- --------------------------------------------------------------------------------
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1996
REGISTRATION NO. 333-10405
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
PRE-EFFECTIVE
AMENDMENT NO. 5
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
MIDAMERICAN ENERGY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
IOWA 4924 42-1425214
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION
NUMBER)
</TABLE>
666 GRAND AVENUE
P.O. BOX 657
DES MOINES, IA 50303-0657
(515) 242-4300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------------
PHILIP G. LINDNER
GROUP VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
MIDAMERICAN ENERGY COMPANY
666 GRAND AVENUE
P.O. BOX 657
DES MOINES, IA 50303-0657
(515) 242-4300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
-------------------------
Copies to:
DAVID M. KIES
JOSEPH B. FRUMKIN
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON
AS PRACTICABLE AFTER THE CONSUMMATION OF THE BUSINESS COMBINATION TRANSACTION
DESCRIBED HEREIN.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
-------------------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------
PROPOSED
MAXIMUM PROPOSED
OFFERING MAXIMUM
TITLE OF EACH CLASS PRICE PER AGGREGATE
OF SECURITIES TO BE AMOUNT TO BE SHARE OF OFFERING AMOUNT OF
REGISTERED REGISTERED COMMON STOCK PRICE REGISTRATION FEE
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Common stock, Not
no par value 42,122,473 applicable $594,759,971 $205,090(1)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Previously paid.
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PRUSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDMENT TO REGISTRATION STATEMENT
The Registrant hereby amends the Registration Statement to incorporate
the exhibit or exhibits filed herewith and to add the following item or items to
Item 21. See "Incorporation of Certain Information by Reference" in the Proxy
Statement contained in the Registration Statement.
Exhibit Description
99(m) August 26, 1996 IES Employee Calls Guideline
99(n) August 23, 1996 IES Shareholders Letter
99(o) August 25, 1996 Newspaper Advertisement
99(p) August 26, 1996 Revised Solicitation Questions & Answers
Signatures
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Des Moines, State of
Iowa, on the 26th day of August, 1996.
MIDAMERICAN ENERGY COMPANY
By /s/ S. J. BRIGHT
-----------------------------
S. J. Bright
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1933,
this report has been signed below by the following persons in the capacities
indicated, on the date set forth above.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------- ------------------------------
