EXHIBIT B
AMENDED AND RESTATED
BYLAWS
OF
MIDAMERICAN ENERGY COMPANY
(an Iowa Corporation)
ARTICLE I.
Offices.
Section 1. Principal Office. The principal office
of the Corporation shall be in the City of Des Moines, Polk
County, Iowa. The Corporation may also have an office or offices
at such other place or places either within or without the State
of Iowa as the Board of Directors from time to time determine or
the business of the Corporation may require.
Section 2. Registered Office. The registered
office of the Corporation required by the Iowa Business
Corporation Act to be maintained in the State of Iowa may be, but
need not be, the same as the principal office of the Corporation
in the State of Iowa, and the address of the registered office
may be changed from time to time by the Board of Directors.
ARTICLE II.
Shareholders' Meetings.
Section 1. Place. All meetings of the shareholders
shall be held in such place as may be ordered by the Board of
Directors.
Section 2. Annual Meetings. The annual meeting of
shareholders shall be held on the Wednesday next preceding the
last Thursday of April in each year, at ten o'clock in the
forenoon, when they shall elect the Board of Directors and
transact such other business as may properly be brought before
the meeting. The Board of Directors may, in its discretion,
change the date or time, or both, of the annual meeting of
shareholders.
Section 3. Special Meetings. Special meetings of
the shareholders for any purpose or purposes may be called by the
President, or by a Vice President (under such conditions as are
prescribed in these bylaws), or by the Chairman of the Board of
Directors (if there be one), or by the Vice Chairman of the Board
of Directors (if there be one), or by the Board of Directors.
Section 4. Notice. Notice, in accordance with the
Iowa Business Corporation Act, stating the place, day and hour of
the annual meeting and of any special meeting, and in the case of
a special meeting, the purpose or purposes for which the meeting
is called, shall be given so that it is effective not less than
ten (10) nor more than sixty (60) days before the date of the
meeting, by or at the direction of the President, or the
Secretary, or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting.
Section 5. Right to Vote. Except as provided in
Sections 8 and 9 of this Article II, only shareholders owning
shares of stock of a class entitled to vote as required by the
Iowa Business Corporation Act or as provided in the Articles of
Incorporation, of record on the books of the Corporation on the
day fixed by the Board of Directors for the closing of the stock
transfer books of the Corporation prior to any meeting of the
shareholders, or, if the stock transfer books be not closed, of
record on the books of the Corporation at the close of business
on the day fixed by the Board of Directors as the record date for
the determination of the shareholders entitled to vote at such
meeting, shall be entitled to notice of and shall have the right
to vote (either in person or by proxy) at such meeting.
Section 6. Closing of Transfer Books or Fixing of
Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case,
seventy (70) days. If the stock transfer books shall be closed
for the purpose of determining shareholders entitled to notice of
or to vote at a meeting of shareholders, such books shall be
closed for at least ten (10) days immediately preceding such
meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for any
such determination of shareholders, such date in any case to be
not more than (70) days prior to the date on which the particular
action requiring such determination of shareholders is to be
taken. Except as provided in the articles of amendment to the
Articles of Incorporation establishing one or more classes or
series of Class I Preferred Stock, Class M Preferred Stock or
Preference Stock, if the stock transfer books are not closed and
no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the date
immediately preceding the date on which notice of the meeting is
mailed, or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any
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meeting of shareholders has been made as provided in this Section
6, such determination shall apply to any adjournment thereof,
except that the Board of Directors must fix a new record date if
the meeting is adjourned to a date more than one hundred twenty
(120) days after the date fixed for the original meeting.
Section 7. Voting Lists. The officer or agent
having charge of the stock transfer books for shares of stock of
the Corporation shall make a complete list of the shareholders
entitled to vote at a meeting of shareholders or any adjournment
thereof, arranged in alphabetical order, with the address of and
the number of shares held by each, which list shall be kept on
file at the registered office of the Corporation and shall be
subject to inspection by any shareholder at any time during usual
business hours beginning two business days after notice of such
meeting is given for which such list was prepared. Such list
shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or
to vote at any meeting of shareholders. Failure to comply with
the requirement of this Section 7 shall not affect the validity
of any action taken at any such meeting.
Section 8. Voting of Shares by Certain Holders.
Shares standing in the name or another corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the
bylaws of such corporation may prescribe, or, in the absence of
such provision, as the Board of Directors of such corporation may
determine.
Shares held by a person who is an administrator,
executor, guardian or conservator may be voted by such person,
either in person or by proxy, without the transfer of such shares
into the name of such person. Shares standing in the name of a
trustee may be voted by such trustee, either in person or by
proxy, but no trustee shall be entitled to vote shares held by
such trustee without a transfer of such shares into the name of
such trustee.
Shares standing in the name of a receiver may be voted
by such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into the name of such receiver if authority so to do is
contained in an appropriate order of the court by which such
receiver was appointed.
A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been
transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.
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On and after the date on which written notice of
redemption of redeemable shares has been given to the holders
thereof and a sum sufficient to redeem such shares has been
deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the
holders thereof upon surrender of certificates therefor, such
shares shall not be entitled to vote on any matter and shall not
be deemed to be outstanding shares.
Shares of the Corporation are not entitled to be voted
if they are owned, directly or indirectly, by a second
corporation, and the Corporation owns, directly or indirectly, a
majority of the shares entitled to vote for the election of
directors of such second corporation, nor shall any such shares
be counted in determining the total number of outstanding shares
at any given time.
At all meetings of shareholders, a shareholder may vote
either in person or by proxy appointment form executed in writing
by the shareholder or by the duly authorized attorney-in-fact of
such shareholder. Such proxy appointment and any revocation
thereof shall be filed with the Secretary of the Corporation. No
proxy appointment shall be valid after eleven (11) months from
the date of its execution, unless otherwise provided in the
proxy.
Section 9. Proxies. When a valid proxy appointment
form is filed with the Secretary of the Corporation, the proxy
named therein (or the duly appointed substitute of such proxy, if
the proxy appointment permits the appointment of a substitute)
shall be entitled to enter and be present at the shareholders'
meeting designated in the proxy appointment, and to exercise the
power granted to such proxy under such proxy appointment,
notwithstanding that the shareholder who gave the proxy
appointment is personally present at the meeting, unless and
until such proxy appointment is revoked by a written instrument
of revocation, stating the time and date of revocation of the
proxy appointment, duly signed by the shareholder who executed
the proxy appointment, and filed with the Secretary of the
Corporation at or prior to the meeting. Subject to any express
limitation or restriction in any such proxy appointment
contained, a vote, consent or action taken by a proxy prior to
revocation thereof, as hereinbefore provided, shall be valid and
binding on the shareholder who gave the proxy appointment. Each
proxy appointment, and also each instrument of revocation
thereof, shall be retained by the Secretary of the Corporation as
required by regulatory authorities.
Section 10. Quorum. The holders of a majority of
the votes of the shares entitled to vote thereat, represented in
person or by proxy, shall constitute a quorum for the transaction
of business at all meetings of the shareholders except as
otherwise provided by the Iowa Business Corporation Act, the
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Articles of Incorporation or these bylaws. The holders of a
majority of the votes of the shares present in person or by proxy
at any meeting and entitled to vote thereat shall have power
successively to adjourn the meeting to a specified date whether
or not a quorum be present. The time and place to which any such
adjournment is taken shall be publicly announced at the meeting,
and no further notice thereof shall be necessary. At any such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally called.
Section 11. Manner of Voting. Upon demand of any
shareholder entitled to vote thereon, the vote on any question
before the meeting shall be by ballot. If a quorum is present,
the affirmative vote of the holders of a majority of the votes of
the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders, unless the
vote of a greater number or voting by classes is required by the
Iowa Business Corporation Act or the Articles of Incorporation.
Section 12. Officers of the Meeting-Powers. The
Chairman of the Board of Directors (if there be one), or in the
absence of the Chairman of the Board, the Vice Chairman of the
Board (if there be one), or the President of the Corporation
shall call meetings of the shareholders to order and shall act as
chairman thereof. The Board of Directors may appoint any
shareholder to act as chairman of any meeting in the absence of
the Chairman of the Board and the President, and in the case of
the failure of the Board to appoint a chairman, the shareholders
present at the meeting shall elect a chairman who shall be either
a shareholder or a proxy of a shareholder.
The Secretary of the Corporation shall act as secretary
at all meetings of shareholders. In the absence of the Secretary
at any meeting of shareholders, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 13. Power of Chairman. The chairman of any
shareholders' meeting shall have power to determine the
eligibility of votes, and may reject votes, whether cast in
person or by proxy, as irregular, unauthorized, or not cast in
accordance with the Articles of Incorporation or these bylaws.
The decisions of such chairman as to such matters shall be final
unless challenged from the floor, immediately after being
announced and overruled by the vote of the holders of a majority
of the votes of the shares represented at the meeting. Such
chairman may appoint tellers to count ballots, whenever voting is
by ballot. Such chairman shall have power to order any
unauthorized persons to leave the meeting and to enforce such
orders, and shall have and exercise all power and authority, and
perform all duties customarily possessed and performed by the
presiding officer of such a meeting.
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ARTICLE III
Board of Directors
Section 1. Powers. The business and affairs of the
Corporation shall be managed by the Board of Directors.
Section 2. Number and Qualification of Directors.
The Board of Directors shall consist of nineteen members who
shall be elected at the annual meeting of the shareholders. A
director may but need not be a shareholder or a resident of the
State of Iowa. Each director shall be elected to serve until the
next annual meeting of the shareholders and until the successor
of such director shall be elected or appointed as provided in
Section 4 of this Article III, and shall have qualified.
Section 3. Nominations. Nominations for the
election of directors may be made by the Board of Directors or a
committee appointed by the Board of Directors or by any
shareholder entitled to vote in the election of directors
generally. However, any shareholder entitled to vote in the
election of directors generally may nominate one or more persons
for election as directors at a meeting only if written notice of
such shareholder's intent to make such nomination or nominations
has been given, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Corporation not
later than (a) with respect to an election to be held at an
annual meeting of shareholders, 90 days in advance of such
meeting, and (b) with respect to an election to be held at a
special meeting of shareholders for the election of directors,
the close of business on the seventh day following the date on
which notice of such meeting is first given to shareholders.
