<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- ------------------------------------------
In the Matter of :
Interstate Energy Corporation : CERTIFICATE
:
File No. 70-8891 : OF
:
: NOTIFICATION
(Public Utility Holding Company Act of 1935):
- -----------------------------------------
This Certificate of Notification (the "Certificate") is filed
by Interstate Energy Corporation ("IEC"), a Wisconsin corporation and a
registered holding company under the Public Utility Holding Company Act of 1935,
as amended (the "Act"), in connection with the following transactions proposed
in IEC's Form U-1 Application-Declaration (the "Application-Declaration"), as
amended and authorized by Order of the Securities and Exchange Commission (the
"Commission") dated April 14, 1998 (the "Order"), in this file 70-8891.
Capitalized terms used herein without definition have the meanings ascribed to
them in the Declaration, as defined below. IEC hereby certifies the matters set
forth below pursuant to Rule 24 of the Act.
i. That IES Industries Inc. ("IES") was merged with and into
WPL Holdings, Inc. ("WPLH"), WPLH Acquisition Co., a wholly-owned subsidiary of
WPLH was merged with and into Interstate Power Company ("IPC"), resulting in IPC
becoming a subsidiary of WPLH and WPLH was renamed IEC.
ii. The common shareholders of IES and IPC received shares of
IEC common stock in exchange for their shares of IES and IPC common stock,
respectively, pursuant to the exchange ratios described in the
Application-Declaration.
<PAGE> 2
iii. Interstate Services Company was incorporated in Iowa.
iv. On April 20, 1998, the Articles of Merger were filed with
the Department of Financial Institutions of the State of Wisconsin.
v. Interstate Services Company has entered into individual
service agreements (in the form appended to the Application-Declaration) with
IEC and various of its direct and indirect subsidiaries.
vi. All of the transactions listed in this Certificate have
been carried out in accordance with the terms and conditions of, and for the
purposes requested in, the Application-Declaration, and in accordance with the
terms and conditions of the Order.
vii. The transactions relating to the dividend reinvestment
and certain employee plans will occur over five years as contemplated by the
Application-Declaration and the Order.
viii. Filed herewith are the exhibits set forth in the Exhibit
Index attached.
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<PAGE> 3
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Transmission
Number Exhibit Method
- ------ ------- ------
<S> <C> <C>
J-1 Amended and Restated Articles of Incorporation Electronic
of Interstate Energy Corporation and Articles of
Merger
J-2 Amended and Restated Bylaws of Electronic
Interstate Energy
L-5 Summary of Lost Economies That Would Electronic
Result From SEC Ordered Divestitures of
Gas Operations
P-1 Preliminary Opinion of Counsel Electronic
P-2 Opinion of Counsel (past tense) Electronic
</TABLE>
<PAGE> 4
S I G N A T U R E
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, as amended, the undersigned company has duly caused this
document to be signed on its behalf by the undersigned thereunto duly
authorized.
June 12, 1998
Interstate Energy Corporation
By: /s/ Barbara J. Swan
--------------------------------
Name: Barbara J. Swan
Title: General Counsel
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<PAGE> 1
Exhibit J-1
ARTICLES OF MERGER
MERGING
IES INDUSTRIES INC.
(an Iowa corporation)
WITH AND INTO
WPL HOLDINGS, INC.
(a Wisconsin corporation)
--------------------------------
ARTICLES OF MERGER executed as of this 20th day of April, 1998, by and
between WPL Holdings, Inc., a Wisconsin corporation (hereinafter referred to as
the "Survivor"), and IES Industries Inc., an Iowa corporation (hereinafter
referred to as the "Merging Corporation"), approved in accordance with Section
180.1107 of the Wisconsin Business Corporation Law ("WBCL") and Section 490.1107
of the Iowa Business Corporation Act ("IBCA").
ARTICLE I
The respective Boards of Directors of the Survivor and the Merging
Corporation, in accordance with their respective Restated Articles of
Incorporation and Bylaws and Sections 180.1101 and 180.1107 of the WBCL and
Sections 490.1101 and 490.1107 of the IBCA, each adopted resolutions adopting
and approving an Agreement and Plan of Merger, dated as of November 10, 1995,
and amendments thereto (the "Agreement"), by and between, among others,
Survivor, Merging Corporation and Interstate Power Company, a Delaware
corporation, and the related Plan of Merger (the "Plan of Merger"), a true and
correct copy of which is attached hereto as Exhibit A and incorporated herein by
reference.
ARTICLE II
The authorized capital stock of the Survivor currently consists of
200,000,000 shares of common stock, par value $.01 per share ("Survivor Common
Stock"), of which 30,795,260 shares were issued and outstanding (and entitled to
one vote) at the close of business on July 10, 1996, the record date for the
determination of holders of Survivor Common Stock entitled to notice of and to
vote on the Agreement and the related Plan of Merger. The authorized capital
stock of the Merging Corporation consists of (i) 48,000,000 shares of common
stock, no par value ("Merging Corp. Common Stock"), of which 29,923,233 shares
were issued and outstanding (and entitled to one vote) at the close of business
on July 10, 1996, the record date for the determination of holders of Merging
Corp. Common Stock entitled to notice of and to vote on the Agreement and the
related Plan of Merger, and (ii) 5,000,000 shares of cumulative preferred stock,
no par value, no shares of which were issued and outstanding as of such record
date.
<PAGE> 2
ARTICLE III
In accordance with Section 180.1103 of the WBCL and Section 490.1103 of the
IBCA, the respective shareholders of the Survivor and the Merging Corporation
each approved as of September 5, 1996 the Agreement and the related Plan of
Merger by the following votes:
<TABLE>
<CAPTION>
Vote on Approval
---------------------------
Number of Shares Outstanding Number of Number of Number of
and Entitled to Vote on the Votes per Affirmative Affirmative
Class Respective Record Dates Share Votes Cast Votes Required
- ----- ---------------------------- --------- ---------- --------------
<S> <C> <C> <C> <C>
Survivor 30,795,260 1 22,155,341 15,397,631
Common Stock
Merging Corp. 29,923,233 1 16,248,843 14,961,617
Common Stock
</TABLE>
ARTICLE IV
In accordance with Section 490.1107 of the IBCA, the Secretary of State of
the State of Iowa is appointed as agent of Survivor for service of process in a
proceeding to enforce any obligation or the rights of dissenting shareholders of
the Merging Corporation. The Survivor agrees that it will promptly pay to the
dissenting shareholders of the Merging Corporation the amount, if any, to which
they are entitled under Division XIII of the IBCA.
ARTICLE V
These Articles of Merger shall be effective, and the merger of Merging
Corporation with and into the Survivor shall take effect, as of 12:01 a.m.,
Central Time, on Tuesday, April 21, 1998.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the undersigned Survivor and Merging Corporation have
executed these Articles of Merger in duplicate as of the date written above.
<TABLE>
<CAPTION>
IES INDUSTRIES INC. WPL HOLDINGS, INC.
("Merging Corporation") ("Survivor")
<S> <C>
By: /s/ Larry D. Root By: /s/ Erroll B. Davis, Jr.
------------------------------------- -------------------------------------
Larry D. Root Erroll B. Davis, Jr.
President and Chief Operating Officer President and Chief Executive Officer
</TABLE>
-------------------------
STATE OF WISCONSIN
FILED
APR 20 1998
DEPARTMENT OF
FINANCIAL INSTITUTIONS
-------------------------
This document was drafted by, and a copy hereof should be returned to, Benjamin
F. Garmer, III of Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202-5367.
-3-
<PAGE> 4
PLAN OF MERGER
THIS PLAN OF MERGER, dated as of April 20, 1998 (the "Plan of Merger"), is
entered into by and between WPL Holdings, Inc., a Wisconsin corporation ("WPL
Holdings"), and IES Industries Inc., an Iowa corporation ("IES"). This Plan of
Merger is being entered into pursuant to an Agreement and Plan of Merger, dated
as of November 10, 1995, as amended (the "Merger Agreement"), by and among WPL
Holdings, IES, Interstate Power Company, a Delaware corporation ("Interstate"),
WPLH Acquisition Co., a Wisconsin corporation and a wholly owned subsidiary of
WPL Holdings, and Interstate Power Company, a Wisconsin corporation and a wholly
owned subsidiary of Interstate. The Merger Agreement, among other things,
provides for the merger of IES with and into WPL Holdings (the "Merger").
NOW, THEREFORE, in consideration of the premises and the agreements herein
contained, the parties hereto, intending to be legally bound hereby, agree to as
follows:
ARTICLE I
THE MERGER
1.01. The Merger. Subject to the terms and conditions of the Merger
Agreement and this Plan of Merger, IES shall be merged with and into WPL
Holdings in accordance with and with the effect as provided in the Wisconsin
Business Corporation Law (the "WBCL") and the Iowa Business Corporation Act (the
"IBCA"). WPL Holdings shall be the surviving corporation in the Merger
(sometimes hereafter referred to as the "Surviving Corporation") and shall
continue its corporate existence under the laws of the State of Wisconsin. The
separate corporate existence of IES shall cease.
1.02. Effective Time of the Merger. Subject to the provisions of the Merger
Agreement and this Plan of Merger, articles of merger (the "Articles of Merger")
shall be duly prepared and executed by or on behalf of IES and WPL Holdings and
thereafter delivered to the Secretary of State of the States of Wisconsin and
Iowa for filing, as provided in the WBCL and the IBCA, on the Closing Date (as
defined in the Merger Agreement). The Merger shall become effective at the time
specified in the Articles of Merger filed with the Secretary of State of the
States of Wisconsin and Iowa (the "Effective Time").
1.03. Restated Articles of Incorporation and By-laws of the Surviving
Corporation. At the Effective Time, (i) the Restated Articles of Incorporation
of WPL Holdings in effect immediately prior to the Effective Time shall be the
Restated Articles of Incorporation of the Surviving Corporation, except that
Article I of the Restated Articles of Incorporation of WPL Holdings shall be
amended in its entirety to provide as follows: "The name of the corporation is
Interstate Energy Corporation."; and (ii) the By-laws of WPL Holdings in effect
immediately prior to the Effective Time shall be the By-laws of the Surviving
Corporation.
