______________________________________________________________________________
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification No.
- ----------- ----------------------------------- ------------------
1-11337 WPS RESOURCES CORPORATION 39-1775292
(A Wisconsin Corporation)
700 North Adams Street
P. O. Box 19001
Green Bay, WI 54307-9001
414-433-1445
1-3016 WISCONSIN PUBLIC SERVICE CORPORATION 39-0715160
(A Wisconsin Corporation)
700 North Adams Street
P. O. Box 19001
Green Bay, WI 54307-9001
414-433-1445
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [x] No [ ]
Indicate the number of shares outstanding of each of the issuers' classes of
common stock, as of the latest practicable date:
WPS RESOURCES CORPORATION Common stock, $1 par value,
23,896,962 shares outstanding at
July 26, 1995
WISCONSIN PUBLIC SERVICE CORPORATION Common stock, $4 par value,
23,896,962 shares outstanding at
July 26, 1995
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
WPS RESOURCES CORPORATION
AND
WISCONSIN PUBLIC SERVICE CORPORATION
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
CONTENTS
Page
INTRODUCTION 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
WPS RESOURCES CORPORATION
Consolidated Statements of Income and
Retained Earnings 4
Consolidated Balance Sheets 5
Consolidated Statements of Capitalization 6
Consolidated Statements of Cash Flows 7
WISCONSIN PUBLIC SERVICE CORPORATION
Consolidated Statements of Income 8
Consolidated Balance Sheets 9
Consolidated Statements of Capitalization 10
Consolidated Statements of Cash Flows 11
Consolidated Statements of Retained Earnings 12
CONDENSED NOTES TO FINANCIAL STATEMENTS OF
WPS Resources Corporation and
Wisconsin Public Service Corporation 13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations for
WPS Resources Corporation and
Wisconsin Public Service Corporation 14 - 20
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 21
Item 5. Other Information 21 - 22
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 24 - 25
EXHIBIT INDEX 26
Exhibit 3(ii) By-Laws
WPS Resources Corporation
Exhibit 27 Financial Data Schedule
WPS Resources Corporation
Wisconsin Public Service Corporation
-2-
<PAGE>
INTRODUCTION
The unaudited interim financial statements presented herein include
the consolidated statements of WPS Resources Corporation and
Subsidiaries ("Company") as well as separate consolidated financial
statements for Wisconsin Public Service Corporation ("WPSC"). The
unaudited statements have been prepared by the Company and WPSC,
respectively, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The Company and WPSC
believe, however, that the disclosures are adequate to make the
information presented not misleading. The Company's and WPSC's
consolidated financial statements should be read in conjunction with
the financial statements and notes thereto incorporated by reference
in the respective Annual Reports on Form 10-K of WPS Resources
Corporation and Wisconsin Public Service Corporation for the year
ended December 31, 1994.
In the opinion of the Company and WPSC, their respective interim
financial statements filed as part of this Form 10-Q reflect all
adjustments necessary to present fairly the results for the respective
periods. Due to the influence of weather and other factors which are
characteristics of WPSC's utility operations, financial results for
the periods ended June 30, 1995 and 1994 are not necessarily
indicative of trends for any 12-month period.
-3-
<PAGE>
<TABLE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
WPS RESOURCES CORPORATION
<CAPTION>
==============================================================================================================================
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS Three Months Ended Six Months Ended
(Thousands, except share amounts) June 30 June 30
1995 1994 1995 1994
==============================================================================================================================
<S> <C> <C> <C> <C>
Operating revenues
Electric $117,418 $115,893 $238,518 $239,502
Gas 44,735 31,676 111,346 108,797
- ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 162,153 147,569 349,864 348,299
==============================================================================================================================
Operating expenses
Electric production fuels 26,388 28,128 50,507 56,302
Purchased power 10,396 8,459 22,477 19,752
Gas purchased for resale 33,962 20,962 78,873 74,328
Other operating expenses 39,784 37,536 75,779 73,641
Maintenance 15,262 14,316 28,538 25,812
Depreciation and decommissioning 15,837 13,874 32,412 28,066
Taxes other than income 6,366 6,451 12,848 12,987
- ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 147,995 129,726 301,434 290,888
==============================================================================================================================
Operating income 14,158 17,843 48,430 57,411
- ------------------------------------------------------------------------------------------------------------------------------
Other income
Allowance for equity funds used during construction 48 23 74 43
Other, net 1,887 1,126 5,914 2,336
- ------------------------------------------------------------------------------------------------------------------------------
Total other income 1,935 1,149 5,988 2,379
==============================================================================================================================
Income before interest expense 16,093 18,992 54,418 59,790
- ------------------------------------------------------------------------------------------------------------------------------
Interest on long-term debt 5,796 5,887 11,589 11,842
Other interest 606 393 1,254 887
Allowance for borrowed funds used during construction (48) (27) (81) (62)
- ------------------------------------------------------------------------------------------------------------------------------
Total interest expense 6,354 6,253 12,762 12,667
==============================================================================================================================
Income before income taxes 9,739 12,739 41,656 47,123
Income taxes 3,095 4,551 13,996 16,560
Preferred stock dividends of subsidiary 778 778 1,556 1,556
- ------------------------------------------------------------------------------------------------------------------------------
Net income 5,866 7,410 26,104 29,007
==============================================================================================================================
Retained earnings at beginning of period 306,957 298,878 297,592 287,915
Cash dividends on common stock 10,873 10,634 21,746 21,268
- ------------------------------------------------------------------------------------------------------------------------------
Retained earnings at end of period $301,950 $295,654 $301,950 $295,654
==============================================================================================================================
Average shares of common stock outstanding 23,897 23,897 23,897 23,897
Earnings per average share of common stock $0.24 $0.31 $1.09 $1.21
Dividend per share of common stock $0.455 $0.445 $0.910 $0.890
==============================================================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-4-
<PAGE>
<TABLE>
WPS RESOURCES CORPORATION
<CAPTION>
====================================================================================================
CONSOLIDATED BALANCE SHEETS June 30 December 31
(Thousands) 1995 1994
====================================================================================================
<S> <C> <C>
ASSETS
- ----------------------------------------------------------------------------------------------------
Utility plant
Electric $1,435,978 $1,412,666
Gas 209,621 202,903
- ----------------------------------------------------------------------------------------------------
Total 1,645,599 1,615,569
Accumulated depreciation and decommissioning (884,489) (846,505)
- ----------------------------------------------------------------------------------------------------
Total 761,110 769,064
Nuclear decommissioning trusts 73,432 64,147
Construction in progress 14,351 11,131
Nuclear fuel, less accumulated amortization 16,966 19,417
- ----------------------------------------------------------------------------------------------------
Net utility plant 865,859 863,759
====================================================================================================
Current assets
Cash and equivalents 25,408 13,167
Customer and other receivables, net of reserves 54,779 60,029
Accrued utility revenues 18,106 28,820
Fossil fuel, at average cost 11,501 10,505
Gas in storage, at average cost 8,241 15,787
Materials and supplies, at average cost 22,316 20,585
Prepayments and other 18,677 21,122
- ----------------------------------------------------------------------------------------------------
Total current assets 159,028 170,015
====================================================================================================
Regulatory assets 103,287 109,135
Investments and other assets 82,402 74,366
====================================================================================================
Total $1,210,576 $1,217,275
====================================================================================================
CAPITALIZATION AND LIABILITIES
- ----------------------------------------------------------------------------------------------------
Capitalization
Common stock equity $451,934 $446,540
Preferred stock of subsidiary
with no mandatory redemption 51,200 51,200
Long-term debt 308,946 309,945
- ----------------------------------------------------------------------------------------------------
Total capitalization 812,080 807,685
====================================================================================================
Current liabilities
Note payable 10,000 10,000
Commercial paper - 12,500
Accounts payable 48,071 66,643
Accrued taxes 3,541 1,152
Accrued interest 8,338 8,068
Gas refunds 12,343 -
Other 13,684 7,494
- ----------------------------------------------------------------------------------------------------
Total current liabilities 95,977 105,857
====================================================================================================
Long-term liabilities and deferred credits
Accumulated deferred income taxes 129,747 126,639
Accumulated deferred investment tax credits 31,274 32,172
Regulatory liabilities 57,880 65,995
Long-term liabilities 83,618 78,927
- ----------------------------------------------------------------------------------------------------
Total long-term liabilities and deferred credits 302,519 303,733
====================================================================================================
Total $1,210,576 $1,217,275
====================================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-5-
<PAGE>
<TABLE>
WPS RESOURCES CORPORATION
<CAPTION>
===============================================================================================
CONSOLIDATED STATEMENTS OF CAPITALIZATION June 30 December 31
(Thousands, except share amounts) 1995 1994
===============================================================================================
<S> <C> <C>
Common stock equity
Common stock, $1 par value, 100,000,000 shares authorized;
and 23,896,962 shares outstanding $23,897 $23,897
Premium on capital stock 145,021 145,021
Retained earnings 301,950 297,592
ESOP loan guarantees (18,934) (19,970)
- -----------------------------------------------------------------------------------------------
Total common stock equity 451,934 446,540
===============================================================================================
Preferred stock - Wisconsin Public Service Corporation
Cumulative, $100 par value, 1,000,000 shares authorized;
with no mandatory redemption
Series Shares Outstanding
------ ------------------
5.00% 132,000 13,200 13,200
5.04% 30,000 3,000 3,000
5.08% 50,000 5,000 5,000
6.76% 150,000 15,000 15,000
6.88% 150,000 15,000 15,000
- -----------------------------------------------------------------------------------------------
Total preferred stock 51,200 51,200
===============================================================================================
Long-term debt
First mortgage bonds - Wisconsin Public Service Corporation
Series Year Due
------ --------
5-1/4% 1998 50,000 50,000
7.30% 2002 50,000 50,000
6.80% 2003 50,000 50,000
6-1/8% 2005 9,075 9,075
6.90% 2013 22,000 22,000
8.80% 2021 60,000 60,000
7-1/8% 2023 50,000 50,000
- -----------------------------------------------------------------------------------------------
Total 291,075 291,075
Unamortized discount and premium on bonds, net (1,110) (1,154)
- -----------------------------------------------------------------------------------------------
Total first mortgage bonds 289,965 289,921
- -----------------------------------------------------------------------------------------------
ESOP loan guarantees 18,934 19,970
Other long-term debt 47 54
- -----------------------------------------------------------------------------------------------
Total long-term debt 308,946 309,945
===============================================================================================
Total capitalization $812,080 $807,685
===============================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-6-
<PAGE>
<TABLE>
WPS RESOURCES CORPORATION
<CAPTION>
===============================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended
(Thousands) June 30
1995 1994
===============================================================================================
<S> <C> <C>
Cash flows from operating activities
Net income $26,104 $29,007
Adjustments to reconcile net income to net cash from
operating activities
Depreciation and decommissioning 32,412 28,066
Amortization of nuclear fuel and other 14,334 14,130
Deferred income taxes (4,430) 598
Investment tax credit restored (898) (905)
AFUDC equity (74) (43)
Pension funding (6,142) (5,454)
Postretirement funding 3,458 3,518
Deferred demand-side management expenditures (4,793) (5,154)
Other, net 6,645 (3,365)
Changes in
Customer and other receivables 5,250 3,747
Accrued utility revenues 10,714 19,452
Fossil fuel inventory (996) 62
Gas in storage 7,546 8,533
Accounts payable (18,572) (19,419)
Miscellaneous current and accruals 20,583 17,068
Accrued taxes 2,389 707
- -----------------------------------------------------------------------------------------------
Net cash from operating activities 93,530 90,548
===============================================================================================
Cash flows from (used for) investing activities
Construction and nuclear fuel expenditures (33,497) (27,910)
Allowance for borrowed funds used during construction (81) (62)
Decommissioning funding (9,285) (2,854)
Purchase of investments (4,000) -
Other (180) 748
- -----------------------------------------------------------------------------------------------
Net cash from (used for) investing activities (47,043) (30,078)
===============================================================================================
Cash flows from (used for) financing activities
Redemption and maturities of first mortgage bonds - (1,000)
Change in commercial paper (12,500) (11,000)
Cash dividends on common stock (21,746) (21,268)
- -----------------------------------------------------------------------------------------------
Net cash from (used for) financing activities (34,246) (33,268)
===============================================================================================
Net increase (decrease) in cash and equivalents 12,241 27,202
Cash and equivalents at beginning of period 13,167 5,391
===============================================================================================
Cash and equivalents at end of period $25,408 $32,593
===============================================================================================
Cash paid during period for
Interest, less amount capitalized $10,586 $10,157
Income taxes 15,264 14,453
Preferred stock dividends of subsidiary 1,556 1,556
