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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Wisconsin Central Transportation Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] 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:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LETTERHEAD OF WISCONSIN CENTRAL TRANSPORTATION CORPORATION]
OFFICE: MAILING ADDRESS:
- --------------------------------------------------------------------------------
Suite 9000 P.O. Box 5062
One O'Hare Centre Rosemont, IL 60017-5062
6250 North River Road
Rosemont, IL 60018
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The 2000 annual meeting of the stockholders of Wisconsin Central
Transportation Corporation will be held at 9:00 a.m., Central Time, on Thursday,
May 18, 2000 in the ground floor auditorium of Riverway Complex, 6133 North
River Road (across River Road from the Westin Hotel and behind the Marriott
Suites Hotel), Rosemont, Illinois 60018, to elect four directors and to transact
any other business that may properly come before the meeting.
Stockholders of record at the close of business on March 20, 2000 are
entitled to vote at the annual meeting.
By Order of the Board of Directors,
Thomas W. Rissman
Secretary
April 10, 2000
<PAGE>
Wisconsin Central Transportation Corporation
Suite 9000, One O'Hare Centre, 6250 North River Road
Rosemont, IL 60018
------------------
===============
PROXY STATEMENT
===============
April 10, 2000
The Board of Directors of Wisconsin Central Transportation Corporation (the
"Company") solicits your proxy for use at the 2000 Annual Meeting of
Stockholders of the Company to be held on May 18, 2000. Stockholders may vote
their shares of the Company's Common Stock by proxy by signing and mailing the
enclosed proxy card or by following the instructions on the proxy card for
telephone or Internet voting. A proxy may be revoked at any time prior to the
voting at the meeting by submitting a later dated proxy or by giving written
notice of such revocation to the Secretary of the Company. If you plan to attend
the annual meeting in person, please mark the appropriate box on the proxy card
and return it promptly by mail.
Holders of the Company's Common Stock of record at the close of business on
March 20, 2000 are entitled to vote at the annual meeting. On that date,
51,250,231 shares of the Company's Common Stock were issued and outstanding.
Each share entitles the holder to one vote.
A quorum of stockholders is necessary to take action at the annual meeting.
A majority of the outstanding shares of Common Stock will constitute a quorum of
stockholders. The inspectors of election appointed for the annual meeting will
determine whether a quorum is present and will treat abstentions as shares of
Common Stock that are present and entitled to vote for purposes of determining
the presence of a quorum.
The persons appointed by the enclosed proxy card have advised the Board of
Directors that it is their intention to vote at the annual meeting in compliance
with the instructions on the proxies received from stockholders with respect to
election of four directors and in their discretion on any other matters that may
properly come before the meeting, including matters that, as of the date of this
proxy statement, the Board of Directors does not know will be brought before the
meeting. If no directions are given on the proxy card, the shares represented by
the proxy will be voted FOR election of the four nominees for directors for a
three year term.
This proxy statement and the enclosed proxy card are being first mailed to
stockholders on or about April 10, 2000.
Your vote is important. Please sign and return the proxy card by mail or
vote your shares by telephone or the Internet, whether or not you plan to attend
the meeting.
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election as Directors
The Board of Directors is divided into three classes, each consisting of
approximately one-third of the total number of the members of the Board of
Directors. Directors are elected for a term of three years. At the Annual
Meeting of Stockholders, the term of office of the Class I directors--
Carl Ferenbach, J. Reilly McCarren, Roland V. McPherson and A. Francis Small--
will expire, and the four directors in that class will be nominated for
reelection to serve until the annual meeting of stockholders of the Company in
2003 and until their respective successors are elected and qualified. The term
of office of the Class II directors--Thomas E. Evans, Thomas F. Power, Jr., and
Robert H. Wheeler--will expire at the annual meeting of stockholders of the
Company in 2001, and the term of office of the Class III directors--
Thomas W. Rissman, John W. Rowe and the person named to fill a currently vacant
position--will expire at the annual meeting of stockholders of the Company in
2002.
The Company's Board of Directors intends to cause the nomination of
Carl Ferenbach, J. Reilly McCarren, Roland V. McPherson and A. Francis Small for
election as Class I directors. The Board of Directors has no reason to believe
that any of these nominees will not serve if elected, but if any of them should
become unavailable to serve as a director, and if the Board designates a
substitute nominee, the persons named in the enclosed proxy card will have
discretionary authority to vote for a substitute nominee or nominees designated
by the Board. Election of nominees to the Board of Directors requires the
approval of the holders of a plurality of the total votes cast at the
stockholders' meeting. The Board of Directors of the Company recommends a vote
FOR each of the nominees for Class I director.
The following sets forth as of March 20, 2000 certain information
concerning each of the nominees for election to the Board of Directors and each
director who will continue in office.
