be available for issuance under the Company's Dividend Reinvestment
and Stock Purchase Plan, or under the Company's Employee Stock Ownership Plan
("ESOP"). Shares of Company Common Stock held by the ESOP at the Effective Time
will automatically be exchanged for WPS Resources Common Stock.
Accordingly, WPS Resources will adopt a plan (the "Reinvestment Plan") which
will provide for purchases of WPS Resources Common Stock with reinvested
dividends on WPS Resources Common Stock and with optional cash payments. The
Reinvestment Plan will be similar to the Company's existing Dividend
Reinvestment and Stock Purchase Plan. All participants in the Company's Dividend
Reinvestment and Stock Purchase Plan will be provided with appropriate
information relating to the Reinvestment Plan prior to consummation of the Share
Exchange.
The Company's existing ESOP will be amended to allow coverage of any
eligible employees of WPS Resources and its subsidiaries and to provide for the
acquisition of WPS Resources Common Stock. The retirement and other employee
benefit plans of the Company will be revised or amended as appropriate to allow
for inclusion of any eligible employees of WPS Resources and its subsidiaries.
VOTE REQUIRED
The Plan will not become effective and the Share Exchange will not take
place unless the Plan is approved by the requisite vote of the holders of shares
of Company Common Stock. In order for the Plan to be approved under the
Wisconsin Business Corporation Law (the "WBCL"), it must receive the favorable
vote of the owners of at least two-thirds of the outstanding shares of Company
Common Stock. Accordingly, abstentions and broker non-votes will have the same
effect as votes against approval of the Plan. Approval of the Plan by the
holders of the Company's preferred stock is not required under the provisions of
Company's Restated Articles of Incorporation or the WBCL.
26
<PAGE>
APPRAISAL RIGHTS
Under the WBCL, neither the holders of Company Common Stock nor the holders
of the Company's preferred stock are entitled to appraisal rights in connection
with the Share Exchange and Corporate Restructuring (I.E., the statutory right
of a shareholder to dissent and receive payment of the fair value of his or her
shares). The Company's preferred stock is not subject to the Share Exchange and
the holders of the Company's preferred stock are not entitled under the WBCL or
under provisions of the Company's Restated Articles of Incorporation relating to
approval of certain mergers and consolidations to vote on the Plan. Although
holders of Company Common Stock are entitled to vote on the Plan, the WBCL does
not provide appraisal rights to the holders of Company Common Stock because the
Share Exchange does not constitute a business combination under the WBCL, and
appraisal rights are not provided by the WBCL for shares which on the record
date for voting on a plan of share exchange were traded on a national securities
exchange. On the Record Date for the 1994 Annual Meeting of Shareholders of the
Company, Company Common Stock was traded on the New York and Chicago Stock
Exchanges.
CONDITIONS TO CONSUMMATION OF SHARE EXCHANGE AND CORPORATE RESTRUCTURING
The Share Exchange and Corporate Restructuring will not be consummated
unless certain conditions are satisfied, including: (i) approval of the Plan by
the requisite vote of the holders of Company Common Stock; (ii) receipt of an
order from the SEC under the Public Utility Holding Company Act of 1935 (the
"Public Utility Holding Company Act"), in form and substance satisfactory to the
Company and WPS Resources, approving the acquisition either directly or
indirectly by WPS Resources of Company Common Stock and common stock of
Wisconsin River Power Company; (iii) receipt of all orders, authorizations,
consents and approvals from all regulatory bodies, boards or agencies
(including, without limitation, the FERC, and the PSCW) in form and substance
satisfactory to the Company and WPS Resources which are necessary or appropriate
for the consummation of the Share Exchange; (iv) approval for listing, upon
official notice of issuance, of WPS Resources Common Stock by the New York Stock
Exchange and the Chicago Stock Exchange; and (v) receipt of an opinion from
Foley & Lardner as to the validity of WPS Resources Common Stock to be issued in
the Exchange.
AMENDMENT OR TERMINATION OF PLAN
The Company and WPS Resources, by action of their respective Boards, may
amend, modify or supplement the Plan or waive any of the conditions described
above at any time before or after approval of the Plan by the shareholders of
the Company. No such amendment, modification, supplement or waiver may be made
or effected which, in the sole discretion of the Board, materially and adversely
affects the rights of the shareholders of the Company.
The Plan provides that it may be terminated before the Effective Time, and
the transaction abandoned, at any time, whether before or after shareholder
approval of the Plan, by action of the Boards of the Company and WPS Resources,
if the Boards determine that the consummation of the Corporate Restructuring
would be inadvisable or that any regulatory or other consents or approvals
deemed necessary or advisable by such Boards have not been obtained within a
reasonable time after approval by holders of Company Common Stock.
EFFECTIVE TIME
The Share Exchange will become effective at the time to be specified in the
Articles of Share Exchange (the "Effective Time"). The form of the Articles of
Share Exchange is attached as Schedule I to the Plan. The Effective Time will be
the close of business on the date that the Articles of Share Exchange are duly
filed in the office of the Secretary of State of the State of Wisconsin or such
later time as may be designated in the Articles of Share Exchange. The Effective
Time is expected to be on or about October 1, 1994. The filing of the Articles
of Share Exchange will be made only upon satisfaction of all the terms and
conditions in the Plan. See "Conditions to Consummation of Share Exchange and
Corporate Restructuring."
27
<PAGE>
EXCHANGE OF STOCK CERTIFICATES NOT REQUIRED
If the Share Exchange becomes effective, the holders of Company Common Stock
immediately prior to the Effective Time will automatically become owners of WPS
Resources Common Stock and, as of the Effective Time, will cease to be owners of
Company Common Stock. Stock certificates representing shares of Company Common
Stock will, at the Effective Time, be deemed for all purposes to represent
shares of WPS Resources Common Stock. Holders of Company Common Stock will not
be required to exchange their stock certificates as a result of the Share
Exchange. Should a shareholder desire to sell WPS Resources Common Stock after
the Effective Time, delivery of the stock certificate or certificates which
previously represented shares of Company Common Stock will be sufficient.
Following the Share Exchange, certificates bearing the name of WPS Resources
will be issued in the normal course upon surrender of outstanding Company Common
Stock certificates for transfer or exchange. If any shareholder surrenders a
certificate representing shares of Company Common Stock for exchange or transfer
and the new certificate to be issued is to be issued in a name other than that
appearing on the surrendered certificate theretofore representing Company Common
Stock, it will be a condition to such exchange or transfer that the surrendered
certificate be properly endorsed and otherwise be in proper form for transfer
and that the person requesting such exchange or transfer either (i) pay to WPS
Resources' transfer agent any transfer or other taxes required by reason of the
issuance of a certificate registered in a name other than that appearing on the
surrendered certificate or (ii) establish to the satisfaction of WPS Resources
or its transfer agent that such taxes have been paid or are not applicable.
DIRECTORS AND EXECUTIVE OFFICERS OF WPS RESOURCES
The WPS Resources Board of Directors (the "WPS Resources Board") consists of
nine directors divided into three classes, with one class (or one-third of the
Board) to be elected each year for a three-year term. The WPS Resources Board
consists of the same persons who are serving as directors of the Company, each
having the same term of office for which he or she was elected or appointed to
the Company Board. See "NOMINEES FOR ELECTION OF DIRECTORS."
WPS Resources executive officers are now, and upon the effectiveness of the
Corporate Restructuring are expected to be:
<TABLE>
<CAPTION>
NAME OFFICE AGE
- ---------------------- --------------------------------------- ---
<S> <C> <C>
Daniel A. Bollom President and Chief Executive Officer 57
Patrick D. Schrickel Vice President 49
Robert H. Knuth Assistant Vice President -- Secretary 60
Ralph G. Baeten Treasurer 50
</TABLE>
See "NOMINEES FOR ELECTION AS DIRECTORS" and "EXECUTIVE COMPENSATION" for
information with respect to Mr. Bollom. For information with respect to the
executive officers of the Company, see the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, which is incorporated by reference to this
Prospectus/Proxy Statement.