Each such notice shall set forth: (i) the name and address of
the shareholder who intends to make the nomination and of the
person or persons to be nominated; (ii) a representation that the
shareholder is a holder of record of stock of the Corporation
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons
specified in the notice; (iii) a description of all arrangements
or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by
the shareholder; (iv) such other information regarding each
nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had the nominee been
nominated, or intended to be nominated, by the Board of
Directors; and (v) the consent of each nominee to serve as a
director of the Corporation if so elected. The Chairman of the
meeting may refuse to acknowledge the nomination of any person
not made in compliance with the foregoing procedure.
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Section 4. Vacancies. In accordance with Article
VI of the Articles of Incorporation, if a vacancy in the Board of
Directors shall occur, a majority of the remaining directors,
though less than a quorum, may appoint a director to fill such
vacancy, who shall hold office for the unexpired term of the
directorship in respect of which such vacancy occurred or for the
full term of any new directorship caused by any increase in the
number of members.
Section 5. Place of Meetings. The Board of
Directors may hold its meetings, regular or special, within or
without the State of Iowa at such place or places as it may from
time to time determine, or as may be specified in the notice of
the meeting.
Section 6. Time and Place of Meeting. Regular
meetings of the Board shall be held, without notice other than
this bylaw, quarterly on the Wednesday next preceding the last
Thursday of each January, April, July, and October at the
principal office of the Corporation in Des Moines at two o'clock
in the afternoon. The Chairman of the Board of Directors (if
there be one), the Vice Chairman of the Board of Directors (if
there be one), or the President may direct a different date, time
or place for the holding of a regular meeting and the Secretary
shall advise the directors of any such change at least three days
in advance of the meeting date in the manner provided in Section
8 of this Article III.
The Chairman of the Board of Directors (if there be
one) or the President shall have power to cancel not more than
two successive regular meetings of the Board of Directors by
causing not less than one day's notice of such cancellation to be
given to the directors.
Section 7. Special Meetings. Special meetings of
the Board of Directors for any purpose or purposes may be called
by the Chairman of the Board of Directors (if there be one), the
Vice Chairman of the Board of Directors (if there be one), by the
President or a majority of the members of the Board, and shall be
held at such place as may b fixed by the person or persons
calling such meeting and as shall be specified in the notice of
such meeting. The Secretary or an assistant secretary shall give
not less than three (3) days' notice of the date, time and place
of each such meeting to each director in the manner provided in
Section 8 of this Article III. Neither the business to be
transacted at, nor the purpose of, any special meeting of the
Board of Directors need be specified in the notice given, or
waiver of notice obtained, of such meeting as provided in Section
8 or 9, as the case may be, of Article III.
Section 8. Manner of Giving Notice of Meetings.
Notice of any special meeting of the Board of Directors may be
given to any director by telephone or by telegram addressed to
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such director at such address as last appears in the records of
the Secretary of the Corporation or by mail by depositing the
same in the post office or letter box in a postpaid, sealed
wrapper addressed to such director at such address.
It shall be the duty of every director to furnish the
Secretary of the Corporation with the post office address of such
director and to notify the Secretary of any change therein.
Section 9. Waiver of Notice. Whenever any notice
is required to be given to directors under the provisions of the
Iowa Business Corporation Act or of the Articles of Incorporation
or these bylaws, a waiver thereof in writing signed by the
director entitled to such notice, whether before, at or after the
time stated therein, shall be deemed equivalent thereto.
Attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction
of any business because the meeting is not lawfully called or
convened.
Section 10. Quorum. At all meetings of the Board, a
majority of the number of directors fixed by these bylaws shall
constitute a quorum for the transaction of business. The act of
a majority of the directors present at any meeting at which a
quorum is present shall be the act of the Board of Directors,
except as may be otherwise specifically provided by the Iowa
Business Corporation Act or by the Articles of Incorporation or
by these bylaws. If a quorum shall not be present at any meeting
of directors, the director or directors present may adjourn the
meeting to a specified time, without notice other than
announcement at the meeting.
Section 11. Conduct of Meetings. The Chairman of
the Board of Directors (if there be one) or, in the absence of
the Chairman of the Board, the Vice Chairman of the Board (if
there be one), or the President of the Corporation shall act as
the presiding officer at Board meetings, and the Secretary or an
assistant secretary of the Corporation shall act as the secretary
of the meeting. In the absence of the Chairman of the Board of
Directors (if there be one), the Vice Chairman of the Board (if
there be one), and the President, the Board may appoint a
director to act as the presiding officer. The presiding officer
at Board meetings shall be entitled to vote as a director on all
questions.
Minutes of all meetings of the Board shall be
permanently kept by the Secretary, and all minutes shall be
signed by the secretary of the meeting.
The Board shall have power to formulate rules and
regulations governing the conduct of Board meetings and the
procedure thereat.
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Section 12. Executive and Other Committees. The
Board of Directors may, by resolution adopted by a majority of
the number of directors fixed by these bylaws, designate from
among its members an executive committee, and one or more other
committees each of which, to the extent provided in such
resolution and permitted by the Iowa Business Corporation Act,
shall have and may exercise all the authority of the Board of
Directors. Unless otherwise provided by resolution of the Board
of Directors, a quorum of each such committee shall consist of a
majority of its members, and if a quorum is present when a vote
is taken, the affirmative vote of a majority of the members
present shall be the act of such committee.
Section 13. Compensation of Directors. The Board of
Directors shall have the authority to fix the compensation of
directors. Any director may serve the Corporation in any other
capacity and receive compensation therefor.
Section 14. Indemnification of Directors, Officers,
Professional and Supervisory Employees.
(a) Right to Indemnification. Each person who was or
is a party or is threatened to be made a party to or is involved
in any action, suit or proceeding, whether civil, criminal,
administrative, investigative or arbitration ("proceeding"), by
reason of the fact that he or she, or a person of whom he or she
is the legal representative, is or was a director, officer or
professional or supervisory employee of the Corporation or is or
was serving at the request of the Corporation as a director,
officer, professional or supervisory employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in
an official capacity as a director, officer, professional or
supervisory employee or agent or in any other capacity while
serving as a director, officer, professional or supervisory
employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Iowa Business
Corporation Act, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader
indemnification rights than said Act permitted the Corporation to
provide prior to such amendment), against all expenses,
liability, costs, judgments, fines, Employee Retirement Income
Security Act excise taxes or penalties and amounts paid or to be
paid in settlement reasonably incurred or suffered by such person
in connection therewith. Such right shall be a contract right
and shall include the right to be paid by the Corporation
expenses incurred in defending any such proceeding in advance of
its final disposition; provided, however, that, the payment of
such expenses incurred by a director, officer or professional or
supervisory employee in his or her capacity as a director,
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officer or professional or supervisory employee (and not in any
other capacity in which service was or is rendered by such person
while a director, officer or professional or supervisory employee
including, without limitation, service to an employee benefit
plan) in advance of the final disposition of such proceeding,
shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director, officer or
professional or supervisory employee, to repay all amounts so
advanced if it should be determined ultimately that such
director, officer, or professional or supervisory employee is not
entitled to be indemnified under this Section or otherwise.
(b) Right of Claimant to Bring Suit. If a claim under
paragraph (a) is not paid in full by the Corporation within
thirty (30) days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expenses of prosecuting such claim.
It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it
permissible under the Iowa Business Corporation Act for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to
have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard
of conduct set forth in the Iowa Business Corporation Act, nor an
actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that
claimant had not met the applicable standard of conduct.
(c) Benefit. Indemnification provided hereunder
shall, in the case of the death of the person entitled to
indemnification, inure to the benefit of such person's heirs,
executors or other lawful representatives. The invalidity or
unenforceability of any provision of this Section 14 shall not
affect the validity or enforceability of any other provision of
this Section 14.
(d) Certain Actions; Presumption of Standard of
Conduct. Any action taken or omitted to be taken by (i) any
director, officer or professional or supervisory employee in good
faith and in compliance with or pursuant to any order,
determination, approval or permission made or given by a
commission, board, official or other agency of the United States
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or of any state or other governmental authority with respect to
the property or affairs of the Corporation or any such business
corporation, not-for-profit corporation, joint venture, trade
association or other entity over which such commission, board,
official or agency has jurisdiction or authority or purports to
have jurisdiction or authority or (ii) by any director of the
Corporation pursuant to Section D of Article IX of the Restated
Articles if Incorporation shall be presumed to be in compliance
with the standard of conduct set forth in Section 490.851 (or any
successor provision) of the Iowa Business Corporation Act whether
or not, in the case of clause (i), it may thereafter be
determined that such order, determination, approval or permission
was unauthorized, erroneous, unlawful or otherwise improper.
(e) Litigation; Presumption of Standard of Conduct.
Unless finally determined, the termination of any litigation,
whether by judgment, settlement, conviction or upon a plea of
nolo contendere, or its equivalent, shall not create a
presumption that the action taken or omitted to be taken by the
person seeking indemnification did not comply with the standard
of conduct set forth in Section 490.851 (or successor provision)
of the Iowa Business Corporation Act.
(f) Non-Exclusivity of Rights. The rights conferred
on any person by this Section 14 shall not be exclusive of any
other right which any person may have or hereafter acquire under
any statute, provision of the Articles of Incorporation, bylaw,
agreement, vote of shareholders or disinterested directors or
otherwise.
(g) Insurance. The Corporation may maintain
insurance, at its expense, to protect itself and any such
director, officer, professional or supervisory employee or agent
of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or
loss under the Iowa Business Corporation Act.
Section 15. Informal Action by Directors. Any
action required to be taken at a meeting of the Board of
Directors or a committee of directors and any other action which
may be taken at a meeting of the Board of Directors or a
committee of directors may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be
signed by all of the directors or all of the members of the
committee of directors, as the case may be, entitled to vote with
respect to the subject matters thereof.
