SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[MARK ONE]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-3632
INTERSTATE POWER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 42-0329500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Main Street, P.O. Box 769, Dubuque, Iowa 52004-0769
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 319-582-5421
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuers
classes of common stock.
Shares Outstanding
November 1, 1997
Common Stock Par Value $3.50 Per Share 9,751,076 Shares
INTERSTATE POWER COMPANY
FORM 10-Q
Table of Contents
Part I - Financial Information
Item 1. Statements of Income - Three Months Ended . . . . . . . . .1
Statements of Income - Six Months Ended . . . . . . . . . .2
Balance Sheets - Assets . . . . . . . . . . . . . . . . . .3
Balance Sheets - Capitalization and Liabilities . . . . . .4
Statements of Cash Flows. . . . . . . . . . . . . . . . . .5
Summarized Financial Information. . . . . . . . . . . . . .6
Item 2. Management's Discussion and Analysis. . . . . . . . . . . .7
Part II - Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 11
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . 11
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders . . . 11
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . 13
INTERSTATE POWER COMPANY
STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended September 30
1997 1996
(In Thousands)
OPERATING REVENUES:
Electric $ 83,842 $ 79,291
Gas 5,015 4,191
88,857 83,482
OPERATING EXPENSES:
Operation:
Fuel for electric generation 16,320 14,344
Power purchased 15,520 16,483
Cost of gas sold 3,863 3,958
Other operating expenses 15,428 14,597
Maintenance 4,090 3,961
Depreciation 7,957 8,061
Income Taxes:
Federal currently payable 5,062 3,536
State currently payable 1,516 1,070
Deferred taxes-net 955 1,544
Investment tax credit amortization (257) (257)
Property and other taxes 4,260 3,423
Total operating expenses 74,714 70,720
OPERATING INCOME 14,143 12,762
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during construction 0 3
Interest income 57 58
Income taxes (443) (730)
Other-net 1,019 1,715
Total other income and deductions 633 1,046
INCOME BEFORE INTEREST CHARGES 14,776 13,808
INTEREST CHARGES:
Long-term debt 3,383 3,647
Other interest charges 494 410
Allowance for borrowed funds used during construction (49) (70)
Total interest charges 3,828 3,987
NET INCOME 10,948 9,821
PREFERRED STOCK DIVIDENDS 617 616
NET INCOME AVAILABLE FOR COMMON STOCK $ 10,331 $ 9,205
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 9,751 9,602
EARNINGS PER COMMON SHARE OUTSTANDING $ 1.05 $ .95
DIVIDENDS PAID PER COMMON SHARE $ .52 $ .52
The accompanying Notes to Financial Statements are an integral part of
these statements.
INTERSTATE POWER COMPANY
STATEMENTS OF INCOME
(Unaudited)
Nine Months
Ended September 30
1997 1996
(In Thousands)
OPERATING REVENUES:
Electric $210,526 $212,227
Gas 38,415 34,602
248,941 246,829
OPERATING EXPENSES:
Operation:
Fuel for electric generation 41,841 43,285
Power purchased 42,532 47,462
Cost of gas sold 22,730 20,543
Other operating expenses 43,766 40,016
Maintenance 12,621 12,394
Depreciation 23,687 23,236
Income Taxes:
Federal currently payable 9,760 8,490
State currently payable 2,933 2,560
Deferred taxes-net 2,692 4,001
Investment tax credit amortization (771) (771)
Property and other taxes 12,708 12,061
Total operating expenses 214,499 213,277
OPERATING INCOME 34,442 33,552
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during construction 16 6
Interest income 183 202
Income taxes (1,106) (1,227)
Other-net 2,505 2,778
Total other income and deductions 1,598 1,759
INCOME BEFORE INTEREST CHARGES 36,040 35,311
INTEREST CHARGES:
Long-term debt 10,498 10,940
Other interest charges 1,253 1,254
Allowance for borrowed funds used during construction (110) (172)
Total interest charges 11,641 12,022
NET INCOME 24,399 23,289
PREFERRED STOCK DIVIDENDS 1,851 1,847
NET INCOME AVAILABLE FOR COMMON STOCK $ 22,548 $ 21,442
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 9,716 9,578
EARNINGS PER COMMON SHARE OUTSTANDING $ 2.32 $ 2.23
DIVIDENDS PAID PER COMMON SHARE $ 1.56 $ 1.56
The accompanying Notes to Financial Statements are an integral part of
these statements.
INTERSTATE POWER COMPANY
BALANCE SHEETS
ASSETS
(Unaudited)
Sept.30 Dec. 31
1997 1996
(In Thousands)
UTILITY PLANT (at original cost)
Electric $863,251 $852,416
Gas 69,378 68,047
932,629 920,463
Less accumulated provision for depreciation 445,523 426,471
487,106 493,992
Held for future use 591 591
Construction work in progress 5,146 3,129
Utility plant - net 492,843 497,712
OTHER PROPERTY AND INVESTMENTS 448 453
CURRENT ASSETS:
Cash and cash equivalents 2,335 3,072
Accounts receivable less reserve 26,213 28,227
Inventories - at average cost:
Fuel 19,932 16,623
Materials and supplies 6,664 6,214
Prepaid pension cost 3,883 3,331
Prepaid income tax 9,773 9,483
Other prepayments and current assets 1,640 683
Total current assets 70,440 67,633
DEFERRED DEBITS:
Regulatory assets 8,845 10,346
Regulatory assets for deferred income taxes 26,898 26,583
Deferred energy efficiency costs 32,250 29,857
Unamortized debt expense 5,555 5,710
Other 1,838 906
Total deferred debits 75,386 73,402
TOTAL $639,117 $639,200
The accompanying Notes to Financial Statements are an integral part of
these statements.
INTERSTATE POWER COMPANY
CAPITALIZATION AND LIABILITIES
(Unaudited)
Sept.30 Dec. 31
1997 1996
(In Thousands)
CAPITALIZATION:
Common stock, par value $3.50 per share;
Authorized - 30,000,000 shares; issued
and outstanding - 9,751,076 in 1997
and 9,670,866 in 1996 $ 34,129 $ 33,848
Additional paid-in capital 107,994 105,959
Retained earnings 73,645 66,251
Total common equity 215,768 206,058
Preferred stock, par value $50 per share 35,055 34,966
Total stockholders' equity 250,823 241,024
Long-term debt 171,786 171,731
Total capitalization 422,609 412,755
CURRENT LIABILITIES:
Commercial paper payable 34,300 28,700
Long-term debt maturing within one year 0 17,000
Accounts payable 13,795 14,013
Payrolls accrued 3,465 3,291
Taxes accrued 13,713 16,953
Interest accrued 3,871 2,817
FERC Order 636 transition costs 1,400 2,200
Other 4,345 3,477
Total current liabilities 74,889 88,451
DEFERRED CREDITS AND OTHER NON-CURRENT LIABILITIES:
Accumulated deferred income taxes 102,732 99,303
Accumulated deferred investment tax credits 16,242 17,013
Deferred pension cost 4,999 4,999
Accrued postretirement benefit cost 910 1,311
Environmental clean-up costs 6,234 7,234
Other 10,502 8,134
Total deferred credits and other non-current
liabilities 141,619 137,994
TOTAL $639,117 $639,200
The accompanying Notes to Financial Statements are an integral part of
these statements.