<TABLE>
<CAPTION>
Director
Name Description Age Class
- ------------------- -------------------------------------------------- --- --------
<S> <C> <C> <C>
Robert H. Wheeler Chairman of the Board 54 II
Thomas F. Power, Jr. Chief Executive Officer and Director 59 II
J. Reilly McCarren President and Chief Executive Officer of the 43 I
North American operating subsidiaries and Director
Thomas E. Evans Director 48 II
Carl Ferenbach Director 57 I
Roland V. McPherson Director 65 I
Thomas W. Rissman Director 42 III
John W. Rowe Director 54 III
A. Francis Small Director 54 I
</TABLE>
-2-
<PAGE>
Nominees For Terms Expiring at the Annual Meeting in 2003
Class I Directors
Carl Ferenbach has served as a director of the Company since 1987. He also
serves as a director of Wisconsin Central International, Inc. ("WCI") and North
American operating subsidiaries. Mr. Ferenbach also serves as a director of
Tranz Rail Holdings Limited ("Tranz Rail"), the publicly held New Zealand
transportation company in which the Company holds shares, Australian Transport
Network Limited ("ATN"), the Australian rail holding company in which the
Company holds shares, and English Welsh & Scottish Railway Holdings Limited
("EWS"), the United Kingdom rail holding company in which the Company holds
shares and of which Mr. Ferenbach is Deputy Chairman of the Board, a non-
executive office. Mr. Ferenbach also serves as a director of US Can Corporation
and Crown Castle International Corporation (U.S.) of which he is also Chairman
of the Board. Since 1986, Mr. Ferenbach has been a Managing Director of
Berkshire Partners LLC, Boston, Massachusetts, a private equity firm sponsoring
and investing in acquisitions and recapitalizations.
J. Reilly McCarren has served as a director of the Company since December
1998. He also serves as a director of Wisconsin Chicago Link Ltd. ("WCLL") and
WCL Railcars, Inc. ("WCL Railcars"), two wholly-owned subsidiaries of the
Company. Since September 1, 1999, Mr. McCarren has served as the President and
Chief Executive Officer of the Company's North American operating subsidiaries.
From July 1996 to August 31, 1999, Mr. McCarren served as the Executive Vice
President and Chief Operating Officer of the Company's North American operating
subsidiaries. From 1990 to 1996, Mr. McCarren served as the president of Gateway
Western Railway Company. From 1988 to 1990, Mr. McCarren served as the General
Superintendent-Transportation of the Chicago, Missouri and Western Railway.
From 1978 to 1988, Mr. McCarren held various operating positions with Conrail.
Mr. McCarren has 21 years of railroad management experience.
Roland V. McPherson has served as a director of the Company since 1987. He
also serves as a director of WCI and North American operating subsidiaries.
Mr. McPherson is the president of Asset Acquisition and Management Corporation,
a private acquisition company. From 1989 to 1998, he was employed as the
Chairman and Chief Executive Officer of Sullivan Industries, Inc. (a
manufacturer of air compressors). From May 1976 until 1988, Mr. McPherson was
employed as Chairman and Chief Executive Officer of Armstrong Containers, Inc.
(a manufacturer of metal containers).
A. Francis Small has served as a director of the Company since
December 1996. He also serves as a director of WCI and North American operating
subsidiaries. Dr. Small has been a director and the Managing Director of Tranz
Rail since 1990 and has been employed by Tranz Rail and its predecessors for 34
years. Dr. Small is also a director of ATN and Meridian Energy Limited of which
he is also Chairman of the Board. Dr. Small has 28 years of railroad management
experience.
-3-
<PAGE>
Current Directors Whose Terms Expire at the Annual Meeting in 2001
Class II Directors
Thomas E. Evans has served as a director of the Company since July 1998.
Since 1999, Mr. Evans has been employed by Collins & Aikman in Troy, Michigan,
where he currently serves as chairman and chief executive officer. From 1995 to
1999, Mr. Evans was employed by Tenneco Automotive in Lake Forest, Illinois,
where he served in senior management positions, most recently as its president.
Prior to 1995 he served six years in various senior management positions with
Case Corporation, two years with Federal-Mogul Corporation and fourteen years
with Rockwell International's Automotive Operations.
Thomas F. Power, Jr. has served as a director of the Company since its
formation in 1987. He also serves as a director of each of the Company's
subsidiaries other than Algoma Central Railway Inc. ("ACRI") and WC Canada
Holdings, Inc. ("WCCHI"). Since September 1, 1999, Mr. Power has served as the
President and Chief Executive Officer of the Company. From 1987 to August 31,
1999, Mr. Power served as Executive Vice President and Chief Financial Officer
of the Company. Mr. Power also serves as a director of Tranz Rail, ATN and EWS
of which he is Chairman of the Board, a non-executive office. From 1970 to 1985,
Mr. Power was employed by the Chicago, Milwaukee, St. Paul and Pacific Railroad
Company, most recently as Chief Financial Officer. Mr. Power has over 32 years
of railroad management experience.
