SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
WPL Holdings, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
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4) Proposed maximum aggregate value of transaction:
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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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[LOGO]
WPL HOLDINGS, INC.
222 WEST WASHINGTON AVENUE P. O. BOX 2568 MADISON WI
53701-2568 PHONE: 608/252-4888
MARCH 29, 1994
TO THE OWNERS OF WPL HOLDINGS, INC.:
We extend a cordial invitation to you to join us at the 1994 Annual Meeting
of Shareowners. The meeting will be held at the Dane County Coliseum, 1881 Expo
Mall, Madison, Wisconsin, on May 18, 1994, directly following the 10:00 a.m.
Annual Meeting of Shareowners of Wisconsin Power and Light Company. To help with
directions, a map showing the location of the meeting site is on the last page
of this document. Parking will be available at no cost. If you plan to join us,
please indicate the names of the individuals who will be attending on the
enclosed proxy card reservation form.
WPL Holdings, Inc. (the Company) and Wisconsin Power and Light Company
(WP&L), a subsidiary of the Company, will be holding separate shareowner
meetings. If you are a shareowner of the Company and a preferred shareowner of
Wisconsin Power and Light, you will receive two Notices of Annual Meetings and
Proxy Statements and two proxy cards, one for each company. If you are a
shareowner of both companies, you will have to return BOTH cards to vote all
your shares.
The enclosed Notice of Annual Meeting and Proxy Statement sets forth the
items to be considered at the meeting of the Company. There will also be
informative reports on the affairs of the Company, WP&L, and Heartland
Development Corporation, after which shareowners will be given the opportunity
to ask questions and make comments. A lunch will be served following the
meeting.
It is important to your interests, and also is helpful to the directors of
the Company, that all shareowners participate in the affairs of the Company,
regardless of the number of shares owned. Whether or not you plan to attend the
meeting, please sign and date the enclosed proxy card and return it in the
postage paid envelope. You may, of course, still vote your shares in person at
the meeting even if you have previously returned your proxy.
Your participation in person or by proxy is very important.
Sincerely,
ERROLL B. DAVIS, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
WPL HOLDINGS, INC.
ANNUAL MEETING OF SHAREOWNERS
DATE: MAY 18, 1994
TIME: DIRECTLY FOLLOWING THE 10:00 a.m. ANNUAL MEETING OF
SHAREOWNERS OF WISCONSIN POWER AND LIGHT COMPANY
LOCATION: Dane County Coliseum
(See map printed on the
last page of the Proxy Statement)
SHAREOWNER INFORMATION NUMBERS
LOCAL CALLS (MADISON AREA) ................ 252-3110
TOLL FREE NUMBER .................... 1-800-356-5343
[LOGO]
WPL HOLDINGS, INC.
222 WEST WASHINGTON AVENUE P. O. BOX 2568 MADISON WI 53701-2568 PHONE:
608/252-4888
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
DIRECTLY FOLLOWING THE 10:00 A.M. ANNUAL MEETING OF SHAREOWNERS
OF WISCONSIN POWER AND LIGHT COMPANY, MAY 18, 1994
The Annual Meeting of Shareowners of WPL Holdings, Inc. (the Company) will
be held at the Dane County Coliseum, 1881 Expo Mall, Madison, Wisconsin, on May
18, 1994, directly following the 10:00 a.m., local time, Annual Meeting of
Shareowners of Wisconsin Power and Light Company, for the following purposes:
(1) To elect a total of eight directors, four for terms expiring at the 1997
Annual Meeting of Shareowners, two for terms expiring at the 1996 Annual
Meeting of Shareowners, and two for terms expiring at the 1995 Annual
Meeting of Shareowners.
(2) To appoint Arthur Andersen & Co. as independent auditors for the
calendar year 1994.
(3) To consider and vote upon a proposal to adopt the WPL Holdings, Inc.
Long-Term Equity Incentive Plan.
(4) To consider and act upon any other business that may properly come
before the meeting.
The Board of Directors of the Company presently knows of no other business
to come before the meeting.
Only the holders of common stock of record on the books of the Company at
the close of business on March 22, 1994, are entitled to vote at the meeting.
All such shareowners are requested to be present at the meeting in person or by
proxy, so that the presence of a quorum may be assured.
PLEASE SIGN AND RETURN YOUR PROXY IMMEDIATELY. IF YOU ATTEND THE MEETING,
YOU MAY WITHDRAW YOUR PROXY AT THE REGISTRATION DESK AND VOTE IN PERSON. ALL
SHAREOWNERS ARE URGED TO RETURN THEIR PROXIES PROMPTLY.
Your proxy covers all of your shares of common stock of the Company. For
present or past employees of the Company or Wisconsin Power and Light Company,
your proxy includes any shares held for your account under the Company's
Dividend Reinvestment and Stock Purchase Plan or credited to an account under
the Wisconsin Power and Light Company Employee Stock Ownership Plan. For shares
credited to an account under the Wisconsin Power and Light Company Employees'
Retirement Savings Plans (formerly called Employees' Long Range Savings and
Investment Plans), you will receive a form of proxy from the trustee of those
plans.
A copy of the 1993 Annual Report of the Company is enclosed.
By Order of the Board of Directors,
EDWARD M. GLEASON
VICE PRESIDENT, TREASURER AND
CORPORATE SECRETARY
WPL Holdings, Inc.
March 29, 1994
[LOGO]
WPL HOLDINGS, INC.
222 WEST WASHINGTON AVENUE P. O. BOX 2568 MADISON WI 53701-2568 PHONE:
608/252-4888
MARCH 29, 1994
------------------------
PROXY STATEMENT RELATING TO
1994 ANNUAL MEETING OF SHAREOWNERS
The purposes of the meeting are set forth in the accompanying notice. The
enclosed proxy relating to the meeting is solicited on behalf of the Board of
Directors of the Company and the cost of such solicitation will be borne by the
Company. Following the original solicitation of proxies by mail, beginning on or
about March 29, 1994, certain of the officers and regular employees of the
Company may solicit proxies by telephone, telegraph or in person, but without
extra compensation. The Company will pay to banks, brokers, nominees, and other
fiduciaries, their reasonable charges and expenses incurred in forwarding the
proxy material to their principals.
The Company is the parent holding company of Wisconsin Power and Light
Company (WP&L) and Heartland Development Corporation (HDC).
THE COMPANY WILL FURNISH WITHOUT CHARGE, TO EACH SHAREOWNER WHO IS ENTITLED
TO VOTE AT THE MEETING AND WHO MAKES A WRITTEN REQUEST, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K (NOT INCLUDING EXHIBITS THERETO), AS FILED PURSUANT
TO THE SECURITIES EXCHANGE ACT OF 1934. WRITTEN REQUESTS FOR THE FORM 10-K
SHOULD BE MAILED TO THE CORPORATE SECRETARY AT THE ADDRESS STATED ABOVE.
REORGANIZATION OF BOARD OF DIRECTORS
In February 1994, the Board of Directors of the Company determined that it
was desirable to have common nonmanagement board membership for the Company and
its principle subsidiaries, WP&L and HDC. Consequently, the Board of Directors
of the Company created five new positions on the Board of the Company and
appointed those members of the WP&L Board of Directors who were not already
members of the Board of the Company to fill the new vacancies. The newly
appointed members of the Board of the Company were appointed to the same class
as held on the Board of WP&L as it relates to the duration of their term of
office. Similar changes were made in the composition of the Boards of Directors
of WP&L and HDC so that after the reorganization the nonmanagement membership of
the Board of the Company and the Boards of WP&L and HDC were identical.
PROPOSAL #1:
ELECTION OF DIRECTORS
Eight directors are to be elected at the meeting. Les Aspin, Erroll B.
Davis, Jr., Milton E. Neshek and Carol T. Toussaint are nominees to hold office
for a term expiring at the 1997 Annual Meeting of Shareowners of the Company or
until successors have been duly elected and qualified. Katharine C. Lyall and
Henry F. Scheig are nominees to hold office for a term expiring at the 1996
Annual Meeting of Shareowners of the Company or until successors have been duly
elected and qualified. L. David Carley and Donald R. Haldeman are nominees to
hold office for a term expiring at the 1995 Annual Meeting of Shareowners or
until successors have been duly elected and qualified.
Directors will be elected by a plurality of the votes cast at the meeting
(assuming a quorum is present). Consequently, any shares not voted at the
meeting, whether due to abstentions, broker nonvotes or otherwise, will have no
impact on the election of directors. The proxies solicited may be voted for a
substitute nominee or nominees in the event that any of the nominees shall be
unable to serve, or for good reason will not serve, a contingency not now
anticipated.
Brief biographies of the director nominees and continuing directors follow.
These biographies include their age (as of March 15, 1994), an account of their
business experience, and the names of publicly-held corporations of which they
are also directors. Except as otherwise indicated, each nominee and continuing
director has been engaged in his or her present occupation for at least the past
five years.
NOMINEES
[PHOTO]
LES ASPIN
Age: 55
Served as Director since: February 1994
Annual Meeting at which nominated term of office will
expire: 1997
OTHER INFORMATION: Mr. Aspin served as Secretary of Defense under President
Clinton from January 1993 to February 1994. Prior to becoming Secretary of
Defense, Mr. Aspin served as Chairman of the House Armed Services Committee from
1985 to 1993. Mr. Aspin was a member of the U. S. House of Representatives from
1970 to 1993. Mr. Aspin is also the founder of the Wisconsin Procurement
Institute, a not-for-profit organization which assists small businesses in
developing business relationships with the Federal Government. Mr. Aspin has
served as a director of WP&L since February 1994.
2
[PHOTO]
L. DAVID CARLEY
Principal occupation: Consultant to institutions and
associations in higher education and health delivery;
financial advisor to small businesses.
Age: 65
Served as director since: February 1994
Annual Meeting at which nominated term of office will
expire: 1995
OTHER INFORMATION: Mr. Carley has served as a director of WP&L from 1975 to
1977, and again since 1983. He is also a trustee of the Kennedy Presidential
Library, and is a former trustee of Kalamazoo College. He is a past member of
the Board of Regents of the University of Wisconsin System, is a past president
of the National Association of Public Television Stations, and is a past
president of the Medical College of Wisconsin.
[PHOTO]
ERROLL B. DAVIS,
JR.
Principal occupation: President and Chief Executive
Officer of the Company; President and Chief Executive
Officer of WP&L; Chairman of the Board of HDC.
Age: 49
Served as director since: May 1982
Annual Meeting at which nominated term of office will
expire: 1997
OTHER INFORMATION: Mr. Davis was elected president of the Company in January
1990, and was elected president and chief executive officer of the Company
effective July 1, 1990. He has served as a director of WP&L since April 1984.
Mr. Davis joined WP&L in August 1978 and was elected president in July 1987. He
was elected to his current position with WP&L in August 1988. Mr. Davis was
elected chairman of the board of HDC effective July 1, 1990. Mr. Davis is a
member of the Board of Regents of the University of Wisconsin System and a
member of the Carnegie Mellon University Board of Trustees. He is a director of
the American Gas Association; Amoco Oil Company; Competitive Wisconsin, Inc.;
Sentry Insurance Company (a mutual company); the Wisconsin Utilities
Association; and director and chair of the Wisconsin Association of
Manufacturers and Commerce.
3
[PHOTO]
DONALD R. HALDEMAN
Principal occupation: Executive Vice President and Chief
Executive Officer, Rural Insurance Companies (a mutual
group), Madison, Wisconsin.
Age: 57
Served as director since: February 1994
Annual Meeting at which nominated term of office will
expire: 1995
OTHER INFORMATION: Mr. Haldeman has served as a director of Wisconsin Power and
Light Company since July 1985. Mr. Haldeman is also a director of Competitive
Wisconsin, Inc., a member of the board and chairman of the Natural Resources
Foundation of Wisconsin, Inc. He is a member of the Board of Visitors for the
University of Wisconsin-Madison School of Veterinary Medicine.
