<PAGE>
[MIDAMERICAN LOGO]
(FORMERLY KNOWN AS "CALENERGY COMPANY, INC.")
666 GRAND AVENUE
DES MOINES, IOWA 50309
April 20, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
MidAmerican Energy Holdings Company to be held at The Joslyn Art Museum, 2200
Dodge Street, Omaha, Nebraska on May 20, 1999 at 9:00 A.M., local time.
The following matters will be considered and acted upon at the Annual
Meeting: (i) election to the Board of Directors of the Company of five Class I
Directors; (ii) ratification of the appointment by the Board of Directors of
Deloitte & Touche LLP as auditors of the Company for the 1999 fiscal year; and
(iii) transaction of such other business as may properly come before the
meeting.
Information concerning the matters to be considered and voted upon at the
Annual Meeting is set forth in the attached Notice of Annual Meeting and Proxy
Statement. We encourage you to review the attached material carefully and to
sign, date and return the enclosed proxy card in the enclosed postage-paid
envelope. Each proxy is revocable and will not affect your right to vote in
person if you attend the meeting.
Sincerely,
/s/ DAVID L. SOKOL
David L. Sokol
Chairman of the Board and
Chief Executive Officer
<PAGE>
[MIDAMERICAN LOGO]
(FORMERLY KNOWN AS "CALENERGY COMPANY, INC.")
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 20, 1999
To the Shareholders of MidAmerican Energy Holdings Company:
Notice is hereby given that the Annual Meeting of Shareholders of
MidAmerican Energy Holdings Company will be held at The Joslyn Art Museum, 2200
Dodge Street, Omaha, Nebraska on May 20, 1999 at 9:00 A.M. local time for the
following purposes:
1. To elect to the Board of Directors of the Company five Class I
Directors (with terms expiring at the May 2002 annual meeting);
2. To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP as auditors of the Company for fiscal year 1999; and
3. To act upon such other matters as may properly come before the
meeting.
All Shareholders of record at the close of business on March 29, 1999 are
entitled to vote at the Annual Meeting.
To ensure that your shares are represented, you are urged to please fill
in, sign, date and return the enclosed proxy card promptly in the enclosed
postage-paid envelope. You may revoke your proxy at any time before it is voted
at the Annual Meeting. If you attend the meeting, you may vote your shares in
person.
Please date your proxy card and sign it exactly as your name appears on the
proxy card.
By Order of the Board of Directors
/s/ DAVID L. SOKOL
David L. Sokol
Chairman of the Board and
Chief Executive Officer
April 20, 1999
<PAGE>
MIDAMERICAN ENERGY HOLDINGS COMPANY
(FORMERLY KNOWN AS "CALENERGY COMPANY, INC.)
666 GRAND AVENUE
DES MOINES, IOWA 50309
----------------
PROXY STATEMENT
APRIL 20, 1999
----------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 20, 1999
SOLICITATION AND VOTING
This Proxy Statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies on behalf of the Board of Directors (the
"Board") of MidAmerican Energy Holdings Company (the "Company") to be voted at
the Annual Meeting of Shareholders to be held on May 20, 1999, or any
adjournment thereof (the "Annual Meeting"). This Proxy Statement, the Notice of
Annual Meeting and the accompanying Proxy are being mailed to Shareholders on
or about April 20, 1999.
The voting stock of the Company (the "Voting Stock") consists of the
Common Stock of the Company, no par value ("Common Stock"), which was
outstanding on the record date. Holders of the Common Stock will vote as a
single class at the Annual Meeting. Each share of Common Stock will be entitled
to one vote on all matters presented at the Annual Meeting.
The close of business on March 29, 1999 is the Record Date (the "Record
Date") for determining the holders of the outstanding Voting Stock (the
"Shareholders") entitled to vote at the Annual Meeting. On the Record Date,
58,848,905 shares of Common Stock were outstanding.
The approval of a majority of the Voting Stock present in person or by
proxy, and entitled to vote at the Annual Meeting is required for the election
of nominees as Directors of the Company. The approval of a majority of the
Voting Stock present in person or by proxy, and entitled to vote, at the Annual
Meeting is required for approval of Proposal 2 (ratification of appointment of
Independent Auditors). A quorum equal to a majority of the outstanding Voting
Stock must be present in person or by proxy at the Annual Meeting in order to
elect Directors and consider Proposal 2.
All shares of Voting Stock represented by properly executed proxies which
are returned and not revoked will be voted in accordance with the instructions,
if any, given therein. If no instructions are provided in a proxy, it will be
voted FOR the Board's nominees for Director, FOR the approval of Proposal 2 and
in accordance with the proxy-holders' best judgment as to any other matters
raised at the Annual Meeting. Abstentions and broker non-votes will be counted
as shares present for purposes of establishing a quorum with respect to the
proposals with respect to which they apply. Abstention votes will be counted as
voted AGAINST the proposals with respect to which they apply. Broker non-votes
will not be considered as either FOR or AGAINST votes with respect to the
proposals to which they apply. The proxy is revocable and any Shareholder who
executes a proxy may revoke it at any time before it is voted by delivering to
the Secretary of the Company a written statement revoking the proxy, by
executing and delivering to the Secretary of the Company a later dated proxy or
by voting in person at the Annual Meeting.
Expenses in connection with this solicitation of proxies will be paid by
the Company. Upon request, the Company will reimburse brokers, dealers, banks
or similar entities acting as nominees for reasonable expenses incurred in
forwarding copies of these proxy materials to the beneficial owners of shares
which such persons hold of record. The Company has engaged MacKenzie Partners,
Inc. to solicit proxies for the
<PAGE>
Annual Meeting for a fee of approximately $15,000, plus reimbursement of
reasonable expenses. In addition, solicitation of proxies may be made through
the mail, in person and by facsimile and telephone by certain directors,
officers and regular employees of the Company.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board currently consists of fourteen members divided into three
classes serving staggered three-year terms.
Class I Nominees. The Board has unanimously nominated Judith E. Ayres,
Stanley J. Bright, Jack W. Eugster, David L. Sokol and David E. Wit for
election at the Annual Meeting as Class I Directors, with terms expiring at the
May 2002 annual meeting of Shareholders.