Robert H. Wheeler has served as a director of the Company since its
formation in 1987 and is also a director of each of the Company's subsidiaries
other than ACRI and WCCHI. He was elected to the additional position of Chairman
of the Board of the Company, a non-executive office, effective September 1,
1999. Mr. Wheeler also serves as a director of EWS and Tranz Rail of which he is
Chairman of the Board, a non-executive office. Mr. Wheeler was a member of the
law firm of Oppenheimer Wolff & Donnelly from December 1987 to August 1994 and
was of counsel to that firm until 1999.
Current Directors Whose Terms Expire at the Annual Meeting in 2002
Class III Directors
Thomas W. Rissman has served as a director of the Company since January
1992 and is also a director of each of the Company's subsidiaries other than
ACRI and WCCHI. Mr. Rissman also has served as Secretary of the Company, a non-
executive office, since June 1991 and has served as General Counsel of the
Company, a non-executive office, since September 1, 1999. Mr. Rissman also
serves as a director of Tranz Rail, EWS and ATN. Mr. Rissman has been a member
of the law firm of McLachlan, Rissman & Doll since December 1987.
John W. Rowe has served as a director of the Company since July 1998. Since
March 1998, he has served as chairman, president and chief executive officer of
Unicom Corporation in Chicago, Illinois. From 1989 to 1998, Mr. Rowe served as
president, chief executive officer and a director of New England Electric
System. From 1984 to 1989, he served as president and chief executive officer of
Central Maine Power
-4-
<PAGE>
Company. Mr. Rowe served as senior vice president of law for Consolidated Rail
Corporation from 1980 to 1984. Mr. Rowe began his career with the Chicago law
firm of Isham, Lincoln and Beale where he became a partner in 1978. Mr. Rowe
also serves as a director of Fleet Boston Corporation and UNUM Provident
Corporation.
There is a vacancy in one Class III directorship.
Committees, Meetings and Compensation
Committees of the Board of Directors. The Board of Directors of the Company
currently maintains an Executive Committee, an Audit Committee, a Compensation
Committee, and a Finance Committee. The Board of Directors does not maintain a
Nominating Committee.
The Executive Committee is authorized to meet between meetings of the Board
of Directors and, except as restricted by law, possesses the authority to act
for and on behalf of the Board of Directors. The members of the Executive
Committee are Robert H. Wheeler (Chairman), Carl Ferenbach and Thomas F. Power,
Jr.
The Audit Committee is an oversight committee which assists the Board of
Directors in fulfilling its responsibilities to the stockholders and the public
markets. The Audit Committee is responsible for ensuring that the Company
employs independent and objective auditors. Together with the independent
auditors and the Company's internal audit department, the Audit Committee
reviews management's preparation of financial information, the presence of
internal controls and audit processes to deter fraud, and management's
procedures to anticipate financial risks and promote accurate, high quality and
timely disclosure of financial and other material information to the Board of
Directors, to the public markets and to the stockholders. The Audit Committee's
primary duties and responsibilities are to assess the processes related to the
Company's risk and control environment, oversee financial reporting and evaluate
internal and independent audit processes. In January 2000, the Audit Committee
adopted a formal written charter which guides the Audit Committee in carrying
out the duties described above. The members of the Audit Committee are
Roland V. McPherson (Chairman), John W. Rowe and Thomas W. Rissman. No member of
the Audit Committee is an executive officer of the Company.
The Compensation Committee makes recommendations to the Board of Directors
as to the salaries and other compensation of all elected officers and as to the
benefit plans for all Company employees. The members of the Compensation
Committee are Thomas E. Evans (Chairman), Robert H. Wheeler and Carl Ferenbach.
No member of the Compensation Committee is an executive officer of the Company.
The Finance Committee makes recommendations to the Board of Directors and
is given specific authority by the Board of Directors from time to time to act
on behalf of the Board of Directors in approving certain matters relating to the
issuance of securities by the Company. The members of the Finance Committee are
Carl Ferenbach (Chairman), Thomas W. Rissman and Robert H. Wheeler.
-5-
<PAGE>
Meetings of the Board of Directors and Committees. During 1999, the Board
of Directors of the Company met eight times, the Audit Committee met four times
and the Compensation Committee met four times. The Finance Committee and the
Executive Committee did not meet.