[PHOTO]
KATHARINE C. LYALL
Principal occupation: President, University of Wisconsin
System, Madison, Wisconsin.
Age: 52
Served as director since: February 1994
Annual Meeting at which nominated term of office will
expire: 1996
OTHER INFORMATION: Ms. Lyall has served as President of the University of
Wisconsin System since April 1992. Prior to becoming President, she served as
Executive Vice President of the University of Wisconsin System. Ms. Lyall has
served as a director of WP&L since October 1986. She also serves on the Board of
Directors of the Kemper National Insurance Companies and the Carnegie Foundation
for the Advancement of Teaching. She is a member of a variety of professional
and community organizations, including the American Economic Association; the
Association of American Universities (currently serving on the Executive
Committee); the Wisconsin Academy of Sciences, Arts and Letters; the American
Red Cross (Dane County); Competitive Wisconsin, Inc.; and Forward Wisconsin. In
addition to her administrative position, she is a professor of economics at the
University of Wisconsin-Madison.
4
[PHOTO]
MILTON E. NESHEK
Principal occupation: President, Chief Executive Officer
and Director of the law firm of Godfrey, Neshek, Worth,
and Leibsle, S.C., Elkhorn, Wisconsin; and Director,
General Counsel, Assistant Secretary and Manager, New
Market Development, Kikkoman Foods, Inc. (a food
products manufacturer), Walworth, Wisconsin.
Age: 63
Served as director since: December 1986
Annual Meeting at which nominated term of office will
expire: 1997
OTHER INFORMATION: Mr. Neshek has served as a director of WP&L since November
1984. He is also a director of Heartland Properties, Inc. and Capital Square
Financial Corporation, both subsidiaries of Heartland Development Corporation;
Friends of Milwaukee Public Museum; Midwest U.S.-Japan Association; Regional
Transportation Authority (for southeast Wisconsin); the Wisconsin Association of
Manufacturers and Commerce; and Wisconsin-Chiba, Inc. He is a fellow in the
American College of Probate Counsel. Mr. Neshek is active in the Walworth County
Bar Association, the State Bar of Wisconsin, and the American Judicature
Society.
[PHOTO]
HENRY F. SCHEIG
Principal occupation: Chairman of the Board, Aid
Association for Lutherans (a fraternal benefit
society), Appleton, Wisconsin.
Age: 69
Served as director since: February 1994
Annual Meeting at which nominated term of office will
expire: 1996
OTHER INFORMATION: Mr. Scheig has served as a director of WP&L since July 1980.
He is also a director of Aid Association for Lutherans and a Trustee of AAL
Mutual Funds. Mr. Scheig is past president of the Bay Lakes Council, Boy Scouts
of America.
5
[PHOTO]
CAROL T. TOUSSAINT
Principal occupation: Consultant
Age: 64
Served as director since: February 1994
Annual Meeting at which nominated term of office will
expire: 1997
OTHER INFORMATION: Mrs. Toussaint has served as a director of WP&L since August
1976. She is an independent consultant on board organization, fund development
and public relations, working primarily with nonprofit organizations. She is the
owner of Vantage Point, a lecture program business, and an Associate of Kolbe
Concepts, Inc., a management consulting firm. She is an active member and past
chair of the Utility Women's Conference (a national organization open to women
serving as directors or officers of investor-owned electric, gas, water, and
telephone companies). She is immediate past president of the Rotary Club of
Madison, and a director of the Evjue Foundation; Madison Civic Center
Foundation; Madison Community Foundation; Wisconsin History Foundation; and the
Wisconsin Taxpayers Alliance. At the University of Wisconsin-Madison, she serves
as a director of the University Research Park, a member of the Board of Visitors
of the School of Business, a member of the Alumni Association Cabinet 99, and on
the Council on Women's Giving of the Bascom Hill Society of the University
Foundation.
THE BOARD OF DIRECTORS RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS
DIRECTORS AND URGES EACH SHAREOWNER TO VOTE "FOR" ALL NOMINEES. SHARES OF COMMON
STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL
NOMINEES.
CONTINUING DIRECTORS
[PHOTO]
ROCKNE G. FLOWERS
Principal occupation: President and Director of Nelson
Industries, Inc. (a muffler, filter, industrial
silencer, and active sound and vibration control
technology and manufacturing firm), Stoughton,
Wisconsin.
Age: 62
Served as director since: April 1981
Annual Meeting at which current term of office will
expire: 1996
OTHER INFORMATION: Mr. Flowers has served as a director of WP&L since February
1994. He also served as a director of WP&L from April 1979 to July 1990. Mr.
Flowers is also a director of RMT, Inc., a subsidiary of Heartland Development
Corporation; Digisonix, Inc.; American Family Mutual Insurance Company;
Janesville Sand and Gravel Company; M&I Madison Bank; Meriter Health Services,
Inc.; Meriter Hospital; and the Wisconsin History Foundation. He is also a
member of the University of Wisconsin-Madison School of Business Board of
Visitors, and the Wisconsin Judicial Commission.
6
[PHOTO]
ARNOLD M. NEMIROW
Principal occupation: President, Chief Executive Officer
and Director, Wausau Paper Mills Company (a pulp and
paper manufacturer), Wausau, Wisconsin.
Age: 50
Served as director since: February 1991
Annual Meeting at which current term of office will
expire: 1995
OTHER INFORMATION: Mr. Nemirow has served as a director of WP&L since February
1994. Mr. Nemirow is also a director of Community Health Care, Inc. (Wausau
Hospital); Competitive Wisconsin, Inc.; M & I First American National Bank,
Wausau; Leadership Wausau; Leigh Yawkey Woodson Art Museum; Wisconsin
Association of Manufacturers and Commerce, Inc. (Vice Chair); Wisconsin Paper
Council Executive Committee; and the Wausau YMCA Foundation. He is also a member
of the New York Bar.
[PHOTO]
HENRY C. PRANGE
Principal occupation: Director and Retired Chairman of
the Board, H. C. Prange Company (retail stores), Green
Bay, Wisconsin.
Age: 66
Served as director since: December 1986
Annual Meeting at which current term of office will
expire: 1996
OTHER INFORMATION: Mr. Prange has served as a director of WP&L since December
1965. Mr. Prange is also a director of H. C. Prange Company, and is a past
director of Frederick Atkins, Inc.
[PHOTO]
JUDITH D. PYLE
Principal occupation: Vice Chair and Senior Vice
President of Corporate Marketing of Rayovac Corporation
(a battery and lighting products manufacturer),
Madison, Wisconsin.
Age: 50
Served as a director since: May 1992
Annual Meeting at which current term of office will
expire: 1995
OTHER INFORMATION: Ms. Pyle has served as a director of WP&L since February
1994. Ms. Pyle is also a director of Rayovac Corporation, Firstar Corporation,
Oshkosh B'Gosh, and H. C. Prange Company. She is also a member of the Board of
Visitors at the University of Wisconsin School of Business and the School of
Family Resources and Consumer Sciences. Further, Ms. Pyle is a former member of
Boards of Directors of the United Way Foundation, the Madison Civic Center
Foundation, the Wisconsin Special Olympics, and is a former trustee of the
Madison Civic Center.
7
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Board of Directors has standing Audit, Compensation and Personnel, and
Nominating Committees. A description of the duties of each committee and
meetings held during 1993 follows.
AUDIT COMMITTEE
During 1993, the Audit Committee consisted of all nonmanagement members of
the Board and was chaired by Mr. Flowers. The committee held two meetings in
1993. Beginning in February 1994, the committee was reconstituted to consist of
L. D. Carley, R. G. Flowers, D. R. Haldeman, H. F. Scheig, and K. C. Lyall
(Chair). The committee recommends to the shareowners the independent auditors to
be elected; reviews the reports and comments of the independent auditors;
reviews the activities and reports of the Company's internal audit staff; and,
in response to the reports and comments of both the independent auditors and
internal auditors, recommends to the Board any action which the Audit Committee
considers appropriate.
COMPENSATION AND PERSONNEL COMMITTEE
During 1993, the Compensation and Personnel Committee consisted of all
directors who are not and have never been officers, employees, or legal counsel
of the Company and was chaired by Mr. Neshek. The committee held three meetings
in 1993. Beginning in February 1994, the committee was reconstituted to consist
of A. M. Nemirow, M. E. Neshek (Chair), H. C. Prange, J. D. Pyle, and C. T.
Toussaint. The committee sets executive compensation policy; reviews the
performance of and approves salaries for officers and certain other management
personnel; reviews and recommends to the Board new or changed employee benefit
plans; reviews major provisions of negotiated employment contracts, if any; and
reviews human resource development programs.
NOMINATING COMMITTEE
During 1993, the Nominating Committee consisted of E. B. Davis, Jr. (Chair),
A. M. Nemirow, and James R. Underkofler, who is retiring as a director of the
Company effective at the 1994 Annual Meeting. The committee held one meeting in
1993. Beginning in February 1994, the committee was reconstituted to consist of
R. G. Flowers, K. C. Lyall, A. M. Nemirow (Chair), H. C. Prange, and J. D. Pyle.
The committee's responsibilities include making recommendations to the Board of
Directors for nominees for election to the Board. In making recommendations of
nominees for election to the Board, the Nominating Committee will consider
nominees recommended by shareowners. Any shareowner wishing to make a
recommendation should write the Chief Executive Officer of the Company, who will
forward all recommendations to the Nominating Committee.
The Board of Directors held eleven meetings during 1993. No director
attended fewer than 94 percent of the aggregate number of meetings of the Board
and committees of the Board on which such director served.
COMPENSATION OF DIRECTORS
No fees are paid to directors who are officers of the Company and/or any of
its subsidiaries (presently Mr. Davis). Nonmanagement directors, who serve on
the Boards of the Company, WP&L, and HDC, receive an annual retainer of $32,800.
Travel expenses are paid for each meeting day attended. All nonmanagement
directors also received a 25 percent Company matching contribution in common
stock for limited optional cash purchases of the Company's common stock through
the Company's Dividend Reinvestment
8
and Stock Purchase Plan. Matching contributions for calendar year 1993 were as
follows: Rockne G. Flowers, $3,125; Arnold M. Nemirow, $2,500; Milton E. Neshek,
$2,500; Henry C. Prange, $2,500; Judith D. Pyle, $3,282; and James R.
Underkofler, $3,288.
DIRECTOR'S CHARITABLE AWARD PROGRAM. In 1993, the Company established the
Director's Charitable Award Program. The purpose of the Program is to recognize
the interest of the Company and its directors in supporting worthy institutions,
and enhance the Company's director benefit program so that the Company is able
to continue to attract and retain directors of the highest caliber. Under the
Program, when a director dies, the Company will donate a total of $500,000 to
one qualified charitable organization, or divide that amount among a maximum of
four qualified charitable organizations, selected by the individual director.
The individual director derives no financial benefit from the Program. All
deductions for charitable contributions are taken by the Company, and the
donations are funded by the Company through life insurance policies on the
directors. Over the life of the Program, all costs of donations and premiums on
the life insurance policies, including a return of the Company's cost of funds,
will be recovered through life insurance proceeds on the directors. The Program,
over its life, will not result in any material cost to the Company.
DIRECTOR'S LIFE INSURANCE PROGRAM. The Company maintains a split-dollar
Director's Life Insurance Program for nonemployee directors which provides a
maximum death benefit of $500,000 to each eligible director. Under the
split-dollar arrangement, directors are provided a death benefit only and do not
have any interest in the cash value of the policies. The Life Insurance Program
is structured to pay a portion of the total death benefit to the Company to
reimburse the Company for all costs of the program, including a return on its
funds. The Life Insurance Program, over its life, will not result in any
material cost to the Company.