===============================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-7-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
==============================================================================================================================
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Six Months Ended
(Thousands, except share amounts) June 30 June 30
1995 1994 1995 1994
==============================================================================================================================
<S> <C> <C> <C> <C>
Operating revenues
Electric $117,418 $115,893 $238,518 $239,502
Gas 33,513 31,676 92,873 108,797
- ------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 150,931 147,569 331,391 348,299
==============================================================================================================================
Operating expenses
Electric production fuels 26,388 28,128 50,507 56,302
Purchased power 10,396 8,459 22,477 19,752
Gas purchased for resale 22,859 20,962 60,742 74,328
Other operating expenses 39,258 37,536 74,898 73,641
Maintenance 15,262 14,316 28,538 25,812
Depreciation and decommissioning 15,837 13,874 32,412 28,066
Federal income taxes 2,640 3,895 10,833 13,601
Investment tax credit restored (449) (453) (898) (906)
State income taxes 891 1,166 3,331 3,827
Gross receipts and other taxes 6,366 6,451 12,847 12,987
- ------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 139,448 134,334 295,687 307,410
==============================================================================================================================
Operating income 11,483 13,235 35,704 40,889
- ------------------------------------------------------------------------------------------------------------------------------
Other income
Allowance for equity funds used during construction 48 23 73 43
Other, net 1,874 1,124 5,889 2,334
Income taxes (116) 59 (826) (36)
- ------------------------------------------------------------------------------------------------------------------------------
Total other income 1,806 1,206 5,136 2,341
==============================================================================================================================
Income before interest expense 13,289 14,441 40,840 43,230
- ------------------------------------------------------------------------------------------------------------------------------
Interest on long-term debt 5,931 5,887 11,862 11,842
Other interest 606 393 1,252 887
Allowance for borrowed funds used during construction (48) (27) (81) (62)
- ------------------------------------------------------------------------------------------------------------------------------
Total interest expense 6,489 6,253 13,033 12,667
==============================================================================================================================
Net income 6,800 8,188 27,807 30,563
Preferred stock dividend requirements 778 778 1,556 1,556
- ------------------------------------------------------------------------------------------------------------------------------
Earnings on common stock $6,022 $7,410 $26,251 $29,007
==============================================================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-8-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
====================================================================================================
CONSOLIDATED BALANCE SHEETS June 30 December 31
(Thousands) 1995 1994
====================================================================================================
<S> <C> <C>
ASSETS
- ----------------------------------------------------------------------------------------------------
Utility plant
Electric $1,435,978 $1,412,666
Gas 209,600 202,897
- ----------------------------------------------------------------------------------------------------
Total 1,645,578 1,615,563
Accumulated depreciation and decommissioning (884,488) (846,505)
- ----------------------------------------------------------------------------------------------------
Total 761,090 769,058
Nuclear decommissioning trusts 73,432 64,147
Construction in progress 14,351 11,131
Nuclear fuel, less accumulated amortization 16,966 19,417
- ----------------------------------------------------------------------------------------------------
Net utility plant 865,839 863,753
====================================================================================================
Current assets
Cash and equivalents 20,167 3,449
Customer and other receivables, net of reserves 51,421 58,036
Accrued utility revenues 18,106 28,820
Fossil fuel, at average cost 11,501 10,505
Gas in storage, at average cost 8,186 15,783
Materials and supplies, at average cost 22,316 20,585
Prepayments and other 18,652 21,091
- ----------------------------------------------------------------------------------------------------
Total current assets 150,349 158,269
====================================================================================================
Regulatory assets 103,287 109,135
Investments and other assets 75,831 74,069
====================================================================================================
Total $1,195,306 $1,205,226
====================================================================================================
CAPITALIZATION AND LIABILITIES
- ----------------------------------------------------------------------------------------------------
Capitalization
Common stock equity $432,994 $429,953
Preferred stock with no mandatory redemption 51,200 51,200
Long-term debt to parent 6,143 6,176
Long-term debt 308,946 309,945
- ----------------------------------------------------------------------------------------------------
Total capitalization 799,283 797,274
====================================================================================================
Current liabilities
Note payable 10,000 10,002
Commercial paper - 12,500
Accounts payable 45,853 65,336
Accrued taxes 3,616 1,199
Accrued interest 8,338 8,068
Gas refunds 12,343 -
Other 12,953 6,627
- ----------------------------------------------------------------------------------------------------
Total current liabilities 93,103 103,732
====================================================================================================
Long-term liabilities and deferred credits
Accumulated deferred income taxes 130,197 127,126
Accumulated deferred investment tax credits 31,274 32,172
Regulatory liabilities 57,880 65,995
Long-term liabilities 83,569 78,927
- ----------------------------------------------------------------------------------------------------
Total long-term liabilities and deferred credits 302,920 304,220
====================================================================================================
Total $1,195,306 $1,205,226
====================================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-9-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
================================================================================================
CONSOLIDATED STATEMENTS OF CAPITALIZATION June 30 December 31
(Thousands, except share amounts) 1995 1994
================================================================================================
<S> <C> <C>
Common stock equity
Common stock $95,588 $95,588
Premium on capital stock 73,605 73,605
Retained earnings 282,735 280,730
ESOP loan guarantees (18,934) (19,970)
- ------------------------------------------------------------------------------------------------
Total common stock equity 432,994 429,953
================================================================================================
Preferred stock
Cumulative, $100 par value, 1,000,000 shares authorized;
with no mandatory redemption
Series Shares Outstanding
------ ------------------
5.00% 132,000 13,200 13,200
5.04% 30,000 3,000 3,000
5.08% 50,000 5,000 5,000
6.76% 150,000 15,000 15,000
6.88% 150,000 15,000 15,000
- ------------------------------------------------------------------------------------------------
Total preferred stock 51,200 51,200
================================================================================================
Long-term note to parent
Series Year Due
------ --------
8.76% 2014 6,143 6,176
================================================================================================
Long-term debt
First mortgage bonds
Series Year Due
------ --------
5-1/4% 1998 50,000 50,000
7.30% 2002 50,000 50,000
6.80% 2003 50,000 50,000
6-1/8% 2005 9,075 9,075
6.90% 2013 22,000 22,000
8.80% 2021 60,000 60,000
7-1/8% 2023 50,000 50,000
- ------------------------------------------------------------------------------------------------
Total 291,075 291,075
Unamortized discount and premium on bonds, net (1,110) (1,153)
- ------------------------------------------------------------------------------------------------
Total first mortgage bonds 289,965 289,922
ESOP loan guarantees 18,934 19,970
Other long-term debt 47 53
- ------------------------------------------------------------------------------------------------
Total long-term debt 308,946 309,945
================================================================================================
Total capitalization $799,283 $797,274
================================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-10-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
==============================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS Six Months Ended
(Thousands) June 30
1995 1994
==============================================================================================
<S> <C> <C>
Cash flows from operating activities
Net income $27,807 $30,563
Adjustments to reconcile net income to net cash from
operating activities
Depreciation and decommissioning 32,412 28,066
Amortization of nuclear fuel and other 14,334 14,130
Deferred income taxes (4,467) 598
Investment tax credit restored (898) (905)
AFUDC equity (74) (43)
Pension funding (6,142) (5,454)
Postretirement funding 3,458 3,518
Deferred demand-side management expenditures (4,793) (5,154)
Other, net 6,343 (3,365)
Changes in
Customer and other receivables 6,615 3,747
Accrued utility revenues 10,714 19,452
Fossil fuel (996) 62
Gas in storage 7,597 8,533
Accounts payable (19,483) (19,419)
Miscellaneous current and accruals 20,719 17,068
Accrued taxes 2,417 707
- ----------------------------------------------------------------------------------------------
Net cash from operating activities 95,563 92,104
==============================================================================================
Cash flows from (used for) investing activities
Construction and nuclear fuel expenditures (33,578) (27,972)
Decommissioning funding (9,285) (2,854)
Other (180) 748
- ----------------------------------------------------------------------------------------------
Net cash from (used for) investing activities (43,043) (30,078)
==============================================================================================
Cash flows from (used for) financing activities
Redemption and maturities of first mortgage bonds - (1,000)
Change in commercial paper (12,500) (11,000)
Preferred stock dividends (1,556) (1,556)
Cash dividends on common stock (21,746) (21,268)
- ----------------------------------------------------------------------------------------------
Net cash from (used for) financing activities (35,802) (34,824)
==============================================================================================
Net increase (decrease) in cash and equivalents 16,718 27,202
Cash and equivalents at beginning of period 3,449 5,391
==============================================================================================
Cash and equivalents at end of period $20,167 $32,593
==============================================================================================
Cash paid during period for
Interest, less amount capitalized $10,586 $10,157
Income taxes 15,249 14,453
==============================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-11-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
==============================================================================================
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS Six Months Ended
(Thousands) June 30
1995 1994
==============================================================================================
<S> <C> <C>
Balance at beginning of period $280,730 $288,693
Add Net income 27,807 30,563
- ----------------------------------------------------------------------------------------------
308,537 319,256
- ----------------------------------------------------------------------------------------------
Deduct
Cash dividends declared on preferred stock 1,556 2,334
Dividends declared on common stock 24,246 21,268
- ----------------------------------------------------------------------------------------------
25,802 23,602
- ----------------------------------------------------------------------------------------------
Balance at end of period $282,735 $295,654
==============================================================================================
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
-12-
<PAGE>
WPS RESOURCES CORPORATION AND SUBSIDIARIES
WISCONSIN PUBLIC SERVICE CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 1. FINANCIAL INFORMATION
______________________________
The following consolidated financial statements have been prepared by
WPS Resources Corporation ("Company") and Wisconsin Public Service
Corporation ("WPSC"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC") and, in
the opinion of Management, include all adjustments (consisting only of
normal recurring adjustments) necessary for a fair statement of
results for each period shown. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such SEC rules and regulations. The
Company believes that the disclosures made are adequate to make the
information presented not misleading. It is recommended that these
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's and WPSC's
latest annual reports on Form 10-K.
Because of the seasonal nature of the Company's operations, interim
results are not necessarily indicative of annual results.
NOTE 2. REGULATORY ASSETS
__________________________
In March 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 121,
Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed Of. This Statement imposes stricter criteria
for regulatory assets by requiring that such assets be probable of
future recovery at each balance sheet date. WPSC anticipates adopting
this standard on January 1, 1996 and does not expect that adoption
will have a material impact on the financial position or results of
operations of WPSC based on the current regulatory structure in which
WPSC operates. This conclusion may change in the future as
competitive factors influence wholesale and retail pricing in this
industry.
-13-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
WPS Resources Corporation ("Company") is a holding company.
Approximately 99% of the Company's assets and revenues are derived
from Wisconsin Public Service Corporation ("WPSC"), an electric and
gas utility.
Overview of Second Quarter of 1995 Compared to Second Quarter of 1994
Earnings per share declined from $.31 in 1994 to $.24 in 1995, or
22.6%. The most significant reason was an increase in operating
expenses, that was partially offset by improved margins.
Electric margins increased by $1.3 million, or 1.7%, due primarily to
lower fuel costs.
Second Quarter
___________________________
Electric Margins (000's) 1995 1994
____ ____
Revenues $117,418 $115,893
Fuel and purchases 36,784 36,587
_______ _______
Margin $ 80,634 $ 79,306
======= =======
Sales in kilowatt-hours (000) 2,676,896 2,542,827
Electric revenues increased $1.5 million, or 1.3%, during the second
quarter of 1995 compared to the second quarter of 1994. Electric
revenues were higher due to a 5.3% increase in kilowatt-hour ("kWh")
sales. This was offset partially by a 2.6% decrease in retail
Wisconsin rates that took effect January 1, 1995. Residential kWh
sales increased 4.4% due to warmer weather. Commercial and industrial
kWh sales rose 4.2% reflecting customer growth and warmer weather.