INTERSTATE POWER COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months
Ended Sept. 30
1997 1996
(In Thousands)
RECONCILIATION OF NET INCOME TO CASH FLOWS
FROM OPERATING ACTIVITIES:
Net income $24,399 $23,289
Adjustment for non-cash items:
Depreciation 23,687 23,236
Deferred income taxes 3,115 4,151
Investment tax credit amortization (771) (771)
Allowance for equity funds used during construction (16) (6)
Changes in assets and liabilities:
Accounts receivable - net 2,014 2,214
Fuel (3,303) 954
Materials and supplies (451) (242)
Accounts payable and other current liabilities (345) 910
Accrued and prepaid taxes (3,529) (3,043)
Interest accrued 1,054 1,492
Other prepayments and current assets (1,610) (1,880)
Rate refund payable 0 (256)
Deferred energy conservation costs (2,393) (5,248)
Regulatory assets 1,186 729
Other operating activities 1,803 3,198
Cash flows from operating activities 44,840 48,727
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant (18,960) (22,475)
Allowance for borrowed funds used during construction (110) (172)
Other (507) (342)
Cash flows from investing activities (19,577) (22,989)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 2,350 2,098
Retirement of long-term debt (17,000) 0
Dividends on common and preferred stock (16,950) (16,734)
Sale of commercial paper - net 5,600 (10,200)
Cash flows from financing activities (26,000) (24,836)
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS: $ (737) $ 902
CASH AND CASH EQUIVALENTS:
Beginning of period $ 3,072 $ 1,537
End of period $ 2,335 $ 2,439
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $10,518 $10,206
Income taxes $14,090 $12,779
The accompanying Notes to Financial Statements are an integral part of
these statements.
INTERSTATE POWER COMPANY
Summarized Financial Information
The September 30, 1997 financial statements included herein have been
prepared by the company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The accounting
policies followed by the company are set forth in Note 1 to the company's
financial statements in the 1996 Form 10-K/A. It is suggested that these
financial statements be read in conjunction with the financial statements
and the notes thereto included in the company's Form 10-K/A for the year
ended December 31, 1996.
In the opinion of the company, the financial statements reflect all
adjustments, consisting only of normal recurring accruals, necessary to
fairly state the results of operations.
INTERSTATE POWER COMPANY
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The company's results of operations and financial condition are affected by
numerous factors, including weather, sales, and changes in customer rates.
EARNINGS PER SHARE for the third quarter of 1997 were $1.05 compared to
$0.95 for the third quarter of 1996. Net income for the third quarter of
1997 was $10.9 million, compared to $9.8 million for the third quarter of
1996.
The ELECTRIC MARGIN (revenue less certain other costs, primarily fuel and
purchased power) was $49.8 million for the third quarter of 1997 compared
to $47.4 million for the third quarter of 1996.
Three Months Ended September 30
ELECTRIC SALES (Mwh) 1997 1996 % Change
Residential 292,251 286,191 2.1
Commercial 191,408 190,307 0.6
Industrial 905,127 849,002 6.6
Other 13,881 14,272 (2.7)
Subtotal 1,402,667 1,339,772 4.7
Interchange 20,850 75,670 N/A
Sales for Resale 37,136 47,919 (22.5)
Total Electric Sales 1,460,653 1,463,361 (0.2)
The increased electric residential sales and weather-sensitive commercial
sales are primarily a result of air-conditioning resulting from warmer
temperatures in July. Industrial sales increased mainly as a result of
higher sales to two of our largest customers, a food manufacturer and a
fertilizer manufacturer. Sales for resale decreased as a result of six of
the company's firm municipal electric wholesale customers purchasing their
requirements from other utilities.
Three Months Ended September 30
ELECTRIC REVENUES (000's) 1997 1996 % Change
Residential $24,959 $23,132 7.9
Commercial 14,617 14,106 3.6
Industrial 38,134 35,803 6.5
Other 3,793 2,825 34.3
Subtotal 81,503 75,866 7.4
Interchange 644 1,084 N/A
Sales for Resale 1,695 2,341 (27.6)
Total Electric Revenues $83,842 $79,291 5.7
The increased revenues for the third quarter of 1997 were primarily
attributable to increased residential, commercial and industrial Mwh sales
as discussed above. Although interchange revenues decreased this quarter,
the impact on net income was negligible as the majority of the margin on
interchange sales is returned to customers through the fuel adjustment
clause. In addition, increased revenues in the third quarter of 1997
included recoveries of demand side management (DSM) costs, including those
that became effective in May 1997.
The GAS MARGIN (revenue less certain other costs, primarily purchased gas)
for the third quarter of 1997 was $0.8 million compared to $0.1 million for
the same period in 1996. The improved gas margin is primarily due to a
Minnesota gas rate increase in an annual amount of $2.1 million which was
implemented in September 1996.
Three Months Ended September 30
GAS DELIVERIES (MMcf) 1997 1996 % Change
Residential 271 282 (3.9)
Commercial 188 190 (1.1)
Industrial 199 151 31.8
Other 13 7 N/A
Total Gas Sales 671 630 6.5
Gas Transportation 7,379 5,815 26.9
Total Gas Deliveries 8,050 6,445 24.9
Although residential and commercial sales decreased 3.9% and 1.1%,
respectively, during the third quarter of 1997 compared to 1996, overall
deliveries increased 24.9% primarily due to the 26.9% increase in
transportation deliveries. The increase in transportation deliveries was
mainly attributable to a 32.0% aggregate increase in deliveries to the
three largest industrial customers.
Three Months Ended September 30
GAS REVENUES $ (000's) 1997 1996 % Change
Residential $2,387 $ 2,083 14.6
Commercial 1,081 888 21.7
Industrial 790 538 46.8
Other 71 33 N/A
Total Gas Sales Revenues 4,329 3,542 22.2
Gas Transportation 686 649 5.7
Total Gas Revenues $5,015 $4,191 19.7
The increase in gas revenues for the third quarter of 1997 compared to the
same period in 1996 was primarily due to the Minnesota gas rate increase as
discussed above. In addition, increased revenues in the third quarter of
1997 included recoveries of demand side management (DSM) costs, including
those that became effective in May 1997.
FUEL FOR ELECTRIC GENERATION increased $2.0 million or 13.8%, during the
third quarter of 1997 compared to the same period in 1996. The increase
was mainly due to a 6.5% increase in kilowatt-hours generated by the
company and a 14.3% increase in the cost of coal.
PURCHASED POWER EXPENSE decreased $1.0 million during the third quarter of
1997 compared to 1996. This decrease was primarily a result of the 12.2%
decrease in kilowatt-hours purchased. Capacity charges included in
purchased power expense were $7.6 million for both the third quarter of
1997 and the third quarter of 1996.
OTHER OPERATING EXPENSE included $65,000 of transmission services expenses
compared to $27,000 during the same period in 1996. These intra-pool
transmission service fees are required by the MAPP Agreement which was
effective May 1, 1995. Under the MAPP Agreement, the company realized
revenues of $757,000 during the third quarter of 1997 compared to $132,000
in 1996.
DEPRECIATION EXPENSE decreased by $104,000 or 1.3% for the third quarter of
1997 compared to the third quarter of 1996. This was mainly due to an
annual one-time adjustment to expense of $37,000 in September 1997 compared
to the $359,000 adjustment in September 1996. Partially offsetting that
were increased depreciation rates which were implemented in September 1996.
Total INCOME TAX EXPENSE was $7.7 million for the third quarter of 1997
compared to $6.6 million for the third quarter of 1996. The increase was
primarily due to higher pre-tax book income and quarterly adjustments to
the 1997 estimated tax liability.
OTHER INCOME included $1.2 million of income relating to a return on demand
side management (DSM) programs. Continued expenditures for DSM increased
the total deferred amounts to $32.2 million at September 30, 1997 compared
to $28.4 million at September 30, 1996. The 1990, 1991 and 1992 DSM costs
are being recovered over a four year period beginning in October 1994 and
the 1993, 1994, and 1995 DSM costs are being recovered over a four year
period beginning in May 1997. Cost recovery of the DSM costs for 1996 and
through September 1997 began in October 1997 in an annual amount of $3.8
million being recovered over each of the next four years. Effective
October 1997, DSM costs for the period of October 1997 through September
1998 will be recovered as they are incurred.
