As filed with the Securities and Exchange Registration No. ___________
Commission on February 21, 2003
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
______________
UNISOURCE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
ARIZONA 86-0786732
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE SOUTH CHURCH AVENUE
SUITE 1820
TUCSON, ARIZONA, 85701
(520) 571-4000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Kevin P. Larson J. Anthony Terrell, Esq.
UniSource Energy Corporation John T. Hood, Esq.
One South Church Avenue, Suite 1820 Thelen Reid & Priest LLP
Tucson, Arizona 85701 875 Third Avenue
(520) 571-4000 New York, New York 10022
(212) 603-2000
(Names and addresses, including zip codes, and telephone numbers,
including area codes, of agents for service)
______________
Approximate date of commencement of proposed sale
of the securities to the public:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
______________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
===========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
===========================================================================================================
Common Stock, no par value 4,000,000 $16.45 $65,800,000 $6,054
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Preferred Share Purchase Rights(2) 4,000,000 N/A N/A N/A
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(1) Solely for the purpose of calculating the registration fee pursuant to Rule
457(c), the proposed maximum offering price has been determined on the basis of
the average of the high and low prices per share for the Common Stock on
February 19, 2003 as reported in the consolidated reporting system for
securities traded on the New York Stock Exchange.
(2) Since no separate consideration is paid for the Preferred Share Purchase
Rights (the Rights), the registration fee for such securities is included in the
fee for the Common Stock. The value attributable to the Rights, if any, is
reflected in the market price of the Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
Subject to Completion, Dated February 21, 2003
P R O S P E C T U S
-------------------
4,000,000 SHARES
UNISOURCE ENERGY CORPORATION
COMMON STOCK
WITHOUT PAR VALUE
______________
By this prospectus, UniSource Energy may offer from time to time up to
4,000,000 shares of its common stock and the attached preferred share purchase
rights. In this prospectus, we refer to the common stock and the attached
preferred share purchase rights together as the "Shares."
UniSource Energy's common stock is listed on the New York Stock Exchange
and the Pacific Exchange. The ticker symbol is: UNS.
One or more supplements to this prospectus will indicate the amount and
terms of each offering of Shares, including the offering price. UniSource Energy
may sell its Shares to or through underwriters, dealers or agents or directly to
one or more purchasers.
You should read this prospectus and the applicable prospectus
supplement carefully before you invest.
______________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ________, 2003.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
TABLE OF CONTENTS
Page
----
Important Information About This Prospectus....................................1
Where You Can Find More Information............................................2
UniSource Energy...............................................................3
Use Of Proceeds................................................................5
Description Of Capital Stock...................................................5
Plan Of Distribution..........................................................10
Forward-Looking Statements....................................................11
Experts.......................................................................12
Legal Matters.................................................................13
IMPORTANT INFORMATION ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the United States Securities and Exchange Commission (SEC). We may sell the
Shares described in this prospectus from time to time in one or more offerings.
This prospectus only provides you with a general description of the Shares. Each
time we offer Shares, we will provide a supplement to this prospectus that
contains specific information about the terms of such offering of the Shares.
The supplement may also add, update or change information contained in this
prospectus.
In addition to the information contained in this prospectus and the
applicable supplement, this prospectus incorporates by reference important
business and financial information about UniSource Energy that is not included
in or delivered with this prospectus. See "WHERE YOU CAN FIND MORE INFORMATION."
You should rely only on the information contained or incorporated by
reference in this prospectus and the applicable supplement. We have not
authorized any other person to provide you with different information. You
should not assume that the information contained or incorporated in this
prospectus as of any time after the date of this prospectus or, if later, the
date of an incorporated document, is accurate because our business, financial
condition or results of operations may have changed since that date.
We are not making an offer to sell any securities in any jurisdiction where
an offer or sale is not permitted.
WHERE YOU CAN FIND MORE INFORMATION
AVAILABLE INFORMATION
UniSource Energy Corporation (UniSource Energy) files reports, proxy
statements and other information with the SEC. You may read and copy this
information at the SEC's Public Reference Room at 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. You may obtain further information on the
operation of the SEC's Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that contains reports,
proxy statements and other information about issuers, such as UniSource Energy,
who file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information
concerning UniSource Energy at the offices of the New York Stock Exchange at 20
Broad Street, New York, New York 10005 or the Pacific Exchange, Inc. at 301 Pine
Street, San Francisco, California 94104. You may also obtain information from
the UniSource Energy Internet site at http://www.unisourceenergy.com (which is
not intended to be an active hyperlink). The information on our website is not
incorporated by reference into this prospectus and you should not consider it a
part of this prospectus.
