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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant X
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Filed by a Party other than the Registrant
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Check the appropriate box:
X Preliminary Proxy Statement
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Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to ss240.14a-11(c) or ss240.14a-12
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WISCONSIN ENERGY CORPORATION
(Name of Registrant as Specified In Its Charter)
Wisconsin Energy Corporation
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
- --- Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to
- --- Exchange Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined.)
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Wisconsin Energy Corporation Richard A. Abdoo
231 West Michigan Chairman of the Board,
P.O. Box 2949 President and
Milwaukee, WI 53201 Chief Executive Officer
March 29, 1995
Dear Wisconsin Energy Corporation Stockholder:
I invite you to attend the 1995 Annual Meeting of Stockholders on WEDNESDAY,
MAY 17, 1995 at 1:30 p.m. The meeting will be at the BRADLEY CENTER, 1001
North Fourth Street, in downtown Milwaukee, Wisconsin. Free parking will be
available.
Following the custom of past meetings, I will review with you the business and
affairs of WEC and our expectations for the future. Business matters to be
considered include election of three directors, approval of the independent
public accountant and approval of certain changes to the Restated Articles of
Incorporation to conform the Articles to current Wisconsin Business
Corporation Law. The proposed changes to the Articles are set forth in their
entirety in Appendix A to the accompanying proxy statement. THE BOARD
RECOMMENDS YOU VOTE "FOR" EACH OF THESE BUSINESS MATTERS (PROPOSALS 1, 2 AND 3
ON YOUR PROXY).
Two stockholder proposals also will be considered. The proposals are:
* To declassify the Board. Your Board currently is divided into three
classes serving staggered three-year terms, such that only one-third of the
Board becomes eligible for election each year. A staggered Board provides
continuity and stability of quality leadership because a majority of the
directors have prior experience at all times. This facilitates the Board's
focus on long-term strategic goals, and is expected to create long-term
value for WEC stockholders. This proposal was defeated by the stockholders
last year and THE BOARD AGAIN RECOMMENDS YOU VOTE "AGAINST" STOCKHOLDER
PROPOSAL #1 (PROPOSAL 4 ON YOUR PROXY).
* To amend the Bylaws to prohibit certain individuals from serving as a WEC
director. In place of the existing director selection criteria, this
proposal would establish new criteria which, among other things, would in
effect prohibit the election as WEC directors of persons who are employed
by a "significant" customer or supplier. This provision would eliminate
many highly-qualified individuals from consideration as directors who live
and work in the region served by WEC's utility subsidiaries, thus depriving
the Board of the participation of the very individuals likely to be most
familiar with many of the principal issues WEC faces. Consequently, your
Board believes adoption of this proposal is inappropriate and RECOMMENDS
YOU VOTE "AGAINST" STOCKHOLDER PROPOSAL #2 (PROPOSAL 5 ON YOUR PROXY).
TO ENSURE YOUR SHARES WILL BE REPRESENTED AT THE 1995 ANNUAL MEETING, WHETHER
OR NOT YOU PLAN TO ATTEND, I URGE YOU TO PROMPTLY COMPLETE AND MAIL YOUR PROXY
IN THE ENCLOSED ENVELOPE SO IT IS RECEIVED BY MAY 10, 1995. You may cancel
your proxy before the meeting and vote in person if you wish. If your shares
are registered in the name of a broker, bank or nominee, it is important that
they receive your completed voting instructions promptly.
If you plan to attend the meeting, please mark the appropriate box on your
proxy and you will be sent an admission card. If you do not receive an
admission card before the meeting, you may attend by registering in person at
the Bradley Center on the day of the meeting.
<PAGE> 4
The meeting will also provide an opportunity to wish three of our directors,
John W. Boston, John L. Murray and Morris W. Reid, best wishes in their future
endeavors. After years of dedicated guidance to WEC and its subsidiaries, Mr.
Boston is retiring effective July 1, 1995 and Messrs. Murray and Reid are
retiring effective on the date of the 1995 Annual Meeting.
I appreciate your continued interest in WEC and hope to see you at the
meeting. If you have any questions about the Annual Meeting, please call our
toll-free Stockholder Hotline at
1-800-558-9663.
Sincerely,
Richard A. Abdoo
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 5
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 29, 1995
To the Stockholders of Wisconsin Energy Corporation:
The Annual Meeting of Stockholders of Wisconsin Energy Corporation will be
held at the Bradley Center, 1001 North Fourth Street, Milwaukee, Wisconsin, on
Wednesday, May 17, 1995 at 1:30 p.m., for the following purposes:
1. To elect three directors for terms expiring at the 1998 Annual Meeting of
Stockholders;
2. To approve the appointment of Price Waterhouse LLP as independent public
accountant for 1995;
3. To approve the amendment and restatement of WEC's Restated Articles of
Incorporation to conform certain provisions with appropriate sections of the
revised Wisconsin Business Corporation Law;
4. To consider two stockholder proposals; and
5. To consider any other matters which may properly come before the meeting.
Stockholders of record at the close of business on March 10, 1995 will be
entitled to vote at the meeting.
By Order of the Board of Directors
John H. Goetsch
Vice President and Secretary
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PROXY STATEMENT
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Solicitation of Proxies
This proxy statement is being furnished to stockholders beginning on or about
March 29, 1995 in connection with the solicitation of proxies by the Wisconsin
Energy Corporation ("WEC") Board of Directors to be used at the Annual Meeting
of Stockholders on May 17, 1995 at the Bradley Center, 1001 North Fourth
Street, Milwaukee, Wisconsin, and at all adjournments of the meeting, for the
purposes listed in the preceding Notice of Annual Meeting of Stockholders.
By completing and returning the form of proxy, the stockholder authorizes
Richard A. Abdoo, John W. Boston and John H. Goetsch to vote all of the
stockholder's shares on his/her behalf. All completed proxy forms returned
will be voted as the stockholders direct. If no direction is given, the
proxies will be voted FOR each of three director nominees, Robert A. Cornog,
Richard R. Grigg, Jr. and Frederick P. Stratton, Jr., FOR the proposal to
approve the appointment of Price Waterhouse LLP as WEC's independent public
accountant, FOR the proposal to amend and restate WEC's Restated Articles of
Incorporation (the "Restated Articles") and AGAINST the two stockholder
proposals. A proxy may be revoked by voting in person at the meeting, by
written notice to WEC's Corporate Secretary, or by delivery of a later-dated
proxy, in each case prior to the closing of the polls for voting at the Annual
Meeting.
If a stockholder is a participant in WEC's Stock Plus Investment Plan (the
"Stock Plus") or owns shares through investments in the WEC Common Stock Fund
of Wisconsin Electric Power Company's ("Wisconsin Electric") Management
Employee Savings Plan (the "MESP") or its Represented Employee Savings Plan
(the "RESP"), the proxy will represent the shares registered in those plans,
as well as shares registered in the participant's name. Shares of plan
participants will be voted by the administrator for Stock Plus and the
trustees for MESP and RESP as directed by such participants in their proxies.
If a proxy is not returned for shares held in Stock Plus, such shares will not
be voted by the administrator. If a proxy is not returned for shares held in
the WEC Common Stock Fund of MESP or RESP, the trustee for such plans will
vote these shares in the same proportion that all shares in the plan Fund are
voted.
WEC will bear the cost of the solicitation of proxies. Proxies may be
solicited by certain officers and employees of WEC or its subsidiaries by
mail, by telephone or other communications, or personally without compensation
apart from their normal salaries. It is not anticipated that any other
persons will be engaged to solicit proxies or that compensation will be paid
for that purpose. However, WEC may seek the services of an outside proxy
solicitor in the event such services become necessary.
Voting
Common stockholders of record at the close of business on March 10, 1995 are
entitled to vote at the Annual Meeting. On that date, there were ____________
shares of WEC common stock outstanding. Each outstanding share is entitled to
one vote upon each matter presented at the meeting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a
quorum. A list of stockholders of record entitled to vote at the meeting will
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be available for inspection by stockholders at WEC's principal business office
at 231 West Michigan Street, Milwaukee, Wisconsin, prior to the meeting. The
list will also be available on the day of the meeting at the meeting site.
The voted proxies will be tabulated by The First National Bank of Boston,
which will also serve as inspector of election. The voting requirements and
procedures described below are based upon the provisions of the revised
Wisconsin Business Corporation Law, WEC's charter documents and any other
requirements applicable to the matters to be voted upon.
Directors are elected by a plurality of the votes cast by the shares entitled
to vote in the election at a meeting at which a quorum is present.
"Plurality" means that the individuals who receive the largest number of votes
are elected as directors up to the maximum number of directors to be chosen in
the election. Therefore, any shares not voted, whether by withheld authority,
broker non-vote or otherwise, have no effect in the election of directors.
If a quorum is present, the affirmative vote of the holders of a majority of
the shares represented at the meeting, in person or by proxy, and entitled to
vote thereon will be required for approval of the independent public
accountant and each of the stockholder proposals. Approval of the amendment
and restatement of the Restated Articles will require the affirmative vote of
the holders of a majority of the outstanding shares of WEC common stock.
Abstentions will count toward establishing a quorum and will have the effect
of negative votes with respect to the independent public accountant, the
amendment and restatement of the Restated Articles and each of the stockholder
proposals. Shares which are the subject of broker non-votes will be counted
for the purpose of determining whether a quorum exists at the meeting, will
have no effect on the outcome of the voting on the approval of the independent
public accountant and each of the stockholder proposals, and will have the
effect of a vote cast against approval of the amendment and restatement of the
Restated Articles.
Shares Held in Street Name
Stockholders whose shares are held in the name of a broker, bank or other
holder of record are invited to attend the meeting, but may not vote at the
meeting unless they have first obtained a proxy, executed in the stockholder's
favor, from the holder of record.
GENERAL INFORMATION ABOUT THE BOARD OF DIRECTORS
Meetings of the Board of Directors
The Board of Directors is responsible for overseeing the performance of WEC.
The Board held nine meetings during 1994. The committees of the Board and the
number of committee meetings held by each are listed in the table on the
following page. Six of the ten incumbent directors at year-end attended 100%,
and none of the incumbent directors attended less than 86%, of the total
number of meetings of the Board and committees on which they served.
