<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 Section240.14a-11(c) or
Section240.14a-12
WPS RESOURCES 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)(1)
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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[LOGO]
WPS RESOURCES CORPORATION
700 NORTH ADAMS STREET, P. O. BOX 19001, GREEN BAY, WISCONSIN 54307-9001
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1999
---------------------
TO THE SHAREHOLDERS OF WPS RESOURCES CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of WPS
Resources Corporation, a Wisconsin corporation ("WPSR"), will be held on
Thursday, May 6, 1999, at 10:30 A.M., CDT, at the Weidner Center, University of
Wisconsin - Green Bay, 2420 Nicolet Drive, Green Bay, Wisconsin, for the
following purposes:
1. To elect two directors of Class B to hold office until the
Annual Meeting of Shareholders in 2002 or until their
successors have been elected and qualified.
2. To approve the WPS Resources Corporation 1999 Stock Option
Plan.
3. To consider and act upon such other business as may properly
come before the Annual Meeting or any adjournment thereof.
Shareholders of record at the close of business on March 12, 1999 will be
entitled to notice of, and to vote at, the Annual Meeting and at any adjournment
thereof.
Even if you plan to attend the Annual Meeting, please vote, sign exactly as
your name appears, date, and promptly mail the enclosed proxy card in the
postage-paid envelope provided. If you attend the Annual Meeting, you may revoke
your proxy and vote your shares in person. Your attention is directed to the
attached Proxy Statement.
WPS RESOURCES CORPORATION
/s/ FRANCIS J. KICSAR
FRANCIS J. KICSAR
SECRETARY
Green Bay, Wisconsin
March 22, 1999
The enclosed proxy is solicited by the Board of Directors. Your vote is
important no matter how large or small your holdings may be. To assure your
representation at the meeting, please vote, sign exactly as your name appears,
date, and promptly mail the enclosed proxy card in the postage-paid envelope
provided.
<PAGE>
March 22, 1999
PROXY STATEMENT
WPS RESOURCES CORPORATION
700 NORTH ADAMS STREET, P. O. BOX 19001, GREEN BAY, WISCONSIN 54307-9001
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1999
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors ("Board") of WPS Resources Corporation
("WPSR") for the Annual Meeting of Shareholders to be held on Thursday, May 6,
1999 at 10:30 A.M., CDT, at the Weidner Center, University of Wisconsin - Green
Bay, 2420 Nicolet Drive, Green Bay, Wisconsin and at any adjournment thereof
("Meeting") for the purposes set forth in the Notice of Annual Meeting of
Shareholders and in this Proxy Statement.
Only shareholders of record as of the close of business on March 12, 1999
("Record Date") are entitled to notice of, and to vote at, the Meeting. As of
the Record Date, WPSR's outstanding voting securities entitled to vote consisted
of 26,522,111 shares of Common Stock. The record holder of each outstanding
share of Common Stock as of the Record Date is entitled to one vote per share
with respect to each proposal submitted for consideration at the Meeting. The
Notice of Annual Meeting of Shareholders, this Proxy Statement, and the
accompanying form of proxy were first mailed to shareholders on or about March
22, 1999.
A proxy, in the enclosed form, which is properly executed, duly returned to
WPSR, and not revoked, will be voted in accordance with the instructions
contained therein. If no specification is indicated on the proxy, the shares
represented thereby will be voted FOR the indicated nominees for directors, FOR
approval of the WPS Resources Corporation 1999 Stock Option Plan, and on such
other business or matters which may properly come before the Meeting in
accordance with the best judgment of the persons named in the proxy. Approval of
the WPS Resources Corporation 1999 Stock Option Plan requires a majority of the
votes cast at a meeting where a quorum is present and is more fully described
starting on page 16. Execution of a proxy given in response to this solicitation
will not affect a shareholder's right to attend the Meeting and to vote in
person. Presence at the Meeting of a shareholder who has signed a proxy does not
in itself revoke a proxy. Each proxy granted may be revoked by the person giving
it at any time before the exercise thereof by giving written notice to such
effect to the Secretary of WPSR, by execution and delivery of a subsequent
proxy, or by attendance and voting in person at the Meeting, except as to any
matter upon which, prior to such revocation, a vote shall have been cast
pursuant to the authority conferred by such proxy.
On December 12, 1996, the Board of Directors of WPSR approved the issuance
to shareholders, as of December 16, 1996, of a dividend of one common share
purchase right (a "Right") for each outstanding share of WPSR's Common Stock.
The Rights are designed to enhance the ability of the Board of Directors to
protect shareholders and WPSR if efforts are made to gain control of WPSR in a
manner that is not in the best interests of WPSR and its shareholders. The
Rights are not presently exercisable; but ten days after a person or group
acquires 15% or
1
<PAGE>
more of WPSR's Common Stock or ten business days (subject to extension) after a
person or group announces a tender offer to acquire at least 15% of WPSR's
Common Stock, the Rights will become exercisable. Such Rights will entitle each
holder of Common Stock of WPSR to purchase one share of authorized but unissued
Common Stock of WPSR for each Right. The exercise price of each Right is $85.
Upon the acquisition by any person or group of 15% or more of the Common Stock
of WPSR, each Right, other than Rights held by an acquiring party, will entitle
the holder to purchase, at the exercise price, Common Stock of WPSR having a
market value of two times the exercise price. The Rights Agreement excludes from
the effects thereof the inadvertent acquisition of 15% or more of WPSR's Common
Stock, provided there is prompt divestment to less than 15%. The Rights may be
redeemed or may, under certain circumstances, be exchanged for shares of Common
Stock of WPSR, all as provided and subject to the limitations set forth in the
agreement setting forth the terms of the Rights; otherwise, such Rights expire
on December 11, 2006. None of the share holdings or percentages of outstanding
shares reported in this Proxy Statement reflect the Rights or shares of Common
Stock which may be purchased upon the exercise of the Rights. WPSR has prepared
a Summary of Rights to Purchase Common Shares, a copy of which is available free
of charge from WPSR.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
No person is known by WPSR to be the beneficial owner of more than 5% of any
class of WPSR's voting securities. Set forth below is a tabulation indicating,
as of January 1, 1999, the shares of WPSR's equity securities beneficially owned
by the five named executives in the Summary Compensation Table, each nominee and
director, and all directors and officers of WPSR as a group. No officer or
director owns more than 1% of any class of WPSR's equity securities.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
TITLE OF CLASS NAME OF BENEFICIAL OWNER OF OWNERSHIP (1)(2)(3)
- ------------------------------ --------------------------------------------- ----------------------
<S> <C> <C>
Common Stock, $1.00 Par Larry L. Weyers 8,499
Value Per Share Patrick D. Schrickel 3,930(4)
Clark R. Steinhardt 6,383(5)
Daniel P. Bittner 11,519(6)
Phillip M. Mikulsky 7,070
A. Dean Arganbright 2,010
Michael S. Ariens 5,721(7)
Richard A. Bemis 3,621
Daniel A. Bollom 17,689(8)
Sister M. Lois Bush 645(9)
Clarence R. Fisher 5,516(10)
Robert C. Gallagher 5,920
Kathryn M. Hasselblad-Pascale 3,489(11)
James L. Kemerling 1,424
All directors and officers as a group (24) 115,664(12)
</TABLE>
- ------------------------
(1) None of the persons listed beneficially owns shares of any other class of
equity securities of WPSR or its subsidiaries, except Mr. Arganbright's
spouse who owns 10 shares of Preferred Stock 5% Series ($100 par value) of
Wisconsin Public Service Corporation ("WPSC").
2
<PAGE>
(2) In each case, the indicated owner has sole voting power and sole
investment power with respect to the shares shown in this column, except
as noted.
(3) Includes shares of common stock held in the Employee Stock Ownership Plan
and Trust ("ESOP") and the Wisconsin Public Service Corporation Deferred
Compensation Trust ("Deferred Compensation Trust").
(4) Includes 200 shares held as custodian for children.
(5) Includes 49 shares held in a family trust.
(6) Includes 188 shares held in joint tenancy.
(7) Includes 2,363 shares held by M&M Ariens, Inc.
(8) Includes 1,570 shares held in survivorship marital property.
(9) Owned by Sisters of the Sorrowful Mother of which Sister M. Lois Bush is a
member.
(10) All 5,516 shares held in joint tenancy.
(11) Includes 852 shares owned by spouse.
(12) Includes shares described in notes (1) through (11) and 222 shares held in
joint tenancy and 40 shares held as custodian for children.
NOMINEES FOR ELECTION AS DIRECTORS
Pursuant to the Restated Articles of Incorporation and the By-Laws of WPSR,
the Board consists of ten directors and is divided into three classes with one
class being elected each year for a term of three years. There are four Class A
directors and three each of Class B and C directors. The Directors of Class B
are standing for election this year. Sister M. Lois Bush, SSM, who is presently
a Class B director is not standing for re-election. WPSR is proposing not to
nominate a replacement for Sister Bush, and the Board will amend the By-Laws at
the Board's May 6, 1999 meeting to provide for nine directors. Accordingly, it
is proposed that the two nominees listed below be elected to serve as Class B
directors for three-year terms to expire at the 2002 Annual Meeting of
Shareholders. Messrs. A. Dean Arganbright and James L. Kemerling are presently
Class B directors whose terms expire at this year's Annual Meeting, and who have
been nominated for re-election.