INCORPORATION BY REFERENCE
The rules of the SEC allow us to "incorporate by reference" information
into this prospectus, which means that we can disclose important information to
you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
and later information that we file with the SEC will automatically update and
supersede that information. The prospectus incorporates by reference the
documents set forth below that have been previously filed with the SEC. These
documents contain important information about UniSource Energy.
o Annual Report on Form 10-K for the year ended December 31, 2001
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002,
June 30, 2002, and September 30, 2002
o Current Reports on Form 8-K dated, respectively, August 9, 2002,
November 1, 2002 and November 27, 2002
We are also incorporating by reference additional documents that UniSource
Energy files with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the Exchange Act), after the date
of this prospectus and all documents that UniSource Energy files with the SEC
pursuant to the Exchange Act after the date of the initial registration
statement and prior to the effectiveness of the registration statement.
UniSource Energy will provide without charge to each person, including any
beneficial owner, to whom a copy of this prospectus has been delivered a copy of
any and all of these filings. You may request a copy of these filings by writing
or telephoning us at UniSource Energy Corporation, P.O. Box 711, Tucson, Arizona
85702, Attention: Records and Library Services, Telephone: (520) 745-3349.
2
UNISOURCE ENERGY
UniSource Energy is a holding company that owns the outstanding common
stock of Tucson Electric Power Company (TEP), Millennium Energy Holdings, Inc.
(Millennium) and UniSource Energy Development Company (UED). References in this
prospectus to "we" and "our" are to UniSource Energy.
TEP
TEP is our principal subsidiary and represents most of our assets. TEP is a
vertically integrated utility that provides regulated electric service to over
355,000 retail customers in its service territory. This service territory
consists of a 1,155 square mile area of Southeastern Arizona with a population
of approximately 891,000 in the greater Tucson metropolitan area in Pima County,
as well as parts of Cochise County. TEP holds a franchise to provide electric
distribution service to customers in the City of Tucson. This franchise expires
in 2026. TEP also sells electricity to other utilities and power marketing
entities in the western U.S. At December 31, 2002, TEP owned or leased 2,002 MW
of net generating capability.
The Federal Energy Regulatory Commission (FERC) and the Arizona Corporation
Commission (ACC) regulate portions of TEP's utility accounting practices and
electricity rates. The FERC regulates the terms and prices of TEP's sales to
other utilities and resellers. The ACC has authority over certain rates charged
to retail customers, the issuance of securities, and transactions with
affiliated parties.
MILLENNIUM
Millennium's assets comprised approximately 6% of the consolidated assets
of UniSource Energy at December 31, 2001. Through its affiliates, Millennium
holds investments in the following subsidiaries including:
o Global Solar Energy, Inc., a developer and manufacturer of flexible
thin-film photovoltaic cells. Target markets for its products include
military, space and commercial applications.
o Infinite Power Solutions, Inc., a developer of thin-film batteries.
o MicroSat Systems, Inc., a developer of small-scale satellites,
focusing on research and development activities related to government
contracts.
UED
UED, established in 2001, is the developer of the expansion project at the
Springerville Generating Station.
EFFECT OF HOLDING COMPANY STRUCTURE
Since UniSource Energy is a holding company, substantially all of the
assets shown on UniSource Energy's consolidated balance sheet are held by its
subsidiaries. Accordingly, UniSource Energy's earnings and cash flow and its
ability to meet its obligations are dependent upon the earnings and cash flows
of such subsidiaries and the distribution or other payment of such earnings to
UniSource Energy. The subsidiaries are separate and distinct legal entities and
have no obligation to make any such distribution or other payment to UniSource
Energy and may do so only after they satisfy their debt obligations and any
preferred stock requirements, and comply with any statutory or contractual
limitations.
3
Any shares of UniSource Energy common stock which may be offered by this
prospectus are, by definition, junior to claims of UniSource Energy's creditors
including, but not limited to, holders of debt securities that may be issued or
guaranteed by UniSource Energy and, as discussed above, to the claims of
creditors of UniSource Energy's subsidiaries. In addition, our articles of
incorporation permit us to issue preferred stock. Before we can pay dividends on
our common stock, we must satisfy our current debt obligations and any preferred
stock requirements, and comply with any statutory or contractual limitations.
UniSource Energy's Board of Directors periodically reviews our dividend
level, taking into consideration a number of factors including our results of
operations and financial condition, general economic and competitive conditions
and the earnings and cash flows of our subsidiary companies, TEP, Millennium and
UED. As discussed above, TEP is our principal subsidiary and represents most of
our assets. TEP pays dividends on its common stock after its Board of Directors
declares them. TEP has certain restrictions on paying dividends, as listed
below:
o TEP's Credit Agreement provides that TEP can pay dividends if it
maintains compliance with the TEP Credit Agreement and certain
financial covenants, including a covenant that requires TEP to
maintain a minimum level of net worth, and so long as the dividends
and certain investments in affiliates would not exceed 65% of TEP's
net income.
o The ACC order which authorized TEP to form UniSource Energy as a
holding company provides that TEP can pay dividends so long as the
dividends do not exceed 75% of TEP's earnings until its equity ratio
equals 37.5% of total capital (excluding capital lease obligations).
o The Federal Power Act states that TEP cannot pay dividends out of
funds that are properly included in the capital account.