FUEL INVENTORIES were $19.9 million at September 30, 1997, compared to
$15.5 million at June 30, 1997 and $18.4 million at September 30, 1996.
The increase from the last quarter was primarily attributable to normal
seasonal build-up of coal inventory during the summer shipping season.
CONSTRUCTION EXPENDITURES during the third quarter of 1997 totaled $8.1
million compared to $8.9 million in 1996. Major projects included three
69 KV transmission line rebuilds and two pole replacement jobs.
Construction work in progress as of September 30, 1997 totalled $5.1
million compared to $6.9 million at September 30, 1996. The 1997 and 1998
construction programs are estimated to be $36 million and $45 million,
respectively.
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
EARNINGS PER SHARE for the nine months ended September 30, 1997 were $2.32
compared to $2.23 for the corresponding period in 1996. The increase in
earnings was primarily due to higher earnings per share in the third
quarter of 1997 compared to the third quarter of 1996.
The year-to-date ELECTRIC MARGIN increased to $121.3 million from $118.6
million in 1996. The higher 1997 margin was boosted by increased
residential, commercial and industrial sales in the third quarter of 1997.
ELECTRIC SALES during the nine months ended September 30, 1997 were 4.8%
lower than the same period a year ago. This was attributable to reduced
sales volumes in residential sales and the weather-sensitive portion of
commercial sales. Other factors in the reduced electric sales were the
decreased sales for resale and interchange sales.
ELECTRIC REVENUES decreased 0.8% during the nine months ended September 30,
1997 compared to the same period of 1996. This was primarily due to the
reduced commercial, resale and interchange sales volumes as discussed
above.
The year-to-date GAS MARGIN has increased to $14.8 million in 1997 from
$13.7 million in 1996 primarily due to a Minnesota gas rate increase in an
annual amount of $2.1 million which was implemented in September 1996.
Offsetting that were reduced residential and commercial gas sales in the
second quarter of 1997 compared to 1996 as well as the reconciliation of
purchases to the billing cycle.
GAS DELIVERIES increased 9.5% during the nine months ended September 30,
1997 compared to the same period in 1996. While residential sales and
commercial sales were down 5.4% and 1.7%, respectively, industrial sales
increased 15.1% and transportation deliveries increased 13.3%.
The 11.0% increase in GAS REVENUES during the nine months ended September
30, 1997 compared to the same period in 1996 was primarily due to the
Minnesota gas rate increase, as discussed above, as well as the increased
industrial sales and transportation deliveries.
Cash flow from operating activities was $44.8 million, used to fund the
company's construction program, to reduce short-term debt and to pay common
and preferred dividends.
OTHER ITEMS
The company does not anticipate any public offerings for new debt or new
stock in the next two years other than the purchase of newly issued shares
on behalf of the Dividend Reinvestment and Stock Purchase Plan. Current
projections of construction expenditures for the 1997 and 1998 periods do
not indicate any need for permanent external financing.
In May 1995 the company filed an application with the Minnesota Public
Utilities Commission for an increase in gas rates in an annual amount of
$2.4 million. Increased interim rates in an annual amount of $1.5 million
were placed in effect in June 1995. On February 29, 1996 the Commission
issued an order allowing an increase in gas rates of $2.1 million. Rates
reflecting the increase were implemented in September 1996. The Department
of Public Service and the Office of Attorney General appealed the
Commission's decision. The appeal was denied by the Minnesota Court of
Appeals on February 18, 1997. On March 21, 1997, the Department of Public
Service and the Office of Attorney General appealed the decision of the
Court of Appeals (and the Commission) to the Minnesota Supreme Court.
In September 1997 the company filed with the Iowa Utilities Board a
settlement agreement reached with the Office of Consumer Advocate which
reflected reduced electric rate levels. The rate reduction, in an annual
amount of $3.2 million, was implemented effective October 1997.
The company's potential liability for coal tar waste at former manufactured
gas plant sites was discussed in the 1996 Annual Report to Stockholders.
Very little activity occurred in the third quarter of 1997 other than
additional investigative processes. Testing and soil sampling are
continuing, but the company is unable to determine what, if any,
remediation will be necessary until a later date. The company is
continuing to pursue recovery of costs from certain of its insurers. The
company is unable at this point to determine what portion, if any, of the
proceeds from the insurance companies will be refunded to its customers.
The company utilizes software and related technologies throughout its
business that will be affected by the date change in the year 2000. An
internal study is currently underway to determine the scope of necessary
changes and the amount of related costs. The company will begin to incur
expenses in 1997 to resolve this issue. These expenses may or may not be
significant depending on the results of the study.
INTERSTATE POWER COMPANY
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the 1996 Form 10-K/A Item 3 for certain
pending legal proceedings. Reference is also made to the
Management Discussion and Analysis included herein. Other than
these items, there are no material pending legal proceedings, or
proceedings known to be contemplated by governmental authorities,
other than ordinary routine litigation incidental to the
business, to which the company is a party or of which any of the
company's property is the subject.
ITEM 2. CHANGES IN SECURITIES
The rights of holders of registered securities have not been
materially modified, limited or qualified.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No defaults upon senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
[a] THE DATE OF THE MEETING AND WHETHER IT WAS AN ANNUAL OR SPECIAL
MEETING.
[b] IF THE MEETING INVOLVED THE ELECTION OF DIRECTORS, THE NAME OF
EACH DIRECTOR ELECTED AT THE MEETING AND THE NAME OF EACH OTHER
DIRECTOR WHOSE TERM OF OFFICE AS A DIRECTOR CONTINUED AFTER THE
MEETING.
[c] BRIEF DESCRIPTION OF EACH OTHER MATTER VOTED UPON AT THE MEETING
AND STATE THE NUMBER OF VOTES CAST FOR, AGAINST OR WITHHELD, AS
WELL AS THE NUMBER OF ABSTENTIONS AND BROKER NON-VOTES, AS TO
EACH SUCH MATTER, INCLUDING A SEPARATE TABULATION WITH RESPECT TO
EACH NOMINEE FOR OFFICE.
No submission of matters to a vote of security holders.
ITEM 5. OTHER INFORMATION
Proposed Merger
WPL Holdings, Inc. (WPLH), IES Industries Inc. (IES) and
Interstate Power Company (IPC) have entered into an Agreement and
Plan of Merger, as amended, dated November 10, 1995, which
provides for the combination of all three companies. The new
company will be named Interstate Energy Corporation. IES is a
holding company headquartered in Cedar Rapids, Iowa, and is the
parent company of IES Utilities and IES Diversified. IES
Utilities supplies electric and gas service to approximately
336,000 and 176,000 customers, respectively, in Iowa. IES
Diversified and its principal subsidiaries are primarily engaged
in the energy-related, transportation and real estate development
businesses. WPLH is a holding company headquartered in Madison,
Wisconsin, and is the parent company of Wisconsin Power and Light
Company (WP&L) and Heartland Development Corporation (HDC). WP&L
supplies electric and gas service to approximately 385,000 and
150,000 customers, respectively, in south and central Wisconsin.
HDC and its principal subsidiaries are engaged in business in
three major areas: environmental engineering, energy services and
affordable housing. The proposed merger, which will be accounted
for as a pooling of interests, was approved by the respective
shareowners on September 5, 1996. The merger is conditioned on
the receipt of approvals of several federal and state regulatory
agencies. The status of these approvals is as follows: On
March 24, 1997, the Minnesota Public Utilities Commission (MPUC)
issued an order approving the merger without hearings, subject to
a number of technical conditions that the parties are willing to
meet. Included is a 4-year rate freeze for IPC's Minnesota
customers. On May 7, 1997, the Illinois Commerce Commission
(ICC) issued an order approving the proposed merger. On
September 26, 1997, the Iowa Utilities Board (IUB) issued its
order granting final approval of the proposed merger. The order
included a four-year rate freeze for Iowa customers. On
November 4, 1997, the Public Service Commission of Wisconsin
(PSCW) granted approval of the proposed merger. The approval
included a number of conditions, including a four-year rate
freeze. The Federal Energy Regulatory Commission (FERC) approved
the merger on November 12, 1997. The Securities and Exchange
Commission (SEC) comment period ended November 5, 1996. Approval
by the SEC is still pending. An impact review of the merger on
market power, which is required by the Hart-Scott-Rodino
Antitrust Improvements Act, was completed by the Department of
Justice (DOJ) in 1997. All requirements of this review were
satisfied.