Wholesale kWh sales grew 9.3% due primarily to increased demand by
WPSC s largest wholesale customer.
Electric fuels and purchases increased $.2 million, or .1%, in the
second quarter of 1995 compared to the same period in 1994. Even
though there was an increase in coal-fired generation of 5.4%, or $1.3
million, coal related costs decreased 10.0%, or $2.8 million, due to
burning less expensive low sulphur coal. There was an increase in kWh
purchases of 22.9%, or $1.9 million due to increased plant outages
resulting from maintenance and warmer weather.
-14-
<PAGE>
Gas margins were relatively flat.
Second Quarter
_________________________
Gas Margins (000's) 1995 1994
____ ____
Revenues $44,735 $31,676
Purchase costs 33,962 20,962
_______ _______
Margin $10,773 $10,714
======= =======
Volume in Therms (000) 168,244 108,724
The Public Service Commission of Wisconsin ("PSCW") allows WPSC to
pass on to its customers, through a purchased gas adjustment clause,
changes in the cost of gas.
Gas operating revenues increased $13.1 million, or 41.2%, during the
second quarter of 1995 compared to the second quarter of 1994. Of the
increase, $11.3 million is attributable to sales by WPS Energy
Services, Inc. ("WPSE"), an energy marketing subsidiary which began
operations in 1994. The balance of the increase is attributable to
higher sales volume at WPSC due to weather.
Gas purchased for resale showed a net increase of $13.0 million, or
62.0%, in the second quarter of 1995 as compared to the same period in
1994. Gas purchases for WPSE of $11.1 million were the primary reason
for this increase.
Other operating expenses increased $2.2 million, or 6.0%, during the
second quarter of 1995 compared to the second quarter of 1994. The
primary reason for this was increased amortization and write-offs of
coal and associated rail transportation contracts of $1.0 million.
Maintenance increased by $.9 million, or 6.6%, in the second quarter
of 1995 compared to the second quarter of 1994 due to increased
maintenance activity at the Kewaunee nuclear plant.
Depreciation and decommissioning increased $2.0 million, or 14.1%, in
the second quarter of 1995 compared to the same period in 1994. This
was due to an increase in decommissioning funding of $1.3 million that
has been reflected in the rates that became effective January 1, 1995,
and increased earnings on the decommissioning trusts that were offset
by the increase discussed below.
Other income increased by $.8 million, or 68.4%, in the second quarter
of 1995 compared to the same period in 1994. The primary factor was a
$.5 million increase in decommissioning trust earnings.
Income taxes decreased $1.4 million, or 32.0%, in the second quarter
of 1995 compared to the same period in 1994, due primarily to lower
earnings.
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Overview of Six Months of 1995 Compared to Six Months of 1994
Earnings per share declined from $1.21 in 1994 to $1.09 in 1995, or
9.9%. The most significant reason was an increase in operating and
maintenance expenses.
Electric margins increased by $2.1 million, or 1.3%, due primarily to
lower fuel costs.
Six Months
___________________________
Electric Margins (000's) 1995 1994
____ ____
Revenues $238,518 $239,502
Fuel and purchases 72,984 76,054
_______ _______
Margin $165,534 $163,448
======= =======
Sales in kilowatt-hours (000) 5,444,097 5,210,352
Electric revenues decreased $1.0 million, or .4%, during the first six
months of 1995 compared to the first six months of 1994. Electric
revenues were lower due to a 2.6% decrease in Wisconsin retail rates
that took effect January 1, 1995. This rate decrease was partially
offset by a 4.5% increase in kWh sales. Residential kWh sales
increased .3% due to weather. Commercial and industrial kWh sales
rose 4.6% reflecting customer growth. Wholesale kWh sales grew by
9.2%, due primarily to increased demand by WPSC s largest wholesale
customer.
Electric fuels and purchases decreased $3.1 million, or 4.0%, in the
first six months of 1995 compared to the same period in 1994. Even
though there was an increase in coal-fired generation of 1.3%, coal
related costs decreased $5.3 million due to burning less expensive low
sulphur coal. These decreases were somewhat offset by a 13.8%, or
$2.7 million increase in kWh purchases due to increased plant outages
resulting from maintenance at some plants and warmer weather.
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Gas margins decreased $2.0 million, or 5.8%, due to the warmer than
normal weather.
Six Months
_________________________
Gas Margins (000's) 1995 1994
____ ____
Revenues $111,346 $108,797
Purchase costs 78,873 74,328
_______ _______
Margin $ 32,473 $ 34,469
======= =======
Volume in Therms (000) 429,565 348,964
The Public Service Commission of Wisconsin ("PSCW") allows WPSC to
pass on to its customers, through a purchased gas adjustment clause,
changes in the cost of gas.
Gas operating revenues increased $2.5 million, or 2.3%, during the
first six months of 1995 compared to the first six months of 1994.
The $2.5 million increase is comprised of an $18.4 million increase in
revenues, attributable to sales by WPSE, an energy marketing
subsidiary which began operation in 1994. Offsetting the increase
were decreases of $13.6 million due to warmer than normal weather and
lower gas cost, and $4.7 million representing a refund from WPSC's
primary gas supplier. (There was a reciprocal reduction recorded in
gas purchased for resale as a result of this refund, thus there was no
impact on net income.)
Gas purchased for resale showed a net increase of $4.5 million, or
6.1%, in the first six months of 1995 compared to the same period in
1994. Gas purchases increased $18.1 million due to WPSE sales and
were offset by the $4.7 million refund discussed earlier.
Other operating expenses increased $2.1 million, or 2.9%, in the first
six months of 1995 compared to 1994 due primarily to increased
amortization and write-offs of coal and associated rail transportation
contracts of $1.5 million.
Maintenance increased by $2.7 million, or 10.6%, in the first six
months of 1995 compared to 1994 due to increased maintenance activity
at WPSC's coal-fired and nuclear plants.
Depreciation and decommissioning increased $4.3 million, or 15.5%, in
the first six months of 1995 compared to the same period in 1994.
There were two primary factors for this increase. The first factor was
an increase in decommissioning funding of $2.6 million reflected in
the rates that became effective January 1, 1995. The second factor
was additional depreciation of $1.1 million, recorded to offset the
gain on the decommissioning portfolio discussed below. This maintains
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the balance between the depreciation reserve and the decommissioning
trusts.
Other income increased by $3.6 million, or 151.7%, in the first six
months of 1995 compared to the same period in 1994. This increase was
the result of two factors. The first factor was a $1.6 million pretax
gain on the decommissioning portfolio from the sale of certain
investments. The second factor was receipt of $1.2 million in
insurance proceeds as the result of the death of a retired WPSC
executive.
Income taxes decreased by $2.6 million, or 15.5%, in the first six
months of 1995 compared to the same period in 1994, due primarily to
lower earnings.
FINANCIAL CONDITION
WPSC requires large investments in capital assets used to deliver
electric and gas services. Most of the Company's capital expenditures
relate to WPSC's construction expenditures. WPSC maintains good
liquidity levels and a financial condition considered to be strong by
utility analysts. Internally generated funds exceeded the Company's
cash requirements resulting in the reduction of short-term borrowings
during the first six months of 1995, along with short-term
investments. No funding difficulties are anticipated in the future.
Pretax interest coverage was 3.9 times for the 12 months ended June
30, 1995 for WPSC.
WPSC's bond ratings are AA+ (Standard & Poor's and Duff & Phelps) and
Aa2 (Moody's).
For the three-year period 1995 to 1997, internally generated funds are
expected to lag construction expenditures and other investments
totaling $280 million by about $42 million. These expenditures are
comprised of $139 million for electric construction, $20 million for
nuclear fuel, $51 million for gas construction, $19 million for other
construction expenditures, and $51 million for nuclear decommissioning
and other investments. The Company currently expects to finance this
shortfall in internally generated funds through short-term debt.
WPSC's Kewaunee nuclear plant is currently licensed through the year
2013. Physical decommissioning of the plant is expected to occur
during the period 2014 to 2021 with additional expenditures being
incurred during the period 2022 to 2050. The estimated
decommissioning cost in current dollars is $155 million and the
undiscounted year of expenditure amount is $785 million. Management
does not anticipate decommissioning to have negative impacts on the
Company's liquidity or capital resources, since these costs are being
funded through external decommissioning trusts.
On January 1, 1995, WPSC reduced its Wisconsin retail electric rates
by 2.6%.
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<PAGE>
In March 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 121,
Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed Of, effective January 1, 1996. This statement
imposes stricter criteria for regulatory assets by requiring that such
assets be probable of future recovery at each balance sheet date. At
this time, WPSC's management does not anticipate any material impact
when this new standard is adopted based on prior and current rate
treatment of such costs.
However, the Public Service Commission of Wisconsin ("PSCW") has
initiated proceedings to consider restructuring electric utility
regulation in Wisconsin, and one of the issues on its agenda is
stranded investment. Stranded investment is unrecovered investment in
facilities that are no longer economical to operate. Therefore, the
impact of any change in the current regulatory compact is not known at
this time.
TRENDS
On July 21, 1995, WPSC and Rhinelander Paper Company ("Rhinelander")
announced the cancellation of their plans to construct the Rhinelander
Energy Center ("REC"). The REC would have been a 123-megawatt
cogeneration power plant which would have provided steam to
Rhinelander's facility in Rhinelander, Wisconsin and electricity to
WPSC's customers. Plans for REC were originally announced on
August 27, 1992. On August 3, 1993, the parties entered into a steam
and electrical sales agreement. The parties had attempted to reach
agreement with respect to an amendment to the original agreement as a
result of certain reopener provisions in that agreement. Following an
in-depth financial analysis and a lengthy negotiation process,
Rhinelander decided it was not feasible to continue and decided to
terminate negotiations. WPSC and Rhinelander had been negotiating
since November of 1994 when the Public Service Commission of Wisconsin
("PSCW") selected the REC as the best project from 13 proposals to
meet WPSC's future electrical needs.
The Kewaunee Nuclear Power Plant ("Kewaunee" or "Plant") was shutdown
on April 1, 1995 for scheduled maintenance and refueling. During the
shutdown, inspection of the steam generators revealed higher levels of
tube degradation than was anticipated. Continued use of degraded
tubes raises concerns regarding primary-to-secondary leakage of
reactor coolant. Thus, the degraded tubes were removed from service
by plugging. Tube plugging and the build-up of deposits on the tubes
affect the heat-transfer capability of the steam generators to the
point where eventually full power operation is affected. Prior to the
recent shutdown, the equivalent of approximately 12% of the tubes in
the steam generators were plugged with no loss of capacity. When the
Plant was returned to service on May 18, 21% of the tubes were
plugged, resulting in a capacity reduction of 3.8% during the Plant s
current operating cycle which extends into the fall of 1996. Thus,
net Plant output has been reduced from 525 megawatts to approximately
510 megawatts. Although preliminary estimates indicated a minor
reduction in earnings as reported in the WPS Resources
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<PAGE>
Corporation/Wisconsin Public Service Corporation Form 10-Q for the
quarter ended March 31, 1995, revised estimates indicate that during
1995 additional expenses related to recent steam generator plugging
likely will be offset by reduced nuclear expenses in other areas. The
small reduction in capacity resulting from the plugging of steam
generator tubes should not affect earnings significantly because of
the availability of reserve capacity in the WPSC system. The study of
tube repair alternatives continues.
Wisconsin Public Service Corporation is the operator and 41.2% owner
of Kewaunee which is owned jointly with Wisconsin Power and Light
Company and Madison Gas and Electric Company who own 41% and 17.8%,
respectively.