Ms. Ayres and Messrs. Bright, Eugster, Sokol and Wit have consented to
serve if elected. If a nominee becomes unable to serve if elected, proxies will
be voted for such other person, if any, as the Board may nominate, or the Board
may be reduced in size accordingly. The Board knows of no reason why any
nominee will be unable to serve if elected.
The approval of a majority of the Voting Stock present in person or by
proxy, and entitled to vote, at the Annual Meeting is required for election of
the nominees as directors. A quorum equal to the majority of the outstanding
Voting Stock must be present in person or by proxy at the Annual Meeting in
order to elect directors. If no instructions are provided in a proxy, it will
be voted FOR the Board's nominees for directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ABOVE-NAMED
NOMINEES.
BOARD OF DIRECTORS
In addition to the above-named current and nominated Directors, the Board
includes the following nine persons, each having a term expiring at the annual
meeting in the year indicated:
<TABLE>
<CAPTION>
YEAR OF
NAME CLASS EXPIRATION OF TERM
- ---- ----- ------------------
<S> <C> <C>
Edgar D. Aronson Class III 2001
Hon. Terry E. Branstad Class III 2001
Richard R. Jaros Class II 2000
David R. Morris Class II 2000
Robert L. Peterson Class III 2001
Bernard W. Reznicek Class III 2001
Walter Scott, Jr. Class III 2001
John R. Shiner Class III 2001
Sir Neville G. Trotter Class II 2000
</TABLE>
During 1998, the Board met eight (8) times and took action by unanimous
written consent one time.
The Board has an Audit Committee, a Compensation Committee, an
Environmental Committee, an Executive Committee, a Nominating Committee, and a
Stock Option Committee.
AUDIT COMMITTEE
The Audit Committee (Messrs. Jaros (Chair), Morris, Reznicek and Shiner)
is empowered to recommend to the Board independent public accounting firms for
selection as auditors of the Company; to make recommendations to the Board on
auditing matters; to examine and make recommendations concerning the scope of
audits; and to review the terms of transactions between the Company and related
entities. The Audit Committee met four (4) times during 1998 and took action by
unanimous written consent zero (0) times.
2
<PAGE>
COMPENSATION COMMITTEE
The Compensation Committee (Messrs. Shiner (Chair), Aronson, Jaros and
Wit) is authorized to make recommendations to the Board with respect to
executive salaries and bonuses, directors' compensation and employee benefits
matters. The Compensation Committee met three (3) times during 1998 and took
action by unanimous written consent zero (0) times.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Jaros served as President of the Company from January 8, 1992 until
April 19, 1993 and served as Chairman of the Company from April 19, 1993 until
May 5, 1994. Messrs. Aronson, Shiner and Wit have not been employees of the
Company or otherwise participated in activities constituting compensation
committee interlocks or insider participation requiring disclosure under this
caption.
ENVIRONMENTAL COMMITTEE
The Environmental Committee (Ms. Ayres (Chair) and Messrs. Aronson,
Reznicek and Trotter) addresses issues and provides advice concerning
environmental regulations and compliance. The Environmental Committee met four
(4) times during 1998 and took action by unanimous written consent zero (0)
times.
EXECUTIVE COMMITTEE
The Executive Committee (Messrs. Sokol (Chair), Bright, Jaros and Scott)
was established to act for the Board in between regularly scheduled Board
meetings. The Executive Committee met two (2) times during 1998 and took action
by unanimous written consent zero (0) times.
NOMINATING COMMITTEE
The Nominating Committee (Messrs. Sokol (Chair), Jaros and Wit) was
established to provide the Board with advice regarding potential nominees to
the Board. The Nominating Committee did not meet during 1998. The Nominating
Committee will consider qualified nominees recommended by holders in the
aggregate of 5% or more of the Voting Stock. The Nominating Committee is under
no obligation, however, to nominate any person so recommended.
STOCK OPTION COMMITTEE
The Stock Option Committee (Messrs. Jaros (Chair), Reznicek, Scott and
Shiner) was established to provide disinterested administration of the
Company's Employee Stock Option Plan pursuant to the requirements of the SEC's
Rule 16b-3. The Stock Option Committee met three (3) times during 1998 and
acted by written consent three (3) times.
3
<PAGE>
INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTORS
AND DIRECTORS IN OFFICE
DAVID L. SOKOL: 42. Chairman of the Board of Directors and Chief Executive
Officer. Mr. Sokol has been CEO since April 19, 1993 and served as President of
the Company from April 19, 1993 until January 21, 1995. He has been Chairman of
the Board of Directors since May 1994. Mr. Sokol has been a director of the
Company since March 1991. Formerly, among other positions held in the
independent power industry Mr. Sokol served as the President and Chief
Executive Officer of Kiewit Energy, a wholly owned subsidiary of Peter Kiewit
Sons' Inc. and Ogden Projects, Inc.
EDGAR D. ARONSON: 64. Mr. Aronson has been a director of the Company since
April 1983. Mr. Aronson founded EDACO, Inc., a private venture capital company,
in 1981, and has been President of EDACO, Inc. since that time. Prior to that,
Mr. Aronson was Chairman, Dillon, Read International from 1979 to 1981 and a
General Partner in charge of the International Department at Salomon Brothers
from 1973 to 1979. Mr. Aronson served during 1962-1968 as Vice President
consecutively in the International Departments of First National Bank of
Chicago and Republic National Bank of New York. He founded the International
Department of Salomon Brothers and Hutzler in 1968.
JUDITH E. AYRES: 54. Ms. Ayres has been a director of the Company since
July 1990. Since 1990, Ms. Ayres has been Principal of The Environmental Group,
an environmental consulting firm in San Francisco, California. From 1988 to
1989, Ms. Ayres was a Vice President of William D. Ruckelshaus Associates, an
environmental consulting firm. From 1983 to 1988, Ms. Ayres was the Regional
Administrator of Region 9 (Arizona, California, Hawaii, Nevada and the Western
Pacific Islands) of the United States Environmental Protection Agency.
