UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended June 30, 2000
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WISCONSIN CENTRAL TRANSPORTATION CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plan)
Wisconsin Central Transportation Corporation
(Employer sponsoring the Plan, issuer of the
participations in the Plan and issuer of
the shares held pursuant to the Plan)
6250 North River Road, Suite 9000
Rosemont, Illinois 60018
(Address of principal executive offices)
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WISCONSIN CENTRAL TRANSPORTATION CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
FORM 11-K
Fiscal Year Ended June 30, 2000
CONTENTS PAGE
Independent Auditors' Report.......................................... 1
Statements of Net Assets Available for Benefits....................... 2
Statements of Changes in Net Assets Available for Benefits............ 3
Notes to Financial Statements......................................... 4
Signatures............................................................ 7
Index to Exhibits..................................................... 8
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Independent Auditors' Report
To Wisconsin Central Transportation Corporation
Employee Stock Purchase Plan Administration Committee:
We have audited the accompanying statements of net assets available for benefits
of the Wisconsin Central Transportation Corporation Employee Stock Purchase Plan
(the "Plan") as of June 30, 2000 and 1999, and the related statements of changes
in net assets available for benefits for each of the years in the three-year
period ended June 30, 2000. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
June 30, 2000 and 1999, and the changes in net assets available for benefits for
each of the years in the three-year period ended June 30, 2000, in conformity
with accounting principles generally accepted in the United States of America.
KPMG LLP
Chicago, Illinois
September 8, 2000
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WISCONSIN CENTRAL TRANSPORTATION CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
Statements of Net Assets Available For Benefits
June 30, 2000 and 1999
June 30,
2000 1999
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Cash...................................................$ 2,000 $ 5,525
Wisconsin Central Transportation Corporation employee
stock options, at quoted fair market value (98,667
and 86,405 options, respectively, total cost
$1,115,924 and $1,391,121, respectively)........... 1,313,258 1,636,511
---------- ----------
Net assets available for benefits..................... $1,315,258 $1,642,036
========== ==========
The accompanying notes to financial statements
are an integral part of these financial
statements.
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WISCONSIN CENTRAL TRANSPORTATION CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
Statements of Changes in Net Assets Available for Benefits
For the Fiscal Years Ended June 30, 2000, 1999 and 1998
Fiscal Year Ended June 30,
2000 1999 1998
---------- ---------- ----------
Net assets available for benefits,
beginning of fiscal year.................$1,642,036 $2,054,373 $2,596,182
Increase (decrease) during year:
Participants' payroll deductions..........1,117,924 1,396,646 1,747,200
Unrealized 15% discount on price of stock.. 197,334 245,390 307,173
Stock issued, at fair market value,
and cash paid to participants........(1,642,036) (2,054,373) (2,596,182)
--------- --------- ---------
Net assets available for benefits,
end of fiscal year.......................$1,315,258 $1,642,036 $2,054,373
========== ========== ==========
The accompanying notes to financial statements
are an integral part of these financial
statements.
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WISCONSIN CENTRAL TRANSPORTATION CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
The financial statements of the Wisconsin Central Transportation
Corporation Employee Stock Purchase Plan (the "Plan") are prepared under
the accrual method of accounting. The Plan's investments are stated at
fair value. All security transactions are recorded on a trade-date basis.
All administrative expenses of the Plan are paid by Wisconsin Central
Transportation Corporation (the "Company").
(2) Description of Plan
The Plan was established by the Company to furnish eligible employees
(see "Eligibility") of the Company and its participating subsidiaries a
mechanism for voluntarily purchasing shares of the Company's common stock
("Common Stock") from the Company at a discount by exercising options to
purchase Common Stock ("Options") under the Plan. The Plan is
administered by a Plan Administration Committee (the "Committee")
composed of members of the Company's Board of Directors. The Plan is not
subject to the provisions of the Employee Retirement Income Security Act
of 1974. Under Internal Revenue Code ("IRC") Section 423, the Plan is not
subject to Federal income tax. Eligible employees are subject to Federal
income taxes.