1.04. Directors and Officers of the Surviving Corporation. At the Effective
Time, the Board of Directors of the Surviving Corporation shall be comprised of
the persons designated pursuant to Section 8.13 of the Merger Agreement and the
Chairman and Vice Chairman of the
<PAGE> 5
Board of Directors and the Chief Executive Officer and President of the
Surviving Corporation shall be the persons designated in Section 8.14 of the
Merger Agreement. Except as otherwise provided in Section 8.14 of the Merger
Agreement, the officers of WPL Holdings at the Effective Time shall, from and
after the Effective Time, continue as the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal.
ARTICLE II
CONVERSION OF SHARES
2.01. Cancellation and Conversion of IES Common Stock. At the Effective
Time, in accordance with the terms and conditions set forth in the Merger
Agreement, and by virtue of the Merger and without any action on the part of any
holder of shares of Common Stock, no par value, of IES ("IES Common Stock"):
(a) Cancellation of Certain IES Common Stock. Each share of IES Common
Stock that is owned by IES or WPL Holdings or any of their respective
subsidiaries shall be cancelled and cease to exist, and no consideration shall
be delivered in exchange therefor.
(b) Conversion of Certain IES Common Stock. Each share of IES Common Stock
issued and outstanding immediately prior to the Effective Time (other than
shares cancelled pursuant to Section 2.01(a) or shares for which dissenters'
rights have been exercised under applicable law) shall be converted into the
right to receive 1.14 shares of Common Stock, $.01 par value, of WPL Holdings
("WPL Holdings Common Stock"), including the associated rights to purchase
shares of WPL Holdings Common Stock (the "Rights") pursuant that certain Rights
Agreement between WPL Holdings and Morgan Shareholder Services Trust Company, as
Rights Agent thereunder, dated February 22, 1989 (the "Rights Agreement"). Until
the Distribution Date (as defined in the Rights Agreement), all references in
this Plan of Merger to the WPL Holdings Common Stock shall be deemed to include
the associated Rights.
(c) No Fractional Shares. Notwithstanding any other provision of this Plan
of Merger to the contrary, no certificates or scrip representing fractional
shares of WPL Holdings Common Stock shall be issued in the Merger, and such
fractional shares shall not entitle the owner thereof to vote as, or to any
rights of, a holder of WPL Holdings Common Stock. In lieu of any such fractional
shares, a holder of IES Common Stock who would otherwise have been entitled to a
fractional share of WPL Holdings Common Stock shall receive a cash payment in an
amount equal to the product (rounded to the nearest cent) of such fraction
(rounded to the nearest thousandth) multiplied by the average of the last
reported sales price, regular way, per share of WPL Holdings Common Stock on the
New York Stock Exchange ("NYSE") Composite Tape for the ten business days prior
to and including the last business day prior to the Effective Time on which WPL
Holdings Common Stock was traded on the NYSE, without any interest thereon.
2.02. WPL Holdings Common Stock. The shares of WPL Holdings Common Stock
issued and outstanding immediately prior to the Effective Time shall not be
affected in any manner by virtue of the Merger.
-2-
<PAGE> 6
2.03. IES Preferred Stock. There are no shares of Cumulative Preferred
Stock, no par value, of IES issued and outstanding and there will be no shares
of Cumulative Preferred Stock of IES issued and outstanding as of the Effective
Time.
ARTICLE III
CONDITIONS; TERMINATION
3.01. Conditions to the Merger. Consummation of the Merger is conditional
upon the fulfillment or waiver of the conditions precedent set forth in Article
IX of the Merger Agreement.
3.02. Termination. This Plan of Merger shall terminate forthwith in the
event that the Merger Agreement shall be terminated as therein provided. In the
event of the termination of this Plan of Merger as provided above, this Plan of
Merger shall forthwith become void and there shall be no liability on the part
of any of the parties hereto, except as otherwise provided in the Merger
Agreement.
ARTICLE IV
GENERAL PROVISIONS
4.01. Counterparts. This Plan of Merger may be executed in counterparts,
each of which shall constitute one and the same instrument.
4.02. Headings. The headings in this Plan of Merger are inserted for
convenience only and shall not constitute a part hereof.
-3-
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Plan of Merger to
be duly executed as of the date first above written.
WPL HOLDINGS, INC.
("WPL Holdings")
By: /s/ Erroll B. Davis
----------------------------------------------------------
Erroll B. Davis, Jr., President and CEO
Attest: /s/ E. M. Gleason
------------------------------------------------------
Edward M. Gleason, VP, Treasurer & Corp. Secretary
IES INDUSTRIES INC.
("IES")
By: /s/ Larry D. Root
----------------------------------------------------------
Larry D. Root, President and CEO
Attest: /s/ Stephen W. Southwick
------------------------------------------------------
Stephen W. Southwick, VP, General Counsel & Secretary
-------------------------
STATE OF WISCONSIN
FILED
APR 20 1998
DEPARTMENT OF
FINANCIAL INSTITUTIONS
-------------------------
-4-
<PAGE> 8
ANNEX A
AGREEMENT AND PLAN OF MERGER, AS AMENDED
By and Among
WPL HOLDINGS, INC.,
IES INDUSTRIES INC.,
INTERSTATE POWER COMPANY
(a Delaware corporation),
WPLH ACQUISITION CO.
and
INTERSTATE POWER COMPANY
(a Wisconsin corporation)
Dated as of November 10, 1995
-------------------------
STATE OF WISCONSIN
FILED
APR 20 1998
DEPARTMENT OF
FINANCIAL INSTITUTIONS
-------------------------
A-1
<PAGE> 9
(c) immediately following the Effective Time, the Company shall cause
the IES nonregulated holding company to merge with and into the WPL
nonregulated holding company, with the WPL nonregulated holding company
being the surviving corporation (the combined company is herein referred to
as the "Nonregulated Company"); and
(d) during the five-year period following the Effective Time or for
such shorter period as the following entities maintain their separate
corporate existences, the Company shall use its best efforts to insure that
the composition of the Board of Directors of each of Utilities, WP&LC and
Interstate and Nonregulated Company will be identical to the composition of
the Board of Directors of the Company
Section 8.17 Expenses. Subject to Section 10.3, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, except that those
expenses incurred in connection with printing the Joint Proxy/Registration
Statement, as well as the filing fee relating thereto, shall be shared by the
parties in the following proportions: 43% by WPL, 14% by Interstate and 43% by
IES.
Section 8.18 Further Assurances. Each party will, and will cause its
Subsidiaries and, will use its best efforts to cause its Joint Ventures to,
execute such further documents and instruments and take such further actions as
may reasonably be requested by the terms hereof. The parties expressly
acknowledge and agree that, although it is their current intention to effect a
business combination among themselves in the form contemplated by this
Agreement, it may be preferable to effectuate such a business combination by
means of an alternative structure in light of the conditions set forth in
Section 9.1(e), Section 9.2(e), Section 9.2(f), Section 9.3(e), Section 9.3(f),
Section 9.4(e) and Section 9.4(f). Accordingly, if the only conditions to the
parties' obligations to consummate the Merger which are not satisfied or waived
are receipt of any one or more of the WPL Required Consents, WPL Required
Statutory Approvals, IES Required Consents, IES Required Statutory Approvals,
Interstate Required Consents, Interstate Required Statutory Approvals or the
opinions referred to in Sections 9.2(e), 9.3(e), and 9.4(e), and the adoption of
an alternative structure (that otherwise substantially preserves for WPL, IES
and Interstate the economic and other material benefits of the Merger) would
result in such conditions being satisfied or waived, then the parties shall use
their respective best efforts to effect a business combination among themselves
by means of a mutually agreed upon structure other than the Merger that so
preserves such benefits; provided that, prior to closing any such restructured
transaction, all material third party and Governmental Authority declarations,
filings, registrations, notices, authorizations, consents or approvals necessary
to effect such alternative business combination shall have been obtained and all
other conditions to the parties' obligations to consummate the Merger, as
applied to such alternative business combination, shall have been satisfied or
waived.
Section 8.19 Charter and By-law Amendments. Prior to the Closing, WPL shall
cause its Articles of Incorporation and By-laws to be amended as contemplated in
Section 8.19 of the WPL Disclosure Schedule.
Section 8.20 IES Rights Agreement. Prior to or at the time of the Closing,
IES shall amend the IES Rights Agreement to cause it to terminate effective as
of the Effective Time.
ARTICLE IX
CONDITIONS
Section 9.1 Conditions to each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction on or prior to the Closing Date of the following conditions,
except, to the extent permitted by applicable law, that such conditions may be
waived in writing pursuant to Section 10.5 by the joint action of the parties
hereto:
(a) Shareholder Approvals. The IES Shareholders' Approval, the
Interstate Shareholders' Approval and the WPL Shareholders' Approval shall
have been obtained.
A-66
<PAGE> 10
(b) No Injunction. No temporary restraining order or preliminary or
permanent injunction or other order by any Federal or state court
preventing consummation of the Merger (including either or both of the IES
Merger and the Interstate Merger) shall have been issued and be continuing
in effect, and the Merger (including either or both of the IES Merger and
the Interstate Merger) and the other transactions contemplated hereby shall
not have been prohibited under any applicable Federal or state law or
regulation.
(c) Registration Statement. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act,
and no stop order suspending such effectiveness shall have been issued and
remain in effect.
(d) Listing of Shares. The shares of WPL Common Stock issuable in the
Merger pursuant to Article II shall have been approved for listing on the
NYSE subject only to official notice of issuance.
(e) Statutory Approvals.
(i) The WPL Required Statutory Approvals, the IES Required
Statutory Approvals and the Interstate Required Statutory Approvals
shall have been obtained at or prior to the Effective Time, such
approvals shall have become Final Orders (as hereinafter defined) and
such Final Orders shall not impose terms or conditions which, in the
aggregate have, or insofar as reasonably can be foreseen, would have,
a material adverse effect on the business, assets, financial condition
or results of operations or prospects of the Company or which would be
materially inconsistent with the agreements of the parties contained
herein.