Millennium and UED have no dividend restrictions.
UniSource Energy's principal executive offices are located at One South
Church Avenue, Suite 1820, Tucson, Arizona 85701. The telephone number is (520)
571-4000.
4
USE OF PROCEEDS
As more particularly described in the prospectus supplement relating to
each issuance of Shares, we will use the net proceeds from the sale of the
Shares offered by this prospectus for general corporate purposes, including
making loans and/or capital contributions to our subsidiaries.
The ACC has issued an order which, unless waived, requires that we invest
30% of any proceeds of equity issuances by UniSource Energy in TEP until TEP has
37.5% equity.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of UniSource Energy presently consists of
76,000,000 shares, of which 75,000,000 shares are common stock without par
value, and 1,000,000 shares are preferred stock without par value (Preferred
Stock). As of February 14, 2003, there were 33,582,976 shares of common stock
outstanding and no shares of Preferred Stock outstanding.
The following is a summary of certain rights and privileges of the holders
of the Shares. This summary does not purport to be complete. The following
information is qualified in its entirety by reference to UniSource Energy's
Restated Articles of Incorporation and shareholder rights plan and to the laws
of the State of Arizona.
COMMON STOCK
Dividend Rights. UniSource Energy may pay dividends on shares of common
stock out of any funds legally available for payment, when and as declared by
our Board of Directors. Payment of dividends may be subject to certain
limitations specified with respect to the Preferred Stock, or any series of
Preferred Stock.
Liquidation Rights. In the event of any dissolution or other winding up of
UniSource Energy, whether voluntary or involuntary, the assets of UniSource
Energy available for payment and distribution to shareholders shall be
distributed ratably in accordance with their holdings to the holders of shares
of the common stock. Those distributions may be subject to certain limitations
specified with respect to the Preferred Stock, or any series of Preferred Stock.
Voting Rights. All voting power is vested in the holders of the common
stock, except as otherwise specified with respect to the Preferred Stock, or any
series of Preferred Stock. With respect to the election of directors and each
other matter coming before any meeting of shareholders, each holder of the
common stock shall be entitled to one (1) vote for each share of such stock
outstanding in the name of that holder on the books of UniSource Energy.
Miscellaneous. The common stock has no preemptive or conversion rights or
redemption or sinking fund provisions and the outstanding common stock is fully
paid and non-assessable.
PREFERRED STOCK
Our Board of Directors has authority to divide the Preferred Stock into
series and to determine the designation, preferences, and voting powers of the
shares of each series so established and the restrictions and qualifications
thereof, all to the extent and in the manner provided by law.
5
PREFERRED SHARE PURCHASE RIGHTS
General. On March 5, 1999, UniSource Energy adopted a shareholder rights
plan. Under that plan, we will grant one preferred share purchase right (Right)
on each outstanding share of common stock to holders of common stock outstanding
on April 1, 1999 or issued thereafter. The description and terms of the Rights
are set forth in the Rights Agreement, dated as of March 5, 1999 (the Rights
Agreement), between UniSource Energy and The Bank of New York, as Rights Agent.
The following statements are qualified in their entirety by reference to the
Rights Agreement.
Each Right will entitle the registered holder, subject to regulatory
approvals and other specified conditions, to purchase one ten-thousandth of a
share of Preferred Stock, Series X, without par value, of UniSource Energy (the
Series X Preferred Stock), at a purchase price of $50.00 (the Purchase Price).
Distribution of Rights. We have distributed one Right to shareholders of
UniSource Energy for each share of common stock owned of record by them at the
close of business on April 1, 1999. Until the earliest of:
o such time as any person or group acquires 15% or more of the
outstanding shares of common stock,
o March 31, 2009 or
o the redemption of the Rights,
we will issue one Right with each share of common stock that is issued after
April 1, 1999 so that all shares of common stock will have attached Rights. We
have initially authorized and reserved 10,000 shares of Preferred Stock for
issuance upon exercise of the Rights.
Exercise. The Rights will be exercisable only if a person or group:
o acquires 15% or more of the outstanding shares of common stock or
o commences a tender or exchange offer, the consummation of which would
result in the beneficial ownership by a person or group of 15% or more
of the outstanding shares of common stock.
Until that time the Rights will be evidenced by and will trade with the
shares of common stock. The Rights will expire on March 31, 2009 unless we first
redeem or exchange them, in each case as described below.