Directors are elected by a plurality of the votes cast by the holders of
WPSR's Common Stock at a meeting at which a quorum is present. "Plurality" means
that the individuals who receive the largest number of votes cast are elected as
directors up to the maximum number of directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention, broker non-vote, or
otherwise) have no impact in the election of directors except to the extent that
the failure to vote for an individual results in another individual receiving a
larger number of votes. Under Wisconsin law, cumulative voting for directors is
permitted but is not presently provided for in WPSR's Restated Articles of
Incorporation.
Certain information about the two nominees for such directorships is set
forth below. It is intended that the proxies solicited on behalf of the Board
will be voted for the following nominees. The Board has no reason to believe
that either of these nominees will be unable or unwilling to serve as a director
if elected; but if either nominee should be unable or unwilling to serve, the
shares represented by proxies solicited by the Board will be voted for the
election of such other person as the Board may recommend in place of such
nominee.
3
<PAGE>
NOMINEES -- CLASS B -- TERM EXPIRING IN 2002
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- --------------------------------- --- ----------------------------------------------------------------- -------
<S> <C> <C> <C>
A. Dean Arganbright 68 Retired Chairman, President, and Chief Executive Officer, 1972
(1)(2)(4)(5) Wisconsin National Life Insurance Company, Oshkosh, WI
James L. Kemerling 59 Consultant, Wausau, WI, since 1996; Chairman, President, and 1988
(1)(2)(4)(5) Chief Executive Officer, The Specialty Packaging Group, Inc.,
Wausau, WI (manufacturer of composite cans), 1994-1996;
President and Chief Executive Officer, Shade/Allied Inc., Green
Bay, WI (manufacturer of business forms), 1990-1994
</TABLE>
- ------------------------
Footnotes appear on page 5
Mr. Arganbright, who is retired, served in the same or another position with
the employer indicated for at least five years prior to his retirement.
The following tables set forth certain information about Class A and Class C
directors who are not standing for election in 1999.
CLASS A -- TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- --------------------------------- --- ----------------------------------------------------------------- -------
<S> <C> <C> <C>
Richard A. Bemis (1)(3) 57 President and Chief Executive Officer, Bemis Manufacturing 1983
Company, Sheboygan Falls, WI (manufacturer of toilet seats,
contract plastics, and wood products)
Daniel A. Bollom (1)(4) 62 Retired Chairman and Chief Executive Officer of WPSR 1989
Clarence R. Fisher 59 President and Chief Executive Officer, Upper Peninsula Power 1998
Company
Robert C. Gallagher 60 President and Chief Operating Officer, Associated Banc-Corp, 1992
(1)(2)(3)(4) Green Bay, WI, since 1998; Chairman and Chief Executive Officer,
Associated Bank, Green Bay, WI and Vice Chairman, Associated
Banc-Corp, Green Bay, WI 1981-1998
</TABLE>
- ------------------------
Footnotes appear on page 5
4
<PAGE>
CLASS C -- TERM EXPIRING IN 2000
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- --------------------------------- --- ----------------------------------------------------------------- -------
<S> <C> <C> <C>
Michael S. Ariens (1)(3)(5) 67 Chairman, Ariens Company, Brillion, WI (manufacturer of outdoor 1974
power equipment)
Kathryn M. Hasselblad-Pascale 51 Managing Partner, Hasselblad Machine Company, LLP, Green Bay, WI 1987
(1)(3)(4) (manufacturer of automatic screw machine products)
Larry L. Weyers 53 Chairman, President, and Chief Executive Officer of WPSR 1996
</TABLE>
- ------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
(3) Member of Nominating Committee.
(4) Member of Shareholder Committee.
(5) Member of Strategic Action Planning Committee.
Each of the Class A and Class C directors, except Mr. Bollom, has served in
the same or another position with the employer indicated for at least five
years. Mr. Bollom, who is retired, served in the same or another position with
the employer indicated for at least five years prior to his retirement.
Other directorships held by the directors include the following:
Richard A. Bemis -- W. H. Brady Company, Milwaukee, WI
Clarence R. Fisher -- Michigan Financial Corporation, Marquette, MI
Robert C. Gallagher -- Associated Banc-Corp, Green Bay, WI
James L. Kemerling -- Badger Paper Mills, Inc., Peshtigo, WI
During 1998, the Board met 11 times. All but two directors attended more
than 75% of the total number of meetings, including meetings of committees of
which they are members. Mr. Bemis attended 72% and Sister Bush attended 71%,
respectively, of the required meetings.
Non-employee director remuneration consists of a monthly fee of $1,417, a
fee of $850 for each Board meeting attended, $200 for each telephonic Board
meeting participation, and $775 for each Board committee meeting attended. These
fees will be $1,458, $900, $200, and $850, respectively, in 1999. Employee
directors receive no compensation for their services as directors.
5
<PAGE>
The Audit Committee, which includes all non-employee directors, met two
times during 1998. Its duties and responsibilities include, but are not
necessarily limited to, the following:
(1) To recommend annually a firm of independent public accountants.
(2) To approve the services to be performed by the independent public
accountants.
(3) To review the reports and comments of the WPSC audit services department
and the independent public accountants and to recommend such action as is
appropriate to the Board.
The Compensation Committee, which is composed of three non-employee
directors, met five times during 1998. Its function is to recommend to the Board
the compensation to be paid to officers and selected managerial personnel.
The Nominating Committee, which consists of four non-employee directors,
recommends to the Board candidates to be nominated for election as directors at
the Annual Meeting and to fill any vacancies on the Board. The Nominating
Committee also approves officer changes. The Nominating Committee met four times
in 1998. The Nominating Committee will consider suggestions from all sources,
including shareholders, regarding possible candidates for director. Such
suggestions, together with appropriate biographical information, should be
submitted to the Secretary of WPSR no later than November 1, in order to be
considered for the Annual Meeting in the following year.
The Shareholder Committee, which consists of five non-employee directors,
considers issues of strategic interest to shareholders. The Shareholder
Committee did not meet in 1998.
The Strategic Action Planning Committee, which consists of four non-employee
directors, reviews and provides input for WPSR's Strategic Plans. The Strategic
Action Planning Committee met one time in 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of statements of beneficial ownership and of
changes therein furnished to WPSR during and with respect to the 1998 calendar
year and written representations made to WPSR, management has concluded that no
person who at any time during 1998 was a director or officer of WPSR failed to
file with the Securities and Exchange Commission, on a timely basis, reports of
beneficial ownership of WPSR's securities required by Section 16(a) of the
Securities and Exchange Act of 1934, as amended.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the total compensation
paid by WPSR and its subsidiaries for all services rendered during 1998, 1997,
and 1996 for the Chief Executive Officer and the four other most highly
compensated current executive officers of WPSR or its subsidiaries who perform
policy-making functions for WPSR.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
(e)
OTHER (f) (g) (i)
ANNUAL RESTRICTED SECURITIES (h) ALL OTHER
(a) (c) (d) COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND (b) SALARY BONUS SATION AWARD(S) OPTIONS/ PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) (5) ($) ($) (6) ($) SARS (#) ($) ($) (7)
- ---------------------- ---- ---------- ----- ------------ ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Larry L. Weyers 1998 393,214.61 0.00 9,390.06 0.00 0.00 0.00 45,188.81
Chairman, President, 1997 245,038.88 0.00 5,177.75 0.00 0.00 0.00 56,301.89
and Chief Executive 1996 192,405.43 0.00 11,375.27 0.00 0.00 0.00 20,497.77
Officer (1)(2)
Patrick D. Schrickel 1998 239,389.87 0.00 9,201.42 0.00 0.00 0.00 15,704.64
Executive Vice 1997 203,840.28 0.00 5,073.74 0.00 0.00 0.00 12,853.18
President (1) 1996 171,392.72 0.00 11,254.43 0.00 0.00 0.00 14,335.34
Clark R. Steinhardt 1998 213,462.81 0.00 14,340.95 0.00 0.00 0.00 5,363.10
Senior Vice President 1997 192,260.94 0.00 7,907.69 0.00 0.00 0.00 5,545.05
(3) 1996 150,555.85 0.00 17,372.81 0.00 0.00 0.00 36,283.37
Daniel P. Bittner 1998 151,734.86 0.00 6,499.11 0.00 0.00 0.00 62,141.94
Vice President and 1997 138,842.29 0.00 3,583.67 0.00 0.00 0.00 53,524.60
Chief Financial 1996 126,367.19 0.00 7,873.10 0.00 0.00 0.00 47,860.99
Officer (1)
Phillip M. Mikulsky 1998 141,264.76 0.00 4,595.01 0.00 0.00 0.00 37,560.26
Senior Vice President 1997 112,107.59 0.00 2,533.75 0.00 0.00 0.00 29,140.03
(4) 1996 100,832.46 0.00 5,566.51 0.00 0.00 0.00 27,023.85
</TABLE>
- ------------------------------
(1) Officer of both WPSR and WPSC.
(2) Mr. Weyers assumed the duties of Chairman and Chief Executive Officer on
February 12, 1998 and May 1, 1997, respectively.
(3) Officer of WPSC. Mr. Steinhardt retired effective January 31,1999.
(4) Officer of WPSR.
(5) In addition to base salary, these amounts include Elective Deferred
Compensation in the Reserve Account, Mandatory Deferred Compensation, and
vacation taken as pay.
(6) These amounts reflect Above Market Earnings on Elective Deferred
Compensation. Perquisites for the Chief Executive Officer and the four named
executive officers did not exceed the lesser of $50,000 or 10% of the total
of Salary and Bonus for the year and, accordingly, are not listed.
