Registration No. 333-____________
333-_________
P.O. Box 19001
This prospectus may not be used to sell any of these securities unless accompanied by a prospectus supplement.
See “Risk Factors” in the accompanying prospectus supplement or in such other document we refer you to in the accompanying prospectus supplement for a discussion of certain risks that prospective investors should consider before investing in our preferred stock and/or the depositary shares.senior debt securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
This prospectus is a part of the registration statement that we filed with the Securities and Exchange Commission. You should read this prospectus and any accompanying prospectus supplement together with the more detailed information regarding our company, our securities and our financial statements and notes to those statements that appear elsewhere in this prospectus or that we incorporate in this prospectus by reference.
You should rely only on the information contained in, or incorporated by reference in, this prospectus and in any accompanying prospectus supplement. We have not authorized anyone to provide you with information different from that contained in, or incorporated by reference in, this prospectus or any prospectus supplement. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of the prospectus or prospectus supplement, as applicable.
This summary highlights selected information from this prospectus and may not contain all of the information that is important to you. To understand the terms of our securities, you should carefully read this prospectus with the accompanying prospectus supplement. Together these documents will give the specific terms of the securities we are offering. You should also read the documents we have incorporated by reference into this prospectus and the accompanying prospectus supplement for information on us and our financial statements.
| Company | Wisconsin Public Service Corporation |
| Securities Being Offered | Not exceeding $30,000,000 of our preferred stock and/or of depositary shares representing interests in our preferred stock$500,000,000 Senior Debt Securities |
The Company |
| Business | Regulated electric and natural gas utility |
| Service Area | Approximately 11,000 square miles in northeastern Wisconsin and an adjacent portion of the Upper Peninsula of Michigan |
Sources of Total Operating Revenues for the Year Ended December 31, 20112012 �� | 78%80% Electric; 22%20% Natural Gas
|
Customers (approximate) at December 31, 20112012 | Electric-441,000;Electric-443,000; Natural Gas-319,000Gas-321,000
|
Sources of Electric Supply in 20112012 | Owned Generation Units | |
| | Coal | 58.9%51.1% |
| | Wind | 2.1%2.3% |
| | Hydroelectric | 1.8%1.2% |
| | Natural gas, fuel oil and tire derived | 0.9%1.2%
|
| | Total owned | 63.7%55.8% |
| | Purchased Power | |
| | Nuclear | 18.2%18.3% |
| | Natural gas | 10.9%20.0% |
| | Hydroelectric | 3.9%2.7% |
| | Wind | 1.4%1.5% |
| | Other (including Midwest Independent Transmission System Operator, Inc.) | 10.8%15.0%
|
| | Total purchased power | 45.2%57.5% |
| | Opportunity Sales | (8.9%(13.3%) |
Ratios of Earnings to Fixed Charges and Preferred Stock Dividend Requirements (Unaudited) *
| Year Ended December 31, | Three Months Ended March 31, |
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 |
| | | | | | |
| 4.4 | 4.7 | 3.9 | 4.3 | 4.4 | 6.0 |
Year Ended December 31, |
| 2008 | 2009 | 2010 | 2011 | 2012 |
| | | | | |
| 5.2 | 4.2 | 4.7 | 4.8 | 5.4 |
______________
* In computing the ratios, earnings represent income from continuing operations before federal and state income taxes and fixed charges, less undistributed earnings of less thanthen 50% owned affiliates. Fixed charges represent interest expense, allowance for borrowed funds used during construction and the estimated interest component of rentals. Preferred stock dividend requirements are computed by dividing the preferred stock dividend requirements by 100% minus the income tax rate.
Where You Can Find More Information
We file annual, quarterly and current reports and other information with the Securities and Exchange Commission. You may read and copy any document we file at the Commission’s public reference room at 100 F Street, N.E., Washington, D.C., 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. Our Securities and Exchange Commission filings are also available to the public at the Commission’s web site at http://www.sec.gov.
We have filed with the Commission a Registration Statement on Form S-3, including exhibits, under the Securities Act of 1933 with respect to the securities offered by this prospectus. This prospectus is part of that registration statement, but does not contain all of the information contained in the registration statement or its exhibits, certain parts of which we have omitted in accordance with the rules and regulations of the Commission. For further information, you should refer to the registration statement and its exhibits. Any statements contained in this prospectus concerning the provisions of any document filed as an exhibit to the registration statement or otherwise filed with the Commission are not necessarily complete. You should refer to the copy of the document filed with the Commission for a more complete description of the matter involved.
The Securities and Exchange Commission allows us to “incorporate by reference” into this prospectus the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the Commission will automatically update and supersede this information. We incorporate by reference the documents listed below (our File No. is 1-3016) and any future filings made with the Securities and Exchange Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until our offering is completed:
| | 1. Our Annual Report on Form 10-K for the year ended December 31, 2011, which was filed on February 29, 2012. |
| 2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, which was filed on May 3, 2012. |
| 3. Our Current Report on Form 8-K dated April 23, 2012, which was filed on April 25, 2012.March 1, 2013. |
You may request a copy of these filings, at no cost, by writing to or telephoning us at either of the following addresses:address:
Wisconsin Public Service Corporation Attn: Secretary 700 North Adams Street
P.O. Box 19001
Green Bay, Wisconsin 54307-9001
(920) 433-1727
| Wisconsin Public Service Corporation
Attn: Assistant Secretary
130 East Randolph Street Chicago, Illinois 60601-6207 (312) 240-4303 |
Our reports are also available on the website of our parent company, Integrys Energy Group, Inc., located at http://www.integrysgroup.com/investor/, and can be accessed by selecting “SEC Filings.”
THE COMPANY
We are a wholly owned subsidiary of Integrys Energy Group, Inc. Any obligations relating to the preferred stock and/or the depositary shares representing interests in the preferred stockThe senior debt securities offered pursuant to this prospectus, however, are solely our obligations, and Integrys Energy Group is not obligated to make any dividendpayments of principal or paymentsinterest on the redemption or liquidation of our preferred stock and/or the depositary shares representing interests in our preferred stock.senior debt securities.
We are a regulated electric and natural gas utility that generates electricity and distributes electricity and natural gas in northeastern Wisconsin and an adjacent portion of the Upper Peninsula of Michigan. As of December 31, 2011,2012, our regulated electric utility operations served approximately 441,000443,000 residential, commercial and industrial, wholesale and other customers. Wholesale electric service is provided to various customers, including municipal utilities, electric cooperatives, energy marketers, other investor-owned utilities and municipal joint action agencies. As of December 31, 2011,2012, our regulated natural gas utility served approximately 319,000321,000 residential, commercial and industrial, transportation and other customers. In 2011,2012, electric revenues accounted for 78%80.4% of total revenues, while natural gas revenues accounted for 22%19.6% of total revenues. Retail salesrevenues accounted for 80.3%86.4% of our 20112012 total electric revenues, while wholesale revenues accounted for 13.6% of our 2012 total electric revenues. We were incorporated under the laws of the State of Wisconsin in 1883. Our executive offices are at 700 North Adams Street, P.O. Box 19001, Green Bay, Wisconsin 54307. Our telephone number is 800-450-7260.
The Public Service Commission of Wisconsin regulates our Wisconsin retail utility rates and service and any issuance of securities by us. The Michigan Public Service Commission regulates our Michigan retail utility rates and service. The Federal Energy Regulatory Commission regulates our wholesale electric rates, hydroelectric projects and certain other matters. We must also comply with mandatory electric system reliability standards developed by the North American Electric Reliability Corporation, the electric reliability organization certified by the Federal Energy Regulatory Commission. The Midwest Reliability Organization is responsible for the enforcement of the North American Electric Reliability Corporation’s standards for us. We are also subject to state and federal environmental regulation and to limited regulation by local authorities.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, we will use the net proceeds from the sale of the preferred stock and/or depositary sharessenior debt securities to redeem any or all(i) fund the purchase of the following currentlyFox Energy Center, a 593-megawatt combined-cycle electric generating facility in Wisconsin, and related acquisition costs, (ii) retire short-term indebtedness issued to temporarily finance the acquisition, (iii) refund outstanding sharesshort-term indebtedness incurred for purposes other than the acquisition, (iv) refund outstanding long-term debt and (v) pay the cost of our preferred stock: 150,000 sharesconstruction or acquisition of 6.76% series preferred stock at a redemption price of $103.35 per share, and 150,000 shares of 6.88% series preferred stock at a redemption price of $100.34 per share, if redeemed before June 1, 2013, and $100.00 per share, if redeemed on or after June 1, 2013, in each case, plus the amount of accumulated and unpaid dividends on such 6.76% series preferred stock or 6.88% series preferred stock at the date of redemption.other capital assets. Any remaining proceeds will be used for other general corporate utility purposes.
DESCRIPTION OF PREFERRED STOCKTHE SENIOR DEBT SECURITIES
The description of the preferred stocksenior debt securities offered in the accompanying prospectus supplement modifies and supplements the following description. Please read both descriptions. The following is a summary of the material provisions of our preferred stock, based principally upon provisions in our restated articles of incorporation.the senior indenture. This summary does not purport to be complete and is qualified in its entirety by the more detailed provisions of the preferred stock set forth in our restated articles of incorporation,senior indenture and supplemental indentures, which isare incorporated by reference in this prospectus.