Compensation of Directors. Under compensation arrangements adopted in 1999,
directors of the company who are not full-time employees of the Company or its
subsidiaries receive annual compensation in the form of options to purchase
6,000 shares of Common Stock and may elect to receive annual compensation of
$30,000 in either (i) phantom stock or (ii) $15,000 cash and $15,000 in phantom
stock, with the phantom stock payable on the date of the Company's annual
meeting and the cash payable in four equal quarterly installments. In addition,
the Company pays compensation of $120,000 per year to Mr. Wheeler for his
services as Chairman of the Board. No additional amounts are paid with respect
to attendance at director or committee meetings. Directors who are full-time
employees of the Company or its subsidiaries do not receive additional
compensation for their services as directors.
The director options represent the right to purchase Common Stock at an
exercise price equal to fair market value as of the date of the grant. Director
options expire at the earlier of 10 years after the date of grant or one year
after the optionee ceases to be a director.
The director phantom stock is issued in units equal to the aggregate
nominal value divided by the fair market value of the Common Stock on the date
of grant. When the holder of phantom stock ceases to be a director of the
Company, the holder's phantom stock units are converted to cash at the current
market value of the Common Stock.
In 1999, directors Thomas E. Evans and John W. Rowe were each granted 5,500
additional options in connection with their first election as directors, as
provided by the director option plan. In 1999 Robert H. Wheeler was granted
10,000 additional options (under the Company's Long-Term Incentive Plan) and
received $30,000 as additional cash compensation for serving as Chairman of the
Board beginning on September 1, 1999.
Executive Compensation
Summary of Compensation. The following table summarizes the total
compensation for services rendered to the Company during each of the last three
fiscal years of (i) all individuals serving as the Company's Chief Executive
Officer during 1999, (ii) the Company's four mostly highly compensated executive
officers other than the CEO who were serving as executive officers at the end of
1999, and (iii) one additional individual for whom disclosure would have been
provided as one of the four most highly compensated executive officers but for
the fact that he was not serving as an executive officer of the Company at the
end of 1999. The individuals listed below in the Summary Compensation Table are
hereinafter referred to together as the "Named Executive Officers."
-6-
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
---------------------------- -------------
Stock Options All Other
Name and Principal Position Year Salary ($) Bonus($)(1) (Shares) Compensation
- --------------------------------- ---- ---------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Thomas F. Power, Jr., 1999 484,750 124,096 55,000 -
President & Chief 1998 430,000 285,950 6,000 -
Executive Officer (2) 1997 388,500 87,490 6,000 -
J. Reilly McCarren, 1999 258,333 66,133 99,000 -
President & Chief Executive 1998 225,000 149,625 - -
Officer of North American 1997 204,000 45,941 - -
operating subsidiaries (3)
William R. Schauer, 1999 155,000 41,230 10,000 -
Vice President-Marketing 1998 150,000 79,050 - -
of North American operating 1997 141,600 25,516 - -
subsidiaries
Walter C. Kelly, 1999 155,000 39,680 10,000 -
Vice President & Chief 1998 150,000 79,050 - -
Accounting Officer 1997 141,000 25,408 - -
Glenn J. Kerbs, 1999 160,000 32,800 10,000 -
Vice President-Engineering 1998 153,000 80,631 - -
of North American operating 1997 145,800 26,273 - -
subsidiaries
Edward A. Burkhardt, 1999 367,500 - 140,000 (4) 2,627,841 (5)
Chairman, President & Chief 1998 525,000 349,125 6,000 -
Executive Officer until 8/31/99 1997 472,000 106,294 6,000 -
Earl J. Currie, 1999 141,989 - 28,000 (6) -
Vice President-Planning 1998 160,000 84,320 - -
until 11/8/99 1997 153,000 27,571 - -
</TABLE>
- -------------------
(1) Annual bonus amounts were earned and accrued during the fiscal years
indicated and paid after the end of each applicable fiscal year.
(2) Mr. Power has held this position since September 1, 1999. Prior to that
date he served as Executive Vice President and Chief Financial Officer.
(3) Mr. McCarren has held this position since September 1, 1999. Prior to that
date he served as Executive Vice President and Chief Operating Officer of
the North American operating subsidiaries.
-7-
<PAGE>
(4) Mr. Burkhardt was granted 70,000 options on January 5, 1999 which lapsed
upon his resignation from the Company and were replaced by a grant of
70,000 options on July 7, 1999.
(5) The Company paid Mr. Burkhardt $1,462,497 in 1999 and accrued $1,165,344 to
be paid in future periods in connection with his resignation from the
Company.
(6) Mr. Currie's option for 28,000 shares lapsed upon his resignation from the
Company.