Compensation of the Board of Directors
During 1994, each nonemployee director received a monthly retainer fee of
$1,500 plus $1,000 for each Board or committee meeting attended. In addition,
a per diem fee of $1,000 for travel on company business is paid for each day
on which a Board or committee meeting is not also held. Nonemployee directors
are also paid $300 for each signed, written unanimous consent in lieu of a
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meeting. Effective with the date of the 1994 Annual Meeting, non-employee
chairs of the committees of the Board received a quarterly committee chair
retainer of $1,250. Although certain WEC directors also serve on Wisconsin
Electric's board and compensation committee, only single fees are paid for
meetings held by both boards or committees on the same day. In these cases,
fees are allocated between WEC and Wisconsin Electric based on services
rendered. Nonemployee directors may defer fees so long as they serve on the
Board of WEC and/or its subsidiaries pursuant to an established plan which
accrues interest semiannually at the prime rate on the amounts which have been
deferred. Such deferral amounts are credited to an unsecured account in the
name of each participating director on the books of WEC and are payable only
following termination of the director's service to WEC and its subsidiaries.
Such amounts will be paid out of the grantor trust described on page 21 of
this proxy statement. Employee directors receive no directors' fees.
New Director Elected; Retirement of Directors Reid and Murray
The Board of Directors increased the size of the Board to ten members and
elected John F. Ahearne, Executive Director of Sigma Xi, The Scientific
Research Society and former chairman of the Nuclear Regulatory Commission, as
a director, effective November 1, 1994. Dr. Ahearne was elected to serve as a
director until the 1996 Annual Meeting and until he is reelected or his
successor is duly elected and qualified. Also, pursuant to the Directors'
Retirement Policy, Director Reid, whose term expires in 1996, is required to
retire effective on the date of the 1995 Annual Meeting. In view of this
pending retirement, the Board has indicated that it will decrease the size of
the Board to nine effective on the date of the 1995 Annual Meeting. In
addition, Director Murray, who has previously retired from his principal
position as Chairman of the Board of Universal Foods Corporation, has
indicated his intention to retire as a director effective with the end of his
present term which expires at the 1995 Annual Meeting.
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COMMITTEES OF THE BOARD OF DIRECTORS
<TABLE>
<CAPTION>
Number of
Members Meetings HeLd
Committee (* denotes chair) During 1994 Principal Duties and Responsibilities
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<S> <C> <C> <C>
EXECUTIVE Richard A. Abdoo* Zero May exercise all of the powers vested in the Board except, among other
(Members listed John. W. Boston things, action regarding dividends or other distributions to
are regular Geneva B. Johnson stockholders, election of officers or the filling of vacancies on the
members; all Morris W. Reid Board or its committees.
other directors Jon. G. Udell
are alternates)
- ----------- ------------------ ------------- ----------------------------------------------------------------------
AUDIT Jon G. Udell* Four Assists the Board of Directors in overseeing the financial reporting
John F. Ahearne and internal controls of WEC; evaluates, reviews and approves the
John F. Bergstrom services of the independent public accountant; recommends to the Board
Robert A. Cornog the independent public accountant to be selected; approves the
Geneva B. Johnson estimated fees paid for services rendered by such accountant;
John L. Murray recommends and reviews special audits or studies it considers
Morris W. Reid necessary or desirable. Both the independent public accountant and
Frederick P. the internal auditor may meet alone with the committee and are
Stratton, Jr. expected to contact it on matters requiring its attention.
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COMPENSATION Morris W. Reid* Four Determines compensation policies for executive officers of WEC and its
John F. Ahearne subsidiaries; reviews and recommends adjustments to the salaries of
John F. Bergstrom elected officers and the fees of directors of WEC and Wisconsin
Robert A. Cornog Electric; reviews and recommends other direct and indirect forms of
Geneva B. Johnson compensation, benefits and privileges which the elected officers and
John L. Murray directors may receive.
Frederick P.
Stratton, Jr.
Jon G. Udell
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NOMINATING Geneva B. Johnson* Two Reviews qualifications of and recommends candidates for election to
John F. Ahearne the boards of WEC and Wisconsin Electric (stockholders may propose
John F. Bergstrom director candidates for consideration by the Nominating Committee);
Morris W. Reid recommends qualified candidates to fill vacancies on WEC's and
Jon G. Udell Wisconsin Electric's boards; establishes, subject to board approval,
director candidate selection criteria; recommends criteria for
composition, size and frequency of meetings of WEC's and Wisconsin
Electric's boards; reviews retirement policy for directors.
</TABLE>
PROPOSAL 1: ELECTION OF DIRECTORS
At the 1995 Annual Meeting, three directors are to be elected to hold office
until the 1998 Annual Meeting of Stockholders or until they are reelected or
until their successors are duly elected and qualified. The WEC Bylaws provide
that the directors be divided into three classes. The term of only one class
expires each year. Biographical information regarding each nominee and each
continuing director is shown below. Ages are shown as of December 31, 1994.
Nominees for Terms Expiring in 1998
The three persons nominated by the Board for election are Robert A. Cornog,
who has been a WEC director since 1993, Richard R. Grigg, Jr., who is being
nominated as a WEC director for the first time, and Frederick P. Stratton,
Jr., who has been a WEC director since 1987. Each nominee has consented to
being nominated and to serve if elected. If any nominee becomes unable to
serve for any reason, which event is not anticipated, the proxies will be
voted for a substitute nominee as may be selected by the WEC Board upon the
recommendation of the Nominating Committee.
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ROBERT A. CORNOG. Age 54. Chairman of the Board, President and Chief
Executive Officer of Snap-on Incorporated, a tool manufacturer, since
1991. President of Macwhyte Company, a maker of wire rope and a
subsidiary of Amsted Industries, from 1981 to 1991. Director of WEC
since 1993. Director of Wisconsin Electric since 1994. Director of
Snap-on Incorporated and Johnson Controls, Inc.
RICHARD R. GRIGG, JR. Age 46. Vice President of WEC and President and
Chief Operating Officer of Wisconsin Electric and Wisconsin Natural Gas
Company ("Wisconsin Natural"), WEC's principal subsidiaries, since
January 1995. Group Executive and Vice President of Wisconsin Electric
from June to December 1994. Vice President of Wisconsin Electric from
1990 to 1994. Director of Wisconsin Electric since 1994. Director of
Wisconsin Natural since January 1995.
FREDERICK P. STRATTON, JR. Age 55. Chairman and Chief Executive Officer
of Briggs & Stratton Corporation, a manufacturer of small gasoline
engines, since 1986. Director of WEC since 1987. Director of Wisconsin
Electric since 1986. Director of Briggs & Stratton Corporation, Banc One
Corporation, Banc One Wisconsin Corporation, Midwest Express Airlines,
Inc. and Weyco Group, Inc.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL THREE DIRECTOR
NOMINEES.
Directors Continuing in Office-Terms Expiring in 1996
JOHN F. AHEARNE. Age 60. Executive Director of Sigma Xi, The Scientific
Research Society, an organization that provides grants to graduate
students and conducts national meetings on major scientific issues, since
1989. Adjunct Scholar of Resources for the Future, an economic research,
non-profit institute, since 1993. Vice President and Senior Fellow of
Resources for the Future from 1984 to 1993. Commissioner of the
United States Nuclear Regulatory Commission from 1978 to 1983, serving as
its Chairman from 1979 to 1981. Director of WEC and Wisconsin Electric
since 1994.
JOHN W. BOSTON. Age 61. WEC Vice Chairman of the Board since January
1995. Vice President of WEC from 1991 to 1994. President and Chief
Operating Officer of Wisconsin Electric from 1990 to 1994. Executive
Vice President and Chief Operating Officer of Wisconsin Electric from
January to June 1990. President and Chief Operating Officer of Wisconsin
Natural from April to December 1994. Director of WEC since 1991.
Director of Wisconsin Electric since 1988. Director of Wisconsin Natural
from March to December 1994.
JON G. UDELL. Age 59. Irwin Maier Professor of Business at the
University of Wisconsin-Madison since 1975. Co-Director of The
Enterprise Center at the University of Wisconsin-Madison, an educational
organization devoted to entrepreneurial management, since 1993. Director
of WEC since 1987. Director of Wisconsin Electric since 1977. Chairman
of the Board of Directors of the Federal Home Loan Bank of Chicago from
1982 to 1989. Director of Research Products Corporation and Versa
Technologies, Inc.
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Directors Continuing in Office-Terms Expiring in 1997
RICHARD A. ABDOO. Age 50. Chairman of the Board, President and Chief
Executive Officer of WEC since 1991. Chairman of the Board and Chief
Executive Officer of Wisconsin Electric and Wisconsin Natural since 1990.
Executive Vice President of WEC from January 1990 to May 1991. President
and Chief Executive Officer of Wisconsin Electric from January 1990 to
June 1990. Director of WEC since 1988. Director of Wisconsin Electric
and Wisconsin Natural since 1989. Director of Marshall & Ilsley
Corporation, M&I Marshall & Ilsley Bank, ARI Network Services, Inc., Blue
Cross & Blue Shield United of Wisconsin and United Wisconsin Services,
Inc.
JOHN F. BERGSTROM. Age 48. President and Chief Executive Officer of
Bergstrom Corporation since 1974; Bergstrom Corporation owns and operates
fifteen automobile dealerships, three hotels, a convention center and a
real estate company. Director of WEC since 1987. Director of Wisconsin
Electric since 1985. Director of First National Bank-Fox Valley,
Kimberly-Clark Corporation, Midwest Express Airlines, Inc. and Universal
Foods Corporation.
GENEVA B. JOHNSON. Age 65. Corporate Director. President and Chief
Executive Officer of Family Service America, an organization representing
private agencies in the United States and Canada that provide human
service programs, from 1983 to 1994. Director of WEC and Wisconsin
Electric since 1988. Director of Firstar Bank Milwaukee, N.A.
Directors Who Will Be Retiring Effective on the Date of the 1995 Annual
Meeting
JOHN L. MURRAY. Age 67. Corporate Director. Chairman of the Board of
Universal Foods Corporation, a manufacturer and marketer of food
ingredients and selected consumer food items, from 1984 to 1990. Chief
Executive Officer of Universal Foods from 1979 to 1988. Director of WEC
since 1987. Director of Wisconsin Electric since 1983. Director of
Briggs & Stratton Corporation, The Marcus Corporation, Twin Disc, Inc.
and Universal Foods Corporation.
MORRIS W. REID. Age 69. Vice Chairman of the Board of Versa
Technologies, Inc., a manufacturer of fluid power and silicone rubber
products, since 1989. Vice Chairman, President and Chief Operating
Officer of Versa Technologies from 1989 to 1992. Chairman of the Board
of Versa Technologies from 1982 to 1989. Independent Management
Consultant and Corporate Director since 1978. Chairman of the Board of
J. I. Case Co., a manufacturer of construction and farm machinery, from
1972 to 1978. Director of WEC since 1987. Director of Wisconsin
Electric since 1979. Director of Banc One Wisconsin Corporation, A&E
Manufacturing Company, Research Products Corporation and Versa
Technologies, Inc.
PROPOSAL 2: APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANT
The Board of Directors has appointed the firm of Price Waterhouse LLP ("PW")
as independent public accountant to audit the books, records and accounts of
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WEC and its subsidiaries with respect to their operations for the year 1995
and recommends that the stockholders approve such appointment.