(7) These amounts include WPSC contributions under the ESOP for Weyers,
Schrickel, Steinhardt, Bittner, and Mikulsky of $1,435.70, $0, $1,560.14,
$1,791.48, and $1,743.14, respectively, for 1998; $1,303.79, $1,149.78,
$1,140.37, $1,073.58, and $1,035.84, respectively, for 1997; and $2,937.39,
$2,937.39, $2,830.16, $2,584.95, and $2,269.31, respectively, for 1996;
Above Market Earnings on Mandatory Deferred Compensation for Weyers,
Schrickel, Steinhardt, Bittner, and Mikulsky of $3,253.08, $3,969.81,
$3,802.96, $3,299.04, and $1,322.16, respectively, for 1998; $1,793.77,
$2,188.99, $2,096.98, $1,819.12, and $729.05, respectively, for 1997; and
$3,940.84, $4,855.55, $4,606.96, $3,996.49, and $1,601.69, respectively, for
1996; and Elective Deferred Compensation in the Stock Account for Weyers,
Schrickel, Steinhardt, Bittner, and Mikulsky of $40,500.00, $11,734.83, $0,
$57,051.42, and $34,494.96, respectively, for 1998; $53,204.33, $9,514.41,
$2,307.70, $50,631.90, and $27,375.14, respectively, for 1997; and
$13,619.54, $6,542.40, $28,846.25, $41,279.55, and, $23,152.85,
respectively, for 1996.
7
<PAGE>
WPSR has employment and severance agreements with each of 12 executives of
WPSR and/or its subsidiaries including the five current executive officers named
in the Summary Compensation Table. These agreements are intended to ensure, as
far as possible, that WPSR will continue to have the benefit of each executive's
services and to protect WPSR's confidential information and good will; to
provide these executives with a measure of security against changes in their
relationship with WPSR and its subsidiary in the event of a change in control
(as defined in the agreements) of WPSR, and to ensure, insofar as possible, that
any proposal for a change in control of WPSR will be considered by the
executives objectively and with reference only to the best interests of WPSR and
its shareholders. These agreements provide that each executive that is a party
thereto is entitled to benefits if, within three years following a change in
control or such shorter period after a change in control and prior to the
executive's normal retirement date (the "employment period"), the executive's
employment is ended through (a) termination by WPSR or WPSC, other than by
reason of death or disability or for cause (as defined in the agreements), or
(b) termination by the executive due to a breach of the agreement by WPSR or its
subsidiary or due to a change in elected or appointed positions held by the
executive or a significant change in the executive's working conditions or
responsibilities. The benefits provided under each of the agreements include:
(a) a cash termination payment equal to the lesser of (i) 2.99 and (ii) the
number of years or fraction thereof remaining in the employment period, times
the sum of the executive's annual salary and his or her average annual bonus
during the three years before the termination and (b) continuation for up to
three years of the most favorable hospital, medical, dental, accident,
disability, and life insurance coverage in effect during the 180-day period
immediately prior to the change in control or, if more favorable to the
executive, the coverage in effect generally thereafter for executives of
comparable status and position. The termination payment is in lieu of any other
severance payments to which the executive may be entitled under the severance
policies of WPSR or its subsidiary. The agreements also provide the foregoing
benefits in connection with certain terminations which are effected in
anticipation of a change in control. Each agreement provides that if any portion
of the benefits under the agreement or under any other agreement for the
executive would constitute an excess payment for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), benefits will be reduced so that
the executive will be entitled to receive $1 less than the maximum amount which
he or she could have received without becoming subject to the 20% excise tax
imposed by the Code on certain excess payments, or which WPSR may pay without
the loss of deduction under the Code.
8
<PAGE>
COMPARATIVE FIVE-YEAR INVESTMENT PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
WPSR's Common Stock with the Standard & Poor's ("S&P") 500 Index and the Edison
Electric Institute ("EEI") 100 Index for the last five fiscal years. Total
return includes dividends and stock price appreciation, assuming reinvestment of
dividends. Total return was calculated assuming investment of $100 on December
31, 1993.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN (1)
<S> <C> <C> <C>
WPS RESOURCES CORPORATION (WPSR),
S&P 500 INDEX, AND EEI 100 INDEX
S&P EEI
500 100
Years WPSR Index Index
1993 $100 $100 $100
1994 85 101 88
1995 114 139 116
1996 102 171 117
1997 129 229 149
1998 143 294 170
</TABLE>
(1) Total return assumes reinvestment of dividends.
9
<PAGE>
BOARD COMPENSATION COMMITTEE REPORT
WPSR maintains a market-based executive compensation plan for the Chairman,
President, and Chief Executive Officer ("CEO") and the other executive officers
of WPSR and its subsidiaries. The plan is designed to support WPSR's vision and
mission statements and its commitment to a quality management philosophy. Pay
advancement is based on the relationship between the executive's salary and the
maximum compensation range value of the assigned pay grade. The pay plan is
designed to bring executives to their maximum compensation range values, which
correspond to median market values, over a seven-year period. The minimum range
values are 80% of the maximum compensation range values. Those farther below the
maximum compensation range values receive larger salary increases than those
closer to the maximum compensation range values. If an executive is promoted to
a higher-rated position, an increase is provided at the time of the change in
duties. The compensation levels for 1998 were not adjusted to reflect actual or
projected financial results; however, the Compensation Committee reserves the
right to recommend revised compensation levels after considering all of the
future qualitative and quantitative facts and circumstances surrounding actual
or projected financial results.
The CEO's annual salary was $362,472 for the period January 1, 1998 through
January 10, 1998. The CEO's annual salary was set at $392,557 effective January
11, 1998 and remained at that level through December 26, 1998.
At the October meeting, the Compensation Committee reviewed the compensation
of the CEO and the other executive officers of WPSR and its subsidiaries.
Pursuant to the market-based executive compensation plan described above, the
CEO's annual salary was set at $422,004 effective December 27, 1998 (and remains
in effect at the date of this Proxy Statement). The new maximum compensation
range value of $466,680 generally corresponds with the median of 1998 base
salaries of $442,200 (which excludes incentive and other forms of cash
compensation) as reported to the EEI by utilities with revenues generally
comparable to those of WPSR. Median total compensation (which includes both
short-term and long-term incentive compensation) reported by the same utilities
was $716,200. Many of the utilities are members of the EEI 100 Index group which
is reflected on the Comparative Five-Year Investment Performance Graph set forth
on the previous page. The composition of the two groups, however, is not
identical.
A Short-Term Variable Pay Plan, described on page 11, was in effect for the
year 1998 and the CEO and the other named executive officers were covered by the
Short-Term Variable Pay Plan. No payments were made under the Short-Term
Variable Pay Plan for the year 1998.
WPSR and its subsidiaries have considered the implications of Section 162(m)
of the Internal Revenue Code (the "Code") regarding the deductibility of annual
executive compensation over $1,000,000. The compensation levels for officers of
WPSR and its subsidiaries fall well below this level and, hence, the provisions
of Section 162(m) of the Code have not affected the compensation program of
WPSR.
A. Dean Arganbright
Robert C. Gallagher
James L. Kemerling
10
<PAGE>
BENEFIT PLANS
In 1998, WPSR adopted a Short-Term Variable Pay Plan for a limited group of
executives, which includes each of the named executive officers listed in the
Summary Compensation Table. The plan provides for various levels of bonus
payments to the participating executives based in part on a Utility Performance
Award and in part on a Non-Utility Performance Award. The Utility Performance
portion of the bonus is determined by an evaluation of five key measures of
performance including: system reliability, safety, customer satisfaction,
environmental strategy, and return on equity as compared with allowed return on
equity. The Non-Utility Performance portion is determined by the earnings per
share provided by non-utility operations, and customer growth and retention
benchmarks. There were no awards made to any participant in this plan for the
calendar year 1998. The Compensation Committee has full authority and discretion
to determine the plan participants and the amount and allocation of payments to
plan participants. The Compensation Committee must approve all awards annually.
The WPS Resources Corporation Deferred Compensation Plan ("Deferred
Compensation Plan") is available to approximately 40 executives of WPSR and its
subsidiaries, including each of the named current executive officers listed in
the Summary Compensation Table. The plan consists of the following components:
(1) Mandatory Salary Deferrals; (2) Voluntary Salary Deferrals; (3) Death
Benefit; (4) Protection of Qualified Pension Benefit; and (5) Supplemental
Retirement Benefits.
MANDATORY SALARY DEFERRALS. Payment of a portion (currently 7%) of the
compensation for certain Deferred Compensation Plan participants, including the
Chief Executive Officer and each of the named executive officers, is credited to
the Deferred Compensation Plan in lieu of being paid directly to the
participant. The amount deferred is credited to the Stock Account and treated as
if fully invested in WPSR Common Stock.
VOLUNTARY SALARY DEFERRALS. Additionally, each Deferred Compensation Plan
participant may elect to defer any bonus payable to such participant for any
year and/or up to 30% of such participant's salary for any year and have such
amount credited, for recordkeeping purposes, to the Deferred Compensation Plan.
In accordance with advance elections made by each participant, Voluntary Salary
Deferrals are credited to the Stock Account as described above with respect to
Mandatory Salary Deferrals, or the amounts are credited to a Reserve Account.
Amounts in the Reserve Account are credited with earnings, generally at the
greater of 6% per annum or a rate equal to 70% of WPSR's return on common
shareholder equity. (Voluntary Salary Deferrals made prior to January 1, 1996
are credited with a higher earnings rate.) The Compensation Committee may revise
the earnings rate applicable to the Reserve Account or the manner in which the
rate is calculated, but the rate may not be reduced below 6% per annum. In
addition, the Compensation Committee may permit a participant to defer in excess
of 30% of the participant's salary.
