-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, THh/I8RhWK384Xozn1FoK6V6ci4h3lveUu4lu375kaXdMuXaZofLdAlzjMQsAV/2 t4O7gaNSMrl1oWAEtdhSvw== 0000897069-98-000249.txt : 19980504 0000897069-98-000249.hdr.sgml : 19980504 ACCESSION NUMBER: 0000897069-98-000249 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980430 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: WISCONSIN POWER & LIGHT CO CENTRAL INDEX KEY: 0000107832 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 390714890 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-00337 FILM NUMBER: 98606339 BUSINESS ADDRESS: STREET 1: 222 W WASHINGTON AVE CITY: MADISON STATE: WI ZIP: 53703 BUSINESS PHONE: 6082523311 10-K405/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 1 TO [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Name of Registrant, State of Incorporation, IRS Employer Commission Address of Principal Executive Offices and Identification File Number Telephone Number Number 0-337 WISCONSIN POWER AND LIGHT COMPANY 39-0714890 (a Wisconsin corporation) 222 West Washington Avenue Madison, Wisconsin 53703 Telephone (608)252-3311 Securities registered pursuant to Section 12 (b) of the Act: None Securities registered pursuant to Section 12 (g) of the Act: Title of Class Preferred Stock (Accumulation without Par Value) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past (90) days. Yes X No _____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. [ X] Aggregate market value of the voting stock held by nonaffiliates as of January 31, 1998: $52.3 million Number of shares outstanding of each class of common stock as of January 31, 1998: Common Stock, $5 par value, 13,236,601 shares outstanding (all of which are owned beneficially and of record by WPL Holdings, Inc.) DOCUMENTS INCORPORATED BY REFERENCE: None On April 21, 1998, the merger involving IES Industries Inc. (IES Industries) (the former parent of IES Utilities Inc. (IES)), Interstate Power Company (IPC) and WPL Holdings, Inc. was completed (the Merger), after which the name of Wisconsin Power and Light Company's (the Company's) parent changed from WPL Holdings, Inc. to Interstate Energy Corporation (IEC). The Company remains a subsidiary of IEC. The Company hereby amends Items 10, 11, 12 and 13 of its Annual Report on Form 10-K for the fiscal year ended December 31, 1997 to provide in their entirety as follows: PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information regarding the directors of the Company as of the date of this filing is set forth below. Election of Directors of Wisconsin Power and Light Company Eleven directors are to be elected at the Company's Annual Meeting of Shareowners scheduled to be held on June 17, 1998. Joyce L. Hanes, Arnold M. Nemirow, Jack R. Newman, Judith D. Pyle, and David Q. Reed are nominees to hold office for a term expiring in 2001; Lee Liu, Robert W. Schlutz and Wayne H. Stoppelmoor are nominees to hold office for a term expiring in 2000; and Alan B. Arends, Robert D. Ray and Anthony R. Weiler are nominees to hold office for a term expiring in 1999. All nominees are currently directors of the Company. All persons elected as directors will serve until the Annual Meeting of Shareowners of the Company in the year their respective term expires, or until their successors have been duly elected and qualified. A proxy statement for the 1998 Annual Meeting will be mailed to shareowners in advance of such meeting. Brief biographies of the director nominees and continuing directors follow. These biographies include their age (as of December 31, 1997), an account of their business experience, and the names of publicly-held and certain other corporations of which they are also directors. Except as otherwise indicated, each nominee and continuing director has been engaged in his or her present occupation for at least the past five years. Nominees For Terms Expiring in 2001 Joyce L. Hanes Principal Occupation: Director and Chair of Midwest Wholesale Inc. Age: 65 Served as a director of the Company since the consummation of the Merger. Annual meeting at which nominated term of office will expire: 2001 Other Information: Ms. Hanes has been a director of Midwest Wholesale Inc., Mason City, Iowa since 1970. She was re-elected Chair of the Board of that company in December, 1997, having previously served as Chair from 1986 to 1988. Ms. Hanes has served as a director of IPC since 1982, and of IES and IEC since the consummation of the Merger. Arnold M. Nemirow Principal Occupation: Chairman, President and Chief Executive Officer, Bowater, Inc. (a pulp and paper manufacturer), Greenville, South Carolina. Age: 54 Served as a director of the Company since 1994. Annual Meeting at which nominated term of office will expire: 2001 Other Information: Mr. Nemirow served as President, Chief Executive Officer and Director of Wausau Paper Mills Company, a pulp and paper manufacturer, from 1990 until joining Bowater, Inc., in September 1994. Mr. Nemirow has served as a director of IEC since 1991, and of IES and IPC since the consummation of the Merger. He is a member of the New York Bar. Jack R. Newman Principal Occupation: Partner of Morgan, Lewis & Bockius, an international law firm based in Washington, D.C. Age: 64 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which nominated term of office will expire: 2001 Other Information: Mr. Newman has been engaged in private practice since 1967 and has been a partner of Morgan, Lewis & Bockius since December 1, 1994. Prior to joining Morgan, Lewis & Bockius, he was a partner in the law firms Newman & Holtzinger and Newman, Bouknight & Edgar. He has served as nuclear legal counsel to IES since 1968. He advises a number of utility companies on nuclear power matters, including many European and Asian companies. Mr. Newman is a member of the Bar of the State of New York, the Bar Association of the District of Columbia, the Association of the Bar of the City of New York, the Federal Bar Association and the Lawyers Committee of the Edison Electric Institute. Mr. Newman has served as a director of IES since 1994, and of IEC and IPC since the consummation of the Merger. Judith D. Pyle Principal Occupation: Vice Chair of The Pyle Group, a financial services company, Madison, Wisconsin. Age: 54 Served as a director of the Company since 1994. Annual Meeting at which nominated term of office will expire: 2001 Other Information: Prior to assuming her current position, Ms. Pyle served as Vice Chair and Senior Vice President of Corporate Marketing of Rayovac Corporation (a battery and lighting products manufacturer), Madison, Wisconsin. Ms. Pyle is a director of Firstar Corporation. She is also a member of the Board of Visitors at the University of Wisconsin School of Human Ecology. Further, Ms. Pyle is a member of Boards of Directors of the United Way Foundation, Greater Madison Chamber of Commerce, Madison Art Center, Wisconsin Taxpayers Alliance, Children's Theatre of Madison, and is a trustee of the White House Endowment Fund. Ms. Pyle has served as a director of IEC since 1992, and of IES and IPC since the consummation of the Merger. David Q. Reed Principal Occupation: Independent practitioner of law in Kansas City, Missouri. Age: 66 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which nominated term of office will expire: 2001 Other Information: Mr. Reed has been engaged in the private practice of law since 1960. He is a member of the American Bar Association, the Association of Trial Lawyers of America, the Missouri Association of Trial Lawyers, the Missouri Bar and the Kansas City Metropolitan Bar Association. Mr. Reed has served as a director of IES (or predecessor companies) since 1967, and of IEC and IPC since the consummation of the Merger. For Terms Expiring in 2000 Lee Liu Principal Occupation: Chairman of the Board of IEC. Age: 64 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which current term of office will expire: 2000 Other Information: Mr. Liu has served as Chairman of the Board of IEC since the consummation of the Merger. Mr. Liu was Chairman of the Board and Chief Executive Officer of IES Industries Inc. and Chairman of the Board and Chief Executive Officer of IES prior to the Merger. Mr. Liu has held a number of professional, management and executive positions after joining Iowa Electric Light and Power Company (later known as IES Utilities Inc.) in 1957. He is a director of HON Industries Inc., an office equipment manufacturer in Muscatine, Iowa; McLeodUSA Inc., a telecommunications company in Cedar Rapids, Iowa; Principal Financial Group, an insurance company in Des Moines, Iowa; and Eastman Chemical Company, a diversified chemical company in Kingsport, Tennessee. He also serves as a trustee for Mercy Medical Center, a hospital in Cedar Rapids, Iowa and is a member of the University of Iowa College of Business Board of Visitors. Mr. Liu has served as a director of IES (or predecessor companies) since 1981, and of IEC and IPC since the consummation of the Merger. Robert W. Schlutz Principal Occupation: President of Schlutz Enterprises, a diversified farming and retailing business in Columbus Junction, Iowa. Age: 62 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which current term of office will expire: 2000 Other Information: Mr. Schlutz is a director of PM Agri-Nutritional Group Inc., an animal health business in St. Louis, Missouri, and the Iowa Foundation for Agricultural Advancement. Mr. Schlutz is President of the Iowa State Fair Board and member of various community organizations. He also served on the National Advisory Council for the Kentucky Fried Chicken Corporation. He is a past Chairman of the Environmental Protection Commission for the State of Iowa. Mr. Schlutz has served as a director of IES (or predecessor companies) since 1989, and of IEC and IPC since the consummation of the Merger. Wayne H. Stoppelmoor Principal Occupation: Vice Chairman of the Board of IEC. Age: 63 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which current term of office will expire: 2000 Other Information: Mr. Stoppelmoor has served as Vice Chairman of the Board of Directors of IEC since the consummation of the Merger. Prior thereto, Mr. Stoppelmoor had served as Chairman, President and Chief Executive Officer of IPC. He retired as President of IPC on October 1, 1996 and as Chief Executive Officer on January 1, 1997. Mr. Stoppelmoor has served as a director of IPC since 1986, and of IEC and IES since the consummation of the Merger. For Terms Expiring in 1999 Alan B. Arends Principal Occupation: Chairman of the Board of Directors of Alliance Benefit Group Financial Services Corp. (formerly Arends Associates, Inc.,) of Albert Lea, Minnesota, an employee benefits company. Age: 64 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which current term of office will expire: 1999 Other Information: Mr. Arends founded Alliance Benefit Group Financial Services Corp. in 1983. Mr. Arends has served as a director of IPC since 1993, and of IEC and IES since the consummation of the Merger. Robert D. Ray Principal Occupation: Retired President and Chief Executive Officer of IASD Health Services Inc. (formerly Blue Cross and Blue Shield of Iowa, Western Iowa and South Dakota), an insurance firm in Des Moines, Iowa. Age: 69 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which current term of office will expire: 1999 Other Information: Mr. Ray served as Governor of the State of Iowa for fourteen years, and was the United States Delegate to the United Nations in 1984. He is a director of the Maytag Company, an appliance manufacturer in Newton, Iowa. He also serves as Chairman of the National Leadership Commission on Health Care Reform and the National Advisory Committee on Rural Health Care. Mr. Ray is Chairman of the Board of Governors, Drake University, Des Moines, Iowa, and a member of the Iowa Business Council. Mr. Ray has served as a director of IES (or predecessor companies) since 1987, and of IEC and IPC since the consummation of the Merger. Anthony R. Weiler Principal Occupation: Senior Vice President, Merchandising, for Heilig-Meyers Company, a national furniture retailer in Richmond, Virginia. Age: 61 Served as a director of the Company since the consummation of the Merger. Annual Meeting at which current term of office will expire: 1999 Other Information: Mr. Weiler