PW has acted as independent public accountant for WEC or its predecessors
continuously since 1932. Representatives of the firm will attend the Annual
Meeting to make any statement they may consider appropriate and to respond to
questions that may be directed to them.
If (i) the foregoing proposal is not approved by the stockholders, or (ii) PW
shall become incapable of accepting or continuing the appointment, or (iii)
the employment of PW is otherwise discontinued, the Audit Committee will
recommend and the Board of Directors will appoint another independent public
accountant.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APPROVE
THE APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT PUBLIC ACCOUNTANT.
PROPOSAL 3: AMENDMENT AND RESTATEMENT OF THE RESTATED ARTICLES OF
INCORPORATION
Information regarding the proposed amendment and restatement of WEC's Restated
Articles is set forth below and is qualified in its entirety by reference to
the text of the proposed Restated Articles (which identifies all changes that
would be made to the Restated Articles), attached as Appendix A and
incorporated herein by reference (the "Proposed Restated Articles").
The WEC Board proposes to amend and restate the Restated Articles to conform
certain provisions therein with changes in the Wisconsin Business Corporation
Law that became effective in 1991 (the "WBCL"). Specifically, the Proposed
Restated Articles would (i) conform certain statutory references with
appropriate sections of the WBCL; (ii) authorize the Bylaws to contain
provisions requiring a greater stockholder vote for certain matters than would
otherwise be required by law or the Restated Articles, pursuant to WBCL
requirements; and (iii) conform provisions relating to managing the business
and affairs of WEC during an emergency with appropriate sections of the WBCL.
With respect to item (i), as a result of a significant revision to the WBCL
effective in 1991, the statutory numbering system of the WBCL was changed.
Consequently, statutory references in Articles III, IV and VII of the Restated
Articles are outdated. The WEC Board proposes that the Restated Articles be
amended and restated to conform these statutory references to the WBCL. The
Proposed Restated Articles reflect the replacement of statute numbers
referring to the former WBCL with statute numbers referring to the current
WBCL. Updating these statutory references does not substantively change any
of the Articles affected or stockholder rights thereunder.
With respect to item (ii), the WEC Bylaws currently require a greater
stockholder vote for various matters than is otherwise required by law or the
Restated Articles. Certain of these matters, which are set forth in Bylaw II,
Section 4 and Bylaw X, Section 3 of the WEC Bylaws, relate to (a) removal of a
director from office; and (b) amending provisions of the Bylaws relating to or
in connection with taking action by the unanimous consent of stockholders
without a meeting; the number, term, qualification, classification and
election of directors; the removal of a director from office; notice for Board
of Directors' meetings; indemnification of officers, directors and other
persons by WEC; and Bylaw amendments. In connection with the 1991 revision, a
new provision was added to the WBCL requiring authorization in the Articles of
Incorporation for the adoption or amendment by stockholders of any bylaw that
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fixes a greater voting requirement for stockholders or voting groups of
stockholders than is otherwise required by the WBCL. Although the Restated
Articles do not currently contain authorization for the WEC Bylaw provisions
mentioned above, since each of these provisions was in effect on December 31,
1990, the WBCL provides that they will continue to remain in effect until the
Bylaw is amended or repealed. However, in order to avoid any future question
as to the continuing validity of such greater stockholder voting requirements
in the Bylaws, the Proposed Restated Articles contain a new section (3) to
Article III. D. which provides that the Bylaws may have a greater stockholder
vote for those matters mentioned above. The new section also makes clear that
for purposes of the WBCL provisions requiring Articles' authorization for
greater voting requirements in the bylaws and grandfathering such bylaw
provisions in effect on December 31, 1990, the term "bylaw," as used in those
provisions (but which is undefined in the WBCL), shall mean each separate
section of the WEC Bylaws rather than an entire Bylaw article. By approving
the amendment and restatement of the Restated Articles, stockholders would not
in any way change the existing provisions in the Bylaws which fix greater
voting requirements than are required by law or the Restated Articles.
Rather, adding section (3) to Article III. D. would simply avoid any future
uncertainty as to the continuing validity of such Bylaw provisions.
With respect to item (iii), the WEC Board proposes to amend Article V of the
Restated Articles, which sets forth certain powers of directors and officers
and procedures to be followed during an emergency. Prior to 1991, the WBCL
did not specifically address emergency powers or procedures. In conjunction
with the 1991 WBCL revision, two new statutory provisions governing
emergencies became effective. One of those provisions defines the term
"emergency" to mean a catastrophic event that prevents a quorum of a
corporation's directors from being readily assembled. The Proposed Restated
Articles would use this definition of "emergency" in lieu of the provision
presently contained in the Restated Articles which defines "emergency" to mean
a condition resulting from various listed causes which makes it impossible to
assemble a quorum of the entire WEC Board or which renders the CEO or two or
more of the principal officers of WEC unable to perform their duties. While
the effect of this proposed change might theoretically limit the situations in
which an emergency could be declared, the WEC Board believes that by
incorporating into the Proposed Restated Articles the definition of
"emergency" found in the WBCL, greater certainty as to the legality of the use
of special powers and procedures in such a situation can be obtained. Because
the proposed amended definition of "emergency" is only relevant if a
catastrophic event prevents assembling a quorum of WEC's directors, the
Proposed Restated Articles would delete a paragraph (and other references)
applicable to the CEO or two or more principal officers of WEC being unable to
perform their duties.
The Proposed Restated Articles would also replace the statutory reference to a
former WBCL provision regarding the management of the affairs of a corporation
by its board of directors with references to, in particular, the two new
statutory sections of the WBCL which specifically address emergency situations
and conform certain terminology to that presently contained in the WBCL. Such
statutes permit a corporation to make all provisions necessary for its
management during an emergency and set forth certain emergency powers and
procedures applicable to a board of directors. WEC directors faced with an
emergency could take any action allowed by Article V to the maximum extent
permitted by the WBCL generally, and such statutes in particular, thus
providing the WEC Board with necessary flexibility in an emergency situation.
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<PAGE> 14
After approval by stockholders, the Proposed Restated Articles will be
effective on the date of receipt for filing by the Wisconsin Secretary of
State. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO
AMEND AND RESTATE THE RESTATED ARTICLES.
PROPOSALS 4 & 5: STOCKHOLDER PROPOSALS
Information regarding two stockholder proposals is set forth below. WEC
disclaims any responsibility for the content of each proposal and statement of
support, which are presented as received from the stockholders. As discussed
below, the Board of Directors recommends that you vote AGAINST both of these
proposals.
Proposal 4: Stockholder Proposal #1
Mr. Richard J. Molenda, S70 W13035 Flintlock Trail, Muskego, Wisconsin, who
has indicated that he holds 210 shares of WEC common stock, has given notice
of his intention to present the following proposal for action at the Annual
Meeting:
"BE IT RESOLVED: That the stockholders of Wisconsin Energy Corporation
("Company") urge that the Board of Directors take the necessary steps, in
compliance with Wisconsin state law, to declassify the Board of Directors for
the purpose of director elections. The Board declassification shall be done
in a manner that does not affect the unexpired terms of directors previously
elected."
Proponent's Statement in Support of Stockholder Proposal #1
"The Board of Directors of the Company is divided into three classes serving
staggered three-year terms. I believe that the classification of the Board of
Directors is not in the best interests of the Company and its shareholders.
The elimination of the staggered board would require each director to stand
for election annually. This procedure would allow shareholders an opportunity
to annually register their views on the performance of the board collectively
and each director individually. Concern that the annual election of all
directors would leave the Company without experienced board members in the
event that all incumbents are voted out is unfounded. If the owners should
choose to replace the entire board, it would be obvious that the incumbent
directors' contributions were not valued.
I believe that a company's corporate governance procedures and practices, and
the level of management accountability they impose, are related to the
financial performance of the company. While the Company's current performance
is fair, I believe sound corporate governance practices, such as the annual
election of all directors, will impose the level of management accountability
necessary to help ensure that a good performance record continues over the
long-term.
A classified board of directors protects the incumbency of the board of
directors and current management which in turn limits accountability to
stockholders. I believe that this protection for incumbents reduces
management's accountability to shareholders and negatively impacts financial
performance.
I urge your support for this proposal."
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<PAGE> 15
Directors' Statement in Opposition to Stockholder Proposal #1
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE FOREGOING
STOCKHOLDER PROPOSAL. Last year, a substantial majority of stockholders (over
72% of the shares represented at the 1994 Annual Meeting) voted against this
proposal. The Board of Directors continues to believe that a staggered board,
where approximately one-third of the directors are elected annually, is in the
best interests of WEC and its stockholders. A staggered board helps provide
continuity and stability of WEC's leadership and policies because a majority
of the directors at any one time will have prior experience as WEC directors
and in-depth knowledge of WEC. This system permits directors to effectively
represent the interests of all stockholders in a variety of circumstances,
including responding to circumstances created by demands or actions by a
minority stockholder or group, proponents of a takeover or restructuring or
other extraordinary corporate action. A staggered board also assists WEC to
attract and retain prominent and well-qualified individuals who are able to
commit the time and resources necessary to understand WEC and its operations.
The continuity and quality of leadership that results from a staggered board
creates long-term value for the stockholders. WEC has operated using a
staggered board since its incorporation and has continually earned recognition
as a well-managed, financially-sound corporation.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST STOCKHOLDER PROPOSAL #1.
Proposal 5: Stockholder Proposal #2
The International Brotherhood of Electrical Workers Local 2150, N8 W22520
Johnson Drive, Unit H, Waukesha, Wisconsin, which has indicated that it holds
8,943 shares of WEC common stock, has given notice of its intention to present
the following proposal for action at the Annual Meeting:
"RESOLVED, that the shareholders of the Wisconsin Energy Corporation (the
"Company") recommend that the Board of Directors amend the bylaws to provide
that any person who meets the following criteria shall be ineligible to serve
as a director of the Company.
The Board of Directors shall not include any individual who:
* is an employee or owner of a firm which is one of the Company's paid
advisors or consultants;
* is employed by a significant customer or supplier of the Company;
* has a personal service contract with the Company;
* is a relative of the management of the Company; or
* may otherwise have a conflict of interest which would prevent the
individual from making decisions for the sole benefit of the shareholders.
Proponent's Statement in Support of Stockholder Proposal #2
"This proposal is designated to help strengthen the process by which members
of the Board of Directors are selected by eliminating from consideration any
individuals who have a potential conflict of interest. We believe there are
sufficient numbers of qualified candidates eligible to serve on our Board
without choosing individuals who because of their employment or for other
reasons, may be unable to make decisions concerning the Company in the sole
interest of the shareholders.