DEATH BENEFIT. A special death benefit will be provided to certain Deferred
Compensation Plan participants, including the Chief Executive Officer and any of
the named executive officers, if such participant dies prior to age 62 if at the
time of the officer's death Mandatory and/or Voluntary Salary Deferrals are
being credited to the officer's account. The benefit is an amount equal to the
amount of Mandatory and/or Voluntary Salary Deferrals, not including deferrals
of bonus amounts, with a maximum 20% voluntary deferral, and earnings that would
have been credited to the officer's account had deferrals (and earnings assuming
that deferrals were credited to the Reserve
11
<PAGE>
Account) continued through age 62 at the rate in effect at the time of the
officer's death, with a maximum benefit at time of death of $1 million. The
special death benefit is payable in 15 annual installments. The benefit is a
fixed amount which does not accrue earnings on the undistributed balance.
PROTECTION OF QUALIFIED PENSION BENEFIT. The Deferred Compensation Plan
will provide a benefit to Deferred Compensation Plan participants, including the
Chief Executive Officer and each of the named executive officers, to the extent
that the officer's benefits under the Wisconsin Public Service Corporation
Administrative Retirement Plan ("Pension Plan") are limited because of certain
legal restrictions. See the description of the Wisconsin Public Service
Corporation Administrative Retirement Plan below.
SUPPLEMENTAL RETIREMENT BENEFITS. The Deferred Compensation Plan provides
supplemental monthly payments to certain Deferred Compensation Plan
participants, including the Chief Executive Officer and each of the current
named executive officers. A full benefit is payable if the participant (i)
retires at or after age 58, (ii) terminates employment at or after age 50 with
at least 10 years of service, or (iii) terminates employment at an earlier date
with the written approval of the Compensation Committee. A prorated benefit is
payable if the participant terminates employment between the ages of 50 and 58
but prior to completing 10 years of service. The supplemental payments equal
either 20% or 10% of the highest average monthly compensation received during
any 36-consecutive month period of employment. In the case of the Chief
Executive Officer and each of the named executive officers, the payments are set
at the 20% level. Such payments commence in the month following the
participant's retirement (or if later, the month following the participant's
attainment of age 58) and continue for 10 years. If the participant dies during
the 10-year period, the participant's surviving spouse will receive 50% of such
payments for the remainder of the 10-year period. If the participant dies prior
to benefit commencement, the participant's surviving spouse will receive, for a
10-year period, 50% of the amount that would have been paid to the participant
(disregarding, in the case of a participant who dies while actively employed,
the age and service eligibility requirements). Payments terminate if neither the
participant nor the surviving spouse is living, even if 120 monthly payments
have not been made.
The following table indicates the annual Supplemental Retirement Benefit
that would be payable during the 10-year period to the Chief Executive Officer
and each of the named executive officers (assuming that each executive had
retired on December 31, 1998 and disregarding, for
12
<PAGE>
this purpose, the age and service eligibility requirements in the case of any
officer who has not yet met these age and service requirements).
<TABLE>
<CAPTION>
HIGHEST AVERAGE MONTHLY
COMPENSATION RECEIVED DURING
ANY 36 CONSECUTIVE MONTHS ANNUAL BENEFITS
PRIOR TO AGE 65 PAYABLE -- 20%
- ------------------------------- ---------------
<S> <C>
$ 14,000 $ 33,600
15,000 36,000
16,000 38,400
17,000 40,800
18,000 43,200
19,000 45,600
20,000 48,000
21,000 50,400
22,000 52,800
23,000 55,200
24,000 57,600
25,000 60,000
26,000 62,400
27,000 64,800
28,000 67,200
29,000 69,600
30,000 72,000
31,000 74,400
32,000 76,800
</TABLE>
The Deferred Compensation Plan contains several provisions that take effect
in the event of a Change in Control of WPSR or WPSC.
First, upon a Change in Control, a revised minimum earnings rate for
Voluntary Salary Deferrals becomes applicable. The minimum rate is the greater
of 6% per annum or a rate equal to two percentage points above the prime lending
rate of Firstar Bank Milwaukee, N.A., Milwaukee, Wisconsin. Second, the
Supplemental Retirement Benefit becomes immediately vested for active Deferred
Compensation Plan participants, even if the participant terminates employment
prior to retirement. Third, contributions to the Deferred Compensation Trust,
which are discretionary prior to a Change in Control, are required in an amount
sufficient to fund the benefits accrued by participants in the Deferred
Compensation Plan through the funding date. Assets in the Deferred Compensation
Trust remain subject to the claims of creditors, but may not, following a Change
in Control, be withdrawn by WPSR or WPSC.
A Change in Control means any of the following events:
(1) The acquisition by any person (other than WPSR or any of its
subsidiaries or employee benefit plans or fiduciaries therefor) of
beneficial ownership of 30% or more of the voting power of the shares of
the then outstanding capital stock of WPSR;
(2) One-half or more of the Board of WPSR consists of persons who are not
"Continuing Directors," (i.e., persons who were either directors on May
1, 1997, or persons whose nominations or elections were recommended or
approved by a majority of the Continuing Directors then in office);
13
<PAGE>
(3) Any merger, consolidation, or reorganization of WPSR with any other
corporation resulting in less than one-half of the outstanding securities
of the surviving or resulting entity being owned by former shareholders
of WPSR exclusive of shares owned by certain persons who are affiliated
with or are substantial shareholders of a party to such transaction;
(4) Any merger or share exchange involving WPSR in which WPSR is not the
controlling or surviving corporation except a merger in which the
shareholders of WPSR have the same proportionate ownership of the
surviving corporation as they held in WPSR immediately prior to such
merger;
(5) Any sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the
assets of WPSR other than to a wholly-owned subsidiary of WPSR; or
(6) Approval by the shareholders of WPSR of any plan or proposal for the
liquidation or dissolution of WPSR.
WPSC maintains the Wisconsin Public Service Corporation Administrative
Employees' Savings Plan ("Savings Plan") and the ESOP, in which substantially
all employees of WPSR and WPSC, including the Chief Executive Officer and each
of the named executive officers, are eligible to participate.
Under the Savings Plan, each participant may defer, in accordance with
applicable tax law limits, a portion of his or her compensation and have the
deferred amount deposited as a pre-tax contribution to the Savings Plan.
The ESOP has entered into a loan guaranteed by WPSC the proceeds of which
were used to purchase the Common Stock of WPSR. Each year, shares become
available under the ESOP for allocation to participants in proportion to the
percentage of the outstanding loan that has been repaid during that year. The
shares available under the ESOP as of the close of any year are allocated among
those participants who for that year made pre-tax contributions to the Savings
Plan.
The Wisconsin Public Service Corporation Administrative Employees'
Retirement Plan ("Pension Plan"), under which the Chief Executive Officer and
each of the named executive officers are included, is a non-contributory defined
benefit plan under which contributions on behalf of a specified participant
cannot be individually calculated. Since the Pension Plan is in a fully-funded
position, no contributions were made to it in 1998. Straight-line benefits at
the normal retirement age of 65 (with a choice of four benefit options payable
to a surviving spouse) are determined by the average of the 5 highest calendar
year's compensation since 1980 or the last 60 months, times 55%, times years of
service up to 32, divided by 32, plus .5% of such average compensation, times
years of service exceeding 32, less an offset for a portion of Social Security
benefits. Employees who were employed prior to 1982 would qualify for the higher
of the current pension formula or a grandfathered formula which is 1.5% of the
final average pay times years of service limited by 50% of final average pay
less a Social Security offset. The following table shows the annual retirement
benefits payable at the normal retirement age of 65 for specified remunerations
and years of service under the provisions of the Pension Plan in effect December
31, 1998 and assuming retirement on that date:
14
<PAGE>
PENSION PLAN TABLE
ANNUAL RETIREMENT BENEFITS AT
NORMAL RETIREMENT AGE OF 65 YEARS
FOR YEARS OF SERVICE INDICATED
<TABLE>
<CAPTION>
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ---------------- --------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
210,000 50,366 67,155 83,944 100,733 110,598
230,000 55,523 74,030 92,538 111,045 121,898
250,000 60,679 80,905 101,131 121,358 133,198
270,000 65,835 87,780 109,725 131,670 144,498
290,000 70,991 94,655 118,319 141,983 155,798
310,000 76,148 101,530 126,912 152,295 167,098
330,000 81,304 108,405 135,506 162,608 178,398
350,000 86,460 115,280 144,100 172,920 189,698
370,000 91,616 122,155 152,694 183,233 200,998
390,000 96,773 129,030 161,287 193,545 212,298
410,000 101,929 135,905 169,881 203,858 223,598
430,000 107,085 142,780 178,475 214,170 234,898
450,000 112,241 149,655 187,069 224,483 246,198
470,000 117,398 156,530 195,663 234,795 257,498
490,000 122,554 163,405 204,256 245,108 268,798
510,000 127,710 170,280 212,850 255,420 280,098
530,000 132,866 177,155 221,444 265,733 291,398
</TABLE>
Compensation for pension purposes differs from the amounts in the annual
compensation columns of the Summary Compensation Table for all named executive
officers. Messrs. Weyers, Schrickel, Steinhardt, Bittner, and Mikulsky had 1998
pensionable compensation of $435,225, $252,010, $214,205, $209,512, and
$176,387, respectively. Messrs. Weyers, Schrickel, Steinhardt, Bittner, and
Mikulsky had credited service under the Pension Plan as of December 31, 1998 of
13, 33, 31, 34, and 28 years, respectively. Benefit amounts in the table have
been reduced for Social Security offsets.