General: We will issue from time to time, in one or more series, senior debt securities under a Trust Indenture dated as of December 1, 1998 between us and U.S. Bank National Association (successor
Generalto Firstar Bank Milwaukee, N.A., National Association), as supplemented and amended by any supplemental indentures, which we refer to collectively in this prospectus as the “senior indenture”. In this prospectus, we refer to U.S. Bank National Association and any successor trustee under the senior indenture as the senior trustee. The senior indenture is an exhibit to the registration statement.
Our restated articles of incorporation authorize us to issue 32,000,000 shares of common stock, par value $4 per share, and 1,000,000 shares of preferred stock, par value $100 per share, issuable in series. At March 31, 2012, there were 23,896,962 shares of our common stock issued and outstanding, all of which is ownedUntil the release date, the senior debt securities will be secured by our parent, Integrys Energy Group, Inc. At March 31, 2012, there were 511,882 shares of our preferred stock issued and outstanding, consisting of 131,916 shares of 5.00% series, 29,983 shares of 5.04% series, 49,983 shares of 5.08% series, 150,000 shares of 6.76% series and 150,000 shares of 6.88% series.
Issuance in Series
All shares of our preferred stock of all series constitute one class and are of equal rank, subject to (1) variations in dividend rates and redemption terms as set forth in our restated articles of incorporation as to all outstanding series and (2) variations in the following respects which our board of directors is authorized to fix prior to the issue of each new series of preferred stock: (a) dividend rate, (b) redemption terms, (c) amounts payable on voluntary or on involuntary liquidation, (d) sinking fund provisions, if any, (e) conversion terms, if any, and (f) voting rights, if any. No sinking fund or conversion terms have been provided in respect to any outstandingmore series of our preferred stock.first mortgage bonds issued and delivered to the senior trustee. See “Security; Release Date” below. These first mortgage bonds, or the collateral bonds, will be issued under the First Mortgage and Deed of Trust dated January 1, 1941 from us to U.S. Bank National Association (successor to First Wisconsin Trust Company), as supplemented and amended by any supplemental indentures, which we refer to collectively as the “mortgage indenture” in this prospectus. In this prospectus, we refer to U.S. Bank National Association and any successor trustee under the mortgage indenture as the “mortgage trustee”. The mortgage indenture is an exhibit to the registration statement.
All unissued sharesOn the release date, the senior debt securities will cease to be secured by the collateral bonds and, at our option, either (i) will become our unsecured general obligations or (ii) will be secured by our first mortgage bonds issued under a mortgage indenture other than the current mortgage indenture, which we refer to in this prospectus as “substituted collateral bonds”. The senior indenture provides that, in addition to the senior debt securities offered by this prospectus, other senior debt securities may be issued from time to time, in one or more series, under the senior indenture, without limitation as to aggregate principal amount, provided that, before the release date, the amount of senior debt securities that may be issued cannot exceed the aggregate principal amount of collateral bonds that we are able to issue under the mortgage indenture.
The senior indenture and the mortgage indenture, which we refer to collectively in this prospectus as the “indentures,” do not contain any debt covenants or provisions that would afford holders of the senior debt securities protection in the event of a highly leveraged transaction.
There is no requirement under the indentures that future issues of our preferred stock and any outstanding sharesdebt securities be issued under the indentures. Subject to certain restrictions following the release date, which are described in “Restrictions” below, we will be free to employ other indentures or documentation, containing provisions different from those included in the indentures, in connection with future issues of preferred stockour debt securities.
Please refer to the prospectus supplement relating to the senior debt securities being offered, which we may redeem or reacquire, may, withinrefer to collectively in this prospectus as the limitations stated in our restated articles of incorporation, be issued in series bearing“offered senior debt securities,” for specific terms respecting the permitted variableoffered senior debt securities, including among other terms as fixed by our board of directors prior to the issuance of each series.following:
Without the affirmative vote of a majority of the outstanding shares of all series of our preferred stock, we are prohibited under our restated articles of incorporation from issuing any additional shares of preferred stock unless our net earnings applicable to the payment of dividends on the preferred stock for any twelve consecutive calendar months within the fifteen calendar months immediately preceding the first day of the calendar month in which such additional shares are issued is at least twice the dividend requirement for a twelve month period upon the entire amount of preferred stock to be outstanding immediately after the issue of such additional shares. Our earnings applicable to the payment of preferred stock dividends for the twelve month period ended March 31, 2012 were $124.5 million, resulting in a ratio of 40.0 times the dividend requirements for such twelve month period for all preferred stock then outstanding, and a ratio of 25.4 times after issuance of all of the preferred stock offered pursuant to this prospectus at an estimated weighted average dividend rate of 6% per share per annum (without giving effect to the use of the proceeds to redeem the shares of preferred stock referred to under “Use of Proceeds” above). After giving effect to the use of the proceeds to redeem the shares of preferred stock referred to under “Use of Proceeds” above, such ratio would be 43.5 times. A difference of 1/8% in the assumed weighted average dividend rate on the preferred stock offered pursuant to this prospectus would change the ratio by approximately 0.6.| · | the title of the offered senior debt securities; |
Dividend Rights| · | any limit on the aggregate principal amount of the offered senior debt securities; |
Dividends on each series of our preferred stock are payable when and as declared, quarterly, on the 1st of February, May, August and November, at the respective dividend rate per annum expressed in the title of such series. The payment of such dividends on the preferred stock from any earned surplus or other available surplus is not restricted by the terms of any of our indentures or other undertakings.| · | the date or dates on which the offered senior debt securities will mature; |
| · | the rate or rates per year (which may be fixed or variable) at which the offered senior debt securities will bear interest or the method by which the rate or rates will be determined; |
| · | the date from which interest will accrue or the method by which that date will be determined; |
| · | the dates on which interest will be payable and the regular record dates for the interest payment dates; |
Limitation on Dividends on Common Stock and on Acquisition of Common Stock| · | the dates, if any, on which, and the price or prices at which, we will redeem any offered senior debt securities, pursuant to any mandatory redemption or sinking fund provisions, and other detailed terms and provisions of any mandatory redemption or sinking funds; |
Dividends on our common stock, which is only held by our parent, Integrys Energy Group, Inc., may be paid only when all cumulative dividends on our preferred stock for all past quarterly dividend periods have been paid or funds for the payment thereof set aside. The foregoing limitation does not apply to dividends payable in shares of common stock.| · | the date, if any, after which, and the price or prices at which, we may, or may be required to, redeem any offered senior debt securities, at our option or the option of the holder, pursuant to any optional redemption provisions, and other detailed terms and provisions of any optional redemption; and |
If,| · | any other terms of any offered senior debt securities (which terms shall not be inconsistent with the senior indenture). |
The following activities relating to the senior debt securities will occur at the endoffice of the third calendar month immediately precedingsenior trustee in St. Paul, Minnesota:
| · | payment of principal and interest; and |
| · | exchange, transfer and registration of certificated senior debt securities. |
At the option of the senior trustee, we may pay interest to the registered holder by check or by electronic funds transfer.
The offered senior debt securities will be represented either by global securities registered in the name of a depositary, or its nominee, or by certificates in certificated form issued to the registered holders of the offered senior debt securities as set forth in the applicable prospectus supplement. See “Book Entry Securities” below.
Definitions: For purposes of the descriptions of the senior debt securities, certain defined terms have the following meanings:
“Capitalization” means the total of all the following items appearing on, or included in, our consolidated balance sheet; (i) liabilities for indebtedness maturing more than 12 months from the date of payment of dividends on ourdetermination; and (ii) common stock, preferred stock, Hybrid Preferred Securities (as defined in the senior indenture), premium on capital represented by our common stock, capital surplus, capital in excess of par value, and surplus accounts (not including premiums on our preferred stock) as a percentageretained earnings (however the foregoing may be designated), less, to the extent not otherwise deducted, the cost of shares of our total capital stock held in treasury. Subject to the foregoing, Capitalization shall be determined in accordance with generally accepted accounting principles and surplus accounts, adjusted to reflect the proposed payment of dividends on our common stock (“the capitalization ratio”) is 25% or more, the amount of such payment of dividends on our common stock is not limited by our restated articles of incorporation. However, our restated articles of incorporation provide that (1) if the capitalization ratio is less than 25%, the amount of such payment of dividends on our common stock may not exceed 75% of net incomepractices applicable to the common stock for the twelve month period ended on the datetype of business in which we are engaged and that are approved by our regularly retained independent accountants, and may be determined as of a date not more than 60 days before the happening of the event for which the capitalization ratiodetermination is determined and (2) if the capitalization ratio is less than 20%, the amount of such payment of dividends on our common stock may not exceed 50% of such net income. For purposes of such limitation (a) “payment of dividends on our common stock” excludes dividends payable in shares of common stock but includes distributions on, or acquisitions for value of, common stock, (b) “capital represented by common stock” includes premiums thereon and (c) “total capital and surplus accounts” include debt maturing one year or more after date of issue. For purposes of such computations, total capital, surplus accounts and net income are defined in our restated articles of incorporation. As so defined, the common stock and surplus accounts at March 31, 2012 represented about 67.3% of the total capital and surplus accounts, including debt maturing one year or more after date of issue. Accordingly, the payment of dividends out of current net income is unrestricted presently.being made.