(ii) As used in this Agreement, "Final Order" means action by the
relevant regulatory authority which has not been reversed, stayed,
enjoined, set aside, annulled or suspended, with respect to which any
waiting period prescribed by law before the transactions contemplated
hereby may be consummated has expired, and as to which all conditions
to the consummation of such transactions prescribed by law, regulation
or order have been satisfied.
(f) Pooling. Each of WPL, IES and Interstate shall have received a
letter of its independent public accountants, dated the Closing Date, in
form and substance reasonably satisfactory, in each case. to WPL, IES and
Interstate, stating that the transactions effected pursuant to this
Agreement will qualify as a pooling of interests transaction pursuant to
GAAP and applicable SEC regulations.
Section 9.2 Further Conditions to Obligation of IES to Effect the IES
Merger. The obligation of IES to effect the IES Merger shall be further subject
to the satisfaction, on or prior to the Closing Date, of the following
conditions, except as may be waived by IES in writing pursuant to Section 10.5:
(a) Performance of Obligations. WPL (and/or its appropriate
Subsidiaries) and Interstate (and/or its appropriate Subsidiaries) will
have performed their agreements and covenants contained in Sections 7.3
and 7.4 and will have performed in all material respects their other
agreements and covenants contained in or contemplated by this Agreement,
and the WPL/IES and Interstate/IES Stock Option Agreements required to be
performed by each of them at or prior to the Effective Time.
(b) Representations and Warranties. The representations and warranties
of WPL and Interstate set forth in this Agreement shall be true and correct
(i) on and as of the date hereof and (ii) on and as of the Closing Date
with the same effect as though such representations and warranties had been
made on and as of the Closing Date (except for representations and
warranties that expressly speak only as of a specific date or time other
than the date hereof or the Closing Date which need only be true and
correct as of such date or time) except in each of cases (i) and (ii) for
such failures of representations or warranties to be true and correct
(without regard to any
A-67
<PAGE> 11
materiality qualifications contained therein) which, individually or in the
aggregate do not, and insofar as reasonably can be foreseen, would not,
result in a WPL Material Adverse Effect or an Interstate Material Adverse
Effect, as the case may be.
(c) Closing Certificates. IES shall have received a certificate signed
by the chief financial officer of each of WPL and Interstate, dated the
Closing Date, to the effect that, to such officer's knowledge, the
conditions set forth in Section 9.2(a) and Section 9.2(b) with respect to
WPL or Interstate, as the case may be, have been satisfied.
(d) Material Adverse Effect. No WPL Material Adverse Effect or
Interstate Material Adverse Effect shall have occurred, and there shall
exist no facts or conditions (other than facts or conditions of general
applicability to electric utility companies in the region in which WPL, IES
and Interstate conduct their utility operations) which have, or insofar as
reasonably can be foreseen, would have a WPL Material Adverse Effect or an
Interstate Material Adverse Effect, as the case may be.
(e) Tax Opinions.
(i) IES shall have received an opinion of Winthrop, Stimson,
Putnam & Roberts dated as of the Closing Date, to the effect that the
IES Merger will be treated as a tax-free reorganization under Section
368(a) of the Code, and
(ii) IES and Winthrop, Stimson, Putnam & Roberts shall have had
the opportunity to review the tax opinions of Interstate's and WPL's
special tax counsel received pursuant to Sections 9.3(e)(i) and
9.4(e)(i), respectively, including the representations, covenants or
other matters in reliance on which the opinions are being rendered,
and shall be reasonably satisfied with the completeness and accuracy
of said opinions.
(f) Required Consents. The WPL Required Consents and the Interstate
Required Consents, the failure of which to obtain would have a WPL Material
Adverse Effect or an Interstate Material Adverse Effect, shall have been
obtained.
(g) Affiliate Agreements. WPL shall have received Affiliate
Agreements, duly executed by each Affiliate of WPL and Interstate,
substantially in the form of Exhibit 8.8(a) or 8.8(b), as provided in
Section 8.8.
Section 9.3 Further Conditions to Obligation of Interstate to Effect the
Interstate Merger. The obligation of Interstate to effect the Interstate Merger
shall be further subject to the satisfaction, on or prior to the Closing Date,
of the following conditions, except as may be waived by Interstate in writing
pursuant to Section 10.5:
(a) Performance of Obligations. IES (and/or its appropriate
Subsidiaries) and WPL (and/or its appropriate Subsidiaries) will have
performed their agreements and covenants contained in Sections 7.3 and 7.4
and will have performed in all material respects their other agreements and
covenants contained in or contemplated by this Agreement and the
IES/Interstate and WPL/Interstate Stock Option Agreement required to be
performed by each of them at or prior to the Effective Time.
(b) Representations and Warranties. The representations and warranties
of IES and WPL set forth in this Agreement shall be true and correct (i) on
and as of the date hereof and (ii) on and as of the Closing Date with the
same effect as though such representations and warranties had been made on
and as of the Closing Date (except for representations and warranties that
expressly speak only as of a specific date or time other than the date
hereof or the Closing Date which need only be true and correct as of such
date or time) except in each of cases (i) and (ii) for such failures of
representations or warranties to be true and correct (without regard to any
materiality qualifications contained therein) which, individually or in the
aggregate do not, and insofar as reasonably can be foreseen, would not,
result in an IES Material Adverse Effect or a WPL Material Adverse Effect,
as the case may be.
A-68
<PAGE> 12
(c) Closing Certificates. Interstate shall have received a certificate
signed by the chief financial officer of each of IES and WPL, dated the
Closing Date, to the effect that, to such officer's knowledge, the
conditions set forth in Section 9.3(a) and Section 9.3(b) with respect to
WPL or IES, as the case may be, have been satisfied.
(d) Material Adverse Effect. No IES Material Adverse Effect or WPL
Material Adverse Effect shall have occurred, and there shall exist no facts
or conditions (other than facts or conditions of general applicability to
electric utility companies in the region in which WPL, IES and Interstate
conduct their utility operations) which have, or insofar as reasonably can
be foreseen, would have an IES Material Adverse Effect or a WPL Material
Adverse Effect, as the case may be.
(e) Tax Opinions.
(i) Interstate shall have received an opinion of Milbank, Tweed,
Hadley & McCloy dated as of the Closing Date, to the effect that the
Interstate Merger will be treated as a tax-free reorganization under
Section 368(a) of the Code; and
(ii) Interstate and Milbank, Tweed, Hadley & McCloy shall have
had the opportunity to review the tax opinions of IES's and WPL's
special tax counsel received pursuant to Sections 9.2(e)(i) and
9.4(e)(i), respectively, including the representations, covenants or
other matters in reliance on which the opinions are being rendered,
and shall be reasonably satisfied with the completeness and accuracy
of said opinions.
(f) Required Consents. The IES Required Consents and the WPL Required
Consents, the failure of which to obtain would have an IES Material Adverse
Effect or a WPL Material Adverse Effect, shall have been obtained.
(g) Affiliate Agreements. WPL shall have received Affiliate
Agreements, duly executed by each Affiliate of IES and WPL, substantially
in the form of Exhibit 8.8(a) and 8.8(b), as provided in Section 8.8.
Section 9.4 Further Conditions to Obligation of WPL to Effect the Merger.
The obligation of WPL to effect the Merger shall be further subject to the
satisfaction, on or prior to the Closing Date, of the following conditions,
except as may be waived by WPL in writing pursuant to Section 10.5:
(a) Performance of Obligations. IES (and/or its appropriate
Subsidiaries) and Interstate (and/or its appropriate Subsidiaries) will
have performed their agreements and covenants contained in Sections 7.3 and
7.4 and will have performed in all material respects their other agreements
and covenants contained in or contemplated by this Agreement and the
IES/WPL and Interstate/WPL Stock Option Agreements required to be
performed by it at or prior to the Effective Time.
(b) Representations and Warranties. The representations and warranties
of IES and Interstate set forth in this Agreement shall be true and correct
(i) on and as of the date hereof and (ii) on and as of the Closing Date
with the same effect as though such representations and warranties had been
made on and as of the Closing Date (except for representations and
warranties that expressly speak only as of a specific date or time other
than the date hereof or the Closing Date which need only be true and
correct as of such date or time) except in each of cases (i) and (ii) for
such failures of representations or warranties to be true and correct
(without regard to any materiality qualifications contained therein) which,
individually or in the aggregate do not, and insofar as reasonably can be
foreseen, would not, result in an IES Material Adverse Effect or an
Interstate Material Adverse Effect, as the case may be.
(c) Closing Certificates. WPL shall have received a certificate signed
by the chief financial officer of each of IES and Interstate, dated the
Closing Date, to the effect that, to such officer's knowledge, the
conditions set forth in Section 9.4(a) and Section 9.4(b) with respect to
IES or Interstate, as the case may be, have been satisfied.
A-69
<PAGE> 13
(d) Material Adverse Effect. No IES Material Adverse Effect or
Interstate Material Adverse Effect shall have occurred, and there shall
exist no facts or conditions (other than facts or conditions of general
applicability to electric utility companies in the region in which WPL, IES
and Interstate conduct their utility operations) which have, or insofar as
reasonably can be foreseen, would have an IES Material Adverse Effect or an
Interstate Material Adverse Effect, as the case may be.
(e) Tax Opinions.
(i) WPL shall have received an opinion of Foley & Lardner dated
as of the Closing Date, to the effect that the Merger will be treated
as a tax-free reorganization under Section 368(a) of the Code; and
(ii) WPL and Foley & Lardner shall have had the opportunity to
review the tax opinions of IES's and Interstate's special tax counsel,
as set forth in Sections 9.2(e)(i) and 9.3(e)(i), respectively,
including the representations, covenants or other matters in reliance
on which the opinions are being rendered, and shall be reasonably
satisfied with the completeness and accuracy of said opinions.
(f) Required Consents. The IES Required Consents and the Interstate
Required Consents, the failure of which to obtain would have an IES
Material Adverse Effect or an Interstate Material Adverse Effect, shall
have been obtained.
(g) Affiliate Agreements. WPL shall have received Affiliate
Agreements, duly executed by each Affiliate of IES and Interstate,
substantially in the form of Exhibit 8.8(b), as provided in
Section 8.8.