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ARTICLE IV.
Officers
At the first regular meeting of the Board of Directors
following each annual meeting of the shareholders, the Board
shall elect a President, one or more Vice Presidents as
prescribed by these bylaws, a Secretary and a Treasurer; and the
Board may at any meeting elect or appoint a Chairman of the Board
of Directors, Vice Chairman, additional vice presidents and other
officers or assistants to officers.
The Chairman of the Board of Directors (if there be
one), the Vice Chairman of the Board of Directors (if there be
one), and the President shall be selected from among the members
of the Board. Other officers of the Corporation may be, but are
not required to be, directors. An officer may, but need not be,
a shareholder of the Corporation.
Subject to the power of the Board to remove any officer
from office at any time when in its judgment the best interests
of the Corporation will be served thereby, each officer shall
serve until the successor of such officer is elected or
appointed, unless the tenure of such officer is otherwise fixed
by the Board by resolution, contract or agreement for a different
period of time.
The Board shall have power to fix the compensation of
each officer, to prescribe the duties of such officer, to
decrease or increase such compensation, change the nature of such
duties, or remove such officer from office and elect or appoint
the successor of such officer, in each case subject to the terms
of any agreement between such officer and the Corporation.
Section 1. Chairman of the Board of Directors. The
Chairman of the Board of Directors (if there be one) shall
preside at all meetings of the shareholders and of the directors,
at which the Chairman is present. The Chairman shall perform all
duties incident to the office of Chairman of the Board of
Directors and such other duties as, from time to time, may be
assigned to the Chairman by the Board of Directors, and, if so
designated by an appropriate resolution of the Board of Directors
or an agreement between the Chairman and the Corporation, shall
be the chief executive officer of the Corporation, subject
however, to the right of the Board of Directors to delegate any
specific power to any other officer or officers of the
Corporation; and the Chairman shall see that all orders and
resolutions of the Board are carried into effect.
Section 2. Vice Chairman of the Board of Directors.
The Board of Directors may elect or appoint a Vice Chairman who
shall, in the absence or disability of the Chairman or in case of
vacancy in the office, assume all duties of the Chairman and such
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other duties as, from time to time, may be assigned to the Vice
Chairman by the Board of Directors.
Section 3. President. The President of the
Corporation shall have general and active management of and
exercise general supervision of the business and affairs of the
Corporation and, if so designated by an appropriate resolution of
the Board of Directors or an agreement between the President and
the Corporation, shall be the chief executive officer of the
Corporation, subject, however, to the right of the Board of
Directors to delegate any specific power to any other officer or
officers of the Corporation; and the President shall see that all
orders and resolutions of the Board are carried into effect. The
President shall have concurrent power with the Chairman of the
Board of Directors to sign bonds, mortgages, certificates for
shares, and other contracts and documents, except in cases where
the signing and execution thereof shall be expressly delegated by
law, by the Board of Directors, or by these bylaws to some other
officer or agent of the Corporation. In the absence of the
Chairman of the Board of Directors or in the event of the
disability or refusal of the Chairman to act, and in the absence
of the Vice Chairman of the Board of Directors or in the event of
the disability or refusal of the Vice Chairman to act, the
President shall have such other powers as are vested in the
Chairman of the Board of Directors. In general the President
shall perform the duties incident to the office of President and
such other duties as may be prescribed by the Board of Directors
from time to time.
Section 4. Executive Vice President. The Board of
Directors may designate an Executive Vice President who shall, in
the absence of disability of the President, or in case of a
vacancy in that office, assume all duties of the President.
Section 5. Vice Presidents. The Vice Presidents,
including the Executive Vice President and Vice Presidents
designated by the Board of Directors as Senior Vice Presidents,
shall perform such of the duties and exercise such of the powers
of the President as shall be assigned to them from time to time
by the Board of Directors or the President, and shall perform
such other duties as the Board of Directors or the President
shall from time to time prescribe. Any Vice President may sign
certificates for shares of the Corporation and any deeds,
mortgages, bonds, contracts or other instruments which the Board
of Directors has authorized to be executed, which authorizations
may be either specific or general. In case of the death,
disability or absence of the Chairman of the Board of Directors
(if there be one) and the President and the Executive Vice
President, the Senior Vice President (or, if there be more than
one, the Senior Vice President designated by the Board of
Directors) shall perform the duties of the President, including
interim duties, and when so acting shall have all the powers of
and be subject to all restrictions upon the President.
B-13
Section 6. Secretary. The Secretary shall attend
all meetings of the shareholders and of the Board of Directors
and shall keep the minutes of such meetings. The Secretary shall
perform like duties of the standing committees of the Board of
Directors when required. Except as otherwise provided by these
bylaws or by the Iowa Business Corporation Act, the Secretary
shall give, or cause to be given, notice of all meetings of the
shareholders and of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors
or the Chairman of the Board of Directors (if there be one) or
the President.
The Secretary shall have custody of the minute books,
containing the minutes of shareholders' and directors' meetings,
of the stock books of the Corporation, and of all corporate
records. The Secretary shall have the duty to see that the
books, reports, statements, certificates and all other documents
and reports of the Corporation required by law are properly
prepared, kept and filed. The Secretary shall, in general,
perform all duties incident to the office of Secretary.
Section 7. Assistant Secretaries. The assistant
secretaries shall perform such of the duties and exercise such of
the powers of the Secretary as shall be assigned to them from
time to time by the Board of Directors or the Chairman of the
Board of Directors (if there be one) or the President or the
Secretary, and shall perform such other duties as the Board of
Directors or the Chairman of the Board of Directors (if there be
one) or the President shall from time to time prescribe.
Section 8. Treasurer. The Treasurer shall have the
custody of all moneys, stocks, bonds and other securities of the
Corporation, and of all other papers on which moneys are to be
received and of all papers which relate to the receipt or
delivery of the stocks, bonds, notes and other securities of the
Corporation in the possession of the Treasurer. The Treasurer is
authorized to receive and receipt for stocks, bonds, notes and
other securities belonging to the Corporation or which are
received for its account, and to place and keep the same in
safety deposit vaults rented for the purpose, or in safes or
vaults belonging to the Corporation. The Treasurer is authorized
to collect and receive all moneys due the Corporation and to
receipt therefor, and to endorse all checks, drafts, vouchers or
other instruments for the payment of money payable to the
Corporation when necessary or proper and to deposit the same to
the credit of the Corporation in such depositories as the
Treasurer may designate for the purpose, and the Treasurer may
endorse all commercial documents for or on behalf of the
Corporation. The Treasurer is authorized to pay interest on
obligations when due and dividends on stock when duly declared
and payable. The Treasurer shall, when necessary or proper,
disburse the funds of the Corporation, taking proper vouchers for
such disbursements. The Treasurer shall cause to be kept in the
B-14
office of the Treasurer true and full accounts of all receipts
and disbursements, and shall render to the Board of Directors and
the Chairman of the Board of Directors (if there be one) or the
President, whenever they may require it, an account of all
transactions as Treasurer and of the financial condition of the
Corporation. The Treasurer shall also perform such other duties
as may be prescribed by the Board of Directors or the Chairman of
the Board of Directors (if there be one) or the President. The
Treasurer shall, in general, perform all duties usually incident
to the office of Treasurer.
Section 9. Assistant Treasurers. The assistant
treasurers shall perform such of the duties and exercise such of
the powers of the Treasurer as shall be assigned to them from
time to time by the Board of Directors or the Chairman of the
Board of Directors (if there be one) or the President or the
Treasurer, and shall perform such other duties as the Board of
Directors or the Chairman of the Board of Directors (if there be
one) or the President shall from time to time prescribe.
ARTICLE V
Stock Certificates
Section 1. Registrars and Transfer Agents. The
Board of Directors shall determine the form of and provide for
the issue, registration and transfer of any stock certificates
representing stock of the Corporation, and may appoint registrars
and transfer agents, who may be natural persons or corporations.
The office of any transfer agent or registrar may be maintained
within or without the State of Iowa.
Section 2. Signatures. Any stock certificates
issued by the Corporation shall bear the signatures of the
Chairman of the Board of Directors (if there be one), or the Vice
Chairman of the Board of Directors (if there be one), or the
President or any Vice President and of the Secretary or any
Assistant Secretary and such officers are hereby authorized and
empowered to sign such certificates when the issuance thereof has
been duly authorized by the Board of Directors; provided,
however, that if certificates representing shares of any class or
series of stock issued by the Corporation are countersigned by
manual signature by a transfer agent, other than the Corporation
or its employee, or registered by manual signature by a
registrar, other than the Corporation or its employee, any other
signature on such certificate may be a facsimile, engraved,
stamped or printed. In case any person who is an officer who has
signed or whose facsimile signature has been placed upon such
certificate representing stock of the Corporation shall cease to
be such officer of the Corporation before such certificate is
issued, such certificate may be issued by the Corporation with
B-15
the same effect as if such person was such officer at the date of
its issue.
Section 3. Transfers. Transfers of shares shall be
made on the books of the Corporation only by the registered owner
thereof (or the legal representative of such owner, upon
satisfactory proof of authority therefor), or by the attorney of
such owner lawfully constituted in writing by documents filed
with the Secretary or transfer agent of the Corporation, and only
upon surrender of any certificate to be transferred, or delivery
of an order of such owner if such shares are not represented by a
certificate, and payment of applicable taxes with respect to such
transfer, unless otherwise ordered by the Board of Directors.
Section 4. Lost or Destroyed Certificates. New
certificates may be issued to replace lost, stolen or destroyed
certificates, upon such terms and conditions as the Board of
Directors may prescribe.
Section 5. Rights of Registered Owners. The
Corporation shall be entitled to recognize the exclusive right of
a person registered or shown on its books as the owner of shares
of its stock to receive dividends or any other distribution
thereon, or to vote such shares, and to treat such person as the
owner of such shares for all purposes and the Corporation shall
not be bound to recognize any equitable or other claim to or
interest in its shares on the part of any person other than the
registered or record owner thereof, whether or not it shall have
notice thereof.