<C> <S>
/s/ R. E. CHRISTIANSEN* Chairman of the Board of Directors
- ----------------------------------- and Director
R. E. Christiansen
/s/ S. J. BRIGHT President, Chief Executive Officer
- ----------------------------------- and Director
S. J. Bright
/s/ P. G. LINDNER Group Vice President and Chief
- ----------------------------------- Financial Officer (Principal
P. G. Lindner Accounting Officer)
<PAGE>
/s/ J. W. AALFS* Director
- -----------------------------------
J. W. Aalfs
/s/ R. A. BURNETT* Director
- -----------------------------------
R. A. Burnett
/s/ R. D. CHRISTENSEN* Director
- -----------------------------------
R. D. Christensen
/s/ J. W. COLLOTON* Director
- -----------------------------------
J. W. Colloton
/s/ F. S. COTTRELL* Director
- -----------------------------------
F. S. Cottrell
/s/ J. W. EUGSTER* Director
- -----------------------------------
J. W. Eugster
/s/ M. FOSTER, JR.* Director
- -----------------------------------
M. Foster, Jr.
/s/ N. GENTRY* Director
- -----------------------------------
N. Gentry
/s/ J. M. HOAK, JR.* Director
- -----------------------------------
J. M. Hoak, Jr.
s/s R. L. LAWSON* Director
- -----------------------------------
R. L. Lawson
/s/ R. L. PETERSON* Director
- -----------------------------------
R. L. Peterson
<PAGE>
/s/ N. L. SEIFERT* Director
- -----------------------------------
N. L. Seifert
/s/ W. S. TINSMAN Director
- -----------------------------------
W. S. Tinsman
/s/ L. L. WOODRUFF* Director
- -----------------------------------
L. L. Woodruff
*By: /s/ P. J. LEIGHTON
- -----------------------------------
(P. J. Leighton
as Attorney-in-fact of
the persons indicated)
</TABLE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------------- ----------------------------------------------------------------------------------------
<C> <S>
99(m) August 26, 1996 IES Employee Calls Guideline
99(n) August 23, 1996 IES Shareholders Letter
99(o) August 25, 1996 Newspaper Advertisement
99(p) August 26, 1996 Revised Solicitation Questions & Answers
</TABLE>
-1-
Exhibit 99(m)
IES EMPLOYEE CALLS GUIDELINE
[The following Q&A was developed to help phone solicitors respond to employment
related questions from IES employees]
IES/MEC Merger
Q. What will be the impact of the merger on employment levels at MidAmerican
Energy and IES?
A. We believe there will be excellent employment opportunities for both
MidAmerican and IES employees in the combined company. A reduction of 448
positions is estimated as a result of the merger.
Q. How will the reductions be made?
A. Any job reductions would be accomplished through attrition and other
voluntary methods. We do not anticipate involuntary separations being
required in the proposed merged company. Utility industry annual attrition
was at 4% prior to the merger. Based on MidAmerican Energy's current
employment level of 3,376 and the addition of IES's 2,317 employees, we
could expect an annual attrition of 228 employees (3376 + 2317 x 4%). In
addition, MidAmerican is currently 156 positions below authorized staffing
levels. In anticipation of the merger, MidAmerican is currently restricting
the filling of open positions.
Q. Will labor contracts be affected?
A. No. All labor contracts will be in force according to their terms.
Q. Who will run the combined company?
A. A number of IES directors may be asked to join the MidAmerican Board of
Directors.
Q. How does the MidAmerican service territory compare with the IES service
territory?
A. The two companies have contiguous and overlapping service territories. We
have a common presence in Cedar Rapids, Ottumwa, Storm Lake, Carroll and
Shenandoah.
Q. Why did MidAmerican wait until the "11th hour" to propose this merger?
A. One of MidAmerican's predecessors entered into a standstill agreement with
IES that did not allow MidAmerican to approach IES until August 1, 1996.
MidAmerican responded very quickly following this date.
Q. Why is this being referred to as a hostile takeover?
A. It is unfortunate that the merger has been portrayed as hostile. Please do
not regard this proposal as hostile in any way; we are simply trying to do
what we believe is best for the shareholders, customers and employees of
both IES and MidAmerican.
<PAGE>
Q. What happens if the vote on September 5 is no?
A. MidAmerican's management will initiate discussions with IES management
concerning a business combination. There can be no assurance that IES
management will be open to such discussions.
Q. Where would the headquarters be located if the merger is successful?
A. The corporate headquarters would be located in Des Moines, centrally
located to the combined company's service territory. There would be a
strong presence maintained in the communities being served. It is too early
to determine where efficiencies can be gained.
Q. How many employees does MidAmerican have?
A. As of July 31, 1996, MidAmerican has 3376 full-time utility employees.
MidAmerican is currently 156 positions below authorized staffing levels.
Q. What will happen to the Duane Arnold Nuclear Plant owned and operated by
IES?
A. There are no current plans to do anything other then to continue to operate
it.
Midwest Resources and Iowa-Illinois Merger
Q. What programs were offered in the merger between Midwest Resources and Iowa-
Illinois to assist with staff reductions?
A. The programs offered included:
* Incentive Retirement Program - offered to salaried employees and the
Local 109 union who were 55 years of age and had 10 years of employment
as of December 31, 1995.
* Relocation Program - offered to salaried and union employees.
* Severance Program - offered to salaried and former MWR union employees.
Q. What were the provisions included in the incentive retirement program?
A. The program provided:
* Adding three years to each participant's years of service for pension
and retiree medical purposes.
* No actuarial reductions to the pension plan for early retirement.
* An additional benefit of $450 per month to age 62.
* The same medical benefits and contribution amounts as active employees
to age 65.