- 10 -
<PAGE> 16
The current climate of deregulation and the resulting increased competition
among utilities make elimination of potential conflicts of interest on the
Board even more crucial. For example, the advent of "wheeling", which will
require the Company to transmit power generated by its competitors across the
Company's transmission lines, is expected to primarily benefit the largest
electric power consumers. At least two of our directors are chief executives
of two of the Company's biggest customers. We believe it is not in the best
interests of shareholders for individuals with this potential for divided
loyalties to serve on our Board of Directors.
The Board of Directors should include a balance of full-time Company employees
and independent, outside directors who have no potential for a conflict of
interest. We believe that such a Board would enhance long-term corporate
performance and shareholder value. We urge you to vote for this proposal."
Directors' Statement in Opposition to Stockholder Proposal #2
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST THE FOREGOING
STOCKHOLDER PROPOSAL FOR THE FOLLOWING REASONS:
The Nominating Committee of the WEC Board of Directors selects candidates
based on criteria designed to provide diversity of backgrounds as well as
demonstrated ability to meet the challenges faced by WEC. The selection
criteria is designed, in part, to seek candidates who:
* possess outstanding integrity;
* are of considerable individual stature;
* possess high intelligence and mature judgment;
* have vision and imagination;
* possess the ability to appraise problems, plans and programs objectively;
and
* are socially conscious.
In assessing these personal qualities, the Committee looks for individuals who
have demonstrated these traits through prior experience. In many cases, this
results in candidates who are directors of other corporations, institutions or
civic organizations, and/or who have earned distinction in business, finance,
law, education, government, community service, or in another profession or
vocation.
In selecting among qualified candidates, the Committee seeks individuals who
will also contribute to the Board's diversity and balance, and who are free
from conflicts of interest.
Because the Committee realizes that having conflicts of interest could be
detrimental to shareholder and corporate goals, the Committee already excludes
from consideration individuals who are paid advisors or consultants to WEC,
who have personal service contracts, who are relatives of the management of
WEC, or who may otherwise have a conflict of interest which would prevent the
individual from making decisions for the sole benefit of the shareholders.
The Committee and the Board do NOT believe that being employed by a
significant customer of WEC necessarily presents a conflict of interest.
The Board of Directors believes that this proposal, if adopted, would
needlessly limit from consideration many highly-qualified individuals that
would serve WEC well. Excluding the top one-half of one percent of WEC's
customers, for example, would eliminate from consideration the employees of
nearly 5,000 firms located within our service territory. Since these firms
likely employ at least 100 individuals each, this proposal would eliminate as
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<PAGE> 17
many as one half million individuals within its service territory -- or 25
percent of the populace -- from consideration.
The increased competition among utilities is cited by the proponents as one of
the critical factors behind their proposal. However, with the advent of
customer choice, almost every person employed by a company in mid-America
could become a potential customer of WEC. The Board does not believe that the
purchase of energy from one of WEC's utility subsidiaries presents, by itself,
a conflict of interest.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS RECOMMENDS A VOTE
AGAINST STOCKHOLDER PROPOSAL #2.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may properly
come before the meeting. The WEC Bylaws set forth the requirements that must
be followed should a stockholder wish to propose any floor nominations for
director or floor proposals at annual or special meetings of stockholders. In
the case of annual meetings, the Bylaws state, among other things, that notice
and certain other documentation must be provided to WEC at least 70 days
before the annual meeting. If any other matters do properly come before the
meeting, it is the intention of the persons named as the proxies in the
accompanying form of proxy to vote the proxy in accordance with their judgment
on such matters.
STOCK OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table lists the beneficial ownership of WEC common stock of each
director, nominee, named executive officer and all directors and executive
officers as a group as of February 28, 1995. Included are shares owned by
each individual's spouse, minor children or any other relative sharing the
same residence, as well as shares held in a fiduciary capacity or held in
WEC's Stock Plus and Wisconsin Electric's MESP.
Number Number
of of
Name Shares Name Shares
-------------------- ------ ------------------------- ------
Richard A. Abdoo 13,956 Geneva B. Johnson 2,167
John F. Ahearne 101 John L. Murray 3,000
John F. Bergstrom 3,000 David K. Porter 8,636
John W. Boston 4,713 Morris W. Reid 3,273
Francis Brzezinski 1,581 Jerry G. Remmel 6,294
Robert A. Cornog 1,000 Frederick P. Stratton, Jr. 5,300
Richard R. Grigg, Jr. 2,524 Jon G. Udell (1) 6,480
All directors and executive officers as a group (17 persons, including
those listed above).....92,509 (2)
_______________
(1) Dr. Udell disclaims beneficial ownership of 274 of such shares.
(2) Amount is less than 1% of total WEC common stock outstanding.
- 12 -
<PAGE> 18
Each person has sole voting and investment power as to all shares listed for
such person except that the following persons have shared voting and/or
investment power as to the indicated number of shares so listed: Mr. Boston
(3,121), Mr. Brzezinski (166), Mr. Grigg (290), Mr. Stratton (3,300), Dr.
Udell (2,937) and all directors and executive officers as a group (12,285).
The preceding beneficial ownership information is based on information
furnished by the specified persons and is determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934, as required for purposes of
this proxy statement. It is not necessarily to be construed as an admission
of beneficial ownership for other purposes.
PERFORMANCE GRAPH
The chart below shows a comparison of the cumulative total return over five
years had $100 been invested at the close of business on December 31, 1989 in
each of WEC common stock, the Standard & Poor's (S&P) 500 Index and a Peer
Group Index. Total return includes the increase/decrease in stock price and
reinvested dividends. The 18 public utility holding companies or public
utilities in the Peer Group Index, weighted by their market capitalization at
the beginning of each period for which a return is indicated, are: Baltimore
Gas & Electric Company, Boston Edison Company, CINergy Corporation, DPL Inc.,
DQE Inc., Florida Progress Corporation, New England Electric System, NIPSCO
Industries, Inc., Northern States Power Company, Pinnacle West Capital
Corporation, Potomac Electric Power Company, Public Service Company of
Colorado, San Diego Gas & Electric Company, SCANA Corporation, TECO Energy,
Inc., Union Electric Company, WPS Resources Corporation and WPL Holdings, Inc.
Beginning with year 1994, Cincinnati Gas & Electric was replaced as a member
of WEC's peer group index by CINergy Corporation, the company which succeeded
it in 1994 through a merger with another corporation which was not part of the
Peer Group Index. WEC is not in the Peer Group Index. Companies in the Peer
Group Index were chosen based on a variety of factors, including comparable
revenues, net income, total assets and market capitalization. Other factors
considered were whether the company has nuclear operations, whether or not it
is a holding company and the location of the company.
[PERFORMANCE GRAPH APPEARS HERE]
Value of Investment at Year-End
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
- ------------ -------- -------- -------- -------- -------- ---------
| WEC $100 $105 $137 $146 $159 $158 |
| Peer Group $100 $101 $136 $149 $169 $156 |
| S&P 500 $100 $ 97 $126 $136 $150 $152 |
- -------------------------------------------------------------------------
- 13 -
<PAGE> 19
EXECUTIVE OFFICERS' COMPENSATION
The table below summarizes certain information concerning compensation awarded
to, earned by or paid to WEC's Chief Executive Officer and each of WEC's other
four most highly compensated executive officers for services in all capacities
to WEC and its subsidiaries for the last three fiscal years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
------------
Awards
Annual Compensation ------------
-------------------------------- Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Options/SARs Compensation
($) ($) ($) (#) (1) ($) (2)
- ----------------------------------- ---- ------- ------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
RICHARD A. ABDOO
Chairman of the Board, President 1994 450,000 222,396 0 25,000 15,970
and Chief Executive Officer of 1993 450,000 122,000 0 22,500 15,170
WEC; Chairman of the Board and 1992 429,167 59,500 3,153 0 12,875
Chief Executive Officer of five
subsidiaries and President and
CEO of the other two subsidiaries
- ------------------------------------ ---- ------- ------- ------------ ------------ -------------
JOHN W. BOSTON
Vice President of WEC; President 1994 320,000 98,246 0 0 11,005
and Chief Operating Officer of 1993 262,000 56,000 0 0 8,876
utility subsidiaries; Vice President 1992 247,667 33,900 3,067 0 7,430
of a nonutility subsidiary
- ------------------------------------ ---- ------- ------- ------------ ------------ -------------
JERRY G. REMMEL
Vice President and Treasurer of 1994 215,000 66,009 0 0 7,481
WEC; Chief Financial Officer of WEC 1993 190,000 41,000 0 0 6,406
and all subsidiaries; Vice President 1992 181,500 22,000 3,153 0 5,445
and Treasurer of a nonutility
subsidiary; Treasurer of four
nonutility subsidiaries
- ------------------------------------ ---- ------- ------- ------------ ------------ -------------
DAVID K. PORTER
Senior Vice President of Wisconsin 1994 190,000 58,333 0 3,000 6,695
Electric; Vice President of 1993 185,000 20,000 0 6,500 6,242
Wisconsin Natural 1992 178,167 17,500 3,497 0 5,345
- ------------------------------------ ---- ------- ------- ------------ ------------ -------------
FRANCIS BRZEZINSKI
Vice President of WEC and Wisconsin 1994 212,000 26,037 0 6,500 7,478
Electric; President and Chief 1993 206,167 22,500 0 6,500 7,058
Operating Officer of three 1992 197,500 21,000 0 0 5,925
nonutility subsidiaries; Vice
President of a nonutility
subsidiary
</TABLE>
(1) Grants in 1994 were in combination with contingent dividend awards, as
described in the table entitled "Long-Term Incentive Plans--Awards in Last
Fiscal Year".
(2) All Other Compensation for 1994 for Messrs. Abdoo, Boston, Remmel, Porter
and Brzezinski, respectively, includes: (i) employer matching of contributions
by each named executive into the MESP in the amount of $4,620 for each named
executive officer, (ii) "make whole" payments under the Executive Deferred
Compensation Plan with respect to matching in the MESP on deferred salary or
salary received but not otherwise eligible for matching in the amounts of
$8,880, $4,980, $1,830, $1,080 and $1,740, respectively, and (iii) term life
insurance premiums in the amounts of $2,470, $1,405, $1,031, $995 and $1,118,
respectively.