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PAGE
<PAGE>
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Proxy voting results at the May 4, 1995 Annual Shareholders Meeting
are as follows:
For the election of directors:
For Abstentions Non-Votes Total
--- ----------- --------- -----
Richard A. Bemis 21,237,542 241,443 2,417,977 23,896,962
Daniel A. Bollom 21,243,794 235,191 2,417,977 23,896,962
Robert C. Gallagher 21,247,202 231,783 2,417,977 23,896,962
The following directors also continued in office after the Annual
Shareholders Meeting:
A. Dean Arganbright
Michael S. Ariens
M. Lois Bush
Kathryn M. Hasselblad-Pascale
James L. Kemerling
Linus M. Stoll
For the approval of the WPS Resources Corporation Deferred
Compensation Plan:
For Against Abstentions Non-Votes Total
--- ------- ----------- --------- -----
19,195,653 1,293,459 989,873 2,417,977 23,896,962
Item 5. Other Information
Kewaunee Nuclear Power Plant
The WPS Resources Corporation/Wisconsin Public Service Corporation
Form 10-Q for the quarterly period ended March 31, 1995, at Part II.,
Item 5, Other Information, pages 19 and 20, reported the shutdown of
the Kewaunee Nuclear Power Plant ("Kewaunee" or "Plant") for scheduled
maintenance and refueling and related steam generator matters
beginning on April 1, 1995.
During the shutdown, inspection of the steam generators revealed
higher levels of tube degradation than was anticipated. Continued use
of degraded tubes raises concerns regarding primary-to-secondary
leakage of reactor coolant. Thus, the degraded tubes were removed
from service by plugging. Tube plugging and the build-up of deposits
on the tubes affect the heat-transfer capability of the steam
-21-
<PAGE>
generators to the point where eventually full power operation is
affected. Prior to the recent shutdown, the equivalent of
approximately 12% of the tubes in the steam generators were plugged
with no loss of capacity. When the Plant was returned to service on
May 18, 21% of the tubes were plugged, resulting in a capacity
reduction of 3.8% during the Plant s current operating cycle which
extends into the fall of 1996. Thus, net Plant output has been
reduced from 525 megawatts to approximately 510 megawatts. Although
preliminary estimates indicated a minor reduction in earnings as
reported in the WPS Resources/Wisconsin Public Service Corporation
Form 10-Q for the quarter ended March 31, 1995, revised estimates
indicate that during 1995 additional expenses related to recent steam
generator plugging likely will be offset by reduced nuclear expenses
in other areas. The small reduction in capacity resulting from the
plugging of steam generator tubes should not affect earnings
significantly because of the availability of reserve capacity in the
WPSC system. The study of tube repair alternatives continues.
See Part I, Item 1. Business - Electric Operations - Kewaunee Nuclear
Power Plant in the WPS Resources Corporation and Wisconsin Public
Service Corporation Form 10-K reports for the year ended December 31,
1994 for additional background on this matter.
Wisconsin Public Service Corporation is the operator and 41.2% owner
of Kewaunee which is owned jointly with Wisconsin Power and Light
Company and Madison Gas and Electric Company who own 41% and 17.8%,
respectively.
Rhinelander Energy Center
On July 21, 1995, WPSC and Rhinelander Paper Company ("Rhinelander")
announced the cancellation of their plans to construct the Rhinelander
Energy Center ("REC"). The REC would have been a 123-megawatt
cogeneration power plant which would have provided steam to
Rhinelander's facility in Rhinelander, Wisconsin and electricity to
WPSC's customers. Plans for REC were originally announced on
August 27, 1992. On August 3, 1993, the parties entered into a steam
and electrical sales agreement. The parties had attempted to reach
agreement with respect to an amendment to the original agreement as a
result of certain reopener provisions in that agreement. Following an
in-depth financial analysis and a lengthy negotiation process,
Rhinelander decided it was not feasible to continue and decided to
terminate negotiations. WPSC and Rhinelander had been negotiating
since November of 1994 when the Public Service Commission of Wisconsin
("PSCW") selected the REC as the best project from 13 proposals to
meet WPSC's future electrical needs.
See Part I, Item 1. Business - Electric Operations - Rhinelander
Energy Center in the WPS Resources Corporation and Wisconsin Public
Service Corporation Form 10-K reports for the year ended December 31,
1994 for additional background on this matter.
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following documents are filed herewith:
Exhibit 3(ii) By-Laws
WPS Resources Corporation
Exhibit 27 Financial Data Schedule
WPS Resources Corporation
Wisconsin Public Service Corporation
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant, WPS Resources Corporation, has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
WPS Resources Corporation
Date: July 26, 1995 /s/ D. L. Ford
________________________________
D. L. Ford
Controller
(Chief Accounting Officer)
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant, Wisconsin Public Service Corporation, has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Wisconsin Public Service Corporation
Date: July 26, 1995 /s/ D. L. Ford
____________________________________
D. L. Ford
Controller
(Chief Accounting Officer)
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<PAGE>
WPSC RESOURCES CORPORATION AND
WISCONSIN PUBLIC SERVICE CORPORATION
EXHIBIT INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
Exhibit No. Description
___________ ___________
3(ii) By-Laws
WPS Resources Corporation
27 Financial Data Schedule
WPS Resources Corporation
Wisconsin Public Service Corporation
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<PAGE>
EXHIBIT 3(ii)
WPS RESOURCES CORPORATION
BY-LAWS
AS IN EFFECT JUNE 1, 1995
ARTICLE I. OFFICES
1. The principal office of the Corporation in the State of
Wisconsin shall be in the City of Green Bay. The Corporation may also
have offices at such other places, within and outside of the State of
Wisconsin, as the Board of Directors may designate or as the business
of the Corporation may require.
2. Registered Office. The Board of Directors shall
designate the registered office of the Corporation and may change such
registered office by resolution.
ARTICLE II. SHAREHOLDERS
1. The annual meeting of the shareholders for the election
of directors and for the transaction of such other business as may
properly be brought before the meeting shall be held each year not
later than the fourth Tuesday in May, on the date designated by the
Board of Directors and specified in the notice of meeting. If the
election of directors shall not be held on the day designated for any
annual meeting of the shareholders, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as convenient.
2. Special meetings of the shareholders may be called by
the Chairman of the Board of Directors or the President or the
Secretary, or by resolution of the Board of Directors. The
Corporation shall call a special meeting of shareholders in the event
that the holders of at least 10% of all the votes entitled to be cast
on any issue proposed to be considered at the proposed special meeting
sign, date and deliver to the Corporation one or more written demands
for the meeting describing one or more purposes for which it is to be
held. The Corporation shall give notice of such a special meeting
within thirty days after the date that the demand is delivered to the
Corporation.
3. Place of Meeting. Each meeting of shareholders, annual
or special, shall be held at the principal office of the Corporation
unless another place, either within or without the State of Wisconsin,
has been designated by the Board of Directors and specified in the
notice of such meeting, but any meeting of shareholders may be
adjourned to reconvene at any place designated by a majority of the
shares represented at such meeting.
<PAGE>
4. Notice of Meetings. Written notice stating the date,
time and place of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than sixty days before the date
of the meeting (unless a different time is provided by the Wisconsin
Business Corporation Law or the Articles of Incorporation) to each
shareholder of record entitled to vote at such meeting and to such
other persons as required by the Wisconsin Business Corporation Law.
Such notice shall be given by or at the direction of the officer or
persons calling the meeting and shall be deemed to be delivered when
deposited in the United States mail, postage prepaid, addressed to the
shareholder of record at his address as it appears in the records of
the Corporation. If any meeting of the shareholders is adjourned to
another time or place, no notice of such adjourned meeting need be
given other than by announcement thereof at the meeting at which such
adjournment is taken; provided, however, that if a new record date for
an adjourned meeting is or must be fixed, the Corporation shall give
notice of the adjourned meeting to persons who are shareholders as of
the new record date.
5. Waiver of Notice. A shareholder may waive any notice
required by the Wisconsin Business Corporation Law, the Articles of
Incorporation or these By-laws before or after the date and time
stated in the notice. The waiver shall be in writing and signed by
the shareholder entitled to the notice, contain the same information
that would have been required in the notice under applicable
provisions of the Wisconsin Business Corporation Law (except that the
time and place of meeting need not be stated) and be delivered to the
Corporation for inclusion in the corporate records. A shareholder's
attendance at a meeting, in person or by proxy, waives objection to
all of the following: (a) lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting or
promptly upon arrival objects to holding the meeting or transacting
business at the meeting; and (b) consideration of a particular matter
at the meeting that is not within the purpose described in the meeting
notice, unless the shareholder objects to considering the matter when
it is presented.
6. Fixing of Record Date. The Board of Directors may fix
in advance a date as the record date for the purpose of determining
shareholders entitled to notice of and to vote at any meeting of
shareholders, shareholders entitled to demand a special meeting as
contemplated by Section 2 of this Article II, shareholders entitled to
take any other action, or shareholders for any other purpose. Such
record date shall not be more than seventy days prior to the date on
which the particular action, requiring such determination of
shareholders, is to be taken. If no record date is fixed by the Board
of Directors or by the Wisconsin Business Corporation Law for the
determination of shareholders entitled to notice of and to vote at a
meeting of shareholders, the record date shall be the close of
business on the day before the first notice is given to shareholders.
If no record date is fixed by the Board of Directors or by the
Wisconsin Business Corporation Law for the determination of
2
<PAGE>
shareholders entitled to demand a special meeting as contemplated in
Section 2 of this Article II, the record date shall be the date that
the first shareholder signs the demand. Except as provided by the
Wisconsin Business Corporation Law for a court-ordered adjournment, a
determination of shareholders entitled to notice of and to vote at a
meeting of shareholders is effective for any adjournment of such
meeting unless the Board of Directors fixes a new record date, which
it shall do if the meeting is adjourned to a date more than 120 days
after the date fixed for the original meeting. The record date for
determining shareholders entitled to a distribution (other than a
distribution involving a purchase, redemption or other acquisition of
the Corporation's shares) or a share dividend is the date on which the
Board of Directors authorized the distribution or share dividend, as
the case may be, unless the Board of Directors fixes a different
record date.
7. Shareholders' List for Meetings. After a record date
for a special or annual meeting of shareholders has been fixed, the
Corporation shall prepare a list of the names of all of the
shareholders entitled to notice of the meeting. The list shall be
arranged by class or series of shares, if any, and show the address of
and number of shares held by each shareholder. Such list shall be
available for inspection by any shareholder, beginning two business
days after notice of the meeting is given for which the list was
prepared and continuing to the date of the meeting, at the
Corporation's principal office or at a place identified in the meeting
notice in the city where the meeting will be held. A shareholder or
his or her agent may, on written demand, inspect and, subject to the
limitations imposed by the Wisconsin Business Corporation Law, copy
the list, during regular business hours and at his or her expense,
during the period that it is available for inspection pursuant to this
Section. The Corporation shall make the shareholders' list available
at the meeting and any shareholder or his or her agent or attorney may
inspect the list at any time during the meeting or any adjournment
thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken
at a meeting of shareholders.
8. Quorum and Voting Requirements. Shares entitled to vote
as a separate voting group may take action on a matter at a meeting
only if a quorum of those shares exists with respect to that matter.
Pursuant to Article IV of the Articles of Incorporation, except as
otherwise provided by law or in or pursuant to the provisions of
Article III of the Articles of Incorporation, the holders of a
majority of the shares entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders. Once a
share is represented for any purpose at a meeting, other than for the
purpose of objecting to holding the meeting or transacting business at
the meeting, it is considered present for purposes of determining
whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set
for the adjourned meeting. If a quorum exists, except in the case of
the election of directors, action on a matter shall be approved if the
votes cast within the voting group favoring the action exceed the
3
<PAGE>
votes cast opposing the action, unless the Articles of Incorporation
or the Wisconsin Business Corporation Law requires a greater number of
affirmative votes. Unless otherwise provided in the Articles of
Incorporation, each director shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election of directors
at a meeting at which a quorum is present. Though less than a quorum
of the outstanding votes of a voting group are represented at a
meeting, a majority of the votes so represented may adjourn the
meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the
meeting as originally notified.
9. Proxies. At all meetings of shareholders, a shareholder
may vote his or her shares in person or by proxy. A shareholder may
appoint a proxy to vote or otherwise act for the shareholder by
signing an appointment form, either personally or by his or her
attorney-in-fact. An appointment of a proxy is effective when
received by the Secretary or other officer or agent of the Corporation
authorized to tabulate votes. An appointment is valid for eleven
months from the date of its signing unless a different period is
expressly provided in the appointment form.