<PAGE>
Q. What were the provisions of the severance program for salaried employees?
A. For Midwest Power Systems employees in pay grades 11 and 12 and Iowa-
Illinois utility employees who were non-officer executives, the program
included:
* A one-time payment equal to the employee's current annual salary.
* The same level of medical and life insurance coverage as an active
employee and on the same cost-sharing basis for one year.
* Out placement services for one year.
For all salaried utility employees not covered under the above section, the
program included: o A one-time payment equal to ten weeks of the employee's
current salary
plus the
employee's years of service times one week pay.
* The same level of medical and life insurance coverage as an active
employee and on the same cost-sharing basis for six months.
* Out placement services.
Q. What were the provisions of the severance program for bargaining unit
employees (local 499)?
A. Bargaining unit employees were eligible for:
* A lump sum amount equal to $30,000 + $850 per year of service.
* South, Clerical and Gas South Contract employees who elected immediate
retirement and desired health insurance coverage under this Agreement a
monthly subsidy of $166.67 to age 62.
Q. How were the staffing reductions achieved?
A. Staffing reductions:
* 100 positions reduced due to attrition - A hiring freeze began with the
announcement of the merger.
* 299 positions reduced by the incentive retirement program.
* 211 positions reduced through voluntary buyouts
* 192 positions reduced through involuntary buyouts (this includes about
100 salaried employees that qualified for severance prior to the
filling of the final open application tier)
* 802 total reductions. 76% of the reductions were voluntary.
MidAmerican is currently 156 positions below authorized staffing
levels.
Q. Did MidAmerican hire consultants to design MidAmerican Energy Company?
A. 16 subteams of approximately 150 employees studied their functional area.
Subteams made recommendations of the structure and staffing for their area.
A transition team of employees and an outside consultant incorporated the
subteams' recommendations to design MidAmerican Energy Company.
Q. Why were the reductions of 250 employees announced when there were
ultimately 850 reductions?
<PAGE>
A. An estimated reduction of 250 jobs was announced July 27, 1994. This
reduction was based on redundant functions. On January 30, 1995 the
transition team announced a new employment reduction target of 650. The
additional 400 positions was to position MidAmerican as a low-cost,
high-quality service provider in the utility industry. There were 802
participants in the reduction programs. We are currently 156 positions
below authorized staffing levels.
Q. What employees made up the subteam?
A. Team members were from the functional group being studied as well as, in
most cases, internal customers of the areas reviewed. Union members were
not part of the subteam.
Open Application
Q. How were employees placed in their current positions?
A. Employees applied for positions through an open application process. This
allowed employees the maximum level of input related to desired positions
and location. This was done by pay band, starting with highest pay bands
first and moving down sequentially through the pay band structure. An
oversight committee was in place to ensure equal employment opportunity
principles were used.
Q. Will there be an open application process if MidAmerican and IES merge?
A. No.
Q. How many office closings resulted with the merger?
A. We had too many offices and needed consolidation. 31 customer offices and
23 service centers were closed. In some cases, we shared common customers
and needed to gain efficiencies.
Compensation
Q. How is the salary pay system structured?
A. MidAmerican moved to a broad-banding concept. Salaried positions are
grouped together in 8 pay bands. Note: see the attached list of pay bands
for specific questions. Bargaining unit employees should refer to their
bargaining agreement.
Q. When do employees receive pay reviews?
A. Salaried employees receive annual pay reviews in July.
<PAGE>
Benefits
Q. What are the benefit plans available to MidAmerican employees.
A. MidAmerican offers medical, dental, vision, disability, life and dependent
life insurance, vacation purchase and medical and dependent flexible
spending accounts. Highlights of current plans are provided as an
attachment. Advantages, MidAmerican's benefit program for salaried
employees, is in the process of being implemented. Some of the Advantages
benefit plans were effective January 1, 1996, while others will change on
January 1, 1997.
Q. Do employees have more than one medical plan available?
A. The current medical plans available include a PPO (preferred provider
organization) and an HMO (health maintenance organization) where available.