- 14 -
<PAGE> 20
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants (1) Potential Realizable
-------------------------------------------------- Value At Assumed
Percent of Annual Rates of
Number of Total Stock Price
Securities Options/SARs Exercise Appreciation for
Underlying Granted to or Base Option Term (2)
Options/SARs Employees in Price Expiration ------- ---------
Name Granted(#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ------------------ ------------ ------------ -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Abdoo 25,000 30.8% 26.813 12/13/04 421,564 1,068,325
John W. Boston 0 N/A N/A N/A N/A N/A
Jerry G. Remmel 0 N/A N/A N/A N/A N/A
David K. Porter 3,000 3.7% 26.813 12/13/04 50,588 128,199
Francis Brzezinski 6,500 8.0% 26.813 12/13/04 109,607 277,765
N/A = Not Applicable
</TABLE>
(1) Consists of incentive and non-qualified stock options to purchase
shares of WEC common stock granted pursuant to the 1993 Omnibus Stock
Incentive Plan (the "OSIP") on December 14, 1994. These options were
granted with an equal number of contingent dividend awards (as described
in the table entitled "Long-Term Incentive Plans--Awards in Last Fiscal
Year"), have exercise prices equal to the fair market value of the WEC
shares on the date of grant and first become exercisable on December 14,
1998, at which time they become fully exercisable. Upon a "change in
control" of WEC, as defined in the OSIP, these options shall become
immediately exercisable. These options were granted for a term of ten
years, subject to earlier termination in certain events related to
termination of employment. In the discretion of the Compensation
Committee, the exercise price may be paid by delivery of already owned
shares and tax withholding obligations related to exercise may be
satisfied by withholding shares otherwise deliverable upon exercise,
subject to certain conditions. Subject to the limitations of the OSIP,
the Compensation Committee has the power with the participant's consent
to modify or waive the restrictions on vesting of these options, to amend
these options and to grant extensions or to accelerate these options.
(2) The dollar amounts in these columns are the result of calculations at
the 5% and 10% stock appreciation rates set by the Securities and
Exchange Commission and therefore do not forecast possible future
appreciation, if any, of WEC's common stock price. At the December 13,
2004 expiration date of the options granted in 1994, the price of a share
of WEC common stock would be $43.68 at an assumed annual appreciation
rate of 5% and $69.55 at an assumed annual appreciation rate of 10%.
Gains to all stockholders of record at year-end 1994 at those assumed
annual appreciation rates would be approximately $1.8 billion and $4.7
billion, respectively. The total "Potential Realizable Value" for the
named executive officers would represent less than .03% of such gains.
No stock options other than those granted pursuant to the OSIP were
outstanding in the last fiscal year. Since the earliest date any options
granted under the OSIP become exercisable is December 15, 1997, no options
were exercisable in 1994. The following table sets forth the number of
options which were not exercisable and the value of such options based upon
the difference between the exercise price and the market price of the
underlying shares as of December 31, 1994.
- 15 -
<PAGE> 21
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
Number of Securities Underlying Value of Unexercised In-the-Money
Unexercised Options/SARs Options/SARs
at Fiscal Year-End at Fiscal Year-End
(#) ($)
------------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Richard A. Abdoo 0 47,500 0 0
John W. Boston N/A N/A N/A N/A
Jerry G. Remmel N/A N/A N/A N/A
David K. Porter 0 9,500 0 0
Francis Brzezinski 0 13,000 0 0
N/A = Not Applicable
</TABLE>
The following table shows long-term incentive awards made during 1994:
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS--AWARDS
IN LAST FISCAL YEAR
Estimated Future
Payouts Under
Performance Non-Stock
Number of or Other Price-Based Plans
Shares, Units Period Until -------------------
or Other Maturation Target
Name Rights(#)(1) or Payout ($ or #) (2)
- ------------------ ------------- ------------- -------------------
<S> <C> <C> <C>
Richard A. Abdoo 25,000 12/13/98 $150,000
John W. Boston 0 N/A N/A
Jerry G. Remmel 0 N/A N/A
David K. Porter 3,000 12/13/98 $18,000
Francis Brzezinski 6,500 12/13/98 $39,000
N/A = Not Applicable
</TABLE>
(1) Consists of performance units awarded under the OSIP in combination
with stock options (as described in the table entitled "Option/SAR Grants
in Last Fiscal Year" above). These performance units, entirely in the
form of contingent dividends, will be paid if total shareholder return
(appreciation in the value of WEC common stock plus reinvested dividends)
over a four year period ending December 13, 1998 equals or exceeds the
median return earned by the other companies included in the Peer Group
Index in the "Performance Graph" section of this proxy statement, except
that there will be no payout if WEC's total shareholder return is
negative over the course of such period. If payable, each participant
shall receive an amount equal to the actual dividends paid on WEC common
stock for the period of December 14, 1994 through December 13, 1998
multiplied by the number of performance units awarded to such
participant. Upon a "change in control" of WEC, as defined in the OSIP,
this benefit shall immediately vest with all performance goals deemed
fully achieved.
(2) Assumes, for purposes of illustration only, 4% per year compound
annual dividend increase based on the current quarterly dividend rate.
- 16 -
<PAGE> 22
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Corporate Mission Statement
Wisconsin Energy Corporation ("Wisconsin Energy" or "WEC") is a diversified
company whose principal mission is being the energy supplier of choice in the
region while providing earnings to shareholders commensurate with risk. WEC's
core business is to meet customer needs for quality electric, gas and steam
utility services. WEC's nonutility subsidiaries engage in business activities
primarily to improve the economic vitality of the company and the region. WEC
is committed to improving the quality of life in the area it serves, to
maintaining employee excellence and to providing a working environment that
encourages each employee to achieve superior results and satisfaction.
Compensation Consultant
The Compensation Committee, comprised entirely of non-employee directors, has
retained Towers Perrin, a nationally recognized compensation consultant, to
work with it on matters relating to the administration and design of WEC's
executive compensation program. The consultant reports directly to the
Committee. The consultant provided the Committee with direct access to
competitive information regarding pay levels and practices within WEC's peer
group and the industry, and the Compensation Committee's decisions regarding
executive compensation have been based, largely, on such information.
Philosophy & Objectives
The Board of Directors of WEC strives to attract, retain and motivate a top-
caliber executive team. To that end, it is WEC's intent to offer an
industry-competitive, performance-based executive compensation program.
The components of the program, as well as the opportunities offered through
the program, are designed to be competitive with practices at other
comparably-sized and situated electric and gas utilities and diversified
utility companies. In determining competitive pay rates for WEC's officer
positions, the Committee relies primarily on an analysis of compensation
(including base salary, annual bonus and long-term incentive grant values) for
the peer companies used in the Industry Peer Group Index (the "peer
companies") on the performance graph included in this proxy statement. Data
are collected and analyzed for these companies from both recent proxy
statements and from a survey conducted by the Edison Electric Institute
("EEI"). The Committee relies secondarily on a broader analysis of utility
compensation rates. In this analysis, the Committee reviews compensation data
from the entire EEI database, adjusted appropriately for company size. While
the peer group is a carefully selected group of utilities of comparable size
and offering comparable services, the Committee does not believe these
companies to be the only direct competitors for WEC's executive talent. The
Committee reviews both peer group specific and broader industry pay practices
to be fully informed of industry compensation levels. The Committee does not
mathematically average the data from the two analyses but, rather, considers
them as separate reads of the external market.
While base salaries provide the basis for the executive compensation program,
the Compensation Committee believes that a substantial portion of the total
compensation package should be at risk, dependent on achievement of individual
and corporate goals. Successful achievement of these goals is critical to
meeting WEC's longer-term financial and shareholder return goals.
Accordingly, the annual incentive compensation program links a portion of each
executive's pay to the successful and timely completion of key operational,
- 17 -
<PAGE> 23
safety, financial and customer satisfaction goals and the long-term incentive
compensation program specifically links a portion of each executive's
compensation to the achievement of the longer-term goals of WEC, including
total return on shareholder equity. The long-term incentive plan, designated
the 1993 Omnibus Stock Incentive Plan (the "OSIP"), was adopted by the WEC
Board in 1993 and was approved by the stockholders at the annual meeting held
on May 11, 1994.
The executive compensation program strikes a balance between offering fair and
reasonable fixed compensation (e.g., base salary tied to the executive's
skills and responsibilities), and variable compensation (e.g., annual
incentive compensation tied to the executive's and the company's results over
the most recent fiscal year and long-term incentive compensation tied to the
company's results over a longer designated period of time). The Compensation
Committee believes that this program, which places a substantial portion of
executive compensation at risk, will benefit WEC and its stockholders. The
Compensation Committee expects total cash compensation (base salary plus
annual incentive compensation) for executives to vary from year-to-year, based
upon WEC's operating, safety, financial and customer satisfaction performance.
In line with WEC's pay-for-performance philosophy, superior performance will
yield above-average compensation; likewise, below-average performance will
yield below-average compensation.
The Compensation Committee annually reviews the competitiveness of executive
base salary levels and annual and long-term incentive opportunities relative
to the external market. The Committee periodically conducts an extensive
review of peer group pay practices covering all elements of compensation (base
salary, annual incentive and longer-term incentives), and is advised as to how
these compensation practices differed from or were similar to broader utility
industry practices. As general business and competitive factors dictate, the
Compensation Committee recommends to the Board of Directors for approval
adjustments to the level of base salary and incentive opportunities for
executives. Periodically, the Compensation Committee also reviews the design
of the executive compensation program, to make sure that it ties closely to
WEC's strategic goals and operating style, and reflects prevailing industry
compensation practices.
Program Components
The executive compensation program currently consists of base salary, annual
incentive compensation and long-term incentive compensation. Base salaries,
annual incentive targets and long-term incentive grant guidelines are targeted
at the 50th percentile of industry pay practices. As stated previously, the
Committee primarily considers compensation practices at the peer companies in
this review and has data presented to it from recent proxies and from the EEI
survey in this regard. The Committee also reviews broader industry data from
the entire EEI database, consisting of approximately 100 utilities, adjusted
appropriately for company size. The Committee reviews these data separately
and does not mathematically average or combine the various competitive
analyses. The Committee sets salaries, annual incentive targets and long-term
incentive grant guidelines in consideration of these data, and after direct
discussion with and recommendations from Towers Perrin, its consultant.
In addition to external competitive data, base salaries are determined by
factors including individual performance and potential, changes in duties and
responsibilities, economic conditions in the utility service areas, financial
success of WEC (measured in terms of such factors as total shareholder return
versus the return earned by WEC's externally defined peer group, earnings per
share on WEC common stock and continuity of WEC's dividend payment), customer
- 18 -
<PAGE> 24
satisfaction, competitiveness of utility service rates and outlook for such
rates in the coming year, and changes in salary compensation for comparable
jobs at other utilities. The Committee weights these factors substantially
equally.
WEC provides annual incentive compensation pursuant to its Short-Term
Performance Plan (the "STPP"), which is administered by the Compensation
Committee. Target annual incentive compensation awards for each individual
for 1994 ranged from 15% to 45% of base salary. Annual incentive payouts
under the plan are based upon the achievement of individual and specific
company-wide operating, safety, financial and customer satisfaction
objectives. Individual award payouts are permitted to range from 0% to 125%
of targeted amounts based on individual and team performance.
