SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-12
ALLIANT ENERGY CORPORATION
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(Name of Registrant as Specified In Its Charter)
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2001
NOTICE OF ANNUAL MEETING
ALLIANT ENERGY CORPORATION
PROXY STATEMENT
YOUR VOTE IS IMPORTANT [ALLIANT ENERGY LOGO]
ALLIANT ENERGY CORPORATION
ANNUAL MEETING OF SHAREOWNERS
DATE: MAY 23, 2001
TIME: 1:00 PM, CENTRAL DAYLIGHT SAVINGS TIME
LOCATION: EXHIBITION HALL
ALLIANT ENERGY CENTER OF DANE COUNTY
1919 ALLIANT ENERGY CENTER WAY
(INTERSECTION OF JOHN NOLEN DRIVE AND
RIMROCK ROAD)
MADISON, WISCONSIN
SHAREOWNER INFORMATION NUMBERS
LOCAL CALLS (MADISON, WI AREA) ............ 608-252-3110
TOLL FREE NUMBER .......................... 800-356-5343
[ALLIANT ENERGY LOGO]
Alliant Energy Corporation
222 West Washington Avenue
P. O. Box 2568
Madison, WI 53701-2568
Phone: 608-252-3110
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
Dear Alliant Energy Corporation Shareowner:
On Wednesday, May 23, 2001, Alliant Energy Corporation (the "Company") will hold
its 2001 Annual Meeting of Shareowners in the Exhibition Hall at the Alliant
Energy Center of Dane County, 1919 Alliant Energy Center Way, Madison, Wisconsin
located at the intersection of John Nolen Drive and Rimrock Road. The meeting
will begin at 1:00 p.m. Central Daylight Savings Time.
Only shareowners of record at the close of business on March 27, 2001 may vote
at this meeting. All shareowners are requested to be present at the meeting in
person or by proxy so that a quorum may be assured. At the meeting, the
Company's shareowners will:
1. Elect four directors for terms expiring at the 2004 Annual Meeting of
Shareowners; and
2. Attend to any other business properly presented at the meeting.
The Board of Directors of the Company presently knows of no other business to
come before the meeting.
If your shares are registered directly with the Company's Shareowner Services
Department, then you may vote these shares by telephone, Internet or fax.
Instructions for voting by these convenient methods are shown on the enclosed
proxy card. If you prefer, you may sign and date the enclosed proxy card and
return it in the postage paid envelope.
A copy of the 2000 Annual Report of the Company is enclosed.
By Order of the Board of Directors
/s/ Edward M. Gleason
EDWARD M. GLEASON
Vice President -- Treasurer and
Corporate Secretary
Dated, mailed and made available on the
Internet on or about April 3, 2001
TABLE OF CONTENTS
Questions and Answers....................................... 3
Election of Directors....................................... 7
Nominees............................................. 7
Continuing Directors................................. 8
Meetings and Committees of the Board........................ 10
Compensation of Directors................................... 12
Ownership of Voting Securities.............................. 14
Compensation of Executive Officers.......................... 16
Summary Compensation Table........................... 16
Stock Options............................................... 18
Stock Option Grants in 2000.......................... 18
Option Values at December 31, 2000................... 19
Long-Term Incentive Awards.................................. 20
Long-Term Incentive Awards in 2000................... 20
Certain Agreements and Transactions......................... 21
Retirement and Employee Benefit Plans....................... 23
Report of the Compensation and Personnel Committee on
Executive Compensation...................................... 27
Report of the Audit Committee............................... 31
Comparison of Five Year Cumulative Total Return............. 32
Section 16(a) Beneficial Ownership Reporting Compliance..... 33
Exhibit A -- Audit Committee Charter........................ 34
2
QUESTIONS AND ANSWERS
1. Q: WHY AM I RECEIVING THESE MATERIALS?
A: The Board of Directors of Alliant Energy Corporation (the
"Company") is providing these proxy materials to you in
connection with the Company's Annual Meeting of Shareowners
(the "Annual Meeting"), which will take place on Wednesday,
May 23, 2001. As a shareowner, you are invited to attend the
Annual Meeting and are entitled to and requested to vote on
the proposal described in this proxy statement.
