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
<PAGE>
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").
<TABLE>
SUMMARY COMPENSATION TABLE
(Dollars)
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C>
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 - $3,767. The split dollar and reverse split dollar insurance
premiums are calculated using the "foregone interest" method.
5 Mr. Amato left the Company following the effective date of the
Merger.
</TABLE>
Stock Options
The following table sets forth certain information concerning options
granted during 1997 to the executives named below:
<TABLE>
OPTION/SAR GRANTS IN 1997
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Appreciation for Option
Individual Grants Term 2
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted 1 Fiscal Year ($/Share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
The following table provides information for the executives named below
regarding the number and value of unexercised options. No options were
exercisable during 1997.
<TABLE>
OPTION/SAR VALUES AT DECEMBER 31, 1997
<CAPTION>
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
<S> <C> <C> <C> <C>
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 $33.125.
</TABLE>
Long-Term Incentive Awards.
The following table provides information concerning long-term incentive
awards made to the executives named below in 1997.
<TABLE>
LONG-TERM INCENTIVE AWARDS IN 1997
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER NON-
STOCK PRICE-BASED PLANS 2
PERFORMANCE OR
NUMBER OF OTHER PERIOD
SHARES, UNTIL
UNITS OR MATURATION OR
NAME OTHER RIGHTS PAYOUT THRESHOLD TARGET MAXIMUM
(#)1 ($) ($) ($)
<S> <C> <C> <C> <C> <C>
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.
</TABLE>
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:
<TABLE>
Retirement Plan Table
<CAPTION>
Average
Annual Annual Benefit After Specified Years in Plan*
Compensation 5 10 15 20 25 30
<S> <C> <C> <C> <C> <C> <C>
$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.
</TABLE>
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.
<PAGE>
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)