WPS Resources presently has no employees. Upon completion of the Share
Exchange and Corporate Restructuring, WPS Resources may hire its own employees
or utilize employees of the Company, in which case the Company will be
reimbursed by WPS Resources for any time expended by the Company's officers and
employees on the affairs of WPS Resources and its other subsidiaries. The
offices of WPS Resources will be located at the principal office of the Company,
and WPS Resources will reimburse the Company for use of office space.
Transactions between the Company and WPS Resources will be pursuant to an
affiliated interest agreement which must be approved by the PSCW.
BUSINESS OF THE COMPANY
The Company is a public utility engaged in the production, transmission,
distribution and sale of electricity and in the purchase, distribution,
transportation and sale of gas in northeastern Wisconsin and an adjacent part of
upper Michigan.
28
<PAGE>
REGULATION
GENERAL. The Company and WPS Resources have been advised by Foley &
Lardner, counsel to the Company, that, so long as WPS Resources is not a public
utility, it will not be subject, under present law, to regulation by the FERC or
the PSCW, except, to the extent described below under "Wisconsin Holding Company
Act." Following the Share Exchange and Corporate Restructuring changes in
control of WPS Resources or the Company would be subject to the jurisdiction of
the PSCW. See "Wisconsin Holding Company Act."
The Company and WPS Resources have further been advised by Foley & Lardner
that, based upon the facts and circumstances existing at the Effective Time and
subject to the terms of the Public Utility Holding Company Act and the filing of
an appropriate exemption statement, WPS Resources will be entitled to exemption
from registration and regulation as a registered public utility holding company
under the Public Utility Holding Company Act upon consummation of the Share
Exchange and Corporate Restructuring. The exemption from the registration
requirements of the Public Utility Holding Company Act is available only if the
businesses of WPS Resources and its utility subsidiary remain primarily
intrastate in nature, and such exemption may be revoked on a finding by the SEC
that exemption "may be detrimental to the public interest or the interest of
investors or consumers." Notwithstanding the availability of such exemption, the
approval of the SEC generally will be required if WPS Resources proposed to
acquire, directly or indirectly, the securities of a public utility other than
the Company. SEC approval under the Public Utility Holding Company Act of the
Share Exchange will in fact be required because the Share Exchange will result
in WPS Resources indirectly acquiring the 33.1% interest in Wisconsin River
Power Company owned by the Company. There also may be limits on the extent to
which WPS Resources and its subsidiaries could diversify without raising the
possibility that the SEC could find that such diversification was detrimental to
the public interest or the interests of investors or consumers. Although current
SEC policies allow a reasonable amount of freedom for non-utility
diversification, criteria for determining the availability of an exemption from
the Public Utility Holding Company Act are subject to change as a result of
legislation, SEC policy, rule changes and judicial and SEC decisions. There is
no present intention, however, of having WPS Resources become a registered
holding company subject to regulatory constraints imposed on such companies by
the SEC under the Public Utility Holding Company Act.
The Company will continue to be subject to the jurisdiction of the PSCW and
the Michigan Public Service Commission (the "MPSC") as to electric and gas
rates, standards of service, issuance of securities, construction of new
facilities, levels of short-term debt obligations, accounting, billing
practices, certain transactions with non-utility affiliates (including WPS
Resources), and various other matters. In addition, the Company will continue to
be subject to FERC jurisdiction with respect to borrowings and the issuance of
securities not regulated by the PSCW, the classification of accounts, rates to
wholesale customers, interconnection agreements and the acquisitions and sales
of certain utility properties. With respect to construction and operation of
nuclear facilities, the Company will continue to be subject to regulation by the
Nuclear Regulatory Commission. Also, in respect of environmental and related
matters, the Company will continue to be subject to regulation by the United
States Environmental Protection Agency and the Wisconsin Department of Natural
Resources. As a result of filing annual exemption statements with the SEC, the
Company is presently exempt from all provisions of the Public Utility Holding
Company Act of 1935, except provisions thereof relating to the acquisition of
securities of other public utility companies. See "Federal Public Utility
Holding Company Act."
WISCONSIN HOLDING COMPANY ACT. Section 196.795 of the Wisconsin Statutes
(the "Wisconsin Holding Company Act") provides for the regulation by the PSCW of
the formation of holding companies, and of various matters with respect to
resulting holding company systems. "Holding company" is defined as including, in
general, any company, directly or indirectly, as beneficial owner, owning,
controlling or holding 5% or more of the outstanding voting securities of a
public utility, with the
29
<PAGE>
unconditional power to vote such securities. "Form a holding company" is defined
to include "as a beneficial owner, to take, hold or acquire 5% or more of the
outstanding voting securities of a public utility with the unconditional power
to vote those securities."
Among the provisions of the Wisconsin Holding Company Act are provisions
briefly summarized as follows: (a) prohibition on any person forming a holding
company or acquiring or holding more than 10% of the outstanding voting
securities of a holding company, without PSCW approval; (b) authorization for
the PSCW, if it finds the capital of any public utility affiliate will be
impaired by payment of a dividend, to order the affiliate to limit or cease
payment of dividends to the holding company; (c) provision that, while a holding
company or a non-utility affiliate is not subject to the general regulatory
jurisdiction of the PSCW, the PSCW has full access to any document or other
information to the extent relevant to the PSCW's performance of its duties in
respect of public utility affiliates; (d) prohibition of various transactions by
a public utility affiliate with others in the holding company system, including
lending money, guaranteeing obligations, certain combined advertising, providing
utility service on terms different from those for other consumers in the same
class, and without PSCW approval after establishment that the utility affiliate
will be paid at fair market value, certain sales or leases of real property and
use of services of utility employees; (e) prohibitions against (i) any public
utility affiliate providing any non-utility product or service in a manner or at
a price that unfairly discriminates against any competing provider, (ii) any
non-utility activity being subsidized materially by the customers of any public
utility in the system, (iii) the operation of the system in any way which
materially impairs the credit, ability to acquire capital on reasonable terms or
ability to provide safe, reasonable, reliable and adequate utility service of
any public utility affiliate in the system, (iv) any transfer by a public
utility affiliate to any other system company of any confidential public utility
information, including customer lists, for use for any non-utility purpose,
unless the PSCW has approved the transfer, and (v) any termination of the
system's interest in any public utility affiliate without PSCW approval; and (f)
limitations on the sale, lease, installation or maintenance by non-utility and
utility affiliates of certain appliances without PSCW approval. Other statutory
provisions which existed prior to the Wisconsin Holding Company Act include
requirements for submission to the PSCW for approval of certain contracts or
other arrangements for furnishing property or services between a public utility
and an affiliate.
The Wisconsin Holding Company Act limits diversification, in that (in
summary) the net book value of the assets (other than investments in system
affiliates) of all non-utility affiliates may not exceed the sum of 25% of the
net book value of all electric utility affiliates and a percentage, to be
determined by the PSCW (but not less than 25%), of the net book value of all
other public utility affiliates, provided that for the first 36 months after the
holding company formation non-utility assets are limited to 40% of the maximum
amount allowed under the foregoing provisions.
Further, the Wisconsin Holding Company Act requires the PSCW, no sooner than
36 months after holding company formation, and at least once every three years
thereafter, to investigate the impact of the operation of every holding company
system formed after November 28, 1985 on every public utility affiliate in the
system and to determine whether each non-utility affiliate does, or can
reasonably be expected to do, at least one of the following: (a) substantially
retain, attract or promote business activity or employment or provide capital to
businesses within the service territory of any public utility affiliate or
certain others, (b) increase or promote energy conservation or develop, produce
or sell renewable energy products or equipment, (c) conduct a business that is
functionally related to the provision of utility service or to the development
or acquisition of energy resources, or (d) develop or operate commercial or
industrial parks in the service territory of any public utility affiliate.
Following approval of a holding company, the PSCW is authorized under the
Wisconsin Holding Company Act to modify any terms of, or add terms to, the
approval. Furthermore, the PSCW is authorized to order a holding company to
terminate its interest in a public utility affiliate if the PSCW finds that,
based upon clear and convincing evidence, termination of the interest is
necessary to protect the interest of utility investors in a financially healthy
utility and the interest of consumers in reasonably adequate utility service at
a just and reasonable price.