The companies expect to receive final decisions on all
outstanding regulatory approvals relating to the merger by the
end of 1997. Additional information regarding the merger is
available in IPC's 1996 Annual Report on Form 10-K/A.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
[a] List of Exhibits filed as a part of this report:
Exhibit
Number Description of Exhibit
3.(ii) By-Laws of Interstate Power Company as adopted
April 20, 1925 and as amended April 17, 1997
27 Financial Data Schedule (required for electronic
filing only in accordance with Item 601[c][1] of
Regulation S-K)
[b] No reports were filed on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Interstate Power Company
(Registrant)
Date November 13, 1997 /s/ W. C. Troy
W. C. Troy, Controller
(Duly Authorized Officer and
Principal Accounting Officer)
INDEX OF EXHIBITS FILED HEREWITH:
EX-3.(ii) By-Laws of Interstate Power Company as adopted April 20, 1925
and as amended April 17, 1997
EX-27 Financial Data Schedule (required for electronic filing only
in accordance with Item 601[c][1] of Regulation S-K).
EX-3.(ii)
INTERSTATE POWER COMPANY
(A DELAWARE CORPORATION)
BY-LAWS
ADOPTED APRIL 20, 1925
AS AMENDED
OCTOBER 24, 1938 MAY 2, 1973
NOVEMBER 16, 1939 JUNE 13, 1979
JUNE 28, 1943 NOVEMBER 19, 1980
APRIL 11, 1944 JUNE 18, 1981
MAY 24, 1944 JANUARY 1, 1982
MAY 9, 1947 DECEMBER 13, 1982
AUGUST 29, 1947 JANUARY 31, 1984
AUGUST 21, 1953 JULY 24, 1986
NOVEMBER 5, 1957 JULY 23, 1987
JANUARY 16, 1958 OCTOBER 15, 1987
FEBRUARY 11, 1959 DECEMBER 10, 1987
FEBRUARY 17, 1965 JULY 20, 1989
MAY 4, 1965 MAY 7, 1991
JANUARY 16, 1969 JANUARY 26, 1996
JULY 15, 1970 OCTOBER 1, 1996
NOVEMBER 19, 1970 APRIL 17, 1997
BY-LAWS
OF
INTERSTATE POWER COMPANY
(A DELAWARE CORPORATION)
ARTICLE I.
OFFICES.
Section 1: The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware. (Amended 2/17/65;
1/16/69.)
Section 2: The Corporation may also have an office in the City of
Dubuque, Iowa, and also offices at such other places as the Board of
Directors may from time to time determine or the business of the
Corporation may require. (Amended 2/11/59; 2/17/65.)
ARTICLE II.
SEAL.
The corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization, and the words "Corporate
Seal, Delaware." Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced. (Amended 8/29/47.)
ARTICLE III.
STOCKHOLDERS' MEETINGS.
Section 1: All meetings of the stockholders entitled to vote
thereat shall be held in Dubuque, Iowa, or at such other location as
set by the Board of Directors from time to time, at such place as
designated by the Board of Directors and stated in the notice of
meeting. (Amended 2/17/65; 1/16/69; 10/15/87.)
Section 2: The annual meeting of the stockholders entitled to
vote thereat shall be held in Dubuque, Iowa, or at such other location
as set by the Board of Directors from time to time, at such place as
designated by the Board of Directors and stated in the notice of
meeting on the first Tuesday of May of each year at the hour of two
o'clock P.M., local time in the place where the meeting is to be held,
or on such other day and/or time as set by the Board of Directors from
time to time, and stated in the notice of meeting. At said meeting the
stockholders shall elect by a plurality vote, by ballot, a board of
directors, the number and term of which shall be set by Section 1 and
Section 1(b) of Article IV of these By-Laws. The order of business at
a stockholders' meeting shall be as follows:
1. Call meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous meeting.
4. Reports of committees.
5. Election of directors when that is the purpose of the meeting.
6. Miscellaneous business.
(Amended 11/16/39; 4/11/44; 5/9/47; 2/17/65; 1/16/69; 1/1/82; 12/13/82;
7/23/87; 10/15/87; 12/10/87; 7/20/89; 5/7/91; 1/26/96.)
Section 3: The holders of a majority of the stock issued and
outstanding and entitled to vote, present in person or represented by
proxy, shall be requisite and sufficient to constitute a quorum at all
meetings of the stockholders for the transaction of business, except as
otherwise provided by law, by the Certificate of Incorporation, or
these By-Laws. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or by proxy shall have
power to adjourn the meeting from time to time without notice other
than announcement at the meeting, until a quorum shall be present or
represented, when any business may be transacted which might have been
transacted at the meeting as originally notified. If the adjournment
is for more than thirty days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote
at the meeting. (Amended 1/16/69.)
Section 4: When a quorum is present at any meeting, the vote of
the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before
such meeting, unless the question is one upon which by express
provision of the statutes or of the Certificate of Incorporation a
different vote is required, in which case such express provision shall
govern; and control the decision of such question. (Added 2/17/65.)
Section 5: At each meeting of the stockholders, every stockholder
entitled to vote or to express consent or dissent to corporate action
in writing without a meeting may vote or act in person or by proxy
appointed by an instrument in writing subscribed by such stockholder or
by his duly authorized attorney and delivered to the Secretary of the
Corporation. But no such proxy shall be voted or acted upon after
three (3) years from its date, unless the proxy provides for a longer
period. Unless otherwise provided in the Restated Certificate of
Incorporation, as amended, each stockholder entitled to vote shall have
one vote upon each matter submitted to a vote at a meeting of
shareholders for each share of stock registered in his name on the
record date fixed by the Board of Directors for said meeting or action
by stockholders. The principle of cumulative voting shall not apply.
The vote for directors, and, upon the demand of any stockholder
entitled to vote, the vote upon any question before the meeting shall
be by written ballot. All elections shall be had by plurality vote and
all other questions shall be decided by a majority vote, except as
otherwise provided by law, the Restated Certificate of Incorporation,
as amended, or these By-Laws. (Amended 2/17/65; 1/16/69; 5/7/91.)
Section 6: Unless otherwise required by law, written notice of
any stockholders' meeting shall be mailed, postage prepaid, to each
stockholder entitled to vote thereat at such address as appears on the
records of the Corporation, which notice shall state the place, date
and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, and said notice
shall be given not less than ten (10) more than sixty (60) days before
the date of the meeting. (Amended 1/16/69; 6/13/79.)
Section 7: Subject to the provisions of Article Fourth of the
Certificate of Incorporation, and unless otherwise prescribed by
statute, special meetings of the stockholders for any purpose or
purposes may be called by the Board of Directors, or by the Chairman of
the Board of Directors, the President or a Vice-President, and shall be
called at the request in writing of stockholders owning twenty-five
percent (25%) of the shares of stock of the Corporation issued and
outstanding and entitled to vote. Such request shall state the purpose
or purposes of the proposed meeting. (Amended 8/21/53; 11/5/57;
2/17/65; 1/16/69.)
Section 8: Business transacted at any special meeting shall be
confined to objects stated in the call and matters germane thereto.
(Former Section 9 deleted 1/16/69)
ARTICLE IV.
DIRECTORS.
