NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD ON APRIL 18, 1996
March 8, 1996
SHAREHOLDERS OF IWC RESOURCES CORPORATION:
The annual meeting of shareholders of IWC Resources Corporation
("Resources") will be held at the University Place Conference Center and Hotel,
850 West Michigan Street, Room 132, Indianapolis, Indiana 46202, on Thursday,
April 18, 1996, at 11:00 a.m., EST, for the following purposes:
(1)To elect five directors to serve three-year terms until the annual meeting
of shareholders in 1999 and until their successors are elected and have
qualified, as set forth in the accompanying Proxy Statement;
(2)To approve or disapprove a proposed amendment to Article V of Resources'
Articles of Incorporation increasing the number of authorized shares of
common stock from 10,000,000 to 20,000,000 shares;
(3)To approve or disapprove the proposed appointment of KPMG Peat Marwick LLP
as auditors for Resources for 1996; and
(4)To transact such other business as may properly come before the meeting.
All shareholders of record at the close of business on February 29, 1996,
will be eligible to vote.
It is important that your shares be represented at this meeting so that a
quorum will be assured. Whether or not you expect to be present, please
complete, date, sign and return the enclosed proxy form in the accompanying
addressed, postage-paid envelope. If you attend the meeting, your proxy will
be canceled at your request.
By Order of the Board of Directors,
JOHN M. DAVIS, Secretary
IWC RESOURCES CORPORATION
<PAGE>
(ANNUAL REPORT MAILED CONCURRENTLY)
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
IWC RESOURCES CORPORATION
TO BE HELD ON APRIL 18, 1996
This statement is being furnished on or about March 8, 1996, to
shareholders of record on February 29, 1996, in connection with a solicitation
by the Board of Directors of IWC Resources Corporation ("Resources") of proxies
to be voted at the annual meeting of shareholders of Resources to be held at
11:00 a.m., EST, Thursday, April 18, 1996, at the University Place Conference
Center and Hotel, 850 West Michigan Street, Room 132, Indianapolis, Indiana
46202, for the purposes set forth in the accompanying Notice. Resources is the
parent corporation of Indianapolis Water Company ("IWC").
On February 29, 1996, there were outstanding and entitled to vote 8,293,765
common shares of Resources. The shareholders entitled to vote at the meeting
will be determined from the record at the close of business on that date and
will have one vote for each share held. In addition, on such date there were
outstanding and entitled to vote 51,612 shares of Resources Series B
Convertible Redeemable Preferred Stock ("Preferred Stock"). The holders of the
Preferred Stock are entitled to one vote for each share held and vote together
with the holders of the common shares.
If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time insofar as it has not been exercised. Unless revoked, a
properly executed proxy will be voted at the meeting in accordance with the
instructions of the shareholder in the proxy as to Proposals 1, 2 and 3 or, if
no instructions are given, for the election as directors of all nominees listed
under Proposal 1 and for approval of Proposals 2 and 3. Assuming a quorum is
present at the meeting, directors will be elected by a plurality of the votes
cast by the shares entitled to vote in the election at the meeting. The
approval of the proposal to increase the number of authorized shares of
Resources will require an affirmative vote of a majority of the total
outstanding shares. The appointment of auditors will require that the votes
cast in favor of such proposal exceed the votes cast against. Pursuant to the
Indiana Business Corporation Law and the Bylaws of Resources, shares held by
persons who abstain from voting on a proposal will be counted in determining
whether a quorum is present but will not be counted as voting either for or
against such proposal. If a broker indicates on a proxy that it does not have
discretionary authority as to certain shares on a particular proposal, those
shares will not be counted in determining whether a quorum is present or as
voting with respect to that proposal.
The Board of Directors knows of no matters, other than those reported
herein, which are to be brought before the meeting. However, if other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed form of proxy to vote such proxy in accordance with their judgment
on such matters.
The cost of this solicitation of proxies will be borne by Resources.
<PAGE>
PROPOSAL 1. ELECTION OF DIRECTORS
Directors are elected for staggered terms of three years with approximately
one-third of the Board of Directors standing for election each year. At the
meeting, five directors are to be elected, each to hold office for a three-year
term and until his successor is elected and has qualified. It is the intention
of the persons named in the accompanying form of proxy to vote such proxy for
the election to the Board of Directors of the persons identified on the
following page. Each such person has indicated that he will accept nomination
and election as a director. However, if any such person is unable or unwilling
to accept nomination or election, it is the intention of management to nominate
such other person as director as it may in its discretion determine, in which
event proxies will be voted for such other person.