Company-wide performance goals are established for each of the active
subsidiaries. For Wisconsin Electric Power Company, WEC's principal
subsidiary, the 1994 STPP financial performance goals focused on achievement
of target earnings per share, while the 1994 STPP operational performance
goals related principally to:
* Total shareholder return versus WEC's externally defined peer group
* Safety of nuclear operations
* Customer satisfaction
* Demand-side management including conservation and load management
* Operating and maintenance cost management
* Energy production availability
Under the STPP for 1994, the Compensation Committee awarded key employee
participants amounts ranging from 12% to 49% of base salary as calculated
under the formula for the STPP for each individual. This decision was based
on (i) the extent to which a variety of predetermined 1994 STPP corporate
performance goals were achieved (principally those enumerated above) and (ii)
the extent to which each STPP participant met his or her 1994 individual
goals. The 1994 STPP corporate performance goals were divided into two
parts -- 60% operational and 40% financial (except that the weightings for the
Chief Executive Officer (CEO) were 60% financial and 40% operational, as the
Compensation Committee believes that the CEO has the primary responsibility
for the financial success of WEC).
In 1994, the stockholders approved the OSIP which had been recommended by
Towers Perrin. The OSIP authorizes the Committee to grant, with Board of
Directors approval, to officers and other key employees of WEC and its
subsidiaries performance-based incentives and other equity interests of WEC in
the form of one or any combination of the following: stock options, stock
appreciation rights, stock awards and performance units. Initial awards were
made under the OSIP for year 1993, subject to the aforementioned stockholder
approval. For 1994, OSIP awards in the form of stock options and performance
dividend units were made to 18 key employees selected by the Committee. The
persons chosen to participate in the OSIP are those officers and key employees
who will be responsible for leading WEC and its subsidiaries into the 21st
century. The Compensation Committee and the Board of Directors have approved
a table of stock option and performance dividend unit grant guidelines for
each of four groups of OSIP participants. The grant guidelines presently
range from 20,000 to 25,000 stock options and performance dividend units for
the Chairman of the Board and Chief Executive Officer to 1,000 to 1,500 of
such options and units for participating junior executives. The Compensation
Committee determined, based on its subjective evaluation of each participant,
that the 1994 grant should be made at the mid-point of the respective
guideline range for each participant, except for that of the Chairman of the
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<PAGE> 25
Board and Chief Executive Officer whose 1994 grant was at the upper limit of
his guideline range. The Compensation Committee expects that the present
guideline range will be modified from time to time based on changing
conditions in the electric and gas utility industry. As a condition of
participation in the OSIP, each participant must achieve specified stock
ownership targets. Several officers who are nearing retirement, including
named executive officers John W. Boston and Jerry G. Remmel, are not
participants in the OSIP.
Chief Executive Officer Compensation
Mr. Abdoo's base salary for 1994 was $450,000 and has been set by the
Committee at approximately the 50th percentile as compared to industry pay
practices. His salary was also adjusted to account for the factors listed in
the Program Components section of this report pertaining to base salaries;
such factors were weighted substantially equally. Mr. Abdoo's base salary has
not been increased since November 1992 because in 1993 and 1994 it continued
to approximate such 50th percentile.
Mr. Abdoo is a designated participant in the STPP and the OSIP. With respect
to the STPP, for fiscal year 1994, the Compensation Committee awarded Mr.
Abdoo the annual incentive award set forth in the "Bonus" column of the
Summary Compensation Table. The Committee established Mr. Abdoo's STPP target
award level at 45% of base salary for 1994, with such award being permitted to
range between 0% and 125% thereof, based on individual performance, as
described under the Program Components section of this report. The
Committee's evaluation of Mr. Abdoo's 1994 performance resulted in an award of
49% of his base salary for the year. The award was based upon WEC's actual
performance versus the specific company-wide operational and financial
performance goals cited above in the Program Components section. Mr. Abdoo's
award was also based on the degree to which his 1994 individual goals were
achieved. His principal goals related to achieving a safe and effective
operation of Wisconsin Electric's Point Beach Nuclear Plant, achieving a
satisfactory earnings level for WEC, ensuring that WEC's subsidiaries met
their 1994 goals, and providing leadership to ensure that WEC and its
subsidiaries operate in an environmentally responsible, community-minded
manner to improve the quality of life in the areas they serve.
In determining Mr. Abdoo's STPP award, the Committee also considered his
exceptional performance in leading WEC during a time of great change and
competitive challenges in the utility industry. Specifically, the committee
members reviewed the progress made during 1994 as part of WEC's revitalization
program, an effort to transition WEC to a leaner, more competitive business
enterprise, including (i) the identification and implementation of a new
management structure which will lead WEC into the next century (ii) his
leadership role and strong voice in influencing federal and state utility
restructuring regulation and legislation, (iii) WEC's continued strong
financial reputation, (iv) the continued safe and low-cost operation of the
Point Beach Nuclear Plant, (v) the construction of a light-weight aggregate
facility at Oak Creek Power Plant, (vi) his leadership of management and
represented employees in guiding them to understand and provide assistance in
restructuring the way WEC does business and (vii) the resulting numerous
process changes that will enable WEC to become the low-cost energy provider in
the upper midwest region. Mr. Abdoo's award was principally determined by
achievement of the company-wide goals and was adjusted based on accomplishment
of individual goals. The Committee weighted the company-wide performance
goals as cited above in the Program Components section; individual goals were
weighted substantially equally with the exception of goals relating to
financial performance, such as earnings per share and total shareholder
return, which were weighted somewhat higher.
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<PAGE> 26
With respect to the OSIP, in keeping with the Compensation Committee's
philosophy as stated above, Mr. Abdoo was awarded stock options and related
dividend performance units in 1994 as set forth in the "Long-Term Compensation
Awards" column of the Summary Compensation Table to specifically link a
portion of his compensation to the achievement of WEC's longer-term goals.
Mr. Abdoo's award was set by the Committee at approximately the 50th
percentile as compared to industry grant practices. The award of dividend
performance units will be paid if total shareholder return (appreciation in
the value of WEC common stock plus reinvested dividends) over a four year
period ending December 13, 1998 equals or exceeds the median return earned by
the peer companies, except that there will be no payout if WEC's total
shareholder return is negative over the course of such period.
The Committee also applied subjective judgment in evaluating the relative
importance of the factors which were the basis for determining each component
of Mr. Abdoo's compensation (i.e., base salary, annual and long-term
incentives) to precisely determine his salary and awards.
Compensation of Other Named Executive Officers
The base salaries of the other four named executive officers are set forth in
the "Salary" column of the Summary Compensation Table. These officers
received increases during the fiscal year ranging from approximately 3% to 22%
of base salary on an annualized basis. The Committee set such salaries at
approximately the 50th percentile as compared to industry pay practices. Each
salary was also adjusted to account for the factors listed in the Program
Components section of this report pertaining to base salaries; such factors
were weighted substantially equally.
The other four named executive officers are designated participants in the
STPP. For fiscal year 1994, such officers received annual incentive awards as
set forth in the "Bonus" column of the Summary Compensation Table. Their
awards, which ranged between 12% and 31% of base salary, were based upon
criteria similar to those described for Mr. Abdoo's annual incentive award,
except that Mr. Brzezinski's award was based on criteria relating 60% to the
accomplishment of financial and operational goals pertaining to WEC's
nonutility subsidiaries and 40% to the accomplishment of financial and
operational goals of Wisconsin Electric Power Company. Each such award was
principally determined by achievement of the company-wide goals and was
adjusted based on accomplishment of individual goals. The Committee weighted
the company-wide goals as cited above in the Program Components section;
individual goals were weighted substantially equally with the exception of
goals relating to financial performance, which were weighted somewhat higher.
Of the other four named executive officers, only Messrs. Porter and Brzezinski
are participants in the OSIP. Their long-term incentive compensation, awarded
based upon criteria similar to those described for Mr. Abdoo's long-term
incentive award, is reflected in the "Long-Term Compensation Awards" column of
the Summary Compensation Table. Their awards were set at approximately the
50th percentile as compared to industry grant practices.
The Committee also applied subjective judgment in evaluating the relative
importance of the factors which were the basis for determining each component
of the named executive officers' compensation (i.e., base salary, annual and
long-term incentives) to determine precisely their respective salaries and
awards.
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Compliance With New Tax Regulations Regarding Executive Compensation
Section 162(m) of the Internal Revenue Code, added by the Omnibus Budget
Reconciliation Act of 1993, generally disallows a tax deduction to public
companies for compensation over $1 million paid to the corporation's chief
executive officer and the other proxy-named executive officers. Qualifying
performance-based compensation will not be subject to the deduction limit if
certain requirements are met. WEC's executive compensation program, as
presently constructed, is not likely to generate non-deductible compensation
in excess of these limits. The Committee will continue to review these
evolving tax regulations as they apply to WEC's executive compensation
program. It is the Committee's intent to preserve the deductibility of
executive compensation to the extent reasonably practicable and to the extent
consistent with its other compensation objectives.
Compensation Committee
----------------------
Morris W. Reid (chair)
John F. Ahearne
John F. Bergstrom
Robert A. Cornog
Geneva B. Johnson
John L. Murray
Frederick P. Stratton, Jr.
Jon G. Udell
RETIREMENT PLANS
WEC's utility subsidiaries maintain separate retirement plans for management
employees, including executive officers. WEC executive officers participate
in the Wisconsin Electric management employee retirement plan. The plans
provide retirement income based upon years of credited service and final
average annual compensation for the 36 highest consecutive months. The
following table shows the estimated annual pension benefits payable upon
retirement to persons in various compensation and years-of-service
classifications:
PENSION PLAN TABLE
Years of Service
----------------------------------------------------------
Remuneration 15 20 25 30 35 40
- ------------ -------- -------- -------- -------- -------- --------
$ 50,000 $ 11,189 $ 14,918 $ 18,648 $ 22,378 $ 24,524 $ 26,670
100,000 24,125 32,167 40,209 48,251 52,834 57,418
150,000 37,064 49,418 61,773 74,128 81,149 88,170
200,000 50,000 66,667 83,334 100,001 109,459 118,918
250,000 62,937 83,916 104,895 125,874 137,770 149,665
300,000 75,875 101,167 126,459 151,751 166,084 180,418
400,000 101,750 135,667 169,584 203,501 222,709 241,918
500,000 127,625 170,167 212,709 255,251 279,334 303,418
600,000 153,500 204,667 255,834 307,001 335,959 364,918
700,000 179,375 239,167 298,959 358,751 392,584 426,418
800,000 205,250 273,667 342,084 410,501 449,209 487,918
900,000 231,125 308,167 385,209 462,251 505,834 549,418
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<PAGE> 28
The compensation for the individuals listed in the Summary Compensation Table
in the columns labeled "Salary", "Bonus" and "All Other Compensation" is
virtually equivalent to the compensation considered for purposes of the
retirement plans and the various supplemental plans. Messrs. Abdoo, Boston,
Remmel, Porter and Brzezinski currently have 19, 12, 39, 25 and 5 credited
years of service, respectively. Credited years of service under the
retirement plans for certain individuals may be fewer than years of service
with the companies as reported in the annual report to stockholders.