10. Acceptance of Instruments Showing Shareholder Action.
If the name signed on a vote, consent, waiver or proxy appointment
corresponds to the name of a shareholder, the Corporation, if acting
in good faith, may accept the vote, consent, waiver or proxy
appointment and give it effect as the act of a shareholder. If the
name signed on a vote, consent, waiver or proxy appointment does not
correspond to the name of a shareholder, the Corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment
and give it effect as the act of the shareholder if any of the
following apply:
(a) The shareholder is an entity and the name signed
purports to be that of an officer or agent of the entity.
(b) The name purports to be that of a personal
representative, administrator, executor, guardian or
conservator representing the shareholder and, if the
Corporation requests, evidence of fiduciary status acceptable
to the Corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(c) The name signed purports to be that of a receiver
or trustee in bankruptcy of the shareholder and, if the
Corporation requests, evidence of this status acceptable to
the Corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and,
if the Corporation requests, evidence acceptable to the
4
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Corporation of the signatory's authority to sign for the
shareholder is presented with respect to the vote, consent,
waiver or proxy appointment.
(e) Two or more persons are the shareholders as
co-tenants or fiduciaries and the name signed purports to be
the name of at least one of the co-owners and the person
signing appears to be acting on behalf of all co-owners.
The Corporation may reject a vote, consent, waiver or proxy
appointment if the Secretary or other officer or agent of the
Corporation who is authorized to tabulate votes, acting in
good faith, has reasonable basis for doubt about the validity
of the signature on it or about the signatory's authority to
sign for the shareholder.
ARTICLE III. BOARD OF DIRECTORS
1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors. The Board
shall determine the nature and character of the business to be
conducted by the Corporation and the method of doing so; what
employees, agents and officers shall be employed and their
compensation; and what purchases or contracts for purchase shall be
made. The Board may delegate any of its aforesaid powers to
committees or to officers, agents or employees as it may from time to
time determine.
2. Number of Directors. The number of directors of the
Corporation shall be nine (9), divided into three (3) classes of three
(3) directors each (Class A, Class B and Class C).
3. Term. At the 1994 annual meeting of shareholders,
the directors of Class A shall be elected for a term to expire at the
first annual meeting of shareholders after their election, and until
their successors are elected and qualify, the directors of Class B
shall be elected for a term to expire at the second annual meeting of
shareholders after their election, and until their successors are
elected and qualify, and the directors of Class C shall be elected for
a term to expire at the third annual meeting of shareholders after
their election and until their successors are elected and qualify. At
each annual meeting of shareholders after the 1994 annual meeting of
shareholders the successors to the class of directors whose terms
shall expire at the time of such annual meeting shall be elected to
hold office until the third succeeding annual meeting of shareholders,
and until their successors are elected and qualify.
5
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4. Qualifications. No director shall be eligible for
re-election after attaining the age of seventy (70) years. Directors
need not be shareholders of the Corporation or residents of the State
of Wisconsin.
5. Meetings. The Board of Directors shall hold its
meetings at such place or places, within or without the State of
Wisconsin, as the Board may from time to time determine.
a. A meeting of the Board of Directors, to be known as
the annual meeting, may be held, without notice, immediately
after and at the same place as the annual meeting of the
shareholders at which such Board is elected, for the purpose
of electing the officers of the Corporation and to transact
such other business as may come before the Board. Such
annual meeting may be held at a different place than the
annual meeting of shareholders and/or on a date subsequent to
the annual meeting of shareholders, if notice of such
different place and/or date has been given to or waived by
all the directors.
b. Regular meetings of the Board of Directors may be
held without call and without notice, at such times and in
such places as the Board may by resolution from time to time
determine.
c. Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board or the Chief
Executive Officer and shall be called by the Secretary of the
Corporation upon the written request of three or more
directors.
6. Notice; Waiver. Notice of each special meeting of
the Board of Directors shall be given by written notice delivered or
communicated in person, by telegraph, teletype, facsimile or other
form of wire or wireless communication, or by mail or private carrier,
to each director at his business address or at such other address as
such director shall have designated in writing filed with the
Secretary, in each case not less than forty-eight hours prior to the
meeting. The notice need not prescribe the purpose of the special
meeting of the Board of Directors or the business to be transacted at
such meeting. If mailed, such notice shall be deemed to be effective
when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice is given by telegram, such notice shall be
deemed to be effective when the telegram is delivered to the telegraph
company. If notice is given by private carrier, such notice shall be
deemed to be effective when delivered to the private carrier.
Whenever any notice whatever is required to be given to any director
of the Corporation under the Articles of Incorporation or these By-
laws or any provision of the Wisconsin Business Corporation Law, a
waiver thereof in writing, signed at any time, whether before or after
the date and time of meeting, by the director entitled to such notice
shall be deemed equivalent to the giving of such notice. The
Corporation shall retain any such waiver as part of the permanent
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corporate records. A director's attendance at or participation in a
meeting waives any required notice to him or her of the meeting unless
the director at the beginning of the meeting or promptly upon his or
her arrival objects to holding the meeting or transacting business at
the meeting and does not thereafter vote for or assent to action taken
at the meeting.
7. Quorum. Except as otherwise provided by the Wisconsin
Business Corporation Law or by the Articles of Incorporation or these
By-laws, a majority of the number of directors specified in Section 2
of Article III of these By-laws shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors.
Except as otherwise provided by the Wisconsin Business Corporation Law
or by the Articles of Incorporation or by these By-laws, a quorum of
any committee of the Board of Directors created pursuant to Section 3
hereof shall consist of a majority of the number of directors
appointed to serve on the committee. A majority of the directors
present (though less than such quorum) may adjourn any meeting of the
Board of Directors or any committee thereof, as the case may be, from
time to time without further notice.
8. Manner of Acting. The affirmative vote of a majority of
the directors present at a meeting of the Board of Directors or a
committee thereof at which a quorum is present shall be the act of the
Board of Directors or such committee, as the case may be, unless the
Wisconsin Business Corporation Law, the Articles of Incorporation or
these By-laws require the vote of a greater number of directors.
9. Minutes of Meetings. Minutes of any regular or special
meeting of the Board of Directors shall be prepared and distributed to
each director.
10. Vacancies. Vacancies occurring in the Board of Directors
shall be filled in the manner provided in Article 5 of the Articles of
Incorporation.
11. Compensation. The Board of Directors, irrespective of
any personal interest of any of its members, may establish reasonable
compensation of all directors for services to the Corporation as
directors, officers or otherwise, or may delegate such authority to an
appropriate committee. The Board of Directors also shall have
authority to provide for or delegate authority to an appropriate
committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and
employees and to their estates, families, dependents or beneficiaries
on account of prior services rendered by such directors, officers and
employees to the Corporation.
12. Presumption of Assent. A director who is present and is
announced as present at a meeting of the Board of Directors or any
committee thereof created in accordance with Section 13 of this
Article III, when corporate action is taken, assents to the action
taken unless any of the following occurs: (a) the director objects at
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the beginning of the meeting or promptly upon his or her arrival to
holding the meeting or transacting business at the meeting; (b) the
director's dissent or abstention from the action taken is entered in
the minutes of the meeting; or (c) the director delivers written
notice that complies with the Wisconsin Business Corporation Law of
his or her dissent or abstention to the presiding officer of the
meeting before its adjournment or to the Corporation immediately after
adjournment of the meeting. Such right of dissent or abstention shall
not apply to a director who votes in favor of the action taken.
13. Committees. The Board of Directors by resolution adopted
by the affirmative vote of a majority of all of the directors then in
office may create one or more committees, appoint members of the Board
of Directors to serve on the committees and designate other members of
the Board of Directors to serve as alternates. Each committee shall
have two or more members who shall, unless otherwise provided by the
Board of Directors, serve at the pleasure of the Board of Directors.
A committee may be authorized to exercise the authority of the Board
of Directors, except that a committee may not do any of the following:
(a) authorize distributions; (b) approve or propose to shareholders
action that the Wisconsin Business Corporation Law requires to be
approved by shareholders; (c) fill vacancies on the Board of Directors
or, unless the Board of Directors provides by resolution that
vacancies on a committee shall be filled by the affirmative vote of
the remaining committee members, on any Board committee; (d) amend the
Corporation's Articles of Incorporation; (e) adopt, amend or repeal
By-laws; (f) approve a plan of merger not requiring shareholder
approval; (g) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the Board of Directors;
and (h) authorize or approve the issuance or sale or contract for sale
of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares, except
that the Board of Directors may authorize a committee to do so within
limits prescribed by the Board of Directors. Unless otherwise
provided by the Board of Directors in creating the committee, a
committee may employ counsel, accountants and other consultants to
assist it in the exercise of its authority.
14. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or
these By-laws, members of the Board of Directors (and any committees
thereof created pursuant to Section 13 of this Article III) may
participate in regular or special meetings by, or through the use of,
any means of communication by which all participants may
simultaneously hear each other, such as by conference telephone. If a
meeting is conducted by such means, then at the commencement of such
meeting the presiding officer shall inform the participating directors
that a meeting is taking place at which official business may be
transacted. Any participant in a meeting by such means shall be
deemed present in person at such meeting. If action is to be taken at
any meeting held by such means on any of the following: (a) a plan of
merger or share exchange; (b) a sale, lease, exchange or other
disposition of substantial property or assets of the Corporation; (c)
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a voluntary dissolution or the revocation of voluntary dissolution
proceedings; or (d) a filing for bankruptcy, then the identity of each
director participating in such meeting must be verified by the
disclosure at such meeting by each such director of each such
director's social security number to the secretary of the meeting
before a vote may be taken on any of the foregoing matters. For
purposes of the preceding clause (b), the phrase "sale, lease,
exchange or other disposition of substantial property or assets" shall
mean any sale, lease, exchange or other disposition of property or
assets of the Corporation having a net book value equal to 10% or more
of the net book value of the total assets of the Corporation on and as
of the close of the fiscal year last ended prior to the date of such
meeting and as to which financial statements of the Corporation have
been prepared but shall exclude any mortgage, pledge or encumbering of
property or assets or the dedication thereof to the repayment of
indebtedness, whether with or without recourse, and whether or not in
the usual and regular course of business. Notwithstanding the fore-
going, no action may be taken at any meeting held by such means on any
particular matter which the presiding officer determines, in his or
her sole discretion, to be inappropriate under the circumstances for
action at a meeting held by such means. Such determination shall be
made and announced in advance of such meeting.
15. Action without Meeting. Any action required or
permitted by the Wisconsin Business Corporation Law to be taken at a
meeting of the Board of Directors or a committee thereof created
pursuant to Section 13 of this Article III may be taken without a
meeting if the action is taken by all members of the Board or of the
committee. The action shall be evidenced by one or more written
consents describing the action taken, signed by each director or
committee member and retained by the Corporation. Such action shall
be effective when the last director or committee member signs the
consent, unless the consent specifies a different effective date.
ARTICLE IV. OFFICERS
1. The principal officers of the Corporation required by
statute shall be a President, such number of Vice Presidents as may be
elected by the Board of Directors, a Secretary, and a Treasurer. The
Board of Directors may elect from among the directors a Chairman of
the Board of Directors and a Vice Chairman of the Board of Directors,
may designate such Chairman, Vice Chairman or any principal officer as
the Chief Executive Officer, may elect such assistant secretaries and
assistant treasurers and other officers as it shall deem necessary,
and may prescribe by resolution their respective powers and duties.
2. The President shall be elected by the directors. Unless
the Board of Directors otherwise prescribes, he shall be the Chief
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Executive Officer of the Corporation. In the event that the President
is not the Chief Executive Officer, he shall have such powers and
duties as the Board of Directors may prescribe.
3. If a Chairman of the Board of Directors shall be
elected, he shall preside as Chairman of all meetings of the
shareholders and of the Board of Directors. He shall have such other
authority as the Board may from time to time prescribe. If there is
no Chairman of the Board, or in the absence of the Chairman, the
presiding officer at meetings of the shareholders, and of the Board of
Directors shall be another officer in the following order of priority:
Vice Chairman of the Board of Directors, President and Vice Presidents
(subject, however, to Section 5 of this Article).