For the 1997 plan year, employees will have the following medical plans
available:
* Comprehensive Plan with a Preferred Provider Organization, including a
prescription drug card. The plan will be administered by Blue Cross
Blue Shield.
* Unity Choice and Heritage (John Deere), where available o IA Care, the
employer coalition health care plan available to
employees in the Des Moines area. Employees will have the choice of
three healthcare networks.
Q. How much do employees pay for medical coverage?
A. Currently employees pay from $0.00 to $18.08 for single coverage or $0.00
to $112.16 for family coverage.
Q. What is the vacation schedule?
A. Employees accrue vacation based on the their years of service with
MidAmerican and its predecessors. Vacation is posted on January 1 of each
year. Following is the vacation accrual schedule.
Years of Service Vacation Accrual
1-6 2 weeks
7-14 3 weeks
15-23 4 weeks
24 or more 5 weeks
Union employees vacation accrual is subject to their labor agreement.
Q. Can employees purchase additional vacation?
A. Salaried and clerical union employees may purchase up to five additional
days per year. Vacation purchase is made with pre-tax payroll deductions.
Q. How many holidays do employees receive?
<PAGE>
A. Employees receive eight fixed holidays and two floating holidays.
Q. Are part-time employees eligible for benefits?
A. Part-time salaried employees are currently eligible for vacation accrual
and holiday pay on a prorated basis and are eligible the for pension plan
and 401(k) after completing one year of service and 1,000 hours. Former
Midwest Power Systems' employees may elect medical coverage. Beginning in
1997, salaried part-time employees will have the option to elect medical,
dental, vision, disability and life insurance coverage as well.
401(k) Retirement Savings Plan
Q. Does MidAmerican have a 401(k) plan?
A. Yes. All full-time and part-time employees are eligible to participate in
the plan. Employees may contribute up to 15 percent of their pay on a
pre-tax or post-tax basis. (There is a cap of $9,500 for 1996.)
Q. What portion of the employee's contribution does MidAmerican match?
A. The company match for salaried employees in 1996 is 65 percent of the first
six percent of pre-tax contributions. The company match for union employees
ranges from 33 1/3 percent to 65% of the first six percent of pre-tax
contributions.
Q. Who provides record-keeping and administrative services for the plan?
A. Merrill Lynch.
Q. What are the investment options?
A. Employees may select from eight investment funds:
* Stable Value Fund, which invests primarily in guaranteed investment
contracts.
* Balanced Fund, which provides a combinations of fixed-income and
equity investments.
* S&P Index Fund, which invests in approximately the same securities as
the Standard & Poor's 500 Total Return Index.
* MidAmerican Energy Company Common Stock Fund, which invests in
company stock.
* Equity Growth Fund, which invests in equity securities of companies
with above-average growth characteristics.
* Equity Small Cap Fund, which invests in equity securities of "small
cap" companies in growth or emerging growth business.
* International Fund, which invests in equity securities of companies
outside the United States.
Q. Can employees borrow from the plan?
A. Yes.
<PAGE>
Pension
Q. Does MidAmerican offer a pension plan? If so, please describe.
A. A new type of pension plan, called a cash balance plan, will be implemented
January 1, 1997 for salaried employees. The cash balance plan offers an
improved concept in retirement benefits by combining the security of a
traditional pension plan with the flexibility and portability of a 401(k)
plan. The cash balance plan:
* meets MidAmerican's objective to unify current plans and offer an
equitable pension plan for all salaried employees.
* is easier to understand than a traditional defined benefit plan.
Employees will receive an annual statement showing the total value of
their pension in today's dollars.
* is designed to meet the changing needs of a diverse, mobile work force.
* allows MidAmerican to attract and retain high quality employees.
A cash balance account grows in two ways:
* the company makes annual allocations to the account.
* "interest" credits are added to the account each year.
Union employees are eligible for a pension plan. There are differences
between the pension formulas between union groups. The pension formulas
range from 1.01 percent to 1.60 percent of final average pay times years of
service.
Q. How will my existing pension be converted to MidAmerican's cash balance
plan?