The following tables set forth information regarding the nominees for
director and those directors of Resources whose terms of office continue past
the meeting. Unless otherwise indicated in a footnote to the following table,
the principal occupation of each person has been the same for the last five
years.
<TABLE>
<CAPTION>
Nominees for Directors
<S> <C> <C> <C>
NAME AND AGE Present Principal Director Term to EXPIRE
OCCUPATION SINCE
Joseph R. Broyles,* 53 President of the Industries 1992 1999
Division of Resources (1)
Robert B. McConnell,* 74 Chairman of the Executive 1971 1999
Committee of Resources and IWC (2)
J. George Mikelsons, 58 Chairman of the Board and 1989 1999
Chief Executive Officer,
Amtran, Inc. (airlines)
Thomas M. Miller,* 66 Associate, Schenkel, McVey 1985 1999
and Associates
(public relations)(3)
Jerry D. Semler, 59 Chairman of the Board, President -- 1999
and Chief Executive Officer,
American United Life
Insurance Company
(mutual life insurance company)(4)
</TABLE>
<TABLE>
<CAPTION>
Directors Continuing in Office
<S> <C> <C> <C>
NAME AND AGE Present Principal Director Term to EXPIRE
OCCUPATION SINCE
Joseph D. Barnette, Jr., 56 Chairman and Chief Executive Officer, Bank 1983 1998
One, Indianapolis, NA (commercial bank)
Robert A. Borns, 60 Chairman of the Board, 1994 1997
Borns Management Corporation
(real estate management)
Milton O. Thompson,** 41 President, Grand Slam 1996 1997
Companies(5)
Otto N. Frenzel, III,* 65 Chairman of the Executive Committee, 1963 1998
National City Bank, Indiana
(commercial bank)(6)
J. B. King, 66 Vice President and General Counsel, 1981 1997
Guidant Corporation
(medical devices)(7)
James T. Morris,* 52 Chairman of the Board and Chief 1989 1997
Executive Officer of Resources
and IWC (8)
Susan O. Conner, 43 Senior Vice President of Public Affairs, 1995 1998
USA Group, Inc. (student loans)(9)
J. A. Rosenfeld, 64 President of the Utilities 1995 1998
Division of Resources and IWC (10)
Fred E. Schlegel, 54 Partner, Baker & Daniels 1988 1998
(attorneys for Resources and IWC)
</TABLE>
* Member of Executive Committee
** Appointed to fill the vacancy created by the resignation of Murvin Enders
incident to Mr. Enders joining Resources as vice president of
administrative affairs in 1995.
( 1)Mr. Broyles joined IWC in 1965 as plant engineer and has served as an
executive officer of IWC in several capacities since 1983, most recently as
president from January 1992 until August 1995 when he was appointed
president of the Industries Division of Resources, incident to formation of
the two divisions (Utilities and Industries).
( 2)Mr. McConnell was chairman of the Board and chief executive officer of
Resources and IWC from October 1986 to April 1991. He also served as
president of Resources and IWC from October 1988 to January 1989.
( 3)Mr. Miller was formerly chairman of the Board and chief executive officer,
NBD Indiana, Inc. and NBD Bank, N.A. Mr. Miller is also a director of NBD
Indiana, Inc., NBD Bank, N.A. and IPALCO Enterprises, Inc.
( 4)Mr. Semler has been employed by American United Life Insurance Company
since 1959, and was elected president in 1980, chief executive officer in
1989, and chairman in 1991, respectively.
( 5)Mr. Thompson also serves on the Board of Directors of American States
Insurance.
( 6)Before retiring December 1995, Mr. Frenzel served as chairman of the Board
of National City Bank, Indiana. Mr. Frenzel is a director of American
United Life Insurance Company, Baldwin & Lyons, Inc., Indiana Energy, Inc.,
IPALCO Enterprises, Inc. and National City Corporation.
( 7)From October 1, 1987 to February 28, 1995, Mr. King served as vice
president and general counsel of Eli Lilly and Company, a pharmaceutical
manufacturer. Mr. King assumed his current position on September 13, 1994.
Concurrent with his duties at Guidant Corporation, Mr. King joined the
legal staff of Baker & Daniels in 1995.
( 8)Mr. Morris became chairman of the Board and chief executive officer of
Resources and IWC in April 1991. He was president and chief operating
officer of Resources and IWC from January 1989 until April 1991. Prior to
that time, Mr. Morris was president of Lilly Endowment, Inc. Mr. Morris is
also a director of American United Life Insurance Company and National City
Bank, Indiana.