Retirement benefits are not subject to any deduction for Social Security or
other offset since they are computed using a step-rate formula which provides
a Social Security integrated benefit based upon percentages of the average of
the participant's highest 36 consecutive months of compensation for up to 30
years of credited service with additional (lower) percentages of compensation
in excess of 30 years up to a maximum of 10 years. The Supplemental Executive
Retirement Plan (described below) provides designated participants a "make
whole" benefit equal to any decrease in pension which may have resulted when
the retirement plans adopted the step-rate formula. Such "make whole" benefit
will be paid as a pension supplement out of the grantor trust described below.
Designated elected officers of WEC and the utility subsidiaries participate in
the Supplemental Executive Retirement Plan (the "SERP"). The SERP provides a
monthly supplemental pension benefit to participants, which will be paid out
of the grantor trust described below, (a) which is equal to the difference
between the actual pension benefit payable under the management employee
retirement plan and what such pension benefit would be if calculated without
regard to any limitation imposed by the Internal Revenue Code on pension
benefits or covered compensation and (b) which is calculated so as to provide
participants with a supplemental lifetime annuity, estimated to amount to
between 8% and 10% of final average compensation depending on which pension
payment option is selected. Except for a "change in control" of WEC, as
defined in the SERP, no such payments are made until after the retirement or
death of the participant.
WEC has entered into an agreement with Mr. Abdoo and Wisconsin Electric has
entered into an agreement with Mr. Boston, each of whom cannot accumulate by
normal retirement age the maximum number of years of credited service under
the management employee retirement plans. According to these agreements,
Messrs. Abdoo and Boston at retirement will receive supplemental retirement
payments which will make their total retirement benefits at age 60 or older
substantially the same as those payable to employees who are in the same
compensation bracket and who became plan participants at the age of 25. On
October 27, 1993, resolutions were adopted authorizing amendments to these
agreements, the SERP and the Executive Deferred Compensation Plan to provide
for establishment of a grantor trust to fund such agreements and plans and to
provide for optional lump sum payments and, in the instance of a change in
control, mandatory lump sum payouts without regard to whether the executive's
employment has terminated. In each case, the interest rate benchmark formula
for calculating the lump sum amount is the five-year U. S. Treasury Security
yield as of the last business day of the month prior to date of payment. The
WEC Executive Non-Qualified Trust has been established and funded for this
purpose.
1996 ANNUAL MEETING
Stockholders wishing to propose director candidates for consideration and
recommendation by the Nominating Committee for election at the 1996 Annual
Meeting must submit the name(s) and qualifications of any proposed
candidate(s) to WEC's Corporate Secretary not later than September 15, 1995.
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<PAGE> 29
The Nominating Committee and WEC Board have approved director candidate
selection criteria which are designed to provide the Board with a diversity of
experience to allow it to effectively meet the many challenges WEC faces in
today's changing environment. The Bylaws state that directors shall be
stockholders of WEC.
Stockholders wishing to submit written proposals for inclusion in the proxy
statement for the 1996 Annual Meeting must send the proposals to WEC's
Corporate Secretary so as to be received on or before November 30, 1995.
Stockholders wishing to propose any floor nominations for director or floor
proposals at the 1996 Annual Meeting must provide notice thereof and submit
certain other documentation as required by WEC's Bylaws to WEC's Corporate
Secretary so as to be received at least 70 days prior to such annual meeting.
The address of the Corporate Secretary is 231 West Michigan Street, P. O. Box
2949, Milwaukee, Wisconsin 53201.
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APPENDIX A
PROPOSED RESTATED ARTICLES OF INCORPORATION OF
WISCONSIN ENERGY CORPORATION
The following Restated Articles of Incorporation reflect all changes to the
existing Restated Articles proposed for approval by the stockholders at the
1995 Annual Meeting. Upon approval by stockholders of the amendment and
restatement of the Restated Articles and filing with the Wisconsin Secretary
of State, the Restated Articles of Incorporation below would constitute WEC's
new Restated Articles of Incorporation.
Material to be deleted from the Restated Articles is shown {between brackets
and is struck through}; material to be added is shown as bold underline.
[Note: EDGAR format shows deletions in brackets and material to be added in
capital letters.]
RESTATED
ARTICLES OF INCORPORATION
OF
WISCONSIN ENERGY CORPORATION
These Restated Articles of Incorporation OF WISCONSIN ENERGY CORPORATION, A
CORPORATION INCORPORATED UNDER CHAPTER 180 OF THE WISCONSIN STATUTES, THE
WISCONSIN BUSINESS CORPORATION LAW, supersede and take the place of the
existing RESTATED Articles of Incorporation and all prior amendments thereto
[and restatements thereof].
ARTICLE I. NAME
The name of the corporation is WISCONSIN ENERGY CORPORATION.
ARTICLE II. PURPOSE
The corporation is organized for the purpose of engaging in any lawful
activity within the purposes for which corporations may be organized under the
Wisconsin Business Corporation Law.
ARTICLE III. DESCRIPTION OF CAPITAL STOCK
A.Authorized Number and Classes of Shares
The aggregate number of shares which the corporation shall have authority to
issue is Three Hundred and Forty Million (340,000,000) shares, consisting of
Three Hundred and Twenty-Five Million (325,000,000) shares of Common Stock of
the par value of One Cent ($.01) per share (hereinafter called the "Common
Stock") and Fifteen Million (15,000,000) shares of Preferred Stock of the par
value of One Cent ($.01) per share (hereinafter called the "Preferred Stock").
B.Common Stock Provisions
(1) Dividends
Subject to any rights of holders of Preferred Stock, such dividends (payable
in cash, stock or otherwise) as may be determined by the Board of Directors
may be declared and paid on the Common Stock from time to time from any funds,
property or shares legally available therefor.
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(2) Voting Rights
Subject to any rights of holders of Preferred Stock to vote on a matter as a
class or series, each outstanding share of Common Stock shall be entitled to
one vote on each matter submitted to a vote of holders of Common Stock at a
meeting of stockholders.
(3) Liquidation, Dissolution or Winding Up
In the event of any liquidation, dissolution or winding up of the corporation,
the holders of Common Stock, subject to any rights of holders of Preferred
Stock, shall be entitled to receive the net balance of any remaining assets of
the corporation.
(4) No Preemptive Rights
No holder of Common Stock shall be entitled as such, as a matter of right, to
subscribe for or purchase or receive any part of any new or additional issue
of stock, or securities convertible into stock, of any class whatever, whether
now or hereafter authorized, or whether issued for cash, property or services,
by way of dividend, or in exchange for the stock of another corporation.
C. Preferred Stock Provisions
The Board of Directors shall have authority to divide the Preferred Stock into
series, to issue shares of any such series and, within the limitations set
forth in these Articles of Incorporation or prescribed by law, to fix and
determine the relative rights and preferences of the shares of any series so
established. Each such series shall be so designated as to distinguish the
shares thereof from the shares of all other series and classes. All shares of
Preferred Stock shall be identical except as to the following relative rights
and preferences, as to which there may be variations between different series:
(1) The rate of dividend;
(2) The price at and the terms and conditions on which shares may be
redeemed;
(3) The amount payable upon shares in the event of voluntary or involuntary
liquidation of the corporation;
(4) Sinking fund provisions for the redemption or purchase of shares;
(5) The terms and conditions on which shares may be converted, if shares are
issued with the privilege of conversion;
(6) Voting rights, if any; and
(7) Any other rights or preferences as to which the laws of the State of
Wisconsin, as in effect at the time of the determination thereof, permit
variations between different series of Preferred Stock.
Shares of Preferred Stock shall have only such voting rights, if any,
preemptive rights, if any, and other rights as are fixed and determined by the
Board of Directors in accordance with the foregoing provisions or as may be
required by law.
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D. Certain Other Provisions Affecting Stockholders
(1) Restriction on Certain Purchases of Common Stock at Market Premium
(a) The corporation shall not purchase any shares of Common Stock from any
person or other entity if more than 5% of the outstanding shares of Common
Stock are believed by the Board of Directors to be Beneficially Owned by such
person or other entity at the time the purchase is authorized by the Board, at
a price exceeding significantly (as determined by the Board of Directors) the
then current market price. This provision shall not apply, however, to (i)
any purchase of shares believed by the Board to have been Beneficially Owned
by the seller, or by the seller and any of the seller's Affiliates
consecutively, for at least the two-year period ending with the date of
purchase; (ii) any purchase of shares which has been approved by affirmative
vote by a majority of the aggregate number of votes which the holders of the
then outstanding shares of Common Stock and Preferred Stock are entitled to
cast, voting together as a class, in the election of directors; or (iii) any
purchase pursuant to a tender offer to all holders of Common Stock on the
same terms.
(b) As used in this Subsection (1):
(i) "Affiliate", with respect to any person or other entity, means any other
person or other entity that directly, or indirectly through one or more
intermediary, controls, is controlled by, or is under common control with,
such former person or other entity;
(ii) "Beneficially Owned", as of any time, means Beneficially Owned within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as in
effect on June 1, 1986.
(2) Shares Not Subject to Statutory Vote Reduction Provisions
The voting power of shares of Common Stock and Preferred Stock shall not at
any time be subject to [subsection (9) of] Section [180.25] 180.1150 of the
Wisconsin [statutes] STATUTES or any successor provision.
(3) BYLAW PROVISIONS FIXING GREATER VOTING REQUIREMENTS
THE BYLAWS MAY REQUIRE A GREATER STOCKHOLDER VOTE THAN WOULD OTHERWISE BE
REQUIRED BY LAW OR BY THESE ARTICLES OF INCORPORATION FOR: (I) REMOVAL OF A
DIRECTOR FROM OFFICE; OR (II) AMENDING PROVISIONS OF THE BYLAWS RELATING TO OR
IN CONNECTION WITH TAKING ACTION BY THE UNANIMOUS CONSENT OF STOCKHOLDERS
WITHOUT A MEETING; THE NUMBER, TERM, QUALIFICATION, CLASSIFICATION AND
ELECTION OF DIRECTORS; THE REMOVAL OF A DIRECTOR FROM OFFICE; NOTICE FOR BOARD
OF DIRECTORS' MEETINGS; INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHER
PERSONS BY THE CORPORATION; OR BYLAW AMENDMENTS. FOR PURPOSES OF SECTIONS
180.1021 AND 180.1706(4) OF THE WISCONSIN STATUTES, EACH SECTION OF THE BYLAWS
SHALL BE DEEMED TO BE A SEPARATE BYLAW.
