PROSPECTUS SUPPLEMENT NO. 1 FILED PURSUANT TO RULE 424(B)(3)
(TO PROSPECTUS DATED SEPTEMBER 23, 2005) REGISTRATION NO. 333-126141
UNISOURCE ENERGY CORPORATION
RELATING TO RESALES BY SELLING SECURITYHOLDERS OF
$150,000,000
4.50% CONVERTIBLE SENIOR NOTES DUE 2035 AND
SHARES OF COMMON STOCK (WITHOUT PAR VALUE) ISSUABLE UPON CONVERSION OF THE NOTES
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This prospectus supplement, which supplements UniSource Energy
Corporation's (the "Company") prospectus dated September 23, 2005, relates to
resales by selling securityholders of $150,000,000 in aggregate principal amount
of the Company's 4.50% Convertible Senior Notes due 2035 and the shares of the
Company's common stock issuable upon conversion of the notes. You should read
this prospectus supplement in conjunction with the related prospectus, which is
to be delivered by selling securityholders to prospective purchasers along with
this prospectus supplement.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
YOU SHOULD READ AND RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE RELATED PROSPECTUS, TOGETHER WITH THOSE DOCUMENTS
INCORPORATED BY REFERENCE, AS DESCRIBED ON PAGE (iii) OF THE PROSPECTUS UNDER
INCORPORATION BY REFERENCE. NEITHER THE COMPANY NOR ANY SELLING SECURITYHOLDER
HAS AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT OR ADDITIONAL
INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR ADDITIONAL INFORMATION,
YOU SHOULD NOT RELY ON IT. THE SELLING SECURITYHOLDERS ARE OFFERING TO SELL, AND
ARE SEEKING OFFERS TO BUY, THE SECURITIES ONLY IN JURISDICTIONS WHERE OFFERS AND
SALES ARE PERMITTED. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE RELATED
PROSPECTUS CONSTITUTES AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
ANY SECURITIES BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR
SUCH PERSON TO MAKE SUCH AN OFFER OR SOLICITATION. YOU SHOULD NOT ASSUME THAT
THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE RELATED
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT COVER OF
THE RESPECTIVE DOCUMENT.
INVESTING IN THE NOTES OR THE SHARES OF THE COMPANY COMMON STOCK ISSUABLE
ON CONVERSION OF THE NOTES INVOLVES RISKS. SEE RISK FACTORS BEGINNING ON PAGE 6
OF THE RELATED PROSPECTUS.
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The date of this prospectus supplement is November 23, 2005.
The information set forth in the following table modifies and supplements
the information set forth in the table appearing under the heading SELLING
SECURITYHOLDERS in the related prospectus. The information is based on
information provided to the Company by or on behalf of the selling
securityholders on or prior to November 16, 2005 and has not been independently
verified by the Company. Since the date on which each selling securityholder
identified below provided this information, any of these selling securityholders
may have sold, transferred or otherwise disposed of all or a portion of its
securities in transactions exempt from the registration requirements of the
Securities Act or pursuant to the prospectus to which this prospectus supplement
relates. The selling securityholders may from time to time offer and sell
pursuant to the prospectus or supplements thereto any or all of the securities.
Because the selling securityholders are not obligated to sell securities, the
Company cannot estimate the amount of the notes or how many shares of common
stock that the selling securityholders will hold upon consummation of any such
sales.