9
OWNERSHIP OF VOTING SECURITIES
Listed in the following table are the shares of the Company's common stock
owned by the executive officers listed in the Summary Compensation Table and all
directors of the Company, as well as the number of shares owned by directors and
officers as a group. To the Company's knowledge, no shareowner beneficially
owned 5 percent of the Company's outstanding common stock as of January 31,
1994.
SHARES
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1)
- ---------------------------------------------------------------------------------------------------- ------------
Executives(2)
Lance W. Ahearn................................................................................... 831(3)
William D. Harvey................................................................................. 4,458(4)
James E. Johnson.................................................................................. 1,063
Eliot G. Protsch.................................................................................. 3,419(4)
Director Nominees
Les Aspin......................................................................................... 426(6)
L. David Carley................................................................................... 2,339
Erroll B. Davis, Jr............................................................................... 6,584(4)
Donald R. Haldeman................................................................................ 2,205
Katharine C. Lyall................................................................................ 2,524
Milton E. Neshek.................................................................................. 7,770
Henry F. Scheig................................................................................... 3,192
Carol T. Toussaint................................................................................ 6,680
Continuing Directors
Rockne G. Flowers................................................................................. 5,901
Arnold M. Nemirow................................................................................. 4,782
Henry C. Prange................................................................................... 6,293(4)
Judith D. Pyle.................................................................................... 2,419
Retiring Director
James R. Underkofler.............................................................................. 19,708(5)
All Executives and Directors as a Group
32 people, including those listed above........................................................... 113,458
<FN>
- ---------
(1) Total shares of Company common stock outstanding as of January 31, 1994
were 30,441,027. All individual executives and directors owned
beneficially less than one percent of the total outstanding shares. All
executives and directors as a group own beneficially less than one percent
of total outstanding shares.
(2) Stock ownership for Mr. Davis is shown with director nominees.
(3) Mr. Ahearn has been awarded 5 shares of restricted HDC common stock
pursuant to an employment agreement with HDC.
10
(4) Included in the beneficially owned shares shown are the following indirect
ownership interests with shared voting and investment powers: Mr.
Harvey--1,365; Mr. Protsch--271; Mr. Davis--3,882; and Mr.Prange--248.
(5) Mr. Underkofler will retire effective on the date of the 1994 Annual
Meeting of Shareowners.
(6) Mr. Aspin owned no shares of Company stock as of January 31, 1994.
However, Mr. Aspin was a shareowner at the time of his appointment to the
board in February 1994. As of March 25, 1994, Mr. Aspin owned 426 shares
of Company common stock.
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table sets forth the total compensation
paid by the Company and its subsidiaries for all services rendered during 1993,
1992, and 1991 for the Chief Executive Officer and the four other most highly
compensated executive officers of the Company or its subsidiaries who perform
policy making functions for the Company.
SUMMARY COMPENSATION TABLE
(DOLLARS)
RESTRICTED
OTHER ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1)(2) AWARDS(3) COMPENSATION(1)(4)
- ------------------------------ ---- ------- ------- ------------------ ---------- ------------------
Erroll B. Davis, Jr........... 1993 418,000 115,796 10,262 0 65,320
President and CEO-- 1992 396,919 82,914 10,675 0 67,166
WPL Holdings, Inc. 1991 300,000 0 0
Lance W. Ahearn............... 1993 178,500 84,609 0 0 3,570
President and CEO-- 1992 170,000 88,400 0 0 2,833
Heartland 1991 157,500 0 840,970 (3)
Development Corp.
William D. Harvey............. 1993 163,846 42,104 4,152 0 29,119
Senior Vice 1992 143,991 24,119 4,321 0 21,692
President--WP&L 1991 139,128 0 0
James E. Johnson.............. 1993 158,250 35,068 6,913 0 33,705
Senior Vice 1992 137,383 24,870 8,684 0 40,152
President--WP&L 1991 126,000 0 0
Eliot G. Protsch.............. 1993 157,549 42,104 3,194 0 15,371
Senior Vice 1992 131,162 23,565 3,163 0 14,974
President--WP&L 1991 125,713 0 0
<FN>
- ---------
(1) In accordance with the rules of the Securities and Exchange Commission
(SEC), the amounts for Other Annual Compensation and All Other
Compensation are first reported for 1992.
(2) Consists of income tax gross-ups for reverse split-dollar life insurance.
11
(3) Restricted stock awards to Mr. Ahearn consist of 5 shares of HDC common
stock which had an estimated value of $864,730 at December 31, 1993.
Dividends are not paid on Mr. Ahearn's restricted stock. These shares have
vested at a rate of 1.25 shares per year. The final portion vested on
January 1, 1994. These shares are subject to transfer restrictions in
accordance with an agreement between HDC and Mr. Ahearn. HDC has loaned to
Mr. Ahearn an amount of $328,416 which equals the income taxes withheld in
connection with shares vested as of December 31, 1993. Mr. Ahearn is
charged interest on the loan at the prime rate.
(4) All Other Compensation for 1993 consists of: vacation buy-back, Mr.
Davis--$9,646, Mr. Harvey-- $5,116; matching contributions to 401(k) plan,
Mr. Davis--$6,415, Mr. Ahearn--$3,570, Mr. Harvey-- $7,214, Mr.
Johnson--$3,800 and Mr. Protsch--$2,249; split dollar life insurance
premiums, Mr. Davis--$32,466, Mr. Harvey--$9,994, Mr. Johnson--$18,592 and
Mr. Protsch--$7,895; reverse split dollar life insurance, Mr.
Davis--$16,793, Mr. Harvey--$6,795, Mr. Johnson--$11,313 and Mr.
Protsch--$5,227. The split dollar and reverse split dollar insurance
premiums are calculated using the "foregone interest" method.
RETIREMENT PLAN. Salaried employees (including officers) of the Company,
WP&L, and HDC corporate staff are eligible to participate in a Retirement Plan
maintained by WP&L. Mr. Ahearn is not eligible to participate in the plan. All
eligible persons whose compensation is reported in the foregoing Summary
Compensation Table participated in the plan during 1993. Contributions to the
plan are determined actuarially, computed on a straight-life, annuity basis, and
cannot be readily calculated as applied to any individual participant or small
group of participants. For purposes of the plan, compensation means payment for
services rendered, including vacation and sick pay, and is substantially
equivalent to the salary amounts reported in the foregoing Summary Compensation
Table. Retirement Plan benefits depend upon length of plan service (up to a
maximum of 30 years), age at retirement, and amount of compensation (determined
in accordance with the plan) and are reduced by up to 50 percent of Social
Security benefits. Credited years of service under the plan for covered persons
named in the foregoing Cash Compensation Table are as follows: Erroll B. Davis,
Jr., 14 years; James E. Johnson, 30 years; Eliot G. Protsch, 14 years; and
William D. Harvey, 6 years. Assuming retirement at age 65, a Retirement Plan
participant would be eligible at retirement for a maximum annual retirement
benefit as follows:
RETIREMENT PLAN TABLE
AVERAGE ANNUAL BENEFIT AFTER SPECIFIED YEARS IN PLAN*
ANNUAL ----------------------------------------------------
COMPENSATION 5 10 15 20 25 30
------------- ------- ------- ------- ------- ------- -------
$125,000.............................. $10,311 $20,623 $30,934 $41,245 $51,557 $61,868
150,000.............................. 12,603 25,206 37,809 50,412 63,015 75,618
200,000.............................. 17,186 34,373 51,559 68,745 85,932 103,118
250,000.............................. 21,770 43,539 65,309 87,079 108,848 130,618
300,000.............................. 26,353 52,706 79,059 105,412 131,765 158,118
350,000.............................. 30,936 61,873 92,809 123,745 154,682 185,618
400,000.............................. 35,520 71,039 106,559 142,079 177,598 213,118
450,000.............................. 40,103 80,206 120,309 160,412 200,515 240,618
500,000.............................. 44,686 89,272 134,059 178,745 223,432 268,118
<FN>
- ---------
* Average annual compensation is based upon the average of the highest 36
consecutive months of compensation. The Retirement Plan benefits shown above
are net of estimated Social Security benefits
12
and do not reflect any deductions for other amounts. The annual retirement
benefits payable are subject to certain maximum limitations (in general,
$115,641 for 1993 and $118,800 for 1994) under the Internal Revenue Code.
Under the Retirement Plan and a supplemental survivors income plan, if a
Retirement Plan participant dies prior to retirement, the designated survivor
of the participant is entitled to a monthly income benefit equal to
approximately 50 percent (100 percent in the case of certain executive
officers and key management employees) of the monthly retirement benefit which
would have been payable to the participant under the Retirement Plan if the
participant had remained employed by the company until eligible for normal
retirement.
UNFUNDED SUPPLEMENTAL RETIREMENT PLAN. WP&L maintains an Unfunded
Supplemental Retirement Plan which provides funds for payment of retirement
benefits above the limitations on payments from qualified pension plans in those
cases where an employee's retirement benefits exceed the qualified plan limits.
Additionally, the plan provides for payments of supplemental retirement benefits
to employees of Vice President or higher, who have been granted additional
months of service by the Board of Directors for purposes of computing retirement
benefits.
UNFUNDED EXECUTIVE TENURE COMPENSATION PLAN. WP&L maintains an Unfunded
Executive Tenure Compensation Plan to provide incentive for key executives to
remain in the service of WP&L by providing additional compensation which is
payable only if the executive remains with WP&L until retirement (or other
termination if approved by the Board of Directors). Participants in the plan
must be designated by the Chief Executive Officer of WP&L and approved by its
Board of Directors. Mr. Davis was the only active participant in the plan as of
December 31, 1993. The plan provides for monthly payments to a participant after
retirement (at or after age 65, or with Board approval, prior to age 65) for 120
months. The payments will be equal to 25 percent of the participant's highest
average salary for any consecutive 36-month period. If a participant dies prior
to retirement or before 120 payments have been made, the participant's
beneficiary will receive monthly payments equal to 50 percent of such amount for
120 months in the case of death before retirement, or if the participant dies
after retirement, 50 percent of such amount for the balance of the 120 months.
Annual benefits of $91,438 would be payable to Mr. Davis upon retirement,
assuming he continues in WP&L's service until retirement at the same salary as
was in effect on December 31, 1993.
REPORT OF THE COMPENSATION AND PERSONNEL COMMITTEE ON EXECUTIVE COMPENSATION
TO OUR SHAREOWNERS
The Company's mission is to become a customer-and strategy-driven, total
quality organization, consistently ranked among the nation's most profitable
utility holding companies. To insure the successful accomplishment of this
objective, the Company has developed a comprehensive business strategy that
emphasizes maximizing long-term shareowner value, providing the highest quality
customer service, and generating increased earnings.
The Compensation and Personnel Committee (the "Committee") is comprised of
five independent, nonemployee directors who have no interlocking relationships,
as defined by the Securities and Exchange Commission. The Committee assesses the
effectiveness and competitiveness of, approves the design of, and administers
executive compensation programs in support of the Company's mission statement,
business strategy, and total compensation framework. The Committee also reviews
and approves all salary arrangements and other remuneration for executives,
evaluates executive performance, and considers related matters.
13
The Committee is committed to implementing a total compensation program for
executives which furthers the Company's mission. We, therefore, adhere to the
following compensation policies which are intended to facilitate the achievement
of the Company's business strategies:
- Compensation opportunity should enhance the Company's ability to attract,
retain, and encourage the development of exceptionally knowledgeable and
experienced utility and nonutility executives, upon whom, in large part,
the successful operation and management of the Company depends.
- Base salary levels should be targeted at the median level paid to
executives of companies in their respective industry(ies).
- Incentive compensation programs should strengthen the relationship between
pay and performance by emphasizing variable, at-risk compensation that is
consistent with meeting predetermined Company, subsidiary, and individual
performance goals.