The purchase of stock pursuant to the Rights may be subject to regulatory
approval and other specified conditions. Under no circumstance will the person
or group that acquired 15% of the common stock be entitled to exercise Rights.
6
"Flip-in". If any person or group acquires 15% or more of the outstanding
shares of common stock, each Right will entitle its holder to purchase that
number of shares of common stock or, at the option of UniSource Energy,
Preferred Stock which has a market value at that time of twice the Purchase
Price.
"Flip-over". In addition, in the event that any person or group has
acquired 15% or more of the outstanding shares of common stock and UniSource
Energy
o consolidates or merges with or into, or
o sells 50% or more of its assets or earning power to,
any person or group, each Right would instead entitle its holder to purchase the
acquiring company's common shares having a market value of twice the Purchase
Price.
Exchange. If a person or group acquires more than 15% but less than 50% of
the outstanding shares of common stock, we may exchange each outstanding Right
for one share of common stock or cash, securities or other assets having a value
equal to the market value of one share of common stock. That exchange may be
subject to regulatory approval.
Redemption. We may redeem the Rights, at a redemption price of $0.001 per
Right, at any time until any person or group has acquired 15% or more of the
outstanding shares of common stock.
Certain Adjustments. The Purchase Price, the amount and type of securities
covered by each Right and the number of Rights outstanding will be adjusted to
prevent dilution:
o in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock,
o if holders of the Preferred Stock are granted certain rights, options
or warrants to subscribe for Preferred Stock or securities convertible
into Preferred Stock or equivalent preferred shares at less than the
current market price of the Preferred Stock, or
o upon the distribution to holders of the Preferred Stock of evidences
of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustments in the Purchase Price will be made
until cumulative adjustments amount to a least 1% of the Purchase Price. We will
not issue fractional shares of Series X Preferred Stock other than in integral
multiples of one ten-thousandth of a share. Instead, we will make an adjustment
in cash based on the market price of the Series X Preferred Stock on the last
trading date prior to the date of exercise.
Amendment. We may amend the Rights Agreement in any respect until any
person or group has acquired 15% or more of the outstanding shares of common
stock. Thereafter, we may amend the Rights Agreement in any manner which will
not adversely affect the holders of the Rights in any material respect.
7
ARIZONA BUSINESS COMBINATION STATUTE
General. The Arizona business combination statute would limit our ability
to engage in Business Combinations with Interested Shareholders (each as defined
below).
"Business Combination" means any (A) merger or consolidation of UniSource
Energy or any UniSource Energy subsidiary with an Interested Shareholder, (B)
exchange of shares of UniSource Energy common stock or any UniSource Energy
subsidiary for shares of an Interested Shareholder, or (C) sale, lease, transfer
or other disposition to or with an Interested Shareholder of 10% or more of the
consolidated assets of UniSource Energy.
"Interested Shareholder" means any person other than UniSource Energy or a
UniSource Energy subsidiary that is either (A) a direct or indirect beneficial
owner of 10% or more of the voting power of the outstanding UniSource Energy
common stock or (B) an affiliate of UniSource Energy who at any time during the
three years immediately before the date in question was the beneficial owner of
10% or more of the voting power of the then outstanding UniSource Energy common
stock.
"Share Acquisition Date" means the date that a person first becomes an
Interested Shareholder of UniSource Energy.
Business Combinations Within Three Years After Share Acquisition Date. For
three years after an Interested Shareholder's Share Acquisition Date, UniSource
Energy may not directly or indirectly engage in any Business Combination with an
Interested Shareholder or any affiliate of an Interested Shareholder unless,
before the Interested Shareholder's Share Acquisition Date, a committee of
disinterested directors approved either:
o the Business Combination; or
o the acquisition of common stock made by the Interested Shareholder on
the Interested Shareholder's Share Acquisition Date.
Business Combinations More Than Three Years After Share Acquisition Date.
If a committee of disinterested directors has not approved the Business
Combination or the acquisition of common stock as provided above, UniSource
Energy may not directly or indirectly engage in any Business Combination with an
Interested Shareholder or any affiliate of an Interested Shareholder unless:
o the Business Combination is consummated no earlier than three years
after the Interested Shareholder's Share Acquisition Date, and before
the Share Acquisition Date, the UniSource Energy Board of Directors
approved either
o the Business Combination; or
o the acquisition of common stock made by the Interested
Shareholder on the Share Acquisition Date; or
o the Business Combination is approved no earlier than three years after
the Interested Shareholder's Share Acquisition Date by the affirmative
vote of a majority of the outstanding voting shares of UniSource
Energy common stock (excluding shares of common stock beneficially
owned by the Interested Shareholder or any affiliate thereof); or
8
o the Business Combination is consummated no earlier than three years
after the Interested Shareholder's Share Acquisition Date and meets
certain specified conditions designed to ensure against discriminatory
pricing.