Eligibility
The Plan covers all full-time employees of the Company and its
subsidiaries, other than Algoma Central Railway Inc., who have had at
least twelve months of continuous service preceding the date of the grant
of Options, except any employee owning 5% or more of the total voting
stock of the Company and certain highly compensated employees ("Eligible
Employees"). At June 30, 2000, 552 Eligible Employees participated in the
Plan.
Grant of Options
Under the Plan, the Company grants Options to all Eligible Employees once
each year on a date selected by the Committee ("Date of Grant"). For the
fiscal years ended June 30, 2000, 1999 and 1998, the Date of Grant was
July 1, 1999, 1998 and 1997, respectively. The term of each Option is
twelve months beginning on the Date of Grant. The last day of each option
period is the date on which the applicable Options may be exercised
("Date of Exercise"). For the fiscal years ended June 30, 2000, 1999 and
1998, the Date of Exercise was June 30, 2000, 1999 and 1998,
respectively. The number of shares subject to Option for each participant
is the quotient of the aggregate payroll deductions authorized by the
participant for the option period divided by the applicable option price
per share; provided, however, that the maximum number of shares for which
Options may be granted to a participant for any option period shall not
exceed $25,000 (as provided by Section 423(b) of the IRC) divided by the
lesser of (i) 85% of the fair market value of the Common Stock on the
Date of Exercise or (ii) 85% of the fair market value of the Common Stock
on the Date of Grant. For purposes of the Plan, "fair market value" of
the Common Stock on each of the Date of Grant, the Date of Exercise or
other applicable date is determined on the basis of the per share closing
price of the last sale of the Common Stock immediately prior to the
applicable date as reported by The Nasdaq Stock Market or, if listed on a
stock exchange, as reported in the published reports of composite
transactions for the exchange.
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Exercise of Options
Each participant is considered to have exercised his or her Option on the
Date of Exercise to the extent of the maximum number of whole shares of
the Company's Common Stock that may be purchased with the balance on that
date in the participant's account under the Plan for such Option. Any
balance in such account after payment of the option price is refunded to
the employee. The Company issues to each participant, in the
participant's name or in joint tenancy, the number of whole shares of
Common Stock acquired on exercise of an option on the first day following
the term of an Option.
The option price per share is equal to the lesser of (i) 85% of the fair
market value of the Common Stock on the Date of Exercise or (ii) 85% of
the fair market value of the Common Stock on the Date of Grant. The
following summarizes the fair market value of the Company's Common Stock
at the Date of Exercise and the Date of Grant as well as the discounted
price offered to employees under the Plan for the fiscal years ended June
30, 2000, 1999 and 1998:
Fair Market Discounted
Date Value Discount Price
Fiscal Year Ended June 30, 2000:
Date of Grant, July 1, 1999............ $ 18.88 $ 2.84 $ 16.04
Date of Exercise, June 30, 2000........ $ 13.31 $ 2.00 $ 11.31
Fiscal Year Ended June 30, 1999:
Date of Grant, July 1, 1998............ $ 21.88 $ 3.28 $ 18.60
Date of Exercise, June 30, 1999........ $ 18.94 $ 2.84 $ 16.10
Fiscal Year Ended June 30, 1998:
Date of Grant, July 1, 1997............ $ 36.56 $ 5.48 $ 31.08
Date of Exercise, June 30, 1998........ $ 22.75 $ 3.41 $ 19.34
Contributions to the Plan
Eligible employees may contribute annually to the Plan up to the smaller
of (1) 7.5% (or another percentage as established by the Committee) of
their annual compensation (not including incentives, bonuses, overtime,
extended work-week premiums or other special payments, fees or
allowances) or (2) an amount which complies with the $25,000 IRC Section
423(b) limitation discussed previously.