COMPONENTS OF COMPENSATION
The Committee relates total compensation levels for the Company's senior
executives to the compensation paid to executives of similar companies in their
respective industry(ies). As WPL Holdings, Inc. is a diversified utility with
both regulated and nonregulated operating environments, comparison groups are
customized to the respective industries of the executive. Utility executives'
pay is compared to that of executives at utilities with similar operations in
both the midwest and national markets, as well as to utilities with similar
revenue levels, market capitalizations, employment levels, and total shareowner
returns. Utility-specific data is drawn from the Edison Electric Institute
survey of executive compensation. Holding company executives are primarily
compared to the same utility comparison group. However, in order to recognize
holding company employees for increasing nonregulated business responsibilities,
benchmark data also is drawn from similarly sized diversified industrial
companies furnished by public survey data. For executives with sole
responsibilities in the nonregulated businesses, comparison group data reflects
the relevant mix of the nonregulated business operations.
The current elements of the Company's executive compensation program are
base salary and short-term (annual) incentives. These elements are addressed
separately below. In addition, as discussed under the Long-Term Incentive
section below, the Committee believes long-term (equity) incentives are crucial
for linking executive compensation to the Company's business strategy and the
creation of shareowner value and is recommending a new program to meet these
objectives. In determining each component of compensation, the Committee
considers all elements of an executive's total compensation package, including
benefit and perquisite programs. In addition, during 1993, the Board of
Directors engaged an independent consultant to conduct a comprehensive study of
the executive compensation policies and practices of the entire Company and to
present results directly to the Committee.
BASE SALARIES
The Committee regularly reviews each executive's base salary. Base salaries
are targeted at the executive's respective industry levels and are adjusted by
the Committee to recognize varying levels of responsibility, prior experience,
breadth of knowledge and internal equity issues. Increases to base salaries are
driven primarily by individual performance. Individual performance is evaluated
based on sustained levels of
14
individual contribution to the Company. All regular salaried employees,
including officers of the Company, received a base salary adjustment from 3.5 to
5.5 percent for calendar year 1993, effective on January 1, 1993, determined by
their current positions in their respective salary ranges.
As reflected in the Summary Compensation Table, Mr. Davis' base salary was
increased in 1993 by $21,081 (5.3%). In determining Mr. Davis' base salary in
1993, the Committee considered Mr. Davis' individual performance and his
long-term contributions to the success of the Company. The Committee also
compared Mr. Davis' base salary to the base salaries of chief executive officers
at the relevant comparison group companies. Overall, executive salaries were
increased at rates comparable to the increases provided at other companies and
are near market levels.
SHORT-TERM INCENTIVES
The goal of WPL Holdings, Inc.'s short-term (annual) incentive programs is
to promote the Company's pay-for-performance philosophy by providing executives
with direct financial incentives in the form of annual cash bonuses to achieve
corporate, subsidiary, and individual performance goals. Annual bonus
opportunities allow the Company to communicate specific goals that are of
primary importance during the coming year and motivate executives to achieve
these goals. Short-term incentive program performance weighting, targeted and
maximum award levels, and performance goals are reviewed annually by the
Committee. A description of the short-term incentive programs follows.
WISCONSIN POWER AND LIGHT COMPANY MANAGEMENT INCENTIVE PLAN
The Management Incentive Plan (MIP) for Wisconsin Power and Light Company
covers utility executives, including Mr. Davis' utility responsibilities. The
Plan is based on achieving annual targets in several areas of overall corporate
performance that include profitability, operations and maintenance expense
reductions, capital spending reductions, electric and gas conservation,
maintenance of competitive utility rates, and achievement of electric service
reliability standards. Target and maximum bonus awards are set at market levels.
Targets are considered by the Committee to be achievable, but to require
above-average performance from each of the executives. For the 1993 Plan year,
all MIP performance category targets were exceeded, except for service
reliability targets which were affected by unusual storm damage. The Plan
awarded 63 percent of its allowable maximum for 1993. MIP awards for executives,
other than Mr. Davis, range from 0 to 35 percent of annual salary. Awards for
1993 made to top executives are shown in the Summary Compensation Table.
The 1993 MIP award range for Mr. Davis was 0 to 50 percent of his annual
utility-based salary. For 1993 performance, Mr. Davis' annual bonus payment
represented 28 percent of his base salary, as reflected in the Summary
Compensation Table. Under this Plan, Mr. Davis was awarded $115,796 solely in
connection with 1993 performance, as discussed above. The Plan does not allow
for discretion in bonus determinations. Mr. Davis' target and maximum award
range is in line with that of the utility comparison group.
HEARTLAND DEVELOPMENT CORPORATION MANAGEMENT INCENTIVE PLAN
Mr. Ahearn and other executives of Heartland Development Corporation (HDC)
are covered by the HDC Management Incentive Plan which is based on achievement
of specified combinations of net income and after-tax return on capital invested
in HDC and on achieving a number of other specific HDC performance objectives.
The incentive compensation plan for Mr. Ahearn consists of a potential award
15
maximum of 80 percent of his base salary. The Plan awarded 59 percent of its
allowable maximum in 1993, solely based on performance in relation to the
preestablished objectives. Mr. Davis is not a participant in this Plan and,
thus, did not receive an award.
LONG-TERM INCENTIVES
At present, the at-risk component of the Company's executive compensation
program is primarily linked to short-term performance. The Committee strongly
believes compensation for senior executives should also include long-term,
at-risk pay to strengthen the alignment of shareowner and management interests.
In this regard, the Committee recommended to the Board of Directors the adoption
of the 1994 Long-Term Equity Incentive Plan. The Plan would allow for grants of
stock options, restricted stock, and performance units/shares. The Committee
believes this Plan will balance the Company's existing compensation programs by
emphasizing compensation based on the long-term successful performance of the
Company from the perspective of the shareowners. In addition, the Plan is
intended to better align subsidiary employees with the interests of the Company
as a whole by encouraging subsidiary programs to encompass a component of total
Company performance through WPL Holdings, Inc.'s equity ownership. The Board of
Directors has approved this Plan and has recommended it to the shareowners for
their approval at the annual meeting.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Recently enacted Section 162(m) of the Internal Revenue Code generally
limits the corporate deduction for compensation paid to executive officers named
in the proxy statement to $1 million unless certain requirements are met. The
Committee has carefully considered the impact of this new tax code provision. At
this time, no executives will earn compensation in excess of the $1 million cap
limitations. The Committee, however, will continue to monitor the impact of
Section 162(m).
CONCLUSION
Because of the many structural changes taking place within the utility
industry, the Committee believes the existing executive compensation policies
and programs, coupled with the recommended 1994 Long-Term Equity Incentive Plan,
will better serve the interests of shareowners, customers, and the Company.
We will continue to monitor the effectiveness of the Company's total
compensation program to meet the current needs of the Company.
COMPENSATION AND PERSONNEL COMMITTEE
Milton R. Neshek (Chair)
Arnold M. Nemirow
Henry C. Prange
Judith D. Pyle
Rockne G. Flowers
16
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
SEC rules require that the Company show a graphical comparison of the total
return on its common stock for the last five fiscal years with the total returns
of a broad market index and a more narrowly focused industry or group index.
(Total return is defined as the return on common stock including dividends and
stock price appreciation, assuming reinvestment of dividends.) The Company has
selected the Standard & Poors (S&P) 500 index for the broad market index, and
the S&P Utility Index as the industry index. These indices were selected because
of their broad availability and recognition. The following chart compares the
total return of an investment of $100 in Company common stock on December 31,
1988, with like returns for the S&P 500 and S&P Utilities indices.
(Filed under cover Form SE)
17
PROPOSAL #2:
APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors of the Company recommends the
reappointment of Arthur Andersen & Co., independent public accountants, as
auditors to examine the consolidated financial statements of the Company for
1994. Arthur Andersen & Co. served as auditors for the Company in 1993. In
tabulating the votes for reappointment of Arthur Andersen & Co., an abstention
has the same effect as a vote against. Beneficially owned shares not voted
(broker nonvotes) have no effect on vote tabulations.
A representative of Arthur Andersen & Co. will be present at the meeting and
available to make a statement or to respond to questions, as appropriate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE REAPPOINTMENT OF ARTHUR
ANDERSEN & CO. SHARES OF COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED
PROXIES WILL BE VOTED "FOR" SUCH REAPPOINTMENT.
PROPOSAL #3:
PROPOSED LONG-TERM EQUITY INCENTIVE PLAN
GENERAL
Given the rapidly changing nature of the utility industry and the major
challenges required to sustain long-term performance, the Board of Directors is
recommending, for shareowner approval, the WPL Holdings, Inc. Long-Term Equity
Incentive Plan (the "Plan"). The Board believes implementation of the Plan is
necessary to promote the success and enhance the value of the Company by linking
the personal interests of participants with those of Company shareowners, and by
providing employees with an incentive for outstanding performance. In addition,
the Plan is designed to provide a compensation structure that is more
competitive, not only with utility companies, but across the broad spectrum of
available employers. (The Company has been advised by its independent
compensation consultants that over 70 percent of major utility companies and 90
percent of general industry companies provide some type of long-term incentive
plan.) In order for the Company to attract and retain exceptionally
knowledgeable and experienced utility and nonutility employees, the Company must
be able to offer comparable compensation programs.
In structuring the Plan, the Board sought to provide for a variety of awards
that could be flexibly administered in order to carry out the purposes of the
Plan. This flexibility will permit the Company to keep pace with changing
developments in compensation programs such as changes in tax laws, accounting
rules, securities regulations and other rules regarding compensation and benefit
plans. In addition, the flexibility is necessary to better align subsidiary
employees with the interests of the Company as a whole by encouraging subsidiary
programs to encompass a component of total compensation performance through
equity ownership. The Plan grants its administrators flexibility to determine
terms and restrictions deemed appropriate for particular awards as facts and
circumstances warrant. The Plan was adopted by the Board on January 23, 1994.
The following summary description of the Plan is qualified in its entirety
by reference to the full text of the Plan which is attached to this Proxy
Statement as Appendix A.
18
ADMINISTRATION
The Plan is required to be administered by a committee of the Board (the
"Committee") consisting of not less than two directors who are eligible to
administer the Plan pursuant to Rule 16b-3 under the Securities Exchange Act of
1934 (the "Exchange Act"). The Compensation and Personnel Committee will serve
as the administrator of the Plan, unless otherwise determined by the Board.
Among other functions, the Committee has the authority to establish rules for
the administration of the Plan; to select the employees of the Company and its
subsidiaries to whom awards will be granted; to determine the types of awards to
be granted to employees and the number of shares covered by such awards; to set
the terms and conditions of such awards; to determine whether, to what extent
and when awards may be settled in cash or shares; and to amend the terms and
conditions of any outstanding awards to the extent authorized under the Plan.
Except as otherwise provided in the Plan, determinations and interpretations
with respect to the Plan and any award agreements will be in the sole discretion
of the Committee, whose determinations and interpretations will be binding on
all parties. Any nonunion employee of the Company or any subsidiary, including
any executive officer or employee-director of the Company, is eligible to
receive awards under the Plan. Approximately 1,650 employees currently would be
eligible to participate in the Plan.
AWARDS UNDER THE PLAN; AVAILABLE SHARES
The Plan authorizes the granting to employees of: (a) stock options, which
may be either incentive stock options ("ISOs") meeting the requirements of
Section 422 of the Internal Revenue Code (the "Code") or nonqualified stock
options; (b) restricted stock; and (c) performance shares and performance units.
The Plan provides that up to a total of 1,000,000 shares of common stock
(subject to adjustment as described below) will be available for the granting of
awards. Of this number, up to 300,000 shares may be granted as restricted stock.