The Public Service Commission“Debt” means any outstanding debt for money borrowed evidenced by notes, debentures, bonds or other securities or guarantees of Wisconsin allows us to pay normal dividendsany debt for money borrowed.
“Net Tangible Assets” means the amount shown as total assets on our common stockconsolidated balance sheet, less the following: (i) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense and (ii) appropriate adjustments, if any, on account of nominority interests. Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which we are engaged and that are approved by our regularly retained independent accountants, and may be determined as of a date not more than 103%60 days before the happening of the previous year’s common stock dividend. In addition,event for which the Public Service Commission of Wisconsin currently requires us to maintain a calendar year average financial common equity ratio of 50.24% or higher. We must obtain Public Service Commission of Wisconsin approval if the payment of dividends on our common stock would cause us to fall below this authorized level of common equity.
Redemption Provisions
Our preferred stockdetermination is redeemable in whole or in part at our option at any time on 30 days’ notice. We may not redeem less than all, nor purchase any, of our preferred stock during the existence of any dividend default thereon.
Voting Rights
Except as hereinafter set forth or required by mandatory provision of law in special instances, the holders of our preferred stock have no voting power.
Holders of our preferred stock are entitled to vote on certain matters relating to the following: (1) a change of the express terms of any series of preferred stock in a manner prejudicial to the holders; (2) the authorization of stock ranking prior to the preferred stock; (3) the authorization of stock (other than a series of the 1,000,000 shares of preferred stock presently authorized) ranking on a parity with the preferred stock; (4) as discussed above, the issuance of additional shares or the disposition of redeemed or reacquired shares of any series of preferred stock unless net earnings available for dividends on preferredbeing made.
stock“Operating Property” means (i) any interest in real property that we own and (ii) any asset that we own that is depreciable in accordance with generally accepted accounting principles, excluding, in either case, any of our interests as lessee under any lease (except for a recent twelve month period shall havelease that results from a Sale and Lease-Back Transaction) which has been at least twiceor would be capitalized on the dividend requirements uponbooks of the entire amountlessee in accordance with generally accepted accounting principles.
“Sale and Lease-Back Transaction” means any arrangement with any person providing for the leasing to us of preferred stock thenany Operating Property (except for leases for a term, including any renewals of not more than 48 months), which Operating Property has been or is to be outstanding; (5) a mergersold or consolidation withtransferred by us to that person; provided, however, Sale and Lease-Back Transaction shall not include any arrangement first entered into before the date of the senior indenture or any transaction in which we sell Operating Property to, and subsequently purchase energy or services from, an entity if the transaction was ordered or authorized by, or was entered into pursuant to any corporation unlessplan or program of industry restructuring ordered approved or permittedauthorized by, the Securities and Exchange Commission or the Federal Power Commission or successorany regulatory authority (now the Federal Energy Regulatory Commission); and (6) the issuancewith jurisdiction over us or assumption of securities representing unsecured indebtedness, other than to refund outstanding unsecured indebtedness or retire preferred stock, if immediately thereafter the total principal amount of all unsecured securities not theretofore consented to would exceed 20% of our secured indebtedness plus capital and surplus. With respect to (1), (2) and (3) above, the affirmative vote of at least two-thirds of the outstanding preferred stock (or the affected series in the case of a change prejudicial to fewer than all series) is required;operations.
“Value” means, with respect to (4)a Sale and (5) above,Lease-Back Transaction, as of any particular time, the affirmative voteamount equal to the greater of (i) our net proceeds from the sale or transfer of the property leased pursuant to the Sale and Lease-Back Transaction or (ii) the net book value of the property, as determined by us in accordance with generally accepted accounting principles at the time of entering into the Sale and Lease-Back Transaction, in either case multiplied by a majority thereoffraction, the numerator of which shall be equal to the number of full years of the term of the lease that is required;part of the Sale and with respectLease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to (6) above, the required affirmative vote isnumber of full years of that term, without regard, in any case, to any renewal or extension options contained in the lease.
Original Issue Discount Securities. We may issue the senior debt securities under the senior indenture as original issue discount securities to be offered and sold at a majoritysubstantial discount below their principal amount. If we do, we will describe the special federal income tax, accounting and other considerations applicable to any original issue discount securities in the prospectus supplement relating to those securities. Original issue discount securities are any securities that provide that an amount less than their principal amount will be due and payable upon a declaration of acceleration of their maturity as a specified quorum thereof. Approval byresult of the holdersoccurrence and continuation of our preferred stock is not required foran event of default.
Security; Release Date. Until the release date, one or more series of the collateral bonds that we issue and deliver to the senior trustee will secure the senior debt securities. See “Description of the First Mortgage Bonds.” Upon the issuance of secured debt. Anysenior debt securities before the release date, we will simultaneously issue and deliver collateral bonds to the senior trustee, as security for those senior debt securities. The collateral bonds will have the same stated rate or rates of interest (or interest calculated in the same manner), interest payment dates, stated maturity date and redemption provisions, and will be in the same aggregate principal amount as the senior debt securities being issued. We have agreed to issue a related series of collateral bonds in the name of the senior trustee in its capacity as trustee under the senior indenture at the same time that we issue each series of senior debt securities. The senior trustee has agreed to hold each series of collateral bonds in that capacity under all circumstances and not transfer the collateral bonds until the earlier of the release date or the retirement of the related series of senior debt securities through redemption, repurchase or otherwise. Before the release date, we will make payments of the principal of, and premium or interest on, each series of collateral bonds to the senior trustee. The senior trustee will apply those payments to satisfaction of all obligations then due on the related series of senior debt securities.
The release date will be the date that all of the voting rights referred to in (4), (5)first mortgage bonds that are issued and (6) above may be denied or limited with respect to the shares of any series ofoutstanding under our preferred stock offered pursuant to this prospectus.
If there is a default in the payment of dividends on our preferred stock in an amount equal to four full quarterly dividends, and until all dividends in default shall have been paid or declared and funds set aside for payment, (1) each share of preferred stock will be entitled to one vote per share, and each share of our common stock will be entitled to one-fourth vote per share, on all mattersmortgage indenture, other than the election of directors, and (2) the holders of the preferred stock will be entitled as a class to elect a majority of our board of directors and the sole holder of the common stock, Integrys Energy Group, Inc., will be entitled as a class to elect the remaining directors. No shareholder has cumulative voting rights. Any or all of the voting rights described in this paragraph may be denied or limited with respect to the shares of any series of our preferred stock offered pursuant to this prospectus.
Any denial or limitation of the voting rights described in the two immediately preceding paragraphs with respect to any series of our preferred stock offered pursuant to this prospectus will be described in the accompanying prospectus supplement.
Liquidation Rights
In the event of our dissolution or liquidation, the holders of our preferred stock will be entitled to receive the applicable preferential amounts specified in our restated articles of incorporationcollateral bonds, have been retired (at, before any of the corporate assets shall be paid to the sole holder of our common stock. Such preferential amounts are as follows: (1) as to the 5.00% series, 5.04% series, 5.08% series and 6.76% series of our preferred stock, the par value ($100) plus the amount of accumulated and unpaid dividends (whether or not earned or declared) in the case of either voluntary or involuntary liquidation; (2) as to the 6.88% series of preferred stock, the then applicable redemption price ($100.34 before June 1, 2013 and $100 on or after their maturities) through payment, redemption or otherwise, provided that date) in the case of a voluntary liquidation and, in the case of an involuntary liquidation, the par value ($100), plus the amount of accumulated and unpaid dividends (whether or not earned or declared) in the case of either a voluntary or involuntary liquidation; and (3) as to our preferred stock offered pursuant to this prospectus, such amount as shall be determined by our board of directors prior to the issuance of those shares as described in an accompanying prospectus supplement. If the assets shall be insufficient to pay the foregoing amounts in full, the respective series shall share ratably in proportion to the amounts which would have been payable if all such amounts were paid in full. Consolidation or merger pursuant to applicable corporate laws is not deemed a dissolution or liquidation for the purposes of this paragraph.no
Preemptive Rightsdefault or event of default under the senior indenture has occurred and is continuing. On the release date, the senior trustee will deliver to us for cancellation all collateral bonds and not later than 30 days after the release date will provide notice of the occurrence of the release date to all holders of senior debt securities. As a result, on the release date, the collateral bonds will cease to secure the senior debt securities, and, at our option, the senior debt securities, either (i) will become our unsecured general obligations or (ii) will be secured by substituted collateral bonds. Each issue of collateral bonds will be secured by a lien on certain property that we own. In certain circumstances before the release date, we are permitted to reduce the aggregate principal amount of an issue of collateral bonds held by the senior trustee, but in no event to an amount lower than the aggregate outstanding principal amount of the senior debt securities initially issued contemporaneously with the collateral bonds. Following the release date, we will cause the mortgage indenture to be discharged, and we will not issue any additional bonds under the mortgage indenture.