was previously Chairman and Chief Executive Officer of Chittenden & Eastman Company, a national manufacturer of mattresses in Burlington, Iowa. He was employed by Chittenden & Eastman in various management positions from 1960 to 1995. Mr. Weiler joined Heilig-Meyers Company as Senior Vice President of Merchandising in 1995. Mr. Weiler is Chairman of the National Home Furnishings Association and a director of the Retail Home Furnishings Foundation. He is a trustee of NHFA Insurance and a past director of the Burlington Area Development Corporation, the Burlington Area Chamber of Commerce and various community organizations. Mr. Weiler has served as a director of IES (or predecessor companies) since 1991, and of IEC and IPC since the consummation of the Merger. Continuing Directors Erroll B. Davis, Jr. Principal Occupation: President and Chief Executive Officer of IEC and Chief Executive Officer of its subsidiaries, including the Company. Age: 53 Served as a director of the Company since 1984. Annual Meeting at which current term of office will expire: 2000 Other Information: Mr. Davis was elected President of IEC in January, 1990, and was elected President and Chief Executive Officer of IEC effective July 1, 1990. Mr. Davis joined the Company in August, 1978 and was elected President in July, 1987. He was elected as President and Chief Executive Officer of the Company in August, 1988. Mr. Davis has also served as Chief Executive Officer of IES and IPC since the consummation of the Merger. He is a director of the Edison Electric Institute, Amoco Oil Company, Competitive Wisconsin, Inc., PPG Industries, Inc., and the Wisconsin Utilities Association. Mr. Davis is also a director and past chair of the Wisconsin Association of Manufacturers and Commerce, former director and vice chair of Forward Wisconsin, and director and acting chair of the Electric Power Research Institute, past director of the Association of Edison Illuminating Companies, and the American Gas Association. Mr. Davis is also a member of the Iowa Business Council. Mr. Davis has served as a director of IEC since 1982, and of IES and IPC since the consummation of the Merger. Rockne G. Flowers Principal Occupation: Chief Executive Officer of Nelson Industries, Inc. (a muffler, filter, industrial silencer, and active sound and vibration control technology and manufacturing firm), Stoughton, Wisconsin (a subsidiary of Cummins Engine Company). Age: 66 Served as a director of the Company from 1979 to 1990 and since 1994. Annual Meeting at which current term of office will expire: 1999 Other Information: Mr. Flowers is a director of Digisonix, Inc.; American Family Mutual Insurance Company; Janesville Sand and Gravel Company; M&I Bank of Southern Wisconsin; Meriter Health Services, Inc.; Meriter Hospital; the Wisconsin History Foundation, and University Research Park. Mr. Flowers has served as a director of IEC since 1981, and of IES and IPC since the consummation of the Merger. Katharine C. Lyall Principal Occupation: President, University of Wisconsin System, Madison, Wisconsin. Age: 56 Served as a director of the Company since 1986. Annual Meeting at which current term of office will expire: 1999 Other Information: Ms. Lyall has served as President of the University of Wisconsin System since April 1992. Prior thereto, she served as Executive Vice President of the University of Wisconsin System. She also serves on the Board of Directors of the Kemper National Insurance Companies and the Carnegie Foundation for the Advancement of Teaching. She is a member of a variety of professional and community organizations, including the American Economic Association; Carnegie Foundation for Advancement of Teaching (President, Board of Trustees); the Wisconsin Academy of Sciences, Arts and Letters; the American Red Cross (Dane County); Competitive Wisconsin, Inc.; and Forward Wisconsin. In addition to her administrative position, she is a professor of economics at the University of Wisconsin-Madison. Ms. Lyall has served as a director of IEC since 1994, and of IES and IPC since the consummation of the Merger. Milton E. Neshek Principal Occupation: Special Consultant to the Kikkoman Corporation, Tokyo, Japan, and General Counsel and Secretary of Kikkoman Foods, Inc. and Manager, New Market Development, Kikkoman Foods, Inc. (a food products manufacturer), Walworth, Wisconsin. Age: 67 Served as a director of the Company since 1984. Annual Meeting at which current term of office will expire: 2000 Other Information: Mr. Neshek is a director of Kikkoman Foods, Inc.; Midwest U.S.-Japan Association; Regional Transportation Authority (for southeast Wisconsin); and Wisconsin-Chiba, Inc. He is a fellow in the American College of Probate Counsel. Mr. Neshek is a member of the Walworth County Bar Association, the State Bar of Wisconsin, and the American Judicature Society. Mr. Neshek is also a member of the Wisconsin Sesquicentennial Commission and a member of its Executive and Finance Committee. Mr. Neshek is a member of the Wisconsin International Trade Council (WITCO) and is Chairman of the WITCO International Education Task Force. Mr. Neshek has served as a director of IEC since 1986, and of IES and IPC since the consummation of the Merger. Section 16(a) Beneficial Ownership Reporting Compliance The Company's directors, its executive officers, and certain other officers are required to report their ownership of IEC's common stock and the Company preferred stock and any changes in that ownership to the Securities and Exchange Commission. To the best of the Company's knowledge, all required filings in 1997 were properly made in a timely fashion. In making the above statements, the Company has relied on the representations of the persons involved and on copies of their reports filed with the Securities and Exchange Commission. Executive Officers of the Company The executive officers of the registrant as of the date of this filing are as follows (figures following the names represent the officer's age as of December 31, 1997): Erroll B. Davis, Jr., 53, was elected Chief Executive Officer effective April 1998. He previously served as President and Chief Executive Officer