ARTICLE VI
General Provisions
Section 1. Instruments Affecting Real Estate.
Deeds, mortgages and other instruments affecting real estate
owned by the Corporation, the execution of which has been duly
authorized by the Board of Directors, shall be signed on behalf
of the Corporation by the Chairman of the Board of Directors (if
there be one), the Vice Chairman of the Board of Directors (if
there be one), or the President or any Vice President and by the
Secretary or any Assistant Secretary. Leases, contracts to
purchase, and other instruments whereby the Corporation acquires,
in the ordinary course of business, an interest in real estate
owned by others may be executed on behalf of the Corporation by
the Chairman of the Board of Directors (if there be one), the
Vice Chairman of the Board of Directors (if there be one), or the
President or by any Vice President so authorized.
Section 2. Other Instruments. Bonds, notes and
other secured or unsecured obligations of the Corporation, when
duly authorized by the Board of Directors, may be executed on
B-16
behalf of the Corporation by the Chairman of the Board of
Directors (if there be one), the Vice Chairman of the Board of
Directors (if there be one), or the President or any Vice
President, or by any other officer or officers thereunto duly
authorized by the Board of Directors and the signature of any
such officer may, if the Board of Directors shall so determine,
be a facsimile. Contracts and other instruments entered into
executed in the ordinary course of business may be signed on
behalf of the Corporation by the Chairman of the Board of
Directors (if there be one), the Vice Chairman of the Board of
Directors (if there be one), or the President or by any officer,
employee or agent of the Corporation thereunto authorized by the
Chairman of the Board of Directors (if there be one), the Vice
Chairman of the Board of Directors (if there be one), or the
President, without obtaining specific authorization therefor from
the Board of Directors.
Section 3. Destruction of Records. The Chairman of
the Board of Directors (if there be one), the Vice Chairman of
the Board of Directors (if there be one), or the President or any
Vice President appointed by the President to serve in place of
the President, the Secretary and the Treasurer shall constitute a
committee for the destruction of records and shall meet from time
to time at the call of the Secretary who shall be chairman of
such committee. It shall have power to order and cause the
destruction of any corporate records, the preservation of which
has been found by it to be no longer necessary or desirable.
Section 4. Fiscal Year. The fiscal year of the
Corporation shall be the calendar year.
Section 5. Annual Report. As soon as practicable
after the close of each fiscal year, the Board of Directors shall
cause an annual report of the business and affairs of the
Corporation to be made to the shareholders.
Section 6. No Corporate Seal. The Corporation
shall have no corporate seal.
Section 7. Stock in Other Corporations. Unless
otherwise ordered by the Board of Directors, the Chairman of the
Board of Directors (if there be one), the Vice Chairman of the
Board of Directors (if there be one), or the President or any
Vice President of the Corporation (1) shall have full power and
authority to act and vote, in the name and on behalf of the
Corporation, at any meeting of shareholders of any corporation in
which the Corporation may hold stock, and at any such meeting
shall possess and may exercise any and all of the rights and
powers incident to the ownership of such stock, and (2) shall
have full power and authority to execute, in the name and on
behalf of the Corporation, proxies appointing any suitable person
or persons to act and to vote at any meeting of shareholders of
B-17
any corporation in which the Corporation may hold stock, and at
any such meeting the person or persons so designated shall
possess and may exercise any and all of the rights and powers
incident to the ownership of such stock.
ARTICLE VII
Amendments
These bylaws may be altered, amended or repealed and
new bylaws may be adopted by vote of a majority of the number of
directors fixed by these bylaws at any regular or special meeting
of the Board.
B-18
EXHIBIT C
IOWA
ARTICLES OF MERGER
OF
MIDAMERICAN ENERGY COMPANY
To the Secretary of State
of the State of Iowa:
Pursuant to the provisions of 490.1105 and 1107 of the Iowa
Business Corporation Act, the undersigned corporation hereby
executes and adopts the following Articles of Merger for the
purpose of merging each of Midwest Resources Inc., an Iowa
corporation ("Resources"), Midwest Power Systems Inc., an Iowa
corporation ("Midwest Power"), and Iowa-Illinois Gas and Electric
Company, an Illinois corporation ("Iowa-Illinois") with and into
MidAmerican Energy Company, an Iowa corporation ("Company"),
which will be the surviving corporation. Resources, Midwest
Power, Iowa-Illinois and the Company are sometimes referred to
individually as a "Constituent Corporation" and collectively as
the "Constituent Corporations".
1. The Agreement and Plan of Merger ("Plan of Merger"),
dated as of July 26, 1994, a copy of which is attached hereto as
Annex A and is incorporated by reference herein, was approved by
the shareholders of each of the Constituent Corporations.
2. The laws of Illinois, the state under which Iowa-
Illinois is organized, permit such merger.
C-1
3. As to each Constituent Corporation, the designation,
number of shares outstanding, and the number of votes entitled to
be cast by each voting group entitled to vote separately on the
Plan of Merger is as follows:
Entitled to
Name Class Outstanding Vote
The Company Common
Resources Common
Midwest Common
Power
Preferred
Common and
Preferred,
together as
a class
Iowa- Common
Illinois
Preference
Preferred
Common,
Preference
and Preferred,
together as
a class
C-2
4. As to each Constituent Corporation, the total number of
shares voted for and against the Plan of Merger by each voting
group entitled to vote separately on the Plan of Merger is as
follows:
Total Total
Shares Voted
Name Class Voted For Against Abstained
The Company Common
Resources Common
Midwest Common
Power
Preferred
Common
and
Preferred
together
as a class
Iowa- Common
Illinois
Prefer-
ence
Preferred
Common,
Prefer-
ence and
Preferred
together
as a class
C-3
5. The number of votes cast for the Plan of Merger by each
voting group was sufficient for approval by that voting group.
6. The Merger shall become effective on __________, _____.
MIDAMERICAN ENERGY COMPANY
By: __________________________
Its:
C-4
EXHIBIT C
ILLINOIS
File #_______________
ARTICLES OF MERGER
1. The names of the corporations proposing to merge, and the
respective states of their incorporation:
State or
Name of Corporation Country of Incorporation
MidAmerican Energy Company Iowa
Midwest Resources Inc. Iowa
Midwest Power Systems Inc. Iowa
Iowa-Illinois Gas and
Electric Company Illinois
2. The laws of the state under which each corporation is
incorporated permit such merger.
3. (a) Name of the surviving corporation: MidAmerican Energy
Company
(b) It shall be governed by the laws of: the State of Iowa
4. The Plan of Merger is set forth as Exhibit A attached
hereto.
5. The Plan of Merger was approved, as to each corporation not
organized in Illinois, in compliance with the laws of the
state under which it is organized, and (b) as to each
Illinois corporation, as follows:
C-5
Name of Illinois Corporation Approval
Iowa-Illinois Gas and Electric Company By the shareholders, a
resolution of the board of
directors having been duly
adopted and submitted to a
vote at a meeting of
shareholders. Not less than
the minimum number of votes
required by statute and by the
articles of incorporation
voting in favor of the action
taken.
6. It is agreed that, upon and after the issuance of a
certificate of merger by the Secretary of State of the State
of Illinois:
a. The surviving corporation may be served with process in
the State of Illinois in any proceeding for the
enforcement of any obligation of any corporation
organized under the laws of the State of Illinois which
is a party to the merger and in any proceeding for the
enforcement of the rights of a dissenting shareholder
of any such corporation organized under the laws of the
State of Illinois against the surviving corporation.
b. The Secretary of State of the State of Illinois shall
be and hereby is irrevocably appointed as the agent of
the surviving corporation to accept service of process
in any such proceedings, and
c. The surviving corporation will promptly pay to the
dissenting shareholders of any corporation organized
under the laws of the State of Illinois which is a
party to the merger the amount, if any, to which they
shall be entitled under the provisions of "The Business
Corporation Act of 1983" of the State of Illinois with
respect to the rights of dissenting shareholders.
C-6
8. Each of the undersigned corporations has caused these
articles to be signed by its duly authorized officers, each
of whom affirms, under penalties of perjury, that the facts
stated herein are true.
Dated __________________, 19___ MIDAMERICAN ENERGY COMPANY
attested by ___________________ by ___________________________
____________________ ___________________________
Dated __________________, 19___ MIDWEST RESOURCES INC.
attested by ___________________ by ___________________________
____________________ ___________________________
Dated __________________, 19___ MIDWEST POWER SYSTEMS INC.
attested by ___________________ by ___________________________
____________________ ___________________________
Dated __________________, 19___ IOWA-ILLINOIS GAS AND ELECTRIC
COMPANY
attested by ___________________ by ___________________________
____________________ ___________________________
C-7
EXHIBIT D
TRANSITION TEAMS
(Charge and mission to be prepared by Mr. Christiansen and Mr.
Bright)
DIVERSIFIED CORPORATE (UTILITY)
Don Heppermann Richard Engle
John Rasmussen Steve Shelton
Dennis Melstad Steve Hollenbeck
Dan Lonergan John Rasmussen
Brent Gale
Ron Stepien
Bev Wharton
Jack Alexander
(Luis Baez)
D-1
EXHIBIT E
BOARD COMMITTEES
EXECUTIVE NOMINATING AUDIT
Christiansen - Chair Foster - Chair Aalfs - Chair
Bright - V. Chair Christensen - Fletcher -
Foster V. Chair V. Chair
Eugster Colloton Lawson
Woodruff Peterson Cottrell
Peterson Asher
Tinsman
FINANCE STRATEGY COMPENSATION
Tinsman - Chair Bright - Chair Eugster - Chair
Hoak - V. Chair Gentry - V. Chair Seifert -
Woodruff Kirk V. Chair
Putney Christensen Schneider
Bright Seifert Colloton
Christiansen Cottrell
E-1
EXHIBIT F-1
July __, 1994
Mr. Russell E. Christiansen
666 Grand Avenue
Des Moines, IA 50306-9244
Dear Mr. Christiansen:
Pursuant to the Agreement and Plan of Merger ("Merger
Agreement") dated as of July __, 1994, by and among Midwest
Resources Inc., Midwest Power Systems Inc., Iowa-Illinois Gas and
Electric Company and MidAmerican Energy Company ("Company"),
Midwest Resources Inc., Midwest Power Inc. and Iowa-Illinois Gas
and Electric Company will be merged into the Company. In
recognition of the value of your past services to Midwest
Resources Inc. and its subsidiaries, and in anticipation of your
contribution to the future growth and success of the Company and
its subsidiaries, the Company wishes to provide itself and its
subsidiaries the continuing benefits of your service as a senior
executive officer of the Company and its subsidiaries on the
terms and conditions set forth below.