Stock Option Grants in 1999. The following table sets forth information
concerning the grant of stock options during 1999 to the Named Executive
Officers.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable
Percentage Value at
Number of of Total Assumed
Securities Options Annual Rates of
Under- Granted to Stock Price
lying Employees Exercise Appreciation For
Options in Price Expir- Option Term (1)
Granted Fiscal Year ($ Per ation ---------------------------
Name (Shares) 1999(%) share) Date 5%($) 10%($)
- ----------------------- ---------- ----------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas F. Power, Jr. 55,000 5.7 16.625 01/04/09 575,025 1,457,278
J. Reilly McCarren 99,000 10.4 16.625 01/04/09 1,035,045 2,623,101
William R. Schauer 10,000 1.0 16.625 01/04/09 104,550 264,960
Walter C. Kelly 10,000 1.0 16.625 01/04/09 104,550 264,960
Glenn J. Kerbs 10,000 1.0 16.625 01/04/09 104,550 264,960
Edward A. Burkhardt (2) 70,000 7.3 16.625 08/31/00 67,561 136,010
Edward A. Burkhardt (2) 70,000 7.3 16.625 lapsed n/a-lapsed n/a-lapsed
Earl J. Currie (2) 28,000 2.9 16.625 lapsed n/a-lapsed n/a-lapsed
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Potential realizable value is based on an assumption that the stock price
appreciates from the stated exercise price at the annual rate shown
(compounded annually) from the date of grant until the end of the option
term. These numbers are calculated based on the requirements promulgated by
the Securities and Exchange Commission and do not reflect the Company's
estimate of future stock price.
(2) Mr. Burkhardt was granted 70,000 options on January 5, 1999 which lapsed
upon his resignation from the Company and were replaced by a grant of
70,000 options on July 7, 1999; and Mr. Currie's option lapsed upon his
resignation from the Company on November 8, 1999.
-8-
<PAGE>
Option Exercises and Year-End Value of Options. The following table sets
forth information concerning the exercise of stock options during 1999, and the
year-end value of unexercised options, for the Named Executive Officers.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION> Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options at
Acquired Options at 12/31/99 12/31/99 ($)(1)
on Value --------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas F. Power, Jr. - - 85,000 - 8,625 -
J. Reilly McCarren - - 189,000 - - -
Willam R. Schauer - - 40,000 - 525 -
Walter C. Kelly - - 40,000 - 525 -
Glenn J. Kerbs - - 40,000 - 525 -
Edward A. Burkhardt - - 100,000 - 8,625 -
Earl J. Currie - - - - - -
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on the closing price of one share of Common Stock on December 31,
1999 ($13.4375) less the exercise price.
Compensation Committee Interlocks and Insider Participation
Robert H. Wheeler, a member of the Compensation Committee, was of counsel,
during part of 1999, to Oppenheimer Wolff & Donnelly, which has provided legal
and other services to the Company in connection with various labor matters,
litigation, regulatory issues and corporate and acquisition issues since shortly
after the Company's formation and continues to provide such services to the
Company. Mr. Wheeler received 10,000 options and $30,000 during 1999, as
compensation for his service as Chairman of the Board of Directors of the
Company beginning September 1, 1999.
Compensation Committee Report on Executive Compensation
The following is a report of the Compensation Committee of the Board of
Directors:
The Compensation Committee reviews the salaries of each executive officer
of the Company annually. It consults with the Chief Executive Officer regarding
salaries other than those of the executive directors and the non-executive
position of Chairman of the Board of the Company, and the Compensation Committee
makes recommendations to the Board of Directors for salaries of the executive
officers. In performing its duties the Compensation Committee has used the
services of outside compensation consultants and has reviewed compensation
surveys that are periodically published by compensation consulting firms. Each
year the Compensation Committee also recommends specific implementation of the
Company's management incentive compensation plan for the year for consideration
by the Board of Directors. That plan, as implemented for 1999, provided for cash
payments to management based on the North American operating subsidiaries'
achieving net income, after certain adjustments, at or above a target level and
on certain additional performance and safety results. The annual performance
-9-
<PAGE>
targets have been established for each year based upon the North American
operating subsidiaries' operating plan for that year and are designed to provide
incentives to meet or exceed the operating plan. The amount of incentive
compensation paid to each executive officer for 1999 was a percentage of base
salary based on the amount by which the applicable performance targets for the
year were met or exceeded, in accordance with a schedule approved when the
targets for the year were established.
For 1999, the Company did not establish incentive compensation based on the
performance of the Common Stock of the Company. All executive officers of the
Company hold Common Stock of the Company and options to acquire additional
shares of Common Stock of the Company. In most cases the executive officer's
holdings of Company securities represent a substantial proportion of his or her
net worth. The Committee believes that these holdings have created economic
interests for management consistent with those of the Company's other
stockholders.