of the Company since 1988 and has been a board member since 1984. William D. Harvey, 48, was elected President effective April 1998. He previously served as Senior Vice President since 1993 and Vice President- Natural Gas and General Counsel from 1992 to 1993. Daniel A. Doyle, 39, was elected Vice President-Fossil Plants effective April 1998. He previously served as Vice President-Power Production since 1996, Vice President-Finance, Controller and Treasurer from 1994 to 1996, Controller and Treasurer from 1993 to 1994 and Controller from 1992 to 1993. John E. Ebright, 54, was elected Vice President-Controller effective April 1998. He previously served as Controller and Chief Accounting Officer since 1996 at IES Industries Inc. and IES Utilities Inc. Prior to joining the company he was Vice President and Controller from 1987 to 1996 at MidCon Corp., a subsidiary of Occidental Petroleum Corporation. Dean E. Ekstrom, 50, was elected Vice President-Sales and Service effective April 1998. He previously served as Vice President- Administration since 1996 and Vice President-Management Systems from 1994 to 1996 at IES Industries Inc. and Vice President and General Manager from 1993 to 1994 at Iowa Southern Utilities Company. John F. Franz Jr., 58, was elected Vice President-Nuclear Operations effective April 1998. He previously served as Vice President-Nuclear since 1992 at IES Utilities Inc. Edward M. Gleason, 57, was elected Vice President-Treasurer and Corporate Secretary effective April 1998. He previously served as Controller, Treasurer and Corporate Secretary of the Company since 1996, Corporate Secretary of the Company from 1993 to 1996 and Vice President-Finance and Treasurer of the Company from 1986 to 1993. He has also served as Vice President-Treasurer and Corporate Secretary of WPL Holdings, Inc. since 1993. Daniel L. Mineck, 49, was elected Vice President-Performance Engineering and Environmental effective April 1998. He previously served as Assistant Vice President-Corporate Engineering since 1996, Assistant Vice President-Nuclear from 1995 to 1996 and Manager-Economic Development from 1992 to 1995 at IES Utilities Inc. Kim K. Zuhlke, 44, was elected Vice President-Customer Operations effective April 1998. He previously served as Vice President-Customer Services and Sales since 1993 and Director of Marketing and Sales Services from 1991 to 1993. David L. Wilson, 51, was elected Assistant Vice President-Nuclear Operations effective April 1998. He previously served as Assistant Vice President-Nuclear since 1997, Facility Leader from 1996 to 1997, Plant Manager from 1995 to 1996 and Plant Supervisor-Nuclear from 1991 to 1995 at IES Utilities Inc. Donald D. Jannette, 55, was elected Assistant Corporate Secretary effective April 1998. He previously served as Assistant Secretary and Assistant Treasurer since 1989 at IPC. Steven F. Price, 45, was elected Assistant Treasurer effective April 1998. He previously served as Assistant Corporate Secretary since 1992 at WPL Holdings, Inc. and the Company and Assistant Treasurer since 1992 at WPL Holdings, Inc. Robert A. Rusch, 35, was elected Assistant Treasurer effective April 1998. He previously served as Assistant Treasurer since 1995 and Financial Analyst from 1989 to 1995. NOTE: None of the executive officers listed above is related to any member of the Board of Directors or nominee for director. Executive officers have no definite terms of office and serve at the pleasure of the Board of Directors. ITEM 11. EXECUTIVE COMPENSATION Compensation of Directors No fees are paid to directors who are officers of the Company, its parent, IEC, or any of IEC's subsidiaries (presently Mr. Davis, Mr. Liu and Mr. Stoppelmoor). Non-management directors, each of whom serve on the Boards of the Company, IEC, IES, IPC and Alliant Industries Inc. (the holding company for IEC's nonregulated businesses), receive an annual retainer of $32,800 for service on all five boards. Travel expenses are paid for each meeting-day attended. All non-management directors also receive a 25% Company matching contribution in IEC common stock for limited optional cash purchases, up to $10,000, of the IEC's common stock through IEC's Shareowner Direct Plan. Matching contributions of $2,500 each for calendar year 1997 were made for the following directors: L. D. Carley, R. G. Flowers, D. R. Haldeman, K. C. Lyall, A. M. Nemirow, M. E. Neshek, H. C. Prange, J. D. Pyle, and C. T. Toussaint. Messrs. Carley, Haldeman and Prange and Ms. Toussaint retired as directors at the effective time of the Merger. Director's Charitable Award Program - A Director's Charitable Award Program is maintained for the members of the Company's Board of Directors beginning after three years of service. The purpose of the Program is to recognize the interest of the Company and its directors in supporting worthy institutions, and to enhance the Company's director benefit program so that the Company is able to continue to attract and retain directors of the highest caliber. Under the Program, when a director dies, the Company and/or IEC will donate a total of $500,000 to one qualified charitable organization, or divide that amount among a maximum of four qualified charitable organizations, selected by the individual director. The individual director derives no financial benefit from the Program. All deductions for charitable contributions are taken by the Company and IEC, and the donations are funded by the Company through life insurance policies on the directors. Over the life of the Program, all costs of donations and premiums on the life insurance policies, including a return of the Company's cost of funds, will be recovered through life insurance proceeds on the directors. The Program, over its life, will not result in any material cost to the Company. Director's Life Insurance Program - The Company maintains a split-dollar Director's Life Insurance Program for non-employee directors, beginning after three years of service, which provides a maximum death benefit of $500,000 to each eligible director. Under the split-dollar arrangement, directors are provided a death benefit only and do not have any interest in the