( 9)Ms. Conner joined USA Group, Inc. in 1992 as vice president of public
affairs. Prior to that time, she was communications director at Lilly
Endowment, Inc., a philanthropic foundation.
(10)Mr. Rosenfeld joined Resources in October 1991 and has served as its chief
financial officer since 1992. Prior to joining Resources, he was president
and a member of the Board of Directors of MSA Realty Corporation, a
publicly traded real estate investment trust. He was appointed president
of the Utilities Division of Resources in August 1995, incident to the
formation of the two divisions (Utilities and Industries).
During 1995, the Board of Directors of Resources held five meetings. All
directors, except Messrs. Barnette, Borns and Reich, attended at least 75% of
the total number of meetings of the Board of Directors and of the committees on
which he or she served. The Board of Directors has created various committees,
including Audit and Compensation committees. The Audit Committee consists of
Messrs. Barnette, McConnell and King. That committee reviews Resources'
internal auditing and reporting procedures and recommends appointment of
Resources' auditors. During 1995, the Audit Committee held four meetings. The
Compensation Committee consists of Messrs. Frenzel, Mikelsons and Miller. The
Compensation Committee determines executive compensation and administers
certain of Resources' employee benefit plans. During 1995, the Compensation
Committee held two meetings. The Board of Directors of Resources does not have
a nominating committee.
<PAGE>
SECTION 16(A) REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires Resources'
officers and directors, and persons who own more than 10 percent of the
outstanding common shares, to file reports of ownership with the Securities and
Exchange Commission. Officers, directors and greater than 10 percent
shareholders are required to furnish Resources with copies of all Section 16(a)
forms they file. Based solely on its review of copies of such forms received
by it, or written representations from certain reporting persons that no
reports were required for those persons, Resources believes that during 1995,
all filing requirements applicable to its officers, directors and greater than
10 percent shareholders were met.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT OWNERSHIP
The following table sets forth information as of January 9, 1996, regarding
the beneficial ownership of common shares of Resources by each 5% beneficial
owner and by each director of Resources, the chief executive officer and the
four other most highly compensated executive officers of Resources whose salary
and bonus exceeded $100,000 for fiscal 1995, and the directors and executive
officers of Resources as a group. The persons named in the table have sole
voting and investment power with respect to all common shares owned by them
unless otherwise noted.
AMOUNT AND NATURE
NAME OF BENEFICIAL OF BENEFICIAL PERCENT OF
OWNER OWNERSHIP (1) CLASS
Don W. Miller 625,494 7.9
Joseph R. Broyles 54,552 (2) *
Robert B. McConnell 14,167 *
J. George Mikelsons 250 *
Thomas M. Miller 423 *
Jerry D. Semler 10,000 *
Joseph D. Barnette, Jr. 200 *
Milton O. Thompson 0 *
Robert A. Borns 8,274 *
Susan O. Conner 178 *
Murvin S. Enders 105 *
Otto N. Frenzel, III 20,927 (3) *
J. B. King 2,057 *
James T. Morris 22,327 (4) *
Jack E. Reich 45,204
Fred E. Schlegel 1,106 *
John M. Davis 6,425 (5) *
Kenneth N. Giffin 17,626 (6) *
J. A. Rosenfeld 10,044 (7) *
Directors and Executive Officers
as a group (27 persons) 874,506 (8) 11%
* Less than 1%
(1) None of the above named persons beneficially owned any shares of IWC
preferred stock except Mr. Broyles, who may have been deemed to own
beneficially 500 shares of preferred stock for which he is custodian for
his minor children.
(2) Shares shown include 7,229 shares owned by Mr. Broyles as custodian for his
minor daughters and 1,329 shares owned by Mr. Broyles' wife, as to which
Mr. Broyles disclaims beneficial ownership. Shares shown include 8,483
shares credited to Mr. Broyles' account under Resources' Employee Stock
Ownership Plan, 4,663 restricted shares granted pursuant to Resources'
Restricted Stock Plan and 7,162 shares allocated within Resources' Thrift
Plan.
(3) Shares shown include 100 shares held in a family partnership, as to which
Mr. Frenzel has voting and investment power, and 18,000 shares of stock
held in charitable remainder trusts in which Mr. Frenzel is co-trustee.
(4) Shares shown include 723 shares credited to Mr. Morris' account under
Resources' Employee Stock Ownership Plan, 7,203 restricted shares granted
pursuant to Resources' Restricted Stock Plan and 4,711 shares allocated
within Resources' Thrift Plan.