RICHARD R. JAROS: 47. Mr. Jaros has been a director of the Company since
March 1991. Mr. Jaros served as President and Chief Operating Officer of the
Company from January 8, 1992 to April 19, 1993 and as Chairman of the Board
from April 19, 1993 to May 1994. Mr. Jaros served as President of Kiewit
diversified (now Level(3)) Communications) from 1996 to 1997 and as Executive
Vice President of Peter Kiewit Sons's Inc. (PKS) from 1993 to 1997 and as Chief
Financial Officer of PKS from 1995 to 1997. Mr. Jaros served in various
capacities at PKS between 1980 and 1993. Mr. Jaros is a Director of Level(3),
RCN, Commonwealth Telephone, and DTN Corporation.
DAVID R. MORRIS: 64. Mr. Morris was appointed a director of the Company in
February 1997. Mr. Morris was Chairman of Northern Electric plc from 1989 to
January 1997. In 1980 he joined Delta plc becoming Managing Director of the
Switchgear and Accessories Division in 1981 and a Board Director in 1984. Prior
to that, Mr. Morris was Managing Director of Wildt Mellor Bromley Ltd., a
subsidiary of Sears Holdings, plc, from 1975 to 1980. From 1958 to 1975, Mr.
Morris was employed by English Electric, which merged with GEC, in production,
development and general management. Mr. Morris has served as a director of
Delta Group plc, EA Technology, Regional Technology Centre (North) Ltd. and
Northern Arts.
BERNARD W. REZNICEK: 62. Mr. Reznicek has been a director of the Company
since May 1995. Mr. Reznicek has been President, Premier Enterprises and
National Director, Utility Marketing for Central States Indemnity Co. of Omaha
since January, 1997. Prior to that, he was Dean, College of Business
Administration at Creighton University. From 1987 to 1994, Mr. Reznicek was the
Chairman, President and Chief Executive Officer of Boston Edison Company and
was the President and Chief Executive Officer of the Omaha Public Power
District from 1981 to 1987. Mr. Reznicek serves on the Board of Directors of
Stone & Webster, Incorporated, State Street Corporation, Guarantee Life
Companies, Inc. and the Nebraska Humane Society.
WALTER SCOTT, JR.: 67. Mr. Scott has been a director of the Company since
June 1991. Mr. Scott was the Chairman and Chief Executive Officer of the
Company from January 8, 1992 until April 19, 1993. Mr. Scott is Chairman and
President of Kiewit, a position he has held since 1979. Mr. Scott is a director
of Berkshire Hathaway, Inc., Burlington Resources, Inc., ConAgra, Inc., Valmont
Industries, Inc., U.S. Bancorp, Commonwealth Telephone Enterprises, Inc., and
RCN Corporation, a publicly-traded company in which Kiewit holds a majority
ownership interest.
4
<PAGE>
JOHN R. SHINER: 55. Mr. Shiner was elected as a director of the Company in
May 1995. He joined the law firm of Morrison & Foerster in 1993, where he is a
partner resident in the Los Angeles office. Prior to that time, he was a
partner in the law firm of Baker & McKenzie. Mr. Shiner has practiced law in
Los Angeles since 1968, specializing in litigation and consultation with the
senior management and Boards of closely held and public corporations.
SIR NEVILLE G. TROTTER, JP, DL, FCA, FRAES: 67. Sir Neville was appointed
a director of the Company in May 1997. In June 1997 he was appointed a Deputy
Lieutenant of the County of Tyne and Wear to assist the Lord Lieutenant as a
representative of Queen Elizabeth. He was elected a Member of Parliament from
1974 to 1997 serving as a Member of the Trade & Industry Select Committee,
Defence Select Committee and the Transport Select Committee. He is a Chartered
Accountant and continued to practice as an active Consultant with Grant
Thornton after his election to Parliament having previously been a Senior
Partner and member of the firm's National Executive Team. He currently serves
as Non-Executive Director or Advisor with several British corporations and
trade associations. He is Vice President of the British Marine Equipment
Council and a Director of the North East Chamber of Commerce Trade and Industry
based in Newcastle upon Tyne, Chairman of the British American Chamber of
Commerce in the North East of England and an Honorary Colonel in the Royal
Marines Reserve.
DAVID E. WIT: 37. Mr. Wit has been a director of the Company since April
1987. He is Co-Chief Executive Officer of Logicat Inc., a software
development/publishing firm. Prior to working at Logicat Inc., Mr. Wit worked
at E.M. Warburg, Pincus & Company, where he analyzed seed-stage financing and
technology investments.
STANLEY J. BRIGHT: 58. Mr. Bright served as Chairman, President and Chief
Executive Officer of MidAmerican Energy Holdings Company ("Old MidAmerican")
prior to its merger with CalEnergy Company, Inc. in March 1999 (the "Merger").
Mr. Bright has served as Chairman of MidAmerican Energy Company since December
1, 1996, Chief Executive Officer since July 1, 1996, President since 1995 and
President of the Office of the Chief Executive Officer of Iowa-Illinois Gas and
Electric Company, a predecessor company of MidAmerican Energy Company, from
1991 to 1995. Mr. Bright joined Old MidAmerican in 1986 and its Board of
Directors in 1987. Prior to the Merger, Mr. Bright was Chair of the Strategy
and Executive Committees and a member of the Finance Committee. Mr. Bright is
also a Director of Norwest Bank Iowa, N.A. and Utilx Corporation.
JACK W. EUGSTER: 53. Chairman and Chief Executive Officer of Musicland
Stores Corp. (specialty retailer), Minneapolis, Minnesota, since 1986 and
President since 1981. Joined the Board of Old MidAmerican in 1987 and served as
Chair of the Compensation Committee and a member of the Executive Committee
prior to the Merger. Mr. Eugster is also a Director of Damark, Inc., Donaldson
Company, Inc., Josten's, Inc. and ShopKo Stores, Inc.
ROBERT L. PETERSON: 66. Chairman and Chief Executive Officer of IBP, Inc.
(meat processor), Dakota City, Nebraska, since 1990, President since 1977 and
Director since 1976. Joined the Board of Old MidAmerican in 1990 and served as
a member of the Executive and Nominating Committees prior to the Merger.