This letter sets forth our agreement with respect to
your employment with the Company and its subsidiaries during the
period commencing on the Effective Time (as defined in the Merger
Agreement) and ending on the date your employment with the
Company and its subsidiaries terminates (as defined herein,
"Employment Period") and beyond the Employment Period, with
respect to your acting as a consultant and advisor to the Company
during the period commencing at the end of the Employment Period
and ending on the third anniversary of the retirement date
("Consulting Period") or until such earlier date as otherwise may
be determined hereunder.
1. (a) If the Effective Time occurs (i) on or before
May 31, 1995, then during the periods commencing on (x) the
Effective Time and ending on May 31, 1996, you shall serve as
Chairman of the Board of the Directors of the Company,
("Chairman") and Chairman, Office of the Chief Executive Officer
of the Company, performing those responsibilities set forth on
Exhibit A attached hereto and (y) June 1, 1996 and ending on May
31, 1997, you shall serve as Chairman, (ii) between June 1, 1995
and May 31, 1996, then during the period commencing on (x) the
Effective Time and ending on the first anniversary of the
Effective Time, you shall serve as Chairman and Chairman, Office
of the Chief Executive Officer of the Company and (y) the first
anniversary of the Effective Time and ending on May 31, 1997, you
shall serve as Chairman or (iii) after May 31, 1996, then
commencing on the Effective Time and ending on the first
anniversary of the Effective Time, you shall serve as Chairman
and Chairman, Office of the Chief Executive Officer of the
Company, all of the foregoing shall constitute the "Employment
Period". During the Employment Period your duties and services
generally shall be performed by you on regular business days
during normal business hours, and you agree to be present as
F-1-1
required and for as much time as is necessary to perform your
duties and services for the business of the Company and its
subsidiaries. You shall be entitled to vacation in accordance
with the policy from time to time in effect for senior executive
officers of the Company and its subsidiaries with credit for past
service with Midwest Resources Inc. and its subsidiaries and
predecessors of each. During the Employment Period you shall be
reimbursed by the Company in accordance with the Company's policy
from time to time in effect for any expenses commensurate with
your position which you may reasonably incur in the performance
of your duties and services hereunder and which are properly
substantiated.
(b) In consideration of and as compensation for your
services hereunder and your agreement not to compete with the
Company as set forth herein, during the Employment Period the
Company will pay to you, in equal installments with the same
frequency as for other executives of the Company, but at least
monthly, a base salary at the annual rate of not less than
$400,000, such base salary to be subject to adjustment during the
Employment Period in accordance with the Company's policy for
executives, and shall never be less than the base salary of the
Chief Executive Officer or President of the Company. In addition
to such salary, you shall be eligible to receive, as additional
compensation, appropriate management bonuses, long-term incentive
awards and such other compensation elements as are applicable, in
amounts not less than those paid or accrued for the Chief
Executive Officer or President of the Company, in relation to the
achievement by the Company and its subsidiaries of corporate
goals and objectives and the Company will provide to you all
other benefits accorded to full-time senior executive employees
of the Company from time to time, provided that such benefits
shall be not less in the aggregate than those in effect at
Midwest Resources Inc., Midwest Power Systems, Inc. and Iowa-
Illinois Gas and Electric Company as of the Effective Time. The
Company's obligations to make the salary payments and to provide
the other benefits provided for by this paragraph 1(b) shall be
expressly contingent upon, and subject to, your observance of,
and substantial compliance with, all of the terms and provisions
hereof.
2. (a) During the Consulting Period, you shall serve
as consultant and advisor to the Company. You agree, in your
capacity as consultant and advisor, to hold yourself ready to and
to render such advice and counsel to the Company and any of its
subsidiaries and affiliates as may be requested from time to time
with reasonable advance notice by the Board of Directors or Chief
Executive Officer of the Company; provided, that you shall not be
required to devote in excess of sixty (60) days in any twelve-
month period to your duties as a consultant hereunder, and
provided further that telephonic consultation shall not require
advance notice. It is understood and agreed that such requests
for consultation shall not unreasonably interfere with your
employment with any other employer. You shall report during the
Consulting Period directly to the Chief Executive Officer of the
Company, who shall represent the Company in all matters relating
to the performance of this Agreement. During the Consulting
Period, you shall be reimbursed for any expenses which you may
reasonably incur in the performance of your duties hereunder and
which are properly substantiated.
F-1-2
(b) In consideration of and as compensation for your
services as a consultant and advisor to the Company hereunder,
and your agreement not to compete with the Company as set forth
herein, during the Consulting Period the Company will pay to you
in equal monthly installments a consulting fee at a rate of
$50,000 per annum. The Company shall not be obligated to make
such payments in respect of any period following the Employment
Period if you continue to be actively employed by the Company or
any subsidiary or affiliate after the Employment Period. During
the Consulting Period the Company shall provide to you the
benefits described in paragraph 1 (other than the base salary,
bonus, long-term incentive and other cash compensation elements
referred to therein), including office space, equipment and
furnishings and a full-time secretary, selected by you, at the
expense of the Company in quarters agreed upon by you and the
Company. The Company's obligations to pay the consulting fee and
benefits provided for by this paragraph 2(b) shall be expressly
contingent upon, and subject to, your observance of, and
substantial compliance with, all of the terms and provisions
hereof.
3. You agree that during the Employment Period and
the Consulting Period, and any additional period during which you
are employed by or act as a consultant to the Company or any
subsidiary or affiliate, except with the prior written consent of
the Company, you will not in any way, directly or indirectly,
own, manage, operate, control, accept employment or a consulting
position with, or otherwise advise or assist or be actively
connected with or have any financial interest in, directly or
indirectly, any enterprise which engages in, or otherwise carries
on, any business activity in competition with the business of the
Company in any geographic area in which it engages in such
business. You further agree that during the Employment Period,
the Consulting Period, and any additional period during which you
are employed by the Company or any subsidiary or an affiliate
and, in any event, until the sixth anniversary of the Effective
Time, subject to the foregoing, you will not take any action
which might divert from the Company or any of its subsidiaries or
affiliates, successors or assigns any opportunity which would be
within the scope of its or their respective present or future
operations or business. It is understood that ownership of not
more than one percent (1%) of the equity securities of a public
company shall in no way be prohibited pursuant to the foregoing
provisions.
4. Notwithstanding any of the foregoing provisions of
this Agreement, the Company may terminate your duties and
services hereunder during the term hereof and discharge you (i)
in the event of a breach of this Agreement by you in any material
respect as determined by the affirmative vote of two-thirds of
the membership of the Company's Board of Directors ("Board"),
provided that the Board shall have given you written notice of
such breach, and you shall have failed to remedy such breach
within thirty (30) days of receipt of such notice, (ii) for
cause, upon the affirmative vote of two-thirds of the membership
of the Board (cause, for purposes of this Agreement, shall mean
persistent incompetence, willful misconduct, dishonesty or
conviction of a felony), or (iii) upon the affirmative vote of
two-thirds of the membership of the Board, provided, in the case
of (iii), the Company shall be obligated to make the salary
payments to and provide the other benefits provided for by
F-1-3
paragraph 1(b) through the remainder of the Employment Period and
the salary payments and other benefits provided for by paragraph
2(b) through the remainder of the Consulting Period
notwithstanding such termination. Your duties and services
hereunder shall terminate in the event of your death or your
physical inability to perform the services required to be
performed by you hereunder, provided such inability shall have
persisted for a continuous period of 270 days. Should your
services be terminated by reason of your breach of this
Agreement, or for cause, the Company shall pay to you your salary
or consulting fee, as the case may be, only through the end of
the calendar month in which such termination occurs, and if your
services are terminated by reason of your death prior to the
Retirement Date or your physical inability to preform the
services required to be performed by you hereunder, your salary
hereunder shall terminate on the date benefits in respect of your
death or physical disability are made available to your estate or
personal representative under the Company's benefit plans.
In the event of a breach of the Agreement by the
Company in any material respect, such breach shall be deemed to
constitute a constructive termination of your employment in
contravention of this Agreement, qualifying you for payment
pursuant to paragraph 4(iii) above and such other remedies as are
available in law or in equity; provided, however, that you shall
have given the Board of the Company written notice of such
breach, and the Board shall have failed to cause the Company to
remedy such breach within thirty (30) days of receipt of such
notice.
5. It is understood and agreed that the services to
be rendered under this Agreement by you are special, unique and
of an extraordinary character, and, more particularly, that in
the event of any breach or threatened breach by you of the
provisions of paragraph 3 hereof, the Company shall have no
adequate remedy in law. Consequently, in the event of a breach
or threatened breach by you of the provisions of paragraph 3
hereof, in addition to the Company's right to terminate this
Agreement pursuant to paragraph 4 hereof, the Company shall be
entitled to an injunction restraining you from any such breach or
threatened breach.
6. Any paragraph, sentence, phrase or other provision
of this Agreement which is in conflict with any applicable
statute, rule or other law shall be deemed, if possible, to be
modified or altered to conform thereto or, if not possible, to be
omitted herefrom. The invalidity of any portion hereof shall not
affect the force and effect of the remaining valid portions
hereof.