(5) Shares shown include 125 shares credited to Mr. Davis' account under
Resources' Employee Stock Ownership Plan and 3,346 restricted shares
granted pursuant to Resources' Restricted Stock Plan.
(6) Shares shown include 4,037 shares credited to Mr. Giffin's account under
Resources' Employee Stock Ownership Plan, 2,766 restricted shares granted
pursuant to Resources' Restricted Stock Plan and 7,412 shares allocated
within Resources' Thrift Plan.
(7) Shares shown include 280 shares credited to Mr. Rosenfeld's account under
Resources' Employee Stock Ownership Plan and 4,147 restricted shares
granted to Mr. Rosenfeld pursuant to Resources' Restricted Stock Plan.
(8) Includes 20,137 shares credited to officers under Resources' Employee Stock
Ownership Plan (with respect to which the officers have voting but not
investment power), 12,959 shares with respect to which voting and
investment power is shared with spouses or relatives of the directors and
officers, 1,329 shares as to which beneficial ownership is disclaimed,
27,309 restricted shares granted pursuant to Resources' Restricted Stock
Plan and 31,046 shares allocated within Resources' Thrift Plan with respect
to officers. As to beneficial ownership of shares of IWC Preferred Stock,
see footnote 1.
<PAGE>
COMPENSATION COMMITTEE REPORT TO SHAREHOLDERS
During 1995, the Compensation Committee consisted of Messrs. Frenzel,
Mikelsons, Miller and Reich. The Compensation Committee determines executive
compensation and administers certain of Resources' employee benefit plans.
GENERAL
Resources' executive compensation policy seeks to serve three goals: (1) to
encourage the creation of value for shareholders by linking compensation to
shareholder value performance; (2) to encourage superior individual
performance; and (3) to provide a total compensation package that is
competitive within the industry, in order to attract and retain qualified
executives.
COMPENSATION STRATEGY
An executive's compensation consists of three principal components: base
salary, annual cash bonus and grants of restricted shares under Resources'
Restricted Stock Plan. Base salary levels are set in part with reference to
compensation paid by other companies in the water utility industry. For
purposes of this comparison, Resources utilizes a comparison group of investor-
owned water utilities. Resources generally seeks to be within the 50-75
percentile of comparison group compensation. In determining base salary,
Resources also takes into account individual experience and performance,
specific issues particular to Resources, including its past compensation
practices, and general salary levels in the Indianapolis area.
The amount of cash bonuses is determined annually by the Compensation
Committee. The Compensation Committee considers a number of factors in
determining the level of bonuses, including the extent to which Resources has
met its financial and operating goals for the year, the performance of
Resources stock in terms of share price and dividends and the individual
performance of the executive during the year. Annual bonuses generally range
from 0% to 40% of base salary.
Effective January 1, 1992, Resources instituted a Restricted Stock Plan
pursuant to which Resources may make grants of common shares to officers of
Resources and its affiliates. The purpose of the Restricted Stock Plan is to
enable Resources to attract, retain and motivate its officers by providing them
with a means of acquiring or increasing a proprietary interest in the Company,
so that they will have an increased incentive to work toward the attainment of
the long-term growth and profit objectives of Resources. Common shares granted
pursuant to the Restricted Stock Plan are subject to restrictions upon transfer
and risk of forfeiture for a three-year period.
The Restricted Stock Plan is administered by the Compensation Committee.
Awards are made to officers of Resources and its affiliates selected by the
Compensation Committee. Grants under the Restricted Stock Plan are made by the
Compensation Committee at the beginning of each measuring period consisting of
three consecutive years ("Measurement Period"). All grants of restricted
shares are subject to adjustments ("Shareholder Value Performance Adjustments")
pursuant to which at the end of the Measurement Period grantees may be entitled
to grants of additional shares or required to forfeit restricted shares
previously granted. The Shareholder Value Performance Adjustments provide for
an increase or decrease in the number of shares granted to a grantee based upon
various levels of performance ("Shareholder Value Performance") of Resources
compared to the Shareholder Value Performance of a group of companies
designated by the Compensation Committee as a comparison group (the "Comparison
Group"). Holders of restricted shares will receive immediate vesting of
restricted shares, as adjusted assuming the maximum Shareholder Value
Performance Adjustment, in the event of a change in control of Resources.
After giving effect to the supplemental awards earned for the Initial
Measurement Period, Resources granted 8,604, 5,200, 4,039, 3,166 and 1,954
restricted shares to Messrs. Morris, Broyles, Rosenfeld, Giffin and Davis,
respectively, in connection with the Initial Measurement Period, after
reduction for mandatory in-kind tax withholding. For the three-year
measurement period beginning January 1, 1995, Resources granted 7,203, 4,663,
4,147, 2,766 and 3,346 shares to the aforementioned individuals, respectively.