If any shares subject to awards granted under the Plan, or to which any award
relates, are forfeited or if an award otherwise terminates, expires or is
cancelled prior to the delivery of all of the shares or other consideration
issuable or payable pursuant to the award, such shares (assuming the holder of
the award did not receive dividends on the shares or exercise other indicia of
ownership) will be available for the granting of new awards under the Plan. Any
shares delivered pursuant to an award may be either authorized and unissued
shares of common stock or shares reacquired and held by the Company.
TERMS OF AWARDS
OPTIONS. Options may be granted to employees at such times and in such
amounts as determined by the Committee, PROVIDED that the maximum number of
shares subject to options that may be granted to any single participant during
the term of the Plan is 150,000. The exercise price per share of common stock
subject to an option granted under the Plan will be determined by the Committee,
provided that the exercise price may not be less than 100% of the fair market
value of a share of common stock on the date of grant. In addition, the
Committee may grant options with exercise prices that increase over time. The
term of an option granted under the Plan will be as determined by the Committee,
but cannot exceed ten years. Options granted under the Plan will become
exercisable in such manner and within such period or periods and in such
installments or otherwise as determined by the Committee; PROVIDED, that no
option may be exercised within six months of its grant. Options will be
exercised by payment in full of the exercise price, either (i) in cash; (ii) by
tendering previously acquired shares of common stock having a fair market value
on the date of exercise equal to the option exercise price; or (iii) by a
combination of (i) and (ii). In addition, the Committee, in its sole discretion,
may allow cashless exercises as permitted under the Federal Reserve Board's
Regulation T. All ISOs granted under the Plan will also be required to comply
with all other terms of
19
Section 422 of the Code. At the time an option is granted, the Committee may
also grant dividend equivalents. Dividend equivalents give the participant a
contingent right to receive an amount equal to the dividends declared on a share
of common stock on all record dates during the related option exercise period.
Payout of the value of a dividend equivalent will be made in cash within 30 days
following the exercise of the related option, provided the option is
in-the-money on the exercise date.
In the event a participant's employment is terminated by reason of death,
disability or retirement, all outstanding options granted to the participant
will become fully vested and remain exercisable prior to their expiration or for
one year (three years in the case of retirement), whichever period is shorter.
If a participant's employment is terminated for any other reason (other than for
cause), unvested options held by the participant will be forfeited, unless
otherwise determined by the Committee, and vested options may be exercised
during the three month period following termination. If a participant's
employment is terminated for cause, all options held by the participant will be
forfeited.
RESTRICTED STOCK. Shares of restricted common stock granted to employees
under the Plan will be subject to such restrictions as the Committee may impose,
including a requirement that participants pay a stipulated purchase price for
each share and restrictions based upon the achievement of specific performance
goals (Company-wide, divisional and/or individual). The restrictions imposed on
the shares may lapse separately or in combination at such time or times, or in
such installments or otherwise, as the Committee may deem appropriate; PROVIDED,
that no restrictions will lapse prior to six months after award, except in the
case of death. Upon termination of an employee's employment for any reason other
than death, disability or retirement during the applicable restriction period,
all shares of restricted stock still subject to restriction will be subject to
forfeiture by the employee. In the event an employee's employment is terminated
by reason of death, disability or retirement, all shares of restricted stock
still subject to restriction will become fully vested. Under the Plan, the
Committee will have the authority at its discretion to waive in whole or in part
any or all remaining restrictions with respect to shares of restricted stock
granted to an employee.
During the period of restriction, participants may exercise full voting
rights with respect to restricted shares and are entitled to receive all regular
cash dividends paid with respect to those shares. All other cash dividends and
distributions may be credited to participants subject to the same restrictions
on transferability and forfeitability as the restricted shares with respect to
which they are paid. If any dividends or distributions are paid in shares, the
shares will be subject to the same restrictions on transferability as the shares
on which the dividends or distributions are paid.
PERFORMANCE SHARES AND PERFORMANCE UNITS. The Plan also provides for the
granting of performance shares and performance units to employees. The Committee
will determine the number of performance units and shares granted to
participants; PROVIDED that so long as the Committee determines that a grant of
performance units or performance shares should qualify for the
"performance-based" exemption under Section 162(m) of the Code, the maximum
payout to any executive officer named in the compensation table with respect to
performance units and/or performance shares granted in any fiscal year is
$400,000. The Committee will determine the applicable performance period, which,
in all cases, will exceed six months, the performance goal or goals to be
achieved during any performance period, the proportion of payments, if any, to
be made for performance between the minimum and full performance levels and any
other terms, conditions and rights relating to the grant of performance shares
or performance units. Company and subsidiary performance goals established by
the Committee under the Plan will be chosen from return on equity, total
shareowner return, net income, earnings per share and cash flow. The Committee
will establish
20
the specific goals each year prior to the commencement of the period to which
the compensation relates. Payment on performance shares and performance units
held by employees will be made in cash or shares of common stock (which, at the
discretion of the Committee, may be shares of restricted stock) (or in a
combination thereof), which have an aggregate fair market value equal to the
value of the earned performance shares and performance units. Payments will be
made in a single lump sum within seventy-five days following the close of the
applicable performance period, unless the participant elects to defer payment.
In the event a participant's employment is terminated by reason of death,
disability, retirement or involuntary termination without cause, the participant
will receive a prorated payout of the performance shares and/or performance
units as determined by the Committee based on the length of time the awards were
held and the achievement of the preestablished performance goals. Upon
termination of a participant's employment for any other reason, all performance
shares and performance units will be forfeited.
Participants will be entitled to receive dividends declared with respect to
shares earned in connection with grants of performance shares and performance
units, subject to the same accrual, forfeiture and payout restrictions which
apply with respect to shares of restricted stock. In addition, participants may,
at the discretion of the Committee, be entitled to exercise voting rights with
respect to shares which have been earned in connection with grants of
performance units and performance shares.
ADJUSTMENTS
In the event of any stock dividend, stock split, merger, consolidation,
reorganization, recapitalization, share combination, liquidation or any other
change affecting the common stock such that an adjustment is appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee will generally
have the authority, in such manner as it deems equitable, to adjust (i) the
number and type of shares of stock that may be issued under the Plan, (ii) the
number and type of shares of stock subject to outstanding awards, and (iii) the
grant, purchase or exercise price with respect to any award.
LIMITS ON TRANSFERABILITY
No award granted under the Plan may be assigned, sold, pledged, transferred
or encumbered by any participant, otherwise than by will, or by the laws of
descent and distribution. The Plan also imposes several other restrictions on
transferability and exercisability of awards granted thereunder to ensure
compliance with Rule 16b-3 under the Exchange Act.
AMENDMENT AND TERMINATION
The Board may amend, suspend or terminate the Plan at any time, PROVIDED
that no amendment which requires shareowner approval in order for the Plan to
continue to comply with Rule 16b-3 under the Exchange Act will be effective
without approval of the Company's shareowners. Further, no termination,
amendment or modification of the Plan will adversely affect in any material way
any outstanding award without the consent of the holder of such award.
DEFERRALS
The Committee may permit a participant to defer receipt of the payment of
cash or delivery of shares due with respect to an award, subject to such rules
and procedures as the Committee may establish.
21
WITHHOLDING
The Company will have the right to reduce the number of shares or amount of
cash payable under an award by the amount necessary to satisfy any federal,
state, local or foreign taxes of any kind required by law to be withheld with
respect to such amount or to take such other actions as may be necessary to
satisfy any such withholding obligations. The Committee may require or permit
withholding obligations arising with respect to awards under the Plan to be
settled with shares of common stock, including shares of common stock that are
part of, or are received upon exercise of, the award that gives rise to the
withholding requirement. The obligations of the Company under the Plan are
conditional on such payment or arrangements, and the Company and any affiliate
will, to the extent permitted by law, have the right to deduct any such taxes
from any payment otherwise due to the employee. The Committee may establish such
procedures as it deems appropriate for the settling of withholding obligations
with shares of common stock. Unless otherwise determined by the Committee, an
election to deliver shares or have shares withheld generally must occur in a
quarterly window period or be made at least six months prior to the taxable
event relating to the award.
CHANGE IN CONTROL
Upon the occurrence of a Change in Control (as defined in the Company's
Rights Agreement dated February 22, 1989) of the Company (i) all outstanding
options will become immediately exercisable; (ii) any restriction periods and
related restrictions on restricted stock will lapse; (iii) the target payout
opportunity attainable under all outstanding performance units and shares will
be deemed fully earned for the entire performance period and a pro rata portion
of the performance share or unit, based on the portion of the performance period
which has elapsed, will be paid out in cash; and (iv) the Committee may make any
other modifications to outstanding awards, except, in all cases, unless
otherwise specifically prohibited by the Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
STOCK OPTIONS. The grant of a stock option under the Plan will create no
income tax consequences to the employee or the Company. An employee who is
granted a nonqualified stock option will generally recognize ordinary income at
the time of exercise in an amount equal to the excess of the fair market value
of the common stock at such time over the exercise price. The Company will be
entitled to a deduction in the same amount and at the same time as ordinary
income is recognized by the employee. A subsequent disposition of the common
stock will give rise to capital gain or loss to the extent the amount realized
from the sale differs from the tax basis, I.E., the fair market value of the
common stock on the date of exercise. This capital gain or loss will be a
long-term capital gain or loss if the common stock had been held for more than
one year from the date of exercise.
In general, if an employee holds the shares of common stock acquired
pursuant to the exercise of an ISO for at least two years from the date of grant
and one year from the date of exercise, the employee will recognize no income or
gain as a result of exercise (except that the alternative minimum tax may
apply). Any gain or loss realized by the employee on the disposition of the
common stock will be treated as a long-term capital gain or loss. No deduction
will be allowed to the Company. If either of these holding period requirements
is not satisfied, the employee will recognize ordinary income at the time of the
disposition equal to the lesser of (i) the gain realized on the disposition or
(ii) the difference between the exercise price and the fair market value of the
shares of common stock on the date of exercise. The Company will be entitled to
a deduction in the same amount and at the same time as ordinary income is
recognized by the
22
employee. Any additional gain realized by the employee over the fair market
value at the time of exercise will be treated as a capital gain. This capital
gain will be a long-term capital gain if the common stock had been held for more
than one year from the date of exercise.
RESTRICTED STOCK. If a stock award is granted in the form of restricted
stock, the employee will not recognize income upon the award of restricted stock
under the Plan unless the election described below is made. However, an
individual who has not made such an election will recognize ordinary income at
the end of the applicable restriction period in an amount equal to the fair
market value of the restricted stock at such time, reduced by any amount paid
for the stock. The Company will be entitled to a corresponding deduction in the
same amount and at the same time as the participant recognizes income. Any
otherwise taxable disposition of the stock after the end of the applicable
restriction period will result in capital gain or loss (long-term or short-term
depending on the length of time the restricted stock is held after the end of
the applicable restriction period). Dividends paid in cash and received by a
participant prior to the end of the applicable restriction period will
constitute ordinary income to the participant in the year paid. The Company will
be entitled to a corresponding deduction for such dividends, subject to the
application of Section 162(m) of the Code, as more completely described below.
Any dividends paid in stock will be treated as an award of additional restricted
stock subject to the tax treatment described herein.
An employee may, within 30 days after the date of the award of restricted
stock, elect to recognize ordinary income as of the date of the award in an
amount equal to the fair market value of such restricted stock on the date of
the award, reduced by any amount paid for the stock. The Company will be
entitled to a corresponding deduction in the same amount and at the same time as
the participant recognizes income, subject to the application of Section 162(m)
of the Code, as more completely described below. If the election is made, any
cash dividends received with respect to the restricted stock will be treated as
dividend income to the participant in the year of payment and will not be
deductible by the Company. Any otherwise taxable disposition of the restricted
stock (other than by forfeiture) will result in capital gain or loss (long-term
or short-term depending on the holding period). If the participant who has made
an election subsequently forfeits the restricted stock, the participant will
only be entitled to deduct a loss equal to the amount (if any) paid for the
stock. In addition, the Company would then be required to include as ordinary
income the amount of the deduction it originally claimed with respect to such
shares.