Section 1: The property, business and affairs of this Corporation
shall be managed by its Board of Directors. Such Board of Directors
shall consist of: seven (7) directors. They shall be elected by the
stockholders at the annual meeting of the stockholders of the
Corporation, except as provided in SECTION 1(b) and SECTION 2 of this
Article, and each director shall hold office until his successor is
duly elected and qualified. Directors need not be stockholders.
(Amended 4/11/44; 5/9/47; 2/17/65; 1/1/82; 12/13/82; 1/31/84; 7/24/86;
12/10/87; 5/7/91.)
Section 1(a): The Chairman of the Board of Directors shall be
chosen from among the directors. (Added 10/1/96.)
Section 1(b): The Chairman of the Board of Directors shall
preside at all meetings of the stockholders and the Board of Directors.
In order to assist the Board of Directors in the formulation of
policies to be pursued by the officers of the Corporation he shall
provide oversight over major problems, policies and activities of the
Corporation and make reports and recommendations as appropriate to
ensure that policies of the Board of Directors are effected. He shall
be a member and Chairman of the Executive Committee and shall ex-
officio be a member of all standing committees and, except as otherwise
provided in these By-Laws or ordered by the Board of Directors, shall
appoint all special or other committees of the Board of Directors, and,
in general, he shall perform such other duties as may, from time to
time, be assigned to him by the Board of Directors. (Added 1/1/82;
amended 7/24/86; 10/1/96.)
Section 1(c): At each annual meeting of stockholders, directors
of the Corporation shall be elected to hold office until the expiration
of the term for which they are elected, and until their successors have
been duly elected and qualified; except that if any such election shall
not be so held, such election shall take place at a stockholders'
meeting called and held in accordance with the Delaware General
Corporation Law. The directors of the Corporation shall be divided
into three classes as nearly equal in size as is practicable, hereby
designated Class I, Class II, and Class III. The term of office of the
initial Class I directors shall expire at the next succeeding annual
meeting of stockholders, the term of office of the initial Class II
directors shall expire at the second succeeding annual meeting of
stockholders and the term of office of the initial Class III directors
shall expire at the third succeeding annual meeting of the
stockholders. For the purposes hereof, the initial Class I, Class II
and Class III directors shall be those directors elected at the May 7,
1991 annual meeting and designated as members of such Class. At each
annual meeting after the May 7, 1991 annual 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
elected and shall qualify. 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.
Notwithstanding the foregoing, the Board of Directors may, by
resolution adopted or to be adopted by them, require that directors
mandatorily retire prior to the expiration of the term for which they
are elected upon their attaining a particular age, as may be set by
resolution of the Board, or upon their relocating from the Company's
service area, subject to such short extensions within their elected
term as the remaining directors may judge to be in the best interests
of the Company.
The foregoing provisions relating to the classification of the
Board are subject to the provisions of Paragraph XII of Article FOURTH
of the Restated Certificate of Incorporation, as amended.(Added 5/7/91;
amended 10/1/96.)
Section 1(d): Any director may be removed from office only for
cause in accordance with Article Eighth, subparagraph (1) of the
Restated Certificate of Incorporation, as amended. (Added 5/7/91;
amended 10/1/96.)
Section 2: Subject to the provisions of Paragraph XII of Article
Fourth of the Certificate of Incorporation, vacancies on the Board of
Directors and newly created directorships resulting from any increase
in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole
remaining director at any meeting of the Board of Directors and the
directors so chosen shall hold office until the next election of the
Class for which such directors shall have been chosen and until their
successors shall have been duly elected and qualified, unless sooner
displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the
time of filling any vacancy or any newly created directorship, the
directors then in office shall constitute less than a majority of the
whole board (as constituted immediately prior to any such increase),
the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent of the total number of shares
at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or
newly created directorships, or to replace the directors chosen by the
directors then in office. (Added 2/17/65; amended 1/16/69; 6/13/79;
5/7/91.)
Section 3: The directors may hold their meetings and have one or
more offices and keep the books and records of the Corporation (except
such as are required by law to be kept within the State of Delaware),
at the office of the Corporation in the City of Dubuque, Iowa, or at
such other places as they may from time to time determine. Any records
maintained by the Corporation in the regular course of its business,
including its stock ledger, books of account, and minute books, may be
kept on, or be in the form of, punch cards, magnetic tape, photographs,
micro-photographs, or any other information storage device; provided
that the records so kept can be converted into clearly legible form
within a reasonable time. (Amended 1/17/65; 1/16/69.)
Section 4: In addition to the powers and duties by these By-Laws
expressly conferred upon it, the Board of Directors may exercise all
such powers of the Corporation and do all such lawful acts and things
as are not by statute or by the Certificate of Incorporation or by
these By-Laws directed or required to be exercised or done by the
stockholders.
Section 5: Compensation for attendance at a regular or special
meeting of the Board of Directors, or of any committee thereof, shall
be payable in such amounts as the Board shall determine by resolution
from time to time, but only to directors or persons who are not full-
time employees or officers of the Corporation. No such payment shall
preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. (Added 6/28/43; amended
5/24/44; 2/17/65; 6/13/79.)
ARTICLE IV-A.
DIRECTOR EMERITUS PROGRAM
Section 1: Eligibility - All present non-employee Interstate
Power Company directors are eligible for the program. (Added 4/17/97.)
Section 2: Appointment - Each Director Emeritus is appointed by
action of the Company's Board of Directors. (Added 4/17/97.)
Section 3: Term Of Service - An individual is entitled to serve
as a Director Emeritus for a period of two years, but not beyond age
70. (Added 4/17/97.)
Section 4: Compensation - Directors Emeriti are entitled to
receive the annual retainer fee paid to the Company's or successor
Company's regular directors, but are not entitled to meeting fees.
(Added 4/17/97.)
Section 5: Scope Of Involvement - Directors Emeriti are invited
to attend the annual stockholders meeting, the annual Board of
Directors meeting, and the Annual Board field trip. They will also be
available to consult with and advise the Chairman of the Board, the
Vice Chairman of the Board and the Chief Executive Officer. Directors
Emeritus shall not be entitled to vote on Board matters. (Added
4/17/97.)
Section 6: Security Law Compliance - Directors Emeriti will be
considered "insiders" and remain subject to the reporting and short
swing profit recovery provisions of Section 16 of the 1934 Securities
Act. (Added 4/17/97.)
Section 7: Indemnification - Directors Emeriti will remain
eligible for indemnification from the Company to the same extent as
regular Directors and will be covered by the Directors and Officers
Liability Insurance Policy. (Added 4/17/97.)
ARTICLE V.
MEETINGS OF THE BOARD - COMMITTEES.
Section 1: A regular meeting of the Board of Directors shall be
held annually immediately following the annual meeting of the
stockholders, and other regular meetings of the Board shall be held at
such time and place as may be fixed by resolution of the Board. No
notice of regular meetings of the Board shall be required. Any meeting
of the Board may be held either within or without the State of
Delaware.
Section 2: At all meetings of the Board a majority of the
directors shall be necessary and sufficient to constitute a quorum for
the transaction of business, and the act of a majority of the directors
present at any meeting at which there is a quorum shall be the act of
the Board of Directors, except as may be otherwise specifically
provided by statute or by the Certificate of Incorporation or by these
By-Laws. If a quorum shall not be present at any meeting of the Board,
the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a
quorum shall be present. (Amended 2/17/65.)
Section 3: Special meetings of the Board may be called by the
Chairman, the President or any two directors on two days' notice by
mail or one day's notice by telephone or telegraph to each director,
which notice shall state the time, place and purpose of the holding
thereof. (Amended 8/21/53; 11/5/57; 2/17/65.)