HON. TERRY E. BRANSTAD: 53. The Hon. Terry E. Branstad is the former
Governor for the State of Iowa, 1983-1999 and a former Lieutenant Governor,
State of Iowa, from 1979-1983. Prior to that, Governor Branstad was an attorney
in private practice from 1974-1982. From 1973-1979, Governor Branstad was a
Representative in the Iowa House of Representatives.
INFORMATION REGARDING DIRECTORS EMERITUS:
Directors Emeritus are former Board members who are appointed by the
Board. The position of Director Emeritus recognizes an individual's
long-standing advice and counsel to the Company after retirement from Board
membership. Directors Emeritus may attend but not vote at Board meetings and
receive no annual or daily director fees for such attendance.
5
<PAGE>
BEN HOLT: 84. Mr. Holt retired as a Board member and was appointed
Director Emeritus at the May 1997 annual meeting after serving as a director of
the Company since September 1993. Mr. Holt is the founder, and was Chairman and
Chief Executive Officer of The Ben Holt Co., an engineering firm located in
Pasadena, California, which the Company acquired in September 1993 and sold in
1997. Mr. Holt retired as Chairman and CEO of The Ben Holt Co. in December 1993
and thereafter served as a consultant to the Company.
EVERETT B. LAYBOURNE: 86. Mr. Laybourne retired as a Board member and was
appointed Director Emeritus by the Board in May 1995 after serving as a
director of the Company since May 1988. For many years he served as counsel for
a number of major publicly-held corporations. He also presently serves as Vice
President and Trustee of The Ralph M. Parsons Foundation and as National Board
Chairman of WAIF, Inc. From 1969 to 1988, Mr. Laybourne was senior partner in
the law firm of MacDonald, Halsted & Laybourne in Los Angeles, California,
whose successor firm was Baker & McKenzie to which he acted for five years in
an "of counsel" capacity. He continues in the practice of law in Los Angeles.
BARTON W. SHACKELFORD: 76. Mr. Shackelford retired as a Board member and
was appointed Director Emeritus by the Board in May 1995 after serving as a
director of the Company since June 1986. Mr. Shackelford served as President
and a director of Pacific Gas & Electric Company from 1979 until his retirement
in 1985. He is a director of Harding Associates, Inc.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
PROPOSAL 2 IS TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE 1999 FISCAL YEAR.
The Board, upon the recommendation of the Audit Committee, has unanimously
appointed Deloitte & Touche LLP as the independent accounting firm engaged to
audit the financial statements of the Company for the 1999 fiscal year.
Deloitte & Touche LLP acted in that capacity for the 1998 fiscal year. A
representative of Deloitte & Touche LLP is expected to be present at the Annual
Meeting and will be available to respond to appropriate questions and will have
an opportunity to make a statement if desired.
The approval of a majority of the Voting Stock present in person or by
proxy, and entitled to vote, at the Annual Meeting is required for approval of
Proposal 2. A quorum equal to the majority of the outstanding Voting Stock must
be present in person or by proxy at the Annual Meeting in order to vote on
Proposal 2. If no instructions are provided in a proxy, it will be voted FOR
the approval of Proposal 2.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS
The Board knows of no other matters which are likely to be brought before
the Annual Meeting. However, if any other matters are brought before the Annual
Meeting, the proxy-holders will vote proxies granted by Shareholders in
accordance with their best judgment.
6
<PAGE>
SECURITY OWNERSHIP OF SIGNIFICANT SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information with respect to all
Shareholders known by the Company to beneficially own more than 5% of either
class of the Voting Stock, and certain information with respect to the
beneficial ownership of each director, the Named Executive Officers (defined
below) and all directors and executive officers of the Company as a group, of
Common Stock. All information is as of March 29, 1999, unless otherwise
indicated.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME (AND ADDRESS IF REQUIRED) BENEFICIALLY PERCENTAGE OF
OF BENEFICIAL OWNER OWNED (1) CLASS (1)
- -------------------------------------------------- ----------------- --------------
<S> <C> <C>
COMMON STOCK:
Sound Shore Management, Inc. (2) ................. 4,960,200 8.32
Bankers Trust Corporation (3) .................... 4,194,650 7.04
Wanger Asset Management, L.P. (4) ................ 3,191,500 5.35
Massachusetts Financial Services Co. (5) ......... 4,519,067 7.06
Edgar D. Aronson ................................. 43,683 0.07
Judith E. Ayres .................................. 52,500 0.09
Richard R. Jaros ................................. 320,297 0.53
David Morris ..................................... 16,132 0.03
Bernard W. Reznicek .............................. 27,801 0.05
Walter Scott, Jr. ................................ 3,013,489 5.06
John R. Shiner ................................... 19,200 0.03
David L. Sokol ................................... 771,910 1.28
Neville Trotter .................................. 21,794 0.04
David E. Wit ..................................... 24,167 0.04
Gregory E. Abel .................................. 270,254 0.45
Thomas R. Mason .................................. 218,557 0.37
Craig M. Hammett ................................. 40,993 0.07
Stanley J. Bright ................................ 91,690 0.15
Jack W. Eugster .................................. 11,000 0.02
Robert L. Peterson ............................... 10,000 0.02
Terry E. Branstad ................................ 10,000 0.02
Donald M. O'Shei, Jr. ............................ 126,274 0.21
All directors and executive officers
as a group (26 persons) ......................... 5,421,118 8.79
</TABLE>
- ----------
(1) Includes shares which the listed beneficial owner is deemed to have the
right to acquire beneficial ownership under Rule 13d-3(d) under the
Securities Exchange Act, including, among other things, shares which the
listed beneficial owner has the right to acquire within 60 days.
(2) According to a Schedule 13G filed by such party on January 22, 1999, the
mailing address for Sound Shore Management, Inc. is 8 Sound Shore Drive,
Greenwich, CT 06836.