ARIZONA CONTROL SHARE ACQUISITION STATUTE
General. The Arizona control share acquisition statute would limit the
voting rights of a person who acquires shares of UniSource Energy under certain
circumstances in a control share acquisition (as defined below).
Control Share Acquisition means an acquisition, directly or indirectly (in
one or more transactions within 120 days or pursuant to a plan), by a person of
beneficial ownership of shares of UniSource Energy common stock that would, but
for the limitations in the control share acquisition statute, entitle the
acquiring person to exercise a new range of voting power within the following
specified ranges: (A) at least 20% but less than 33-1/3%, (B) at least 33-1/3%
but less than or equal to 50% and (C) over 50%.
Information Statement. Within ten days after a Control Share Acquisition,
the acquiring person must deliver to the corporation an information statement
specifying, among other things, the range of voting power in the election of
directors that, but for the limitations in the statute, the acquiring person
believes would result from the Control Share Acquisition. At the time of
delivery of the information statement, the acquiring person may request that a
special meeting of shareholders be called to consider the voting rights of
"excess" shares (referred to below).
Limitation on Voting Rights of "Excess" Shares. To the extent that shares
of UniSource Energy common stock acquired in a Control Share Acquisition exceed
the threshold of voting power of any of the next specified range of voting
power, such "excess" shares will have the same voting rights as other shares of
UniSource Energy common stock for election of directors but will not have the
right to vote on other matters unless approved by a shareholder resolution at an
annual or special meeting. Such resolution must be approved by the affirmative
vote of a majority of the outstanding voting shares of UniSource Energy common
stock (excluding shares owned by the acquiring person, its affiliates or any
officer or director of UniSource Energy).
Financing Agreement. The status of voting rights of "excess" shares is not
required to be presented for consideration at any meeting of shareholders
unless, at the time of delivery of the information statement referred to above,
the acquiring person has entered into a definitive financing agreement for any
financing of the acquisition not to be provided by monies of the acquiring
person.
Redemption by UniSource Energy. If an acquiring person fails to deliver the
required information statement within ten days after a Control Share Acquisition
or if the UniSource Energy shareholders have voted not to accord voting rights
to an acquiring person's "excess" shares referred to above, then UniSource
Energy may call for the redemption of such "excess" shares at the fair market
value of those shares at the time the call for redemption is given.
ANTITAKEOVER EFFECT
The Rights or the provisions of Arizona Law described above, individually
or collectively, may discourage, deter, delay or impede a tender offer or other
attempt to acquire control of UniSource Energy even if the transaction would
result in the shareholders receiving a premium for their shares over current
market prices or if the shareholders otherwise believe the transaction would be
in their best interests.
9
PLAN OF DISTRIBUTION
We may sell Shares in one or more of the following ways from time to time:
(1) directly to institutional purchasers, (2) through agents, (3) through
underwriters and/or (4) through dealers.
The prospectus supplement will set forth the terms of each offering of
Shares, including:
o the names of any underwriters or agents,
o the purchase price of the Shares and the proceeds to UniSource Energy,
from the sale,
o any underwriting discounts or agency fees and other items constituting
underwriters'; or agents' compensation,
o any discounts or concessions allowed or reallowed or paid to dealers
and
o any securities exchange on which the common stock may be listed.
If we use underwriters to sell Shares, the underwriters will acquire such
Shares for their own account and resell them from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. Unless otherwise set
forth in the applicable prospectus supplement, the obligations of the
underwriters to purchase such Shares will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all of such
securities if any of such securities are purchased, except that, in certain
cases involving a default by one or more underwriters; less than all of such
securities may be purchased. The initial public offering prices and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If we use one or more agents to sell securities, the agents will be named,
and any, commissions payable by UniSource Energy to such agents will be set
forth, in the applicable prospectus supplement. Unless otherwise indicated in
the applicable prospectus supplement, any such agent will act on a best efforts
basis for the period of its appointment.
New Shares sold through agents or underwriter may be sold by means of (1)
ordinary brokers' transactions, (2) block transactions (which may involve
crosses) in accordance with the rules of the New York Stock Exchange, the
Pacific Exchange and other exchanges on which the common stock is admitted to
trading privileges, including transactions in which any agent may sell Shares as
agents but may also position and resell all or a portion of the blocks as
principals, (3) offerings off the floors of the exchanges or (4) a combination
of any such methods. Sales may be made at prevailing market prices (which could
be subject to change). Any such offering would be described in a supplement to
this prospectus setting forth the terms of the offering and the number of Shares
offered.