Section 4: The Board of Directors may designate and appoint a
standing committee to be known as the "Executive Committee" to consist
of three members, including the Chairman, with the full powers of the
Board of Directors in the management of the business and affairs of the
Corporation including the declaration of a dividend, the issuance of
stock and the voting powers, designations, preferences, and relative,
participating, optional or other rights thereof, if any, or the
qualifications, limitations or restrictions thereof, if any, (except as
the Board of Directors shall otherwise direct and except when the Board
of Directors shall be in session), but subject to the restrictions of
Section 5 of this Article and of any applicable statute, and with power
to authorize the seal of the Corporation to be affixed to all papers
which may require it. (Added 2/17/65; amended 11/19/70; 6/13/79;
1/1/82; 7/23/87.)
Section 5: The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees in
addition to the Executive Committee, each committee to consist of one
or more of the directors of the Corporation, which, to the extent
provided by the resolution, shall have and may exercise the powers of
the Board in the management of the business and affairs of the
Corporation and may authorize the seal of the Corporation to be affixed
to all papers which may require it; but no such committee shall have
the power or authority in reference to amending the Certificate of
Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-Laws of the
Corporation. In the absence or disqualification of any member of such
committee or committees, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in the place of any such absent or
disqualified member. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted
by the Board. (Added 2/17/65; amended 11/19/70; 6/13/79.)
Section 6: Each committee shall keep regular minutes of its
meetings and report the same to the Board when required. (Added
2/17/65.)
Section 7: Unless otherwise restricted by statute, or by the
Certificate of Incorporation or by these By-Laws, any action required
or permitted to be taken at any meeting of the Board or of any
committee thereof may be taken without a meeting, if prior to such
action a written consent thereto is signed by all members of the Board
or of such committee, as the case may be, and such written consent is
filed with the minutes of proceedings of the Board or committee. (Added
2/17/65.)
ARTICLE VI.
OFFICERS
Section 1: The officers of the Corporation shall be a Chief
Executive Officer, a President, an Executive Vice-President, one or
more other Vice-Presidents, a Secretary, a Treasurer, a Controller, an
Assistant Controller, and one or more Assistant Secretaries and
Assistant Treasurers, who shall be elected by the Board of Directors at
its first meeting after each annual meeting of the stockholders.
(Amended 10/24/38; 8/21/53; 11/5/57; 2/17/65; 6/13/79; 1/1/82;
10/1/96.)
Section 2: The Board may appoint such other officers and agents
as it shall deem necessary, who shall have such authority and perform
such duties as from time to time shall be prescribed by the Board or
the President. (Amended 1/1/82.)
Section 3: The salaries of all officers of the Corporation shall
be fixed by the Board of Directors.
Section 4: The officers of the Corporation shall hold office for
one year and until their successors are elected and qualified. Any
officers elected or appointed by the Board of Directors may be removed
at any time by the affirmative vote of a majority of the whole Board of
Directors. (Amended 2/17/65.)
ARTICLE VII.
DUTIES OF OFFICERS.
Section 1: Chief Executive Officer. The Chief Executive Officer of
the Corporation shall have general management of the business of the
Corporation, but may delegate duties and powers to the President; and
in general he shall perform such other duties as may, from time to
time, be assigned to him by the Board of Directors. In the absence or
disability of the Chairman of the Board, the Chief Executive Officer
shall act as Chairman of the Executive Committee and shall preside at
all meetings of the stockholders and meetings of the Board of Directors
and he shall be an ex-officio member of all standing committees.
(Added 10/1/96.)
Section 2: President. The President shall be the chief
operating officer of the Corporation and as such shall have general and
active management of and exercise general supervision over the business
and property of the Corporation and shall have such other power and
duties as usually appertain to the office of President and as may be
assigned to him by the Chairman of the Board or by the Board of
Directors. In the absence or disability of the Chief Executive
Officer, the President shall be the Chief Executive Officer of the
Corporation and act as Chairman of the Executive Committee; also in the
absence or disability of the Chairman, he shall preside at all meetings
of the stockholders and meetings of the Board of Directors; he shall
ex-officio be a member of all standing committees. (Amended 8/21/53;
11/5/57; 2/17/65; 11/19/70; 6/13/79; 11/19/80; 1/1/82; 10/1/96.)
Section 3: Vice-Presidents. In the absence or disability of the
President, the Executive Vice-President shall perform the duties and
exercise the powers of the President. If other Vice-Presidents are
elected, they shall have such powers and perform such duties as the
President or Board of Directors shall from time to time assign to them.
(Amended 10/24/38; 8/21/53; 11/5/57; 2/17/65; 11/19/70; 6/13/79;
1/1/82; 10/1/96.)
Section 4: Secretary and Assistant Secretaries. The Secretary
shall attend all meetings of the stockholders and Board of Directors,
and shall record all votes and other proceedings in a book to be kept
for that purpose. He shall give, or cause to be given, all required
notices of meeting of the stockholders and Board of Directors. He
shall have the custody of the seal of the Corporation and of its
records and shall perform such other duties as usually appertain to
the office of Secretary and as may be prescribed by the President or
the Board of Directors. He shall be sworn to the faithful discharge of
his duty. The Assistant Secretaries shall perform such duties as shall
be delegated to them by the Board of Directors, the President or the
Secretary. (Amended 8/21/53; 11/5/57; 2/17/65; 11/19/70; 6/13/79;
1/1/82; 10/1/96.)
Section 5: Treasurer and Assistant Treasurers. The Treasurer
shall have the custody of the corporate funds, and securities, and
shall keep full and accurate accounts of receipts and disbursements in
books of the Corporation to be kept for that purpose, and shall deposit
all moneys and other valuable effects in the name and to the credit of
the Corporation, in such depositaries as may be designated by authority
of the Board of Directors. He shall disburse the funds of the
Corporation as may be ordered by the Board of Directors, or the
President taking proper vouchers for such disbursements, and shall
render to the Board of Directors, at the regular meetings of the Board,
or whenever it may so require, an account of all his transactions as
Treasurer and of the financial condition of the Corporation and shall
have such other powers and duties as may be assigned to him by the
President or the Board of Directors. The Assistant Treasurers shall
perform such duties as shall be delegated to them by the Board of
Directors, the President or the Treasurer. (Amended 8/21/53; 11/5/57;
2/17/65; 11/19/70; 6/13/79; 1/1/82; 10/1/96.)
Section 6: Controller and Assistant Controller. The Controller
shall be the principal accounting officer and as such shall have charge
of the books and accounts of the Corporation subject to the direction
of the President. He shall keep or cause to be kept full and complete
books of account of all operations of the Corporation and of its assets
and liabilities (except those kept by the Treasurer as herein
provided).
He shall render to the Chairman, the President and the Board of
Directors, as and when requested, reports of the operations and
business of the Corporation and of its financial condition.
He shall have such other powers and perform such other duties as
the President and the Board of Directors may from time to time assign
to him. The Assistant Controller shall perform such duties as shall be
delegated to him or her by the Board of Directors, the President or the
Controller. (Added 2/17/65; amended 11/19/70; 6/13/79; 1/1/82;
10/1/96.)
Section 7: The Board of Directors may, by resolution, require any
officers of the Corporation to furnish bonds conditioned for the
faithful performance of their respective duties as such officers, with
a surety company satisfactory to such Board as surety, the expense of
which shall be paid by the Corporation. (Amended 8/21/53; 11/5/57;
10/1/96.)
ARTICLE VIII.
OFFICERS - VACANCIES.
If the office of the Chief Executive Officer, President, the
Executive Vice-President, Vice-President, Secretary, Treasurer,
Controller, or other officer or agent, one or more, becomes vacant by
reason of death, resignation, retirement, disqualification, removal
from office or otherwise, the directors then in office may choose a
successor or successors, who shall hold office for the unexpired term
in respect of which such vacancy occurred. (Amended 8/21/53; 11/5/57;
2/17/65; 1/1/82; 10/1/96.)
ARTICLE IX.
DUTIES OF OFFICERS MAY BE DELEGATED.
In case of the absence of any officer of the Corporation, or for
any other reason that the Board may deem sufficient, the Board may
delegate the powers or duties of such officer to any other officer, or
to any director, for the time being.