-------------------------
STATE OF WISCONSIN
FILED
-----------
APR 20 1998
-----------
DEPARTMENT OF
FINANCIAL INSTITUTIONS
-------------------------
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
Section 10.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date, whether before or after approval by the shareholders
of the respective parties hereto contemplated by this Agreement:
(a) by mutual written consent of WPL, IES and Interstate;
(b) by any party hereto, by written notice to the other parties, if
the Effective Time shall not have occurred on or before May 10, 1997 (the
"Initial Termination Date"); provided, however, that the right to terminate
the Agreement under this Section 10.(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Effective Time to occur on or
before the Initial Termination Date; and provided, further, that if on the
Initial Termination Date the conditions to the Closing set forth in
Sections 9.1(e), 9.2(f), 9.3(f) and/or 9.4(f) shall not have been fulfilled
but all other conditions to the Closing shall be fulfilled or shall be
capable of being fulfilled, then the Initial Termination Date shall be
extended to May 10, 1998;
(c) by any party hereto, by written notice to the other parties, if
(i) the WPL Shareholders' Approval shall not have been obtained
at a duly held WPL Special Meeting, including any adjournments
thereof, or
(ii) the IES Shareholders' Approval shall not have been obtained
at a duly held IES Special Meeting, including any adjournments
thereof, or
(iii) the Interstate Shareholders' Approval shall not have been
obtained at a duly held Interstate Special Meeting, including any
adjournments thereof;
(d) by any party hereto, if any state or Federal law, order, rule or
regulation is adopted or issued, which has the effect, as supported by the
written opinion of outside counsel for such party,
A-70
<PAGE> 14
United States of America
State of Wisconsin
DEPARTMENT OF FINANCIAL INSTITUTIONS
I, RICHARD L. DEAN, Secretary, Department of Financial Institutions, do
hereby certify that the annexed copy has been compared by me with the record on
file in the Corporations unit of the Division of Corporate & Consumer Services
of this department and that the same is a true copy thereof, and of the whole of
such record; and that I am the legal custodian of such record, and that this
certification is in due form.
IN TESTIMONY WHEREOF, I have
hereunto set my hand and affixed
the official seal of the Department.
[SEAL]
/s/ Richard L. Dean
Richard L. Dean, Secretary
Department of Financial Institutions
DATE: FEB 27 1998 BY: /s/ Patricia Weber
================================================================================
Effective July 1, 1996, the Department of Financial Institutions assumed the
functions previously performed by the Corporations Division of the Secretary of
State and is the successor custodian of corporate records formerly held by the
Secretary of State.
5
<PAGE> 15
----------
WI SEC
OF STATE
--------
CREDIT
----------
RESTATED
ARTICLES OF INCORPORATION
OF
WPL HOLDINGS, INC.
These Restated Articles of Incorporation supersede and take the place of
the existing Articles of Incorporation and all prior amendments thereto.
ARTICLE I
The name of the corporation is WPL Holdings, Inc.
ARTICLE II
The period of existence of the corporation shall be perpetual.
ARTICLE III
The corporation is organized for the purpose of engaging in any lawful
activities within the purposes for which corporations may be organized under
Chapter 180 of the Wisconsin Statutes, as amended from time to time.
ARTICLE IV
The corporation shall have authority to issue one hundred million
(100,000,000) shares of common stock. $.01 par value.
ARTICLE V
No holder of any capital stock of the corporation shall have any preemptive
right to purchase, acquire to subscribe to any capital stock or other securities
issued or sold by the Corporation, including any such capital stock or
securities now or hereafter authorized.
ARTICLE VI
The address of the initial registered office of the Corporation is 222
West Washington Avenue, P. 0. Box 2568, Madison, Wisconsin 53701-2568, and the
name of the registered agent of the Corporation at such address is Thomas A.
Landgraf.
6
<PAGE> 16
ARTICLE VII
The corporation reserves the right to increase or decrease its authorized
capital stock or any class or series thereof, or to reclassify the same.
ARTICLE VIII
The number of directors constituting the Board of Directors shall be as
fixed from time to time by the Bylaws of the Corporation, but shall not be less
than seven (7). Each director shall be a stockholder of the Corporation. The
directors of the Corporation shall be divided into three classes as nearly equal
in number as possible, to serve for staggered three-year terms or until their
respective successors are duly elected and qualified. The initial directors of
the Corporation shall be those persons who, at the time of the effectiveness of
the merger of the Corporation's subsidiary, WPL Acquisitions, Inc., into the
Corporation's subsidiary, Wisconsin Power and Light Company, are serving as
directors of Wisconsin Power and Light Company, each to hold office for the
term for which such person was elected a director of Wisconsin Power and Light
Company. Beginning with the Corporation's annual meeting of stockholders in
1988, the successors of the class of directors whose terms shall then expire
shall be elected to hold office for a term expiring at the third annual meeting
of stockholders after their election or until their respective successors are
duly elected and qualified. If, at any annual meeting of stockholders, directors
of more than one class are to be elected, each class of directors to be elected
at such meeting shall be nominated and voted for in a separate election. Any
vacancy occurring in the Board of Directors, including a vacancy created by an
increase in the number of directors, shall be filled until the next succeeding
annual meeting of stockholders by the majority vote of the directors then in
office, even if less than a quorum.
The undersigned officers of the Corporation, with its registered office in
Dane County, Wisconsin, certify that the foregoing restatement of the Articles
of Incorporation of said Corporation was consented to in writing by the holders
of all shares entitled to vote with respect to the subject matter of said
amendment, duly signed by said shareholders or in their names by the duly
authorized attorneys.
The foregoing restatement of the Articles of Incorporation of said
corporation was adopted by the shareholders on the 17th day of May, 1989 by the
following vote:
7
<PAGE> 17
<TABLE>
<CAPTION>
Common Shares
-------------
<S> <C>
Number of shares outstanding 26,662,553
Number of shares entitled to vote 26,662,553
Number of "Yes" votes cast 21,713,800
Number of "No" votes cast 1,323,511*
</TABLE>
(*Number of abstentions - 762,979)
Executed in duplicate and seal affixed this 17th day of May, 1989.
WPL HOLDINGS, INC.
By /s/ James R. Underkofler WDH
------------------------------------------
James R. Underkofler, President
(SEAL)
By /s/ Thomas A. Landgraf
------------------------------------------
Thomas A. Landgraf, Secretary
This document was drafted by
William D. Harvey, Esq.
(608) 252-5088
Mail Returned Copy To:
William D. Harvey, Esq.
Wisconsin Power and Light Company
222 W. Washington Avenue
Madison, WI 53701-0192
<PAGE> 18
----------
WI SEC
OF STATE
--------
CREDIT
----------
Restated A/C
Changing reg. office address
Increasing authorized shares
From $12.00 Dane Co.
[Illegible]
56,000,000 sh @ $.01 to
100,000,000 sh @ $.01 $650.00
STATE OF WISCONSIN
FILED
NOV 17 1989
DOUGLAS LA FOLLETTE
SECRETARY OF STATE
<PAGE> 19
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
OF
WPL HOLDINGS, INC.
1. The name of the Corporation is WPL Holdings, Inc..
2. Article IV of the Corporation's Restated Articles of Incorporation is
hereby amended in its entirety to provide as follows:
The corporation shall have authority to issue two hundred
million (200,000,000) shares of common stock, $.01 par value.
3. The foregoing amendment to the Corporation's Restated Articles of
Incorporation was submitted to the Corporation's shareholders by the
Board of Directors of the Corporation and was adopted by such
shareholders on September 5, 1996, in accordance with Section 180.1003
of the Wisconsin Business Corporation Law.
Executed on behalf of the Corporation as of this 20th day of April, 1998.
/s/ Erroll B. Davis, Jr.
----------------------------------
Erroll B. Davis, Jr.
President and Chief Executive
Officer
-----------------------------
STATE OF WISCONSIN
FILED
----------------------
APR 20 1998
----------------------
DEPARTMENT OF
FINANCIAL INSTITUTIONS
-----------------------------
- ----------
This instrument was drafted by, and should be returned to, Benjamin F.
Garmer, III of the firm of Foley & Lardner, 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202-5367.
<PAGE> 1
BYLAWS
OF
INTERSTATE ENERGY CORPORATION
(Effective as of April 21, 1998)
ARTICLE I
OFFICES
Section 1.1 PRINCIPAL AND BUSINESS OFFICES. - The Corporation may have
such principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
Corporation may require from time to time.
Section 1.2 REGISTERED OFFICE. - The registered office of the Corporation
required by the Wisconsin Business Corporation Law to be maintained in the State
of Wisconsin may be, but need not be, identical with the principal office in the
State of Wisconsin, and the address of the registered office may be changed from
time to time by the Board of Directors or by the registered agent. The business
office of the registered agent of the Corporation shall be identical to such
registered office.
ARTICLE II
SEAL
Section 2.1 CORPORATE SEAL. - The corporate seal shall have inscribed
thereon the name of the Corporation and the words "CORPORATE SEAL, WISCONSIN."
Said seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced.
ARTICLE III
SHAREOWNERS
Section 3.1. ANNUAL MEETING. - The Annual Meeting of Shareowners shall be
held at such date and time as the Board of Directors may determine. The Board of
Directors may designate any place, either within or without the State of
Wisconsin, as the place for the Annual Meeting. If no designation is made, the
place of the Annual Meeting shall be the principal office of the Corporation.
The Annual Meeting shall be held for the purposes of electing Directors and of
transacting such other business as may properly come before the meeting.
<PAGE> 2
Section 3.2 SPECIAL MEETINGS. - Special Meetings of the Shareowners may
be called by the Board of Directors or the Chief Executive Officer. The
Corporation shall call a Special Meeting of Shareowners in the event that the
holders of at least ten percent (10%) of all of the votes entitled to be cast on
any issue request a special meeting be held.