Resources also provides medical and pension benefits to its executive
officers. With the exception of the Executive Supplemental Benefits Plan, the
benefits paid to executive officers are similar to those available to other
employees of Resources.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
For 1995, Mr. Morris received a salary of $316,592, the annual base salary
rate established in December, 1994, plus a cash bonus of $120,814. The bonus
for 1995 represented an increase over the bonus paid in 1994. The Compensation
Committee believes the higher bonus paid for 1995 was appropriate because of
Resources' excellent performance in 1995 in achieving record earnings, and
because of Mr. Morris' central role in Resources' strategic planning, its
progress in the area of growth in both regulated and non-regulated markets.
Otto N. Frenzel, III
J. George Mikelsons
Thomas M. Miller
Jack E. Reich
<PAGE>
COMPENSATION OF EXECUTIVES
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning total compensation
for each of the last three fiscal years awarded to or earned by the chief
executive officer of Resources and the other four most highly compensated
officers of Resources.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
<S> <C> <C> <C> <C> <C> <C>
Name & Principal Fiscal Year Salary Bonus (1) Restricted LTIP All Other
Position Stock Payouts (3) Compensation (4)
Awards (2)
James T. Morris 1995 $316,592 $120,814 $72,930 -- $21,870
Chairman of the Board
and CEO
1994 304,202 114,639 -- $170,921 18,848
1993 287,219 72,100 -- -- 14,318
Joseph R. Broyles 1995 208,407 78,215 47,213 -- 14,331
President, Industries
Division
1994 193,269 69,269 -- 104,797 11,814
1993 176,079 44,200 -- -- 9,913
J.A. Rosenfeld 1995 182,269 69,555 41,988 -- 12,591
Executive Vice
President,
Chief Financial
Officer and President,
Utilities Division
1994 174,903 61,600 -- 82,198 10,643
1993 156,799 40,000 -- -- 8,855
Kenneth N. Giffin 1995 128,353 29,299 28,006 -- 7,883
Senior Vice President
1994 119,026 17,608 -- 65,315 6,149
1993 113,937 13,780 -- -- 5,747
John M. Davis 1995 147,057 29,536 33,878 -- 15,174
Vice President,
General
Counsel and Secretary
1994 141,342 21,300 -- 41,619 7,319
1993 63,690 6,750 18,700 -- --
</TABLE>
(1) Includes all amounts received with respect to a fiscal year, even though
actual payment of some or all of the bonus may have been made in the
following fiscal year.
(2) For the three-year measurement period beginning January 1, 1995, Resources
granted an aggregate of 29,461 restricted common shares under its
Restricted Stock Plan. Messrs. Morris, Broyles, Rosenfeld, Giffin and
Davis received 7,203, 4,633, 4,147, 2,766 and 3,346 restricted shares,
respectively. The amounts shown as awards in 1995 reflect one-half of the
number of restricted shares initially granted, representing the number of
shares to which the named executive was entitled at the lowest level of
performance. The value shown for restricted shares awarded in 1995 is
based upon the closing price of Resources common shares of $20.25 on
January 3, 1995. Holders of restricted shares are entitled to receive any
dividends paid on the common shares.
(3) Restricted shares granted relate to a three-year measurement period and
generally vest upon completion of such three-year period. The number of
shares granted is subject to adjustment based upon the Shareholder Value
Performance of Resources compared to the Shareholder Value Performance of a
Comparison Group. See "Compensation Committee Report to Shareholders."
Under the schedule of Shareholder Value Performance Adjustments adopted by
the Compensation Committee, if the Shareholder Value Performance of
Resources for the measurement period would place Resources in the top
quartile of the Comparison Group, the number of shares granted would be
increased by 100%. If the Shareholder Value Performance of Resources would
place it in the bottom quartile, the number of restricted shares would be
reduced by 50%, and if Shareholder Value Performance is in the second or
third quartile, a ratable adjustment would be made. Amounts shown reflect
the value of additional shares awarded January 11, 1995, pursuant to the
Shareholder Value Performance Adjustments, based upon the closing price of
Resources common shares of $20.25 on January 3, 1995.
(4) Includes amounts contributed by Resources for the benefit of the named
executive pursuant to Resources' Employee Stock Ownership Plan, Employee
Thrift Plan and Non-Qualified Deferred Compensation Plan.