cash value of the policies. The Life Insurance Program is structured to pay a portion of the total death benefit to the Company to reimburse the Company for all costs of the program, including a return on its funds. The Life Insurance Program, over its life, will not result in any material cost to the Company. Director Emeritus Program - In connection with the Merger, the Company put in place a Director Emeritus Program under which directors that retired from the Board as a result of the Merger are paid the same annual retainer fee as continuing directors for up to two years after they retire or until they reach age 71, whichever occurs first. This program is intended to apply only to directors who retired in connection with the Merger. Compensation of Executive Officers The following Summary Compensation Table sets forth the total compensation paid by the Company for all services rendered during 1997, 1996, and 1995 to the Chief Executive Officer and the four other most highly compensated executive officers (the "named executive officers"). SUMMARY COMPENSATION TABLE (Dollars)
Long-Term Compensation Awards Annual Compensation Securities Other Underlying Annual Options/ SARs All Other Name and Principal Position Year Salary 1 Bonus Compensation 2 (Shares) 3 Compensation 4 Erroll B. Davis, Jr. 1997 396,000 78,750 17,584 13,800 53,029 President and CEO 1996 396,000 146,790 20,625 12,600 58,706 1995 374,913 125,496 16,688 13,100 54,131 William D. Harvey 1997 209,000 18,986 14,197 5,100 31,391 Senior Vice President - 1996 209,000 82,104 10,227 4,650 27,875 the Company 1995 193,654 47,340 5,459 4,700 22,357 Eliot G. Protsch 1997 200,200 26,400 10,414 5,100 24,353 Senior Vice President - 1996 200,200 81,224 6,968 4,650 23,559 the Company 1995 182,000 47,520 3,951 4,700 18,362 Anthony J. Amato 5 1997 160,404 20,262 13,086 5,100 26,418 Senior Vice President - 1996 160,404 60,920 8,879 3,550 21,586 the Company 1995 148,964 40,046 4,887 3,650 17,156 Daniel A. Doyle 1997 157,130 10,139 6,733 3,900 17,121 Vice President - Power 1996 149,150 46,865 3,053 2,800 12,180 Production - the Company 1995 140,399 32,465 3,090 2,900 11,155 ____________________ 1 Includes vacation days sold back to the Company. Does not include the portion of salary charged to IEC. 2 Other Annual Compensation for 1997 consists of: Income tax gross-ups for reverse split-dollar life insurance: Mr. Davis - $11,903, Mr. Harvey - $5,289, Mr. Protsch - $2,608, Mr. Amato - $4,495, and Mr. Doyle - $3,096; Income tax gross-ups on financial counseling benefit: Mr. Davis - $5,681, Mr. Harvey - $8,908, Mr. Protsch - $7,806, Mr. Amato - $8,591, and Mr. Doyle - $3,727. 3 Awards made in 1997 were in combination with contingent dividend awards as described in the table entitled "Long-Term Incentive Awards in 1997". 4 All Other Compensation for 1997 consists of: Matching contributions to 401(k) plan: Mr. Davis - $11,880, Mr. Harvey - $6,270 Mr. Protsch - $6,006, Mr. Amato - $3,895, and Mr. Doyle - $4,714; Financial counseling benefit: Mr. Davis - $6,160, Mr. Harvey - $9,659, Mr. Protsch - $9,783, Mr. Amato - $10,766 and Mr. Doyle - $4,671; Split dollar life insurance premiums: Mr. Davis - $22,084, Mr. Harvey - $9,729, Mr. Protsch - $8,296, Mr. Amato - $6,123, and Mr. Doyle - $3,969; Reverse split dollar life insurance: Mr. Davis - $12,905, Mr. Harvey - $5,733, Mr. Protsch - $3,268, Mr. Amato - $5,634 and Mr. Doyle - $3,767. The split dollar and reverse split dollar insurance premiums are calculated using the "foregone interest" method. 5 Mr. Amato left the Company following the effective date of the Merger.
Stock Options The following table sets forth certain information concerning options granted during 1997 to the executives named below: OPTION/SAR GRANTS IN 1997
Potential Realizable Value at Assumed Annual Rates of Stock Appreciation for Option Individual Grants Term 2 Number of % of Total Securities Options/SARs Underlying Granted to Exercise or Options/SARs Employees in Base Price Expiration Name Granted 1 Fiscal Year ($/Share) Date 5% 10% Erroll B. Davis, Jr. 13,800 17% $28.00 1/2/07 $243,018 $615,814 William D. Harvey 5,100 6% 28.00 1/2/07 89,811 227,613 Eliot G. Protsch 5,100 6% 28.00 1/2/07 89,811 227,613 A. J. (Nino) Amato 3,900 5% 28.00 1/2/07 68,679 174,057 Daniel A. Doyle 3,250 4% 28.00 1/2/07 57,233 145,048 1 Consists of non-qualified stock options to purchase shares of IEC common stock granted pursuant to IEC's Long Term Equity Incentive Plan. Options were granted on January 2, 1997, and will fully vest on January 2, 2000. These options were granted with an equal number of contingent dividend awards as described in the table entitled "Long-Term Incentive Awards in 1997" and have exercise prices equal to the fair market value of IEC shares on the date of grant. Upon a "change in control" of IEC as defined in the Plan or upon retirement, disability or death of the option holder, these options shall become immediately exercisable. Upon exercise of an option, the executive purchases all or a portion of the shares covered by the option by paying the exercise price multiplied by the number of shares as to which the option is exercised, either in cash or by surrendering common shares already owned by the executive. 2 The hypothetical potential appreciation shown for the named executives is required by the Securities and Exchange Commission (SEC) rules. The amounts shown do not represent either the historical or expected future performance of the IEC common stock level of appreciation.
The following table provides information for the executives named below regarding the number and value of unexercised options. No options were exercisable during 1997. OPTION/SAR VALUES AT DECEMBER 31, 1997
Number of Securities Underlying Unexercised Options/SARs at Fiscal Year Value of Unexercised In-the-Money End Options/SARs at Year End 1 Name Exercisable Unexercisable Exercisable Unexercisable Erroll B. Davis, Jr. 0 39,500 0 $174,338 William D. Harvey 0 14,450 0 63,620 Eliot G. Protsch 0 14,450 0 63,620 A. J. (Nino) Amato 0 11,000 0 48,950 Daniel A. Doyle 0 8,950 0 39,619 1 Based on the closing per share price on December 31, 1997 of IEC common stock of $33.125.