30
<PAGE>
The Company filed an application with the PSCW to form the holding company
provided for in the Plan on December 22, 1993.
The PSCW, acting under the Wisconsin Holding Company Act, has previously
approved the formation of holding companies by other electric and gas public
utility systems operating in Wisconsin. Such approvals were granted subject to
various conditions, including the following: that no affiliated interest
transaction (including the sharing of officers, directors or employees or the
transfer of any item of value) could occur prior to approval by the PSCW of an
affiliated interest agreement; that each of the public utilities involved
maintain a balanced capital structure within a reasonable range to be
established by the PSCW in appropriate proceedings; that the directors of each
public utility involved set a dividend policy based upon the financial health of
such utility as if it were not part of a holding company system, that the public
utilities involved submit specified forecasts in rate cases and other
appropriate proceedings; that the holding company provide full access to the
records of the holding company and non-utility affiliates for any document which
the PSCW staff determines is relevant to fulfill its statutory duties, with the
burden to be on the holding company to prove that a document is not relevant or
is protected by confidentiality; that the holding company submit for PSCW staff
review specific procedures for accounting for affiliated transactions; that the
utility company and holding company submit management plans for maximum possible
separation of officers and employees between utility and non-utility affiliates;
that certain reports be submitted; and that jurisdiction be retained by the
PSCW. The Company is unable to determine whether similar or other conditions
will be imposed by the PSCW in connection with the Company's application.
MICHIGAN UTILITY REGULATORY STATUTES. The Company will, after the
restructuring, continue to be subject to the regulatory jurisdiction of the
MPSC. Although the MPSC does not have jurisdiction to regulate WPS Resources,
the MPSC, in the course of regulating the Company, may take action which impacts
WPS Resources and its relationship to the Company.
FEDERAL PUBLIC UTILITY HOLDING COMPANY ACT. WPS Resources will apply to the
SEC under the Public Utility Holding Company Act for an approval necessary for
the Corporate Restructuring. The Company's application will also request an
exemption under Section 3(a)(1) of the Public Utility Holding Company Act. That
exemption would exempt WPS Resources and its subsidiaries, upon completion of
the Corporate Restructuring, from all the provisions of the Public Utility
Holding Company Act except Section 9(a)(2) thereof, which relates to the
acquisition of securities of other public utility companies. The granting of an
exemption is not a condition precedent to consummation of the Corporate
Restructuring. The basis for the exemption would be that WPS Resources and every
public utility subsidiary from which WPS Resources derives a material amount of
its income are predominantly intrastate in character and carry on their
businesses substantially in a single state (Wisconsin) in which they are
organized. Such exemption, if granted, may be revoked on a finding by the SEC
that the circumstances which gave rise to the exemption no longer exist or if
such exemption "may be detrimental to the public interest or the interest of
investors or consumers." There may be limits on the extent to which WPS
Resources and its subsidiaries could diversify without raising a possibility
that the SEC might find that such diversification may be detrimental to the
public interest or the interest of investors or consumers. WPS Resources has no
present intention, however, of becoming a registered holding company subject to
the regulation of the SEC under the Public Utility Holding Company Act.
MARKET PRICES OF WISCONSIN PUBLIC SERVICE CORPORATION COMMON STOCK
Company Common Stock is traded on the New York Stock Exchange. As of
February 4, 1994, there were 25,222 holders of record of Company Common Stock.
The closing price of the common stock on December 8, 1993 (the trading day next
preceding the public announcement by the Company of its intention to proceed
with the Share Exchange), was $33 1/8 and the closing price of the common stock
on February 4 was $30 3/8.
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<PAGE>
The Company's Annual Report on Form 10-K for the year ended December 31,
1993, incorporated herein by reference and the Company's 1993 Annual Report to
Shareholders includes market information with respect to Company Common Stock
for each quarter of 1993 and 1992. The high and low sales prices of Company
Common Stock as reported on the New York Stock Exchange consolidated tape during
1994 (through February 4) were $33 5/8 and $30 1/4, respectively.
FINANCIAL STATEMENTS
The Company's Annual Report on Form 10-K for the year ended December 31,
1993, incorporated by reference in this Prospectus/Proxy Statement, contains the
following: balance sheets and statements of capitalization of the Company as of
December 31, 1993, 1992 and 1991, and the related statements of income, retained
earnings and cash flow for each of the three years in the period ended December
31, 1993, the report of Arthur Andersen & Co., independent public accountants,
and Management's Discussion and Analysis of Financial Condition and Results of
Operations. Comparable financial information was included in the Company's 1993
Annual Report to Shareholders. Copies of such Annual Report to Shareholders were
mailed to shareholders of record as of the close of business on February 25,
1994, and will be mailed to all new shareholders up to the March 17, 1994,
record date for the Annual Shareholders' Meeting. Additional copies of the
Annual Report may be obtained without charge upon request as provided under
"Information Incorporated by Reference."
Financial statements of WPS Resources are not presented in this
Prospectus/Proxy Statement because WPS Resources is an inactive company without
material assets or liabilities or operating history.
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
The following table sets forth the capitalization of the Company at December
31, 1993, and the pro forma capitalization and the pro forma consolidated
capitalization of WPS Resources assuming the effectiveness of the Share Exchange
and Corporate Restructuring as of that date. No other pro forma consolidated
statements of WPS Resources and subsidiary following the effectiveness of the
Share Exchange and Corporate Restructuring are included herein, since such pro
forma consolidated financial statements would reflect no change from the
financial statements of the Company at the time of such effectiveness. The Share
Exchange and Corporate Restructuring will not result in any change in accounting
treatment for the Company. After the Share Exchange the accounts of the Company
will be included in the consolidated financial statements of WPS Resources.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1993
-------------------------------------------------------
WPS
RESOURCES
WISCONSIN WPS CORPORATION
PUBLIC RESOURCES AND
SERVICE CORPORATION SUBSIDIARIES
CORPORATION PRO FORMA ADJUSTMENTS (1) PRO FORMA
----------- ----------- ---------------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CAPITALIZATION
Common Stock Equity
Common Stock......................................... $ 95,588 $ 23,897 $ (95,588) $ 23,897
Premium on Capital Stock............................. 73,605 145,296 (73,605) 145,296
Retained Earnings.................................... 288,693 288,693 (288,693) 288,693
ESOP Loan Guarantees................................. (23,383) -- -- (23,383)
----------- ----------- ---------------- -----------
Total Common Stock Equity.......................... 434,503 457,886 (457,886) 434,503
----------- ----------- ---------------- -----------
Cumulative Preferred Stock
With No Mandatory Redemption......................... 51,200 -- -- 51,200
----------- ----------- ---------------- -----------
Long-Term Debt......................................... 314,225 -- -- 314,225
----------- ----------- ---------------- -----------
Total Capitalization............................... $ 799,928 $ 457,886 $ (457,886) $ 799,928
----------- ----------- ---------------- -----------
----------- ----------- ---------------- -----------
<FN>
- ------------------------
(1) To eliminate the equity of the Company after the effectiveness of the
Corporate Restructuring.
</TABLE>
32
<PAGE>
RESTATED ARTICLES OF INCORPORATION AND BY-LAWS OF WPS RESOURCES
The Restated Articles of Incorporation of WPS Resources (the "WPS Resources'
Articles") have been prepared in accordance with the WBCL. A copy of WPS
Resources' Articles is attached hereto as Exhibit B. Set forth below is a
summary of certain differences and similarities between the WPS Resources'
Articles and the Company's Restated Articles of Incorporation as amended (the
"Company's Articles"), including differences arising under the WBCL. The
Company's Articles and By-Laws and WPS Resources' By-Laws are included in the
materials incorporated by reference in this Prospectus/Proxy Statement. The
following discussion is qualified by reference to the information included in
the exhibits hereto or such materials incorporated by reference.