A. This process would need to be reviewed. Currently, the transition includes
converting the accrued benefit you have earned in your current pension plan
to a lump sum. The lump sum is the initial account balance in the cash
balance plan.
Benefits - General
Q. Will my years of service count towards my benefits with MidAmerican?
A. MidAmerican would honor your prior years of service for benefit purposes.
Q. If the merger is successful, what will my benefits be?
A. If the merger is successful, salaried employees will be part of the
MidAmerican salaried benefits plan. Bargaining unit employees' benefits
are generally subject to negotiations.
<PAGE>
Policies
Q. Does MidAmerican offer tuition reimbursement for employees interested in
furthering their education?
A. Yes. MidAmerican's Education Assistance Program, offers full-time employees
100 percent reimbursement for tuition and book costs for course work at the
senior and graduate level and 75% for undergraduate courses through a
student's third year. Employees passing professional examinations will be
reimbursed for the full cost of their fees and expenses.
Q. Does MidAmerican have a policy on hiring relatives of employees?
A. Yes. The company will not employ relatives of a current employee as
defined in the Nepotism Policy. This applies to future hiring. Should an
employee marry another employee, arrangements must be made so that one of
the employees does not have supervisory responsibility over the other.
Q. What is the reimbursement for mileage of personal vehicles used for company
business?
A. Employees are currently reimbursed at $0.31 per mile.
Q. What is the average age of employees working for MidAmerican?
A. 42 years old.
Q. What is the average length of service for employees working for MidAmerican?
A. 13 years.
<PAGE>
Exhibit 99(n)
[The following letter was mailed to IES Shareholders.]
[MidAmerican Energy letterhead]
August 23, 1996
Dear IES Shareholders:
You are currently being asked to vote on a merger of IES Industries
with WPL Holdings, Inc. and Interstate Power Company (the "Wisconsin deal"). We
urge you to vote against that deal. The simple truth is that MidAmerican's
proposal offers you more value for your investment. Remember, if the Wisconsin
deal is approved, you will be deprived of the opportunity to receive greater
value for your IES shares.
MAXIMIZE YOUR DIVIDEND
VOTE AGAINST THE WISCONSIN DEAL
The choice is yours. Which annual dividend would you rather receive?
What IES Wants To Send You:
[Graphic presentation of annual dividend check for $450
to holder of 200 IES shares.]
*Based on WPL dividend of $1.97 and exchange ratio of 1.14 shares
of WPL common stock for each share of IES common stock.
What MidAmerican Wants To Send You:
[Graphic presentation of annual dividend check for $564
to holder of 200 IES shares.]
**Based on MidAmerican dividend of $1.20 and exchange ratio of 2.346 shares
of MidAmerican common stock for each share of IES common stock.
It is as simple as it seems. The MidAmerican proposal offers you a
dividend 25% greater than the one proposed in the Wisconsin deal. Under our
proposal, you would receive an annual dividend of $2.82 per IES share. The
Wisconsin deal would pay you only $2.25 per IES share. Of course, if you select
our $39 cash option, you won't receive a dividend after your shares are sold.
<PAGE>
CHOOSE THE BETTER MERGER PARTNER
VOTE AGAINST THE WISCONSIN DEAL
We believe IES is trying to divert your attention from the very real
benefits of the MidAmerican proposal. Don't let them get away with it. We
believe the MidAmerican proposal is clearly in your best interests, and we hope
you will not be distracted from its obvious benefits.
These are the facts:
* Higher Dividend. MidAmerican's proposal would pay you a dividend 25%
higher than the Wisconsin deal.
* Financial Strength. MidAmerican Energy is financially sound, with a
solid "A" credit rating from the major rating agencies.
* Cash Option. MidAmerican's proposal lets you choose cash or stock for
your IES shares. If you choose cash, you will receive $39.00 per
share of IES common stock.* The Wisconsin deal offers no cash option.