2. Q: WHAT IS ALLIANT ENERGY CORPORATION?
A: The Company is a public utility holding company whose first
tier subsidiaries include Wisconsin Power and Light Company
("WP&L"), IES Utilities Inc. ("IES"), Interstate Power
Company ("IPC"), Alliant Energy Resources, Inc. ("AER") and
Alliant Energy Corporate Services, Inc. ("Alliant Energy
Corporate Services"). IES and IPC have entered into an
agreement and plan of merger pursuant to which IPC would
merge with and into IES as the surviving corporation.
Subject to regulatory and IES and IPC shareowner approval,
the merger is expected to close in the second quarter of
2001.
3. Q: WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?
A: Only shareowners of record at the close of business on
March 27, 2001 are entitled to vote at the Annual Meeting.
As of the record date, 79,055,349 shares of the Company's
common stock were issued and outstanding. Each shareowner is
entitled to one vote for each share of the Company's common
stock held on the record date.
4. Q: WHAT MAY I VOTE ON AT THE ANNUAL MEETING?
A: You may vote on the election of four nominees to serve on
the Company's Board of Directors for terms expiring at the
Annual Meeting of Shareowners in the year 2004.
5. Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND I VOTE?
A: The Board of Directors recommends that you vote your shares
FOR each of the nominees.
6. Q: HOW CAN I VOTE MY SHARES?
A: You may vote either in person at the Annual Meeting or by
appointing a proxy. If your shares are registered directly
with the Company's Shareowner Services Department, then you
have four options to appoint a proxy:
- by telephone;
- by Internet;
- by faxing the proxy card; or
- by mailing the proxy card.
Please refer to the instructions included on your proxy card
to vote by proxy. If you hold your shares through a bank,
broker or other record holder, then you may vote by the
methods your bank or broker makes available, in which case
the bank or broker will include instructions with this proxy
statement. If you vote by the Internet or fax, then you
should understand that there may be costs associated with
electronic access, such as usage charges from Internet
access providers and telephone companies, that you must
bear. Appointing a proxy will not affect your right to vote
your shares if you attend the Annual Meeting and desire to
vote in person.
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7. Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote FOR all of the
nominees or your vote may be WITHHELD with respect to one or
more nominees. If you return your signed proxy card but do
not mark the boxes showing how you wish to vote, your shares
will be voted FOR all nominees.
8. Q: CAN I CHANGE MY VOTE?
A: You have the right to revoke your proxy at any time before
the Annual Meeting by:
- providing written notice to the Corporate Secretary of
the Company and voting in person at the Annual Meeting;
or
- appointing a new proxy prior to the start of the
Annual Meeting.
Attendance at the Annual Meeting will not cause your
previously appointed proxy to be revoked unless you
specifically so request in writing.
9. Q: WHAT SHARES ARE INCLUDED ON THE PROXY CARD(S)?
A: Your proxy card(s) covers all of your shares of the
Company's common stock, including any shares held in your
account under the Company's Shareowner Direct Plan. For
present or past employees of IES, your proxy includes any
shares held in your account under the IES Utilities Employee
Stock Ownership Plan.
10. Q: HOW IS THE COMPANY'S COMMON STOCK HELD FOR EMPLOYEES IN THE
ALLIANT ENERGY CORPORATION 401(K) SAVINGS PLAN VOTED?
A: For shares held in the 401(k) Savings Plan, you will receive
a separate form of proxy from the trustee of the Plan.
11. Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY CARD?
A: If your shares are registered differently and are in more
than one account, then you will receive more than one card.
Be sure to vote all of your accounts to ensure that all of
your shares are voted. The Company encourages you to have
all accounts registered in the same name and address
(whenever possible). You can accomplish this by contacting
the Company's Shareowner Services Department at the
Shareowner Information Numbers shown at the front of this
proxy statement.
12. Q: WHO MAY ATTEND THE ANNUAL MEETING?
A: All shareowners who owned shares of the Company's common
stock on March 27, 2001 may attend the Annual Meeting. You
will be asked to indicate whether you plan to attend the
Annual Meeting when voting electronically, or you may
indicate on the reservation portion of the enclosed proxy
card your intention to attend the Annual Meeting and return
it with your signed proxy.