COMMON STOCK. The WPS Resources' Articles authorize the issuance of
100,000,000 shares of common stock, $1 par value. The Company's Articles
authorize the issuance of 32,000,000 shares of common stock, $4 par value. There
are presently outstanding 23,896,962 shares of Company Common Stock and assuming
no change in the number of shares of Company Common Stock outstanding prior to
the Effective Time, the same number of shares of WPS Resources Common Stock will
be outstanding immediately following completion of the Corporate Restructuring.
Accordingly, upon consummation of the Corporate Restructuring, WPS Resources
will have approximately 76,103,000 authorized and unissued shares (68,000,000
shares more than the Company). Under the WBCL, shares of WPS Resources Common
Stock or Company Common Stock or preferred stock may be issued from time to time
upon such terms and for such consideration as may be determined by their
respective boards of directors. Any such issuance of Company Common Stock or
preferred stock of the Company will be subject to the jurisdiction of the PSCW;
but any such issuance of WPS Resources Common Stock will not. Although there are
no plans for WPS Resources to issue additional WPS Resources Common Stock
subsequent to the completion of the Corporate Restructuring (other than shares
of WPS Resources Common Stock which may be issued pursuant to the Dividend
Reinvestment Plan), the Board believes that it is in the best interest of WPS
Resources and the Company to have additional shares of WPS Resources Common
Stock available to be issued without further shareholder action, if, at some
time in the future, it is deemed to be desirable to issue additional shares for
financing, acquisitions, possible future employee benefit plans, stock splits,
stock dividends and other purposes. See "SPECIAL CONSIDERATIONS -- Additional
Authorized Shares of WPS Resources Common Stock" above.
PREFERRED STOCK. The WPS Resources' Articles make no provision for
preferred stock. The Company's Articles authorize the issuance of 1,000,000
shares of preferred stock, $100 par value, which may be issued in series from
time to time as authorized by the Board. A total of 512,000 shares of preferred
stock are outstanding.
PREEMPTIVE RIGHTS. Holders of WPS Resources Common Stock and holders of
capital stock of the Company have no preemptive rights of subscription or
purchase in respect of shares of any class of stock or other securities.
AMENDMENTS AND CERTAIN OTHER TRANSACTIONS. Under the WBCL, WPS Resources'
Articles may be amended upon the affirmative vote of a majority of the votes
cast by the holders of WPS Resources Common Stock at a meeting at which a quorum
exists. The Company's Articles specifically provide for amendments upon the
affirmative vote of holders of two-thirds of the Company's outstanding common
stock with a two-thirds class (or series) vote of the preferred stock in certain
limited circumstances.
Under the WBCL, certain corporate transactions involving WPS Resources, such
as mergers, consolidations, share exchanges, sales, leases, exchanges or other
dispositions of all or substantially all assets, and dissolutions, require the
approval of a majority of the outstanding voting securities. In the case of
similar transactions involving the Company, the affirmative vote of the holders
of two-thirds of Company Common Stock is presently required with a majority or
two-thirds class (or series) vote of the preferred stock in certain limited
circumstances.
33
<PAGE>
The higher vote requirements respecting amendments and certain transactions
contained in the Company's Articles were not added to WPS Resources' Articles
because the Company desired to have these requirements conform to those now
generally applicable to Wisconsin corporations under the WBCL. Adoption of the
WBCL requirements as compared to the requirements contained in the Company's
Articles will facilitate the future adoption of amendments to WPS Resources'
Articles. The Company is not presently considering any amendments to the WPS
Resources Articles. See "SPECIAL CONSIDERATIONS -- Amendment of the Restated
Articles of Incorporation of WPS Resources" above.
ELECTION OF DIRECTORS. The Company's Articles and WPS Resources' Articles
require the classification of directors, with directors elected for staggered,
three-year terms. The initial directors of WPS Resources are the same persons
who are serving as directors of the Company, each holding office for the term
for which such person was elected a director of the Company.
VOTING RIGHTS. Each share of WPS Resources Common Stock and of Company
Common Stock has one vote on all matters submitted to shareholders, except as
otherwise provided by the WBCL.
Under the Company's Articles, holders of preferred stock are granted certain
special voting rights designed to protect their interests with respect to
specified corporate actions by the Company, including certain amendments to the
Company's Articles, the authorization of preferred stock, parity stock or stock
ranking prior to the preferred stock, the issuance or assumption of certain
unsecured indebtedness, and certain mergers or consolidations. Holders of
preferred stock of the Company will not, as such, be holders of securities of
WPS Resources. Accordingly, holders of preferred stock of the Company will not
have any voting rights with respect to matters submitted to a vote of WPS
Resources shareholders or with respect to corporate transactions effected by WPS
Resources.
DIVIDENDS. WPS Resources' Articles do not contain any limitations on the
declaration or payment of dividends or other distributions on WPS Resources
Common Stock. The Company's Articles contain certain capitalization and net
income tests which limit the declaration, payment and amount of dividends or
other distributions on its common stock in addition to requiring that dividends
on all outstanding shares of its preferred stock for all past dividend periods
be declared and paid or set apart for payment before any dividend may be paid on
its common stock. See "Dividends on WPS Resources Common Stock".
BY-LAWS. The By-Laws of WPS Resources have been prepared in accordance with
the WBCL and are substantially identical to the By-Laws of the Company.
POSSIBLE ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF THE ARTICLES OF
INCORPORATION AND BY-LAWS. Provisions of the Articles of Incorporation and
By-Laws of WPS Resources providing for a classified Board of Directors, limiting
the rights of shareholders to remove directors and permitting the Company to
issue additional shares of common stock without further shareholder approval
(which, except for authority to issue a greater number of shares of common
stock, are identical to provisions presently contained in the Restated Articles
of Incorporation and By-Laws of the Company) except as required under rules of
the New York Stock Exchange and the Chicago Stock Exchange. Such provisions
could have the effect, among others, of discouraging takeover proposals for WPS
Resources or impeding a business combination between WPS Resources and a major
shareholder of WPS Resources. See "Description of WPS Resources Common Stock --
Voting Rights; -- Certain Statutory and Other Provisions." See "SPECIAL
CONSIDERATIONS -- Possible Anti-Takeover Effects of Certain Provisions of the
Articles of Incorporation and By-Laws of WPS Resources" above.
The Wisconsin Holding Company Act provides that no person may take, hold or
acquire, directly or indirectly, more than 10% of the outstanding voting
securities of a holding company unless the PSCW determines that such action is
in the best interest of utility consumers, investors and the public.
34
<PAGE>
DESCRIPTION OF WPS RESOURCES COMMON STOCK
After the Effective Time, the number of shares of WPS Resources Common Stock
outstanding will equal the number of shares of Company Common Stock outstanding
at the Effective Time.
DIVIDEND AND LIQUIDATION RIGHTS. All shares of WPS Resources Common Stock
will participate equally with respect to dividends and rank equally upon
liquidation subject to the rights of holders of any prior ranking stock which
may be subsequently authorized and issued. In the event of liquidation,
dissolution or winding up of WPS Resources, the owners of WPS Resources Common
Stock are entitled to receive pro rata the assets and funds of WPS Resources
remaining after satisfaction of all creditors of WPS Resources and payment of
all amounts to which owners of prior ranking stock, if any, then outstanding may
be entitled.
VOTING RIGHTS. Except as hereinafter set forth and subject to Section
180.1150 of the WBCL (described under "Certain Statutory and Other Provisions"
below), every holder of common stock of WPS Resources has one vote for each
share.
No shareholder of WPS Resources has cumulative voting rights which means
that the holders of shares entitled to exercise more than 50% of the voting
power of shares entitled to vote, represented in person or by proxy at a meeting
at which a quorum (a majority of the shares entitled to vote) is represented,
are entitled to elect all of the directors to be elected. Under the WPS
Resources Articles and By-Laws, the WPS Resources Board is divided into three
classes of three directors each. One class is elected each year for a three-year
term.