* Tax-Free Alternative. You always have the opportunity to choose
MidAmerican common stock, at an exchange ratio of 2.346 shares of
MidAmerican common stock per share of IES common stock. If you choose
MidAmerican common stock, the transaction will be entirely tax-free.
* Growth Strategy. MidAmerican Energy is on e of the fastest-growing
utility companies in the country, with a proven strategy of growth
through mergers. The Company is focusing on energy and communications
related businesses from a strong Iowa base.
We believe that by rejecting our proposal without even taking with us,
IES is depriving you of the opportunity to realize the substantial benefits
inherent in the MidAmerican merger. Don't settle for less than you deserve. Tell
the IES Board you want greater value. Vote AGAINST the Wisconsin deal.
*If holders or more than 40% of the total IES shares choose to receive cash,
then all shareholders who elected to receive all cash will receive the same
combination of cash and stock. If you get a combination of cash and stock, the
stock portion will be entirely tax-free.
DON'T SETTLE FOR LOWER VALUE
VOTE AGAINST THE WISCONSIN DEAL
To support the MidAmerican proposal, check the "AGAINST" box, then
sign, date and mail the enclosed BLUE proxy today. We urge you NOT to return any
green or white proxy sent to you by IES. If you have already returned your IES
proxy, you can still change your vote. Only the latest-dated proxy will count.
Time is short, so please act today.
If you have any questions, please call us, toll free, at 1 (888)
776-4692.
Thank you for your interest.
Sincerely,
/s/ Russell E. Christiansen /s/ Stanley J. Bright
RUSSELL E. CHRISTIANSEN STANLEY J. BRIGHT
Chairman of the Board President and
Chief Executive Officer
IMPORTANT
If your IES shares are held in your own name, please sign, date and
mail the enclosed BLUE proxy card today. If your shares are held in the name of
a brokerage firm, only your broker can vote your shares and only upon receipt of
your specific instructions. Please call and instruct your broker to execute a
BLUE proxy card on your behalf. You should also promptly sign, date and mail
your BLUE card when you receive it from your broker. Please do so for each
separate account you maintain.
If you have any questions or need assistance in voting your shares,
please call D.F. King & Co., Inc. At (212) 269-5550 or MidAmerican toll free at
1-888-776-4692.
FOR THE INFORMATION OF IES SHAREHOLDERS: Please be advised that each
proxy card that you have received or will receive from MidAmerican is a card
with which you can vote (i) shares of IES Common Stock registered in your name,
if any, and (ii) shares of IES Common Stock owned by you as a participant in
each of the following Company Plans: the IES Dividend Reinvestment and Stock
Purchase Plan, IES Employee Stock Purchase Plan, and the IES Bonus Stock
Ownership Plan, if any.
MidAmerican has filed with the Securities and Exchange Commission a
proxy statement and other materials relating to the solicitation of proxies
against the proposed IES/WPL/Interstate transaction and that proxy statement and
the other materials are incorporated herein by reference.
To IES Shareholders . . .
Maximize your dividend. Which annual dividend would
you rather receive?
This is what IES wants to send you:
[Graphic presentation of annual dividend check for $450
to holder of 200 IES shares.]
*Based on WPL dividend of $1.97 and conversion ratio of 1.14 shares of
WPL common stock for every share of IES common stock.
This is what MidAmerican wants to send you:
Graphic presentation of annual dividend check for $564
to holder of 200 IES shares.]
**Based on MidAmerican dividend of $1.20 and exchange ratio of 2.346 shares of
MidAmerican common stock for each share of IES common stock.
The MidAmerican Energy merger proposal offers IES shareholders a dividend 25%
greater than the one proposed in the IES three-way merger which includes a
Wisconsin utility. MidAmerican is offering an annual dividend of $2.82 for every
existing IES share. The Wisconsin deal would pay IES shareholders only $2.25 per
share. Of course, if you select MidAmerican's $39 cash option, you won't receive
a dividend after your shares are sold. As always, the choice is yours.
During the 1990s, MidAmerican Energy has been one of the fastest-growing
utilities in the nation, with a solid A credit rating. We believe the
MidAmerican proposal is better for IES shareholders. Vote to maximize your
dividend . . .