Section 3.3 NOTICE OF MEETINGS - WAIVER. - Notice of the time and place
of each Annual or Special Meeting of Shareowners shall be sent by mail to the
recorded address of each shareowner not less than ten (10) days nor more than
sixty (60) days before the date of the meeting, except in cases where other
special method of notice may be required by statute, in which case the statutory
method shall be followed. The notice of a Special Meeting shall state the
purpose of the meeting. If an Annual or Special Meeting of shareowners is
adjourned to a different date, time or place, the Corporation shall not be
required to give notice of the new date, time or place if the new date, time or
place is announced at the meeting before adjournment; provided, however, that if
a new record date for an adjourned meeting is or must be fixed, the Corporation
shall give notice of the adjourned meeting to persons who are shareowners as of
the new record date. Notice of any meeting of the shareowners may be waived by
any shareowner.
Section 3.4 FIXING OF RECORD DATE. - For the purpose of determining
shareowners entitled to notice of, or to vote at, any meeting of shareowners, or
at any adjournment thereof, or shareowners entitled to receive payment of any
dividend, or in order to make a determination of shareowners for any other
lawful action, the Board of Directors may fix, in advance, a record date for
such determination of shareowners. Such date in case of a meeting of shareowners
or other lawful action shall not be more than seventy (70) days prior to the
date of such meeting or lawful action. If no record date is fixed by the Board
of Directors or by statute for the determination of shareowners entitled to
demand a special meeting as contemplated in Section 3.2 hereof, the record date
shall be the date that the first shareowner signs the demand. When a
determination of shareowners entitled to vote at any meeting of shareowners has
been made as provided in this section, such determination shall apply to any
adjournment thereof unless the meeting is adjourned to a date more than one
hundred twenty (120) days after the date fixed for the original meeting in which
event the Board of Directors must fix a new record date.
Section 3.5 SHAREOWNER LIST. - The Corporation shall have available,
beginning two (2) days after the notice of the meeting is given for which the
list was prepared and continuing to the date of the meeting, a
2
<PAGE> 3
complete record of each shareowner entitled to vote at such meeting, or any
adjournment thereof, showing the address of and number of shares held by each
shareowner. The shareowner list shall be available for inspection by any
shareowner during normal business hours at the Corporation's principal office or
at a place identified in the meeting notice in the city where the meeting will
be held. The Corporation shall make the shareowners' list available at the
meeting and any shareowner or his agent or attorney may inspect the list at any
time the meeting or any adjournment thereof.
Section 3.6 QUORUM AND VOTING REQUIREMENTS. - Shares entitled to vote as
a separate voting group may take action on a matter at a meeting only if a
quorum of those shares exists with respect to that matter. A majority of the
outstanding shares entitled to vote on a matter, represented in person or by
proxy, shall constitute a quorum for action on that matter. If a quorum exists,
except in the case of the election of directors, action on a matter shall be
approved if the votes cast favoring the action exceed the votes cast opposing
the action, unless the Corporation's Articles of Incorporation, any Bylaw
adopted under authority granted in the Articles of Incorporation or statute
requires a greater number of affirmative votes. Directors shall be elected by a
plurality of the votes cast by the shares entitled to vote in the election of
directors at a meeting at which a quorum is present. Though less than a quorum
of the outstanding votes are represented at a meeting, a majority of the votes
so represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 3.7 CONDUCT OF MEETING. - The Chairperson of the Board shall
preside at each meeting of shareowners. In the absence of the Chairperson of the
Board, such persons, in the following order, shall act as chair of the meeting;
the Vice Chairperson of the Board the Chief Executive Officer, the President,
any Vice President, the Director in attendance with the longest tenure in that
office. The Secretary, or if absent, an Assistant Secretary, of the Company
shall act as Secretary of each shareowner meeting.
Section 3.8 PROXIES. - Any shareowner having the right to vote at a
meeting of shareowners may exercise such right by voting in person or by proxy
at such meeting. Such proxies shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy.
3
<PAGE> 4
Section 3.9 VOTING OF SHARES. - Except as provided in the Articles of
Incorporation or statute, each outstanding share entitled to vote shall be
entitled to one (1) vote upon each matter submitted to a vote at a meeting of
shareowners.
Section 3.10 VOTING OF SHARES BY CERTAIN HOLDERS. - Shares standing in
the name of another corporation may be voted by such officer, agent or proxy as
the Bylaws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted by such person, either in person or by proxy, without a transfer of such
shares into that person's name. Shares standing in the name of a trustee may be
voted by such trustee, either in person or by proxy, without a transfer of such
shares into the trustee's name. The Corporation may request evidence of such
fiduciary status with respect to the vote, consent, waiver, or proxy
appointment.
Shares standing in the name of a receiver or trustee in bankruptcy may be
voted by such receiver or trustee, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer of the shares into
such person's name if authority so to do is contained in an appropriate order of
the court by which such receiver was appointed.
A pledgee, beneficial owner, or attorney-in-fact of the shares held in
the name of a shareholder shall be entitled to vote such shares. The Corporation
may request evidence of such signatory's authority to sign for the shareholder
with respect to the vote, consent, waiver, or proxy appointment.
Neither treasury shares nor shares held by another corporation, if a
majority of the shares entitled to vote for the election of Directors of such
other corporation is held by the Corporation, shall be voted at any meeting or
counted in determining the total number of outstanding shares at any given time.
4
<PAGE> 5
ARTICLE IV
BOARD OF DIRECTORS
Section 4.1 GENERAL POWER. - The business and affairs of the Corporation
shall be managed by its Board of Directors.
Section 4.2 NUMBER. CLASSES & TERM. - The number of Directors of the
Corporation shall be fifteen (15). The Directors of the Corporation shall be
divided into three classes, hereinafter referred to as "Class I," "Class II,"
and "Class III" with each class having five (5) Directors. The initial Class I
Directors shall consist of two (2) directors selected by each of IES Industries
Inc. ("IES") and WPL Holdings Inc. ("WPLH") and one (1) selected by Interstate
Power Company ("IPC"); the initial Class II Directors shall consist of two (2)
directors selected by each of IES and WPLH and one (1) selected by IPC; and the
initial Class III Directors shall consist of two (2) directors selected by each
of IES and WPLH and one (1) selected from IPC. The initial term of Class I
Directors shall expire at the first annual meeting of Shareowners of the
Corporation, the initial term of Class II Directors shall expire at the second
annual meeting of Shareowners of the Corporation and the initial term of Class
III Directors shall expire at the third annual meeting of Shareowners of the
Corporation.
At each annual shareowner meeting after the first annual shareowner
meeting, directors to replace those of a Class whose terms expire at such annual
meeting shall be elected to hold office until the third succeeding annual
meeting and until their respective successors shall have been duly qualified and
elected. If the number of directors is hereafter changed, any newly created
directorships or decrease in directorships shall be so apportioned among the
classes as to make all classes as nearly equal in number as is practicable.
Section 4.3 CHAIRPERSON OF THE BOARD. - The Chairperson of the Board if
not designated as the Chief Executive Officer of the Company shall assist the
Board in the formulation of policies and may make recommendations therefore.
Information as to the affairs of the Company in addition to that contained in
the regular reports shall be furnished to him or her on request. He or she may
make suggestions and recommendations to the Chief Executive Officer regarding
any matters relating to the affairs of the Company and shall be available for
consultation and advice.
Section 4.4 VICE CHAIRPERSON OF THE BOARD. - The Vice Chairperson of the
Board shall assist the Board in the formulation of policies and make
recommendations therefore. The Vice Chairperson shall have such other powers and
duties as may be prescribed for him or her by the Chairperson of the
5
<PAGE> 6
Board or the Board of Directors. In the absence of or the inability of the
Chairperson of the Board to act as Chairperson of the Board, the Vice
Chairperson of the Board shall assume the powers and duties of the Chairperson
of the Board.
Section 4.5 QUALIFICATIONS AND REMOVAL. - No person who has attained 70
years of age shall be eligible for election or re-election to the Board of
Directors. Any Director who has attained seventy (70) years of age shall resign
from the Board of Directors effective as of the next annual Meeting of
Shareowners. For a period of five (5) years following the formation of the
Corporation, no person, except any of the initial Directors selected pursuant to
Section 4.2 hereof, who is an executive officer or employee of the Corporation
or any of its subsidiaries shall be eligible to serve as a Director of the
Corporation; provided, however, that any individual serving as Chief Executive
Officer of the Corporation shall be eligible to serve as a Director of the
Corporation. In the event the Chief Executive Officer resigns or retires from
his or her office or employment with the Corporation, he or she shall
simultaneously submit his or her resignation from the Board of Directors. In the
event that the Chief Executive Officer is removed from his or her office by the
Board of Directors, or is involuntarily terminated from employment with the
Corporation, he or she shall simultaneously submit his or her resignation from
the Board of Directors. In the event that a Director experiences a change in
their principal occupation or primary business affiliation, the Director must
submit their resignation from the Board to the Nominating and Governance
Committee. The Nominating and Governance Committee shall recommend to the Board
of Directors whether the Board should accept such resignation. If the Nominating
and Governance Committee recommends acceptance of the resignation, an
affirmative vote of two-thirds of the remaining Directors holding office is
required to affirm the Nominating and Governance Committee's recommendation. A
resignation may be tendered by any Director at any meeting of the shareholders
or of the Board of Directors, who shall at such meeting accept the same.
Section 4.6 REGULAR MEETINGS. - Regular meetings of the Board of
Directors shall be held at such time and place as may be determined by the Board
of Directors, but in no event shall the Board meet less than once a year.
Section 4.7 SPECIAL MEETINGS. - Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board, the
Vice Chairman of the Board, the Chief Executive Officer or any two (2)
Directors. The Chief Executive Officer or Secretary may fix any place, either
within or without the State of Wisconsin, whether in person or by
telecommunications, as the place for holding any special meeting.
Section 4.8 NOTICE; WAIVER. - Notice of any meeting of the Board of
Directors, unless otherwise provided pursuant to Section 4.6, shall be given at
6
<PAGE> 7
least forty-eight (48) hours prior to the meeting by written notice delivered
personally or mailed to each Director at such address designed by each Director,
by telegram or other form of wire or wireless communication. The notice need not
describe the purpose of the meeting of the Board of Directors or the business to
be transacted at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, so addressed, with postage
prepared. Any Director may waive notice of any meeting. The attendance of a
Director at a meeting shall constitute a waiver of notice of such meeting,
except where a Director attends a meeting for the express purpose of objecting
to the transaction of business because the meeting is not lawfully called or
convened.