Long-Term Incentive Awards. The following table provides information concerning long-term incentive awards made to the executives named below in 1997. LONG-TERM INCENTIVE AWARDS IN 1997
ESTIMATED FUTURE PAYOUTS UNDER NON- STOCK PRICE-BASED PLANS 2 PERFORMANCE OR NUMBER OF OTHER PERIOD SHARES, UNTIL UNITS OR MATURATION OR NAME OTHER RIGHTS PAYOUT THRESHOLD TARGET MAXIMUM (#)1 ($) ($) ($) Erroll B. Davis, Jr. 13,800 1/2/00 66,240 82,800 144,900 William D. Harvey 5,100 1/2/00 24,480 30,600 53,550 Eliot G. Protsch 5,100 1/2/00 24,480 30,600 53,550 A. J. (Nino) Amato 3,900 1/2/00 18,720 23,400 40,950 Daniel A. Doyle 3,250 1/2/00 15,600 19,500 34,125 1 Consists of Performance Units awarded under IEC's Long Term Equity Incentive Plan in combination with stock options (as described in the table entitled "Option/SAR Grants in 1997"). These Performance Units are entirely in the form of contingent dividends and will be paid if total IEC shareholder return over a three-year period ending January 2, 2000 equals or exceeds the median return earned by the companies in a peer group of utility holding companies, except that there will be no payment if IEC's total return is negative over the course of such period. If payable, each participant shall receive an amount equal to the accumulated dividends paid on one share of IEC common stock during the period of January 2, 1997 through December 31, 2000 multiplied by the number of performance units awarded to the participant, and modified by a performance multiplier which ranges from 0 to 1.75 based on IEC's total return relative to the peer group. 2 Assumes, for purposes of illustration only, a $2.00 per share annual dividend on shares of IEC common stock for 1998 and 1999.
Agreements and Transactions with Executives In connection with the Merger, Mr. Davis entered into a new employment agreement with IEC. Under Mr. Davis's agreement, Mr. Davis will serve as the Chief Executive Officer of IEC until at least the fifth anniversary of the effective time of the Merger. Mr. Davis will also serve as the Chairman of IEC following the second anniversary of the Merger. Following the expiration of the initial term of Mr. Davis's employment agreement, his agreement will automatically renew for successive one-year terms, unless either Mr. Davis or IEC gives prior written notice of his or its intent to terminate the agreement. Mr. Davis will also serve as Chief Executive Officer of each subsidiary of IEC, including the Company, until at least the third anniversary of the effective time of the Merger and as a director of such companies during the term of his employment agreement. Mr. Davis's employment agreement provides that he be paid an annual base salary of not less than $450,000. Mr. Davis also has the opportunity to earn short-term and long-term incentive compensation (including stock options, restricted stock and other long-term incentive compensation) in amounts no less than he was eligible to receive before the effective time of the Merger, as well as supplemental retirement benefits (including continued participation in the Company's Executive Tenure Compensation Plan) in an amount no less than he was eligible to receive before the effective time of the Merger, and life insurance providing a death benefit of three times his annual salary. If the employment of Mr. Davis is terminated without cause (as defined in his employment agreement) or if he terminates his employment for good reason (as defined in his employment agreement), IEC or its affiliates will continue to provide the compensation and benefits called for by the employment agreement through the end of the term of the employment agreement (with incentive compensation based on the maximum potential awards and with any stock compensation paid in cash), and all unvested stock compensation will vest immediately. If Mr. Davis dies or becomes disabled, or terminates his employment without good reason, during the term of his employment agreement, IEC or its affiliates will pay to him or his beneficiaries or estate all compensation earned through the date of death, disability or such termination (including previously deferred compensation and pro rata incentive compensation based upon the maximum potential awards). If Mr. Davis is terminated for cause, IEC or its affiliates will pay his base salary through the date of termination plus any previously deferred compensation. Notwithstanding the foregoing, in the event that any payments to Mr. Davis under his employment agreement or otherwise are subject to the excise tax on excess parachute payments under the Internal Revenue Code (the Code), then the total payments to be made under the employment agreement will be reduced so that the value of these payments Mr. Davis is entitled to receive is $1 less than the amount that would subject him to the 20% excise tax imposed by the Code on certain excess payments, or which IEC or its affiliates may pay without loss of deduction under the Code. IEC also has key executive employment and severance agreements (KEESAs) with Mr. Davis and with certain other executive officers of IEC and its subsidiaries, including Messrs. Harvey, Protsch, Amato and Doyle. The KEESAs provide that each executive officer that is a party thereto is entitled to benefits if, within five years after a change in control of IEC (as defined in the KEESAs), the officer's employment is ended through (i) termination by IEC, other than by reason of death or disability or for cause (as defined in the KEESAs), or (ii) termination by the officer due to a breach of the agreement by IEC or a significant change in the officer's responsibilities, or (iii) in the case of Mr. Davis's agreement, termination by Mr. Davis following the first anniversary of the change of control. The consummation of the Merger was deemed to constitute a change in control of IEC for purposes of the KEESAs. The benefits provided are, (i) a cash termination payment of one, two or three times (depending on which executive is involved) the sum of the officer's annual salary and his average annual bonus during the three years before the termination and (ii) continuation for up to five years of equivalent hospital, medical, dental, accident, disability and life insurance coverage as in effect at the time of termination. Each KEESA provides that if any portion of the