ARTICLE IV. NUMBER OF DIRECTORS
The Board of Directors shall consist of such number of directors as shall be
fixed from time to time by or in the manner provided in the Bylaws, which may
provide that the directors shall be divided into three classes as contemplated
in [Sec. 180.33] SECTION 180.0806 of the Wisconsin [statutes] STATUTES or any
successor provision.
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ARTICLE V. EMERGENCY PROVISIONS
The business and affairs of the corporation shall be managed by its Board of
Directors, except as otherwise provided in this Article V after the occurrence
and during the continuance of any Emergency. During any Emergency the
provisions of this Article V shall apply to the maximum extent permitted by
the Wisconsin Business Corporation Law, particularly [Section 180.30] SECTIONS
180.0207 AND 180.0303 thereof, or any successor [provision] PROVISIONS, as at
the time in effect. The provisions of this Article V shall control during any
Emergency, notwithstanding any contrary provisions of these Articles of
Incorporation or the Bylaws of the corporation.
As used in this Article V, "Emergency" means a [condition resulting from any
cause, including but not limited to acts of war, attack or insurrection, or
disasters caused by accident or the forces of nature, which either makes it
impossible to notify and assemble a quorum of the entire Board of Directors
for a meeting within the minimum notice period specified in the Bylaws, or
which renders the chief executive officer or two or more of the other
principal officers of the corporation unable to perform their duties in such
capacities, whether through death, injury, illness, disappearance or inability
to contact them.] CATASTROPHIC EVENT THAT PREVENTS A QUORUM OF THE BOARD OF
DIRECTORS FROM BEING READILY ASSEMBLED.
During any Emergency [which makes it impossible to assemble a quorum of
directors at a duly noticed and constituted meeting], the business and affairs
of the corporation shall be managed by an interim Board of Directors
consisting of so many of the incumbent directors, if any, as are known to be
alive and not incapacitated, and whom the corporation is able to contact by
normal means of communication, together with provisional directors selected as
hereinafter provided. The total number of directors on such interim Board of
Directors shall be the lesser of the number determined in or pursuant to the
Bylaws, or the number of eligible persons who are known to be alive, are not
incapacitated and can be readily contacted by the usual means of
communication. The Board of Directors by resolution may from time to time
designate a list of provisional directors and the order of priority in which
such persons shall become interim directors in the event of Emergency, which
designation shall continue in effect until such resolution has been
subsequently amended or rescinded or has by its terms ceased to have effect.
Interim directors need not be stockholders of the corporation. In addition to
the exercise, on a temporary basis, of all of the powers of the regular Board
of Directors, the interim Board of Directors shall have the authority to
declare vacancies in any positions of the regular Board of Directors in cases
where any incumbent director is incapacitated or missing or otherwise unable
to be contacted within a reasonable time, and to fill such vacancies, as well
as any vacancy resulting from the death of a director, by electing
replacements to the regular Board of Directors to serve until the next
succeeding annual meeting of stockholders.
[During any Emergency which renders the chief executive officer or two or more
of the other principal officers of the corporation unable to perform their
duties, the functions and duties of the chief executive officer or such other
principal officers, as the case may be, may be performed by such interim
officers, selected as hereinafter provided, as are known to be alive and not
incapacitated, and whom the corporation is able to contact by normal means of
communication. The Board of Directors by resolution may from time to time
designate one or more provisional successors to each principal office of the
corporation and the order of priority in which such persons shall succeed to
such positions in the event of an Emergency, which designation shall continue
in effect until such resolution has been subsequently amended or rescinded or
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has by its terms ceased to have effect. Any interim officer shall have, and
may exercise, all of the duties and powers of the office to which he has
succeeded on an interim basis until the Board of Directors has determined by
affirmative action that the officer whom he succeeded is again able to perform
his duties, or has elected a regular successor to such office.]
When an Emergency has occurred, any director[, principal officer] or
provisional director [or officer] named in any aforementioned resolution is
empowered on behalf of the corporation to declare the provisions of this
Article V to be in effect, and to call a meeting of either the regular or an
interim Board of Directors on such notice, which may be shorter than the
notice provided for in the Bylaws for special meetings of the Board of Direc-
tors, as such person may determine to be advisable. In the case of a meeting
of the interim Board of Directors, reasonable efforts shall be made to give
such notice to all persons who are or may be eligible to serve as interim
directors. At the first meeting of any interim Board of Directors, three or
more interim directors may act, notwithstanding any other quorum requirement
provided by these Articles of Incorporation or the Bylaws of the corporation,
and notwithstanding any failure of other interim directors to receive notice
of the meeting. Prior to any initial meeting of the interim Board of
Directors three or more interim directors, and thereafter a majority of the
interim directors who are deemed to be serving as such, may take action as the
Board of Directors by telephone [poll] MEETING, written instrument or other
means which reasonably evidences the assent to the action of a majority of
such number of interim directors, in lieu of action at a meeting.
ARTICLE VI. ACQUISITION OF OWN SHARES
Subject to the provisions of Section D(1) of Article III of these Articles of
Incorporation, the corporation is authorized to purchase, take, receive or
otherwise acquire shares of Common Stock or Preferred Stock of the
corporation, with the approval of the Board of Directors, with or without any
vote or consent of stockholders.
ARTICLE VII. AMENDMENTS TO THE ARTICLES
Any lawful amendment of these Articles of Incorporation may be made by
affirmative vote by at least the proportion specified below of the aggregate
number of votes which the holders of the then outstanding shares of Common
Stock and Preferred Stock are entitled to cast on the amendment and, if the
shares of one or more classes or series are entitled under these Articles of
Incorporation or otherwise by law to vote thereon as a class, affirmative vote
by the same proportion of the aggregate number of votes which the holders of
the then outstanding shares of such one or more classes or series are entitled
to cast on the amendment. The proportion referred to above in this Article
VII shall be 80% in the case of any amendment of the provisions set forth in
Sections C and D(1) of Article III of these Articles of Incorporation, and in
this Article VII, and any amendment rendering inapplicable to the corporation
[Section 180.725] SECTIONS 180.1130 THROUGH 180.1134 of the Wisconsin Business
Corporation Law or any successor [provision] PROVISIONS, and shall be a
majority in all other cases.
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ARTICLE VIII. EFFECT OF HEADINGS
The descriptive headings in these Articles of Incorporation were formulated,
used and inserted herein for convenience only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
ARTICLE IX. REGISTERED OFFICE AND AGENT
The address of the registered office of the corporation is 231 West Michigan
Street, Milwaukee, Wisconsin 53201 and the name of its registered agent at
such address is J. H. Goetsch. The county of such registered office is
Milwaukee County.
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This document is printed on recycled paper.
<PAGE> 37
WISCONSIN ENERGY CORPORATION
P
R PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
O
X May 17, 1995
Y
This PROXY is solicited by the Board of Directors for use at the Annual
Meeting of Stockholders on May 17, 1995. Your shares of stock will be voted
as you specify below. If no choice is specified, your proxy will be voted
"FOR" proposals 1, 2 and 3 and "AGAINST" proposals 4 and 5.
By signing this PROXY, you revoke all prior proxies and appoint Richard
A. Abdoo, John W. Boston and John H. Goetsch, or any of them, as proxies, with
the power to appoint substitutes, to vote your shares on the matters shown
below and on any other matters which may come before the Annual Meeting of
Stockholders and all adjournments of the meeting.
1. Elect Robert A. Cornog, Richard R. Grigg, Jr. and Frederick P.
Stratton, Jr. as Directors;
2. Ratify appointment of PRICE WATERHOUSE LLP as Independent Public
Accountant;
3. Approve the amendment and restatement of Wisconsin Energy
Corporation's Restated Articles of Incorporation (the "Restated
Articles") to conform certain provisions of the Restated Articles
with the appropriate sections of the revised Wisconsin Business
Corporation Law ("WBCL");
4. Stockholder Proposal #1 to declassify the Board of Directors;
5. Stockholder Proposal #2 to establish different director selection
criteria;
all as described in the Notice and Proxy Statement relating to the Annual
Meeting, receipt of which is hereby acknowledged.
SEE REVERSE SIDE. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS, JUST SIGN AND DATE ON THE REVERSE SIDE; YOU NEED
NOT MARK ANY VOTING BOXES.
SEE REVERSE
SIDE
<PAGE> 38
Please mark your
[X] votes as in this
example.
------------------------------------------------------------------
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
------------------------------------------------------------------
1. Elect Robert A. Cornog,
Richard R. Grigg, Jr. and
Frederick P. Stratton, Jr.
as Directors:
FOR WITHHELD
ALL FROM ALL
[ ] [ ]
--------------------------------------------------------
For, except vote withheld from the following nominee(s):
2. Ratify appointment of Auditors
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Amendment and restatement of
Restated Articles to conform
certain provisions with the
WBCL
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
-------------------------------------------------------------------
The Board of Directors recommends a vote AGAINST Proposals 4 and 5.
-------------------------------------------------------------------
4. Stockholder Proposal #1 to
declassify the Board of Directors
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. Stockholder Proposal #2 to
establish different director
selection criteria
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Where no voting instructions are given, the shares represented
by this Proxy will be VOTED FOR Proposals No. 1, 2 and 3 and
VOTED AGAINST Proposals No. 4 and 5.
<PAGE> 39
Please sign exactly as name(s) appears hereon. Joint owners
should each sign personally. When signing as executor,
administrator, corporation officer, attorney, agent, trustee,
guardian or in other representative capacity, please state
your full title as such.
- ------------------------------------------------------------
SIGNATURE DATE
- ------------------------------------------------------------
SIGNATURE DATE
(If Held Jointly)
I PLAN TO ATTEND MEETING
If you check this box to the right
an admission card will be sent to you. [ ]
<PAGE> 40
This appendix provides a narrative description of the differences between the
electronic format document and the printed copy relating to the substantive
graphic or image material contained in the proxy statement.
1. Under the heading "Election of Directors", a black and white photograph
of each nominee and director appears immediately to the left of the
narrative of each respective nominee and director. The photographs will
appear on pages 4-6 of the printed copy.
2. Under the heading "Performance Graph", the table in the electronic
format document represents datapoints for the graph labeled "Relative
Market Performance--Five-Year Cumulative Total Return", a paper copy of
which is being filed supplementally to the Branch Chief in the Division
of Corporation Finance. The performance graph will appear on page 12
of the printed copy.
B-1