Article 5 of WPS Resources' Articles (which is essentially identical to
Article V of the Company's Articles) provides that, subject to the exception
discussed below, a director may be removed only for cause by the affirmative
vote of shareholders possessing a majority of the voting power of the then
outstanding shares of voting stock. As defined in Article 5, "cause" exists only
if the director whose removal is proposed has been convicted of a felony by a
court of competent jurisdiction and such conviction is no longer subject to
direct appeal or such director has been adjudged to be liable for negligence or
misconduct in the performance of his duty to WPS Resources in a matter which has
a materially adverse effect on the business of WPS Resources, and such
adjudication is no longer subject to direct appeal. Article 5 also provides for
the removal of a director by the shareholders without cause when such removal is
recommended by the "Requisite Vote" of the directors and approved by the
affirmative vote of shareholders possessing a majority of the voting power of
the then outstanding shares of voting stock. The term "Requisite Vote" is
defined as the affirmative vote of at least two-thirds of the directors then in
office plus one director. Unless "cause" is established or removal is
recommended by the Requisite Vote of the directors, a director may not be
removed from office even if shareholders possessing a majority of the voting
power favor such action. Additionally, pursuant to Article 5, vacancies on the
Board, including those resulting from the removal of a director, may be filled
for the unexpired portion of the director's term by the majority vote of the
remaining members of the Board.
Article 5 of WPS Resources' Articles provides that those sections of Article
III of WPS Resources' By-Laws which set forth the general powers, number,
qualifications and classification of directors may be amended, altered, changed
or repealed only by the affirmative vote of shareholders possessing at least 75%
of the voting power of the then outstanding shares of stock generally possessing
voting rights in the election of directors, or by the Requisite Vote of the
directors. Article 5 of WPS Resources' Articles provides that Article 5 may
itself be amended, altered, changed or repealed only by the affirmative vote of
shareholders possessing at least 75% of the voting power of the then outstanding
shares of stock generally possessing voting rights in the election of directors.
CERTAIN STATUTORY AND OTHER PROVISIONS. Section 180.1150 of the WBCL
provides that the voting power of shares of an "issuing public corporation,"
which includes the Company and will include WPS Resources after the Effective
Time, which are held by any person holding in excess of 20% of the voting power
in the election of directors of the issuing public corporation's shares shall be
limited to 10% of
35
<PAGE>
the full voting power of such excess shares. This statutory voting restriction
will not be applicable to shares acquired directly from WPS Resources, to shares
acquired in a transaction incident to which shareholders of WPS Resources vote
to restore the full voting power of such shares (either before or after the
acquisition of the shares) and under certain other circumstances.
Except as may otherwise be provided by law, the requisite affirmative vote
of shareholders for certain significant corporate actions, including a merger or
share exchange with another corporation, sale of all or substantially all of the
corporate property and assets, or voluntary liquidation, is a majority of all
the votes entitled to be cast on the transaction by each voting group of
outstanding shares entitled to vote thereon. Sections 180.1130 through 180.1134
of the WBCL provide generally that, in addition to the vote otherwise required
by law or the articles of incorporation of an "issuing public corporation,"
certain business combinations not meeting certain adequacy-of-price standards
specified in the statute must be approved by (a) the holders of at least 80% of
the votes entitled to be cast and (b) two-thirds of the votes entitled to be
cast by the corporation's outstanding voting shares owned by persons other than
a "significant shareholder" who is a party to the transaction or an affiliate or
associate thereof. Section 180.1130 defines "business combination" to include,
subject to certain exceptions, a merger or share exchange of the issuing public
corporation (or any subsidiary thereof) with, or the sale or other disposition
of substantially all assets of the issuing public corporation to, any
significant shareholder or affiliate thereof. "Significant shareholder" is
defined generally to mean a person that is the beneficial owner of 10% or more
of the voting power of the outstanding voting shares of the issuing public
corporation.
Sections 180.1140 through 180.1145 of the WBCL provide that a "resident
domestic corporation," such as WPS Resources, may not engage in a "business
combination" with an "interested stockholder" (E.G., a person beneficially
owning 10% or more of the aggregate voting power of the stock of such
corporation) within three years after the date (the "stock acquisition date") on
which the interested stockholder acquired his or her 10% or greater interest,
unless the business combination (or the acquisition of the 10% or greater
interest) was approved before the stock acquisition date by the corporation's
board of directors. If the interested stockholder fails to obtain such approval
by the board of directors, then even after such three-year period, a business
combination with the interested stockholder may be consummated only with the
approval of the holders of a majority of the voting stock not beneficially owned
by such interested stockholder, unless the combination satisfies certain
adequacy-of-price standards intended to provide a fair price for shares held by
non-interested shareholders.
The above sections of the WBCL and the provisions of the WPS Articles and
By-Laws, previously described under "Articles of Incorporation and By-Laws of
WPS Resources -- Possible Anti-Takeover Effects of Certain Provisions of the
Articles of Incorporation and By-Laws", could have the effect, among others, of
discouraging takeover proposals for WPS Resources or impeding a business
combination between WPS Resources and a major shareholder of WPS Resources.
Section 196.795 of the Wisconsin Statutes states that no person may hold or
acquire more than 10% of the outstanding voting securities of a public utility
holding company with the unconditional power to vote such securities unless the
PSCW determines, after investigation and an opportunity for hearing, that such
holding or acquisition is in the best interests of utility consumers, investors
and the public.
PREEMPTIVE RIGHTS. No holder of WPS Resources Common Stock has any
preemptive or subscription rights.
CONVERSION RIGHTS, REDEMPTION PROVISIONS, AND SINKING FUND PROVISIONS. WPS
Resources Common Stock is not convertible, is not redeemable and has no sinking
fund.
LIABILITY TO FURTHER CALLS OR TO ASSESSMENT. The shares of WPS Resources
Common Stock issued pursuant to the Share Exchange will be fully-paid and
non-assessable by WPS Resources, except for certain statutory personal liability
which may be imposed upon shareholders under Section
36
<PAGE>
180.0622(2)(b) of the WBCL. The substantially identical predecessor to such
statute has been judicially interpreted to mean that shareholders of a Wisconsin
corporation are subject to personal liability, up to an amount equal to the
consideration for which their shares were issued (instead of the aggregate par
value in the case of shares with par value, as the statute states), for all
debts owing to employees of the corporation for services performed for the
corporation, but not exceeding six months service in any one case. The
provisions of this Section of the WBCL are presently applicable to the shares of
capital stock of the Company.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock of WPS Resources is
Firstar Trust Company, P.O. Box 2077, Milwaukee, Wisconsin 53201.
LEGAL OPINIONS
The validity of the shares of common stock of WPS Resources being issued in
the Share Exchange will be passed upon by Foley & Lardner, 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202, counsel for the Company.
EXPERTS
The financial statements and schedules which are incorporated by reference
into this Prospectus/ Proxy Statement by reference to the Company's Annual
Report on Form 10-K for the years ended December 31, 1993, 1992 and 1991, have
been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
Reference is made to said report, which includes an explanatory paragraph with
respect to the changes in the methods of accounting for income taxes, pension
expense and post-retirement benefits other than pensions as discussed in Note 1
to the financial statements.
OTHER BUSINESS
At the time this Proxy Statement went to press, the Company knew of no
matters constituting a proper subject for action by the shareholders which would
be presented at the Meeting, other than the election of directors and approval
of the Plan. If any other matters are properly presented at the Meeting, the
persons named in the proxies will vote upon them in accordance with their best
judgment.
Certain of the officers, directors and employees of the Company may solicit
proxies by correspondence, telephone, telegraph or in person, but without extra
compensation. The Company may reimburse banks, brokers, nominees and other
fiduciaries their reasonable charges and expenses incurred in forwarding the
proxy soliciting material to and receiving proxies from the beneficial owners.
In addition, the Company has retained Morrow & Co., Inc. to assist in the
solicitation of proxies. Such solicitation may be made by mail, telephone,
telegraph or in person. It is estimated that the cost of the services of Morrow
& Co., Inc. will not exceed $20,000 plus out of pocket expenses. The cost of the
solicitation will be paid by the Company.