(3) According to a Schedule 13G filed by such party on February 12, 1999 on
behalf of itself and Bankers Trust Company and BT Alex Brown Incorporated
the mailing address is: 130 Liberty Street, New York, New York 10006. The
mailing address for its subsidiary BT Australia Limited is Level 15, The
Chifley Tower, 2 Chifley Square, Sydney, NSW 2000 Australia. The mailing
address for its indirect 50 percent owned affiliate Alex.Brown Investment
Management is One South Street, Baltimore, Maryland 21202.
(4) According to Scheduled 13G filed by such party on February 8, 1999, the
mailing address for Wanger Asset Management, L.P. is 227 West Monroe
Street, Suite 3000, Chicago, Illinois 60606.
(5) These 4,519,067 shares of common stock include 4,037,004 shares of common
stock owned by MFS and certain other non-reporting entities and 499,263
shares of common stock which may be acquired through the conversion of
convertible preferred stock.
7
<PAGE>
COMPENSATION COMMITTEE REPORT
The Company's executive compensation is determined by the Compensation
Committee of the Board. The Compensation Committee usually meets from time to
time during the year as may be required and at least once a year in December,
at which time salaries with respect to the next fiscal year, and bonuses with
respect to the nearly completed year are determined, as well as making
recommendations to the Stock Option Committee for stock option or, if
applicable, restricted stock grants as long-term incentive compensation and
making other determinations or recommendations with respect to employee benefit
plans and related matters.
The Compensation Committee believes that compensation of the Company's key
executives should be sufficient to attract and retain highly qualified and
productive personnel and also to provide meaningful incentives for enhanced
productivity and superior performance. It is the policy of the Company that the
three primary components of the Company's total compensation package (salary,
bonuses and grants of stock options or, if applicable, restricted stock) will
be considered in the aggregate in determining the amount of any one component.
The Company seeks to reward achievement of long and short-term individual
performance goals, viewed in the context of both individual power or other
infrastructure project and Company performance. However, given the unique
nature of each independent development project (particularly considering the
context of the different legal, regulatory, financial, accounting, tax,
political and cultural systems, issues and structures found in various
countries in which the Company develops or acquires or joint ventures on
projects internationally) and the resulting flexible adaptation required in the
duties and tasks performed by the Company's key executives, the Compensation
Committee's criteria for assessing executive performance in any year is
inherently subjective and not subject to specific enumeration of factors,
relative weighting or formulae calculations. The Company did not specifically
use any companies in the same industry as a basis for comparison when
establishing executive compensation.
During 1998, the Company's executive compensation generally included a
base salary, cash bonuses and long-term incentive compensation in the form of
stock options awarded under the Company's Employee Stock Option Plan, all
dependent on subjective evaluations of performance as noted above. The cash
bonus compensation of executives is designed to compensate executives for the
Compensation Committee's assessment of superior performance and meritorious and
diligent individual efforts, and such assessments usually relate to individual
and unique projects and, in part, also recognize the individual executive's
level of commitment (demonstrated by subjective factors) to the Company's
long-term success. The long-term incentive option grants recommended by the
Compensation Committee and implemented by the Stock Option Committee are
intended to align the interests of employees and Shareholders and thereby to
motivate executives as equity owners to contribute at superior levels in the
future and to allow them to share in increased value developed for Shareholders
generally.
The Company's Chairman and Chief Executive Officer, has an existing
employment agreement with the Company which has a term of five years (ending
August 2000 unless extended). Mr. Sokol's employment agreement, as amended,
provides for a base salary of $675,000 per annum and a minimum annual bonus of
$400,000. The employment contract also provides for the payment of three years
base salary and average bonus and the three years of accelerated option vesting
(and all performance option vesting) and full retirement plan vesting in the
event of termination without cause.
At its October 19, 1998 meeting, the Compensation Committee determined to
award Mr. Sokol a cash bonus of $1,850,000 in order to reflect Mr. Sokol's
superior performance and significant accomplishments during the year. In
addition, at the Compensation Committee's October 19, 1998 meeting, the
Compensation Committee authorized salary increases, cash bonuses and, if
applicable, recommendations for stock option grants to other executives
commensurate with the Compensation Committee's subjective assessment of their
relative individual performance.
In reviewing Mr. Sokol's compensation, the Compensation Committee
subjectively considered Mr. Sokol's significant contribution to the management
of the Company during the year, including: successfully negotiating,
structuring and executing a definitive merger agreement to acquire the
strategically important MidAmerican Energy Holdings Company and thereby enter
the regulated U.S.
8
<PAGE>
energy distribution and supply businesses (the "MEC Acquisition"); the
successful supply business results at Northern Electric plc in the U.K.; the
successful issuance of $1,500,000,000 principal amount of the Company's Senior
Notes in various tranches at various favorable fixed interest rates; (which
issuances were effected to provide the requisite funding for the MEC
Acquisition); the successful financial closing of the innovative $285,000,000
non-recourse construction financing facility for the Company's zinc recovery
project and related capital improvements in the Imperial Valley; the successful
conclusion of the Casecnan project arbitration and litigation matters and
construction progress on that project; the Company's promising project
development and acquisition activities and achievement of record electrical
production levels at the Coso and Imperial Valley Projects. Mr. Sokol
contributed very significantly to these achievements and the Company's current
success, and the Compensation Committee believes his overall compensation was
wholly justified. Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to public companies for compensation over
$1 million paid to the chief executive or any of the four other most highly
compensated executive officers. However, certain compensation meeting a tax law
definition of "performance-based" is generally exempt from this deduction
limit. The Company does not currently intend to qualify cash compensation paid
to executive officers for deductibility under Section 162(m). Further, in
general, the Company does not currently have a policy that requires or
encourages the Committee to qualify other types of compensation awarded to
executive officers for deductibility under Section 162(m). However, the Company
has included provisions in the Employee Stock Option Plan designed to enable
option grants made to executive officers affected by Section 162(m) to qualify
as "performance-based" compensation if the Committee determines that it is
appropriate to make such qualifying grants.