13. Q: HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: The Board of Directors of the Company does not know of any
business to be considered at the 2001 Annual Meeting other
than the election of four directors. If any other business
is properly presented at the Annual Meeting, your proxy
gives Erroll B. Davis, Jr., the Company's Chairman,
President and Chief Executive Officer, and Edward M.
Gleason, the Company's Vice President-Treasurer and
Corporate Secretary, authority to vote on such matters in
their discretion.
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14. Q: WHERE AND WHEN WILL I BE ABLE TO FIND THE RESULTS OF THE
VOTING?
A: The results of the voting will be announced at the Annual
Meeting. You may also call the Company's Shareowner Services
Department at the Shareowner Information Numbers shown at
the front of this proxy statement for the results. The
Company will also publish the final results in its Quarterly
Report on Form 10-Q for the second quarter of 2001 to be
filed with the Securities and Exchange Commission.
15. Q: ARE THE COMPANY'S 2000 ANNUAL REPORT AND THESE PROXY
MATERIALS AVAILABLE ON THE INTERNET?
A: Yes. You can access the Company's home page at
WWW.ALLIANT-ENERGY.COM to view the 2000 Annual Report and
these proxy materials.
16. Q: HOW CAN I ACCESS FUTURE PROXY MATERIALS AND ANNUAL REPORTS
ON THE INTERNET?
A: The Company is offering you the opportunity to consent to
access its future notices of shareowner meetings, proxy
materials and annual reports electronically through the
Company's Web site. If you are a shareowner of record, you
can consent to access these materials electronically to
allow the Company to save the cost of producing and mailing
these materials by marking the appropriate box on your proxy
card or by following the instructions provided if you vote
over the Internet or by telephone. If you consent to access
these materials over the Internet, then you will receive a
proxy card in the mail next year with instructions
containing the Internet address to access those materials.
However, you will not receive those materials by mail. Your
consent will remain in effect unless it is revoked by
calling or writing the Company's Shareowner Services
Department at the Shareowner Information Numbers shown at
the front of this proxy statement or at the address of the
Company shown on the first page of this proxy statement. If
you hold your stock through a bank, broker or other holder
of record, please refer to the information provided by that
entity for instructions on how to elect to view future proxy
statements and annual reports over the Internet. If you
consent to electronic access, then you will be responsible
for your usual Internet related charges (e.g., online fees,
telephone charges) in connection with electronic viewing and
printing of proxy materials and annual reports. The Company
will continue to distribute printed materials to shareowners
who do not consent to access these materials electronically.
17. Q: WHEN ARE SHAREOWNER PROPOSALS FOR THE 2002 ANNUAL MEETING
DUE?
A: All shareowner proposals to be considered for inclusion in
the Company's proxy statement for the 2002 Annual Meeting
must be received at the principal office of the Company by
December 4, 2001. In addition, any shareowner who intends to
present a proposal from the floor at the 2002 Annual Meeting
must submit the proposal in writing to the Corporate
Secretary of the Company no later than February 17, 2002,
which must be accompanied by the information required by the
Company's Bylaws. A proposal may be presented from the floor
only after the Company's Board of Directors has determined
that it is a proper matter for consideration under the
Company's Bylaws.
18. Q: WHO ARE THE INDEPENDENT AUDITORS OF THE COMPANY AND HOW ARE
THEY APPOINTED?
A: The Board of Directors has appointed Arthur Andersen LLP as
the Company's independent auditors for 2001. Arthur Andersen
LLP acted as independent auditors for the Company in 2000.
Representatives of Arthur Andersen LLP are expected to be
present at the meeting with the opportunity to make a
statement if they so desire and to be available to respond
to appropriate questions.
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19. Q: WHO WILL BEAR THE COST OF SOLICITING PROXIES FOR THE ANNUAL
MEETING?
A. The Company will pay the cost of preparing, assembling,
printing, mailing and distributing these proxy materials. In
addition to the mailing of these proxy materials, the
solicitation of proxies or votes may be made in person, by
telephone or by electronic communication by the Company's
officers and employees who will not receive any additional
compensation for these solicitation activities. The Company
will pay to banks, brokers, nominees and other fiduciaries
their reasonable charges and expenses incurred in forwarding
the proxy materials to their principals.