benefits under the KEESA or under any other agreement for the officer would constitute an excess payment for purposes of the Code, benefits will be reduced so that the officer will be entitled to receive $1 less than the maximum amount which he could receive without becoming subject to the 20% excise tax imposed by the Code on certain excess payments, or which IEC or its affiliates may pay without loss of deduction under the Code. Mr. Davis's employment agreement as described above limits benefits paid thereunder to the extent that duplicate payments would be provided to him under his KEESA. In connection with the termination of his employment and pursuant to a letter agreement with IEC, Mr. Amato received benefits totaling $614,771 under his KEESA. During 1997, in connection with a Restricted Stock Agreement, Mr. Davis converted 0.5567 shares of Alliant Industries stock into 7,754 shares of IEC common stock and redeemed his remaining 1.1133 shares of Alliant Industries stock for $421,553 per share. The proceeds of the redemption to Mr. Davis were used, in part, to repay $315,257 of principal and interest on loans made by IEC to Mr. Davis for taxes withheld in connection with the vesting of his Alliant Industries stock. Mr. Davis was charged interest on these loans at the prime rate. Retirement and Employee Benefit Plans Salaried employees (including officers) of the Company are eligible to participate in a Retirement Plan maintained by the Company. All executives named in the foregoing Summary Compensation Table participated in the plan during 1997. Contributions to the plan are determined actuarially, computed on a straight-life annuity basis, and cannot be readily calculated as applied to any individual participant or small group of participants. For purposes of the plan, compensation means payment for services rendered, including vacation and sick pay, and is substantially equivalent to the salary amounts reported in the foregoing Summary Compensation Table. Retirement Plan benefits depend upon length of plan service (up to a maximum of 30 years), age at retirement, and amount of compensation (determined in accordance with the plan) and are reduced by up to 50% of Social Security benefits. Credited years of service under the plan for covered persons named in the foregoing Summary Compensation Table are as follows: Erroll B. Davis, Jr., 18 years; Eliot G. Protsch, 18 years; A. J. (Nino) Amato, 11 years; Daniel A. Doyle, 5 years; and William D. Harvey, 10 years. Assuming retirement at age 65, a Retirement Plan participant (in conjunction with the Unfunded Supplemental Retirement Plan described below) would be eligible at retirement for a maximum annual retirement benefit as follows: Retirement Plan Table
Average Annual Annual Benefit After Specified Years in Plan* Compensation 5 10 15 20 25 30 $125,000 $ 10,132 $ 20,265 $ 30,397 $ 40,529 $ 50,662 $ 60,794 150,000 12,424 24,848 37,272 49,696 62,120 74,544 200,000 17,007 34,015 51,022 68,029 85,037 102,044 250,000 21,591 43,181 64,772 86,363 107,953 129,544 300,000 26,174 52,348 78,522 104,696 130,870 157,044 350,000 30,757 61,515 92,272 123,029 153,787 184,544 400,000 35,341 70,681 106,022 141,363 176,703 212,044 450,000 39,924 79,848 119,772 159,696 199,620 239,544 475,000 42,216 84,431 126,647 168,863 211,078 253,294 500,000 44,507 89,015 133,722 178,029 222,537 267,044 525,000 46,799 93,598 140,397 187,196 233,995 280,794 550,000 49,091 98,181 147,272 196,363 245,453 294,544 * Average annual compensation is based upon the average of the highest 36 consecutive months of compensation. The Retirement Plan benefits shown above are net of estimated Social Security benefits and do not reflect any deductions for other amounts. The annual retirement benefits payable are subject to certain maximum limitations (in general, $150,000 for 1996 and $160,000 for 1997) under the Code. Under the Retirement Plan and a supplemental survivors income plan, if a Retirement Plan participant dies prior to retirement, the designated survivor of the participant is entitled to a monthly income benefit equal to approximately 50% (100% in the case of certain executive officers and key management employees) of the monthly retirement benefit which would have been payable to the participant under the Retirement Plan if the participant had remained employed by the Company until eligible for normal retirement.
Unfunded Supplemental Retirement Plan - The Company maintains an Unfunded Supplemental Retirement Plan which provides funds for payment of retirement benefits above the limitations on payments from qualified pension plans in those cases where an employee's retirement benefits exceed the qualified plan limits. Additionally, the plan provides for payments of supplemental retirement benefits to employees holding the position of Vice President or higher, who have been granted additional months of service by the Board of Directors for purposes of computing retirement benefits. Unfunded Executive Tenure Compensation Plan - The Company maintains an Unfunded Executive Tenure Compensation Plan to provide incentive for key executives to remain in the service of the Company by providing additional compensation which is payable only if the executive remains with the Company until retirement (or other termination if approved by the Board of Directors). In the case of the Chief Executive Officer only, in the event that the Chief Executive Officer (1) is terminated under his employment agreement with IEC as described above (the Employment Agreement) other than for cause, death or disability (as those terms are defined in the Employment Agreement), (2) terminates his employment under the Employment Agreement for good reason (as such term is defined in the Employment Agreement), or (3) is terminated as a result of a failure of the Employment Agreement to be renewed automatically pursuant to its terms (regardless of the reason for such non-renewal), then for purposes of the plan, the Chief Executive Officer shall be deemed to have retired at age 65 and shall be entitled to benefits under the plan. Participants in the plan must be designated by the Chief Executive Officer of the Company and approved by its Board of Directors. Mr. Davis was the only active participant in the plan as of December 31, 1997. The plan provides for monthly payments to a participant