ANNUAL REPORTS
The annual report of the Company for the year 1993, including financial
statements and the report of independent public accountants, Arthur Andersen &
Co. (which firm has been selected to continue to act in that capacity for the
year 1994), was mailed to all shareholders in March, 1994, and to all persons
who subsequently became shareholders of record prior to the close of business on
the Record Date. A representative of Arthur Andersen & Co. will be present at
the annual meeting, available to respond to appropriate questions and will have
an opportunity to make a statement if such representative desires to do so.
THE COMPANY FILES A SEPARATE ANNUAL REPORT WITH THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K. A COPY OF THE FORM 10-K FOR THE YEAR 1993 (NOT
INCLUDING EXHIBITS THERETO) WILL BE PROVIDED
37
<PAGE>
WITHOUT CHARGE TO ANY PERSON WHO IS A RECORD OR BENEFICIAL HOLDER OF SHARES OF
THE COMMON STOCK AS OF THE RECORD DATE FOR THIS ANNUAL MEETING AND WHO MAKES
WRITTEN REQUEST FOR IT, ADDRESSED TO THE ATTENTION OF ROBERT H. KNUTH, ASSISTANT
VICE PRESIDENT -- SECRETARY, 700 NORTH ADAMS STREET, P. O. BOX 19001, GREEN BAY,
WISCONSIN 54307.
FUTURE SHAREHOLDER PROPOSALS
Any shareholder proposals intended for consideration at the 1995 annual
meeting of shareholders must be received by the Company (or, if the Share
Exchange shall have previously become effective, by WPS Resources) by November
28, 1994.
WISCONSIN PUBLIC SERVICE CORPORATION
Robert H. Knuth
ASSISTANT VICE PRESIDENT-SECRETARY
38
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF SHARE EXCHANGE
AGREEMENT AND PLAN OF SHARE EXCHANGE, dated January 17, 1994, (this
"Agreement"), between WISCONSIN PUBLIC SERVICE CORPORATION, a Wisconsin
corporation ("WPS"), and WPS RESOURCES CORPORATION, a Wisconsin corporation
("WPS Resources").
WHEREAS, WPS has authority to issue 33,000,000 shares, consisting of
1,000,000 shares of Preferred Stock, par value $100 per share (the "WPS
Preferred Stock"), of which 512,000 shares were issued and outstanding on
January 17, 1994; and 32,000,000 shares of Common Stock, par value $4 per share
(the "WPS Common Stock"), of which 23,896,962 shares were issued and outstanding
on January 17, 1994;
WHEREAS, WPS Resources has authority to issue 100,000,000 shares of Common
Stock, par value $1 per share (the "WPS Resources Common Stock"), of which 100
shares are issued and outstanding and owned beneficially and of record of WPS;
WHEREAS, the respective Boards of Directors of WPS and WPS Resources have
determined that it is advisable and in the best interests of each of such
corporations to effect an exchange of the issued and outstanding shares of WPS
Common Stock for shares of WPS Resources Common Stock upon the terms and subject
to the conditions herein provided (the "Exchange") for the purpose of
reorganizing WPS into a holding company structure; and
WHEREAS, the respective Boards of Directors of WPS and WPS Resources have,
by resolutions duly adopted, approved this Agreement and directed that it be
executed by the undersigned officers and that it be submitted to a vote of their
respective shareholders.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE 1
NAMES OF ACQUIRED CORPORATION AND
ACQUIRING CORPORATION
Section 1.1 THE ACQUIRED CORPORATION. The name of the corporation the
shares of which are proposed to be acquired by WPS Resources in the Exchange is
WISCONSIN PUBLIC SERVICE CORPORATION.
Section 1.2 THE ACQUIRING CORPORATION. The name of the corporation
proposing to acquire shares of WPS in the Exchange is WPS RESOURCES CORPORATION.
ARTICLE 2
TERMS AND CONDITIONS OF PROPOSED EXCHANGE
Section 2.1 GENERAL. At the Effective Time (as hereinafter defined): (a)
the shares of WPS Common Stock then issued and outstanding shall be exchanged
for shares of WPS Resources Common Stock, and (b) the shares of WPS Preferred
Stock then issued and outstanding shall be and remain issued and outstanding
shares of WPS Preferred Stock in accordance with their terms.
Section 2.2 EFFECTIVE TIME. The "Effective Time" of the Exchange shall be
the close of business on the day on which Articles of Share Exchange with
respect thereto substantially in the form attached hereto as Exhibit I are filed
with the Secretary of State of Wisconsin in accordance with the Wisconsin
Business Corporation Law (the "WBCL") or such later time as may be designated in
the Articles of Share Exchange.
A-1
<PAGE>
ARTICLE 3
MANNER AND BASIS OF EXCHANGING SHARES
OF CAPITAL STOCK IN THE EXCHANGE
Section 3.1 EXCHANGE OF WPS COMMON STOCK FOR WPS RESOURCES COMMON
STOCK. At the Effective Time, automatically by virtue of the Exchange and
without further action on the part of the holder thereof, each share of WPS
Common Stock outstanding immediately prior to the Effective Time shall be
exchanged for one share of WPS Resources Common Stock, which shall thereupon be
validly issued, fully paid and nonassessable except for liability which may be
imposed on the holders thereof under Section 180.0622(2)(b) of the WBCL.
Section 3.2 CANCELLATION OF WPS RESOURCES COMMON STOCK. Each share of WPS
Resources Common Stock issued and outstanding immediately prior to the Effective
Time shall be cancelled and restored to the status of authorized and unissued
WPS Resources Common Stock.
Section 3.3 WPS PREFERRED STOCK. The Exchange shall not affect, or cause
any change in, WPS Preferred Stock. Each share of WPS Preferred Stock issued and
outstanding immediately prior to the Effective Time shall, immediately following
the Effective Time, be issued and outstanding as a validly issued, fully paid
and nonassessable share of WPS Preferred Stock.
Section 3.4 FRACTIONAL SHARES. No fractional shares of WPS Resources
Common Stock shall be issued in the Exchange.
Section 3.5 STOCK CERTIFICATES. (a) Following the Effective Time, each
holder of a certificate or certificates theretofore representing outstanding
shares of WPS Common Stock may, but shall not be required to, surrender the same
to WPS Resources or its transfer agent for cancellation or transfer, and each
such holder or transferee will be entitled to receive a certificate or
certificates representing the same number of shares of WPS Resources Common
Stock as the number of shares of WPS Common Stock previously represented by such
stock certificates so surrendered. Until so surrendered or presented for
transfer, each outstanding certificate which prior to the Effective Time
represented shares of WPS Common Stock shall be deemed for all corporate
purposes to represent the ownership of the same number of shares of WPS
Resources Common Stock as though such surrender and transfer had taken place. If
any certificate representing shares of WPS Resources Common Stock is to be
issued in a name other than that of the registered holder of the certificate
formerly representing shares of WPS Common Stock presented for transfer, it
shall be a condition of issuance that (i) the certificate so surrendered shall
be properly endorsed or accompanied by a stock power and shall otherwise be in
proper form for transfer and (ii) the person requesting such issuance shall pay
to WPS Resources' transfer agent any transfer or other taxes required by reason
of issuance of certificates representing WPS Resources Common Stock in a name
other than that of the registered holder of the certificate presented, or
establish to the satisfaction of WPS Resources or its transfer agent that such
taxes have been paid or are not applicable; (b) immediately following the
Effective Time, WPS shall cause to be delivered to WPS Resources, a certificate
registered in the name of WPS Resources for the number of shares of WPS Common
Stock issued and outstanding at the Effective Time.
ARTICLE 4
OTHER PROVISIONS WITH RESPECT TO THE EXCHANGE
Section 4.1 FURTHER ASSURANCES. WPS and WPS Resources, respectively, shall
take all such action as may be necessary or appropriate in order to effectuate
the Exchange. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the officers
and directors of each of WPS and WPS Resources shall take all such further
action.