The annual benefits payable from the Pension Plan are subject to a maximum
limitation ($130,000 for 1999) under Internal Revenue Code Section 415. In
addition, the amount of compensation considered for purposes of the Pension Plan
is limited ($160,000 for 1999) under Internal Revenue Code Section 401(a)(17).
The Deferred Compensation Plan provides additional monthly benefits, for
Deferred Compensation Plan participants, including the Chief Executive Officer
and named executive officers, equal to any loss of benefit payments under the
Pension Plan caused by the maximum benefit or compensation limitations and/or
Mandatory and Voluntary Salary Deferrals under the Deferred Compensation Plan.
These additional payments are made only while the participant or surviving
spouse receives a monthly benefit from the Pension Plan. Benefit amounts shown
in the table include projected payments to the participant under the Pension
Plan and the additional payments for the loss of Pension Plan benefits as
described in this paragraph. Amounts were accrued during 1998 for the unfunded
future payment obligations.
15
<PAGE>
APPROVAL OF WPS RESOURCES CORPORATION
1999 STOCK OPTION PLAN
GENERAL
On February 11, 1999 the Board unanimously adopted, subject to approval by
the shareholders at the Meeting, the WPS Resources Corporation 1999 Stock Option
Plan (the "Plan"). The Plan authorizes the granting of non-qualified stock
options to employees of WPSR and of entities of which at least 20% of the equity
interest is held directly or indirectly by WPSR ("Affiliates").
PURPOSE
The purpose of the Plan is to enhance WPSR's ability to continue to attract
and retain employees who will make substantial contributions to WPSR's long-term
business growth and to provide incentives to such employees which are more
directly linked to the profitability of WPSR's businesses and increases in
shareholder value. In addition, the Plan is designed to encourage and provide
opportunities for stock ownership by such employees which will increase their
proprietary interest in WPSR and, consequently, their identification with the
interests of the WPSR shareholders. The Board believes that approval of the Plan
will promote continuity of management and increase incentive and personal
interest in the welfare of WPSR by those who are primarily responsible for
shaping and carrying out the long-range plans of WPSR.
ADMINISTRATION
The Plan will be administered by the Compensation Committee of the Board,
which shall consist of not less than two directors, each of whom shall qualify
as a "non-employee director" within the meaning of Rule 16b-3 ("Rule 16b-3")
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
as an "outside director" under Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). If at any time the Compensation Committee is not
in existence, the Board will administer the Plan. To the extent permitted by
applicable law, the Board may delegate to another committee of the Board or to
one or more senior officers of WPSR any or all of the authority and
responsibility of the Compensation Committee with respect to the Plan, other
than with respect to participants who are subject to Section 16 of the Exchange
Act. To the extent that the Board has delegated to such other committee or one
or more officers the authority and responsibility of the Compensation Committee,
all references to the Compensation Committee herein shall include such other
committee or one or more officers.
Subject to the terms of the Plan and applicable law, the Compensation
Committee will have full power and authority to interpret and administer the
Plan and any instrument or agreement relating to, or made under, the Plan; to
establish, amend, suspend, or waive rules and regulations for the administration
of the Plan; appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and to make any other determination and take any
other action that the Compensation Committee deems necessary or desirable for
the administration of the Plan. The Compensation Committee's decisions and
determinations under the Plan need not be uniform and may be made selectively
among participants, whether or not they are similarly situated. A majority of
the members of the Compensation Committee will constitute a quorum and all
determinations of the Compensation Committee will be made by a majority of its
members at the meeting.
16
<PAGE>
ELIGIBILITY AND PARTICIPATION
Participants in the Plan will be selected by the Compensation Committee from
among those employees of WPSR and its Affiliates as the Committee may designate
from time to time. The Committee will consider such factors as it deems
appropriate in selecting participants and in determining their respective
benefits.
STOCK SUBJECT TO PLAN
The Plan limits to 1,500,000 the number of shares of common stock, $1 par
value, of WPSR ("Stock") which may be issued under the Plan, subject to
appropriate adjustments in the event of payment of stock dividends or changes in
the Stock by reason of a stock split, reorganization, recapitalization, merger,
consolidation or similar event. Options for no more than 400,000 shares may be
granted to any one participant under the Plan during any five-year period.
TERMS OF AWARDS
PARTICIPANTS. Participants in the Plan will be selected by the Compensation
Committee from among those employees of WPSR, its subsidiaries and entities of
which at least 20% of the equity interest therein is owned by WPSR or a WPSR
subsidiary as the Compensation Committee may designate from time to time.
OPTIONS. The exercise price per share of Stock subject to an option granted
under the Plan will be not less than 100% of the fair market value of a share of
the Stock on the date of grant unless otherwise determined by the Compensation
Committee. The Compensation Committee determined that the exercise price for the
initial option grant of February 11, 1999, will be the closing price of the
Stock on the New York Stock Exchange on the date the Plan is approved by the
shareholders. On February 26, 1999, the closing sales price of the Stock as
reported on The New York Stock Exchange Composite Transaction reporting system
was $29 3/4 per share. Options will be exercisable as determined by the
Compensation Committee and shall terminate at such time as the Compensation
Committee shall determine. The Compensation Committee shall determine the
methods and the forms for payment of the purchase price of options, including
(a) by delivery of cash or other shares or securities of WPSR having a then fair
market value equal to the purchase price of such shares; or (b) by delivery to
WPSR or its designated agent of an executed irrevocable option exercise form
together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the Stock and deliver the sale or margin loan proceeds
directly to WPSR to pay the purchase price.
On February 11, 1999, the Compensation Committee authorized the immediate
grant of options for an aggregate of 478,000 shares of Stock pursuant to the
Plan to 19 employees of WPSR or WPSR subsidiaries, as described in the following
table. The Compensation Committee currently contemplates future option grants in
years 2001 through 2003 at an average annual level of approximately one half of
the initial grant, subject to the Compensation Committee's discretion to award
options under the Plan. All of the options are contingent upon shareholder
approval of the Plan at the Meeting. If the Plan is not approved by the WPSR
shareholders at the Meeting, all of the options will become null and void.
17
<PAGE>
New Plan Benefits
WPS Resources Corporation
1999 Stock Option Plan
<TABLE>
<CAPTION>
NAME AND POSITION NUMBER OF UNITS (1)
- -------------------------------------------------------------------------------------------- --------------------
<S> <C>
Larry L. Weyers ............................................................................ 136,000
Chairman, President and Chief Executive Officer
Patrick D. Schrickel ....................................................................... 56,000
Executive Vice President
Clark R. Steinhardt ........................................................................ 0
Senior Vice President (2)
Daniel P. Bittner .......................................................................... 22,000
Vice President and Chief Financial Officer
Phillip M. Mikulsky ........................................................................ 34,000
Senior Vice President
Executive Group............................................................................. 418,000
Non-Executive Director Group................................................................ 0
Non-Executive Officer Employee Group........................................................ 60,000
</TABLE>
- ------------------------
(1) Number of shares subject to options granted on February 11, 1999.
(2) Mr. Steinhardt retired effective January 31, 1999, prior to the effective
date of the Plan.
ADJUSTMENTS
In the event that the Compensation Committee determines that any dividend or
other distribution (whether in the form of cash, Stock, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Stock or other securities of WPSR, issuance of
warrants or other rights to purchase Stock or other securities of WPSR, or other
similar corporate transaction or event affects the Stock such that an adjustment
is determined by the Compensation Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Compensation Committee may, in
such manner as it may deem equitable, adjust any or all of (i) the number and
type of shares of Stock subject to the Plan and which thereafter may be made the
subject of options under the Plan; (ii) the number and type of shares of Stock
subject to outstanding options; and (iii) the grant, purchase or exercise price
with respect to any option, or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding option; provided, however, that the
number of shares of Stock subject to any award payable or denominated in Stock
shall always be a whole number.
TRANSFERABILITY
Each award granted under the Plan will not be transferable by any
participant, other than by will or the laws of descent and distribution, except
that a participant may transfer any award to the extent allowed by, and in a
manner specified by, the Compensation Committee.
18
<PAGE>
AMENDMENT AND TERMINATION
The Board may at any time amend, alter, suspend, discontinue or terminate
the Plan; provided, however, that shareholder approval of any amendment of the
Plan shall be obtained if otherwise required by the Code in order to enable the
Company to comply with the provisions of Section 162(m) of the Code or by the
listing requirements of the principal securities exchange or market on which the
Stock is then traded (in order to maintain the listing or quotation of the Stock
thereon). To the extent permitted by applicable law, the Compensation Committee
may also amend the Plan, provided that any such amendments shall be reported to
the Board. Termination of the Plan will not affect the rights of participants
with respect to options previously granted to them, and all unexpired options
will continue in force and effect after termination of the Plan except as they
may lapse or be terminated by their own terms and conditions. The Compensation
Committee may, in whole or in part, waive any conditions or other restrictions
with respect to any option granted under the Plan. The Compensation Committee
may cancel any stock options granted if the Compensation Committee determines
that such cancellation is necessary to permit transactions, in which WPSR or any
Affiliate is a party, to be accounted for on a pooling-of-interests basis. The
Plan will terminate on February 10, 2004, unless otherwise extended by the
Board.