STOCK OPTION REPRICING IN 1998
In response to unanticipated developments in 1998, in particular the
unforeseen political developments in Indonesia which resulted in a steep drop
in the share price of the Common Stock, the Stock Option Committee, in
February, 1998, approved a reduction in the existing exercise prices of
out-of-the-money employee stock options. The existing exercise prices of these
options ranged from $29.0625 to $40.8125. Although many option repricings take
the form of reducing the exercise price to the then market value, the Committee
authorized a reduction of only 15% in the exercise price of the out of the
money options, which left many options out of the money, but less so than
previously. The Stock Option Committee determined that repricing was in the
best interests of the Company as the unforeseen political developments in
Indonesia were outside of management's control and it was necessary to maintain
the motivational value that the options were intended to create. The Committee
was also concerned that failure to take action on repricing could have had
significant adverse effects on employee moral and the Company's ability to
retain key personnel.
COMPENSATION COMMITTEE
John R. Shiner, Chair
Edgar D. Aronson
Richard R. Jaros
David E. Wit
9
<PAGE>
PERFORMANCE GRAPH
The following performance graph shall not be deemed to be incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates such information by reference, and shall not otherwise be deemed
filed under such Acts.
The following graph compares the yearly percentage change in the
cumulative weighted average total return on the Company's Common Stock with the
cumulative total return assuming reinvestment of dividends of (1) the S&P 400
Index, (2) the S&P Utilities Index and (3) an index of comparable peer issuers
constructed by the Company. The index of comparable peer issuers is composed of
AES Corp., CMS Corp, Duke Energy, Enron Corp, Entergy Corp., Northern States
Power, Southern Company and Southern Electric plc during the periods that each
company has been publicly traded. In compliance with Securities and Exchange
Commission regulations, the returns of each of the comparables have been
weighted according to capitalization as of the beginning of the five year
period.
Trijen Energy and Calpine Corp. have been removed from last year's list of
comparables since following the Company's merger with MidAmerican (a regional
U.S. utility) they were considered to no longer provide comparability and have
been replaced by Northern States Power, CMS Corp., Duke Energy and Southern
Company.
STOCK PERFORMANCE WEIGHTED BY BEGINNING MARKET CAPITALIZATION
- -----------------------------------------------------------------------------
Weighted Comparables CalEnergy Company, Inc. S&P Utilities S&P 400
- -----------------------------------------------------------------------------
1993 100.00% 100.00% 100.00% 100.00%
1994 94.63% 84.46% 92.20% 103.86%
1995 123.51% 105.41% 129.29% 139.05%
1996 132.08% 181.76% 131.43% 170.13%
1997 154.97% 155.41% 155.89% 219.30%
1998 187.14% 187.50% 171.63% 289.27%
- -----------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation of the Company's five most
highly compensated executive officers who were employed as of the last day in
1998 ("Named Executive Officers"). Information is provided regarding these
individuals for the last three fiscal years during which they were executive
officers of the Company, if applicable.
10
<PAGE>
<TABLE>
<CAPTION>
BONUS
-------------------
NAME AND YEAR ENDED SALARY CASH (1) STOCK
PRINCIPAL POSITIONS DECEMBER 31, ($) ($) ($)
- ----------------------- -------------- --------- ----------- -------
<S> <C> <C> <C> <C>
David L. Sokol 1998 675,000 2,042,735 0
Chairman and 1997 515,000 2,377,280 0
Chief Executive 1996 500,000 1,500,000 0
Officer
Gregory E. Abel 1998 325,775 622,258 0
President and 1997 173,573 335,742 0
Chief Operating 1996 129,202 218,947 0
Officer
Thomas R. Mason 1998 210,000 128,755 0
President, 1997 210,000 133,975 0
CalEnergy 1996 210,000 129,994 0
Operating
Company
Craig M. Hammett 1998 160,000 139,964 0
Chief Financial 1997 113,542 100,345 0
Officer 1996 18,205 1,000 0
Donald M. O'Shei, Jr. 1998 181,125 78,747 0
President, 1997 171,421 125,958 0
CalEnergy 1996 120,000 80,000 0
Development
Company
<CAPTION>
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND COMPENSATION (2) STOCK AWARDS OPTIONS COMPENSATION (3)
PRINCIPAL POSITIONS ($) ($) (#) ($)
- ----------------------- ------------------ -------------- ------------------ -----------------
<S> <C> <C> <C> <C>
David L. Sokol 0 0 1,600,000(4) 4,927
Chairman and 0 0 1,200,000 4,927
Chief Executive 0 0 200,000 4,927
Officer
Gregory E. Abel 117,606 0 380,000(4) 4,333
President and 146,711 0 150,000 4,333
Chief Operating 0 0 130,000 3,820
Officer
Thomas R. Mason 0 0 80,000(4) 5,681
President, 0 0 60,000 5,681
CalEnergy 0 0 20,000 5,681
Operating
Company
Craig M. Hammett 0 0 100,000(5) 3,891
Chief Financial 0 0 90,000 3,019
Officer 0 0 10,000 1,637
Donald M. O'Shei, Jr. 88,256 0 145,000(4) 3,935
President, 119,267 0 120,000 3,935
CalEnergy 113,041 0 25,000 3,801
Development
Company
</TABLE>
- ----------
(1) Includes amounts voluntarily deferred by the executive, if applicable.
(2) Includes various expatriate compensation items, including expatriate
allowances, company provided transportation, housing and tax benefits.
(3) 401(k) Plan contributions and group term life insurance premiums.
(4) Except as described below, the options reflected for 1998 do not reflect
new grants but rather the number of options subject to the repricing
described in the Compensation Committee report. In the case of Messrs.
Sokol and Abel, 200,000 and 100,000 reflect new grants, respectively.