PRINCIPAL AMOUNT OF NUMBER OF SHARES PERCENTAGE OF
NOTES BENEFICIALLY PERCENTAGE OF COMMON STOCK SHARES OF
OWNED THAT OF NOTES THAT MAY COMMON STOCK
SELLING SECURITYHOLDER MAY BE SOLD (1) OUTSTANDING BE SOLD (2) OUTSTANDING (3)(4)
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Alexandra Global Master Fund, Ltd. (5) $5,000,000 3.33 133,333 *
Institutional Benchmark Series 526,000 0.35 14,027 *
(Master Feeder) Limited in respect
of Electra Series c/o Quattro Fund (6)
Luminus Energy Partners Master Fund, 500,000 0.33 13,333 *
Ltd. (7)
McMahan Securities Co., L.P. (8) 500,000 0.33 13,333 *
The Northwestern Mutual Life 5,000,000 3.33 133,333 *
Insurance Company (9)
Quattro Fund Ltd. (10) 9,200,000 6.13 245,333 *
Quattro Multistrategy Masterfund 524,000 0.35 13,973 *
LP (11)
Sunrise Partners Limited 2,500,000 1.67 66,667 *
Partnership (12)
Teachers Insurance and Annuity 4,000,000 2.67 106,667 *
Association College Retirement
Equity Fund (13)
T. Rowe Price Small Cap Value Fund, 10,000,000 6.67 266,667 *
Inc. (14)
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* Less than 1%
(1) Beneficial ownership is reported on the basis of regulations of the SEC
governing the determination of beneficial ownership of securities. Under
the rules of the SEC, a person is deemed to be a "beneficial owner" of a
security if that person has or shares "voting power," which includes the
power to vote or to direct the voting of such security, or "investment
power, which includes the power to dispose of or to direct the disposition
of such security. Under these rules, more than one person may be deemed to
be a beneficial owner of such securities as to which such person has an
economic interest.
(2) Assumes conversion of all of the holder's notes at an initial conversion
rate of 26.6667 shares of the Company's common stock per $1,000 principal
amount of the notes. However, this conversion rate will be subject to
adjustment as described in the prospectus under "Description of the
Notes--Conversion of Notes--Conversion Rate Adjustments". As a result, the
number of shares of the Company's common stock issuable upon conversion of
the notes may increase or decrease in the future.
(3) Calculated on the basis of 34,731,206 shares of the Company's common stock
outstanding as of November 7, 2005. In calculating this percentage, based
on Rule 13d-3(d)(1)(i) of the Exchange Act, the Company treated as
outstanding that number of shares of the Company's common stock issuable
upon conversion of all of the particular holder's notes. However, the
Company did not assume the conversion of any other holder's notes.
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(4) Assumes that all holders of notes, or any future transferees, pledgees,
donees, or successors of or from such holders of notes, do not beneficially
own any shares of the Company's common stock other than the shares issuable
upon conversion of the notes at the initial conversion rate.
(5) Alexandra Investment Management, LLC ("AIM") is an investment adviser to
Alexandra with respect to the securities listed above for Alexandra. AIM
may therefore be deemed to be an indirect beneficial owner with shared
voting/investment power with respect to such securities, however, AIM
disclaims beneficial ownership of such securities. Messrs. Mikhail A.
Filimonov and Dimitri Sogoloff are managing members of AIM and therefore
may be deemed to be indirect beneficial owners with shared
voting/investment power with respect to such securities, however, Messrs.
Filimonov and Sogoloff disclaim beneficial ownership of such securities.
(6) Gary Crowder has voting and investment power with respect to the securities
listed for Institutional Benchmark Series (Master Feeder) Limited in
respect of Electra Series c/o Quattro Fund.
(7) Paul Segal has voting and investment power with respect to the securities
listed for Luminus Energy Partners Master Fund, Ltd. ("Luminus") but
disclaims beneficial ownership of such securities. Luminus also owns
614,500 shares of the Company's common stock which were not included in the
calculation of Luminus' percentage of shares of common stock outstanding in
the table above. Taking into account the additional 614,500 shares of the
Company's common stock held by Luminus, Luminus would, upon conversion,
hold 1.81% of the Company's outstanding common stock.
(8) McMahan Securities Co., L.P. ("McMahan") has identified itself as a
registered broker-dealer and may therefore be deemed an "underwriter"
within the meaning of the Securities Act of 1933, as amended, with respect
to the securities listed above for such selling securityholder. Ron Fertig,
Jay Glassman, Joseph Dwyer, D. Bruce McMahan, Scott Dillinger and Norman
Zeigler have voting and investment power with respect to the securities
listed for McMahan.
(9) The Northwestern Mutual Life Insurance Company ("Northwestern Mutual") has
identified itself as an affiliate of the following registered
broker-dealers: Northwestern Mutual Investment Services, LLC, Frank Russell
Capital Inc., Frank Russell Securities, Inc. and Russell Fund Distributors,
Inc., and has represented to the Company that it (i) purchased the
securities listed above in the ordinary course of business and (ii) at the
time of the purchase of the securities, had no agreements or
understandings, directly or indirectly, with any person to distribute the
securities.