6
ELECTION OF DIRECTORS
Four directors will be elected this year for terms expiring in 2004. The
nominees for election as selected by the Nominating and Governance Committee of
the Company's Board of Directors are: Jack B. Evans, Joyce L. Hanes, David A.
Perdue and Judith D. Pyle. Each of the nominees is currently serving as a
director of the Company. Each person elected as director will serve until the
Annual Meeting of Shareowners of the Company in 2004 or until his or her
successor has 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 by abstention or otherwise, will have no effect on the election
of directors. The proxies solicited may be voted for a substitute nominee or
nominees if any of the nominees are 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 December 31, 2000), an account of
their business experience and the names of publicly-held and certain other
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
JACK B. EVANS Director Since 2000
[PHOTO] Age 52 Nominated Term Expires in 2004
Mr. Evans is a director and since 1996 has served as President of The Hall-Perrine Foundation, a private philanthropic
corporation in Cedar Rapids, Iowa. Previously, Mr. Evans was President and Chief Operating Officer of SCI Financial
Group, Inc., a regional financial services firm. Mr. Evans is a director of Gazette Communications, the Federal Reserve
Bank of Chicago and Nuveen Institutional Advisory Corp., and Vice Chairman and a director of United Fire and Casualty
Company. Mr. Evans has served as a director of IES, IPC, WP&L and AER since 2000. Mr. Evans is Chairperson of the Audit
Committee.
JOYCE L. HANES Director Since 1998
[PHOTO] Age 68 Nominated Term Expires in 2004
Ms. Hanes has been a director of Midwest Wholesale, Inc., a products wholesaler in Mason City, Iowa, since 1970 and
Chairman of the Board since December 1997, having previously served as Chairman from 1986 to 1988. She is a director of
Iowa Student Loan Liquidity Corp. Ms. Hanes has served as a director of IPC since 1982 and of WP&L, IES and AER since
1998.
DAVID A. PERDUE Director Since 2001
[PHOTO] Age 51 Nominated Term Expires in 2004
Mr. Perdue is President of the Reebok brand for Reebok International Limited, a designer, distributor and marketer of
footwear, apparel and sports equipment, located in Canton, Massachusetts. Prior to joining Reebok in 1998, Mr. Perdue
was Senior Vice President of Operations at Haggar, Inc. He was appointed to serve as a director of the Company, IES,
IPC, WP&L and AER as of February 15, 2001.
7
JUDITH D. PYLE Director Since 1992
[PHOTO] Age 57 Nominated Term Expires in 2004
Ms. Pyle is Vice Chair of The Pyle Group, a financial services company located in Madison, Wisconsin. Prior to assuming
her current position, Ms. Pyle served as Vice Chairman and Senior Vice President of Corporate Marketing of Rayovac
Corporation (a battery and lighting products manufacturer), Madison, Wisconsin. In addition, Ms. Pyle is Vice Chairman
of Georgette Klinger, Inc. and a director of Uniek, Inc. Ms. Pyle has served as a director of WP&L since 1994, of AER
since 1992 and of IES and IPC since 1998. Ms. Pyle is Chairperson of the Compensation and Personnel Committee.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ALL NOMINEES FOR
ELECTION AS DIRECTORS.
CONTINUING DIRECTORS
ALAN B. ARENDS Director Since 1998
[PHOTO] Age 67 Term Expires in 2002
Mr. Arends is Chairman of the Board of Directors of Alliance Benefit Group Financial Services Corp., Albert Lea,
Minnesota, an employee benefits company that he founded in 1983. He has served as a director of IPC since 1993 and of
WP&L, IES and AER since 1998.
ERROLL B. DAVIS, JR. Director Since 1982
[PHOTO] Age 56 Term Expires in 2003
Mr. Davis has been President of the Company since January 1990 and was elected President and Chief Executive Officer in
July 1990. He was elected Chairman of the Board in April 2000. Mr. Davis joined WP&L in August 1978 and was elected
President of WP&L in July 1987. He was elected President and Chief Executive Officer of WP&L in August 1988. Mr. Davis
has also served as Chief Executive Officer of AER, IES and IPC since 1998. He is a member of the Boards of Directors of
BP Amoco p.l.c., PPG Industries, Inc., Electric Power Research Institute and the Edison Electric Institute. Mr. Davis
has served as a director of WP&L since 1984, of AER since 1988 and of IES and IPC since 1998.