7. This Agreement is governed by and is to be
construed in accordance with the substantive law (and not the
choice of law rules) of the State of Iowa. This Agreement (and
the Merger Agreement at Section 7.12 and Exhibit F-3) constitutes
the entire understanding between you and the Company with respect
to the subject matter contained herein and, except as otherwise
set forth in this paragraph 7, supersedes and cancels any and all
prior written or oral understandings and agreements with respect
to such matters, including the employment agreement dated March
15, 1990. It is understood and agreed that the Merger of Midwest
Resources Inc., Midwest Power Systems Inc. and Iowa-Illinois Gas
and Electric Company into the Company ("Merger") as contemplated
F-1-4
in the Merger Agreement shall not constitute a Change in Control
for purposes of the Agreement between you and Midwest Resources
Inc., as successor to Midwest Energy Company, dated April 19,
1989 ("MWE Agreement") only, and that notwithstanding the
foregoing, the MWE Agreement shall remain in full force and
effect in accordance with the terms thereof with respect to any
event, transaction or circumstance other than the Merger.
8. Any notice or other communication required or
permitted under this Agreement shall be effective only if it is
in writing and delivered personally or sent by registered or
certified mail, postage prepaid, or sent by an overnight delivery
service, addressed as follows:
If to the Company:
MidAmerican Energy Company
666 Grand Avenue
Des Moines, IA 50306-9244
If to you:
Mr. Russell E. Christiansen
666 Grand Avenue
Des Moines, IA 50306-9244
or to such other address as either party may designate by notice
to the other, and shall be deemed to have been given upon
receipt.
9. This Agreement may be amended only by an
instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement
of such waiver is sought. The failure of either party hereto at
any time to require the performance by the other party hereto of
any provision hereof shall in no way affect the full right to
require such performance at any time thereafter, nor shall the
waiver by either party hereto of a breach of any provision hereof
be taken or held to be a waiver of any succeeding breach of such
provision or a waiver of the provision itself or a waiver of any
other provision of this Agreement.
10. This Agreement is binding on and is for the
benefit of the parties hereto and their respective successors,
heirs, executors, administrators and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may
be assigned by the Company or by you.
11. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
F-1-5
12. This Agreement shall have no force and effect
unless and until the Effective Time.
Very truly yours,
MIDAMERICAN ENERGY COMPANY
By /s/ STANLEY J. BRIGHT
Stanley J. Bright
President, Office of the
Chief Executive Officer
Accepted and agreed to as
of the date first written
above.
/s/ RUSSELL E. CHRISTIANSEN
Russell E. Christiansen
F-1-6
EXHIBIT A
RESPONSIBILITIES OF CHAIRMAN, OFFICE OF THE CEO
Shareholder Meetings
Meetings of the Board of Directors and Committees of
the Board. (The Chairman would preside and the
President would have a principal presentation role.)
Agenda setting for board and board committee
meetings to be done by the Chairman, Office of the
CEO, with concurrence of the President, Office of
the CEO.
Committees of the Board
Executive (Chairman, Office of the CEO, to
serve as chairman; President, Office of the
CEO, to serve as vice chairman.)
Nominating
Finance (Chairman, Office of the CEO, and
President, Office of the CEO, to be members.)
Audit
Management Development and Compensation
Strategic Planning (President, Office of the
CEO, to serve as chairman)
Corporate Charter and By Law Revisions
Major Economic Development Initiatives
Major Governmental or Regulatory Initiatives and
programs undertaken by the Company at the federal,
state or local level.
Major Industry Initiatives
F-1-7
July __, 1994 EXHIBIT F-2
Mr. Stanley J. Bright
206 East Second Street
Davenport, IA 52801
Dear Mr. Bright:
Pursuant to the Agreement and Plan of Merger ("Merger
Agreement") dated as of July 26, 1994, by and among Midwest
Resources Inc., Midwest Power Systems Inc., Iowa-Illinois Gas and
Electric Company and MidAmerican Energy Company ("Company"),
Midwest Resources Inc., Midwest Power Systems Inc. and Iowa-
Illinois Gas and Electric Company will be merged into the
Company. In recognition of the value of your past services to
Iowa-Illinois Gas and Electric Company and its subsidiaries, and
in anticipation of your contribution to the future growth and
success of the Company and its subsidiaries, the Company wishes
to provide itself and its subsidiaries the continuing benefits of
your services as a senior executive officer of the Company and
its subsidiaries on the terms and conditions set forth below.
This letter sets forth our agreement with respect to
your employment with the Company and its subsidiaries during the
period commencing on the Effective Time (as defined in the Merger
Agreement) and ending on the fifth anniversary of the Effective
Time (such period herein referred to as the "Employment Period").
1. (a) If the Effective Time occurs (i) on or before
May 31, 1995, then during the periods commencing on (x) the
Effective Time and ending on May 31, 1996, you shall serve as
President of the Company ("President") and President, Office of
the Chief Executive Officer of the Company performing those
responsibilities set forth on Exhibit A attached hereto, (y)
June 1, 1996 and ending on May 31, 1997, you shall serve as
President and Chief Executive Officer of the Company and (z) June
1, 1997 and ending on the fifth anniversary of the Effective
Time, you shall service as Chairman of the Board of Directors of
the Company ("Chairman") and Chief Executive Officer of the
Company, (ii) between June 1, 1995 and May 31, 1996, then during
the periods commencing on (x) the Effective Time and ending on
the first anniversary of the Effective Time, you shall serve as
President and President, Office of the Chief Executive Officer of
the Company and (y) the first anniversary of the Effective Time
and ending on May 31, 1997, you shall serve as President and
Chief Executive Officer of the Company and (z) June 1, 1997 and
ending on the fifth anniversary of the Effective Time, you shall
serve as Chairman and Chief Executive Officer of the Company, or
(iii) after May 31, 1996, then commencing on (x) the Effective
Time and ending on the first anniversary of the Effective Time,
you shall serve as President and President, Office of the Chief
Executive Officer of the Company and (y) the first anniversary of
the Effective Time and ending on the fifth anniversary of the
Effective Time, you shall serve as Chairman and Chief Executive
Officer of the Company. Any service required to be performed by
you hereunder shall be of the type usually performed by the
officer holding such title at a major public company. Your
F-2-1
duties and services generally shall be performed by you on
regular business days during normal business hours, and you agree
to be present in Des Moines, Iowa, as required and for as much
time as is necessary to perform your duties and services for the
business of the Company and its subsidiaries. You shall be
entitled to vacation in accordance with the policy from time to
time in effect for senior executive officers of the Company and
its subsidiaries with credit for past service with Iowa-Illinois
Gas and Electric Company and its subsidiaries. During the
Employment Period you shall be reimbursed by the Company in
accordance with the Company's policy from time to time in effect
for any expenses commensurate with your position which you may
reasonably incur in the performance of your duties and services
hereunder and which are properly substantiated.
(b) In consideration of and as compensation for your
services hereunder and your agreement not to compete with the
Company as set forth herein, during the Employment Period the
Company will pay to you, while serving as President and
President, Office of the Chief Executive Officer, in equal
installments with the same frequency as for other executives of
the Company, but at least monthly, a base salary at the annual
rate of not less than $350,000, such base salary to be subject to
adjustment during the Employment Period in accordance with the
Company's policy for executives. At such time as you shall serve
as President and Chief Executive Officer of the Company in
accordance with paragraph 1(a), you will be paid a base salary
not less than the base salary paid the Chairman. In addition to
such salary, you shall be eligible to receive, as additional
compensation, appropriate management bonuses, long-term incentive
awards and such other compensation elements as are applicable, in
amounts not less than those paid or accrued for the Chairman of
the Company, in relation to the achievement by the Company and
its subsidiaries of corporate goals and objectives and the
Company will provide to you all other benefits accorded to full-
time senior executive employees of the Company from time to time,
provided that such benefits shall be not less in the aggregate
than those in effect at Midwest Resources Inc., Midwest Power
Systems Inc. and Iowa-Illinois Gas and Electric Company as of the
Effective Time. The Company's obligations to make the salary
payments and to provide the other benefits provided for by this
paragraph 1(b) shall be expressly contingent upon, and subject
to, your observance of, and substantial compliance with, all of
the terms and provisions thereof.
2. You agree that during the Employment Period, and
any additional period during which you are employed by or act as
a consultant to the Company or any subsidiary or affiliate,
except with the prior written consent of the Company, you will
not in any way, directly or indirectly, own, manage, operate,
control, accept employment or a consulting position with or
otherwise advise or assist or be actively connected with, or have
any financial interest in , directly or indirectly, any
enterprise which engages in, or otherwise carries on, any
business activity in competition with the business of the Company
in any geographic area in which it engages in such business. You
further agree that during the Employment Period, and any
additional period during which you are employed by the Company or
any subsidiary or an affiliate and, in any event, until the sixth
anniversary of the Effective Time, subject to the foregoing, you
F-2-2
will not take any action which might divert from the Company or
any of its subsidiaries or affiliates, successors or assigns any
opportunity which would be within the scope of its or their
respective present or future operations or business. It is
understood that ownership of not more than one percent (1%) of
the equity securities of a public company shall in no way be
prohibited pursuant to the foregoing provisions.
3. Notwithstanding any of the foregoing provisions of
this Agreement, the Company may terminate your duties and
services hereunder during the term hereof and discharge you (i)
in the event of a breach of this Agreement by you in any material
respect as determined by the affirmative vote of two-thirds of
the membership of the Company's Board of Directors ("Board"),
provided that the Board shall have given you written notice of
such breach, and you shall have failed to remedy such breach
within thirty (30) days of receipt of such notice, (ii) for
cause, upon the affirmative vote of two-thirds of the membership
of the Board (cause, for purposes of this Agreement, shall mean
persistent incompetence, willful misconduct, dishonesty or
conviction of a felony), or (iii) upon the affirmative vote of
two-thirds of the membership of the Board, provided, in the case
of (iii), the Company shall be obligated to make the salary
payments to and provide the other benefits provided for by
paragraph 1(b) through the remainder of the Employment Period
notwithstanding such termination. Your duties and services
hereunder shall terminate in the event of your death or your
physical inability to perform the services required to be
performed by you hereunder, provided such inability shall have
persisted for a continuous period of 270 days. Should your
services be terminated by reason of your breach of this
Agreement, or for cause, the Company shall pay to you your salary
only through the end of the calendar month in which such
termination occurs, and if your services are terminated by reason
of your death or your physical inability to perform the services
required to be performed by you hereunder prior to the Retirement
Date, your salary hereunder shall terminate on the date benefits
in respect of your death or physical disability are made
available to your estate or personal representative under the
Company's benefit plans.