In the ordinary course of business, broker-dealer affiliates of
Northwestern Mutual, may, from time to time, have acquired or disposed of,
or may in the future acquire or dispose of, the Company's securities or
securities of its affiliates, for such broker-dealers' own accounts or for
the accounts of others. Other affiliates of Northwestern Mutual, including
investment advisor affiliates, may in the ordinary course of business,
effect transactions in the Company's securities or securities of its
affiliates. Only security holdings of Northwestern Mutual are specifically
disclosed in above table.
Northwestern Investment Management Company, LLC ("NIMC") is one of the
investment advisers to Northwestern Mutual and is the investment adviser
for Northwestern Mutual with respect to the securities listed for
Northwestern Mutual above. NIMC therefore may be deemed to be an indirect
beneficial owner with shared voting power/investment power with respect to
such securities. Jerome R. Baier is a portfolio manager for NIMC and
manages the portfolio which holds the securities listed for Northwestern
Mutual above and therefore may be deemed to be an indirect beneficial owner
with shared voting power/investment power with respect to such securities,
however, Mr. Baier disclaims beneficial ownership of such securities.
Northwestern Mutual and its affiliates may, in the ordinary course of
business, take part in transactions involving the real property of the
Company or its affiliates. However, Northwestern Mutual does not concede
that the foregoing necessarily constitutes material relationships under
Item 507 of Regulation S-K that must be disclosed in the prospectus.
(10) Andrew Kaplan, Louis Napoli and Brian Swain have voting and investment
power with respect to the securities listed for Quattro Fund ltd.
(11) Andrew Kaplan, Louis Napoli and Brian Swain have voting and investment
power with respect to the securities listed for Quattro Multistrategy
Masterfund LP.
(12) Sunrise Partners Limited Partnership has identified itself as an affiliate
of Paloma Securities LLC, a registered broker-dealer, and INFM Securities
LLC, a registered broker-dealer, and has represented to us that it: (i)
purchased the securities listed above in the ordinary course of business
and (ii) at the time of the purchase of the securities, had no agreements
or understandings, directly or indirectly, with any person to distribute
the securities. S. Donald Sussman has voting and investment power with
respect to securities listed for Sunrise Partners Limited Partnership,
however, Mr. Sussman disclaims beneficial ownership of such securities.
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(13) Teachers Insurance and Annuity Association College Retirement Equities Fund
has identified itself as an affiliate of TIAA-CREF Individual &
Institutional Services, LLC, a registered broker dealer, and Teachers
Personal Investors Services, Inc., a registered broker-dealer, and has
represented to us that it: (i) purchased the securities listed above in the
ordinary course of business and (ii) at the time of the purchase of the
securities, had no agreements or understandings, directly or indirectly,
with any person to distribute the securities.
(14) T. Rowe Price Small Cap Value Fund, Inc. ("T. Rowe Price") has identified
itself as an affiliate of T. Rowe Price Investment Services, Inc., a
wholly-owned subsidiary of T. Rowe Price Associates, Inc. and a limited
purpose broker-dealer. T. Rowe Price also owns 412,000 shares of the
Company's common stock which were not included in the calculation of T.
Rowe Price's percentage of shares of common stock outstanding in the table
above. Taking into account the additional 412,000 shares of the Company's
common stock held by T. Rowe Price, T. Rowe Price would, upon conversion,
hold 1.954% of the Company's outstanding common stock. T. Rowe Price
Associates, Inc. ("Price Associates"), which is a registered investment
advisor under the Investment Advisors Act of 1940, has voting and
investment power with respect to 3,190,550 shares of the Company's common
stock, including the additional 412,000 shares of the Company's common
stock held by T. Rowe Price. Taking into account the 3,190,550 shares of
the Company's common stock, Price Associates would, upon conversion, have
voting and investment power with respect to 9.954% of the Company's
outstanding common stock.
(15) Information about other selling securityholders, if any, will be provided
in one or more prospectus supplements or post-effective amendments to the
registration statement of which the prospectus is a part.
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