The Chief Executive Officer receives a base salary as recommended by the
Compensation Committee and approved by the Board of Directors. In addition, the
Chief Executive Officer participates in the incentive compensation program
described above. In its annual review of the Chief Executive Officer's base
salary, the Compensation Committee considers the Chief Executive Officer's
responsibilities and performance, as well as the compensation paid to chief
executives of other rail transportation companies and other industrial companies
of comparable size. As described above for all executive officers, the incentive
compensation of the Chief Executive Officer for fiscal year 1999 was paid in
accordance with the terms of the management incentive compensation plan. The
Chief Executive Officer's incentive compensation is not based upon performance
of the Common Stock of the Company. A significant factor in the Compensation
Committee's consideration of incentive compensation for the Chief Executive
Officer is his ownership of 946,418 shares of Common Stock and options for
85,000 shares of Common Stock and the resulting consistency of his economic
interests with those of the Company's other stockholders.
The Company's policy with respect to executive compensation is to have all
compensation qualify for deductibility under the provisions of the Internal
Revenue Code.
The Compensation Committee
Thomas E. Evans, Chairman
Robert H. Wheeler
Carl Ferenbach
-10-
<PAGE>
Transactions With Management And Others
Affiliates of Berkshire Partners LLC ("Berkshire"), of which Carl Ferenbach
is an executive officer, director and beneficial owner, granted the Company
options to purchase up to 302,500 shares of ATN, in connection with the
investments by both the Company and Berkshire in ATN in November 1997 and in
December 1999. The options may be exercised at any time prior to November 14,
2002 and currently have an exercise price of A$1.11 per share or A$335,755 in
the aggregate (approximately US$204,000 at current exchange rates). The exercise
price increases approximately 3.5% at each November 14th.
Oppenheimer Wolff & Donnelly, to which Robert H. Wheeler was of counsel
during part of 1999, has provided legal and other services to the Company in
connection with various labor matters, litigation, regulatory issues and
corporate and acquisition issues since shortly after the Company's formation and
continues to provide such services to the Company. The Company paid OW&D
$1,028,000 during 1999. Mr. Wheeler received 10,000 options and $30,000 during
1999, as compensation for his service as Chairman of the Board of Directors of
the Company beginning September 1, 1999.
McLachlan, Rissman & Doll, of which Thomas W. Rissman is a member, has
provided legal and other services to the Company in connection with various
corporate, acquisition and financing matters since December 1, 1987 and
continues to provide such services to the Company. The Company paid MRD $828,000
during 1999.
Tranz Rail, of which five directors of the Company are directors and hold
shares and options, is party to a Management Services Agreement with the Company
under which the Company provides management services to Tranz Rail. The amounts
earned by the Company for services under the Tranz Rail Management Services
Agreement in 1999 were $534,000.
EWS, of which four directors of the Company are directors and hold shares
and options, is party to a Management Services Agreement with the Company under
which the Company provides management services to EWS. The amounts earned by the
Company for services under the EWS Management Services Agreement in 1999 were
$1,998,000.
-11-
<PAGE>
Stock Price Performance Graph
The following graph compares the cumulative total stockholder return on the
Company's Common Stock during the period from December 31, 1994 through December
31, 1999 with the cumulative total return on the S&P 500 Index and the S&P
Railroads Index during that period assuming the investment of $100 in the
Company's Common Stock and in each such index at the beginning of such period
and the reinvestment of all dividends.
Comparison Of Five Year Cumulative Total Return
Among Wisconsin Central Transportation Corporation,
the S & P 500 Index and the S & P Railroads Index
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG WCTC, S&P 500 AND S&P RAILROADS
<TABLE>
<CAPTION>
Measurement Period S&P
(Fiscal Year Covered) WCTC 500 S&P Railroads
- --------------------- ---- --- -------------
<S> <C> <C> <C>
Measurement Pt-
12/31/94 $100 $100 $100
FYE 12/31/95 $159 $138 $146
FYE 12/31/96 $288 $169 $182
FYE 12/31/97 $170 $226 $205
FYE 12/31/98 $125 $290 $188
FYE 12/31/99 $ 98 $351 $159
</TABLE>
Principal Stockholders
The following table sets forth the beneficial ownership of the Company's
Common Stock (i) by each person who is known by the Company to own beneficially
more than 5% of the outstanding shares of Common Stock, (ii) by each director,
(iii) by each of the Named Executive Officers and (iv) by all current directors
and executive
-12-
<PAGE>
officers as a group. Except as indicated in notes to the table, each beneficial
owner listed in the table has advised the Company or indicated in filings with
the Securities and Exchange Commission that such owner has sole investment and
voting power with respect to the shares of Common Stock indicated. The
information in the table is provided based on information known to the Company
as of March 20, 2000.