No holder of shares of any class of our stock has any preemptive or subscription rights.
Conversion Rights
Shares of our preferred stock offered pursuant to this prospectus willRestrictions. The senior indenture provides that we may not be convertible into shares of our common stockconsolidate with, merge with or into any other corporation (whether or not we are the surviving corporation), or sell, assign, transfer or lease all or substantially all of our properties and assets as an entirety or substantially as an entirety to any person or group of affiliated persons, in one transaction or a series of related transactions, unless: (1) either we will be the continuing person or the person (if other than us) formed by the consolidation or with which or into which we are merged or the person (or group of affiliated persons) to which we sell, assign, transfer or lease all or substantially all our properties and assets is a corporation (or constitute corporations) and that corporation (A) expressly assumes all our obligations under the senior debt securities and the senior indenture by an indenture supplemental to the senior indenture, executed and delivered to the senior trustee in form satisfactory to the senior trustee and (B) expressly assumes all of ours.our obligations under any outstanding collateral bonds or substituted collateral bonds and under the mortgage indenture or substituted mortgage indenture, by an indenture supplemental to the mortgage indenture (if before the release date) or any substituted mortgage indenture (if on or after the release date), executed and delivered to the mortgage trustee or the trustee under the substituted mortgage indenture in form satisfactory to the mortgage trustee or the trustee under the substituted mortgage indenture; (2) immediately before and after giving effect to the transaction or series of transactions, no event of default, and no default, with respect to the senior debt securities shall have occurred and be continuing; and (3) we shall have delivered to the senior trustee an officer’s certificate and an opinion of counsel, each stating that the consolidation, merger or transfer and the supplemental indentures comply with the senior indenture, the mortgage indenture or the substituted mortgage indenture, as the case may be.
Transfer AgentThere is inherent uncertainty in the phrase “all or substantially all.” This uncertainty may make it difficult for holders of the senior debt securities to (1) determine whether our covenant relating to consolidation, merger and Registrar
Thesale of our properties and assets to another person has been breached, (2) declare an event of default and (3) exercise their acceleration rights. Further, interpretation of this phrase as it relates to any transfer agentof our properties and registrar for our preferred stock is American Stock Transfer & Trust Company, LLC.
DESCRIPTION OF DEPOSITARY SHARES
We may, at our option, elect to offer depositary shares rather than full shares of preferred stock.assets will be governed by applicable law and will be dependent upon the particular facts and circumstances. In the event such option is exercised, each of the depositary shares will represent ownership of and entitlement to all rights and preferences of a fraction of a share of preferred stock of a specified series (including dividend, voting, redemption and liquidation rights). The applicable fraction will be specified in the accompanying prospectus supplement. The shares of preferred stock represented by the depositary shares will be deposited with a depositary named in the accompanying prospectus supplement, under a deposit agreement, among the depositary, the holders of the depositary receiptssenior debt securities attempt to exercise their rights under the senior indenture following the occurrence of a particular transfer or series of transfers that they believe constitutes a transfer of “all or substantially all” of our properties and us. Depositary receipts, which are certificates evidencing depositary shares, will be deliveredassets and we contest such exercise, we cannot provide any assurance as to those persons purchasing depositary shares inhow a court would interpret the offering. The depositary will be the transfer agent, registrar and dividend disbursing agent for the depositary shares. Holders of depositary receipts agree to be bound by the deposit agreement, which requires holders to take certain actions such as filing proof of residence and paying certain charges.phrase “all or substantially all.”
Limitation on Liens. The summary of terms ofsenior indenture provides that, so long as any senior debt securities are outstanding, we may not issue, assume, guarantee or permit to exist after the depositary shares containedrelease date any Debt that is secured by any mortgage, security interest, pledge or lien, which we refer to collectively in this prospectus does not purport to be complete and is subject to, and qualified in its entirety by,as liens, of or upon any of our Operating Property, whether owned at the provisionsdate of the applicable deposit agreement, the form of depositary receipt, our restated articles of incorporation and the articles of amendment to our restated articles of incorporation for the applicable series of preferred stock, which are incorporated by referencesenior indenture or acquired after that date, without in this prospectus.
Dividends
The depositary will distribute all cash dividends or other cash distributions received by it in respect of the series of preferred stock represented by the depositary shares to the record holders of depositary receipts in proportion to the number of depositary shares owned by such holders on the relevant record date, which will be the same date as the record date fixed by us for the applicable series of preferred stock. In the event that the calculation of any such cash dividend or other cash distribution results in an amount which is a fraction of a cent,case effectively securing the amount the depositary will distribute will be rounded to the next highest whole cent if such fraction of a cent is equal to or greater than $.005, otherwise such fractional interest shall be disregarded.
In the event of a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary receipts entitled thereto, in proportion, as nearly as may be practicable, to the number of depositary shares owned by such holders on the relevant record date, unlesssenior debt
securities (together with, if we shall so determine, any of our other indebtedness ranking equally with the depositary determines (after consultationsenior debt securities) equally and ratably with us) that itsuch Debt (but only so long as such Debt is not feasible to make such distribution, in which case the depositary may (with our approval) adopt any other method for such distribution as it deems equitable and practicable, including the sale of such property (at such place or places and upon such terms as it may deem equitable and appropriate) and distribution of the net proceeds from such sale to such holders.so secured).
Liquidation RightsThat restriction will not apply to:
| ● | liens on any Operating Property existing at the time of its acquisition (which liens may also extend to subsequent repairs, alterations and improvements to the Operating Property); |
| ● | liens on Operating Property of a corporation existing at the time the corporation is merged into, or consolidated with, or the corporation disposes of its properties (or those of a division) as or substantially as an entirety to, us; |
●i | liens on Operating Property to secure the cost of acquisition, construction, development or substantial repair, alteration or improvement of the Operating Property or to secure indebtedness incurred to provide funds for any of those purposes or for reimbursement of funds previously expended for any of those purposes, provided those liens are created or assumed contemporaneously with, or within 18 months after, the acquisition or the completion of construction, development or substantial repair, alteration or improvement of the Operating Property; |
●i | liens in favor of any state or any department, agency or instrumentality or political subdivision of any state, or for the benefit of holders of securities issued by any of those entities (or providers of credit enhancement with respect to those securities), to secure any Debt (including, without limitation, any of our obligations with respect to industrial development, pollution control or similar revenue bonds) incurred for the purpose of financing all or any part of the purchase price or the cost of constructing, developing or substantially repairing, altering or improving our Operating Property; |
| ● | any liens created by any substituted mortgage indenture securing substituted collateral bonds; or |
| ● | any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any liens referred to in the foregoing exceptions, provided, however, that the principal amount of Debt secured by the liens and not otherwise authorized by the foregoing exceptions, shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal or replacement, so secured at the time of such extension, renewal or replacement. |
In addition, the eventrestriction on liens described in this section will not apply to our issuance, assumption or guarantee of the liquidation, dissolution or windingDebt secured by any liens that would otherwise be subject to that restriction up to an aggregate amount which, together with all of our affairs, whether voluntary or involuntary, the holders of each depositary share will be entitled to the fraction of the liquidation amount accorded each share of the applicable series of preferred stock, as set forth in the accompanying prospectus supplement.
Redemption
If the series of preferred stock represented by the applicable series of depositary shares is redeemable, such depositary shares will be redeemed from the proceeds received by the depositary resulting from the redemption, in whole or in part, of preferred stock held by the depositary. Whenever we redeem any preferred stock held by the depositary, the depositary will redeem as of the same redemption date the number of depositary shares representing the preferred stock so redeemed. The depositary will mail the notice of redemption promptly upon receipt of such notice from us and not less than 30 days prior to the date fixed for redemption of the preferred stock and the depositary shares to the record holders of the depositary receipts.
Voting
Promptly upon receipt of notice of any meeting at which the holders of the series of preferred stock represented by the applicable series of depositary shares are entitled to vote, the depositary will mail the information contained in such notice of meeting to the record holders of the depositary receipts as of the record date for such meeting. Each such record holder of depositary receipts will be entitled to instruct the depositary as to the exercise of the voting rights pertaining to the number of shares of preferred stock represented by such record holder’s depositary shares. The depositary will endeavor, insofar as practicable, to vote such preferred stock represented by such depositary shares in accordance with such instructions, and we will agree to take all action which may be deemed necessary by the depositary in order to enable the depositary to do so. The depositary will abstain from votingother secured Debt (not including secured Debt permitted under any of the preferred stockexceptions described above) and the Value of Sale and Lease-Back Transactions existing at that time (other than Sale and Lease-Back Transactions the proceeds of which have been applied to the extentretirement of certain indebtedness, Sale and Lease-Back Transactions in which the property involved would have been permitted to be subjected to any liens under any of the foregoing exceptions and Sale and Lease-Back Transactions that itare permitted by the first sentence of “Limitations on Sale and Lease-Back Transactions” below), does not receive specific instructions fromexceed the holdersgreater of depositary receipts.