4. The Chief Executive Officer shall exercise active
supervision over the business, property and affairs of the
Corporation.
a. The Chief Executive Officer shall have authority,
subject to such rules as may be prescribed from time to time
by the Board or its committees, to appoint agents or
employees other than those elected by the Board, to prescribe
their powers and duties, and to delegate such authority as he
may see fit. Any agent or employee not elected by the Board
shall hold office at the discretion of the Chief Executive
Officer or other officer employing him.
b. The Chief Executive Officer is authorized to sign,
execute and acknowledge, on behalf of the Corporation, all
deeds, mortgages, bonds, notes, debentures, contracts,
leases, reports and other documents and instruments, except
where the signing and execution thereof by some other officer
or agent shall be expressly authorized and directed by law or
by the Board or by these By-laws. Unless otherwise provided
by law or by the Board, the Chief Executive Officer may
authorize any officer, employee or agent to sign, execute and
acknowledge, on behalf of the Corporation, and in his place
and stead, all such documents and instruments.
c. Unless otherwise ordered by the Board of Directors,
the Chief Executive Officer, or a proxy appointed by him,
shall have full power and authority, in the name of and on
behalf of the Corporation, to attend, act, and vote at any
meeting of the shareholders of any other corporation in which
the Corporation may hold shares of stock. At any such
meeting, he shall possess and may exercise any and all rights
and powers incident to the ownership of shares of stock.
d. The Chief Executive Officer shall have such other
powers and perform such other duties as are incident to the
office of Chief Executive Officer and as may be prescribed by
the Board.
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5. Vice Presidents. In the absence of the President or
during his inability or refusal to act, his powers and duties shall
temporarily devolve upon such Vice Presidents or other officers as
shall be designated by the Board of Directors or, if not designated by
the Board, by the Chief Executive officer or other officer to whom
such power may be delegated by the Board; provided, that no Vice
President or other officer shall act as a member or chairman of any
committee of the Board of Directors of which the President is a member
or chairman, except at the direction of the Board.
a. Each Vice President shall have such powers and
perform such other duties as may be assigned to him by the
Board or by the President, including the power to sign,
execute and acknowledge all documents and instruments
referred to in Section 4 of this Article.
b. The Board may assign to any Vice President, general
supervision and charge over any branch of the business and
affairs of the Corporation, subject to such limitations as it
may elect to impose.
c. The Board of Directors may, if it chooses,
designate one or more of the Vice Presidents "Executive Vice
President" with such powers and duties as the Board shall
prescribe.
6. The Secretary shall attend, and keep the minutes of,
meetings of the shareholders, of the Board of Directors and, unless
otherwise directed by any such committee, of all committees, in books
provided for that purpose; shall have custody of the corporate records
and seal; shall see that notices are given and records and reports
properly kept and filed as required by law or by these By-laws; and,
in general, shall have such other powers and perform such other duties
as are incident to the office of Secretary and as may be assigned to
him by the Board of Directors or the Chief Executive Officer.
7. Assistant Secretaries. In the absence of the Secretary,
or during his inability or refusal to act, his powers and duties shall
temporarily devolve upon such one of the Assistant Secretaries as the
President or the Board of Directors may direct. The Assistant
Secretaries shall have such other powers and perform such other duties
as may be assigned to them by the Board, the Chief Executive Officer
or the Secretary.
8. The Treasurer shall have charge and custody of the
funds, securities and other evidences of value of the Corporation, and
shall keep and deposit them as required by the Board of Directors. He
shall keep proper accounts of all receipts and disbursements and of
the financial transactions of the Corporation. He shall render
statements of such accounts and of money received and disbursed by him
and of property and money belonging to the Corporation as required by
the Board. The Treasurer shall have such other powers and perform
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such other duties as are incident to the office of Treasurer and as
from time to time may be prescribed by the Board or the Chief
Executive officer.
9. Assistant Treasurers. In the absence of the Treasurer,
or during his inability or refusal to act, his powers and duties shall
temporarily devolve upon such one of the Assistant Treasurers as the
President or the Board of Directors may direct. The Assistant
Treasurers shall have such other powers and perform such other duties
as from time to time may be assigned to them, respectively, by the
Board, the Chief Executive Officer or the Treasurer.
10. Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint any person to act as
assistant to any officer, or as agent for the Corporation in his or
her stead, or to perform the duties of such officer whenever for any
reason it is impracticable for such officer to act personally, and
such assistant or acting officer or other agent so appointed by the
Board of Directors or an authorized officer shall have the power to
perform all the duties of the office to which he or she is so
appointed to be an assistant, or as to which he or she is so appointed
to act, except as such power may be otherwise defined or restricted by
the Board of Directors.
11. Compensation. The salaries or other compensation of all
officers elected as provided under Section 1 of this Article (other
than assistant officers) shall be fixed from time to time by the Board
of Directors. The salaries or other compensation of all other agents
and employees of the Corporation shall be fixed from time to time by
the Chief Executive Officer, but only within such limits as to amount,
and in accordance with such other conditions as may be prescribed by
or under the authority of the Board of Directors.
12. Tenure. Each officer shall hold office until his
successor shall have been duly elected and qualified, or until his
death, resignation, disqualification or removal. Any officer, agent
or employee may be removed, with or without cause, at any time by the
Board of Directors notwithstanding the contract rights, if any, of the
officer removed. The appointment of an officer does not of itself
create contract rights.
13. Resignation. An officer may resign at any time by
delivering notice to the Corporation that complies with the Wisconsin
Business Corporation Law. The resignation shall be effective when the
notice is delivered, unless the notice specifies a later effective
date and the Corporation accepts the later effective date.
14. Vacancies. Any vacancy in any office may be filled by
the Board of Directors for the unexpired portion of the term. If a
resignation of an officer is effective at a later date as contemplated
by Section 13 of this Article IV, the Board of
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Directors may fill the pending vacancy before the effective date if
the Board provides that the successor may not take office until the
effective date.
15. Reassignment of Duties. In case of the absence or
disability of any officer of the Corporation, or for any other reason
deemed sufficient by the Board of Directors, the Board may reassign or
delegate the powers and duties, or any of them, to any other officer,
director, or person it may select.
ARTICLE V. CERTIFICATES FOR AND TRANSFER OF SHARES
1. Form. Certificates representing shares of the
Corporation shall be in such form as shall be determined by the Board
of Directors. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the person
to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books
of the Corporation. All certificates surrendered for the transfer
shall be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been
surrendered and cancelled, except in case of a lost or destroyed
certificate provided for in Section 4 of this Article V or a
certificate for shares transferred in compliance with the escheat laws
of any state.
2. Signatures. Certificates representing shares of the
Corporation shall be signed by the President or a Vice President and
by the Secretary or an Assistant Secretary; and may be sealed with the
seal of the Corporation (which may be a facsimile) and countersigned
and registered in such manner, if any, as the Board of Directors may
prescribe. Whenever any certificate is manually signed on behalf of a
transfer agent, or a registrar, other than the Corporation itself or
an employee of the Corporation, the signatures of the President, Vice
President, Secretary or Assistant Secretary, upon such certificate may
be facsimiles. In case any officer who has signed, or whose facsimile
signature has been placed upon such certificate, ceases to be such
officer before such certificate is issued, it may be issued with the
same effect as if he were such officer at the date of its issue.
3. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation
of any restriction imposed by the Corporation upon the transfer of
such shares.
4. Lost, Destroyed or Stolen Certificates. Where the owner
claims that his certificate for shares has been lost, destroyed or
wrongfully taken, a new certificate shall be issued in place thereof
if the owner (a) so requests before the Corporation has notice that
such shares have been acquired by a bona fide purchaser, (b) files
with the Corporation a sufficient indemnity bond, and (c) satisfies
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such other reasonable requirements as may be prescribed by or under
the authority of the Board of Directors.
5. Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer the Corporation
may treat the registered owner of such shares as the person
exclusively entitled to vote, to receive notifications and otherwise
to have and exercise all the rights and powers of an owner. Where a
certificate for shares is presented to the Corporation with a request
to register for transfer, the Corporation shall not be liable to the
owner or any other person suffering loss as a result of such regis-
tration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the Corporation had no duty to inquire
into adverse claims or has discharged any such duty. The Corporation
may require reasonable assurance that said endorsements are genuine
and effective and compliance with such other regulations as may be
prescribed by or under the authority of the Board of Directors.
6. Consideration for Shares. The Board of Directors may
authorize shares to be issued for consideration consisting of any
tangible or intangible property or benefit to the Corporation,
including cash, promissory notes, services performed, contracts for
services to be performed or other securities of the Corporation.
Before the Corporation issues shares, the Board of Directors shall
determine that the consideration received or to be received for the
shares to be issued is adequate. The determination of the Board of
Directors is conclusive insofar as the adequacy of consideration for
the issuance of shares relates to whether the shares are validly
issued, fully paid and nonassessable. The Corporation may place in
escrow shares issued in whole or in part for a contract for future
services or benefits, a promissory note, or otherwise for property to
be issued in the future, or make other arrangements to restrict the
transfer of the shares, and may credit distributions in respect of the
shares against their purchase price, until the services are performed,
the benefits or property are received or the promissory note is paid.
If the services are not performed, the benefits or property are not
received or the promissory note is not paid, the Corporation may
cancel, in whole or in part, the shares escrowed or restricted and the
distributions credited.
7. Other Rules. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may
deem expedient concerning the issue, transfer and registration of
certificates representing shares of the Corporation, including the
appointment and designation of Transfer Agents and Registrars.
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ARTICLE VI. INDEMNIFICATION OF OFFICERS AND DIRECTORS
1. Mandatory Indemnification.
a. In all cases other than those set forth in Section
1b hereof, subject to the conditions and limitations set
forth hereinafter in this Article VI, the Corporation shall
indemnify and hold harmless any person who is or was a party,
or is threatened to be made a party, to any Action (see
Section 16 of this Article VI for definitions of capitalized
terms used herein) by reason of his or her status as an
Executive, and/or as to acts performed in the course of such
Executive's duties to the Corporation and/or an Affiliate,
against Liabilities and reasonable Expenses incurred by or on
behalf of an Executive in connection with any Action,
including, without limitation, in connection with the
investigation, defense, settlement or appeal of any Action;
provided, pursuant to Section 3, that it is not determined by
the Authority, or by a court, that the Executive engaged in
misconduct which constitutes a Breach of Duty.
b. To the extent an Executive has been successful on
the merits or otherwise in connection with any Action,
including, without limitation, the settlement, dismissal,
abandonment or withdrawal of any such Action where the
Executive does not pay, icur or assume any material
Liabilities, or in connection with any claim, issue or matter
therein, he or she shall be indemnified by the Corporation
against reasonable Expenses incurred by or on behalf of him
or her in connection therewith. The Corporation shall pay
such Expenses to the Executive (net of all Expenses, if any,
previously advanced to the Executive pursuant to Section 2),
or to such other person or entity as the Executive may
designate in writing to the Corporation, within ten (10) days
after the receipt of the Executive's written request
therefor, without regard to the provisions of Section 3. In
the event the Corporation refuses to pay such requested
Expenses, the Executive may petition a court to order the
Corporation to make such payment pursuant to Section 4.
c. Notwithstanding any other provision contained in
this Article VI to the contrary, the Corporation shall not:
(i) indemnify, contribute or advance Expenses
to an Executive with respect to any Action initiated or
brought voluntarily by the Executive and not by way of
defense, except with respect to Actions:
(a) brought to establish or enforce a
right to indemnification, contribution and/or an
advance of Expenses under Section 4 of this Article
VI, under the Statute as it may then be in effect
or under any other statute or law or otherwise as
required;
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(b) initiated or brought voluntarily by
an Executive to the extent such Executive is
successful on the merits or otherwise in connection
with such an Action in accordance with and pursuant
to Section 1b of this Article VI; or
(c) as to which the Board determines it
to be appropriate.
(ii) indemnify the Executive under this Article
VI for any amounts paid in settlement of any Action
effected without the Corporation's written consent.
The Corporation shall not settle in any manner
which would impose any Liabilities or other type of
limitation on the Executive without the Executive's
written consent. Neither the Corporation nor the
Executive shall unreasonably withhold their consent to
any proposed settlement.
d. An Executive's conduct with respect to an employee
benefit plan sponsored by or otherwise associated with the
Corporation and/or an Affiliate for a purpose he or she
reasonably believes to be in the interests of the
participants in and beneficiaries of such plan is conduct
that does not constitute a breach or failure to perform his
or her duties to the Corporation or an Affiliate, as the case
may be.