WITHHOLDING
WPSR or any Affiliate thereof is entitled to withhold the amount of any tax
attributable to shares of Stock deliverable under the Plan after giving the
person entitled to receive such shares of Stock notice as far in advance as
practicable, including withholding from the compensation otherwise payable to
the participant, and WPSR may defer making delivery of the shares if any such
tax may be pending unless and until indemnified to its satisfaction. The
Compensation Committee may, in its discretion and subject to such rules as it
may adopt, permit or require a participant to pay all or a portion of the
federal, state and local withholding taxes arising in connection with the
exercise of a stock option, by (a) having WPSR withhold shares of Stock
otherwise issuable, (b) tendering back shares of Stock received in connection
with such benefit, or (c) delivering other previously owned shares of Stock,
having a fair market value equal to the amount to be withheld; provided,
however, that the amount to be withheld shall not exceed the participant's
estimated total federal, state and local tax obligations associated with the
transaction.
CHANGE IN CONTROL
The Plan provides that in the event of a "Change in Control" (as defined in
the WPSR Deferred Compensation Plan, or any successor plan thereto):
(1) Any nonvested portion of an option issued to a participant who is
employed by WPSR or any Affiliate thereof on the date immediately
preceding the Change in Control shall become immediately and fully
vested;
(2) Each holder of an option shall have the right at any time thereafter to
exercise the vested option whether or not the option was theretofore
exercisable, subject to the expiration of the exercise period as provided
in the option agreement; and
(3) If, as a result of the Change in Control, WPSR is not the surviving
corporation (or survives only as a subsidiary of another corporation),
the Compensation Committee may
19
<PAGE>
determine that all outstanding options that are not exercised shall be
replaced with comparable options by the surviving corporation.
The Compensation Committee may, in its sole and absolute discretion, amend,
modify or rescind the foregoing provisions of the Plan if it determines that the
operation of such provisions may prevent a transaction in which WPSR or any
Affiliate thereof is a party from being accounted for on a pooling-of-interests
basis.
The Plan provides, unless otherwise determined by the Compensation
Committee, that if any portion of the payments or benefits described in the Plan
or under any other agreement with or plan of WPSR (in the aggregate, "Total
Payments"), would constitute an "excess parachute payment," (as defined in
Section 280G of the Code) then the Total Payments to be made to the participant
shall be reduced such that the value of the aggregate Total Payments that the
participant is entitled to receive shall be one dollar ($1.00) less than the
maximum amount that the participant may receive without becoming subject to the
tax imposed by Section 4999 of the Code or any successor provision thereto or
which WPSR may pay without loss of deduction under Section 280G(a) of the Code;
provided that this provision will not apply in the case of a participant who has
in effect a valid employment contract providing that the Total Payments to the
participant will be determined without regard to the maximum amount allowable
under Section 280G of the Code.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The grant of a stock option under the Plan creates no income tax
consequences to the employee or WPSR or any Affiliate thereof. An employee who
is granted a stock option under the Plan generally recognizes ordinary income at
the time of exercise in an amount equal to the excess of the fair market value
of the Stock at such time over the exercise price. WPSR or its Affiliate is
entitled to a deduction in the same amount and at the same time as ordinary
income is recognized by the employee. A subsequent disposition of the Stock
gives rise to capital gain or loss to the extent the amount realized from the
sale differs from the fair market value of the Stock on the date of exercise.
This capital gain or loss will be a long-term capital gain or loss if the Stock
has been held for more than the required holding period for income tax purposes
from the date of exercise.
AWARDS
WPSR cannot now determine all of the recipients or their respective awards
under the Plan. Such determinations will be made from time to time by the
Compensation Committee. On February 11, 1999 the Compensation Committee granted
options to 19 employees of WPSR or WPSR subsidiaries for an aggregate of 478,000
shares of Stock. All of such options are for a term of ten years, have an
exercise price equal to the closing price of the Stock on The New York Stock
Exchange on the date the Plan is approved by the shareholders, and become
exercisable in equal increments over the four year period commencing with the
date of grant. All of the options are contingent upon approval of the Plan by
the WPSR shareholders at the Meeting. Among those officers receiving option
grants were Mr. Weyers, 136,000 shares; Mr. Schrickel, 56,000 shares; Mr.
Bittner, 22,000 shares; Mr. Mikulsky, 34,000 shares; all current executive
officers as a group, 418,000 shares; all current directors who are not executive
officers as a group, none; each nominee for election as a director, none; each
associate of any such directors, executive officers or nominees, none; each
other person who received or is to receive 5% of such options, warrants
20
<PAGE>
or rights, none; and all employees, including all current officers other than
executive officers, as a group, 60,000 shares.
VOTE REQUIRED
The affirmative vote of a majority of the votes represented and voted at the
Meeting (assuming a quorum is present) is required to approve the Plan. Any
shares not voted at the Meeting (whether by broker non-votes or otherwise,
except abstentions), will have no impact on the vote. Shares as to which holders
abstain from voting will be treated as votes against the proposal.
The Board recommends a vote "FOR" approval of the Plan. The shares
represented by the proxies received will be voted FOR approval of the Plan,
unless a vote against such approval or to abstain from voting is specifically
indicated on the proxy.
OTHER BUSINESS
At the time this Proxy Statement went to press, WPSR knew of no matters
constituting a proper subject for action by the shareholders which would be
presented at the Meeting, other than the election of directors and approval of
the WPS Resources Corporation 1999 Stock Option Plan. If any other matters are
properly presented at the Meeting, the persons named as proxies will vote upon
them in accordance with their best judgment.
Certain of the officers, directors, and employees of WPSR may solicit
proxies by correspondence, telephone, electronic communications, or in person,
but without extra compensation. WPSR may reimburse banks, brokers, nominees, and
other fiduciaries for reasonable charges and expenses incurred in forwarding the
proxy soliciting material to and receiving proxies from the beneficial owners.
ANNUAL REPORTS
The Annual Report of WPSR for the year 1998, including financial statements
and the report of independent public accountants, Arthur Andersen LLP (which
firm has been selected to continue to act in that capacity for the year 1999),
is being mailed to shareholders together with this proxy statement. A
representative of Arthur Andersen LLP will be present at the Annual Meeting,
will be available to respond to appropriate questions, and will have an
opportunity to make a statement if such representative desires to do so.
WPSR FILES A SEPARATE ANNUAL REPORT WITH THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K. A COPY OF FORM 10-K FOR THE YEAR 1998 (NOT INCLUDING
EXHIBITS THERETO) WILL BE PROVIDED WITHOUT CHARGE TO ANY PERSON WHO IS A RECORD
OR BENEFICIAL HOLDER OF SHARES OF THE COMMON STOCK AS OF THE RECORD DATE FOR
THIS ANNUAL MEETING AND WHO MAKES WRITTEN REQUEST FOR IT, ADDRESSED TO THE
ATTENTION OF FRANCIS J. KICSAR, SECRETARY, 700 NORTH ADAMS STREET, P. O. BOX
19001, GREEN BAY, WISCONSIN 54307-9001.
FUTURE SHAREHOLDER PROPOSALS
The deadline for submission of shareholder proposals pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended, for inclusion in the WPSR
proxy statement for its 2000 Annual Meeting of Shareholders is November 23,
1999. After February 6, 2000, notice to WPSR of a shareholder proposal submitted
otherwise than pursuant to Rule 14a-8 will be
21
<PAGE>
considered untimely, and the persons named in proxies solicited by the Board of
Directors of WPSR for its 2000 Annual Meeting of Shareholders may exercise
discretionary voting power with respect to any such proposal as to which WPSR
does not receive timely notice.
WPS RESOURCES CORPORATION
/s/ FRANCIS J. KICSAR
FRANCIS J. KICSAR
SECRETARY
22
<PAGE>
Filed Pursuant to Instruction 3
to Rule 14A-101 Item 10
Appendix to Proxy Statement
WPS RESOURCES CORPORATION
1999 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the WPS Resources Corporation 1999 Stock Option
Plan (the "Plan") is to promote the best interests of WPS Resources
Corporation and its subsidiaries (together with any successor thereto, the
"Company"), its shareholders and any entities of which at least 20% of the
equity interest is held directly or indirectly by the Company (together
"Affiliates"), by encouraging and providing for the acquisition of an
equity interest in the success of the Company by employees.
SECTION 2. EFFECTIVE DATE
The Plan shall become effective on February 11, 1999, provided
that any grant made prior to the date on which the shareholders of the
Company approve the Plan shall be contingent upon such approval. In the event
shareholder approval is not obtained by June 30, 1999, the Plan and all
contingent grants previously made shall be cancelled.
SECTION 3. ADMINISTRATION
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of WPS Resources Corporation (the
"Board"), which shall consist of not less than two directors, each of whom
shall qualify as a "non-employee director" within the meaning of Rule 16b-3
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and as an "outside director" under Section 162(m)(4)(C) of
the Internal Revenue Code of 1986, as amended (the "Code"). If at any time
the Committee shall not be in existence, the Board shall administer the Plan.
To the extent permitted by applicable law, the Board may delegate to another
committee of the Board or to one or more senior officers of the Company any
or all of the authority and responsibility of the Committee with respect to
the Plan, other than with respect to participants who are subject to Section 16
of the Exchange Act ("Section 16 participants"). To the extent that the Board
has delegated to such other committee or one or more officers the authority
and responsibility of the Committee, all references to the Committee herein
shall include such other committee or one or more officers.