Withdrawal of Preferred Stock
Upon surrender of depositary receipts at the principal office10% of the depositary, upon paymentNet Tangible Assets or 10% of any unpaid amount due the depositary, and subject to the terms of the deposit agreement, the owner of the depositary shares evidenced thereby is entitled to delivery of the number of whole shares of preferred stock and all money and other property, if any, represented by such depositary shares. Partial shares of preferred stock will not be issued. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number of depositary shares representing the number of whole shares of preferred stock to be withdrawn, the depositary will deliver to such holder at the same time a new depositary receipt evidencing such excess number of depositary shares. Holders of preferred stock thusCapitalization.
withdrawnLimitations on Sale and Lease-Back Transactions. The senior indenture provides that so long as the senior debt securities are outstanding, we may not enter into or permit to exist after the release date any Sale and Lease-Back Transaction with respect to any Operating Property (except for transactions involving leases for a term, including renewals, of not more than 48 months), if the purchaser’s commitment is obtained more than 18 months after the later of the completion of the acquisition, construction or development of the Operating Property or the placing in operation of the Operating Property or of the Operating Property as constructed or developed or substantially repaired, altered or improved. This restriction will not thereafterapply if (a) we would be entitled to deposit such shares under the deposit agreement or to receive depositary receipts evidencing depositary shares therefore.
Amendment and Termination of Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement mayexceptions described in the second paragraph under “Limitation on Liens” above to issue, assume, guarantee or permit to exist Debt secured by any liens on the Operating Property without equally and ratably securing the senior debt securities, (b) after giving effect to the Sale and Lease-Back Transaction, we could incur pursuant to the provisions described in the third paragraph under “Limitation on Liens,” at any time and from time to time be amendedleast $1.00 of additional Debt secured by agreement between the depositary and us. However, any amendment which materially and adversely alters the rights of the holdersliens (other than any change in fees) of depositary shares will not be effective unless such amendment has been approvedliens permitted by at least a majority of the depositary shares then outstanding. No such amendment may impair the right, subjectclause (a)) or (c) we apply within 180 days an amount equal to, the terms of the deposit agreement, of any owner of any depositary shares to surrender the depositary receipt evidencing such depositary shares with instructions to the depositary to deliver to the holder the preferred stock and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions of applicable law. The deposit agreement may be terminated by the depositary or us only if (i) all outstanding depositary shares have been redeemed or (ii) there has been a final distribution in respect of the preferred stock in connection with our liquidation, dissolution or winding up and such distribution has been made to all the holders of depositary shares.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the depositary in connection with the initial deposit of the preferred stock and the initial issuance of the depositary shares, and redemption of the preferred stock and all withdrawals of preferred stock by owners of depositary shares. Holders of depositary receipts will pay transfer and other taxes and governmental charges and certain other charges as are provided in the deposit agreement to be for their accounts. In certain circumstances, the depositary may refuse to transfer depositary shares, may withhold dividends and distributions and may sell the depositary shares evidenced by such depositary receipts if such charges are not paid.
Miscellaneous
The depositary will forward to the holders of depositary receipts all reports and communications from us which are delivered to the depositary and which we are required to furnish to the holders of the preferred stock. In addition, the depositary will make available for inspection by holders of depositary receipts at the principal office of the depositary, and at such other places as it may from time to time deem advisable, any reports and communications received from us which are received by the depositary as the holder of preferred stock.
Neither the depositary nor we assume any obligation or will be subject to any liability under the deposit agreement to holders of depositary receipts other than for its or our gross negligence, willful misconduct or bad faith. Neither the depositary nor we will be liable if the depositary or us is prevented or delayed by law or, in the case of a sale or transfer for cash, the depositary, any circumstance beyond its control, in performing itsnet proceeds (not exceeding the net book value), and, otherwise, an amount equal to the fair value (as determined by our Board of Directors) of the Operating Property so leased to the retirement of our senior debt securities or our obligationsother Debt ranking senior to or equally with, the senior debt securities, subject to reduction for senior debt securities and such Debt retired during such 180-day period otherwise than pursuant to mandatory sinking fund or prepayment provisions and payments at stated maturity.
Events of Default and Notice of Default. The following events of default under the deposit agreement. We andsenior indenture apply to the depositary will not be obligated to prosecute or defend any legal proceeding in respectsenior debt securities of any depositary sharesseries:
| ● | failure to pay interest on any senior debt security when due and |
| (1) | if such failure occurs before the release date, continued for 90 days, or |
| (2) | if such failure occurs on or after the release date, continued for 30 days; |
| ● | failure to pay the principal of (or premium, if any, on) any senior debt security when due and payable at maturity, upon redemption or otherwise; |
| ● | failure to observe or perform any other covenant, warranty or agreement contained in the senior debt securities of that series or in the senior indenture (other than a covenant, agreement or warranty included in the senior indenture solely for the benefit of senior debt securities other than that series) and |
| (1) | if such failure occurs before the release date, continued for 90 days, or |
| (2) | if such failure occurs on or after the release date, continued for 60 days, |
in each case following receipt of notice of the default from the senior trustee or preferred stock unless satisfactory indemnity is furnished. We and the depositary may rely on written advice of counsel or accountants, on information provided by holders of depositary receipts or other persons believedat least 25% in good faith to be competent to give such information and on documents believed to be genuine and to have been signed or presented byaggregate principal amount of the proper party or parties.outstanding senior debt securities of that series;
| ● | before the release date, the occurrence and continuance of a completed default under the mortgage indenture, provided, however, the waiver or cure of the completed default under the mortgage indenture and the rescission and annulment of the consequences of that completed default under the mortgage indenture will constitute a waiver of the corresponding event of default under the senior indenture; |
| ● | if any substituted collateral bonds are outstanding, the occurrence and continuance of an event of default or completed default under the substituted mortgage indenture, provided, however, the waiver or cure of the event of default |
Holders of depositary receipts may inspect the depositary’s transfer records for the depositary receipts at the depositary’s office during normal business hours provided that such inspection is for a proper purpose. | or completed default under the substituted mortgage indenture and the rescission and annulment of the consequences of that default or event of completed default under the substituted mortgage indenture will constitute a waiver of the corresponding event of default under the senior indenture; |
| ● | certain events of bankruptcy, insolvency or reorganization relating to us; and |
Registration
| ● | any other event of default with respect to the senior debt securities of a series specified in the prospectus supplement relating to that series or in the supplemental indenture under which that series of senior debt securities is issued. |
The senior trustee shall, within 30 days after the occurrence of Transferany default or event of Receiptsdefault with respect to senior debt securities of any series, give the holders of senior debt securities of that series notice of all uncured defaults or events of default known to it (the term default includes any event which after notice or passage of time or both would be an event of default); provided, however, that, except in the case of an event of default or a default in payment on any senior debt securities of any series, the senior trustee shall be protected in withholding the notice if and so long as the board of directors, the executive committee of the board of directors or responsible officers of the senior trustee in good faith determine that the withholding of the notice is in the interest of the holders of senior debt securities of that series.
If an event of default with respect to senior debt securities of any series (other than due to events of bankruptcy, insolvency or reorganization) occurs and is continuing, the senior trustee or the holders of at least 25% in aggregate principal amount of the outstanding senior debt securities of that series, by notice in writing to us (and to the senior trustee if given by the holders of at least 25% in aggregate principal amount of the senior debt securities of that series) may declare the unpaid principal of and accrued interest to the date of acceleration on all the outstanding senior debt securities of that series to be due and payable immediately and, upon any such declaration, the senior debt securities of that series shall become immediately due and payable.
If an event of default occurs due to bankruptcy, insolvency or reorganization, all unpaid principal of and accrued interest on the outstanding senior debt securities of any series will become immediately due and payable without any declaration or other act on the part of the senior trustee or any holder of any senior debt security of that series. Upon any acceleration of the senior debt securities before the release date, the senior trustee has the power to cause the mandatory redemption of the collateral bonds or substituted collateral bonds, as the case may be.
The depositary will register on its books transfersholders of depositary receipts upon surrendernot less than a majority of the receiptprincipal amount of the outstanding senior debt securities of any series may rescind a declaration of acceleration and its consequences with respect to the senior debt securities of that series (including if given, the written demand for redemption of collateral bonds or substituted collateral bonds) if (1) all existing events of default, other than the nonpayment of principal of and interest on the senior debt securities of that series that have become due solely by such declaration of acceleration, have been cured or waived; (2) to the extent lawful, interest on overdue interest and on overdue principal that has become due otherwise than by reason of such acceleration has been paid; (3) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and (4) all amounts due to the senior trustee under the senior indenture have been paid. The senior indenture requires us to file periodic statements with the senior trustee regarding our compliance with certain of the covenants of the senior indenture and to specify any event of default or defaults with respect to senior debt securities, in performing such covenants, of which the signers of the statements may have knowledge.