EMPLOYEES' PENSION PLAN AND OTHER RELATED PLANS
All employees of Resources (and subsidiaries) become eligible to
participate in a pension plan (the "Pension Plan") as of the first January 1 or
July 1 after completing one year of service (as defined in the Pension Plan).
Resources and IWC also maintain a nonqualified executive supplemental benefits
plan (the "ESB") to supplement the benefits of key executives under the Pension
Plan. Participation is limited to key executives designated by Resources'
Board of Directors, and the ESB currently covers eighteen persons, including
Messrs. Morris, Broyles, Rosenfeld, Giffin and Davis.
The following table sets forth a range of combined annual retirement
benefits under the Pension Plan and the ESB for graduated levels of average
annual earnings and years of service (as calculated under the ESB) for
employees of Resources and its subsidiaries. The benefit amounts listed in the
table are computed as a straight life annuity beginning at age 65.
<TABLE>
<CAPTION>
Years of Service Credited under ESB at Retirement
<S> <C> <C> <C> <C> <C> <C>
Average Annual 10 YEARS 20 YEARS 30 YEARS 40 YEARS 50 YEARS 52 Years
Earnings OR MORE
(3 HIGHEST YEARS)
$100,000 12,500 25,000 37,500 50,000 62,500 65,000
150,000 18,750 37,500 56,250 75,000 93,750 97,500
200,000 25,000 50,000 75,000 100,000 125,000 130,000
250,000 31,250 62,500 93,750 125,000 156,250 162,500
300,000 37,500 75,000 112,500 150,000 187,500 195,000
350,000 43,750 87,500 131,250 175,000 218,750 227,500
400,000 50,000 100,000 150,000 200,000 250,000 260,000
</TABLE>
Generally, the Pension Plan provides a pension beginning at age 65 of $20
per month multiplied by the participant's years of service or, if greater, a
pension equal to (a) 1.25% of the participant's average stated salary (for the
three consecutive years that produce the highest average) in excess of $833 per
month multiplied by the participant's years of service (up to 50 years), plus
(b) varying lesser percentages (ranging from .85% to 1.13%) of salary under
$833 per month, multiplied by the number of the participant's years of service
to which each percentage applies under the Pension Plan. The Pension Plan also
includes provisions for early retirement benefits, late retirement benefits,
disability retirement benefits, optional methods of benefit payments to an
employee who leaves the employ of Resources and its subsidiaries after a
certain number of years of service and payments to the surviving spouse.
Pension Plan benefits are funded through a tax-exempt trust to which Resources
and its subsidiaries make annual contributions.
In calculating a participant's benefit under the ESB, the participant's
total years of service are added to their years of service as an executive.
Thus, for example, if a participant has 25 years of service with Resources and
its subsidiaries and has served as an executive for 20 years, they will be
credited with 45 years of service. Messrs. Morris, Broyles, Rosenfeld, Giffin
and Davis have been credited with 19, 43, 6, 39 and 4 years of service,
respectively, under the ESB. In the case of Mr. Morris, his years of credited
service includes those as director of Compucom, a formerly affiliated company.
The monthly amount of the life annuity payable to a participant under the
ESB upon their retirement on or after age 65 is calculated as follows:
Step 1. The participant's years of service (determined in the
aforementioned manner) are multiplied by 1.25% of the participant's average
stated salary for the 36 consecutive months that produce the highest average.
The amount determined under this Step 1 is limited to 65% of the participant's
average stated salary for the 36 consecutive months that produce the highest
average.
Step 2. The result of Step 1 is reduced by the amount payable to the
participant under the Pension Plan.
If a participant retires before age 65, their benefit under the ESB is
reduced, unless they retire after attaining age 60 and have completed 30 years
of service. If a participant dies after retirement, one half of the retirement
annuity payable to them during their life will be continued to their spouse.
In addition, the spouse of a participant who dies before retirement is entitled
to a death benefit, as if the decedent retired on their date of death with such
full benefit paid to surviving spouse until decedent's age 65, at which time it
is reduced to 50%.
Benefits payable under the Pension Plan and ESB are not reduced by any
Social Security payments made. The amount of covered compensation for each of
the executive officers of Resources named in the Summary Compensation Table is
approximated by the amount shown as salary and bonus in the table.
COMPENSATION OF DIRECTORS
Each director who is not a salaried officer or employee of Resources,
receives a retainer of $2,500 per quarter and an additional $1,000 for each
Board of Directors meeting attended. Each such director who is a member of the
Executive Committee receives an additional $500 per month, and $1,000 for each
Executive Committee meeting attended. Each such director who is a member of
the Audit Committee or Compensation Committee receives $1,000 for each
committee meeting attended. Mr. McConnell receives an additional $1,667 per
month for his services as chairman of the Executive Committee. Messrs.