A-2
<PAGE>
Section 4.2 CONDITIONS TO THE EXCHANGE. The consummation of the Exchange
is subject to the satisfaction of the following conditions prior to the
Effective Time:
(a) The Exchange shall have received the approval of the holders of Common
Stock of each of WPS and WPS Resources to the extent required by the WBCL
and the respective Articles of Incorporation and By-laws of WPS and WPS
Resources;
(b) A registration statement or registration statements relating to the
shares of WPS Resources Company Common Stock to be issued as a result of
the Exchange shall be effective under the Securities Act of 1933, as
amended, and shall not be the subject of any "stop order";
(c) There shall have been obtained an order from the Securities and Exchange
Commission under the Public Utility Holding Company Act of 1935 in form
and substance satisfactory to WPS and WPS Resources, and their counsel
approving the acquisition, either directly or indirectly, by WPS
Resources of securities of WPS and Wisconsin River Power Company in
connection with the Exchange;
(d) The shares of WPS Resources Common Stock to be issued as a result of the
Exchange shall have been approved for listing, upon official notice of
issuance, by the New York Stock Exchange and the Chicago Stock Exchange;
(e) WPS shall have received an opinion from Foley & Lardner, counsel to WPS,
substantially to the effect that, on the basis of the facts, assumptions
and qualifications set forth in such opinion, for Federal income tax
purposes: (1) no gain or loss will be recognized by WPS Resources or the
holders of WPS Common Stock who receive WPS Resources Common Stock by
reason of the consummation of the Exchange; (2) the basis of WPS
Resources Common Stock received by a holder of WPS Common Stock in the
Exchange will be the same as the basis of the WPS Common Stock exchanged
for such WPS Resources Common Stock; and (3) each holder who holds WPS
Common Stock as a capital asset will include in his holding period for
WPS Resources Common Stock which he receives in the Exchange his holding
period for such WPS Common Stock exchanged for such WPS Resources Common
Stock;
(f) WPS shall have received an opinion, in form and substance satisfactory
to WPS from Foley & Lardner, counsel to WPS, as to the validity of WPS
Resources Common Stock to be issued in the Exchange; and
(g) WPS shall have received all orders, authorizations, consents and
approvals from all regulatory bodies, boards or agencies, (including,
without limitation, the Federal Energy Regulatory Commission, the Public
Service Commission of Wisconsin and the Michigan Public Service
Commission) in form and substance satisfactory to WPS and WPS Resources,
which are necessary or appropriate for the consummation of the Exchange
and all other transactions contemplated hereby.
Section 4.3 AMENDMENT; WAIVER. The parties hereto, to the extent permitted
by law, by mutual consent of their respective Boards of Directors, may amend,
modify or supplement this Agreement or waive any condition set forth in Section
4.2 hereof in such manner as may be agreed upon by them in writing, at any time
before or after approval of this Agreement by the shareholders of WPS; provided,
however, that no such amendment, modification, supplement or waiver shall, in
the sole judgment of the Board of Directors of WPS, materially and adversely
affect the rights of the shareholders of WPS.
Section 4.4 DEFERRAL. Consummation of the transactions herein provided for
may be deferred by the Boards of Directors of WPS and WPS Resources for a
reasonable period of time if said Boards determine that such deferral would be
in the best interests of WPS and its shareholders.
Section 4.5 TERMINATION. This Agreement may be terminated and the Exchange
and other transactions herein provided for abandoned at any time before the
Effective Time, whether before or after approval of this Agreement by the
shareholders of WPS, by the parties hereto, by mutual consent of their
respective Boards of Directors, if such Boards of Directors determine for any
reason that the
A-3
<PAGE>
consummation of the transactions provided for herein would for any reason be
inadvisable, or that any regulatory or other consents or approvals deemed
necessary or advisable by such Boards of Directors have not been obtained within
a reasonable time after approval by the shareholders of WPS.
Section 4.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
Section 4.7 HEADINGS. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
Section 4.8 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin.
IN WITNESS WHEREOF, WPS and WPS Resources have executed this Agreement by
their respective duly authorized officers as of the date first written above.
<TABLE>
<S> <C>
WISCONSIN PUBLIC SERVICE CORPORATION
By: /s/ Daniel A. Bollom
Attest: -----------------------------------------
Name: Daniel A. Bollom
Title: President and Chief
Executive Officer
/s/ Robert H. Knuth
-------------------------------------------
Robert H. Knuth, Secretary
WPS RESOURCES CORPORATION
By: /s/ Daniel A. Bollom
Attest: -----------------------------------------
Name: Daniel A. Bollom
Title: President and Chief
Executive Officer
/s/ Robert H. Knuth
-------------------------------------------
Robert H. Knuth, Secretary
</TABLE>
A-4
<PAGE>
EXHIBIT I
ARTICLES OF SHARE EXCHANGE
WPS RESOURCES CORPORATION
(A WISCONSIN CORPORATION)
THE ACQUIRING CORPORATION
AND
WISCONSIN PUBLIC SERVICE CORPORATION
(A WISCONSIN CORPORATION)
THE ACQUIRED CORPORATION
------------------------
In accordance with and pursuant to Section 180.1105 of the Wisconsin
Business Corporation Law ("WBCL"), WPS Resources Corporation, a Wisconsin
corporation ("Acquiring Corporation"), as of the day of , 1994, DOES
HEREBY EXECUTE the following ARTICLES OF SHARE EXCHANGE:
ARTICLE 1
The Agreement and Plan of Share Exchange by and between the Acquiring
Corporation and Wisconsin Public Service Corporation, a Wisconsin corporation
(the "Acquired Corporation"), dated as of January 17, 1994 ("Plan of Share
Exchange"), a true and correct copy of which is attached hereto as Exhibit A and
hereby incorporated by referenced herein, was approved in accordance with
Section 180.1103 of the WBCL.
ARTICLE 2
The Board of Directors of Acquired Corporation, in accordance with its
Restated Articles of Incorporation and By-Laws and the WBCL, approved and
adopted the Plan of Share Exchange and the transactions contemplated thereby on
December 9, 1993.
ARTICLE 3
The stockholders of Acquired Corporation, in accordance with Acquired
Corporation's Restated Articles of Incorporation and By-Laws and the WBCL,
approved and adopted the Plan of Share Exchange and the transactions
contemplated thereby on May 5, 1994.
ARTICLE 4
The Board of Directors of the Acquiring Corporation, in accordance with the
Acquiring Corporation's Articles of Incorporation and By-Laws and the WBCL,
approved and adopted the Plan of Share Exchange and the transactions
contemplated thereby and directed the submission of the Plan of Share Exchange
to the sole shareholder of the Acquiring Corporation on December 9, 1993.
ARTICLE 5
Acquired Corporation, as the then sole shareholder of the Acquiring
Corporation, in accordance with the Acquiring Corporation's Articles of
Incorporation and By-Laws and the WBCL, approved and adopted the Plan of Share
Exchange and the transactions contemplated thereby on December 9, 1993.
A-5
<PAGE>
ARTICLE 6
These Articles of Share Exchange shall be effective, and the exchange of
shares provided for under the Plan of Share Exchange shall take effect, upon the
filing of these Articles of Share Exchange with the office of the Wisconsin
Secretary of State.
IN WITNESS WHEREOF, the Acquiring Corporation has caused these Articles of
Share Exchange to be executed by its duly authorized officers as of the day and
year first above written.
WPS RESOURCES CORPORATION
By: __________________________________
Daniel A. Bollom
President and Chief Executive
Officer
Attest: ______________________________
Robert H. Knuth
Secretary
These Articles of Share Exchange have been drafted by, and should be
returned to, Michael S. Nolan, Esq., Foley & Lardner, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202.
A-6
<PAGE>
EXHIBIT B
RESTATED ARTICLES OF INCORPORATION
OF
WPS RESOURCES CORPORATION
WPS Resources Corporation, a corporation organized under the laws of the
State of Wisconsin and being subject to the provisions of the Wisconsin Business
Corporation Law, hereby amends its Articles of Incorporation in their entirety
and as so amended adopts the following Restated Articles of Incorporation of
said Corporation, which supersede and take the place of the existing Articles of
Incorporation of said Corporation and any amendments to the Articles of
Incorporation of said Corporation.