Modification of the Senior Indenture; Waiver. We and the senior trustee without the consent of any holders may modify the senior indenture with respect to certain matters, including (i) to cure any ambiguity, defect or inconsistency or to correct or supplement any provision which may be inconsistent with any other provision of the senior indenture and (ii) to make any change that does not materially adversely affect the interests of any holder of senior debt securities of any series. In addition, we and the senior trustee may modify certain of our rights and obligations and the rights of holders of the senior debt securities with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding senior debt securities of each series affected by the modifications. None of the following modifications, however, will be effective against any holder properly endorsedof any outstanding senior debt securities of any series affected by the modifications without that holder’s consent:
| ● | extension of the maturity or reduction of the principal amount of any senior debt securities of the affected series, reduction in the interest rate or extension of the time for payment of interest; |
| ● | change in the redemption provisions in a manner adverse to any holder of senior debt securities of the affected series; |
| ● | modification that would |
| ● | adversely impair the interest of the senior trustee in the collateral bonds held by it, or |
| ● | before the release date, reduce the principal amount of any issue of collateral bonds securing the senior debt securities of the affected series to an amount less than the principal amount of the related issue of senior debt securities, or |
| ● | alter the payment provisions of the collateral bonds in a manner adverse to the holders of the affected series of senior debt securities; |
| ● | other modification in the terms of payment of the principal of, or interest on, the senior debt securities of the affected series; or |
| ● | reduction of the percentage required for waivers of defaults or events of default under the senior indenture or for modification of the senior indenture. |
The holders of not less than a majority in aggregate principal amount of the outstanding senior debt securities of any series may, on behalf of the holders of all senior debt securities of that series, waive any event of default or accompanieddefault under the senior indenture with respect to that series, except an event of default in the payment of the principal of, or premium, if any, or any interest on, any senior debt security of that series or in respect of a provision which under the senior indenture cannot be modified or amended without the consent of the holder of each outstanding senior debt security of the affected series.
Defeasance. We may terminate our substantive obligations under the senior debt securities of any series (except for our obligations to pay the principal of (and premium, if any, on) and the interest on the senior debt securities of that series) by appropriate instruments(i) depositing with the senior trustee, under the terms of transfer, subjectan irrevocable trust agreement, money or U.S. government obligations sufficient to pay all remaining indebtedness on the senior debt securities of that series, (ii) delivering to the senior trustee either an opinion of counsel or a ruling directed to the senior trustee from the Internal Revenue Service to the effect that the holders of the senior debt securities of that series will not recognize income, gain or loss for federal income tax purposes as a result of the deposit and termination of obligations, and (iii) complying with certain restrictions and conditionsother requirements set forth in the deposit agreement. Titlesenior indenture.
Voting of Collateral Bonds Held by Senior Trustee. The senior trustee, as holder of collateral bonds, will attend any meeting of holders of first mortgage bonds under the mortgage indenture, as to which it receives due notice, or, at its option, will deliver its proxy in connection with the meeting. Either at the meeting, or otherwise where the consent of holders of first mortgage bonds is sought without a meeting, the senior trustee will vote or consent with respect to all of the collateral bonds held by it, as directed by the holders of a majority in aggregate principal amount of the outstanding senior debt securities; provided, however, that the senior trustee shall not vote the collateral bonds of any particular series in favor of, or consent to, any action which in the senior trustee’s opinion would materially adversely affect that series of collateral bonds in a manner not shared generally by all other collateral bonds, except upon notification by the senior trustee to the holders of the related series of senior debt securities of the proposal and the receipt of the consent to the proposal of the holders of not less than a majority in principal amount of the outstanding senior debt securities of that series.
Concerning the Senior Trustee. U.S. Bank National Association (“U.S. Bank”), is the senior trustee under the senior indenture. U.S. Bank is also the mortgage trustee under the mortgage indenture and a depositary shares representedof our funds. See “Description of the First Mortgage Bonds -- Concerning the Mortgage Trustee.” U.S. Bank and its affiliates also provide other banking or investment banking and other financial services to us and our affiliates. The Trust Indenture Act of 1939, as amended, contains limitations on the rights of U.S. Bank, should it become one of our creditors, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claim, as security or otherwise. Under the Trust Indenture Act, U.S. Bank is permitted to engage in other transactions with us and our affiliates from time to time, provided that if U.S. Bank acquires any conflicting interests it must eliminate such conflicts upon the occurrence of an event of default under the senior indenture, or else resign.
Book-Entry Securities. We may initially issue the senior debt securities of any series in the form of one or more global securities under a book-entry only system operated by a depositary receipt,securities depository. Unless otherwise specified in the applicable prospectus supplement, The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for each series of senior debt securities. We will issue the senior debt securities as fully-registered securities registered in the name of Cede & Co., DTC’s partnership nominee, or such other name as an authorized representative of DTC may request. We will issue one fully-registered debt security certificate for each issue of the senior debt securities, each in the aggregate principal amount of such issue, and deposit the certificate with DTC.
DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC also facilitates the post-trade settlement among DTC participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between direct participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is properly endorsedowned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or accompanied by appropriate instruments of transfer, will be transferable by deliverymaintain a custodial relationship with a direct participant, either directly or indirectly. The DTC rules applicable to its participants are on file with the same effectSecurities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of debt securities under the DTC system must be made by or through direct participants, which will receive a credit for the debt securities on DTC’s records. The ownership interest of each actual purchaser of each debt security, the beneficial owner, is in turn to be recorded on the records of direct and indirect participants. Beneficial owners will not receive written confirmation from DTC of their purchase. Beneficial owners should, however, receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct or indirect participant through which they entered into the transaction. Transfers of ownership interests in the casedebt securities are accomplished by entries made on the books of a negotiable instrument.
Resignationdirect and Removalindirect participants acting on behalf of Depositary
The depositary may resign at any time by delivering to us notice of its election to do so, and we may at any time remove the depositary, any such resignation or removal to take effect upon the appointment of a successor depositary and its acceptance of such appointment. Such successor depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States of America and having a combined capital and surplus of at least $150,000,000.
BOOK-ENTRY SECURITIES
The preferred stock and/or depositary shares offered pursuant to this prospectus may be issued in whole or in part in book-entry form, meaning that beneficial owners. Beneficial owners of such securities maywill not receive certificates representing their ownership interests in suchdebt securities, except in the event that use of the book-entry system for suchthe debt securities is discontinued. Preferred stock and/
To facilitate subsequent transfers, all debt securities deposited by direct participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or depositary shares issuedsuch other name as an authorized representative of DTC may request. The deposit of debt securities with DTC and their registration in book-entry formthe name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the debt securities; DTC’s records reflect only the identity of the direct participants to whose accounts such debt securities are credited, which may or may not be the beneficial owners. The direct and indirect participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by direct participants and indirect participants to beneficial owners will be evidencedgoverned by onearrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the debt securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to debt securities unless authorized by the direct participants. Under its usual procedures, DTC mails an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those direct participants to whose accounts debt securities are credited on the record date (identified in a listing attached to the omnibus proxy).
Redemption proceeds, principal payments and interest, premium or other payments on the debt securities will be made to Cede & Co., as DTC’s nominee, or to such other nominee as an authorized representative of DTC may request. DTC’s practice is to credit direct participants’ accounts upon DTC’s receipt of funds and corresponding detail information from us or our paying agent, if any, in accordance with their respective holdings shown on DTC’s records. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such participant and not of DTC, the senior trustee, or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal payments and interest, premium or other payments to Cede & Co. (or such other nominee as an authorized representative of DTC may request) is the responsibility of us or our paying agent, if any, disbursement of such payments to direct participants will be the responsibility of DTC, and disbursement of such payments to the beneficial owners will be the responsibility of direct and indirect participants.
DTC may discontinue providing its services as depository with respect to the senior debt securities at any time by giving reasonable notice to us or the senior trustee. Under such circumstances, in the event that a successor depository is not obtained, senior debt security certificates are required to be printed and delivered.
We may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, senior debt security certificates will be printed and delivered to DTC.
The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but neither we nor the trustees nor any underwriter takes any responsibility for the accuracy of the information.
Neither we nor the trustees under the indentures will have any responsibility or obligation to any DTC direct or indirect participant or any beneficial owner of a book-entry interest or any other person not shown on the registration books of the trustees as being a holder of the debt securities with respect to: (1) any senior debt securities; (2) the accuracy of any records maintained by DTC or any DTC direct or indirect participant; (3) the payment by DTC or any DTC direct or indirect participant of any amount due to any beneficial owner of a book-entry interest in respect of the principal or redemption price of or interest on the debt securities; (4) the delivery by DTC or any DTC direct or indirect participant of any notice to any beneficial owner of a book-entry interest which is required or permitted under the terms of the indentures to be given to holders of the senior debt securities; (5) the selection of the owners of a book-entry interest to receive payment in the event of any partial redemption of any senior debt securities; or (6) any consent given or other action taken by DTC or its nominee as holder of the senior debt securities.
DESCRIPTION OF THE FIRST MORTGAGE BONDS
The following is a summary of the material provisions of the first mortgage bonds and the mortgage indenture. This summary does not purport to be complete and is qualified in its entirety by reference to the more globaldetailed provisions of the mortgage indenture and supplemental indentures, which are incorporated by reference in this prospectus.
General. Before the release date, we will issue to the senior trustee any series of first mortgage bonds issued as collateral bonds. Each issue of collateral bonds to the senior trustee will be in a principal amount equal to the principal amount of the senior debt securities issued contemporaneously with the collateral bonds. Before the release date, we will make payments of the principal of, and premium or interest on, each series of collateral bonds to the senior trustee. The senior trustee will apply those payments to the satisfaction of all obligations then due on the related series of senior debt securities.