Barnette and Frenzel each receive an additional $313 per quarter for their
services as chairman of the Audit and Compensation committees, respectively.
DIRECTORS' RETIREMENT
On October 21, 1994, the Board of Directors established the IWC Resources
Directors' Retirement Plan. The purpose of the Plan is to provide a quarterly
retirement benefit for retiring directors, and to establish certain age
criteria for director election or re-election. Normal retirement, for purposes
of this Plan, is at age 65 or when the director's term is complete, whichever
is later. A director may not stand for re-election if they have attained the
age of 70 years, except for directors who formerly served as the chairman of
the Board.
A director may choose to retire at any age; however, quarterly benefits
will not commence until reaching age 65. Upon attaining age 65 with at least
ten years of service, a director will be entitled to receive the directors
quarterly retainer ($2,500) upon his or her retirement. If a director retires
on or after age 65 with less than ten years of service, the quarterly benefit
will be reduced by 1/10 for each year of service less than ten. The quarterly
benefits are payable for the life of the director.
COMPENSATION COMMITTEE INTERLOCKS
Messrs. Frenzel, Mikelsons, Miller and Reich served as members of the
Compensation Committee during 1995. Each of these persons is an outside
director and, with the exception of Mr. Reich, not a present or former officer
or employee of Resources. Mr. Reich served as chairman of the Board of IWC
from 1962 to 1967. No executive officer of Resources served as a member of the
Compensation Committee of another entity, one of whose executive officers
served on the Compensation Committee. Mr. Morris serves as director of
National City Bank, Indiana. Mr. Frenzel is Chairman of the Executive
Committee of National City Bank, Indiana. Mr. Morris does not serve on the
Compensation Committee of National City Bank, Indiana.
EMPLOYMENT CONTRACTS
There are no contracts for current employment between Resources and any of
its executive officers. Under the Resources Restricted Stock Plan, holders of
restricted shares will receive immediate vesting of restricted shares, as
adjusted assuming the maximum Shareholder Value Performance Adjustment, in the
event of a change in control of Resources. However, in the event of a change
in control of Resources, Messrs. Morris, Broyles, Rosenfeld, Giffin and Davis
each vest in a three-year employment contract at the same title, duties,
location and compensation as before such change in control. In the case of
Messrs. Morris, Broyles and Giffin, in the event of a change in control, a
supplemental pension applies pursuant to their contracts that provides for the
difference between their benefits under the regular benefit plans and that
which would be available upon attaining age 65.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(M) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the corporation's chief executive officer and four other most highly
compensated executive officers. Qualifying performance-based compensation will
not be subject to the deduction limit if certain conditions are met.
Resources does not foresee that the limitation will apply because the
compensation for the chief executive officer and four other highest-compensated
executives is significantly below the limitation threshold. If the limitation
was exceeded, it would be as a result of performance-based portions of the
respective compensation packages, which Resources structured in order to
qualify for deduction.
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholder return on the
common shares of Resources for the last five years with a cumulative total
return on the S&P 500 index and a comparison group of companies (the
"Comparison Group") over the same period (assuming the investment of $100 in
Resources common shares, the S&P 500 index and the Comparison Group on January
1, 1990, and reinvestment of all dividends).
Comparison
S&P Group IWC
1990 100 100 100
1991 130 147 121
1992 140 154 145
1993 154 177 156
1994 156 168 159
1995 215 216 169
(1) The Comparison Group consists of the following investor-owned water
utilities: American Water Works Company, Inc., Aquarion Company,
Connecticut Water Service, Inc., Consumers Water Company, E'town
Corporation, GWC Corporation, Middlesex Water Company, Philadelphia
Suburban Corporation and United Water Resources.
<PAGE>
PROPOSAL 2. AMENDMENT TO ARTICLE V OF RESOURCES'
ARTICLES OF INCORPORATION
The Board of Directors has proposed an amendment to Article V of Resources'
Articles of Incorporation increasing the number of authorized shares of
Resources' common stock, no par value, from 10,000,000 to 20,000,000 shares.