Any agents, underwriters or dealers participating in the distribution of
the securities may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of the securities may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933, as
amended (the Securities Act). Agents and underwriters may be entitled under
agreements entered into with UniSource Energy to indemnification by UniSource
Energy, against certain liabilities, including liabilities under the Securities
Act and other securities laws, or to contribution with respect to payments that
the agents or underwriters may be required to make in respect thereof.
10
The outstanding shares of UniSource Energy common stock are listed on the
New York Stock Exchange and the Pacific Exchange. Any new shares of common stock
will also be listed on those Exchanges, subject to official notice of issuance.
Any agents, underwriters or dealers or agents participating in the
distribution of the securities, and/or affiliates thereof, may engage in
transactions with and perform services for UniSource Energy and its affiliates
in the ordinary course of business.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus contain forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995. UniSource Energy is including the
following cautionary statements to make applicable and take advantage of the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995
for any forward-looking statements made by or for UniSource Energy in this
prospectus. Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance and underlying
assumptions and other statements that are not statements of historical facts.
Forward-looking statements may be identified by the use of words such as
"anticipates," "estimates," "expects," "intends," "plans," "predicts,"
"projects," and similar expressions. All such forward-looking statements,
whether written or oral, and whether made by or on behalf of UniSource Energy,
are expressly qualified by these cautionary statements and any other cautionary
statements which may accompany the forward-looking statements. In addition,
UniSource Energy disclaims any obligation to update any forward-looking
statements to reflect events or circumstances after the date of this prospectus.
Forward-looking statements involve risks and uncertainties that could cause
actual results or outcomes to differ materially from those expressed in the
forward-looking statements. We express our expectations, beliefs and projections
in good faith and believe them to have a reasonable basis. However, we make no
assurances that management's expectations, beliefs or projections will be
achieved or accomplished. We have identified the following important factors
that could cause actual results to differ materially from those discussed in our
forward-looking statements. These may be in addition to other factors and
matters discussed in other parts of this prospectus:
1. Effects of restructuring initiatives in the electric industry and
other energy-related industries.
2. Effects of competition in retail and wholesale energy markets.
3. Changes in economic conditions, demographic patterns and weather
conditions in TEP's retail service area.
4. Supply and demand conditions in wholesale energy markets, including
volatility in market prices and illiquidity in markets, which are
affected by a variety of factors. These factors include the
availability of generating capacity in the western U.S., including
hydroelectric resources, weather, natural gas prices, the extent of
utility restructuring in various states, transmission constraints,
environmental restrictions and cost of compliance, and FERC regulation
of wholesale energy markets.
5. The creditworthiness of the entities with whom UniSource Energy, TEP,
Millennium and their affiliates transact business.
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6. Changes affecting TEP's cost of providing electrical service including
changes in fuel costs, generating unit operating performance,
scheduled and unscheduled plant outages, interest rates, tax laws,
environmental laws, and the general rate of inflation.
7. Changes in governmental policies and regulatory actions with respect
to financing and rate structures.
8. Changes affecting the cost of competing energy alternatives, including
changes in available generating technologies and changes in the cost
of natural gas.
9. Changes in accounting principles or the application of such principles
to UniSource Energy or TEP.
10. Market conditions and technological changes affecting UniSource
Energy's unregulated businesses.
11. Regulatory conditions to the approval of the acquisition of Citizens'
Arizona electric utility and gas utility assets.
12. The level of rate relief granted with respect to Citizens' Arizona
electric utility and gas utility assets.
13. Unanticipated changes in future liabilities relating to employee
benefit plans due to changes in market values of its retirement plan
assets and health care costs.
14. The outcome of any ongoing litigation.
15. Ability to obtain financing through debt and/or equity issuance, which
can be affected by various factors, including interest rate
fluctuations and capital market conditions.
16. Whether the proposed Springerville Generating Station expansion
proceeds; the role of Tri-State, SRP, and other third parties in such
expansion; and the terms of the ownership, operating and power
purchase arrangements ultimately utilized.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
2001, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
INDEPENDENT ACCOUNTANTS
With respect to the unaudited consolidated financial information of
UniSource Energy Corporation for the three-month periods ended March 31, 2002
and 2001, the three-month and six-month periods ended June 30, 2002 and 2001 and
the three-month and nine-month periods ended September 30, 2002 and 2001,
incorporated by reference in this prospectus, PricewaterhouseCoopers LLP
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
reports dated May 3, 2002, August 2, 2002 and November 1, 2002, incorporated by
reference herein, state that they did not audit and they do not express an
opinion on that unaudited consolidated financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied.
PricewaterhouseCoopers LLP is not subject to the liability provisions of Section
11 of the Securities Act of 1933 for their reports on the unaudited consolidated
financial information because those reports are not a "report" or a "part" of
the registration statement prepared or certified by PricewaterhouseCoopers LLP
within the meaning of Sections 7 and 11 of the Securities Act.