Section 4.9 QUORUM. - A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but if less than such majority is present at a meeting, a majority
of the Directors present may adjourn the meeting to some other day without
further notice.
Section 4.10 MEETING PARTICIPATION. - (a) Any or all members of the Board
of Directors, or any committee thereof, may participate in a regular or special
meeting by, or to conduct the meeting through, the use of any means of
communication by which any of the following occurs:
1) All participating directors may simultaneously hear each
other during the meeting.
2) All communication during the meeting is immediately
transmitted to each participating director, and each
participating director is able to immediately send messages
to all other participating directors.
(b) If a meeting is conducted by the means of communication described
herein, all participating directors shall be informed that a
meeting is taking place at which official business may be
transacted.
(c) A director participating in a meeting by means of such
communication is deemed to be present in person at the meeting.
Section 4.11 ACTION WITHOUT MEETING. - Any action required or permitted
to be taken at any meeting of the Directors of the Corporation or of any
committee of the Board may be taken without a meeting if a consent in writing
setting forth the action so taken shall be signed by all of the Directors or all
of the members of the Committee of Directors, as the case may be. Such consent
7
<PAGE> 8
shall have the same force and effect as a unanimous vote at a meeting and shall
be filed with the Secretary of the Corporation to be included in the official
records of the Corporation. The action taken is effective when the last Director
signs the consent unless the consent specifies a different effective date.
Section 4.12 PRESUMPTION OF ASSENT. - A Director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless (a) the Director objects at the beginning of the meeting or promptly upon
arrival to the holding of or transacting business at the meeting, (b) the
Director's dissent or abstention shall be entered in the minutes of the meeting,
(c) the Director shall file a written dissent or abstention to such action with
the presiding officer of the meeting before the adjournment thereof or shall
forward such dissent or abstention by registered or certified mail to the
Secretary of the Corporation immediately after the adjournment of the meeting,
or (d) the Director shall file a written notice to the Secretary of the
Corporation promptly after receiving the minutes of the meeting that the minutes
failed to show the Director's dissention or abstention from the action taken.
Such right to dissent or abstain shall not apply to a Director who voted in
favor of such action.
Section 4.13 VACANCIES. - Except as provided below, any vacancy occurring
in the Board of Directors or on any Committee of the Board of Directors and any
directorship to be filled by reason of an increase in the number of Directors
may be filled by the affirmative vote of a majority of the Directors then in
office, even if less than a quorum of the Board of Directors. For a period of
time commencing on formation of Interstate Energy Corporation and expiring on
the date of the third annual meeting of shareowners of the Corporation, the
initially appointed IES, IPC and WPLH directors, each as a separate group, shall
be entitled to nominate those persons who will be eligible to be appointed,
elected or re-elected as IFS, IPC and WPLH Directors. The Director or Directors
so chosen shall hold office until the next election of the Class for which such
Director or Directors shall have been chosen and until their successors shall
have been duly elected and qualified..)
Section 4.14 COMPENSATION. - Compensation and expenses for attendance at
a regular or special meeting of the Board of Directors, or at any committee
meeting, shall be payable in such amounts as determined from time to time by the
Board of Directors. No such payment shall preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor. Directors
who are full time employees or officers of the Corporation shall not receive any
compensation.
8
<PAGE> 9
ARTICLE V
COMMITTEES
Section 5.1 COMMITTEES. - The Board of Directors may, by resolution
passed by a majority of the whole Board, designate from their number various
Committees from time to time as corporate needs may dictate. The Committees may
make their own rules of procedure and shall meet where and as provided by such
rules, or by resolution of the Board of Directors. A majority of the members of
the Committee shall constitute a quorum for the transaction of business. Each
Committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required. The Committee may be authorized by the Board
of Directors to perform specified functions, except that a committee may not do
any of the following: (a) authorize distributions; (b) approve or propose to
shareowners action that the Wisconsin Business Corporation Law requires to be
approved by shareowners; (c) fill vacancies on the Board of Directors, or,
unless the Board of Directors provides by resolution that vacancies on a
committee shall be filled by the affirmative vote of the remaining committee
members, on any Board committee; (d) amend the Corporation's Articles of
Incorporation; (e) adopt, amend or repeal bylaws; (f) approve a plan of merger
not requiring shareowner approval; (g) authorize or approve reacquisition of
shares, except according to a formula or method prescribed by the Board of
Directors; and (h) authorize or approve the issuance or sale or contract for
sale of shares, or determine the designation and relative rights, preferences
and limitations of a class or series of shares, except that the Board of
Directors may authorize a committee to do so within limits prescribed by the
Board of Directors.
Section 5.2 EXECUTIVE COMMITTEE. An Executive Committee is hereby
established and shall consist of at least three (3) members, including the
Chairman of the Board. The Executive Committee shall possess all the powers and
authority of the Board of Directors when said Board of Directors is not in
session, except for the powers and authorities set forth in Section 5.1.
Section 5.3 AUDIT COMMITTEE. - An Audit Committee is hereby established
and shall consist of at least three (3) Directors, all of whom shall be outside
members of the Board of Directors. The members of the Committee shall be elected
annually by a majority vote of the members of the Board of Directors. Said
Committee shall meet at the call of any one of its members, but in no event
shall it meet less than once a year. Subsequent to each such Committee meeting,
a report of the actions taken by such Committee shall be made to the Board of
Directors.
9
<PAGE> 10
Section 5.4 COMPENSATION AND PERSONNEL COMMITTEE - A Compensation and
Personnel Committee is hereby established and shall consist of at least three
(3) Directors who are not and never have been officers, employees or legal
counsel of the Company. The Chairperson and the members of the Compensation and
Personnel Committee shall be elected annually by a majority vote of the members
of the Board of Directors. Said Committee shall meet at such times as it
determines, but at least twice each year, and shall meet at the request of the
Chairman of the Board, the Chief Executive Officer, or any Committee member.
Subsequent to each such Committee meeting, a report of the actions taken by such
Committee shall be made to the Board of Directors.
Section 5.5 NOMINATING AND GOVERNANCE COMMITTEE. - A Nominating and
Governance Committee shall be established and shall consist of at least three
(3) Directors, all of whom shall be outside members of the Board of Directors.
The Chairperson and the members of the Nominating and Governance Committee shall
be elected annually by a majority vote of the members of the Board of Directors.
Said Committee shall meet at the call of any one of its members, but in no event
shall it meet less than once a year. Subsequent to each such Committee meeting,
a report of the actions taken by such Committee shall be made to the Board of
Directors.
ARTICLE VI
OFFICERS
Section 6.1 OFFICERS. - The Board of Directors shall elect a Chief
Executive Officer, a President, such number of Vice Presidents with such
designations as the Board of Directors at the time may decide upon, a Secretary,
a Treasurer and a Controller. The Chief Executive Officer may appoint such other
officers and assistant officers as may be deemed necessary. The same person may
simultaneously hold more than one such office.
Section 6.2 TERM OF OFFICERS. - All Officers, unless sooner removed,
shall hold their respective offices until their successors, willing to serve,
shall have been elected but any Officer may be removed from Office at any time
by the Board of Directors.
Section 6.3 REMOVAL OF OFFICERS. - Any officer may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Election or
appointment of an officer shall not of itself create contract rights.
Section 6.4 CHIEF EXECUTIVE OFFICER. - Subject to the control of the
Board of Directors the Chief Executive Officer designated by the Board of
Directors shall have and be responsible for the general management and
10
<PAGE> 11
direction of the business of the Corporation, shall establish the lines of
authority and supervision of the Officers and employees of the Corporation,
shall have the power to appoint and remove and discharge any and all agents and
employees of the Corporation not elected or appointed directly by the Board of
Directors and shall assist the Board in the formulation of policies of the
Corporation. The Chairperson of the Board, if Chief Executive Officer, may
delegate any part of his or her duties to the President, or to one or more of
the Vice Presidents of the Corporation.
Section 6.5 PRESIDENT. - The President, when he or she is not designated
as and does not have the powers of the Chief Executive Officer, shall have such
other powers and duties as may from time to time be prescribed by the Board of
Directors or be delegated to him or her by the Chairperson of the Board or the
Chief Executive Officer.
Section 6.6 VICE PRESIDENTS. - The Vice Presidents shall have such powers
and duties as may be prescribed for him or her by the Board of Directors and the
Chief Executive Officer. In the absence of or in the event of the death of the
Chief Executive Officer and the President, the inability or refusal to act, or
in the event for any reason it shall be impracticable for Chief Executive
Officer and the President to act personally, the Vice President (or in the event
there be more than one Vice President, the Vice Presidents in the order
designated by the Board of Directors, or in the absence of any designation, then
in the order of their election) shall perform the duties of the Chief Executive
Officer and the President, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the Chief Executive Officer and the
President. The execution of any instrument of the Corporation by any Vice
President shall be conclusive evidence, as to third parties, of his or her
authority to act in the stead of the Chief Executive Officer and the President.
Section 6.7 SECRETARY. - The Secretary shall attend all meetings of the
Board of Directors, shall keep a true and faithful record thereof in proper
books to be provided for that purpose, and shall be responsible for the custody
and care of the corporate seal, corporate records and minute books of the
Corporation, and of all other books, documents and papers as in the practical
business operation of the Corporation shall naturally belong in the office or
custody of the Secretary, or shall be placed in his or her custody by the Chief
Executive Officer or by the Board of Directors. He or she shall also act as
Secretary of all shareowners' meetings, and keep a record thereof. He or she
shall, except as may be otherwise required by statute or by these bylaws, sign,
issue and publish all notices required for meetings of shareowners and of the
Board of Directors. He or she shall be responsible for the custody of the stock
books of the Corporation and shall keep a suitable record of the addresses of
shareowners. He or she shall also be responsible for the collection, custody and
disbursement of the funds received for dividend reinvestment. He or she shall
11
<PAGE> 12
sign stock certificates, bonds and mortgages, and all other documents and papers
to which his or her signature may be necessary or appropriate, shall affix the
seal of the Corporation to all instruments requiring the seal, and shall have
such other powers and duties as are commonly incidental to the office of
Secretary, or as may be prescribed for him or her by the President or by the
Board of Directors.