The affirmative vote of the holders of 4,123,677 shares of the Company's common
stock, representing a majority of the total outstanding shares entitled to vote
on the proposal as of the record date, is necessary for approval. At February
29, 1996, there were 1,706,235 authorized but unissued shares of common stock
of Resources, most of which were reserved for issuance in connection with
Resources' Dividend Reinvestment and Stock Purchase Plan. If the proposed
amendment is approved by the shareholders, the authorized but unissued shares
will be increased to a total of 11,706,235. All of the shares proposed to be
authorized will be available for future issue as determined by the Board of
Directors for any proper corporate purpose, including raising additional
capital and investing in or acquiring other businesses, without further action
by the shareholders. Shareholders will have no preemptive rights to subscribe
to purchase such additional shares when and if issued. The Board has no
present plans, and there are no negotiations or understandings, with respect to
the issuance of any of the additional shares proposed to be authorized. The
Board, however, believes that the proposed additional authorized shares would
provide Resources with increased flexibility in dealing with its future
financing needs.
The following is the exact text of Article V of Resources' Articles of
Incorporation, as proposed to be amended:
The total number of shares which the Corporation has authority to issue
shall be 22,000,000 shares, consisting of 20,000,000 common shares (the
"Common Shares") and 2,000,000 special shares (the "Special Shares"). The
Corporation's shares do not have any par or stated value, except that,
solely for the purpose of any statute or regulation imposing any tax or fee
based upon the capitalization of the Corporation, all of the Corporation's
shares shall be deemed to have a par value of $1.00 per share.
If the amendment is approved by the shareholders of Resources, it will
become effective upon the filing of Articles of Amendment with the Indiana
Secretary of State, which is expected to be accomplished as promptly as
practicable following shareholder approval.
The Board of Directors recommends a vote for the proposed amendment.
PROPOSAL 3. APPOINTMENT OF AUDITORS
The appointment of KPMG Peat Marwick LLP as auditors for Resources for 1996
is recommended by the Board of Directors and will be submitted to the meeting
in order to permit the shareholders to express their approval or disapproval.
KPMG Peat Marwick LLP has served as auditors for Resources and IWC since 1954.
In the event of a negative vote, a selection of other auditors will be made by
the Board. A representative of KPMG Peat Marwick LLP will be present at the
meeting, and will be provided an opportunity to make a statement and respond to
appropriate questions.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
The date by which shareholder proposals must be received by Resources for
inclusion in proxy materials relating to the 1997 annual meeting of
shareholders of Resources is November 9, 1996.
INFORMATION INCORPORATED BY REFERENCE
The following information has been incorporated by reference into this
proxy statement:
The audited financial statements of Resources and Management's Discussion
and Analysis of Financial Condition and Results of Operations contained in
Resources' Annual Report to Shareholders, which was mailed concurrently
herewith. You are encouraged to review the financial information contained in
the Annual Report before voting on the proposal to amend the Articles of
Incorporation.
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I hereby appoint James T. Morris, J.A. Rosenfeld and John M. Davis, or any of
them, my proxies with power of substitution, to vote all shares of common stock
of the Company which I am entitled to vote at the annual meeting of common
shareholders of the Company, to be held at the University Place Conference
Center and Hotel, 850 West Michigan Street, Room 132, Indianapolis, Indiana
46202, on April 18, 1996 at 11:00 a.m., E.S.T., and at any adjournment, as
follows:
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS FOR the nominees listed below (except WITHHOLD AUTHORITY
as marked to the contrary below)____ (to vote for the nominees listed
below) ____
<S> <C> <C>
Joseph R. Broyles, Robert B. McConnell, J. George Mikelsons, Thomas M. Miller, Jerry D. Semler
</TABLE>
(INSTRUCTIONS: To WITHHOLD authority to vote for any individual nominee write
that nominee's name on the space provided below.)
2. PROPOSAL to approve an amendment to the Company's Articles of
Incorporation.
______ FOR ______ AGAINST ______ ABSTAIN
3. PROPOSAL to approve the appointment of KPMG Peat Marwick LLP, as auditors
for the Company for 1996.
______ FOR ______ AGAINST ______ ABSTAIN
4. In their discretion, on any other matters that may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NOT DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION AS DIRECTOR OF THE NOMINEES LISTED UNDER PROPOSAL 1 AND
FOR PROPOSALS 2 AND 3.
Please sign exactly as your name appears below. When shares are held by two or
more persons, all of them should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
SIGNATURE
SIGNATURE IF HELD JOINTLY
DATE _____________________________,
1996
Please mark, sign, date and return
the proxy card promptly using the
enclosed envelope.
<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT
OF 1934
(AMENDMENT NO. ___)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to <section>240.14a-11(c) or
<section>240.14a-12
IWC RESOURCES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $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.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ X ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