ARTICLE 1
The name of the Corporation is WPS Resources Corporation.
ARTICLE 2
The Corporation is organized for the purpose of engaging in any lawful
activity within the purposes for which corporations may be organized under the
Wisconsin Business Corporation Law.
ARTICLE 3
The aggregate number of shares which the Corporation shall have authority to
issue is One Hundred Million (100,000,000), consisting of one class only,
designated as "Common Stock," with a par value of one dollar ($1) per share.
ARTICLE 4
The Corporation shall be entitled to treat the holder of record of any share
or shares of stock as the owner thereof for all purposes, and shall not be bound
to recognize any equitable or other claim to or interest in any such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof.
ARTICLE 5
The general powers, number and classification of Directors shall be as set
forth in Article III, Sections 1, 2, 3 and 4 of the By-Laws (and as such
Sections shall exist from time to time) and such Article III, Sections 1, 2, 3
and 4 of the By-Laws, or any provision thereof, shall be amended, altered,
changed or repealed only by the affirmative vote of shareholders possessing at
least three-fourths of the voting power of the then outstanding shares of all
classes of stock of the corporation generally possessing voting rights in
elections for Directors, considered for this purpose as one class; provided,
however, that the Board of Directors, by a resolution adopted by the Requisite
Vote (as defined herein), may amend, alter, change or repeal Sections 1, 2, 3
and 4 of Article III of the By-Laws, or any provision thereof, without the vote
of the shareholders. As used herein, the term "Requisite Vote" shall mean the
affirmative vote of at least two-thirds of the Directors then in office plus one
Director.
Any Director may be removed from office, but only for cause as hereinafter
defined, by the affirmative vote of shareholders possessing at least a majority
of the voting power of the then outstanding shares of all classes of stock of
the corporation generally possessing voting rights in elections for Directors,
considered for this purpose as one class; provided, however, that if the Board
of Directors by a resolution adopted by the Requisite Vote shall have
recommended removal of a Director, then the shareholders may remove such
Director from office by the foregoing vote without cause. As used herein, the
meaning of "cause" shall be construed to exist only if the Director whose
removal is
B-1
<PAGE>
proposed has been convicted of a felony by a court of competent jurisdiction and
such conviction is no longer subject to direct appeal or has been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation in a matter which has a materially adverse effect on the business of
the corporation, and such adjudication is no longer subject to direct appeal.
Any vacancy occurring in the Board of Directors, including a vacancy created
by an increase in the number of Directors, may be filled by the affirmative vote
of a majority of the Directors then in office, though less than a quorum of the
Board of Directors, or by a sole remaining Director. Any Director so elected
shall serve until the next election of the class for which such Director shall
have been chosen and until his successor shall be elected and qualified.
The provisions of this Article 5 shall be amended, altered, changed or
repealed only by the affirmative vote of shareholders possessing at least
three-fourths of the voting power of the then outstanding shares of all classes
of stock of the corporation generally possessing voting rights in elections for
Directors, considered for this purpose as one class.
ARTICLE 6
The address of the registered office of the Corporation is 700 North Adams
Street, P.O. Box 19001, Green Bay, Wisconsin, 54307. The name of the
Corporation's registered agent at such address is R. H. Knuth.
ARTICLE 7
The Bylaws of the Corporation may provide for a greater or lower quorum
requirement or a greater voting requirement for shareholders or voting groups of
shareholders than is provided by the Wisconsin Business Corporation Law.
B-2
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
a. List of Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
- ----------- ----------------------------------------------------------------------------------------------------
<C> <S>
1 None.
2 Agreement and Plan of Share Exchange (set forth as Exhibit A to the Prospectus/Proxy Statement
herein).
3A Restated Articles of Incorporation of WPS Resources Corporation (set forth as Exhibit B to the
Prospectus/Proxy Statement herein).
3B By-Laws of WPS Resources Corporation.*
4 None.
5 Opinion of counsel re legality.*
6 None.
7 None.
8 Opinion of counsel re tax matters.*
9 None.
10 None.
11 Statement re computation of Per Share Earnings.*
12 None.
13 None.
14 None.
15 None.
16 None.
22 None.
24.1 Consent of Experts.
24.2 Consents of Counsel (contained in Exhibit 5 and 8 hereto).*
25 Powers of Attorney (contained on signature pages of original Registration Statement).*
26 None.
27 None.
28.1 Form of proxy for annual meeting of Wisconsin Public Service Corporation shareholders to be held May
5, 1994.*
28.2 Form of brochure accompanying proxy statement containing a letter of the President of Wisconsin
Public Service Corporation and questions and answers.*
29 None.
</TABLE>
*_Previously filed with original Registration Statement.
b. Financial Statement Schedules: Not Applicable.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Green Bay,
State of Wisconsin, on this 28th day of February, 1994.
WPS RESOURCES CORPORATION
By: /s/ Robert H. Knuth
--------------------------------------
Robert H. Knuth
Assistant Vice President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below on February 28, 1994, by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
NAME CAPACITY
- -------------------------------------------------------- --------------------------------------------------------
<C> <S>
Daniel A. Bollom President, Principal Executive Officer and Director
Ralph G. Baeten Principal Financial and Accounting Officer
A. Dean Arganbright Director
Michael S. Ariens Director
Richard A. Bemis Director
Sister M. Lois Bush Director
Robert C. Gallagher Director
Kathryn Hasselblad-Pascale Director
James L. Kemerling Director
Linus M. Stoll Director
By:/s/ R. H. Knuth
------------------------------------------
R. H. Knuth
Attorney-in-Fact
</TABLE>
The required Powers of Attorney to R. H. Knuth were included on the
signature pages of the original Registration Statement (Reg. No. 33-52199) dated
February 8, 1994.
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document Page
- ------- ----------------------- ----
<S> <C> <C>
1 None. N/A
2 Agreement and Plan of Share Exchange (set forth as Exhibit A to the
Prospectus/Proxy Statement herein).
3A Restated Articles of Incorporation of WPS Resources Corporation (set
forth as Exhibit B to the Prospectus/Proxy Statement herein).
3B By-Laws of WPS Resources Corporation.* N/A
4 None. N/A
5 Opinion of counsel re legality.* N/A
6 None. N/A
7 None. N/A
8 Opinion of counsel re tax matters.* N/A
9 None. N/A
10 None. N/A
11 Statement re computation of Per Share Earnings.* N/A
12 None. N/A
13 None. N/A
14 None. N/A
15 None. N/A
16 None. N/A
22 None. N/A
24.1 Consent of Experts.
24.2 Consents of Counsel (contained in Exhibit 5 and 8 hereto).* N/A
25 Powers of Attorney (contained on signature pages hereto).* N/A
26 None. N/A
27 None. N/A
<FN>
* Previously filed.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document Page
- ------- ----------------------- ----
<S> <C> <C>
28.1 Form of proxy for annual meeting of Wisconsin Public Service
Corporation shareholders to be held May 5, 1994.* N/A
28.2 Form of brochure accompanying proxy statement containing a
letter of the President of Wisconsin Public Service Corporation
and questions and answers.* N/A
29 None. N/A
<FN>
* Previously filed.
</TABLE>
<PAGE>
APPENDIX
Set forth on page 20 are two graphics. The first graphic is a box
chart showing the present corporate structure with Packerland Energy
Services, Inc., WPS Resources Corporation and WPS Communications, Inc.
as subsidiaries of Wisconsin Public Service Corporation. The second
graphic is a box chart showing the proposed corporate structure with
Packerland Energy Services, Inc., Wisconsin Public Service Corporation and
WPS Communications, Inc., as subsidiaries of WPS Resources Corporation.
<PAGE>
EXHIBIT 24.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 26, 1994,
included in Wisconsin Public Service Corporation's Form 10-K for the year ended
December 31, 1993 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Milwaukee, Wisconsin,
February 25, 1994.