after retirement (at or after age 65, or with Board approval, prior to age 65) for 120 months. The payments will be equal to 25% of the participant's highest average salary for any consecutive 36-month period. If a participant dies prior to retirement or before 120 payments have been made, the participant's beneficiary will receive monthly payments equal to 50% of such amount for 120 months in the case of death before retirement, or if the participant dies after retirement, 50% of such amount for the balance of the 120 months. Annual benefits of $112,500 would be payable to Mr. Davis upon retirement, assuming he continues in the Company's service until retirement at the same salary as was in effect on December 31, 1997. Supplemental Executive Retirement Plan - The Company maintains an unfunded Supplemental Executive Retirement Plan to provide incentive for key executives to remain in the service of the Company by providing additional compensation which is payable only if the executive remains with the Company until retirement, disability or death. Participants in the plan must be approved by the Compensation and Personnel Committee of the Board. The plan provides for payments of 60% of the participant's average annual earnings (base salary and bonus) for the highest paid three years out of the last ten years of the participant's employment. The normal retirement date under the plan is age 65 or the date the participant has completed 10 years of employment, whichever is later. If a participant retires prior to age 62, the 60% payment under the plan is reduced by 3% per year for each year the participant's retirement date precedes his/her normal retirement date. Benefit payments under the plan will be made for a maximum of 18 years, with a minimum of 12 years of payments if the participant dies after retirement. Messrs. Davis, Harvey, Protsch, and Doyle are participants in this plan. The following table shows payments under the plan, assuming a minimum of 10 years of service at retirement age. Supplemental Executive Retirement Plan Table Average Compensation < 10 Years >10 Years $125,000 $0 $75,000 150,000 0 90,000 200,000 0 120,000 250,000 0 150,000 300,000 0 180,000 350,000 0 210,000 400,000 0 240,000 450,000 0 270,000 500,000 0 300,000 550,000 0 330,000 Key Employee Deferred Compensation Plan - The Company maintains an unfunded Key Employee Deferred Compensation Plan under which participants may defer up to 100% of base salary or incentive compensation. The Company matches up to 50% of the employee deferral (plus 401(k) contributions up to 6% of pay, less 401(k) matching contributions). The deferrals and matching contributions receive an annual return equal to the A-utility bond rate with a minimum return no less than the prime interest rate published in the Wall Street Journal. Payments from the plan may be made in lump sums or installments at the election of the participant. Participants are selected by the CEO of Alliant Services Company. Messrs. Davis, Harvey, Protsch and Doyle participate in this plan. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Ownership of Voting Securities All of the common stock of the Company is held by IEC. Listed in the following table are the shares of IEC's common stock owned by the executive officers listed in the Summary Compensation Table and all directors of the Company, as well as the number of shares owned by directors and officers as a group as of April 21, 1998. The directors and executive officers of the Company as a group owned less than 1% of the outstanding shares of common stock on that date. To the Company's knowledge, no shareowner beneficially owned 5% or more of IEC's outstanding common stock or the Company's preferred stock as of April 21, 1998. None of the directors or officers of the Company own any shares of Company preferred stock. Shares Beneficially Name of Beneficial Owner Owned(1) Executives(2) A. J. (Nino) Amato . . . . . . . . . . . . . . 5,810(3) Daniel A. Doyle . . . . . . . . . . . . . . . . 3,603(3) William D. Harvey . . . . . . . . . . . . . . . 14,767(4)(3) Eliot G. Protsch . . . . . . . . . . . . . . . 14,941(3) Director Nominees Alan B. Arends . . . . . . . . . . . . . . . . 1,100 Joyce L. Hanes. . . . . . . . . . . . . . . . . 1,868(3) Lee Liu . . . . . . . . . . . . . . . . . . . . 56,617(3) Arnold M. Nemirow . . . . . . . . . . . . . . . 9,567 Jack R. Newman . . . . . . . . . . . . . . . . 1,482 Judith D. Pyle . . . . . . . . . . . . . . . . 6,100 Robert D. Ray . . . . . . . . . . . . . . . . . 3,193 David Q. Reed . . . . . . . . . . . . . . . . . 6,044(3) Robert W. Schlutz . . . . . . . . . . . . . . . 3,633 Wayne H. Stoppelmoor . . . . . . . . . . . . . 6,075 Anthony R. Weiler . . . . . . . . . . . . . . . 4,603(3) Continuing Directors Erroll B. Davis, Jr. . . . . . . . . . . . . . 33,703(3) Rockne G. Flowers . . . . . . . . . . . . . . . 9,819 Katharine C. Lyall . . . . . . . . . . . . . . 7,194 Milton E. Neshek . . . . . . . . . . . . . . . 12,195 All Executives and Directors as a Group 33 people, including those listed above . . . . . . . . . . . . . . . . 312,257 (1) Total shares of IEC common stock outstanding as of April 21, 1998 were 76,757,268. (2) Stock ownership of Mr. Davis is shown with continuing directors. (3) Included in the beneficially owned shares shown are: Indirect ownership interests with shared voting and investment powers: Mr. Amato -1,032, Mr. Harvey -1,828, Mr. Protsch - 552, Mr. Davis - 5,603, Ms. Hanes - 425, Mr. Liu - 9,755, Mr. Reed - 353 and Mr. Weiler - 1,037; and Excercisable stock options : Mr. Davis - 13,100, Mr. Harvey - 4,700, Mr. Protsch - 4,700, Mr. Amato - 3,650 and Mr. Doyle - 2,900 (all directors and officers as a group - 39,200). ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Director nominee Jack R. Newman serves as legal counsel to IEC and IES on nuclear issues. Mr. Newman's firm, Morgan, Lewis & Bockius has also provided legal services to IEC related to the Merger. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized on the 30th day of April 1998. Wisconsin Power and Light Company By: /s/ Edward M. Gleason Vice President, Treasurer and Corporate Edward M. Gleason Secretary (Principal Financial Officer) By: /s/ John E. Ebright Vice President-Controller (Principal John E. Ebright Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----