(5) Reflects partial year only as Mr. Hammett only joined the Company on
October 28, 1996.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth options granted to each of the named
executive officers of the Company during 1998 or options that were the subject
of repricing in such year. Except as described below, the options reflected for
1998 do not reflect new grants but rather the number of options subject to the
repricing described in the Compensation Committee report. In the case of
Messrs. Sokol and Abel, 200,000 and 100,000 reflect new grants, respectively.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
ANNUAL RATES OF
% OF STOCK PRICE APPRECIATION
TOTAL OPTIONS FOR OPTION TERM (1)
GRANTED TO EXERCISE -------------------------
SECURITIES UNDERLYING EMPLOYEES PRICE EXPIRATION 5% 10%
NAME OPTIONS GRANTED IN FISCAL YEAR(2) ($/SHARE) DATE ($) ($)
- ---------------------- ----------------------- ------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
David L. Sokol 200,000 49.38 24.22 10/2008 2,041,065 5,172,459
200,000 N/A 24.7031 12/2006 2,081,777 5,275,631
200,000 N/A 29.0063 04/2007 2,444,415 6,194,629
800,000 N/A 29.0063 04/2007 9,777,662 24,778,515
200,000 N/A 34.6906 05/2007 2,923,442 7,408,576
Gregory E. Abel 100,000 24.69 24.22 10/2008 1,020,532 2,586,230
90,000 N/A 25.8188 08/2006 979,109 2,481,256
40,000 N/A 24.7031 12/2006 416,355 1,055,126
25,000 N/A 29.0063 04/2007 305,552 774,329
100,000 N/A 29.0063 04/2007 1,222,208 3,097,314
25,000 N/A 34.6906 05/2007 365,430 926,072
Thomas R. Mason 20,000 N/A 24.7031 12/2006 208,178 527,563
10,000 N/A 29.0063 04/2007 122,221 309,731
40,000 N/A 29.0063 04/2007 488,883 1,238,926
10,000 N/A 34.6906 05/2007 146,172 370,429
Craig M. Hammett 10,000 N/A 24.9688 10/2006 105,208 266,619
10,000 N/A 34.1581 06/2007 143,928 364,743
80,000 N/A 28.6344 11/2007 965,230 2,446,082
Donald M. O'Shei, Jr 25,000 N/A 24.7031 12/2006 260,222 659,454
20,000 N/A 29.0063 04/2007 244,442 619,463
80,000 N/A 29.0063 04/2007 977,766 2,477,851
20,000 N/A 34.6906 05/2007 292,344 740,858
</TABLE>
- ----------
(1) As required by the Securities and Exchange Commission ("SEC"), potential
values stated are based on the prescribed assumption that the Company's
Common Stock will appreciate in value from the date of grant to the end
of the option term (ten years from the date of grant) at annualized rates
of 5% and 10%, respectively, and therefore are not intended to forecast
possible future appreciation, if any, in the price of the Company's
Common Stock. The total of all stock options granted to employees,
including executive officers during fiscal 1998 was approximately 1% of
total shares outstanding during the year. Accordingly, the potential
value of such options for all optionees under the prescribed assumptions
is approximately 1% of the potential realizable value of all shareholders
for the same period under the same assumptions. (For the total
percentages including repricings, see footnote 2 below.) As an
alternative to the assumed potential realizable values stated above, SEC
rules would permit stating the present value of such options at the date
of grant. Methods of computing present value suggested by different
authorities can produce significantly different results. Moreover, since
stock options granted by the Company are not transferable, there are no
objective criteria by which any computation of present value can be
verified. Consequently, the Company's management does not believe there
is a reliable method of computing the present value of such stock options
and that all assumptions as to annualized appreciation rates are
inherently speculative.
(2) Not applicable refers to those options not granted during fiscal 1998 but
which were the subject of option repricing during 1998. The total of all
stock options granted as well as those repriced ranged from approximately
1% to approximately 6% of total shares outstanding during the years in
question for all officers other than Mr. Sokol and from approximately
5.58% to approximately 22.33% for Mr. Sokol.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table sets forth the option exercises and the value of
in-the-money unexercised options held by each of the named executive officers
of the Company at December 31, 1998, calculated as being equal to the
difference between the exercise price of the options and the closing price of
the Company's Common Stock on the New York Stock Exchange of $34.6875 per share
on December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT FY
SHARES VALUE OPTIONS HELD AT FY END ($) END ($)
ACQUIRED REALIZED ----------------------------- ----------------------------
NAME ON EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- ------------- --------- ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
David L. Sokol ................ 0 0 541,713 1,108,287 4,101,808 6,469,772
Gregory E. Abel ............... 0 0 237,030 257,970 2,934,107 2,041,602
Thomas R. Mason ............... 0 0 184,936 55,064 3,143,212 349,599
Craig M. Hammett .............. 0 0 31,846 68,154 187,425 399,304
Donald M. O'Shei, Jr. ......... 0 0 115,131 104,869 1,386,503 637,790
</TABLE>
COMPENSATION OF DIRECTORS
For 1999, directors who are not employees of the Company will be paid an
annual retainer fee of $35,000 and a fee of $500 per day for attendance at
Board and Committee meetings. Directors who are employees of the Company will
not receive such fees. Under the Company's Non-Employee Director Stock Option
Plan, in lieu of receiving the annual $35,000 fee, directors may elect to
receive stock options having a value approximately equal to such cash amount
(approximated in the case of options by reference to shares or a Black-Scholes
calculation and subject to rounding and appropriate discounts for illiquidity).
All directors are reimbursed for their expenses incurred in attending Board
meetings.
TERMINATION OF EMPLOYMENT ARRANGEMENTS
Under the terms of his employment contract, Mr. Sokol is entitled to
receive three times his base salary and last two year's average bonus and three
years of accelerated option vesting (and all performance option vesting) and
full retirement plan vesting in the event of the termination of his employment
by the Company other than for cause. Under the terms of a separate employment
agreement between Mr. Abel and the Company, Mr. Abel is entitled to receive two
years base salary continuation and/or payments in respect of average bonuses
for the prior two years and two years continued option vesting (and all
performance option vesting) and full retirement plan vesting in the event of
the termination of his employment by the Company other than for cause. If such
persons were terminated without cause, Mr. Sokol and Mr. Abel would currently
be entitled to be paid approximately $8,655,000 and $1,609,000, respectively in
cash, pursuant to their employment agreements, without giving effect to any tax
related provisions.
13
<PAGE>
STOCK OPTION REPRICING TABLE
The following table provides information about the repricing of options
for named executive officers during 1998. See the description of such action in
the Stock Option Committee Report above.