Subject to the terms of the Plan and applicable law, the
Committee shall have full power and authority to interpret and administer the
Plan and any instrument or agreement relating to, or made under, the Plan; to
establish, amend, suspend, or waive rules and regulations for the
administration of the Plan; appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and to make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan. The Committee's decisions and
determinations under the Plan need not be uniform and may be made selectively
among participants, whether or not they are similarly situated. A majority of
the members of the Committee shall constitute a quorum and all determinations
of the Committee shall be made by a majority of its members at the meeting.
Any determination
<PAGE>
of the Committee under the Plan may be made without notice or meeting of the
Committee by a writing signed by a majority of the Committee members.
SECTION 4. ELIGIBILITY AND PARTICIPATION
Participants in the Plan shall be selected by the Committee from
among those employees of the Company and its Affiliates as the Committee may
designate from time to time. The Committee shall consider such factors as it
deems appropriate in selecting participants and in determining the type and
amount of their respective benefits. The Committee's designation of a
participant in any year shall not require the Committee to designate such
person to receive a benefit in any other year.
SECTION 5. STOCK SUBJECT TO PLAN
5.1 NUMBER. Subject to adjustment as provided in Section 5.3,
the total number of shares of Common Stock of the Company, par value of $1.00
per share (the "Stock") which may be issued under the Plan shall not exceed
1,500,000. No participant shall be granted options for more than 400,000
shares of Stock during any five year period. The shares to be delivered under
the Plan may consist, in whole or in part, of authorized but unissued Stock
or treasury Stock.
5.2 UNUSED STOCK: UNEXERCISED RIGHTS. If, after the effective
date of the Plan, any shares of Stock covered by an option granted under the
Plan are forfeited or if an option otherwise terminates, expires or is
canceled prior to the delivery of all of the shares of Stock or of other
consideration issuable or payable pursuant to such option, then the number of
shares of Stock counted against the number of shares available under the Plan
in connection with the grant to such option, shall again be available for
the granting of additional options under the Plan to the extent determined to
be appropriate by the Committee.
5.3 ADJUSTMENT IN CAPITALIZATION. In the event that the
Committee shall determine that any dividend or other distribution (whether in
the form of cash, Stock, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of
Stock or other securities of the Company, issuance of warrants or other
rights to purchase Stock or other securities of the Company, or other similar
corporate transaction or event affects the Stock such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Committee may, in such manner as it may
deem equitable, adjust any or all of (a) the number and type of shares of
Stock subject to the Plan and which thereafter may be made the subject of
options under the Plan; (b) the number and type of shares of Stock subject to
outstanding options; and (c) the grant, purchase or option price with respect
to any option, or, if deemed appropriate, make provision for a cash payment
to the holder of an outstanding option; provided, however, that the number of
shares of Stock subject to any award payable or denominated in Stock shall
always be a whole number.
-2-
<PAGE>
SECTION 6. TERM OF THE PLAN
No award shall be granted under the Plan after February 10, 2004.
However, unless otherwise expressly provided in the Plan or in an applicable
option, any option theretofore granted may extend beyond such date and, to
the extent set forth in the Plan, the authority of the Committee to amend,
alter, adjust, suspend, discontinue or terminate any such award, or to waive
any conditions or restrictions with respect to any such option, and the
authority of the Board to amend the Plan, shall extend beyond such date.
SECTION 7. STOCK OPTIONS
7.1 GRANT OF OPTIONS. Options may be granted to participants at
any time and from time to time as shall be determined by the Committee. The
Committee shall have complete discretion in determining the number, terms and
conditions of options granted to a participant. All options granted under the
Plan shall be nonqualified stock options. Such options may be granted for or
without consideration as determined by the Committee in its sole discretion.
If the Committee grants options in exchange for consideration, the Committee
may establish, in its sole discretion, any rules with respect to the form,
manner and timing of the payment of the consideration for such options, and
may establish any additional rules or conditions with respect to the receipt
of options in exchange for such consideration.
7.2 EXERCISE OF STOCK OPTIONS. Options will be exercisable at
purchase prices of not less than One Hundred percent (100%) of the Fair
Market Value of the Stock on the date of grant, unless otherwise determined
by the Committee. Options will be exercisable as determined by the Committee
and shall terminate at such time as the Committee shall determine.
7.3 OPTION AGREEMENT. Each option shall be evidenced by an
option agreement that shall specify the date of grant, the option price, the
duration of the option, the number of shares of Stock to which the option
pertains and such other provisions as the Committee shall determine.
7.4 FAIR MARKET VALUE. The Fair Market Value of the Stock shall
be determined by such methods or procedures as shall be established from time
to time by the Committee; provided, however, that the Fair Market Value shall
not be less than the par value of the Stock; and provided further, that so
long as the Stock is traded on a public market, Fair Market Value means the
closing price of a share of Stock on the relevant date as reported on the
composite list used by the Wall Street Journal for reporting stock prices, or
if no such sale shall have been made on that day, on the last preceding day
on which there was such a sale.
7.5 PAYMENT. The Committee shall determine the methods and the
forms for payment of the purchase price of options, including (a) by delivery
of cash or other shares or securities of the Company having a then Fair
Market Value equal to the purchase price of such shares; or (b) by delivery
(including by fax) to the Company or its designated agent of an executed
irrevocable option exercise form together with irrevocable instructions to a
broker-
-3-
<PAGE>
dealer to sell or margin a sufficient portion of the Stock and deliver the
sale or margin loan proceeds directly to the Company to pay the purchase
price.
SECTION 8. TRANSFERABILITY
Each award granted under the Plan shall not be transferable other
than by will or the laws of descent and distribution, except that a
participant may transfer any award to the extent allowed by, and in a manner
specified by, the Committee.
SECTION 9. RIGHTS OF EMPLOYEES
Nothing in the Plan shall interfere with or limit in any way the
right of the Company or any Affiliate to terminate any participant's
employment at any time nor confer upon any participant any right to continue
in the employ of the Company or any Affiliate.
SECTION 10. CHANGE OF CONTROL
(a) In the event of a "Change of Control" (as defined in the WPS
Resources Corporation Deferred Compensation Plan, or any successor plan
thereto):
(1) Any nonvested portion of an option issued to a
participant who is employed by the Company or an Affiliate on the
date immediately preceding the Change of Control shall become
immediately and fully vested;
(2) Each holder of an option shall have the right at any
time thereafter to exercise the vested option whether or not the
option was theretofore exercisable, subject to the expiration of
the exercise period as provided in the option agreement; and
(3) If, as a result of the Change of Control, the Company
is not the surviving corporation (or survives only as a
subsidiary of another corporation), the Committee may determine
that all outstanding options that are not exercised shall be
replaced with comparable options by the surviving corporation.
(b) The Committee may, in its sole and absolute discretion,
amend, modify or rescind the provisions of this Section 10 if it determines
that the operation of this Section 10 may prevent a transaction in which the
Company or any Affiliate is a party from being accounted for on a
pooling-of-interests basis.
(c) Notwithstanding any other provision of this Plan, unless
otherwise determined by the Committee, if any portion of the payments or
benefits described in this Plan or under any other agreement with or plan of
the Company (in the aggregate, "Total Payments"), would constitute an "excess
parachute payment," then the Total Payments to be made to the participant
shall be reduced such that the
-4-
<PAGE>
value of the aggregate Total Payments that the participant is entitled to
receive shall be one dollar ($1.00) less than the maximum amount that the
participant may receive without becoming subject to the tax imposed by
Section 4999 of the Code or which the Company may pay without loss of
deduction under section 280G(a) of the Code; provided that this Section 10(c)
shall not apply in the case of a participant who has in effect a valid
employment contract providing that the Total Payments to the participant shall
be determined without regard to the maximum amount allowable under Section
280G of the Code. The terms "excess parachute payment" and "parachute
payment" shall have the meanings assigned to them in Section 280G of the
Code, and such "parachute payments" shall be valued as provided therein.
Present value shall be calculated in accordance with Section 280G(d)(4) of
the Code. Within forty (40) days following delivery of notice by the Company
to the participant of its belief that there is a payment or benefit due the
participant which will result in an excess parachute payment, the participant
and the Company, at the Company's expense, shall obtain the opinion (which
need not be unqualified) of a nationally recognized tax counsel selected by
the Company's independent auditors (which may be regular outside counsel of
the Company), which opinion sets forth (i) the amount of the Base Period
Income; (ii) the amount and present value of the Total Payments; and (iii)
the amount and present value of any excess parachute payments determined
without regard to the limitations of this Section 10(c). As used herein, the
term "Base Period Income" means an amount equal to the participant's
"annualized includible compensation for the base period" as defined in
Section 280G(d)(1) of the Code. For purposes of such opinion, the value of
any noncash benefits or any deferred payments or benefit shall be determined
by the Company's independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code, which determination shall be
evidenced in a certificate of such auditors addressed to the Company and the
participant and shall be binding upon the Company and the participant. If
such opinion determines that there would be an excess parachute payment, the
benefits granted hereunder or any other payment or benefit determined by such
counsel to be includible in Total Payments shall be reduced, cancelled or
eliminated as specified by the participant in writing delivered to the Company
within thirty (30) days of his receipt of such opinion or, if the participant
fails to so notify the Company, then as the Company shall reasonably
determine, so that under the bases of calculations set forth in such opinion
there will be no excess parachute payments. If such legal counsel so requests
in connection with the opinion required by this Section 10(c), the
participant and the Company shall obtain, at the Company's expense, and the
legal counsel may rely on in providing the opinion, the advice of a firm or
recognized executive compensation consultants as to the reasonableness of any
item of compensation to be received by the participant. If the provisions of
Sections 280G and 4999 of the Code are repealed without succession, then this
Section 10(c) shall be of no further force or effect. All references to
sections of the Code shall include any successor provision thereto.
