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SCHEDULE 14A
(Rule 14A-101)
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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or Rule 14a-12
IES INDUSTRIES INC.
(Name of Registrant as Specified in Its Charter)
MIDAMERICAN ENERGY COMPANY
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Item 22(a)(2) of Schedule 14A.
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14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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[August 27, 1996 Letter to IES Bargaining Unit]
August 27, 1996
Mr. Ken D. Sagar
Business Manager/Financial Secretary
IBEW, Local Union No. 204
116 14th Avenue, SE
Cedar Rapids, IA 52401
Dear Mr. Sagar:
Thank you for your letter of August 26, 1996 in which you ask several questions
about the proposed IES/MidAmerican merger. MidAmerican shares your concern about
accurate information being made available to the membership of Local 204. Your
questions and MidAmerican's responses follow.
1. How will the MidAmerican merger proposal impact union/bargaining unit
jobs on the IES/MEC properties?
Both the Wisconsin proposal and the MidAmerican proposal will lead to
employment reductions. MidAmerican and IES together currently employ
approximately 6,237 persons. Our preliminary estimate of savings from
the merger includes a workforce reduction of approximately 450
positions from the current combined employment level compared to a
reduction of 750 positions in the Wisconsin proposal. Under the
MidAmerican proposal that adjustment would be accomplished primarily
through normal attrition and other voluntary programs such as early
retirement and would be dispersed throughout the service areas. At this
time it is not known how many of the anticipated reduction of 450
positions will be in Union-represented classifications. We do not
anticipate that layoffs will be required. We will be particularly
mindful of the need to maintain a sufficient work force to provide safe
and reliable energy services. We believe that the merged company will
be a strong competitor and a company that will provide excellent
employment opportunities.
2. What will MidAmerican's philosophy be in dealing with bargaining unit
employment reductions?
In prior mergers, MidAmerican and its predecessor companies met with
the leadership of affected local Unions to negotiate the terms of
employment reduction programs which included early retirement, buyouts,
and layoff with recall rights. If bargaining unit employment reductions
are necessary, MidAmerican would meet with the leadership of
Mr. Ken Sagar
August 27, 1996
Page 2
Local 204 to negotiate appropriate reduction programs. We anticipate
that these would be voluntary programs.
3. Will MidAmerican recognize and assume all the union contracts on IES
property?
Yes. MidAmerican will recognize existing collective bargaining
agreements.
4. Would MidAmerican be willing to offer an employment security agreement
to union workers at IES?
The Union agreements that MidAmerican will recognize provide
significant employment security to Union members. As we previously
noted, any reductions in Union employment following the merger should
be achievable through attrition and voluntary programs. In our recent
merger, 86% of eligible Union members took advantage of the early
retirement program.
5. What is MidAmerican's philosophy on the use of contractors (union and
non-union)?
MidAmerican currently uses contractors to supplement its workforce, as
needed. We anticipate this will continue following the merger of IES
and MidAmerican. We believe that Union contractors and their employees
can be competitive with non-union workers, and we make strong efforts
to utilize the represented trades.
6. How will the MidAmerican merger proposal benefit IES union employees?
A successful merger of IES and MidAmerican will result in a regional
company, based in Iowa. Our focus will be on doing what we, the Company
and the Unions, do best; that is to provide reliable and safe energy
services to existing and prospective customers. We believe that the
more profitable and competitive we are, the greater the employment
opportunities for all employees.
7. How does MidAmerican believe the radical restructuring of the utility
industry will impact its union employees and how will the company
address these impacts?
As the industry changes, MidAmerican wants to continue to serve its
customers as well as expand to serve new customers and take advantage
of new opportunities. The changes in the industry will mean that energy
providers will make less profit on a kWh or therm of energy, but it
will also mean new markets for energy services; increased opportunities
for
Mr. Ken Sagar
August 27, 1996
Page 3
new services and products; incentives to maintain efficient, safe and
reliable services to retain and attract new customers; and
opportunities for financial and employment growth.
Please let us know if you have additional questions regarding the merger of IES
and MidAmerican.
Sincerely,
/s/ Stanley J. Bright
Stanley J. Bright
President and CEO
[Guest Newspaper Editorial]
Guest Editorial submitted by
Stan Bright, President and CEO
of MidAmerican Energy Company
August 30, 1996
THE MIDAMERICAN PROPOSAL - BETTER FOR IOWANS
With all the ads and news coverage you've seen over the past few weeks,
you may be asking yourself, "What are those two utility companies doing,
anyway?" Let me shed some light on it for you.
Back in October 1995, I wrote a letter to Lee Liu, chairman of IES
Industries, proposing a merger of our two companies. IES declined our offer, but
soon announced that it had accepted an inferior offer to merge with a Wisconsin
utility company. Incredible as it may seem, IES didn't even bother to tell its
shareholders about the better offer from MidAmerican!
A MidAmerican/IES merger makes too much sense to ignore. The companies
have contiguous and overlapping service areas and share ownership in many energy
facilities. As a result, we estimate a merger would save $650 million over the
next ten years.
So, early this month, I sent another letter to Mr. Liu, outlining our
plan to merge with IES and describing the benefits such a merger would bring to
Iowa and to shareholders, customers and employees. Concerned that IES would
again fail to inform its shareholders of our better offer, we decided to present
our proposal directly to IES shareholders. That's what all the commercials and
advertisements are about.
Our offer is simple, and it's better than the Wisconsin deal. As an IES
shareholder, you have a choice: you can exchange your IES stock for MidAmerican
stock tax-free (worth $37.54 as of August 29, 1996) and get a 25% higher
dividend; or you could sell your IES stock to MidAmerican for $39 in cash. In
either case, you will benefit by receiving a premium for your IES shares.
Any IES shareholder who wants all stock will get all stock, tax-free.
We will exchange up to 40% of the IES shares for cash, for those who choose
cash. If more than 40% choose cash, we will pay those shareholders the same
combination of cash and stock.
The MidAmerican proposal would keep your utility company based right
here in Iowa. The Wisconsin deal would move corporate headquarters to Madison,
Wisconsin.
IES is arguing that the MidAmerican plan is "less than advertised", but
independent financial experts such as Value Line and Institutional Shareholder
Services call the MidAmerican plan superior, and urge IES shareholders to vote
against the Wisconsin deal.
In our community meeting in Burlington this week, IES customers,
employees and shareholders told us what happened when IES merged with Iowa
Southern Utilities Company several years ago. Electric prices went up and Iowa
Southern's corporate headquarters in Centerville disappeared, despite promises
to the contrary.
MidAmerican has filed a plan with the Iowa Utilities Board to reduce or
freeze electric prices through the year 2001. Our economic development
activities helped Iowa communities create over 3,500 new jobs in 1995 alone.
We'll continue our strong commitment to competitive electric prices and economic
development.
IES shareholders now have an opportunity to send a message to their
board of directors that they should consider MidAmerican's offer. We believe the
MidAmerican plan is better for the citizens of Burlington and for all Iowans.
MidAmerican has filed with the Securities and Exchange Commission a proxy
statement and other materials relating to the solicitation of proxies against
the proposed IES/WPL/Interstate transaction and that proxy statement and the
other materials are incorporated herein by reference. MidAmerican Energy
Company, 666 Grand Avenue, Des Moines, Iowa 50303.