2. Advance for Expenses.
a. The Corporation shall pay to an Executive, or to
such other person or entity as the Executive may designate in
writing to the Corporation, his or her reasonable Expenses
incurred by or on behalf of such Executive in connection with
any Action, or claim, issue or matter associated with any
such Action, in advance of the final disposition or
conclusion of any such Action (or claim, issue or matter
associated with any such Action), within ten (10) days after
the receipt of the Executive's written request therefor;
provided, the following conditions are satisfied:
(i) the Executive has first requested an
advance of such Expenses in writing (and delivered a
copy of such request to the Corporation) from the
insurance carrier(s), if any, to whom a claim has been
reported under an applicable insurance policy purchased
by the Corporation and each such insurance carrier, if
any, has declined to make such an advance;
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(ii) the Executive furnishes to the Corporation
an executed written certificate affirming his or her
good faith belief that he or she has not engaged in
misconduct which constitutes a Breach of Duty; and
(iii) the Executive furnishes to the Corporation
an executed written agreement to repay any advances made
under this Section 2 if it is ultimately determined that
he or she is not entitled to be indemnified by the
Corporation for such Expenses pursuant to this Article
VI.
b. If the Corporation makes an advance of Expenses to
an Executive pursuant to this Section 2, the Corporation
shall be subrogated to every right of recovery the Executive
may have against any insurance carrier from whom the
Corporation has purchased insurance for such purpose.
3. Determination of Right to Indemnification.
a. Except as otherwise set forth in this Section 3
or in Section 1c, any indemnification to be provided to an
Executive by the Corporation under Section 1a of this Article
VI upon the final disposition or conclusion of any Action, or
any claim, issue or matter associated with any such Action,
unless otherwise ordered by a court, shall be paid by the
Corporation to the Executive (net of all Expenses, if any,
previously advanced to the Executive pursuant to Section 2),
or to such other person or entity as the Executive may
designate in writing to the Corporation, within sixty (60)
days after the receipt of the Executive's written request
therefor. Such request shall include an accounting of all
amounts for which indemnification is being sought. No
further corporate authorization for such payment shall be
required other than this Section 3.
b. Notwithstanding the foregoing, the payment of such
requested indemnifiable amounts pursuant to Section 1a may be
denied by the Corporation if:
(i) the Board by a majority vote thereof
determines that the Executive has engaged in misconduct
which constitutes a Breach of Duty; or
(ii) a majority of the directors of the
Corporation are a party in interest to such Action.
c. In either event of nonpayment pursuant to Section
3b, the Board shall immediately authorize and direct, by
resolution, that an independent determination be made as to
whether the Executive has engaged in misconduct which
constitutes a Breach of Duty and, therefore, whether
indemnification of the Executive is proper pursuant to this
Article VI.
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d. Such independent determination shall be made, at
the option of the Executive(s) seeking indemnification, by
(i) a panel of three arbitrators (selected as set forth below
in Section 3f from the panels of arbitrators of the American
Arbitration Association) in Milwaukee, Wisconsin, in
accordance with the Commercial Arbitration Rules then
prevailing of the American Arbitration Association; (ii) an
independent legal counsel mutually selected by the
Executive(s) seeking indemnification and the Board by a
majority vote of a quorum thereof consisting of directors who
were not parties in interest to such Action (or, if such
quorum is not obtainable, by the majority vote of the entire
Board); or (iii) a court in accordance with Section 4 of this
Article VI.
e. In any such determination there shall exist a
rebuttable presumption that the Executive has not engaged in
misconduct which constitutes a Breach of Duty and is,
therefore, entitled to indemnification hereunder. The burden
of rebutting such presumption by clear and convincing
evidence shall be on the Corporation.
f. If a panel of arbitrators is to be employed
hereunder, one of such arbitrators shall be selected by the
Board by a majority vote of a quorum thereof consisting of
directors who were not parties in interest to such Action or,
if such quorum is not obtainable, by an independent legal
counsel chosen by the majority vote of the entire Board, the
second by the Executive(s) seeking indemnification and the
third by the previous two arbitrators.
g. The Authority shall make its independent
determination hereunder within sixty (60) days of being
selected and shall simultaneously submit a written opinion of
its conclusions to both the Corporation and the Executive.
h. If the Authority determines that an Executive is
entitled to be indemnified for any amounts pursuant to this
Article VI, the Corporation shall pay such amounts to the
Executive (net of all Expenses, if any, previously advanced
to the Executive pursuant to Section 2), including interest
thereon as provided in Section 6c, or such other person or
entity as the Executive may designate in writing to the
Corporation, within ten (10) days of receipt of such opinion.
i. Except with respect to any judicial determination
pursuant to Section 4, the Expenses associated with the
indemnification process set forth in this Section 3,
including, without limitation, the Expenses of the Authority
selected hereunder, shall be paid by the Corporation.
18
<PAGE>
4. Court-Ordered Indemnification and Advance for Expenses.
a. An Executive may, either before or within two years
after a determination, if any, has been made by the
Authority, petition the court before which such Action was
brought or any other court of competent jurisdiction to
independently determine whether or not he or she has engaged
in misconduct which constitutes a Breach of Duty and is,
therefore, entitled to indemnification under the provisions
of this Article VI. Such court shall thereupon have the
exclusive authority to make such determination unless and
until such court dismisses or otherwise terminates such
proceeding without having made such determination. An
Executive may petition a court under this Section 4 either to
seek an initial determination by the court as authorized by
Section 3d or to seek review by the court of a previous
adverse determination by the Authority.
b. The court shall make its independent determination
irrespective of any prior determination made by the
Authority; provided, however, that there shall exist a
rebuttable presumption that the Executive has not engaged in
misconduct which constitutes a Breach of Duty and is,
therefore, entitled to indemnification hereunder. The burden
of rebutting such presumption by clear and convincing
evidence shall be on the Corporation.
c. In the event the court determines that an Executive
has engaged in misconduct which constitutes a Breach of Duty,
it may nonetheless order indemnification to be paid by the
Corporation if it determines that the Executive is fairly and
reasonably entitled to indemnification in view of all of the
circumstances of such Action.
d. In the event the Corporation does not (i) advance
Expenses to the Executive within ten (10) days of such
Executive's compliance with Section 2; or (ii) indemnify an
Executive with respect to requested Expenses under Section 1b
within ten (10) days of such Executive's written request
therefor, the Executive may petition the court before which
such Action was brought, if any, or any other court of
competent jurisdiction to order the Corporation to pay such
reasonable Expenses immediately. Such court, after giving
any notice it considers necessary, shall order the
Corporation to pay such Expenses if it determines that the
Executive has complied with the applicable provisions of
Section 2 or 1b, as the case may be.
e. If the court determines pursuant to this Section 4
that the Executive is entitled to be indemnified for any
Liabilities and/or Expenses, or to the advance of Expenses,
unless otherwise ordered by such court, the Corporation shall
pay such Liabilities and/or Expenses to the Executive (net of
all Expenses, if any, previously advanced to the Executive
pursuant to Section 2), including interest thereon as
provided in Section 6c, or to such other person
19
<PAGE>
or entity as the Executive may designate in writing
to the Corporation, within ten (10) days of the rendering of
such determination.
f. An Executive shall pay all Expenses incurred by
such Executive in connection with the judicial determination
provided in this Section 4, unless it shall ultimately be
determined by the court that he or she is entitled, in whole
or in part, to be indemnified by, or to receive an advance
from, the Corporation as authorized by this Article VI. All
Expenses incurred by an Executive in connection with any
subsequent appeal of the judicial determination provided for
in this Section 4 shall be paid by the Executive regardless
of the disposition of such appeal.
5. Termination of an Action is Nonconclusive. The adverse
termination of any Action against an Executive by judgment, order
settlement, conviction, or upon a plea of no contest or its
equivalent, shall not, of itself, create a presumption that the
Executive has engaged in misconduct which constitutes a Breach of
Duty.
6. Partial Indemnification; Reasonableness; Interest.
a. If it is determined by the Authority, or by a
court, that an Executive is entitled to indemnification as to
some claims, issues or matters, but not as to other claims,
issues or matters, involved in any Action, the Authority, or
the court, shall authorize the proration and payment by the
Corporation of such Liabilities and/or reasonable Expenses
with respect to which indemnification is sought by the
Executive, among such claims, issues or matters as the
Authority, or the court, shall deem appropriate in light of
all of the circumstances of such Action.
b. If it is determined by the Authority, or by a
court, that certain Expenses incurred by or on behalf of an
Executive are for whatever reason unreasonable in amount, the
Authority, or the court, shall nonetheless authorize
indemnification to be paid by the Corporation to the
Executive for such Expenses as the Authority, or the court,
shall deem reasonable in light of all of the circumstances of
such Action.
c. Interest shall be paid by the Corporation to an
Executive, to the extent deemed appropriate by the Authority,
or by a court, at a reasonable interest rate, for amounts for
which the Corporation indemnifies or advances to the
Executive.
7. Insurance; Subrogation.
a. The Corporation may purchase and maintain insurance
on behalf of any person who is or was an Executive of the
20
<PAGE>
Corporation, and/or is or wasserving as an Executive of an
Affiliate, against Liabilities and/or Expenses asserted
against him or her and/or incurred by or on behalf of him or
her in any such capacity, or arising out of his or her status
as such an Executive, whether or not the Corporation would
have the power to indemnify him or her against such
Liabilities and/or Expenses under this Article VI or under
the Statute as it may then be in effect. Except as expressly
provided herein, the purchase and maintenance of such
insurance shall not in any way limit or affect the rights and
obligations of the Corporation and/or any Executive under
this Article VI. Such insurance may, but need not, be for
the benefit of all Executives of the Corporation and those
serving as an Executive of an Affiliate.
b. If an Executive shall receive payment from any
insurance carrier or from the plaintiff in any Action against
such Executive in respect of indemnified amounts after
payments on account of all or part of such indemnified
amounts have been made by the Corporation pursuant to this
Article VI, such Executive shall promptly reimburse the
Corporation for the amount, if any, by which the sum of such
payment by such insurance carrier or such plaintiff and
payments by the Corporation to such Executive exceeds such
indemnified amounts; provided, however, that such portions,
if any, of such insurance proceeds that are required to be
reimbursed to the insurance carrier under the terms of its
insurance policy, such as deductible, retention or
co-insurance amounts, shall not be deemed to be payments to
such Executive hereunder.
c. Upon payment of indemnified amounts under this
Article VI, the Corporation shall be subrogated to such
Executive's rights against any insurance carrier in respect
of such indemnified amounts and the Executive shall execute
and deliver any and all instruments and/or documents and
perform any and all other acts or deeds which the Corporation
shall deem necessary or advisable to secure such rights. The
Executive shall do nothing to prejudice such rights of
recovery or subrogation.
8. Witness Expenses. The Corporation shall advance or
reimburse any and all reasonable Expenses incurred by or on behalf of
an Executive in connection with his or her appearance as a witness in
any Action at a time when he or she has not been formally named a
defendant or respondent to such an Action, within ten (10) days after
the receipt of an Executive's written request therefor.
9. Contribution.
a. Subject to the limitations of this Section 9, if
the indemnity provided for in Section 1 of this Article VI is
unavailable to an Executive for any reason whatsoever, the
Corporation, in lieu of indemnifying the Executive, shall
contribute to the amount incurred by or on behalf of the
21
<PAGE>
Executive, whether for Liabilities and/or for reasonable
Expenses in connection with any Action in such proportion as
deemed fair and reasonable by the Authority, or by a court,
in light of all of the circumstances of any such Action, in
order to reflect:
(i) the relative benefits received by the
Corporation and the Executive as a result of the
event(s) and/or transaction(s) giving cause to such
Action; and/or
(ii) the relative fault of the Corporation (and
its other Executives, employees and/or agents) and the
Executive in connection with such event(s) and/or
transaction(s).
b. The relative fault of the Corporation (and its
other Executives, employees and/or agents), on the one hand,
and of the Executive, on the other hand, shall be determined
by reference to, among other things, the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent the circumstances resulting in such
Liabilities and/or Expenses. The Corporation agrees that it
would not be just and equitable if contribution pursuant to
this Section 9 were determined by pro rata allocation or any
other method of allocation which does not take account of the
foregoing equitable considerations.
c. An Executive shall not be entitled to contribution
from the Corporation under this Section 9 in the event it is
determined by the Authority, or by a court, that the
Executive has engaged in misconduct which constitutes a
Breach of Duty.
d. The Corporation's payment of, and an Executive's
right to, contribution under this Section 9 shall be made and
determined in accordance with and pursuant to the provisions
in Sections 3 and/or 4 of this Article VI relating to the
Corporation's payment of, and the Executive's right to,
indemnification under this Article VI.