ARTICLE IX-A.
INDEMNIFICATION OF DIRECTORS AND OTHERS
BY THE CORPORATION.
Provided he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, he
had no reasonable cause to believe his conduct was unlawful, every
person (and the heirs, executors and administrators of such person) who
is or was a director, officer, employee or attorney of the Corporation,
or of any partnership, joint venture, trust or other enterprise or of
any other corporation which he served or is serving as such at the
request of the Corporation, and, as to such other corporation, in which
the Corporation owns shares of capital stock or is a creditor, shall be
indemnified by the Corporation against all legal and other fees and
expenses (including judgements, fines or penalties and amounts paid,
other than to the Corporation, or actually and reasonably incurred in
connection with settlements, whether with or without court approval,
made with a view to curtailment of costs of litigation and with the
approval of a majority of the Directors of the Corporation then in
office other than those who have incurred expenses in relation to the
matter for which indemnification is or has been sought, whether or not
such majority constitutes a quorum, or if there are no such Directors
then with the approval of independent Counsel appointed by the Board)
actually and reasonably incurred by him in connection with or resulting
from any threatened, pending or completed claim, action, suit or
proceeding (whether brought by or in the right of the Corporation or
such other corporation or otherwise), civil, criminal, administrative
or investigative, or any appeal therein, in which he is made a party by
reason of his serving or having served at the request of the
Corporation as a director, officer, employee or attorney of the
Corporation, or such other corporation, partnership, joint venture,
trust or other enterprise, before or after the adoption of this By-Law.
Such person shall be indemnified against expenses (including attorneys
fees) except in relation to matters as to which he shall be finally
determined as a result of such claim, action, suit or proceeding to be
liable to the Corporation, whether such determination is made by a
court of competent jurisdiction or, in the absence of that, either by
such majority of directors not seeking indemnification, acting on the
advice of Counsel, or by independent Counsel appointed by the Board,
unless and only to the extent a court of competent jurisdiction, upon
timely application being made, despite a final determination of
liability, determines that in view of all of the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which such court deems proper. Expenses incurred with
respect to any claim, action, suit or proceeding of the character above
described shall be advanced by the Corporation prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of
the recipient to repay such amount if it is ultimately determined that
he is not entitled to indemnification under this Article IX-A. In the
case of any claim, action, suit or proceeding (whether civil,
administrative or investigative), a judgment in or settlement of a
civil, administrative or investigative claim, action, suit or
proceeding, or in the case of a criminal action, suit or proceeding, a
conviction or judgment (whether based on a plea of guilty or nolo
contendere or its equivalent, or after trial) shall not be deemed a
determination or create a presumption that such director, officer,
employee or attorney, or former director, officer, employee, or
attorney, did not act in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe that his conduct was unlawful.
Notwithstanding any prior judgement, settlement or conviction as
aforesaid, indemnification hereunder shall be mandatory upon the
determination that such director, officer, employee, or attorney, or
former director, officer, employee, or attorney, was acting in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and with respect to any criminal
action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. The indemnification and advancement of expenses
granted hereunder shall not be deemed exclusive of any other rights to
which such director, officer, employee, or attorney may be entitled
under any agreement, vote of stockholders, or at law or in equity or
otherwise, and the indemnification hereby granted shall be in addition
to and not in restriction or limitation of any other privilege or power
which the Corporation may lawfully exercise with respect to the
indemnification or advancement of expenses to directors, officers,
employees, or attorneys, or persons formerly holding such positions.
For the purposes of this Article IX-A, references to the "the
Corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees, or attorneys, so that
any person who is or was a director, officer, employee, or attorney of
such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee, or
attorney of another corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under this Article
IX-A with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate
existence had continued. (Adopted by stockholders 5/4/65; amended
7/15/70; 5/2/73; 6/13/79; 10/15/87.)
All of the rights, privileges and immunities extended to directors
of the Company by this By-Law are also extended to Directors Emeriti of
the Company. As used in this By-Law, Article IX-A, director shall mean
either a director of the Company elected by the shareholders or the
Board of Directors or a Director Emeritus appointed by the Board of
Directors of the Company. (Added 4/17/97.)
ARTICLE IX-B.
REGARDING DUTIES OF DIRECTORS AND OTHERS.
Section 1: Unless otherwise provided by statute, or by the
Certificate of Incorporation, no liability shall attach to any person
(and the heirs, executors and administrators of such person) who is or
was a director, Director Emeritus, officer, employee or attorney of the
Corporation, or of any partnership, joint venture, trust or other
enterprise in which position he is or was acting as such at the request
of the Corporation, or of any other corporation which he served or is
serving as such at the request of the Corporation, and in which the
Corporation owns shares of capital stock or is a creditor (hereinafter
in this Article referred to as "such person"), who shall perform or
have performed his duties in good faith in a manner he reasonably
believes or believed to be in or not opposed to the best interests of
the Corporation with such care that an ordinarily prudent person in a
like position would use under similar circumstances. (Added 6/18/81;
amended 10/15/87; amended 4/17/97.)
Section 2: Any "such person" in the performance of his duties
shall be entitled to rely in good faith on information, opinions,
reports or statements, including financial statements and other
financial data, in each case prepared or presented by: (a) one or more
officers or employees of the Corporation whom "such person" reasonably
believes to be reliable and competent in the matters presented, (b)
counsel, public accountants, appraisers or other persons as to matters
which "such person" reasonably believes to be within the other person's
professional or expert competence, or (c) a committee of the Board upon
which he does not serve, duly designated in accordance with a provision
of the Certificate of Incorporation of the By-Laws, as to matters
within its designated authority, which committee "such person"
reasonably believes to merit confidence; but he shall not be considered
to be acting in good faith if he has knowledge concerning the matter in
question that would cause such reliance to be unwarranted. Any "such
person" who so performs his duties for the Corporation shall have no
liability by reason of such reliance. (Added 6/18/81.)
Section 3: No "such person" who makes or causes to be made any
disclosure in any application, report or document found to be
misleading with respect to any material fact shall have any liability
who shall sustain the burden of proof with respect to (a) any matter
not purporting to be made on the authority of an expert, and not
purporting to be a copy of or extract from a report or valuation of an
expert, and not purporting to be made on the authority of a public
official document or statement, that he had, after reasonable
investigation, reasonable ground to believe and did believe, at the
time such matter was published, that the statements therein were true
and that there was no omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and (b) as regards any matter purporting to be made upon
his authority as an expert or purporting to be a copy of or extract
from a report or valuation of himself as an expert, (i) he had, after
reasonable investigation, reasonable ground to believe and did believe,
at the time such matter was published, that the statements therein were
true and that there was no omission to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or (ii) such matter did not fairly represent his statement
as an expert or was not a fair copy of or extract from his report or
valuation as an expert; and (c) as regards any matter purporting to be
made on the authority of an expert (other than himself), he had no
reasonable ground to believe and did not believe, at the time such
matter was published, that the statements therein were untrue or that
there was an omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that such matter did not fairly represent the statement of the expert
or was not a fair copy of or extract from the report or valuation of
the expert; and (d) as regards any matter purporting to be a statement
made by an official person or purporting to be a copy of or extract
from a public official document, he had no reasonable ground to believe
and did not believe, at the time such matter was published, that the
statements therein were untrue, or that there was an omission to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that such matter did not fairly
represent the statement made by the official person or was not a fair
copy of or extract from the public official document. (Added 6/18/81.)
Section 4: In determining, for the purpose of Section 3 of this
Article, what constitutes reasonable investigation and reasonable
ground for belief, the standard of reasonableness shall be that
required of a prudent man in the management of his own property. (Added
6/18/81.)