Section 6.8 TREASURER. - The Treasurer shall have charge of, and be
responsible for, the collection, receipt, custody and disbursement of the funds
of the Corporation, and shall deposit its funds in the name of the Corporation
in such banks or trust companies as he or she shall designate and shall keep a
proper record of cash receipts and disbursements. He or she shall be responsible
for the custody of such books, receipted vouchers and other books and papers as
in the practical business operation of the Corporation shall naturally belong in
the office or custody of the Treasurer, or shall be placed in his or her custody
by the President, or by the Board of Directors. He or she shall sign checks,
drafts, and other paper providing for the payment of money by the Corporation
for operating purposes in the usual course or business. He or she may, in the
absence of the Secretary and Assistant Secretaries sign stock certificates. The
Treasurer shall have such other powers and duties as are commonly incidental to
the office of Treasurer, or as may be prescribed for him or her by the President
or by the Board of Directors.
Section 6.9 CONTROLLER. - The Controller shall be the principal
accounting Officer of the Corporation. He or she shall have general supervision
over the books of accounts of the Corporation. He or she shall examine the
accounts of all Officers and employees from time to time and as often as
practicable, and shall see that proper returns are made of all receipts from all
sources. All bills, properly made in detail and certified, shall be submitted to
him or her, and he or she shall audit and approve the same if found satisfactory
and correct, but he or she shall not approve any voucher unless charges covered
by the voucher have been previously approved through work orders, requisition or
otherwise by the head of the department in which it originated, or unless he or
she shall be otherwise satisfied of its propriety and correctness. He or she
shall have full access to all minutes, contracts, correspondence and other
papers and records of the Corporation relating to its business matters, and
shall be responsible for the custody of such books and documents as shall
naturally belong in the custody of the Controller and as shall be placed in his
or her custody by the President or by the Board of Directors. The Controller
shall have such other powers and duties as are commonly incidental to the office
of Controller, or as may be prescribed for him or her by the President or by the
Board of Directors.
Section 6.10 ASSISTANT OFFICERS. - The Assistant Secretaries, Assistant
Treasurers, Assistant Controllers, and other Assistant Officers shall
12
<PAGE> 13
respectively assist the Secretary, Treasurer, Controller, and other Officers of
the Corporation in the performance of the respective duties assigned to such
principal Officer, and in assisting his or her principal Officer each assistant
Officer shall to that extent and for such purpose have the same powers as his or
her principal Officer. The powers and duties of any such principal Officer shall
temporarily devolve upon an assistant Officer in case of the absence,
disability, death, resignation or removal from office of such principal Officer.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 7.1 CERTIFICATES FOR SHARES. - Each certificate representing
shares of the Corporation shall state upon the fact (a) that the Corporation is
organized under the laws of the State of Wisconsin, (b) the name of the person
to whom issued, (c) the number and class of shares, and the designation of the
series, if any, which such certificate represents, and (d) the par value of each
share, if any, and each such certificate shall otherwise be in such form as
shall be determined by the Board of Directors. Such certificates shall be
signed by the Chairman of the Board, or the Chief Executive Officer or the
President and by the Secretary or an Assistant Secretary and shall be sealed
with the corporate seal or a facsimile thereof. The signatures of such officers
upon a certificate may be facsimiles if the certificate is manually signed on
behalf of a transfer agent and registrar. In case any officer or other
authorized person who has signed or whose facsimile signature has been placed
upon such certificate for the Corporation shall have ceased to be such officer
or employee or agent before such certificate is issued, it may be issued by the
Corporation with the same effect as if such person where an officer or employee
or agent at the date of its issue. Each certificate for shares shall be
consecutively numbered or otherwise identified.
All certificates surrendered to the Corporation for transfer shall be
canceled and no new certificate shall be issued until the former certificate for
a like number of shares shall have been surrendered and canceled, except that in
case of a lost, destroyed or mutilated certificate a new one may be issued
therefor upon such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
Section 7.2. TRANSFER OF SHARES. - Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by such person's legal representative, who shall furnish
proper evidence of authority to transfer, or authorized attorney, by power of
attorney duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate for such shares.
13
<PAGE> 14
Subject to the provisions of Section 3.10 of Article III of these Bylaws,
the person in whose name shares stand on the books of the Corporation shall be
treated by the Corporation as the owner thereof for all purposes, including all
rights deriving from such shares, and the Corporation shall not be bound to
recognize any equitable or other claim to, or interest in, such shares or rights
deriving from such shares, on the part of any other person, including (without
limitation) a purchaser, assignee or transferee of such shares, or rights
deriving from such shares, unless and until such purchaser, assignee, transferee
or other person becomes the record holder of such shares, whether or not the
Corporation shall have either actual or constructive notice of the interest of
such purchaser, assignee, transferee or other person. Except as provided in said
Section 3.10 hereof, no such purchaser, assignee, transferee or other person
shall be entitled to receive notice of the meetings of shareholders, to vote at
such meetings, to examine the complete record of the shareholders entitled to
vote at meetings, or to own, enjoy or exercise any other property or rights
deriving from such shares against the Corporation, until such purchaser,
assignee, transferee or other person has become the record holder of such
shares.
Section 7.3 LOST, DESTROYED OR STOLEN CERTIFICATES. - When the owner
claims that certificates for shares have been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner (a) so
requests before the Corporation has notice that such shares have been acquired
by a bona fide purchaser, (b) files with the Corporation a sufficient indemnity
bond if required by the Corporation and (c) satisfies such other reasonable
requirements as may be provided by the Corporation.
Section 7.4 STOCK REGULATIONS. - The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with law as it may deem expedient concerning the issue, transfer
and registration of shares of the Corporation.
14
<PAGE> 15
ARTICLE VIII
INDEMNIFICATION AND LIABILITY OF DIRECTOR AND OFFICERS
Section 8.1 INDEMNIFICATION. - The Corporation shall, to the fullest
extent permitted or required by Sections 180.0850 to 180.0859, inclusive, of the
Wisconsin Business Corporation Law, including any amendments thereto (but in the
case of any such amendment, only to the extent such amendment permits or
requires the corporation to provide broader indemnification rights than prior to
such amendment), indemnify its Directors, Officers, employees and agents against
any and all Liabilities, and advance any and all reasonable Expenses, incurred
thereby in any Proceeding to which any such Director, Officer, employee or agent
is a Party because he or she is or was a Director, Officer, employee or agent of
the Corporation. The rights to indemnification granted hereunder shall not be
deemed exclusive of any other rights to indemnification against Liabilities or
the advancement of Expenses which a Director, Officer, employee or agent may be
entitled under any written agreement, Board resolution, vote of shareowners, the
Wisconsin Business Corporation Law or otherwise. The Corporation may, but shall
not be required to, supplement the foregoing rights to indemnification against
Liabilities and advancement of Expenses under this Section 8.1 by the purchase
of insurance on behalf of any one or more of such Directors, Officers, employees
or agents, whether or not the Corporation would be obligated to indemnify or
advance Expenses to such Director, Officer, employee or agent under this Section
8.1. All capitalized terms used in this Article VIII and not otherwise defined
herein shall have the meaning set forth in Section 180.0850 of the Wisconsin
Business Corporation Law.
ARTICLE IX
MISCELLANEOUS
Section 9.1 FISCAL YEAR. - The fiscal year of the Corporation shall be
the calendar year.
Section 9.2 DIVIDENDS. - Subject to the provisions of law or the Articles
of Incorporation, the Board of Directors may, at any regular or special meeting,
declare dividends upon the capital stock of the Corporation payable out of
surplus (whether earned or paid-in) or profits as and when they deem expedient.
Before declaring any dividend there may be set apart out of surplus or profits
such sum or sums as the directors from time to time in their discretion deem
proper for working capital or as a reserve fund to meet contingencies or for
such other purposes as the directors shall deem conducive to the interests of
the Corporation.
15
<PAGE> 16
Section 9.3 CONTRACTS, CHECKS, DRAFTS, DEEDS, LEASES AND OTHER
INSTRUMENTS. - All contracts, checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
Corporation, shall be signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors. The Board may authorize by resolution any
officer or officers to enter into and execute any contract or instrument of
indebtedness in the name of the Corporation, and such authority may be general
or confined to specific instances. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks or other depositories as the Treasurer may authorize.
All contracts, deeds, mortgages, leases or instruments that require the
corporate seal of the Corporation to be affixed thereto shall be signed by the
President or a Vice President, and by the Secretary, or an Assistant Secretary,
or by such other officer or officers, or person or persons, as the Board of
Directors may be resolution prescribe.
Section 9.4 VOTING OF SHARES OWNED BY THE CORPORATION. Subject always to
the specific directions of the Board of Directors, any share or shares of stock
issued by any other corporation and owned or controlled by the Corporation may
be voted at any shareholders' meeting of such other corporation by the Chief
Executive Officer of the Corporation, if present, or if absent by any other
officer of the Corporation who may be present. Whenever, in the judgment of the
Chief Executive Officer, or if absent, of any officer, it is desirable for the
Corporation to execute a proxy or give a shareholders' consent in respect to any
share or shares of stock issued by any other corporation and owned by the
Corporation, such proxy or consent shall be executed in the name of the
Corporation by the Chief Executive Officer or one of the officers of the
Corporation and shall be attested by the Secretary or an Assistant Secretary of
the Corporation without necessity of any authorization by the Board of
Directors. Any person or persons designated in the manner above stated as the
proxy or proxies of the Corporation shall have full right, power and authority
to vote the share or shares of stock issued by such other corporation and owned
by the Corporation in the same manner as such share or shares might be voted by
the Corporation.
16
<PAGE> 17
ARTICLE X
AMENDMENT OR REPEAL OF BYLAWS
Section 10.1 AMENDMENTS BY BOARD OF DIRECTORS. - Except as otherwise
provided by the Wisconsin Business Corporation Law or the Articles of
Incorporation, these Bylaws may be amended or repealed and new Bylaws may be
adopted by the Board of Directors by the affirmative vote of a majority of the
number of directors present at any meeting at which a quorum is in attendance~
provided, however, that the shareowners in adopting, amending or repealing a
particular bylaw may provide therein that the Board of Directors may not amend,
repeal or readopt that bylaw.