VOTE AGAINST THE WISCONSIN DEAL.
IES shareholders have been sent proxy materials, including a BLUE proxy, by
MidAmerican Energy. Check the "Against" box; sign, date and mail the BLUE proxy
as soon as possible. We urge you not to return any green or white proxies sent
to you by IES. If you have already returned your IES proxy, we urge you to
change your vote now by sending the BLUE proxy. Only the latest-dated proxy will
count. For more information about MidAmerican's merger proposal, call this
toll-free number:
1-888-PRO-IOWA [MidAmerican Energy logo]
(1-888-776-4692)
MidAmerican has filed with the Securities and Exchange Commission a proxy
statement and other materials relating to the solicitation of proxies against
the proposed IES/WPL/Interstate transaction and that proxy statement and the
other materials are incorporated herein by reference.
[Revision to Telephone Solicitor Training Document, Item 10 Questions
and Answers]
8/26/96-Rev. #1
QUESTIONS AND ANSWERS
23. Q. How long did the Iowa Electric/Iowa Southern merger take?
A. The Iowa Electric/Iowa Southern merger was announced in March 1991 and
was completed in July 1991 to form IES. The Iowa Resources/Midwest
Energy merger was announced in March 1990 and completed in November
1990.
24. Q. Originally, you stated that you anticipated $500 million in savings
and now you're saying $650 million. Why the difference?
A. The $500 million figure was preliminary. After further analysis of
various potential savings, it was determined that $650 million could
actually be saved over the next 10 years as a result of a merger with
IES.
25. Q. How much of McLeod would MidAmerican and IES own together ?
A. Approximately 40 percent.
26. Q. Did the IES proposal to freeze rates get approved?
A. IES had included a proposal for a three-year freeze when it filed its
merger proposal with the Iowa Utilities Board. IES later withdrew
that filing.
27. Q. I'm going to vote FOR the Wisconsin deal. I've sent in my proxy.
Do I now have to turn in the new proxy IES has sent to me?
A. Please refer to the materials sent to you by IES. If you decide to
vote AGAINST the Wisconsin deal, you need to return the BLUE
MidAmerican proxy card. (Return the BLUE proxy card if you are voting
for the Wisconsin deal also.)
28. Q. IES says a merger of MidAmerican and IES would reduce competition.
Is that true?
A. As a result of restructuring now taking place in the electric
industry, we generally expect increased competition and greater
customer choice for both wholesale and retail electric customers in
the near future. To the extent MidAmerican currently competes with
IES, by definition a merger between them will reduce competition
between them; however, for the most part MidAmerican and IES are in
complementary not competing markets. The Federal Energy Regulatory
Commission's open access rules require utilities to keep their
transmission lines open for use by wholesale customers such as
municipal utilities and rural electric cooperatives. MidAmerican was
the first Iowa utility to implement this open access policy. State
regulation of utility service will continue to ensure fair treatment
and reliable service for customers.
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29. Q. What will a merger of MidAmerican and IES do to IES retiree pensions?
A. We have not been able to, but look forward to discussing matters such
as these with IES and, though we therefore cannot make any comment on
the status of retirement benefits at this time, MidAmerican has record
of treating employees and retirees fairly and we are confident that
all issues such as this would be quickly resolved during the
negotiation of a definitive merger agreement.
30. Q. Why does one of the newspaper ads refer to a $2.01 dividend in the
Wisconsin deal instead of $1.99?
A. The $1.99 figure was calculated with information we had available at
the time the MidAmerican/IES was announced on Aug. 4, 1996. The $2.01
dividend figure comes from IES proxy materials.
31. Q. I was an IES shareholder of record July 10, 1996, but have since sold
my shares. Can I still vote on the Wisconsin deal?
A. All shareholders who owned shares as of the record date are entitled
to vote, even if they have since sold their shares. In limited cases
(institutional holders only), the right to vote shares may have been
transferred with the stock, but this rarely happens with individual
shareholders.