Section 5: Any suit for liability as above provided may be to
recover only such damages as shall represent the difference between the
amount paid for the security issued by the Corporation (not exceeding
the price at which the security was offered to the public) and (i) the
value thereof as of the time such suit was brought, or (ii) the price
at which such security shall have been disposed of in the market before
suit, or (iii) the price at which such security shall have been
disposed of after suit but before judgment if such damages shall be
less than the damages representing the difference between the amount
paid for the security (not exceeding the price at which the security
was offered to the public) and the value thereof as of the time such
suit was brought: Provided, that if the defendant proves that any
portion or all of such damages represents other than the depreciation
in value of such security resulting from such material misleading
matter, with respect to which his liability is asserted, not being true
or omitting to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, such portion
of or all such damages shall not be recoverable. (Added 6/18/81.)
Section 6: All or any one or more of the persons held liable as
above provided in Section 5 of this Article shall be jointly and
severally liable, and every person who becomes so liable to make any
payment may recover contribution as in cases of contract from any
person who, if sued separately, would have been liable to make the same
payment, unless the person who has become liable was, and the other was
not, guilty of fraudulent misrepresentation. (Added 6/18/81.)
Section 7: In no case shall the amount recoverable exceed the
price at which the security was offered to the public. (Added 6/18/81.)
ARTICLE X.
Section 1: Every holder of stock in the Corporation shall be
entitled to have a certificate, signed by, or in the name of the
Corporation by the President or a Vice-President, and by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, certifying the number of shares owned by him in the
Corporation. If such certificate is countersigned (1) by a transfer
agent other than the Corporation or its employee, or, (2) by a
registrar other than the Corporation or its employee, any other
signature on the certificate may be a facsimile. In case any officer
or officers who have signed, or whose facsimile signature or signatures
have been used on, any such certificate or certificates shall cease to
be such officer or officers of the Corporation, whether because of
death, resignation or otherwise, before such certificate or
certificates have been delivered by the Corporation, such certificate
or certificates may nevertheless be adopted by the Corporation and be
issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures
have been used thereon had not ceased to be such officer or officers of
the Corporation. (Amended 8/29/47; 2/17/65; 1/16/69; 1/1/82.)
Section 2: If the Corporation shall be authorized to issue more
than one class of stock, or more than one series of any class, the
designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or
rights shall be set forth in full or summarized on the face or back of
the certificate which the Corporation shall issue to represent such
class of stock; provided, however, that except as otherwise provided by
statute, in lieu of the foregoing requirements, there may be set forth
on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, a statement that the
Corporation will furnish without charge to each stockholder who so
requests, the designations, preferences and relative, participating,
optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. (Added 2/17/65.)
ARTICLE XI.
TRANSFER OF STOCK, FIXING RECORD DATE, ETC.
Section 1: The shares of stock of the Corporation shall be
transferable as provided in the Uniform Commercial Code as enacted in
the State of Delaware. (Amended 1/16/69.)
Section 2: In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other
action. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting. (Amended
1/16/58; 2/17/65; 1/16/69.)
Section 3: The Corporation shall be entitled to treat the holder
of record of any share or shares of stock as the holder in fact thereof
and accordingly shall not be bound to recognize any equitable or other
claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of Delaware.
Section 4: The Board of Directors may appoint one or more
transfer agents and registrars for its stock, and may require all stock
certificates to bear the signature either of a transfer agent or of a
registrar, or both.
ARTICLE XII.
LOST, STOLEN OR DESTROYED CERTIFICATES.
Any person claiming a certificate of stock to be lost, stolen or
destroyed shall make an affidavit or affirmation of the fact and
advertise the same in such manner as the Board of Directors may
require, and shall give the Corporation and/or the transfer agents
and/or the registrars, if they shall so require, a bond of indemnity,
in form and with one or more sureties satisfactory to the Board, and/or
the transfer agents and/or the registrars, in such sum as they may
direct, whereupon a new certificate may be issued of the same tenor and
for the same number of shares as the one alleged to be lost, stolen or
destroyed, but always subject to the approval of the Board of
Directors. (Amended 2/17/65; 1/16/69.)
ARTICLE XIII.
INSPECTION OF BOOKS.
The Board of Directors shall determine from time to time whether,
and, if allowed, when and under what conditions and regulations the
accounts and books of the Corporation (except such as may by statute be
specifically open to inspection) or any of them, shall be open to the
inspection of the stockholders, and the stockholder's rights in this
respect are and shall be restricted and limited accordingly.
ARTICLE XIV.
CONTRACTS, ETC.
Section 1: All checks, notes, drafts, acceptances or other
demands or orders for the payment of money of the Corporation shall be
signed by such officer or officers or person or persons as the Board of
Directors may from time to time designate.
Section 2: 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 by
resolution prescribe. (Amended 8/21/53; 11/5/57; 2/17/65; 1/1/82.)
ARTICLE XV.
FISCAL YEAR.
The fiscal year shall be the calendar year.
ARTICLE XVI.
DIVIDENDS.
Subject to the provisions of law and of the Certificate of
Incorporation, the Board of Directors shall have absolute discretion in
the declaration of dividends and in fixing and changing the date for
the declaration and payment of dividends. Before payment of any
dividend or making any distribution of profits, the Board of Directors
may set aside, out of the surplus or net profits of the Corporation,
such sum or sums as the directors may from time to time in their
absolute discretion deem proper as a reserve or reserves to meet
contingencies or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any other purpose
which the directors shall think conducive to the interests of the
Corporation and the directors may modify or abolish any such reserve.
(Amended 2/17/65.)
ARTICLE XVII.
NOTICES.
Section 1: Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or
stockholders at their addresses appearing on the books of the
Corporation or, in default of other address, to such director, officer
or stockholder at the General Post Office in the City of Dubuque, Iowa.
Notice by mail shall be deemed to be given at the time when the same
shall be mailed. Notice to directors may also be given by telegram.
(Amended 2/17/65.)
Section 2: Whenever any notice is required to be given under the
provisions of the statutes or of the Certificate of Incorporation or of
these By-Laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. (Amended 2/17/65.)
ARTICLE XVIII.
AMENDMENTS.
These By-Laws may be altered, amended or repealed, and new By-Laws
may be made at any annual, regular or special meeting of the
stockholders by the affirmative vote of a majority in interest of the
stock then issued and outstanding and entitled to vote, or at any
regular or special meeting of the Board of Directors by the affirmative
vote of a majority of such Board.
<TABLE> <S> <C>
<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 492,843
<OTHER-PROPERTY-AND-INVEST> 448
<TOTAL-CURRENT-ASSETS> 70,440
<TOTAL-DEFERRED-CHARGES> 75,386
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 639,117
<COMMON> 34,129
<CAPITAL-SURPLUS-PAID-IN> 107,994
<RETAINED-EARNINGS> 73,645
<TOTAL-COMMON-STOCKHOLDERS-EQ> 215,768
24,236
10,819
<LONG-TERM-DEBT-NET> 171,786
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 34,300
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 88
<LEASES-CURRENT> 14
<OTHER-ITEMS-CAPITAL-AND-LIAB> 182,106
<TOT-CAPITALIZATION-AND-LIAB> 639,117
<GROSS-OPERATING-REVENUE> 248,941
<INCOME-TAX-EXPENSE> 14,614
<OTHER-OPERATING-EXPENSES> 199,885
<TOTAL-OPERATING-EXPENSES> 214,499
<OPERATING-INCOME-LOSS> 34,442
<OTHER-INCOME-NET> 1,598
<INCOME-BEFORE-INTEREST-EXPEN> 36,040
<TOTAL-INTEREST-EXPENSE> 11,641
<NET-INCOME> 24,399
1,851
<EARNINGS-AVAILABLE-FOR-COMM> 22,548
<COMMON-STOCK-DIVIDENDS> 15,154
<TOTAL-INTEREST-ON-BONDS> 13,853
<CASH-FLOW-OPERATIONS> 44,806
<EPS-PRIMARY> $2.32
<EPS-DILUTED> $2.32
</TABLE>