In the event of a breach of this Agreement by the
Company in any material respect, such breach shall be deemed to
constitute a constructive termination of your employment in
contravention of this Agreement, qualifying you for payment
pursuant to paragraph 3(iii) above and such other remedies as are
available in law or in equity; provided, however, that you shall
have given the Board of the Company written notice of such
breach, and the Board shall have failed to cause the Company to
remedy such breach within thirty (30) days of receipt of such
notice.
4. It is understood and agreed that the services to
be rendered under this Agreement by you are special, unique and
of an extraordinary character, and, more particularly, that in
the event of any breach or threatened breach by you of the
provisions of paragraph 2 hereof, the Company shall have no
adequate remedy in law. Consequently, in the event of a breach
or threatened breach by you of the provisions of paragraph 2
hereof, in addition to the Company's right to terminate this
Agreement pursuant to paragraph 3 hereof, the Company shall be
entitled to an injunction restraining you from any such breach or
threatened breach.
F-2-3
5. Any paragraph, sentence, phrase or other provision
of this Agreement which is in conflict with any applicable
statute, rule or other law shall be deemed, if possible, to be
modified or altered to conform thereto or, if not possible, to be
omitted herefrom. The invalidity of any portion hereof shall not
affect the force and effect of the remaining valid portions
hereof.
6. This Agreement is governed by and is to be
construed in accordance with the substantive law (and not the
choice of law rules) of the State of Iowa. This Agreement (and
the Merger Agreement at Section 7.12 and Exhibit F-3) constitutes
the entire understanding between you and the Company with respect
to the subject matter contained herein and, except as otherwise
set forth in this paragraph 6, supersedes and cancels any and all
prior written or oral understandings and agreements with respect
to such matters.
7. Any notice or other communication required or
permitted under this Agreement shall be effective only if it is
in writing and delivered personally or sent by registered or
certified mail, postage prepaid, or sent by an overnight delivery
service, addressed as follows:
If to the Company:
MidAmerican Energy Company
666 Grand Avenue
Des Moines, Iowa 50306-9244
If to you:
Mr. Stanley J. Bright
206 East Second Street
Davenport, IA 52808
or to such other address as either party may designate by notice
to the other, and shall be deemed to have been given upon
receipt.
8. This Agreement may be amended only by an
instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement
of such waiver is sought. The failure of either party hereto at
any time to require the performance by the other party hereto of
any provision hereof shall in no way affect the full right to
require such performance at any time thereafter, nor shall the
waiver by either party hereto of a breach of any provision hereof
be taken or held to be a waiver of any succeeding breach of such
provision or a waiver of the provision itself or a waiver of any
other provision of this Agreement.
9. This Agreement is binding on and is for the
benefit of the parties hereto and their respective successors,
heirs, executors, administrators and other legal representatives.
Neither this Agreement nor any right or obligation hereunder may
be assigned by the Company or by you.
F-2-4
10. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
11. This Agreement shall have no force and effect
unless and until the Effective Time.
Very truly yours,
MIDAMERICAN ENERGY COMPANY
By: /s/ RUSSELL E. CHRISTIANSEN
Russell E. Christiansen
Chairman, Office of the
Chief Executive Officer
Accepted and agreed to as
of the date first written
above:
/s/ STANLEY J. BRIGHT
Stanley J. Bright
F-2-5
EXHIBIT A
RESPONSIBILITIES OF PRESIDENT, OFFICE OF THE CEO:
Development of Strategic Alternatives and Merger
Implementation
All Operating Functions
Financial Management
Budgeting, Financial Planning and Financial
Analysis
Treasury Functions
Finance, including relationships with
Institutional Investors, Analysts and other
shareholders; Investment Banking Relationships and
Dealing with Credit Rating Agencies
Dealings with External Auditors
Accounting, Financial Reporting, and Taxation
Legal Affairs
Corporate Development
Rates and Regulatory Matters
Governmental Affairs
Marketing and Economic Development
Human Resources
Other Administrative Functions (e.g., Purchasing and
Management Information Services)
F-2-6
EXHIBIT F-3
OFFICE OF THE CEO
_________________________________
| |
| CHAIRMAN |
| |
| PRESIDENT |
|_______________________________|
|
|
________________________|_________________________
| |
| SENIOR OPERATING AND STAFF OFFICERS |
|________________________________________________|
Office of the Chief Executive Officer:
Upon approval of the merger of Midwest Resources Inc., Midwest
Power Systems Inc. and Iowa-Illinois Gas and Electric Company
into the Company, the Office of the Chief Executive Officer would
be formed, composed of the CEO of Midwest Resources Inc. and the
CEO of Iowa-Illinois Gas and Electric Company. If the Effective
Time occurs (i) on or before May 31, 1995, then during the
periods commencing on (x) the Effective Time and ending on May
31, 1996, Russell E. Christiansen shall serve as Chairman of the
Board of Directors of the Company ("Chairman") and Chairman,
Office of the Chief Executive Officer of the Company and Stanley
J. Bright shall serve as President of the Company ("President")
and President, Office of the Chief Executive Officer of the
Company and (y) June 1, 1996 and ending on May 31, 1997, Russell
E. Christiansen shall serve as Chairman and Stanley J. Bright
shall serve as President and Chief Executive Officer, (ii)
between June 1, 1995 and May 31, 1996, then during the period
commencing on (x) the Effective Time and ending on the first
anniversary of the Effective Time, Russell E. Christiansen shall
serve as Chairman and Chairman, Office of the Chief Executive
Officer of the Company and Stanley J. Bright shall serve as
President and President, Office of the Chief Executive Officer of
the Company and (y) the first anniversary of the Effective Time
and ending on May 31, 1997, Russell E. Christiansen shall serve
as Chairman and Stanley J. Bright shall serve as President and
Chief Executive Officer or (iii) after May 31, 1996, then
commencing on the Effective Time and ending on the first
anniversary of the Effective Time, Russell E. Christiansen shall
serve as Chairman and Chairman, Office of the Chief Executive
Officer of the Company and Stanley J. Bright shall serve as
President and President, Office of the Chief Executive Officer of
the Company. At such time as Russell E. Christiansen retires as
Chairman (which shall be the later of May 31, 1997 or one year
after the Effective Time), then Stanley J. Bright shall become
Chairman.
F-3-1
General Policy:
During the period the Office of the CEO exists, the Chairman
and the President would confer on all matters of importance. In
general, the Chairman would have the primary responsibility for
matters relating to Corporate Governance and the President would
have the primary responsibility for Strategic Direction and
Executive Management. However, the Chairman would participate
fully in the development of alternatives leading to major
decisions having strategic importance. As a general guideline,
the following chart sets forth the primary respective
responsibilities of the Chairman and the President. The term
"primary," as used in this context, refers to the officer having
the principal decision-making role with respect to issues
relating to such responsibility, it being understood that the
Chairman and the President would confer on major decisions.
Senior operating and staff officer appointments or other officer
appointments would be approved by the Board of Directors upon the
recommendation of the President with the concurrence of the
Chairman. Other executive appointments would be made by the
President.
F-3-2
EXHIBIT F-3
Corporate Governance:
(Responsibilities of Chairman, Office of the CEO)
Shareholder Meetings
Meetings of the Board of Directors and Committees of
the Board. (The Chairman would preside and the
President would have a principal presentation role.)
Agenda setting for board and board committee
meetings to be done by the Chairman, Office of the
CEO, with concurrence of the President, Office of
the CEO.
Committees of the Board
Executive (Chairman, Office of the CEO, to
serve as chairman; President, Office of the
CEO, to serve as vice chairman.)
Nominating
Finance (Chairman, Office of the CEO, and
President, Office of the CEO, to be members.)
Audit
Management Development and Compensation
Strategic Planning (President, Office of the
CEO, to serve as chairman)
Corporate Charter and By Law Revisions
Major Economic Development Initiatives
Major Governmental or Regulatory Initiatives and
programs undertaken by the Company at the federal,
state or local level.
Major Industry Initiatives
F-3-3
EXHIBIT F-3
Executive Management of Electric and Gas Utility Operations and
non-regulated businesses.
(Responsibilities of President, Office of the CEO):
Development of Strategic Alternatives and Merger
Implementation
All Operating Functions
Financial Management
Budgeting, Financial Planning and Financial
Analysis
Treasury Functions
Finance, including relationships with
Institutional Investors, Analysts and other
shareholders; Investment Banking Relationships and
Dealing with Credit Rating Agencies
Dealings with External Auditors
Accounting, Financial Reporting, and Taxation
Legal Affairs
Corporate Development
Rates and Regulatory Matters
Governmental Affairs
Marketing and Economic Development
Human Resources
Other Administrative Functions (e.g., Purchasing and
Management Information Services)
F-3-4
EXHIBIT G
SEVERANCE PLAN FOR SPECIFIED OFFICERS
1. Purpose
The purpose of this Severance Plan is to encourage the
continued attention and dedication of the Specified Officers to
their assigned duties, without distraction, in the face of the
potentially disruptive circumstances that accompany a merger of
companies.
2. Qualification for Severance Benefits
A Specified Officer shall be entitled to receive
Severance Benefits if, during the Term of the Severance Plan,
such Specified Officer incurs a Qualifying Termination. No
Severance Benefits shall become due or payable unless and until
the occurrence of such Qualifying Termination. At the time of a
Qualifying Termination, a Specified Officer eligible for
severance benefits under both this Plan and the Severance Plan In
The Event Of A Change In control of Iowa-Illinois shall elect
coverage under one of the two Plans, but not both.
3. Specified Officers
The position titles of the persons who are potentially
eligible to receive benefits under this Severance Plan are set
forth in Appendix I, attached hereto and incorporated herein.