-5-
<PAGE>
SECTION 11. CANCELLATION OF OPTIONS
Notwithstanding anything herein to the contrary, the Committee
may, in its sole and absolute discretion, cancel any option granted
hereunder, including options to which the Participant has a vested interest,
if the Committee determines that such cancellation is necessary to permit a
transaction, in which the Company or any Affiliate is a party, to be
accounted for on a pooling-of-interests basis.
SECTION 12. AMENDMENT, MODIFICATION AND TERMINATION OF PLAN
12.1 AMENDMENTS AND TERMINATION. The Board may at any time
amend, alter, suspend, discontinue or terminate the Plan; provided, however,
that shareholder approval of any amendment of the Plan shall be obtained if
otherwise required by (a) the Code in order to enable the Company to comply
with the provisions of Section 162(m) of the Code, or (b) the listing
requirements of the principal securities exchange or market on which the
Stock is then traded (in order to maintain the listing or quotation of the
Stock thereon). To the extent permitted by applicable law, the Committee may
also amend the Plan, provided that any such amendments shall be reported to
the Board. Termination of the Plan shall not affect the rights of
participants with respect to options previously granted to them, and all
unexpired options shall continue in force and effect after termination of the
Plan except as they may lapse or be terminated by their own terms and
conditions, or be cancelled pursuant to Section 11.
12.2 WAIVER OF CONDITIONS. The Committee may, in whole or in
part, waive any conditions or other restrictions with respect to any option
granted under the Plan.
SECTION 13. TAXES
The Company or any Affiliate shall be entitled to withhold the
amount of any tax attributable to shares of Stock deliverable under the Plan
after giving the person entitled to receive such shares of Stock notice as
far in advance as practicable, including withholding from the compensation
otherwise payable to the participant, and the Company may defer making
delivery if any such tax may be pending unless and until indemnified to its
satisfaction. The Committee may, in its discretion and subject to such rules
as it may adopt, permit or require a participant to pay all or a portion of
the federal, state and local withholding taxes arising in connection with the
exercise of a nonqualified stock option, by (a) having the Company withhold
shares of Stock otherwise issuable, (b) tendering back shares of Stock
received in connection with such benefit, or (c) delivering other previously
owned shares of Stock, having a Fair Market Value equal to the amount to be
withheld; provided, however, that the amount to be withheld shall not exceed
the participant's estimated total federal, state and local tax obligations
associated with the transaction. If the Committee provides that a participant
may elect the method of withholding, the election must be made on or before
the date as of which the amount of tax to be withheld is determined and
otherwise as required by the Committee. The Fair Market Value of fractional
shares of Stock remaining after payment of the withholding taxes shall be
paid to the participant in cash.
-6-
<PAGE>
SECTION 14. MISCELLANEOUS
14.1 OTHER PROVISIONS. The grant of any option under the Plan
may also be subject to other provisions (whether or not applicable to the
benefit awarded to any other participant) as the Committee determines
appropriate, including, without limitation, provisions for (a) the purchase
of Stock under options in installments; (b) the financing of the purchase of
Stock under the options in the form of a promissory note issued to the
Company by a participant on such terms and conditions as the Committee
determines; (c) restrictions on resale or other disposition; and (d)
compliance with federal or state securities laws and stock exchange or market
requirements.
14.2 OPTION AGREEMENT. No person shall have any rights under
any option granted under the Plan unless and until the Company and the
participant to whom the award was granted shall have executed an option
agreement in such form as shall have been approved by the Committee.
SECTION 15. LEGAL CONSTRUCTION
15.1 REQUIREMENTS OF LAW. The granting of options under the
Plan and the issuance of shares of Stock in connection with an option, shall
be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as
may be required.
15.2 GOVERNING LAW. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State
of Wisconsin.
15.3 SEVERABILITY. If any provision of the Plan or any option
agreement is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction, or as to any person or option, or would disqualify the
Plan, under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to applicable laws, or if it cannot
be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan, any option agreement
or the option, such provision shall be stricken as to such jurisdiction,
person or option, and the remainder of the Plan, any such option agreement
and any such option shall remain in full force and effect.
-7-
<PAGE>
Please mark one box only in 1. ELECTION OF DIRECTORS, and one box only in 2.
STOCK OPTION PLAN, sign exactly as your name is printed on this card, date
it and RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
This Proxy, when properly executed, will be voted in the manner directed by
the undersigned shareholder. If no direction is given, this Proxy will be
voted for all nominees and for the approval of the 1999 Stock Option Plan.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Signature(s) of shareholder(s)
Date: , 1999
----------------------------------------------------------------
1. ELECTION OF DIRECTORS
A. Dean Arganbright and James L. Kemerling
/ / FOR ALL NOMINEES EXCEPT THOSE
WRITTEN ON LINE BELOW
/ / WITHHOLD AUTHORITY FOR ALL NOMINEES
- ------------------------------------------------------------------------------
2. Approval of the WPS Resources Corporation 1999
STOCK OPTION PLAN
/ / FOR
/ / AGAINST
/ / ABSTAIN
-----------------------------------------------------------------
This is your Proxy. Please read both sides, vote, sign exactly
as your name appears, date, DETACH AT THE PERFORATION
BELOW, and return promptly in the enclosed postage-paid
envelope.
-----------------------------------------------------------------
- -------------------------------------------------------------------------------
WPS RESOURCES CORPORATION
700 North Adams Street, P. O. Box 19001, Green Bay, Wisconsin 54307-9001
March 22, 1999
Dear WPS Resources Corporation Shareholder:
Enclosed for your review is a copy of our 1998 Annual Report. You are
cordially invited to attend the 1999 Annual Shareholders' Meeting which will
be held at 10:30 A.M., on Thursday, May 6, 1999, at the Weidner Center,
University of Wisconsin - Green Bay, 2420 Nicolet Drive, Green Bay,
Wisconsin. Directions to the meeting location are included on the reverse side
of this page. Free parking will be available.
The formal Notice of Annual Meeting of Shareholders and Proxy Statement which
appear in the accompanying booklet provide information concerning matters to
be considered. At the meeting, we will report on the Company's progress,
plans, and prospects, and we will respond to your questions and comments.
We hope for a large attendance either in person or by proxy. Whether you own
many shares or only a few, your presence or your proxy is important in making
up the total number of shares necessary to transact business at the meeting.
IF YOU ARE UNABLE TO ATTEND, PLEASE VOTE, SIGN EXACTLY AS YOUR NAME APPEARS,
DATE, AND PROMPTLY MAIL THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE
PROVIDED. IF YOU WILL BE ATTENDING THE MEETING, PLEASE INDICATE YOUR
INTENTION ON THE REVERSE SIDE OF THE ABOVE PROXY WHERE YOU ALSO MAY INDICATE
TOPICS WHICH YOU WOULD LIKE TO HAVE DISCUSSED AT THE MEETING.
Sincerely,
/s/ Larry L. Weyers
LARRY L. WEYERS
Chairman, President, and
Chief Executive Officer
<PAGE>
PROXY - WPS RESOURCES CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
SHAREHOLDERS' MEETING TO BE HELD ON MAY 6, 1999
The undersigned hereby appoints Larry L. Weyers and Francis J. Kicsar as
Proxies, each with the power to appoint a substitute, and hereby authorizes
them to represent and to vote, as designated on the reverse side of this form
and, at their discretion, upon such other business as may properly come
before the meeting, all the shares of common stock of WPS Resources
Corporation held of record by the undersigned on March 12, 1999, at the
Annual Meeting of Shareholders to be held on May 6, 1999, at 10:30 A.M., CDT,
or any adjournment thereof:
(This proxy is continued, and is to be signed and dated on the reverse side.)
-----------------------------------------------------------------------------
Check this box if you plan to attend the Annual Shareholders Meeting. / /
Indicate the number of persons who will be attending the meeting.
-----------
Please indicate in the space below any topics which you believe should be
addressed as part of management's presentation at the Annual Shareholders'
Meeting.
- --------------------------------------------------------------------------------
DIRECTIONS TO THE WEIDNER CENTER,
UNIVERSITY OF WISCONSIN - GREEN BAY
RECOMMENDED ROUTES TO
UNIVERSITY OF WISCONSIN - GREEN BAY
THE CITY ROUTE:
54-57 (University Ave.) to the University Ave.
Nicolet Drive exit. Nicolet Drive to
the campus.
THE SCENIC ROUTE:
Monroe-Quincy (57) or Webster Ave.
north from downtown Green Bay to East
Shore Drive, east along the bay to the [MAP]
campus. N. Irwin Ave. or Danz Ave. may also
be taken north to East Shore Drive.
FROM 41 SOUTH, 41-141 NORTH:
I-43 South (Tower Drive) to Exit 185
(54-57), or 172 east to I-43, then north to
Exit 185 (54-57), 54-57 to University Ave.-
Nicolet Drive exit, Nicolet Drive to
campus.
FROM AUSTIN-STRAUBEL FIELD:
172 east to I-43, then north to Exit 185
(54-57), 54-57 to University Ave.-Nicolet
Drive exit, Nicolet Drive to campus. [MAP]
FROM I-43 SOUTH:
I-43 North to Exit 185 (54-57), 54-57 to
University Ave.-Nicolet Drive exit,
Nicolet Drive to campus.
FROM 29 EAST:
29 West to I-43 North, I-43 to Exit 185 (54-57),
54-57 to University Ave.-Nicolet Drive exit,
Nicolet Drive to campus.