PERFORMANCE SHARES AND PERFORMANCE UNITS. The grant of performance units or
performance shares will create no income tax consequences for the employee or
the Company. Upon the receipt of cash, shares of common stock or other property
at the end of the applicable performance period, the employee will generally
recognize ordinary income equal to the amount of any cash and the fair market
value of any shares or other property received. The Company will be entitled to
a deduction in the same amount and at the same time as income is recognized by
the employee.
CODE SECTION 162(M). Section 162(m) of the code limits the Company's income
tax deduction for compensation paid in any taxable year to certain executive
officers to $1,000,000 per individual, subject to several exceptions. The
Committee intends to grant Awards under the Plan that are designed, in most
cases, to qualify for the performance-based compensation exception. While the
grant of options, performance shares and performance units can be structured so
as to qualify for this exception, the restricted stock grants may or may not
qualify for the exception, depending on the nature of the restrictions imposed
by the Committee. The Company does not anticipate that this restriction will
have a material impact on its ability to deduct compensation payable under the
Plan.
23
FUTURE AWARDS
No awards have been made to date under the Plan. The Company cannot
currently determine the awards that may be granted in the future to employees
under the Plan. Such determinations will be made from time to time by the
Committee.
On March 11, 1994, the last reported sales price per share of the common
stock on the NYSE was $29.875.
VOTE REQUIRED
The affirmative vote of a majority of the votes represented and voted at the
Annual Meeting (assuming a quorum is present) is required to approve the Plan;
PROVIDED that a majority of the outstanding shares of the Company's stock are
voted on the proposal. Assuming such proviso is met, any shares not voted at the
Annual Meeting (whether by broker non-votes or otherwise, except abstentions),
will have no impact on the vote. Shares as to which holders abstain from voting
will be treated as votes against the proposal.
THE BOARD RECOMMENDS A VOTE "FOR" THE PLAN. SHARES OF COMMON STOCK
REPRESENTED AT THE ANNUAL MEETING BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED
"FOR" THE PLAN, UNLESS A VOTE AGAINST THE PLAN OR TO ABSTAIN FROM VOTING IS
SPECIFICALLY INDICATED ON THE PROXY.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company's directors, its executive officers, and certain other officers
are required to report their ownership of the Company's common stock and WP&L
Preferred Stock and any changes in that ownership to the SEC and the New York
Stock Exchange. All required filings in 1993 were properly made in a timely
fashion except one purchase of 20 shares of Company common stock by Milton E.
Neshek, a Director, in April, 1993, which was not reported until June, 1993.
In making this statement, the Company has relied on the representations of
the persons involved and on copies of their reports filed with the SEC.
GENERAL
VOTING. The outstanding voting securities of the Company on the record date
stated below consisted of 30,566,636 shares of common stock.
Only shareowners of the Company of record on its books at the close of
business on March 22, 1994, are entitled to vote at the meeting. Each such
shareowner is entitled to one vote for each share of common stock registered in
his or her name on the record date, on each matter submitted to a vote at the
meeting. Shareowners may vote either in person or by duly authorized proxy. The
giving of proxies by shareowners will not affect their right to vote their
shares if they attend the meeting and desire to vote in person. Presence at the
meeting of a shareowner who signed a proxy, however, does not itself revoke the
proxy. A proxy may be revoked by the person giving it at any time prior to the
time it is voted by advising the Secretary of the Company prior to such voting.
A proxy may also be revoked by a shareowner who duly executes another proxy
bearing a later date but prior to the voting. All shares represented by
effective proxies on the enclosed form, received by the Company, will be voted
at the meeting or any adjourned session of the meeting, all in accordance with
the terms of such proxies.
24
PROPOSALS OF SHAREOWNERS. Under the rules of the Securities and Exchange
Commission, any shareowner proposal intended to be presented at the 1995 Annual
Meeting of Shareowners must be received at the principal office of the Company
no later than November 29, 1994, in order to be eligible to be considered for
inclusion in the Company's proxy materials relating to that meeting.
OTHER BUSINESS. The meeting is being held for the purposes set forth in the
notice accompanying this proxy statement. The Board of Directors of the Company
knows of no business to be transacted at the meeting other than that set forth
in the notice. However, if any other business should properly be presented to
the meeting, the proxies will be voted in respect thereof in accordance with the
judgment of the person or persons voting the proxies.
WPL HOLDINGS, INC.
ERROLL B. DAVIS, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
25
Appendix A
LONG-TERM
EQUITY INCENTIVE PLAN
WPL HOLDINGS, INC.
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CONTENTS
- ---------------------------------------------------------------------------------------------------------------------
PAGE
Article 1. Establishment, Purpose, and Duration........................................................ A-3
Article 2. Definitions................................................................................. A-3
Article 3. Administration.............................................................................. A-5
Article 4. Shares Subject to the Plan.................................................................. A-6
Article 5. Eligibility and Participation............................................................... A-6
Article 6. Stock Options............................................................................... A-7
Article 7. Restricted Stock............................................................................ A-9
Article 8. Performance Units and Performance Shares.................................................... A-11
Article 9. Beneficiary Designation..................................................................... A-12
Article 10. Deferrals................................................................................... A-13
Article 11. Rights of Employees......................................................................... A-13
Article 12. Change in Control........................................................................... A-13
Article 13. Amendment, Modification, and Termination.................................................... A-13
Article 14. Withholding................................................................................. A-14
Article 15. Indemnification............................................................................. A-15
Article 16. Successors.................................................................................. A-15
Article 17. Restrictions on Share Transferability....................................................... A-15
Article 18. Legal Construction.......................................................................... A-15
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WPL HOLDINGS, INC.
LONG-TERM EQUITY INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. WPL Holdings, Inc., a Wisconsin corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as the "WPL Holdings, Inc. Long-Term Equity
Incentive Plan" (hereinafter referred to as the "Plan"), as set forth in this
document. The Plan permits the grant of Nonqualified Stock Options, Incentive
Stock Options, Restricted Stock, Performance Units, and Performance Shares.
Subject to ratification by an affirmative vote of a majority of Shares, the Plan
shall become effective as of January 23, 1994 (the "Effective Date"), and shall
remain in effect as provided in Section 1.3 herein.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success
and enhance the value of the Company by linking the personal interests of
Participants to those of Company shareowners, and by providing Participants with
an incentive for outstanding performance. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract, and
retain the services of Participants upon whose judgment, interest, and special
effort the successful conduct of its operation largely is dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date,
as described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Board of Directors to terminate the Plan at any time pursuant to
Article 13 herein, until all Shares subject to it shall have been purchased or
acquired according to the Plan's provisions. However, in no event may an Award
be granted under the Plan on or after January 22, 2004.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is
capitalized:
(a) "Award" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Performance Units, or Performance Shares.
(b) "Award Agreement" means an agreement entered into by each Participant
and the Company, setting forth the terms and provisions applicable to
Awards granted to Participants under this Plan.
(c) "Beneficial Owner" shall have the meaning ascribed to such term in Rule
13d-3 of the General Rules and Regulations under the Exchange Act.
(d) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(e) "Cause" means the admission by or the conviction of the Participant of
an act of fraud, embezzlement, theft, or other criminal act constituting
a felony under U.S. laws involving moral turpitude. The Board of
Directors, by majority vote, shall make the determination of whether
Cause exists.
(f) "Change in Control" shall have the meaning ascribed to such term in the
Rights Agreement dated February 22, 1989 with Morgan Shareholder Services
Trust Company.
(g) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
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(h) "Committee" means the committee, as specified in Article 3, appointed by
the Board to administer the Plan.
(i) "Company" means WPL Holdings, Inc., a Wisconsin corporation, or any
successor thereto as provided in Article 16 herein.
(j) "Director" means any individual who is a member of the Board of
Directors of the Company.
(k) "Disability" shall have the meaning ascribed to such term in the
Wisconsin Power and Light Company Retirement Plan A Plan of the Company.
(l) "Dividend Equivalent" means a contingent right to be paid dividends
declared with respect to outstanding Option grants, pursuant to the terms
of Section 6.5 herein.
(m) "Employee" means any full-time, nonunion employee of the Company or of
the Company's Subsidiaries. Directors who are not otherwise employed by
the Company shall not be considered Employees under this Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor Act thereto.
(o) "Fair Market Value" means the Fair Market Value of the Shares determined
by such methods or procedures as shall be established from time to time
by the Committee; PROVIDED, HOWEVER, that so long as the Shares are
traded in a public market, Fair Market Value means the average of the
high and low prices of a Share in the principal market for the Shares on
the specified date (or, if no sales occurred on such date, the last
preceding date on which sales occurred).
(p) "Incentive Stock Option" or "ISO" means an option to purchase Shares,
granted under Article 6 herein, which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the
Code, or any successor provision thereto.
(q) "Insider" shall mean an Employee who is, on the relevant date, an
officer, director, or ten percent (10%) beneficial owner of the Company,
as defined under Section 16 of the Exchange Act.
(r) "Named Executive Officer" means a Participant who, as of the date of
vesting and/or payout of an Award is one of the group of "covered
employees," as defined in the Regulations promulgated under Code Section
162(m), or any successor statute.
(s) "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares, granted under Article 6 herein, which is not intended to be an
Incentive Stock Option.
(t) "Option" means an Incentive Stock Option or a Nonqualified Stock Option.
(u) "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the Committee.
(v) "Participant" means an Employee of the Company who has outstanding an
Award granted under the Plan.
(w) "Performance Unit" means an Award granted to an Employee, as described
in Article 8 herein.
(x) "Performance Share" means an Award granted to an Employee, as described
in Article 8 herein.
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(y) "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage
of time, the achievement of performance goals, or upon the occurrence of
other events as determined by the Committee, at its discretion), and the
Shares are subject to a substantial risk of forfeiture, as provided in
Article 7 herein.
(z) "Person" shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d).
(aa) "Restricted Stock" means an Award granted to a Participant pursuant to
Article 7 herein.
(ab) "Retirement" shall have the meaning ascribed to such term in the
Wisconsin Power and Light Company Retirement Plan A Plan of the Company.
(ac) "Shares" means the Shares of Class A common stock of the Company.
(ad) "Subsidiary" means any corporation, partnership, venture, or other
entity in which the Company, directly or indirectly, has at least an
eighty percent (80%) ownership interest.
(ae) "Window Period" means the period beginning on the third business day
following the date of public release of the Company's quarterly sales and
earnings information, and ending on the twelfth business day following
such date.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Compensation and
Personnel Committee of the Board or by any other Committee appointed by the
Board consisting of not less than two (2) Directors. The members of the
Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board of Directors. The Committee shall be comprised solely
of Directors who are eligible to administer the Plan pursuant to Rule
16b-3(c)(2) under the Exchange Act.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full power except
as limited by law or by the Articles of Incorporation or Bylaws of the Company,
and subject to the provisions herein, to designate employees to be Participants
in the Plan; to determine the size and types of Awards; to determine the terms
and conditions of such Awards in a manner consistent with the Plan; to determine
whether, to what extent, and under what circumstances, Awards granted to
Participants may be settled or exercised in cash, Shares or other property; to
construe and interpret the Plan and any agreement or instrument entered into
under the Plan; to establish, amend, or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 13 herein) to
amend the terms and conditions of any outstanding Award to the extent such terms
and conditions are within the discretion of the Committee as provided in the
Plan. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. As permitted by law,
the Committee may delegate its authorities as identified hereunder.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive, and binding on all persons,
including the Company, its shareowners, Employees, Participants, and their
estates and beneficiaries.