LEE LIU Director Since 1998
[PHOTO] Age 67 Term Expires in 2003
Mr. Liu served as Chairman of the Board of the Company from April 1998 until April 2000 in accordance with the terms of
his employment agreement. He was Chairman of the Board and Chief Executive Officer of IES Industries Inc. (a predecessor
to the Company) and Chairman of the Board and Chief Executive Officer of IES prior to 1998. Mr. Liu held a number of
professional, management and executive positions after joining Iowa Electric Light and Power Company (later known as
IES) in 1957. He is a director of Principal Financial Group and Eastman Chemical Company. Mr. Liu has served as a
director of IES (or predecessor companies) since 1981 and of WP&L, IPC and AER since 1998.
8
KATHARINE C. LYALL Director Since 1994
[PHOTO] Age 59 Term Expires in 2002
Ms. Lyall is President of the University of Wisconsin System in Madison, Wisconsin. In addition to her administrative
position, she is a professor of economics at the University. She serves on the Boards of Directors of the Kemper
National Insurance Companies, M&I Corporation and the Carnegie Foundation for the Advancement of Teaching. Ms. Lyall has
served as a director of WP&L since 1986, of AER since 1994 and of IES and IPC since 1998.
ROBERT W. SCHLUTZ Director Since 1998
[PHOTO] Age 64 Term Expires in 2003
Mr. Schlutz is President of Schlutz Enterprises, a diversified farming and retailing business in Columbus Junction,
Iowa. Mr. Schlutz has served as a director of IES (or predecessor companies) since 1989 and of WP&L, IPC and AER since
1998. Mr. Schlutz is Chairperson of the Environmental, Nuclear, Health and Safety Committee.
WAYNE H. STOPPELMOOR Director Since 1998
[PHOTO] Age 66 Term Expires in 2003
Mr. Stoppelmoor served as Vice Chairman of the Board of the Company from April 1998 until April 2000 in accordance with
the terms of his consulting agreement. Prior to 1998, he was Chairman, President and Chief Executive Officer of IPC. He
retired as President of IPC in 1996 and as Chief Executive Officer in 1997. Mr. Stoppelmoor has served as a director of
IPC since 1986 and of WP&L, IES and AER since 1998.
ANTHONY R. WEILER Director Since 1998
[PHOTO] Age 64 Term Expires in 2002
Mr. Weiler is a consultant for several home furnishings organizations. Prior to assuming his current position,
Mr. Weiler had been a Senior Vice President for Heilig-Meyers Company, a national furniture retailer headquartered in
Richmond, Virginia. He is a director of the Retail Home Furnishings Foundation. Mr. Weiler has served as a director of
IES (or predecessor companies) since 1979 and of WP&L, IPC and AER since 1998. Mr. Weiler is Chairperson of the
Nominating and Governance Committee.
RETIRING DIRECTORS
Rockne G. Flowers will turn 70 years of age on April 6, 2001. Milton E. Neshek
turned 70 years of age on October 26, 2000. Pursuant to the mandatory retirement
provisions in the Company's Bylaws, Mr. Flowers and Mr. Neshek will retire as
directors on the date of the Annual Meeting.
In addition, Arnold M. Nemirow has indicated his intent, as a result of his
other time commitments, to resign as a director effective as of the Annual
Meeting.
The Company expresses its most sincere thanks and appreciation to
Messrs. Flowers, Neshek and Nemirow for their many years of service to the
Company and for their valued advice and guidance.
9
MEETINGS AND COMMITTEES OF THE BOARD
The full Board of Directors of the Company considers all major decisions of the
Company. However, the Board has established standing Audit; Compensation and
Personnel; Environmental, Nuclear, Health and Safety; Nominating and Governance;
and Capital Approval Committees so that certain important matters can be
addressed in more depth than may be possible in a full Board meeting. The
following is a description of each of these committees:
AUDIT COMMITTEE
The Audit Committee held two meetings in 2000. The Committee currently consists
of J. B. Evans (Chair), A. B. Arends, K. C. Lyall, J. D. Pyle and M. E. Neshek.
The Audit Committee recommends to the Board the appointment of independent
auditors; 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 Committee
considers appropriate.