TEN-YEAR OPTION/SAR REPRICING
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (F) (G)
LENGTH OF
NUMBER OF MARKET PRICE EXERCISE ORIGINAL
SECURITIES OF STOCK AT PRICE AT TIME OPTION TERM
UNDERLYING TIME OF OF REPRICING REMAINING AT
OPTIONS/SAR REPRICING OR OR DATE OF
REPRICED OR AMENDMENT AMENDMENT NEW EXERCISE REPRICING OR
NAME DATE AMENDED(#) ($) ($) PRICE ($) AMENDMENT
- ----------------- ----------- ------------- -------------- --------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
David L. Sokol 19-Feb-98 200,000 24.59375 29.0625 24.7031 106 Months
Chairman 19-Feb-98 200,000 24.59375 34.1250 29.0063 110 Months
and Chief 19-Feb-98 800,000 24.59375 34.1250 29.0063 110 Months
Executive 19-Feb-98 200,000 24.59375 40.8125 34.6906 111 Months
Officer
Gregory E. Abel 19-Feb-98 90,000 24.59375 30.3750 25.8188 102 Months
President 19-Feb-98 40,000 24.59375 29.0625 24.7031 106 Months
and Chief 19-Feb-98 25,000 24.59375 34.1250 29.0063 110 Months
Operating 19-Feb-98 100,000 24.59375 34.1250 29.0063 110 Months
Officer 19-Feb-98 25,000 24.59375 40.8125 34.6906 111 Months
Thomas R. 19-Feb-98 20,000 24.59375 29.0625 24.7031 106 Months
Mason 19-Feb-98 10,000 24.59375 34.1250 29.0063 110 Months
President, 19-Feb-98 40,000 24.59375 34.1250 29.0063 110 Months
CalEnergy 19-Feb-98 10,000 24.59375 40.8125 34.6906 111 Months
Operating
Company
Craig M. 19-Feb-98 10,000 24.59375 29.3750 24.9688 104 Months
Hammett 19-Feb-98 10,000 24.59375 40.1860 34.1581 112 Months
Chief 19-Feb-98 80,000 24.59375 33.6875 28.6344 117 Months
Financial
Officer
Donald M. 19-Feb-98 25,000 24.59375 29.0625 24.7031 106 Months
O'Shei, Jr. 19-Feb-98 20,000 24.59375 34.1250 29.0063 110 Months
President, 19-Feb-98 80,000 24.59375 34.1250 29.0063 110 Months
CalEnergy 19-Feb-98 20,000 24.59375 40.8125 34.6906 111 Months
Development
Company
</TABLE>
No other Option/SAR repricing has occurred in the last ten (10) fiscal years.
14
<PAGE>
CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Company retained the law firm of Morrison & Foerster in 1998. Mr.
Shiner, a director of the Company, is a partner in the Los Angeles office of
Morrison & Foerster. The Company paid Morrison & Foerster a total of
approximately $220,000 in legal fees in 1998. The Company believes that the
fees payable to Morrison & Foerster are comparable to fees that would be
payable in similar transactions with unaffiliated third parties.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recent fiscal year and Forms 5 and
amendments thereto furnished to the Company with respect to its most recent
fiscal year, the Company is not aware of any director, officer or other person
subject to Section 16(a) of the Securities Exchange Act in respect of the
Company who failed to file on a timely basis, as disclosed in the above Forms,
reports required by Section 16(a) of the Exchange Act during the Company's most
recent fiscal year or prior fiscal years except that the 1998 Amended Form 5
for Sir Neville Trotter, Director, included an option grant for 20,000 shares
dated February 20, 1997, which was inadvertently not reported earlier due to a
clerical error on the part of the Company.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder intends to present at the 2000 annual
meeting of shareholders must be received by the Company not later than January
20, 2000 in order to be considered for inclusion in the proxy statement
relating to such meeting. Any such proposals should be directed to the
Secretary, MidAmerican Energy Holdings Company, 666 Grand Avenue, Des Moines,
Iowa 50309.
By Order of the Board of Directors
/s/ DAVID L. SOKOL
David L. Sokol
Chairman of the Board and
Chief Executive Officer
April 20, 1999
Omaha, Nebraska
15
<PAGE>
PROXY
[MIDAMERICAN LOGO]
PROXY SOLICITATION
MIDAMERICAN ENERGY HOLDINGS COMPANY
(FORMERLY KNOWN AS "CALENERGY COMPANY, INC.")
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING MAY 20, 1999
The undersigned hereby appoints David L. Sokol, Gregory E. Abel and Steven A.
McArthur, or any one of them, with full power of substitution, attorneys and
proxies of the undersigned, to represent the undersigned and vote all shares of
Common Stock, no par value, of MidAmerican Energy Holdings Company, which the
undersigned would be entitled to vote if personally present at the annual
meeting of Shareholders to be held at The Joslyn Art Museum, 2200 Dodge Street,
Omaha, Nebraska on May 20, 1999 at 9:00 a.m., local time, and any adjournments
thereof, on all matters coming before said meeting and in the following manner:
(Continued and to be signed on the other side)
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
<PAGE>
[x] Please mark your
votes like this in
blue or black ink
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR ALL NOMINEES" IN ITEM 1 AND "FOR"
PROPOSAL 2
1. ELECTION OF DIRECTORS:
JUDITH E. AYRES, STANLEY J. BRIGHT, JACK W. EUGSTER,
DAVID L. SOKOL, AND DAVID E. WIT
FOR all Nominees [ ] WITHHOLD authority to vote for all nominees [ ]
WITHHELD for the following only: [Write the name of the nominee(s) in the space
below.]
- --------------------------------------------------------------------------------
2. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP, CERTIFIED
PUBLIC ACCOUNTANTS AS THE COMPANY'S AUDITORS FOR FISCAL YEAR 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Signature(s) Date
---------------------------------------- -------------------
Please sign above exactly as your name or names appear hereon. Joint owners
should each sign personally. Corporate proxies should be signed in full
corporate name by an authorized officer. Fiduciaries should give full titles as
such. PLEASE MARK, DATE, SIGN, AND MAIL PROMPTLY IN THE POSTAGE-PAID ENVELOPE
ENCLOSED. If no instructions are provided in this proxy, it will be voted FOR
the Board's nominees for directors and FOR Proposal 2.