Principal Stockholders
<TABLE>
<CAPTION>
Shares Beneficially Owned (1)
------------------------------
Name Number Percent
- --------------------------------------------------- --------- -------
<S> <C> <C>
Southeastern Asset Management, Inc. (2) 7,909,300 15.4
Shapiro Capital Management, Inc. (3) 3,595,965 7.0
Edward A. Burkhardt (4) 3,580,004 7.0
State of Wisconsin Investment Board (5) 2,745,000 5.4
Thomas F. Power, Jr. (6) 1,031,418 2.0
Robert H. Wheeler 533,448 1.0
Roland V. McPherson 513,582 1.0
J. Reilly McCarren 261,700 *
Glenn J. Kerbs 249,868 *
Walter C. Kelly 143,306 *
William R. Schauer 142,128 *
Thomas W. Rissman (7) 122,514 *
Carl Ferenbach 110,926 *
A. Francis Small (8) 42,000 *
John W. Rowe (9) 30,000 *
Thomas E. Evans 29,000 *
Earl J. Currie (10) 2,790 *
Directors and current executive officers as a group
(21 persons) (11) 4,806,041 9.2
</TABLE>
- ---------------------------------------------------
* Percentage beneficially owned does not exceed 1%.
(1) Any shares of Common Stock which a person has the right to acquire through
exercise of options exercisable within 60 days after March 20, 2000 are
considered to be outstanding for purposes of this table. Listed
stockholders have such options to acquire shares of Common Stock in the
following numbers: Mr. Burkhardt: 100,000; Mr. Power: 85,000; Mr. Wheeler:
46,000; Mr. McPherson: 36,000; Mr. McCarren: 189,000; Mr. Kerbs: 40,000;
Mr. Kelly: 40,000; Mr. Schauer: 40,000; Mr. Rissman: 36,000; Mr. Ferenbach:
36,000; Dr. Small: 30,000; Mr. Rowe: 24,000; and Mr. Evans: 24,000.
(2) According to a Schedule 13G filed as of February 9, 2000 with the
Securities and Exchange Commission by Southeastern Asset Management, Inc.
("Southeastern"), Longleaf Partners Small Cap-Fund ("Longleaf") and
Longleaf Partners International Fund ("Longleaf International") which
indicates that Southeastern has sole voting power with respect to 676,500
of these shares, sole dispositive power with respect to 1,208,500 of these
shares, shared voting and shared dispositive power with respect to
6,700,800 of these shares, and no voting power with respect to 532,000 of
these shares; and Longleaf has no sole voting or sole dispositive power
with respect to these shares but has shared voting and shared dispositive
power with respect to 5,550,800 of these shares; and Longleaf International
has no sole voting or sole dispositive power with respect to these shares
but has shared voting and shared dispositive power with respect to
1,150,000 of these shares. Beneficial ownership of these shares is
disclaimed by
-13-
<PAGE>
Southeastern. The address of Southeastern, Longleaf and Longleaf
International is 6410 Poplar Ave., Suite 900, Memphis, Tennessee 38119.
(3) According to a Schedule 13G filed as of February 9, 2000 with the
Securities and Exchange Commission by Shapiro Capital Management Company,
Inc. ("Shapiro") and The Kaleidoscope Fund, L.P., which indicates that
Shapiro has sole voting power and sole dispositive power with respect to
3,543,965 of these shares and has no shared voting or shared dispositive
power with respect to these shares; and The Kaleidoscope Fund, L.P. has
sole voting power and sole dispositive power with respect to 52,000 of
these shares and has no shared voting or shared dispositive power with
respect to these shares. The address of Shapiro is 3060 Peachtree Road,
N.W., Atlanta, Georgia 30305.
(4) The number of shares shown for Mr. Burkhardt is based on the Company's
records of registered holders of shares and options. According to the
Company's records, Mr. Burkhardt's address is 573 Earlston Road,
Kenilworth, Illinois 60043-1014.
(5) According to a Schedule 13G filed as of February 2, 2000 with the
Securities and Exchange Commission by State of Wisconsin Investment Board
("Investment Board"), which indicates that Investment Board has sole voting
power and sole dispositive power with respect to all of these shares and
has no shared voting or shared dispositive power with respect to these
shares. The address of Investment Board is P.O. Box 7842, Madison,
Wisconsin 53707.
(6) Includes 57,000 shares held for the benefit of Mr. Power's spouse who has
sole voting and sole dispositive power with respect to those 57,000
shares.
(7) Mr. Rissman serves as one of three co-trustees who have shared voting and
dispositive power with respect to 1,016,316 shares held by the Mary Cynthia
K. McLachlan Trust.
(8) Dr. Small reports that he has shared voting and dispositive power with
respect to these shares.
(9) Includes 2,000 shares held by Mr. Rowe's spouse who has sole voting and
sole dispositive power with respect to those 2,000 shares.
(10) The amount of shares shown for Mr. Currie is based on the Company's records
of Section 16 filings for shares and options.