Liens and Titles. The collateral bonds will be secured by the mortgage indenture equally and ratably with all other bonds issued under the mortgage indenture (except as to any sinking fund or similar fund established for the benefit of bonds of a particular series). At the time of issuance of each series of the collateral bonds, our counsel will deliver its opinion that willthe mortgage indenture constitutes, except as stated in this paragraph, a valid and direct first lien upon substantially all of the real and fixed property and governmental licenses and permits that we own (including our interests as tenant-in-common), subject only to permissible encumbrances and to the other limitations and exceptions respecting title to real and fixed properties that are stated in their opinion on title described below. Excepted from the lien are investments in other companies, items of the general character such as would be included on our balance sheet as current assets (unless deposited or required to be deposited with the mortgage trustee), motor vehicles, and timber and minor parcels of real estate. The term “permissible encumbrances”
includes liens upon transmission or distribution line rights-of-way, and certain tax and other liens, easements or leases, and other adverse interests of a nature or of a proportion that would not under ordinary circumstances materially impair the lien of the mortgage indenture or the use of the property.
The mortgage indenture by its terms also covers in general all of our after-acquired property, other than property of the nature excepted from the lien of the mortgage indenture as stated above. The lien on an after-acquired system may be subject to a prior lien and, in case of merger, to possible limitation to our system at that time.
At the time of issuance of each series of the collateral bonds, our counsel will deliver its opinion that we have good and marketable title to the real and fixed properties described in the mortgage indenture (other than properties disposed of and released under the mortgage indenture and lands described as held only under flowage rights) free and clear of all liens, charges and encumbrances prior to or on behalfa parity with the lien of a depository identifiedthe mortgage indenture, except for and subject only to “permissible encumbrances” and to those exceptions, defects and qualifications which in our counsel’s opinion do not materially affect the security for the collateral bonds or title to or our right to use the properties in the conduct of our business. The opinion of counsel does not cover the validity of or title to easements or rights-of-way for transmission and distribution lines.
The mortgage indenture does not prevent us from merging or consolidating with another entity, selling all or substantially all of our assets, or engaging in a recapitalization or other comparable transaction as long as (1) the lien of the mortgage indenture and the rights and powers of the mortgage trustee and the bondholders under the mortgage indenture are not impaired; (2) the principal amount of prior lien bonds secured by a prior lien or liens on property of the successor corporation (exclusive of the property that we owned immediately before the merger, consolidation or sale) and outstanding immediately after the consolidation, merger or sale shall not exceed 60% of the cost or fair value, whichever is less, of the property of the character of permanent additions owned by the successor corporation, immediately before such transaction; (3) the earnings applicable prospectus supplement relatingto bond interest of the successor corporation determined as provided in the mortgage indenture, excluding our net earnings, for a period of 12 consecutive calendar months within the 15 consecutive calendar months immediately preceding the first day of the calendar month in which the consolidation, merger or sale is made shall have been in the aggregate at least equal to twice the interest requirements for a period of one year upon all prior lien bonds secured by a prior lien or prior liens on the property of the successor corporation and outstanding immediately after the transaction; and (4) the successor corporation assumes our obligations under the mortgage indenture. If these conditions are satisfied with respect to any such transaction, we may enter into the transaction. Although the mortgage indenture limits the principal amount of additional bonds which we may issue, it does not restrict the amount of unsecured debt that we may incur. Except as described above, the mortgage indenture does not provide any protection to the securities. Unlessbondholder against a highly leveraged transaction however structured.
Outstanding and until it is exchangedAdditional Bonds: Under the mortgage indenture, there were outstanding as of December 31, 2012, $872,100,000 principal amount of bonds of various prior series, $22,000,000 of which matured and was repaid in whole or in part for the individual securities represented thereby, a global security may not be transferred exceptFebruary 2013. Additional bonds without limit as a whole by the depository for the global security to a nominee of such depository or by a nominee of such depository to such depository or another nominee of such depository or by the depository or any nominee of such depository to a successor depository or a nominee of such successor. Global securitiesaggregate amount may be issued in either registereda principal amount up to (a) 60% of the lesser of cost or bearer formfair value of net permanent additions (electric, gas or steam property acquired after January 1, 1941, less retirements after that date taken at undepreciated cost, subject to certain adjustments) except permanent additions otherwise utilized under the mortgage indenture or restricted under the terms of certain supplemental indentures; (b) the amount of bonds retired or cancelled, except from certain funds; and (c) the amount of cash deposited with the mortgage trustee for the purpose, which cash may thereafter be withdrawn in lieu of the issuance of an equal amount of bonds under clauses (a) or (b) but without any earnings’ test requirement. Bonds may be issued under clauses (a) and (c), and under certain circumstances under clause (b), only if
earnings applicable to bond interest for a period of 12 months within the preceding 15 months have been at least twice the annual interest requirements upon all bonds then applied for and outstanding.
Earnings applicable to bond interest, as defined in the mortgage indenture, for the year ended December 31, 2012, were $239.8 million, resulting in a ratio of 5.59 times the full annual interest requirements upon all bonds then outstanding, and a ratio of 3.63 after the issuance of $500,000,000 principal amount of collateral bonds at an estimated weighted average interest rate of 4.625% per annum (without taking into account the maturing of $22,000,000 of collateral bonds in February 2013 and $125,000,000 of collateral bonds in December 2013). A difference of 1/8% in the assumed weighted average interest rate on the collateral bonds would change the ratio by approximately 0.034.
The aggregate amount of unbonded bondable property was approximately $689 million as of December 31, 2012, a portion or all of which will be applied as the basis for the issuance of the collateral bonds. The retirement of bonds of prior series may also be the basis for the issuance of additional collateral bonds.
Release Provisions: The mortgage trustee may release property which we have sold from the lien of the mortgage indenture upon our deposit of the fair value of the property with the mortgage trustee. Purchase money obligations so deposited may not exceed 60% of fair value of the released property. We may withdraw release funds on the basis of the lesser of cost or fair value of net permanent additions applied for the purpose, or the principal amount of bonds that we have surrendered, or we may apply release funds to bond retirement. Bonds may be redeemed from release funds only when they are subject to redemption and upon payment of the applicable regular redemption premium. The mortgage trustee may release property certified as no longer necessary in our business and of less than $500,000 value (but not to exceed in the aggregate per year an amount equal to 1% of the outstanding bonds) upon our covenant to deposit the proceeds of sale, if any, and we may withdraw such proceeds upon our covenant to expend the same for permanent additions.
Modification of Mortgage Indenture: With our consent and the consent of the holders of 70% in principal amount of bonds then outstanding, we and the mortgage trustee may modify the mortgage indenture and the bonds (including the collateral bonds) except as to (a) the due dates, amounts and other terms (other than sinking fund provisions) of payment of principal or interest, or (b) the creation of any lien ranking prior to or on a parity with the lien of the mortgage indenture, or (c) deprivation of any nonassenting bondholder of a lien on the mortgaged property for the security of such bondholder’s bonds, or (d) reduction of the percentage in the amount of bonds required to consent to a modification of the mortgage indenture. We and the mortgage trustee may also modify the mortgage indenture, without any action on the part of the bondholders, provided that any modification that would adversely affect the rights of the holders of any bonds then outstanding may not become effective until all bonds outstanding at the time of the adoption of the modification have been redeemed or retired.
Concerning the Mortgage Trustee: The mortgage trustee under the mortgage indenture is U.S. Bank National Association, which is also the senior trustee under the senior indenture and a depositary of our funds. U.S. Bank and its affiliates also provide other banking or investment banking and other financial services to us and our affiliates. The Trust Indenture Act of 1939 contains limitations on the rights of U.S. Bank, should it become one of our creditors, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claim, as security or otherwise. Under the Trust Indenture Act, U.S. Bank is permitted to engage in other transactions with us and our affiliates from time to time, provided that if U.S. Bank acquires any conflicting interests it must eliminate such conflicts upon the occurrence of an event of default under the mortgage indenture, or else resign.
Defaults and Notice Thereof: The following events are defined as “completed defaults” under the mortgage indenture: (a) default in the payment of the principal of any bond; (b) default continued for 90 days in the payment of any interest upon any bond; (c) default in our covenants with respect to bankruptcy, insolvency, assignment or receivership; or (d) default continued for 90 days after notice to us from the mortgage trustee in the performance of any other covenant, agreement or condition contained in the mortgage indenture. The mortgage trustee may withhold notice to bondholders of defaults (other than in payment of principal, interest or a sinking fund installment) if its responsible officers believe that the withholding of such notice is in the interest of the bondholders.
The holders of a majority in principal amount of the bonds outstanding may direct the mortgage trustee in the exercise of its powers and in either temporarythe case of a completed default may require the mortgage trustee to declare the maturity of the bonds accelerated, and upon certain conditions may rescind and annul such declaration. The mortgage trustee may decline to follow any direction as to the exercise of its powers if the mortgage trustee (i) is advised by counsel that the directed action may not lawfully be taken or permanent form.(ii) determines in good faith that compliance with the directions would involve the mortgage trustee in personal liability or that it will not be sufficiently indemnified for any expenditures arising from compliance with the directions.