Persons occupying these positions are herein referred as
"Specified Officers."
4. Qualifying Termination
For the purpose of this Severance Plan, a "Qualifying
Termination" shall mean a termination of employment of a
Specified Officer occurring within the Term of this Severance
Plan either (a) involuntarily for any reason (except in the
instance of a felony as provide in this Section) or (b)
voluntarily if the Specified Officer has furnished the President
of the Company with six (6) months prior written notice of the
intent to voluntarily terminate employment.
Termination of employment due, in whole or in part, to
the commission of a felony by a Specified Officer shall not
constitute a Qualifying Termination under this Severance Plan.
All Severance Benefits for a Specified Officer charged with a
felony shall be suspended until such time as the felony charge is
finally disposed. Conviction of a felony or a plea of no contest
to a felony charge shall be sufficient to disqualify the
Specified Officer for Severance Benefits.
G-1
5. Severance Benefits
For the purpose of this Severance Plan, "Severance
Benefits" shall mean:
a. an amount equal to two (2) times the Specified
Officer's highest Total Cash Compensation, said
amount to be paid in a lump sum on the effective
date of his/her Qualifying Termination (except in
the circumstance of a felony charge as provided
above); and
b. the Specified Officer's accrued vacation pay
through the effective date of his/her Qualifying
Termination, said amount to be paid in a lump sum
on the effective date of such Qualifying
Termination (except in the circumstance of a
felony charge as provided above); and
c. a continuation of the welfare benefits of health
insurance, disability insurance, and group term
life insurance for twenty-four (24) full calendar
months after the effective date of the Specified
Officer's Qualifying Termination, at the same
premium cost and at the same coverage level as in
effect on such effective date; provided, however,
in the event the premium cost and/or coverage
level shall change at any time during the twenty-
four (24) month period for all welfare benefit
participants, then the premium cost and/or
coverage level likewise shall change for such
Specified Officer in a corresponding manner; and
d. standard outplacement services from a nationally
recognized firm of the Specified Officer's
selection for a period up to twenty-four (24) full
calendar months after the effective date of the
Qualifying Termination or until such Specified
Officer obtains employment, whichever is less.
The cost of such services shall not exceed twenty
percent (20%) of the Specified Officer's Total
Cash Compensation.
6. Term
This Severance Plan shall be effective for a term
commencing at the Effective Time (as defined in the Agreement and
Plan of Merger by and among Midwest Resources Inc., Midwest Power
Systems Inc., Iowa-Illinois Gas and Electric Company and
MidAmerican Energy Company ("Company")) and terminating two (2)
years thereafter. The Plan shall not be amended during its term
except with the written consent of all Specified Officers.
7. Total Cash Compensation
The term "Total Cash Compensation" shall mean the
amount payable to a Specified Officer by the Company or its
predecessors as annual salary and Bonus, without regard to
deferrals. For the purpose of this Plan, "Bonus" shall mean the
larger of (i) the three-year average of bonuses actually paid to
the Specified Officer or (ii) the three-year average of accruals
G-2
to the account of the Specified Officer under any incentive
compensation plan. In the event that less than three years of
payments or accruals have occurred, then the average of any
payments or accruals, respective, shall be used.
8. Taxes
A. The corporation paying the Severance Benefits
shall be entitled to withhold all Federal, state,
city, or other taxes legally required, subject to
subparagraphs B, C and D hereof.
B. In the event any of the Severance Benefits payable
to a Specified Officer are subject to the tax
("Excise Tax") imposed by Section 4999 of the
Internal Revenue Code of 1986 (or any similar tax
that may hereafter be imposed) ("Code"), the
corporation paying such Severance Benefits shall
pay to the Specified Officer in cash an additional
amount ("Gross-Up Payment") such that the net
amount retained by the Specified Officer after
deduction of any Excise Tax payable on the
Severance Benefits and any Federal, state, and
local income tax and Excise Tax payable upon the
Gross-Up Payment shall be equal to the Severance
Benefits. Such Gross-Up Payment shall be made by
the corporation to the Specified Officer on the
effective date of his/her Qualifying Termination.
C. For the purpose of determining whether any of the
Severance Benefits will be subject to the Excise
Tax and the amount of such Excise Tax:
(a) any other payments of benefits received or to
be received by a Specified Officer in
connection with his/her termination of
employment (whether pursuant to the terms of
this Plan or any other plan, arrangement, or
agreement) shall be treated as "parachute
payments" within the meaning of
Section 280G(b)(2) of the Code, and all
"excess parachute payments" within the
meaning of Section 280(G)(b)(1) shall be
treated as subject to the Excise Tax, unless
in the opinion of tax counsel, selected by
such Specified Officer, such other payments
or benefits (in whole or in part) do not
constitute parachute payments, or that such
excess parachute payments (in whole or in
part) represent reasonable compensation for
services actually rendered within the meaning
of Section 280G(b)(4) in excess of the base
amount within the meaning of Section
280G(b)(3), or are otherwise not subject to
the Excise Tax; and
(b) the amount of Severance Benefits which shall
be treated as subject to the Excise Tax shall
be equal to the lesser of: (i) the total
amount of Severance Benefits; or (ii) the
amount of excess parachute payments within
G-3
the meaning of Section 280G(b)(1) of the Code
(after applying clause (a) above; and
(c) the value of any noncash benefits or any
deferred payment or benefit shall be
determined by the independent auditors of the
corporation paying such Severance Benefits in
accordance with the principles of Sections
280G(d) of the Code and applicable
regulations.
For the purpose of determining the amount of
the Gross-Up Payment, the Specified Officer shall
be deemed to pay Federal income taxes at the
highest marginal rate of Federal income taxation
in the calendar year in which such Gross-Up
Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in
the state and locality of the Specified Officer's
residence on the effective date of his/her
Qualifying Termination, net of the maximum
reduction in Federal income taxes which could be
obtained from deduction of such state and local
taxes.
D. In the event the Internal Revenue Service adjusts
the computations under paragraph C hereof such
that the Specified Officer does not receive the
maximum Severance Benefits (including Gross-Up
Payment) permitted by this Plan, the corporation
paying such Severance Benefits shall reimburse the
Specified Officer for the full amount necessary to
make him/her whole, plus interest from the date
such additional Severance Benefits became due to
the date of such payment at the prime rate as may
be established by The First National Bank of
Chicago from time-to-time.
9. Employment Status
In no event shall any Specified Officer be obligated to
seek other employment or to take other action by way of
mitigation of the amounts payable to such Officer under the
provisions of this Severance Plan, nor shall the amount of any
payment hereunder be reduced by any compensation earned by such
Specified Officer as a result of employment by another employer.
Nothing herein contained shall be deemed to create an
employment agreement with the Specified Officer providing for the
employment of such Specified Officer for any fixed period of
time.
10. Other Benefits
Neither the provisions of this Severance Plan nor the
right to receive Severance Benefits shall reduce any amounts
otherwise payable to any Specified Officer or in any way diminish
his/her rights under any benefit, bonus, incentive, stock option,
G-4
stock bonus or other stock purchase plan, or any employee
agreement, or any other plan, program, policy or practice for
which the Specified Officer may qualify. Vested benefits and
other amounts which the Specified Officer is otherwise entitled
to receive under any plan, program, policy or practice at or
subsequent to the effective date of such Specified Officer's
Qualifying Termination shall be payable in accordance with such
plan, program, policy or practice.
11. Contractual Rights
This Plan establishes in each Specified Officer a right
to the benefits to which he or she is entitled hereunder. This
Plan shall inure to the benefit of, and be enforceable by, each
Specified Officer's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If a Specified Officer dies while any Severance
Benefits would still be payable to him/her under this Severance
Plan, all such unpaid amounts shall be paid to such Specified
Officer's designated beneficiaries or, in the absence thereof, to
such Specified Officer's estate.
12. No Separate Fund Required
Nothing herein contained shall require or be deemed to
require, or prohibit or be deemed to prohibit, that the Company
segregate or otherwise set aside any funds or other assets, in
trust or otherwise, to provide for the payment of Severance
Benefits.
13. Legal Remedies
A. To the extent permitted by law, the corporation
obligated to pay any Severance Benefits shall pay
all legal fees, cost of litigation, prejudgment
interest, and other expenses incurred in good
faith by each Specified Officer as a result of
such corporation's refusal to provide the
Severance Benefits to which the Specified Officer
becomes entitled under this Plan, or as a result
of such corporation's contesting the validity,
enforceability, or interpretation of this Plan, or
as a result of any conflict pertaining of this
Plan.
B. Each Specified Officer shall have the right and
option to elect (in lieu of litigation) to have
any dispute or controversy arising under or in
connection with this Plan settled by arbitration
conducted by an arbitrator in accordance with the
rules of the American Arbitration Association then
in effect. A Specified Officer's election to
arbitrate and the decision of the arbitrator in
that proceeding shall be binding on the parties to
such arbitration.
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Judgement may be entered on the award of the
arbitrator in any court having jurisdiction. All
expenses of such arbitration, including the fees
and expenses of the counsel for the Specified
Officer, shall be borne by the corporation which
is the party to the arbitration.
14. Severability
In the event any provision of this Severance Plan shall
be held illegal or invalid for any reason, such illegality or
invalidity shall not effect the remaining parts of this Plan, and
this Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
15. Captions
The captions of this Severance Plan are not a part of
the provisions hereof and shall have no force and effect.
16. Applicable Law
This Severance Plan shall be interpreted in accordance
with the laws of the State of Iowa.
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APPENDIX I
Specified Officers
A. Specified Officers of Midwest Resources Inc. and Midwest
Power Systems Inc.
1. Richard C. Engle
2. Lynn K. Vorbrich
3. Beverly A. Wharton
4. Philip G. Lindner
5. John A. Rasmussen
B. Specified Officers of Iowa-Illinois Gas and Electric
Company.
1. Stephen E. Shelton
2. Ronald W. Stepien
3. Lance E. Cooper
4. Donald C. Heppermann
5. Brent E. Gale
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