A-5
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 4.3
herein, the total number of Shares available for grant under the Plan shall be
1,000,000. Of this number, up to 300,000 Shares may be granted as Restricted
Stock. These Shares may be either authorized but unissued or reacquired Shares.
The following rules will apply for purposes of the determination of the number
of Shares available for grant under the Plan:
(a) While an Award is outstanding, it shall be counted against the
authorized pool of Shares, regardless of its vested status.
(b) The grant of an Option or Restricted Stock shall reduce the Shares
available for grant under the Plan by the number of Shares subject to
such Award.
(c) The Committee shall in each case determine the appropriate number of
Shares to deduct from the authorized pool in connection with the grant of
Performance Units and/or Performance Shares.
(d) Unless otherwise determined by the Committee, the grant of an award
opportunity under Article 8 of this Plan shall not reduce the authorized
pool; provided, however, that payout of such opportunity in the form of
Shares shall reduce the authorized pool by such number of Shares.
(e) To the extent that an Award is settled in cash rather than in Shares,
the authorized Share pool shall be credited with the appropriate number
of Shares represented by the cash settlement of the Award, as determined
at the sole discretion of the Committee (subject to the limitation set
forth in Section 4.2 herein).
4.2 LAPSED AWARDS. If any Award granted under this Plan is canceled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available for the grant of an Award under the Plan. However, in
the event that prior to the Award's cancellation, termination, expiration, or
lapse, the holder of the Award at any time received one or more "benefits of
ownership" pursuant to such Award (as defined by the Securities and Exchange
Commission, pursuant to any rule or interpretation promulgated under Section 16
of the Exchange Act), the Shares subject to such Award shall not be made
available for regrant under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination, or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number and class of Shares which may be delivered under the Plan, and in the
number and class of and/or price of Shares subject to outstanding Awards granted
under the Plan, as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of rights;
and provided that the number of Shares subject to any Award shall always be a
whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
active Employees of the Company and its Subsidiaries, as determined by the
Committee, including Employees who are members of the Board, but excluding
Directors who are not Employees.
A-6
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as shall
be determined by the Committee. The Committee shall have discretion in
determining the number of Shares subject to Options granted to each Participant;
provided, however, that the maximum number of Shares subject to Options which
may be granted to any single Participant during the term of the Plan is 150,000.
The Committee may grant ISOs, NQSOs, or a combination thereof.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Section 422 of the Code,
or a NQSO whose grant is intended not to fall under the Code provisions of
Section 422.
6.3 OPTION PRICE. The Option Price for each grant of an Option under this
Section 6.3 shall be at least equal to one hundred percent (100%) of the Fair
Market Value of a Share on the date the Option is granted. In addition, the
Committee may grant Options which have Option Prices that increase over time,
upon such terms as the Committee, in its sole discretion, deems appropriate.
6.4 DURATION OF OPTIONS. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary date of its
grant.
6.5 DIVIDEND EQUIVALENTS. Simultaneous with the grant of an Option, the
Participant receiving the Option may be granted, at no additional cost, Dividend
Equivalents. Each Dividend Equivalent shall entitle the Participant to receive a
contingent right to be paid an amount equal to the dividends declared on a Share
on all record dates occurring during the period between the grant date of an
Option and the date the Option is exercised. The underlying value of each
Dividend Equivalent shall accrue as a book entry in the name of each Participant
holding the Dividend Equivalent. Payout of the accrued value of a Dividend
Equivalent shall occur only in the event the Option issued in tandem with the
Dividend Equivalent is "in the money" (i.e., the Fair Market Value of Shares
underlying the Option as of the exercise date exceeds the Option Price) as of
the exercise date. Payout of Dividend Equivalents shall be made in cash, in one
lump sum, within thirty (30) days following the exercise of the corresponding
Option.
6.6 EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant. However, in no event may any Option granted
under this Plan become exercisable prior to six (6) months following the date of
its grant.
6.7 PAYMENT. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for
the Shares. The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having an
A-7
aggregate Fair Market Value at the time of exercise equal to the total Option
Price (provided that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy the
Option Price), or (c) by a combination of (a) and (b).
Notwithstanding the foregoing, the Committee also may allow cashless
exercises as permitted under Federal Reserve Board's Regulation T, subject to
such procedures as the Committee may deem appropriate, including without
limitations the establishment of such procedures as may be necessary to satisfy
the requirements of Rule 16b-3, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.8 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT.
(a) TERMINATION BY DEATH. In the event the employment of a Participant is
terminated by reason of death, all outstanding Options granted to that
Participant shall immediately vest one hundred percent (100%), and shall
remain exercisable at any time prior to their expiration date, or for one
(1) year after the date of death, whichever period is shorter, by such
person or persons as shall have been named as the Participant's
beneficiary, or by such persons that have acquired the Participant's
rights under the Option by will or by the laws of descent and
distribution.
(b) TERMINATION BY DISABILITY. In the event the employment of a Participant
is terminated by reason of Disability, all outstanding Options granted to
that Participant shall immediately vest one hundred percent (100%) as of
the date the Committee determines the definition of Disability to have
been satisfied, and shall remain exercisable at any time prior to their
expiration date, or for one (1) year after the date that the Committee
determines the definition of Disability to have been satisfied, whichever
period is shorter.
(c) TERMINATION BY RETIREMENT. In the event the employment of a Participant
is terminated by reason of Retirement, all outstanding Options granted to
that Participant shall immediately vest one hundred percent (100%), and
shall remain exercisable at any time prior to their expiration date, or
for three (3) years after the effective date of Retirement, whichever
period is shorter.
(d) EMPLOYMENT TERMINATION FOLLOWED BY DEATH. In the event that a
Participant's employment terminates by reason of Disability or
Retirement, and within the exercise period following such termination the
Participant dies, then the remaining exercise period under outstanding
Options shall equal the longer of: (i) one (1) year following death; or
(ii) the remaining portion of the exercise period which was triggered by
the employment termination. Such Options shall be exercisable by such
person or persons who shall have been named as the Participant's
beneficiary, or by such persons who have acquired the Participant's
rights under the Option by will or by the laws of descent and
distribution.
(e) EXERCISE LIMITATIONS ON ISOS. In the case of ISOs, the tax treatment
prescribed under Section 422 of the Internal Revenue Code of 1986, as
amended, may not be available if the Options are not exercised within the
Section 422 prescribed time periods after each of the various types of
employment termination.
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6.9 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of a
Participant shall terminate for any reason other than the reasons set forth in
Section 6.8 (and other than for Cause), all Options held by the Participant
which are not vested as of the effective date of employment termination
immediately shall be forfeited to the Company (and shall once again become
available for grant under the Plan). However, the Committee, in its sole
discretion, shall have the right to immediately vest all or any portion of such
Options, subject to such terms as the Committee, in its sole discretion, deems
appropriate.
Options which are vested as of the effective date of employment termination
may be exercised by the Participant within the period beginning on the effective
date of employment termination, and ending three (3) months after such date.
If the employment of a Participant shall be terminated by the Company for
Cause, all outstanding Options held by the Participant immediately shall be
forfeited to the Company and no additional exercise period shall be allowed,
regardless of the vested status of the Options.
6.10 NONTRANSFERABILITY OF OPTIONS. No Option granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, all
Options granted to a Participant under the Plan shall be exercisable during his
or her lifetime only by such Participant, or, if permissible under applicable
law, by such Participant's guardian or legal representative.
ARTICLE 7. RESTRICTED STOCK
7.1 GRANT OF RESTRICTED STOCK. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to eligible Employees in such amounts as the Committee shall
determine.
7.2 RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement that shall specify the Period of
Restriction, or Periods, the number of Restricted Stock Shares granted, and such
other provisions as the Committee shall determine.
7.3 TRANSFERABILITY. Except as provided in this Article 7, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Restricted Stock
Agreement, or upon earlier satisfaction of any other conditions, as specified by
the Committee in its sole discretion and set forth in the Restricted Stock
Agreement. However, in no event may any Restricted Stock granted under the Plan
become vested in a Participant prior to six (6) months following the date of its
grant, except in case of death. All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be available during his or her
lifetime only to such Participant.
7.4 OTHER RESTRICTIONS. The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Plan as it may deem advisable including, without limitation, a requirement that
Participants pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, and/or individual), and/or restrictions under
applicable Federal or state securities laws; and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
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7.5 CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 7.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan may bear the following legend:
"The sale or other transfer of the Shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the WPL
Holdings, Inc. Equity Incentive Plan, and in a Restricted Stock
Agreement. A copy of the Plan and such Restricted Stock Agreement may be
obtained from WPL Holdings, Inc."
The Company shall have the right to retain the certificates representing
Shares of Restricted Stock in the Company's possession until such time as all
conditions and/or restrictions applicable to such Shares have been satisfied.
7.6 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this Article
7, Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Participant after the last day
of the Period of Restriction. Once the Shares are released from the
restrictions, the Participant shall be entitled to have the legend required by
Section 7.5 removed from his or her Share certificate.
7.7 VOTING RIGHTS. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares.
7.8 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock granted hereunder may be
credited with all regular cash dividends paid with respect to all Shares while
they are so held. Except as provided in the succeeding sentence, all other cash
dividends and other distributions paid with respect to Shares of Restricted
Stock may be credited to Participants subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid. If any such dividends or distributions are paid
in Shares, the Shares shall be subject to the same restrictions on
transferability and forfeitability as the Shares of Restricted Stock with
respect to which they were paid.
Subject to the succeeding paragraph, all dividends credited to a Participant
shall be paid to the Participant within forty-five (45) days following the full
vesting of the Shares of Restricted Stock with respect to which such dividends
were earned.
In the event that any dividend constitutes a "derivative security" or an
"equity security" pursuant to Rule 16(a) under the Exchange Act, such dividend
shall be subject to a vesting period equal to the longer of: (i) the remaining
vesting period of the Shares of Restricted Stock with respect to which the
dividend is paid; or (ii) six months. The Committee shall establish procedures
for the application of this provision.
7.9 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, OR RETIREMENT. In
the event the employment of a Participant is terminated by reason of death,
Disability, or Retirement, all outstanding Shares of Restricted Stock shall
immediately vest one hundred percent (100%) as of the date of employment
termination (in the case of Disability, the date employment terminates shall be
deemed to be the date that the Committee designates as the date the definition
of Disability has been satisfied). The holder of the certificates of Restricted
Stock shall be entitled to have any nontransferability legends required under
Sections 7.4 and 7.5 of this Plan removed from the Share certificates.
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7.10 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. If the employment of a
Participant shall terminate for any reason other than those specifically set
forth in Section 7.9 herein, during the applicable Period of Restriction, all
Shares of Restricted Stock still subject to restriction as of the effective date
of employment termination immediately shall be forfeited and returned to the
Company; provided, however, that the Committee may waive in whole or in part any
or all remaining restrictions with respect to such Shares, upon such terms as
the Committee, in its sole discretion, deems appropriate.
ARTICLE 8. PERFORMANCE UNITS AND PERFORMANCE SHARES
8.1 GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the Plan,
Performance Units and Performance Shares may be granted to eligible Employees at
any time and from time to time, as shall be determined by the Committee. The
Committee shall have complete discretion in determining the number of
Performance Units and Performance Shares granted to each Participant; provided,
however, that unless and until the Committee determines that a grant of
Performance Units and/or Shares shall not be designed to qualify for the
"performance-based" exemption under Code Section 162(m), the maximum payout to
any Named Executive Officer with respect to Performance Units and/or Performance
Shares granted in any one fiscal year of the Company shall be four hundred
thousand dollars ($400,000).