Participant Accounts
All payroll deductions and payments during the term of an Option are held
in the general assets of the Company and credited to a special account
established under the Plan in the employee's name. No interest is paid or
credited to amounts accumulated in the special account under the Plan. On
the first business day following the term of an Option, the Company
issues whole shares of Common Stock in return for the funds accumulated
in the special account under the Plan. Any balance in the special account
after the Common Stock is issued is refunded to the employee.
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Withdrawals
An employee can withdraw from the Plan at any time with proper notice.
Withdrawal from the Plan is also effected by termination of service with
the Company. Employees are entitled to a full refund of monies previously
withheld under the Plan during the current Plan fiscal year upon
withdrawal.
Stock Subject to the Plan
The Common Stock which may be issued pursuant to Options under the Plan
is limited to 2,400,000 shares of Common Stock. After the stock Options
are exercised under the Plan for the fiscal year ended June 30, 2000, the
remaining number of shares which may be issued pursuant to the Plan is
1,394,310 as is illustrated below:
Since
Fiscal Year Ended June 30, Inception
2000 1999 1998 of Plan
--------- --------- --------- ---------
Stock issuable under the Plan at the
beginning of the fiscal year..... 1,492,977 1,579,382 1,669,462 2,400,000
Stock options exercised for the
fiscal year....................... (98,667) (86,405) (90,080)(1,005,690)
--------- --------- --------- ---------
Remaining stock issuable at end
of fiscal year................... 1,394,310 1,492,977 1,579,382 1,394,310
========= ========= ========= =========
(3) Stock and Cash Payable to Participants
For the fiscal years ended June 30, 2000, 1999 and 1998, participant
deductions under the Plan amounted to $1,117,924, $1,396,646 and
$1,747,200, respectively. Utilizing the discounted exercise price of the
Common Stock offered to participants ($11.31, $16.10 and $19.34 for the
fiscal years ended June 30, 2000, 1999 and 1998, respectively), these
deductions were used to purchase 98,667, 86,405 and 90,080 whole shares
of Common Stock for participants for the fiscal years ended June 30,
2000, 1999 and 1998, respectively. The cash remaining in the Plan after
purchasing whole shares ($2,000, $5,525 and $5,053 for the fiscal years
ended June 30, 2000, 1999 and 1998, respectively) was refunded to
employees as part of their August 1, 2000, August 1, 1999 and August 1,
1998 payroll, respectively. Stock certificates issued to participants
on July 1, 2000, July 1, 1999 and July 1, 1998 from the exercise of
options for the fiscal years ended June 30, 2000, 1999 and 1998,
respectively, were mailed to participants by EquiServe, the Company's
transfer agent.
(4) Wisconsin Central Transportation Corporation Employee Stock Options
Options owned by the Plan at June 30, 2000 and 1999 (the Date of Exercise
for each of the fiscal years ended June 30, 2000 and 1999) are stated in
the Statement of Net Assets Available for Plan Benefits at the fair
market value of the Common Stock on these Exercise Dates ($13.31 and
$18.94, respectively) as reported by The Nasdaq Stock Market.
(5) Unrealized Appreciation in Employee Stock Options
The unrealized appreciation in the value of the stock Options is the
increase in the fair market value of the Company's Common Stock from the
Date of Grant to the Date of Exercise multiplied by the number of Options
exercised. For the fiscal years ended June 30, 2000, 1999 and 1998, there
was no unrealized appreciation as of the Date of Exercise. The 15%
discount on the purchase price of the Common Stock, which amounted to
$2.00, $2.84 and $3.41 per share for the fiscal years ended June 30,
2000, 1999 and 1998, respectively, was unrealized.
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WISCONSIN CENTRAL TRANSPORTATION CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administration Committee has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
Date: September 27, 2000 By: /s/ Ronald G. Russ
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Ronald G. Russ
Executive Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description Page
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23 Consent of KPMG LLP 11
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