Section 10.2 IMPLIED AMENDMENT. - Any action taken or authorized by the
shareowners or by the Board of Directors which would be inconsistent with the
Bylaws then in effect but which is taken or authorized by affirmative vote of
not less than the number of shares or the number of directors required to amend
the Bylaws so that the Bylaws would be consistent with such action shall be
given the same effect as though the Bylaws had been temporarily amended or
suspended so far, but only so far, as is necessary to permit the specific action
so taken or authorized.
Iecbylw. doc
3/3/98
17
<PAGE> 1
Exhibit L-5
SUMMARY OF LOST ECONOMY RATIOS
Interstate Energy Corporation
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Gasco de Novo - WPLH NewGasCo. - IES Tri-State Gas Co. - IPC
-------------------------------------------------------------------------------------------
Percent of Percent of Percent of
estimated estimated estimated
loss of loss of loss of
economies economies economies
Amount to: Amount to: Amount to:
------------- ----------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $144,000,000 10.80% $144,377,806 9.84% $43,669,329 11.56%
Operating Revenue
Deductions/1/ 133,242,000 11.68% 130,359,782 10.90% 34,148,636 14.78%
Gross Income/2/ 19,199,000 81.04% 14,018,024 101.33% 9,520,693 53.03%
Net Income/2/ 10,758,000 144.62% 9,751,955 145.66% 5,798,949 87.06%
Estimated Loss of
Economies 15,558,000 14,205,142 5,048,533
</TABLE>
NOTES
1 Excludes federal income taxes.
2 Before deducting federal income taxes.
<PAGE> 1
EXHIBIT P-1
[Milbank, Tweed, Hadley & McCloy
Letterhead]
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Interstate Energy Corporation
Form U-1 Application-Declaration
(File No. 70-8891)
Ladies and Gentlemen:
We refer to the Form U-1 Application-Declaration, as amended
(the "Application") under the Public Utility Holding Company Act of 1935, as
amended (the "Act"), filed with the Securities and Exchange Commission (the
"Commission") by WPL Holdings, Inc. ("WPLH"), a Wisconsin corporation and a
public utility holding company exempt from registration under Section 3(a)(1) of
the Act, IES Industries Inc. ("IES"), an Iowa corporation and a holding company
exempt from registration under Rule 2 under Section 3(a)(1) of the Act and
Interstate Power Company ("IPC"), a Delaware corporation and a public utility
company. The Application relates to the combination of WPLH, IES and IPC,
pursuant to which the utility subsidiary of IES, IES Utilities Inc., and IPC
will merge to become subsidiaries of WPLH and, upon consummation of the merger,
WPLH will be renamed Interstate Energy Corporation ("IEC"). After the approval
of the combination and the consummation of the merger, IEC will register with
the Commission as a holding company under the Act.
In the Application, WPLH, IES and IPC also request that the
Commission approve, among other things: the establishment of Interstate Services
Company ("Services") in accordance with Rule 88 under the Act; the execution of
the Utility and Non-Utility Service Agreements; the retention by IEC of its gas
properties, utility subsidiaries and non-utility affiliates; the continuation of
all outstanding intrasystem obligations and guarantees; the issuance of shares
of IEC stock, $.01 per share, in connection with the Transaction; and authority,
for a period ending five years after the date of the Commission's Order
approving the matters requested by the Application, for IEC to issue (and/or
acquire through open-market transactions) up to 11 million shares of IEC common
stock under dividend reinvestment and stock-based management incentive and
employee benefit plans. We have acted as special counsel for WPLH, IES and IPC
in connection with the Application and, as such counsel, we are familiar with
the corporate proceedings taken by WPLH, IES and IPC in connection with the
Transactions as described in the Application. Terms used herein and not defined
herein shall have the respective meanings assigned thereto in the Application
and the exhibits thereto.
<PAGE> 2
We have examined originals, or copies certified to our
satisfaction, of such corporate records of WPLH, IES and IPC, certificates of
public officials, certificates of officers and representatives of WPLH, IES and
IPC, and other documents as we have deemed it necessary to examine as a basis
for the opinions hereinafter expressed. In such examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity with the originals of all documents submitted
to us as copies. As to various questions of fact material to such opinions we
have, when relevant facts were not independently established, relied upon
certificates of officers of WPLH, IES and IPC, and other appropriate persons and
statements contained in the Application and the exhibits thereto.
The opinions expressed below in respect of the Transactions
described in the Application are subject to the following assumptions and
conditions:
a. The Transactions shall have been duly authorized
and approved to the extent required by the governing corporate
documents and applicable state law by the Boards of Directors
and shareholders of WPLH, IES and IPC.
b. All required approvals, authorizations, consents,
certificates, and orders of, and all filings and registrations
with, all applicable federal and state commissions and
regulatory authorities with respect to the Transactions
(including the approval and authorization of the Commission
under the Act) shall have been obtained or made, as the case
may be, and remain in effect; the Commission shall have duly
entered an appropriate order or orders granting and permitting
the Application to become effective with respect to the
Transactions as described in the Application; and the
Transactions shall have been accomplished in accordance with
all such approvals, authorizations, consents, certificates,
orders, filings and registrations.
c. A certificate of incorporation for Services shall
have been duly and validly filed with the Secretary of State
of the State of Iowa, and such other corporate formalities as
are required by Iowa law for the organization of a corporation
shall have been taken.
d. No act or event other than as described herein
shall have occurred subsequent to the date hereof which would
change the opinions expressed above.
e. The consummation of the Transactions as described
in the Application shall be conducted under our supervision
and all legal matters incident thereto shall be satisfactory
to us, including the receipt in satisfactory form of such
opinions of other counsel, qualified to practice in
jurisdictions pertaining to the Transactions in which we are
not admitted to practice, as we may deem appropriate.
Based upon the foregoing, and subject to the assumptions and
conditions set forth above, and having regard to legal considerations which we
deem relevant, we are of the opinion
2
<PAGE> 3
that, in the event that the proposed Transactions are consummated in accordance
with the Application:
1. The Transactions will be carried out in accordance
with the provisions of the Application.
2. All state laws (other than the state securities or
"blue sky" laws of various states as to which we express no
opinion) applicable to the proposed Transactions will have
been complied with.
We hereby consent to the use of this opinion as an exhibit to
the Application.
Very truly yours,
Milbank, Tweed, Hadley & McCloy
MDD/
3
<PAGE> 1
EXHIBIT P-2
[MTHM LETTERHEAD]
June 11, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Interstate Energy Corporation Form U-1
Declaration
(File No. 70-8891)
Ladies and Gentlemen:
We refer to the Form U-1 Declaration, as amended (the "Declaration"),
under the Public Utility Holding Company Act of 1935, as amended (the "Act"),
filed with the Securities and Exchange Commission (the "Commission") by WPL
Holdings, Inc. ("WPLH"), a Wisconsin corporation and a public utility holding
company exempt from registration under Section 3(a)(1) of the Act, IES
Industries Inc. ("IES"), an Iowa corporation and a public utility holding
company exempt from registration under Rule 2 of Section 3(a)(1) of the Act and
Interstate Power Company ("IPC"), a Delaware corporation and a public utility
company in File No. 70-8891; dated April 14, 1998 (the "Order") granting the
Declaration and permitting the Declaration to become effective; and the
Certificate of Notification to be filed with the Commission by Interstate
Energy Corporation ("IEC") with respect to the Declaration (the "Certificate of
Notification"). The Declaration, Order and Certificate of Notification relate
to the combination of WPLH, IES and IPC, pursuant to which IESmerged with and
into WPLH and IPC merged with and into a subsidiary of WPLH (the "Merger") and,
upon consummation of the Mergers, WPLH was renamed IEC. After the approval of
the combination and the consummation of the Mergers, IEC registered with the
Commission as a holding company under the Act. In the Application, WPLH, IES
and IPC also requested that the Commission approve, among other things: the
establishment of Interstate Services Company in accordance with Rule 88 under
the Act; the execution of the Utility and Non-Utility Service Agreements; the
retention by IEC of its gas properties, utility subsidiaries and non-utility
affiliates; all outstanding intrasystem obligations and guarantees; the
issuance of shares of IEC stock, $.01 per share, in connection with the
Mergers; and authority, for a period ending five years after the date of the
Commission's Order approving the matters requested by the Application, for IEC
to issue (and/or acquire through open-market transactions) up to 11 million
shares of IEC common stock under dividend reinvestment and stock-based
management incentive and employee benefit plans. Capitalized terms used in this
letter without definition have the meanings ascribed to such terms in the
Declaration.
<PAGE> 2
We have acted as special counsel for WPLH, IES and IPC in
connection with the Declaration and, as such counsel, we are familiar with the
corporate proceedings taken by WPLH, IES and IPC in connection with the
Transactions as described in the Declaration. We have examined originals, or
copies certified to our satisfaction, of such corporate records, certificates
of public officials, certificates (including the Certificate of Notification) of
officers and representatives of WPLH, IES and IPC, and other documents as we
have deemed it necessary to examine as a basis for the opinions hereinafter
expressed. In such examination we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals and the
conformity with the originals of all documents submitted to us as copies. As to
various questions of fact material to such opinions, we have, when relevant
facts were not independently established, relied on certificates of officers of
WPLH, IES and IPC and other appropriate persons and statements contained in the
Declaration and the exhibits thereto.
Based on the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that, through and
as of the date hereof:
1. The Transactions have been consummated in accordance with
the terms and conditions of the Declaration and Order.
2. All state laws applicable to the proposed Transactions,
other than the state securities or "blue sky" laws of various states as
to which we express no opinion, have been complied with.
We hereby consent to the use of this opinion as an exhibit to
the Declaration. We do not assume or undertake any responsibility to advise you
of changes in either fact or law which may come to our attention after the date
hereof.
Very truly yours,
Milbank, Tweed, Hadley & McCloy
MDD/JTO
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