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LEGAL MATTERS
The validity of the shares and certain other matters will be passed upon
for UniSource Energy by Thelen Reid & Priest LLP, our special counsel, and
Vincent Nitido, Jr., Esq., our Vice President and General Counsel, and for any
agents, underwriters or dealers by counsel to be identified in the applicable
prospectus supplement. In giving their opinions, Thelen Reid & Priest LLP and
counsel for any agents, underwriters or dealers may rely, as to matters of
Arizona law, upon the opinion of Mr. Nitido.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
S.E.C. Filing Fee.......................................... $ 6,054
Printing Expenses*......................................... 50,000
Accounting Fees and Expenses*.............................. 7,000
Legal Fees and Expenses*................................... 150,000
Miscellaneous*............................................. 30,946
Total*................................................ $244,000
______________
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article SIXTH of the Restated Articles of Incorporation of UniSource
Energy, as amended provides in pertinent part as follows:
SIXTH:
(B) No director of the Corporation shall be personally liable to the
Corporation or its shareholders for money damages for any action taken or any
failure to take any action as a Director; provided, however, that nothing herein
shall be deemed to eliminate or limit any liability which may not be so
eliminated or limited under the laws of the State of Arizona, as in effect at
the effective date of this paragraph (B) of Article SIXTH or as thereafter
amended. No amendment, modification or repeal of this paragraph (B) shall
eliminate or limit the protection afforded by this paragraph (B) to a director
with respect to any act or omission occurring before the effective date thereof.
(C) (1) The Corporation shall, to the maximum extent permitted by
applicable law, as from time to time in effect, indemnify any individual who is
or was a party to or otherwise involved in (or threatened to be made a party to
or otherwise involved in) any Proceeding (as hereafter defined) because such
individual is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against all Liability (as hereinafter defined) incurred by such individual in
connection with such Proceeding.
As used in this paragraph (C) of Article SIXTH, (a) the term "Expenses"
includes attorneys' fees and all other costs and expenses reasonably related to
a Proceeding, (b) the term "Liability" means the obligation to pay a judgment,
settlement, penalty or fine (including any excise tax assessed with respect to
an employee benefit plan) and reasonable Expenses incurred with respect to a
Proceeding, and includes without limitation obligations and Expenses that have
not yet been paid but that have been or may be incurred, and (c) the term
"Proceeding" means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal, including without limitation any action, suit or proceeding
by or in the right of the Corporation and including, further, any appeal in
connection with any such action, suit or proceeding.
(2) The Corporation shall, to the maximum extent permitted by
applicable law, pay any Expenses incurred by a director or officer of the
Corporation in defending any such Proceeding in advance of the final disposition
thereof upon receipt of any undertaking by or on behalf of such individual to
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repay such advances if it is ultimately determined that such individual did not
meet any standard of conduct prescribed by applicable law and upon the
satisfaction of such other conditions as may be imposed by applicable law.
(3) The Corporation, by resolution of the Board of Directors, may
extend the benefits of this paragraph (C) of Article SIXTH to employees and
agents of the Corporation (each individual entitled to benefits under this
paragraph (C) being hereinafter sometimes called an "Indemnified Person").
(4) All rights to indemnification and to the advancement of expenses
granted under or pursuant to this paragraph (C) shall be deemed to arise out of
a contract between the Corporation and each person who is an Indemnified Person
at any time while this paragraph (C) is in effect and may be evidenced by a
separate contract between the Corporation and each Indemnified Person; and such
rights shall be effective in respect of all Proceedings commenced after the
effective date of this paragraph (C), whether arising from acts or omissions
occurring before or after such date. No amendment, modification or repeal of
this Article shall affect any rights or obligations theretofore existing.
(5) The Corporation may purchase and maintain insurance on behalf of,
or insure or cause to be insured, any person who is an Indemnified Person
against any Liability asserted against or incurred by him in any capacity in
respect of which he is an Indemnified Person, or arising out of his status in
such capacity, whether or not the Corporation would have the power to indemnify
him against such liability under this Article. As used in this Section,
"insurance" includes retrospectively rated and self-insured programs; provided,
however, that no such program shall provide coverage for directors and officers
which is prohibited by applicable law. The Corporation's indemnity of any
individual who is an Indemnified Person shall be reduced by any amounts such
individual may collect with respect to such liability (a) under any policy of
insurance purchased and maintained on his behalf by the Corporation or (b) from
any other entity or enterprise served by such individual.
(6) The rights to indemnification and to the advancement of Expenses
and all other benefits provided by, or granted pursuant to, this Article shall
continue as to a person who has ceased to serve in the capacity in respect of
which such person was an Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such person.