10. Indemnification of Employees. Unless otherwise
specifically set forth in this Article VI, the Corporation shall
indemnify and hold harmless any person who is or was a party, or is
threatened to be made a party to any Action by reason of his or her
status as, or the fact that he or she is or was an employee or
authorized agent or representative of the Corporation and/or an
Affiliate as to acts performed in the course and within the scope of
such employee's, agent's or representative's duties to the Corporation
and/or an Affiliate, in accordance with and to the fullest extent
permitted by the Statute as it may then be in effect.
11. Severability. If any provision of this Article
VI shall be deemed invalid or inoperative, or if a court of
competent jurisdiction determines that any of the
22
<PAGE>
provisions of this Article VI contravene public policy, this Article
VI shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such
provisions which are invalid or inoperative or which contravene public
policy shall be deemed, without further Action or deed by or on behalf
of the Corporation, to be modified, amended and/or limited, but only
to the extent necessary to render the same valid and enforceable, and
the Corporation shall indemnify an Executive as to Liabilities and
reasonable Expenses with respect to any Action to the full extent per-
mitted by any applicable provision of this Article VI that shall not
have been invalidated and to the full extent otherwise permitted by
the Statute as it may then be in effect.
12. Nonexclusivity of Article VI. The right to
indemnification, contribution and advancement of Expenses provided to
an Executive by this Article VI shall not be deemed exclusive of any
other rights to indemnification, contribution and/or advancement of
Expenses which any Executive or other employee or agent of the
Corporation and/or of an Affiliate may be entitled under any charter
provision, written agreement, resolution, vote of shareholders or
disinterested directors of the Corporation or otherwise, including,
without limitation, under the Statute as it may then be in effect,
both as to acts in his or her official capacity as such Executive or
other employee or agent of the Corporation and/or of an Affiliate or
as to acts in any other capacity while holding such office or
position, whether or not the Corporation would have the power to
indemnify, contribute and/or advance Expenses to the Executive under
this Article VI or under the Statute; provided that it is not
determined that the Executive or other employee or agent has engaged
in misconduct which constitutes a Breach of Duty.
13. Notice to the Corporation; Defense of Actions.
a. An Executive shall promptly notify the Corporation
in writing upon being served with or having actual knowledge
of any citation, summons, complaint, indictment or any other
similar document relating to any Action which may result in a
claim of indemnification, contribution or advancement of
Expenses hereunder, but the omission so to notify the
Corporation will not relieve the Corporation from any
liability which it may have to the Executive otherwise than
under this Agreement unless the Corporation shall have been
irreparably prejudiced by such omission.
b. With respect to any such Action as to which an
Executive notifies the Corporation of the commencement
thereof:
(i) The Corporation shall be entitled to
participate therein at its own expense; and
23
<PAGE>
(ii) Except as otherwise provided below, to the
extent that it may wish, the Corporation (or any other
indemnifying party, including any insurance carrier,
similarly notified by the Corporation or the Executive)
shall be entitled to assume the defense thereof, with
counsel selected by the Corporation (or such other
indemnifying party) and reasonably satisfactory to the
Executive.
c. After notice from the Corporation (or such other
indemnifying party) to the Executive of its election to
assume the defense of an Action, the Corporation shall not be
liable to the Executive under this Article VI for any
Expenses subsequently incurred by the Executive in connection
with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. The Executive
shall have the right to employ his or her own counsel in such
Action but the Expenses of such counsel incurred after notice
from the Corporation (or such other indemnifying party) of
its assumption of the defense thereof shall be at the expense
of the Executive unless (i) the employment of counsel by the
Executive has been authorized by the Corporation; (ii) the
Executive shall have reasonably concluded that there may be a
conflict of interest between the Corporation (or such other
indemnifying party) and the Executive in the conduct of the
defense of such Action; or (iii) the Corporation (or such
other indemnifying party) shall not in fact have employed
counsel to assume the defense of such Action, in each of
which cases the Expenses of counsel shall be at the expense
of the Corporation. The Corporation shall not be entitled to
assume the defense of any Derivative Action or any Action as
to which the Executive shall have made the conclusion
provided for in clause (ii) above.
14. Continuity of Rights and obligations. The terms and
provisions of this Article VI shall continue as to an Executive
subsequent to the Termination Date and such terms and provisions shall
inure to the benefit of the heirs, estate, executors and
administrators of such Executive and the successors and assigns of the
Corporation, including, without limitation, any successor to the
Corporation by way of merger, consolidation and/or sale or disposition
of all or substantially all of the assets or capital stock of the
Corporation. Except as provided herein, all rights and obligations of
the Corporation and the Executive hereunder shall continue in full
force and effect despite the subsequent amendment or modification of
the Corporation's Articles of Incorporation, as such are in effect on
the date hereof, and such rights and obligations shall not be affected
by any such amendment or modification, any resolution of directors or
shareholders of the Corporation, or by any other corporate action
which conflicts with or purports to amend, modify, limit or eliminate
any of the rights or obligations of the Corporation and/or of the
Executive hereunder.
15. Amendment. This Article VI may only be altered, amended
or repealed by the affirmative vote of a majority of the shareholders
24
<PAGE>
of the Corporation so entitled to vote; provided, however, that the
Board may alter or amend this Article VI without such shareholder
approval if any such alteration or amendment:
a. is made in order to conform to any amendment or
revision of the Wisconsin Business Corporation Law,
including, without limitation, the Statute, which (i) expands
or permits the expansion of an Executive's right to
indemnification thereunder; (ii) limits or eliminates, or
permits the limitation or elimination, of liability of the
Executives; or (iii) is otherwise beneficial to the
Executives; or
b. in the sole judgment and discretion of the Board,
does not materially adversely affect the rights and
protections of the shareholders of the Corporation.
Any repeal, modification or amendment of this Article VI
shall not adversely affect any rights or protections of an
Executive existing under this Article VI immediately prior to
the time of such repeal, modification or amendment and any
such repeal, modification or amendment shall have a
prospective effect only.
16. Certain Definitions. The following terms as used in
this Article VI shall be defined as follows:
a. "Action(s)" shall include, without limitation, any
threatened, pending or completed action, claim, litigation,
suit or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, whether predicated on foreign,
Federal, state or local law, whether brought under and/or
predicated upon the Securities Act of 1933, as amended,
and/or the Securities Exchange Act of 1934, as amended,
and/or their respective state counterparts and/or any rule or
regulation promulgated thereunder, whether a Derivative
Action and whether formal or informal.
b. "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit
plan, trust, or other similar enterprise that directly or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the
Corporation.
c. "Authority" shall mean the panel of arbitrators or
independent legal counsel selected under Section 3 of the
Agreement.
d. "Board" shall mean the Board of Directors of the
Corporation.
25
<PAGE>
e. "Breach of Duty" shall mean the Executive breached
or failed to perform his or her duties to the Corporation or
an Affiliate, as the case may be, and the Executive's breach
of or failure to perform those duties constituted:
(i) A willful failure to deal fairly with the
Corporation (or an Affiliate) or its shareholders in
connection with a matter in which the Executive has a
material conflict of interest;
(ii) A violation of the criminal law, unless the
Executive:
(a) Had reasonable cause to believe his or her conduct
was lawful; or
(b) Had no reasonable cause to believe his or her
conduct was unlawful;
(iii) A transaction from which the Executive
derived an improper personal profit (unless such profit
is determined to be immaterial in light of all the
circumstances of the Action); or
(iv) Willful misconduct.
f. "Derivative Action" shall mean any Action brought
by or in the right of the Corporation and/or an Affiliate.
g. "Executive(s)" shall mean any individual who is,
was or has agreed to become a director and/or officer of the
Corporation and/or an Affiliate.
h. "Expenses" shall include, without limitation, all
expenses, fees, costs, charges, attorneys' fees and
disbursements, other out-of-pocket costs, reasonable
compensation for time spent by the Executive in connection
with the Action for which he or she is not otherwise
compensated by the Corporation, any Affiliate, any third
party or other entity and any and all other direct and
indirect costs of any type or nature whatsoever.
i. "Liabilities" shall include, without limitation,
judgments, amounts incurred in settlement, fines, penalties
and, with respect to any employee benefit plan, any excise
tax or penalty incurred in connection therewith, and any and
all other liabilities of every type or nature whatsoever.
j. "Statute" shall mean Wisconsin Business Corporation
Law Section 180.05 (or any successor provisions).
26
<PAGE>
k. "Termination Date" shall mean the date an Executive
ceases, for whatever reason, to serve in an employment
relationship with the Company and/or any Affiliate.
ARTICLE VII. SEAL
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the words
"WPS RESOURCES CORPORATION, CORPORATE SEAL." The continued use for any
purpose of any former corporate seal or facsimile thereof shall have
the same effect as the use of the corporate seal or facsimile thereof
in the form provided by the preceding sentence.
ARTICLE VIII. AMENDMENTS
1. The Board of Directors shall have authority to adopt,
amend, or repeal the By-laws of this Corporation upon affirmative vote
of a majority of the total number of directors at a meeting of the
Board, the notice of which shall have included notice of the proposed
amendment; but the Board of Directors shall have no power to amend any
By-law or to reinstate any By-law repealed by the shareholders unless
the shareholders shall hereafter confer such authority upon the Board
of Directors.
2. The shareholders shall have power to adopt, amend or
repeal any of the By-laws of the Corporation, at any regular or
special meeting of the shareholders, in accordance with the provisions
of Article II of these By-laws. There shall be included in the notice
of such regular or special meeting a statement of the nature of any
amendment that is proposed for the consideration of the shareholders
by the holders of at least 5% of the voting stock of the Corporation
in a writing delivered to the Secretary of the Corporation not less
than ninety (90) days prior to the date of such meeting or by the
Board of Directors.
GOB_LAN l:\group\common\w\corp\bylaws\bylaws.hc
27
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000916863
<NAME> WPS RESOURCES CORPORATION
<SUBSIDIARY>
<NUMBER> 1
<NAME> WISCONSIN PUBLIC SERVICE CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 865,859
<OTHER-PROPERTY-AND-INVEST> 82,402
<TOTAL-CURRENT-ASSETS> 159,028
<TOTAL-DEFERRED-CHARGES> 103,287
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,210,576
<COMMON> 23,897
<CAPITAL-SURPLUS-PAID-IN> 145,021
<RETAINED-EARNINGS> 283,016
<TOTAL-COMMON-STOCKHOLDERS-EQ> 451,934
0
51,200
<LONG-TERM-DEBT-NET> 308,946
<SHORT-TERM-NOTES> 10,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 0
<TOT-CAPITALIZATION-AND-LIAB> 822,080
<GROSS-OPERATING-REVENUE> 349,864
<INCOME-TAX-EXPENSE> 13,996
<OTHER-OPERATING-EXPENSES> 301,434
<TOTAL-OPERATING-EXPENSES> 301,434<F1>
<OPERATING-INCOME-LOSS> 48,430<F2>
<OTHER-INCOME-NET> 5,988
<INCOME-BEFORE-INTEREST-EXPEN> 68,414<F3>
<TOTAL-INTEREST-EXPENSE> 12,762
<NET-INCOME> 27,660
1,556
<EARNINGS-AVAILABLE-FOR-COMM> 26,104
<COMMON-STOCK-DIVIDENDS> 21,746
<TOTAL-INTEREST-ON-BONDS> 10,586
<CASH-FLOW-OPERATIONS> 93,530
<EPS-PRIMARY> 1.09
<EPS-DILUTED> 1.09
<FN>
<F1>Operating expenses exclude income taxes of $13,996.
<F2>Operating income is before income taxes of $13,996.
<F3>Income before interest expense is before income taxes of $13,996.
</FN>
</TABLE>