8.2 VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the number and/or value of Performance Units/Shares that will be paid out to the
Participants. The time period during which the performance goals must be met
shall be called a "Performance Period." Performance Periods shall, in all cases,
exceed six (6) months in length. Unless and until the Committee proposes for
shareowner vote a change in the general performance measures, the attainment of
which shall determine the number and/or value of Performance Units and/or
Performance Shares granted under the Plan, the Company or Subsidiary performance
measure to be used for purposes of grants to Named Executive Officers shall be
chosen from among the following alternatives:
(a) Return on equity;
(b) Total shareowner return (share price appreciation plus dividends);
(c) Net income;
(d) Earnings per share; and/or
(e) Cash flow.
The Committee shall have sole discretion to alter the governing performance
measures, subject to shareowner approval, to the extent required in order to
comply with Section 162(m) of the Code and Rule 16b-3 under the Exchange Act.
Notwithstanding the foregoing, in the event the Committee determines it is
advisable to grant Performance Units and/or Performance Shares which shall not
qualify for the "performance-based" exemption under Code Section 162(m), the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
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8.3 EARNING OF PERFORMANCE UNITS/SHARES. After the applicable Performance
Period has ended, the holder of Performance Units/Shares shall be entitled to
receive payout on the number and value of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance goals have been achieved.
8.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES. Payment of
earned Performance Units/ Shares shall be made in a single lump sum, within
seventy-five (75) calendar days following the close of the applicable
Performance Period. The Committee, in its sole discretion, may pay earned
Performance Units/ Shares in the form of cash or in Shares (or in a combination
thereof), which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Committee.
Participants shall be entitled to receive any dividends declared with
respect to Shares which have been earned in connection with grants of
Performance Units and/or Performance Shares which have been earned, but not yet
distributed to Participants. (Such dividends shall be subject to the same
accrual, forfeiture, and payout restrictions as apply to dividends earned with
respect to Shares of Restricted Stock, as set forth in Section 7.8 herein.) In
addition, Participants may, at the discretion of the Committee, be entitled to
exercise their voting rights with respect to such Shares.
8.5 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY, RETIREMENT, OR
INVOLUNTARY TERMINATION WITHOUT CAUSE. In the event the employment of a
Participant is terminated by reason of death, Disability, Retirement, or
involuntary termination without Cause during a Performance Period, the
Participant shall receive a prorated payout of the Performance Units/Shares. The
prorated payout shall be determined by the Committee, in its sole discretion,
and shall be based upon the length of time that the Participant held the
Performance Units/Shares during the Performance Period, and shall further be
adjusted based on the achievement of the preestablished performance goals.
Payment of earned Performance Units/Shares shall be made at the same time
payments are made to Participants who did not terminate employment during the
applicable Performance Period.
8.6 TERMINATION OF EMPLOYMENT FOR OTHER REASONS. In the event that a
Participant's employment terminates for any reason other than those reasons set
forth in Section 8.5 herein, all Performance Units/ Shares shall be forfeited by
the Participant to the Company.
8.7 NONTRANSFERABILITY. Performance Units/Shares may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
ARTICLE 9. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant's lifetime. In the absence of
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any such designation, benefits remaining unpaid at the Participant's death shall
be paid to the Participant's estate. The spouse of a married Participant
domiciled in a community property jurisdiction shall join in any designation of
beneficiary or beneficiaries other than the spouse.
ARTICLE 10. DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the exercise of an Option or the lapse or waiver
of restrictions with respect to Restricted Stock, or the satisfaction of any
requirements or goals with respect to Performance Units/Shares. If any such
deferral election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.
ARTICLE 11. RIGHTS OF EMPLOYEES
11.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company. For purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Subsidiaries, or vice versa, (or between
Subsidiaries) shall not be deemed a termination of employment.
11.2 PARTICIPATION. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected to
receive a future Award.
ARTICLE 12. CHANGE IN CONTROL
Upon the occurrence of a Change in Control, unless otherwise specifically
prohibited by the terms of Section 17 herein:
(a) Any and all Options granted hereunder shall become immediately
exercisable;
(b) Any Period of Restriction and restrictions imposed on Restricted Shares
shall lapse;
(c) The target payout opportunity attainable under all outstanding
Performance Units and Performance Shares shall be deemed to have been
fully earned for the entire Performance Period(s) as of the effective
date of the Change in Control, and there shall be paid out in cash to
Participants within thirty (30) days following the effective date of the
Change in Control a pro rata portion of such target payout opportunity
based on the number of complete and partial calendar months within the
Performance Period which had elapsed as of such effective date; provided,
however, that there shall not be an accelerated payout with respect to
Performance Units or Performance Shares which were granted less than six
(6) months prior to the effective date of the Change in Control;
(d) Subject to Article 13 herein, the Committee shall have the authority to
make any modifications to the Awards as determined by the Committee to be
appropriate before the effective date of the Change in Control.
ARTICLE 13. AMENDMENT, MODIFICATION, AND TERMINATION
13.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may, at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part; provided, that no amendment which
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requires shareowner approval in order for the Plan to continue to comply with
Rule 16b-3 under the Exchange Act, including any successor to such Rule, shall
be effective unless such amendment shall be approved by the requisite vote of
shareowners of the Company entitled to vote thereon.
The Committee shall not have the authority to cancel outstanding Awards and
issue substitute Awards in replacement thereof.
13.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant holding
such Award.
ARTICLE 14. WITHHOLDING
14.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising or as a result of any Awards to Participants under
this Plan.
14.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, upon the lapse of restrictions on Restricted Stock, or upon
any other taxable event arising as a result of Awards granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the transaction.
The Committee may establish such procedures as it deems appropriate for the
settling of withholding obligations with Shares, including, without limitation,
the establishment of such procedures as may be necessary to comply with the
requirements of Rule 16b-3, unless otherwise determined by the Committee.
(a) AWARDS HAVING EXERCISE TIMING WITHIN PARTICIPANTS' DISCRETION. The
Insider must either:
(i) Deliver written notice of the stock withholding election to the
Committee at least six (6) months prior to the date specified by the
Insider on which the exercise of the Award is to occur; or
(ii) Make the stock withholding election in connection with an exercise
of an Award which occurs during a Window Period.
(b) AWARDS HAVING A FIXED EXERCISE/PAYOUT SCHEDULE WHICH IS OUTSIDE
INSIDER'S CONTROL. The Insider must either:
(i) Deliver written notice of the stock withholding election to the
Committee at least six (6) months prior to the date on which the
taxable event (e.g., exercise or payout) relating to the Award is
scheduled to occur; or
(ii) Make the stock withholding election during a Window Period which
occurs prior to the scheduled taxable event relating to the Award
(for this purpose, an election may be made prior to such a Window
Period, provided that it becomes effective during a Window Period
occurring prior to the applicable taxable event).
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ARTICLE 15. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company's approval, or paid by him or her in satisfaction of any
judgment in any such action, suit, or proceeding against him or her, provided he
or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or
her own behalf.
The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or Bylaws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.
ARTICLE 16. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 17. RESTRICTIONS ON SHARE TRANSFERABILITY
In addition to any restrictions imposed pursuant to the Plan, all
certificates for Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange or market upon which such Shares are then listed or traded,
any applicable Federal or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
ARTICLE 18. LEGAL CONSTRUCTION
18.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
18.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
18.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
Notwithstanding any other provision set forth in the Plan, if required to
comply with the then-current rules promulgated under Section 16 of the Exchange
Act, any "equity security" offered pursuant to the Plan
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to any Insider may not be sold or transferred for at least six (6) months after
the date of grant, except in the case of death. The terms "equity security" and
"derivative security" shall have the meanings ascribed to them in the
then-current Rule 16(a) under the Exchange Act.
18.4 SECURITIES LAW COMPLIANCE. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions or Rule
16b-3 or its successors under the 1934 Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.
18.5 GOVERNING LAW. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Wisconsin.
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WPL Holdings, Inc.
PROXY CARD AND ANNUAL MEETING RESERVATION
The Annual Meeting of Shareowners will be held at the Dane County Coliseum, 1881
Expo Mall, Madison, Wisconsin, on Wednesday, May 18, 1994, at 10:00 a.m. The
enclosed Proxy Statement contains additional information about the meeting
location.
Please review, complete and SIGN the Proxy Card.
If you are attending the Annual Meeting, please detach and return the completed
Annual Meeting Reservation Form with the SIGNED PROXY CARD in the enclosed
envelope.
TO AVOID UNNECESSARY EXPENSE, WE ARE ASKING SHAREOWNERS TO CONTACT SHAREOWNER
SERVICES AT 1-800-356-5343 IF THEY NEED TO CANCEL THEIR RESERVATION.
PLEASE DETACH AND RETURN THE COMPLETED AND SIGNED PROXY CARD.
IMPORTANT
YOU ARE URGED TO DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY.
THIS WILL HELP SAVE THE EXPENSE OF FOLLOW-UP LETTERS TO SHAREOWNERS WHO HAVE NOT
RESPONDED.
TOLL FREE SHAREOWNER INFORMATION NUMBERS
Local (Madison)...................252-3110
All Other Areas.............1-800-356-5343
(WE) WILL ATTEND THE ANNUAL MEETING LUNCHEON.
Please list your name(s) and your guest(s) below:
- -------------------------------------------------
- -------------------------------------------------
- -------------------------------------------------
RETURN THIS STUB WITH YOUR PROXY CARD TO RESERVE LUNCH.
1. ELECTION OF DIRECTORS - Nominees for terms ending:
(*) TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST BELOW AND MARK AN (X) IN THE 'FOR ALL
EXCEPT' BOX.
1995-L. DAVID CARLEY, DONALD R. HALDEMAN
1996-KATHARINE C. LYALL, HENRY F. SCHEIG
1997-LES ASPIN, ERROLL B. DAVIS, JR., MILTON E. NESHEK, CAROL T. TOUSSAINT
For All
Withhold For All
For All Except(*)
2. PROPOSAL TO APPOINT ARTHUR ANDERSEN & CO. AS INDEPENDENT AUDITORS FOR 1994.
For
Against
Abstain
3. PROPOSAL TO APPROVE THE WPL HOLDINGS INC. EQUITY INCENTIVE PLAN.
For
Against
Abstain
P
R
O
X
Y
Please date and sign your name(s) exactly as shown above and mail promptly in
the enclosed envelope.
______________________________________________ DATED: __________________________
______________________________________________ DATED: __________________________
Signature(s)
IMPORTANT: When signing as attorney, executor, administrator, trustee, or
guardian, please give your full title as such. In the case of JOINT HOLDERS,
all should sign.
WPL HOLDINGS, INC.
P.O. BOX 2568
MADISON, WI 53701-2568
ANNUAL MEETING OF SHAREOWNERS - MAY 18, 1994
The undersigned appoints Erroll B. Davis, Jr. and Edward M. Gleason, or
either of them, attorneys and proxies, with the power of substitution to vote
all shares of stock of WPL Holdings, Inc., of record in the name of the
undersigned (including any shares held or credited to the undersigned's account
under the Company's Dividend Reinvestment and Stock Purchase Plan or Wisconsin
Power and Light Company's Employee Stock Ownership Plan) at the close of
business on March 22, 1994, at the Annual Meeting of Shareowners of the Company
to be held at the Dane County Coliseum, Madison, Wisconsin, on May 18, 1994, at
10:00 a.m., and at all adjournments thereof, upon all matters that properly come
before the meeting, including the matters described in the Company's Notice of
Annual Meeting of Shareowners and Proxy Statement dated March 28, 1994, subject
to any directions indicated on the reverse side of this card.
This Proxy is solicited on behalf of the Board of Directors of WPL Holdings,
Inc.
If No Choice is Specified, the Proxies Shall Vote FOR the Proposals.
(continued and to be signed and dated on the other side)
Appendix
Pictures of each WPL Holdings, Inc. Board member appears next to a brief
summary of his/her experience on pages 2 through 7. A map showing the location
of the meeting appears on the back cover.