Evidence of Compliance with Indenture Provisions: The specificmortgage indenture does not require us to furnish periodic evidence to the mortgage trustee as to absence of defaults or as to general compliance with the terms of the depository arrangementmortgage indenture; however, each time we request the mortgage trustee to take any action, such as the issuance of additional bonds or the release of cash or property under the mortgage indenture, we are required to deliver to the mortgage trustee certain certificates signed and verified by officers, engineers, accountants or other experts, who in certain cases are required to be independent persons. Under pertinent circumstances these certificates certify as to absence of default, the fair value of property in respect of which the action is requested and our net earnings, and in all cases certificates or opinions are required as to our compliance with respectconditions precedent to a series of preferred stock or depositary shares representing such series of preferred stock that differ from the terms described herein will be described in the applicable prospectus supplement.action.
PLAN OF DISTRIBUTION
We may sell the preferred stock and/or depositary shares representing interests in the preferred stock:senior debt securities:
| · | directly to a limited number of institutional purchasers or to a single purchaser. |
As required by applicable law, these underwriters or agents will be registered broker-dealers or associated persons of registered broker-dealers acting in that capacity. We will describe the plan of distribution for any particular offering of preferred stock and/or depositary sharessenior debt securities in the corresponding prospectus supplement, in accordance with applicable law.
The prospectus supplement will set forth the terms of the offering of the preferred stock and/or depositary shares,senior debt securities, including the following:
| · | the name or names of any underwriters or agents; |
| · | the purchase price and the proceeds we will receive from the sale; |
| · | any underwriting discounts and commissions or agency fees and other items constituting underwriters’ or agents’ compensation; |
| · | any initial public offering price; |
| · | any discounts or concessions allowed or reallowed or paid to dealers; and |
| · | any securities exchanges on which the securities of the series may be listed. |
The distribution of the preferred stock and/or depositary sharessenior debt securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.
Through Underwriters. If we use underwriters in the sale, the underwriters will acquire the preferred stock and/or depositary sharessenior debt securities for their own account and may resell them from time to time in one or more transactions, including negotiated transactions. We will enter into an underwriting agreement with the underwriter or underwriters once we have reached an agreement for the sale of the preferred stock and/or depositary shares.senior debt securities. The underwriters may offer the preferred stock and/or depositary sharessenior debt securities to the public directly or through underwriting syndicates represented by managing underwriters. Unless otherwise provided in the underwriting agreement, the obligations of the underwriters to purchase securities will be subject to conditions precedent, and the underwriters will be obligated to purchase all the securities of a series if any are purchased.
In connection with the sale of the preferred stock and/or depositary shares,senior debt securities, underwriters may receive compensation from us or from purchasers of the preferred stock and/or depositary sharessenior debt securities for whom they may act as agents in the form of discounts, concessions or commissions. Underwriters may sell the preferred stock and/or depositary sharessenior debt securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they act as agents. Any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. Underwriters, dealers and agents that participate in the distribution of the preferred stock and/or depositary sharessenior debt securities may be deemed to be underwriters, and any discounts or commissions that they receive from us and any profit on the resale of the preferred stock and/or depositary sharessenior debt securities by them may be deemed to be underwriting discounts and commissions, under the Securities Act of 1933.
Through Agents. We may sell securities directly or through agents we may designate from time to time. Unless otherwise indicated in the prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment.
Directly to Purchasers. We may sell preferred stock and/or depositary sharessenior debt securities directly to one or more purchasers. Under those circumstances, no underwriters, dealers or agents would be involved. We will describe the terms of any direct sales in the prospectus supplement.
We may enter into agreements with underwriters and agents to indemnify them against civil liabilities arising out of this prospectus and the prospectus supplement, including liabilities under the Securities Act of 1933, or to contribute to payments which the agents or underwriters may be required to make relating to those liabilities.
Underwriters or agents may be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.
Representatives of underwriters that we use may engage in overallotment, stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 of Regulation M under the Securities Exchange Act of 1934. Over-allotment involves sales in excess of the offering size, which create a short position for the underwriters. Stabilizing transactions involve bids to purchase the offered securities in the open market for the purpose of pegging, fixing or maintaining the price of the offered securities. Syndicate covering transactions involve purchases of the offered securities in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the managing underwriter to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the offered securities to be higher than it would otherwise be in the absence of such transactions. If the representatives engage in stabilizing transactions, syndicate covering transactions or penalty bids, they may discontinue them at any time.
Each series of preferred stock and/or depositary sharessenior debt securities will be a new issue of securities with no established trading market. Unless otherwise specified inWe do not propose to list the applicable prospectus supplement, we intend to apply to have the preferred stock and/or depositary shares offered pursuant to this prospectus listedsenior debt securities on the New York Stock Exchange, but we cannot assure you that the preferred stock and/or depositary shares will be approved for listing. Even if the preferred stock and/or depositary shares are listed, there may be little or no active trading market for these shares or, even if an active trading market develops, it may not last.a securities exchange. An underwriter may make a market in the preferred stock and/or depositary shares,senior debt securities, but will not be obligated to do so and may discontinue any market making at any time without notice. Consequently, noNo assurance can be given as to the liquidity of the trading market for any preferred stock and/or depositary shares.senior debt securities.
LEGAL MATTERS
Foley & Lardner LLP, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, our counsel, will render opinions as to the validity of the preferred stock and/or depositary shares.senior debt securities. Counsel for the underwriters or agents will pass upon certain legal matters in connection with the offering or offerings of the preferred stock and/or depositary sharessenior debt securities for the underwriters or agents.
EXPERTS
The consolidated financial statements and the related financial statement schedule, incorporated in this prospectus by reference from Wisconsin Public Service Corporation’s Annual Report on Form 10-K, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated herein by reference. Such consolidated financial statements and the related financial statement schedule have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses, other than underwriting discounts and commissions, payable by Wisconsin Public Service Corporation are as follows:
| Fees to regulatory commissions | | $ | 1,000 | | | $ | 1,000 | |
| Registration fee under the Securities Act of 1933 | | | 3,438 | | | | 45,280 | |
| Trustee’s fee | | | | 5,000 | |
| Accounting services and expenses | | | 40,000 | | | | 110,000 | |
| Rating agency fees | | | 80,000 | | | | 376,000 | |
| Legal services and expenses | | | 160,000 | | | | 150,000 | |
| Financial printing and miscellaneous expenses | | | 15,562 | | | | 12,720 | |
| | | | | | | | | |
Total | | $ | 300,000 | | | $ | 700,000 | |
Pursuant to the Wisconsin Business Corporation Law and Article VI of the By-laws of Wisconsin Public Service Corporation, directors and officers of Wisconsin Public Service Corporation are entitled to mandatory indemnification from us against certain liabilities and expenses to the extent such officers or directors are successful on the merits or otherwise in connection with a proceeding, unless it is determined that the director or officer breached or failed to perform his or her duties to Wisconsin Public Service Corporation and such breach or failure constituted: (a) a willful failure to deal fairly with Wisconsin Public Service Corporation or its shareholders in connection with a matter in which the director or officer had a material conflict of interest; (b) a violation of the criminal law unless the director or officer had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; (c) a transaction from which the director or officer derived an improper personal profit (unless such profit is immaterial under the circumstances); or (d) willful misconduct. It should also be noted that the Wisconsin Business Corporation Law specifically states that it is the policy of Wisconsin to require or permit indemnification in connection with a proceeding involving securities regulation, as described therein, to the extent required or permitted as described above. Additionally, under the Wisconsin Business Corporation Law, directors of Wisconsin Public Service Corporation are not subject to personal liability to Wisconsin Public Service Corporation, its shareholders or any person asserting rights on behalf thereof for certain breaches or failures to perform any duty resulting solely from their status except in circumstances paralleling those in subparagraphs (a) through (d) outlined above.
The indemnification provided by the Wisconsin Business Corporation Law and our By-laws is not exclusive of any other rights to which a director or officer may be entitled. The general effect of the foregoing provisions may be to reduce the circumstances under which an officer or director may be required to bear the economic burden of the foregoing liabilities and expenses.
The indemnification described above may be broad enough to cover liabilities under the Securities Act of 1933. Officers and Directors of Wisconsin Public Service Corporation would also be indemnified by the underwriters for certain claims under the Securities Act of 1933 pursuant to the terms of the proposed form of underwriting agreement filed herewith. Wisconsin Public Service Corporation has purchased insurance permitted by the Wisconsin Business Corporation Law on behalf of its officers and directors which may cover liabilities under the Securities Act of 1933.
The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this registration statement.
(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below as of July 2, 2012,March 1, 2013, by the following persons in the capacities indicated. Each person whose signature appears below constitutes and appoints Lawrence T. Borgard, Joseph P. O’Leary, Barth J. Wolf and Jodi J. Caro, and each of them individually, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and any additional registration statement to be filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, relating to public offerings of preferred stock and/or depositary shares representing a fractional interest in preferred stock to be issued by Wisconsin Public Service Corporation, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission in connection with the registration of such preferred stock and/or depositary shares representing a fractional interest in preferred stock under the Securities Act of 1933, as amended, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.