(7) The Board of Directors shall have the power and authority to make,
alter, amend and repeal such procedural rules and regulations relating to
indemnification and the advancement of Expenses as it, in its discretion, may
deem necessary or expedient in order to carry out the purposes of this Article,
such rules and regulations, if any, to be set forth in the Bylaws of the
Corporation or in a resolution of the Board of Directors.
ITEM 16. EXHIBITS
Reference is made to the Exhibit Index on page II-6 hereof.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the Securities Act);
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(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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-3 or Form S-8 and
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934, as amended (the Exchange Act) that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
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POWER OF ATTORNEY
EACH DIRECTOR AND/OR OFFICER OF REGISTRANT WHOSE SIGNATURE APPEARS BELOW
HEREBY APPOINTS KEVIN P. LARSON, VINCENT NITIDO, JR., ESQ. AND KAREN G.
KISSINGER, AND EACH OF THEM SEVERALLY, AS HIS ATTORNEY-IN-FACT TO SIGN IN HIS
NAME AND BEHALF, IN ANY AND ALL CAPACITIES STATED BELOW, AND TO FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION, ANY AND ALL AMENDMENTS, INCLUDING
POST-EFFECTIVE AMENDMENTS, TO THIS REGISTRATION STATEMENT AND THE REGISTRANT
HEREBY ALSO APPOINTS EACH SUCH AGENT FOR SERVICE AS ITS ATTORNEY-IN-FACT WITH
THE AUTHORITY TO SIGN AND FILE ANY SUCH AMENDMENTS IN ITS NAME AND BEHALF.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized to sign, in the City of Tucson, and the State of Arizona, on
February 21, 2003.
UNISOURCE ENERGY CORPORATION
By: /s/ KEVIN P. LARSON
----------------------------
KEVIN P. LARSON
Vice President and Principal
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: February 21, 2003 /s/ James S. Pignatelli
---------------------------------------
James S. Pignatelli
Chairman of the Board, President and
Principal Executive Officer
Date: February 21, 2003 /s/ Kevin P. Larson
---------------------------------------
Kevin P. Larson
Vice President and Principal Financial
Officer
Date: February 21, 2003 /s/ Karen G. Kissinger
---------------------------------------
Karen G. Kissinger
Vice President and Principal Accounting
Officer
Date: February 21, 2003 /s/ Lawrence J. Aldrich
---------------------------------------
Lawrence J. Aldrich
Director
Date: February 21, 2003 /s/ Larry W. Bickle
---------------------------------------
Larry W. Bickle
Director
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Date: February 21, 2003 /s/ Elizabeth T. Bilby
---------------------------------------
Elizabeth T. Bilby
Director
Date: February 21, 2003 /s/ Harold W. Burlingame
---------------------------------------
Harold W. Burlingame
Director
Date: February 21, 2003 /s/ John L. Carter
---------------------------------------
John L. Carter
Director
Date: February 21, 2003 /s/ Daniel W.L. Fessler
---------------------------------------
Daniel W.L. Fessler
Director
Date: February 21, 2003 /s/ Kenneth Handy
---------------------------------------
Kenneth Handy
Director
Date: February 21, 2003 /s/ Warren Y. Jobe
---------------------------------------
Warren Y. Jobe
Director
Date: February 21, 2003 /s/ H. Wilson Sundt
---------------------------------------
H. Wilson Sundt
Director
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EXHIBIT INDEX
-------------
Exhibit No. Description of Exhibit
1 -- Form of Underwriting Agreement with respect to Common Stock (A
form will be filed as an exhibit to a report on Form 8-K, as
contemplated by Item 601(b)(1) of Regulation S-K under the
Securities Act, or by amendment.)
* 4(a) -- Amended and Restated Articles of Incorporation (filed with the
Commission on January 30, 1998, as Exhibit 2(a) to Registrant's
Amendment No. 1 to Form 8-A and incorporated herein by reference
thereto).
* 4(b) -- Bylaws (filed with the Commission on December 23, 1997 as Exhibit
2(b) to Registrant's Form 8-A and incorporated herein by
reference thereto).
* 4(c) -- Rights Agreement, dated as of March 5, 1999, between UniSource
Energy Corporation and The Bank of New York, as Rights Agent
(filed with the Commission on March 5, 1999, as Exhibit 4 to
Registrant's Form 8-K dated March 5, 1999, and incorporated
herein by reference thereto).
5(a) -- Opinion of Vincent Nitido, Jr., Esq.
5(b) -- Opinion of Thelen Reid & Priest LLP.
15 -- Letter of PricewaterhouseCoopers LLP regarding unaudited interim
financial information.
23(a) -- The Consents of Vincent Nitido, Jr., Esq. and Thelen Reid &
Priest LLP are contained in their opinions as Exhibits 5(a) and
5(b), respectively.
23(b) -- Consent of Independent Accountants
24 -- Power of Attorney is contained herein at page II-4.
_______________________
* Previously filed.
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