(11) Includes (i) the 57,000 shares owned by Mr. Power's spouse and referred to
in Note 6, (ii) the 1,016,316 shares owned by the Mary Cynthia K. McLachlan
Trust and referred to in Note 7, (iii) the 2,000 shares owned by Mr. Rowe's
spouse and referred to in Note 9, and (iv) 874,200 shares which directors
and executive officers have the right to acquire through exercise of
options within 60 days after March 20, 2000.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's directors,
officers and beneficial owners of more than 10% of the Company's Common Stock
(collectively "Reporting Persons") to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Reporting Persons are
required by the Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) forms which they file. Based solely on
its review of the copies of such forms received or written representations from
certain Reporting Persons, the Company believes that during 1999 all Reporting
Persons complied with all applicable filing requirements, except that Mr.
Ferenbach filed later than required a Form 5 for 1998, and as of March 20, 2000,
Messrs. Burkhardt and Currie had not filed a Form 5 for 1999.
-14-
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected KPMG LLP as independent public
accountants to conduct the annual audit of the financial statements of the
Company for the year ending December 31, 2000.
Representatives of KPMG LLP are expected to be present at the annual
meeting. They will have the opportunity to make a statement if they desire to do
so, and they are expected to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholder proposals intended to be presented at the 2001 annual meeting
of the Company must be received by the Company no later than December 31, 2000
to be eligible for inclusion in the Company's proxy statement and form of proxy
relating to the 2001 annual meeting. Any stockholder proposal received after
December 31, 2000 will be considered untimely and will not be eligible for
inclusion in the Company's proxy statement and form of proxy relating to the
2001 annual meeting.
OTHER MATTERS
The cost of soliciting proxies by mail, telephone, Internet, telecopy or in
person, as needed, will be borne by the Company. Officers or regular employees
of the Company may, without additional compensation, engage in the solicitation
of proxies by telecopy, telephone or personal calls.
Results of the meeting will be included in the Company's quarterly report
on Form 10Q, a copy of which may be obtained after August 15, 2000 by calling
(847) 318-4592.
By Order of the Board of Directors,
Thomas W. Rissman
Secretary
-15-
<PAGE>
1056-PS-00
<PAGE>
PROXY
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors of
Wisconsin Central Transportation Corporation
The undersigned appoints Thomas F. Power, Jr., Robert H. Wheeler, Thomas W.
Rissman, or any of them, proxies, with full power of substitution, to vote all
shares of Common Stock of Wisconsin Central Transportation Corporation ("WCTC")
owned of record by the undersigned upon all matters properly coming before the
2000 Annual Meeting of Stockholders to be held on May 18, 2000 and any
adjournments thereof.
This proxy is to be voted as directed on the reverse side of this card. IN THE
ABSENCE OF SPECIFIC DIRECTION, THE PROXIES WILL VOTE THE SHARES OF THE PERSON
WHO SIGNS THE REVERSE SIDE OF THIS PROXY (1) FOR ITEM 1--ELECTION OF THE
DIRECTOR NOMINEES LISTED ON THE REVERSE SIDE AND (2) IN THEIR DISCRETION ON ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.
Please sign and date this proxy on the reverse side and return it promptly in
the enclosed envelope or vote by telephone or via the Internet. If you do not
vote by proxy or attend the meeting and vote by ballot, your shares cannot be
voted.
SEE REVERSE SIDE (To be signed on reverse side) SEE REVERSE SIDE
<PAGE>
<TABLE>
<CAPTION>
Vote by Telephone Vote by Internet
<S> <C>
It's fast, convenient, and immediate! It's fast, convenient, and your vote is
Call Toll-Free on a Touch-Tone Phone immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683) or call
collect on a touch-tone phone 1-201-536-8073.
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy Statement 1. Read the accompanying Proxy Statement
and Proxy Card. and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683) or call http.//www.eproxyvote.com/wclx
collect on a touch-tone phone 1-201-536-8073.
3. Enter your 14-digit Control Number located on 3. Enter your 14-digit Control Number located
your Proxy Card above your name. on your Proxy Card above your name.
4. Follow the recorded instructions. 4. Follow the instructions provided.
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/wclx anytime!
Do not return your Proxy Card if you are voting by Telephone or Internet
THANK YOU FOR VOTING
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
DETACH HERE
[X] Please mark votes as in this example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. Election of Four Directors
For Three-Year Term: Carl Ferenbach, J. Reilly McCarren, Roland V. McPherson and A. Francis Small
[_] For all nominees [_] Withhold from all nominees [_] For all nominees except____________________
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT [ ]
PLEASE SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING.
Sign exactly as name appears on this card. Joint owners should both sign. If signing for a corporation or
partnership or as agent, attorney or fiduciary, indicate the capacity in which you are signing.
Signature: Signature:
Date: Date:
</TABLE>