COMPENSATION AND PERSONNEL COMMITTEE
The Compensation and Personnel Committee held three meetings in 2000. The
Committee currently consists of J. D. Pyle (Chair), A. B. Arends, J. B. Evans,
A. M. Nemirow and D. A. Perdue. This Committee sets executive compensation
policy; administers the Company's Long-Term Equity Incentive Plan; 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; and reviews
human resource development programs.
ENVIRONMENTAL, NUCLEAR, HEALTH AND SAFETY COMMITTEE
The Environmental, Nuclear, Health and Safety Committee held two meetings in
2000. The Committee currently consists of R. W. Schlutz (Chair), J. L. Hanes,
M. E. Neshek, D. A. Perdue and A. R. Weiler. The Committee's responsibilities
are to review environmental policy and planning issues of interest to the
Company, including matters involving the Company before environmental regulatory
agencies and compliance with air, water and waste regulations. In addition, the
Committee reviews policies and operating issues related to the Company's nuclear
generating station investments including planning and funding for
decommissioning of the plants. The Committee also reviews health and safety
related policies, activities and operational issues as they affect employees,
customers and the general public.
NOMINATING AND GOVERNANCE COMMITTEE
The Nominating and Governance Committee held three meetings in 2000. The
Committee currently consists of A. R. Weiler (Chair), R. G. Flowers, J. L.
Hanes, K. C. Lyall and R. W. Schlutz. This Committee's responsibilities include
recommending and nominating new members of the Board; recommending committee
assignments and committee chairpersons; evaluating overall Board effectiveness;
preparing an annual report on Chief Executive Officer effectiveness; and
considering and developing recommendations to the Board of Directors on other
corporate governance issues. In nominating persons for election to the Board,
the Nominating and Governance Committee will consider nominees recommended by
shareowners. Any shareowner wishing to make a recommendation should write to the
Corporate Secretary of the Company, who will forward all recommendations to the
Committee. The Company's Bylaws also provide for shareowner nominations of
candidates for election as directors. These provisions require such nominations
to be made pursuant to timely notice (as specified in the Bylaws) in writing to
the Corporate Secretary of the Company.
CAPITAL APPROVAL COMMITTEE
The Capital Approval Committee held no meetings in 2000. The Committee currently
consists of J. B. Evans, J. D. Pyle and A. R. Weiler. The purpose of this
Committee is the
10
evaluation of certain investment proposals where (i) an iterative bidding
process is required and/or (ii) the required timelines for such a proposal would
not permit the proposal to be brought before a regular meeting of the Board of
Directors and/or a special meeting of the full Board of Directors is not
practical or merited.
The Board of Directors held seven meetings during 2000. Each director attended
at least 80% of the aggregate number of meetings of the Board and Board
committees on which he or she served.
The Board and each committee conducts performance evaluations annually to
determine its effectiveness and suggests improvements for consideration and
implementation. In addition, Mr. Davis' performance as Chief Executive Officer
is also evaluated by the full Board on an annual basis.
11
COMPENSATION OF DIRECTORS
No retainer fees are paid to Messrs. Davis and Stoppelmoor for their service on
the Company's Board of Directors. In 2000, all other directors (the
"non-employee directors"), each of whom serve on the Boards of the Company, IES,
IPC, WP&L and AER, received an annual retainer of $45,000 for service on all
five Boards consisting of $25,000 in cash and $20,000 in Company common stock.
Travel expenses are paid for each meeting day attended. Beginning in 2001, the
annual retainer for each non-employee director has been changed to $25,000 in
cash and 1,000 shares of Company common stock for service on all five Boards.
The directors have the option to receive each amount outright (in cash and
stock), to have each amount deposited to their Shareowner Direct Plan account or
to a directors' Deferred Compensation Account or any combination thereof.
Effective April 21, 2001, Mr. Stoppelmoor's existing consulting contract will
expire and he will be eligible to receive compensation as a non-employee
director on a prorated basis for 2001.
DIRECTOR'S DEFERRED COMPENSATION PLAN
Under the Director's Deferred Compensation Plan, directors may elect to defer
all or part of their retainer fee. Amounts deposited to a Deferred Compensation
Interest Account receive an annual return based on the A-Utility Bond Rate with
a minimum return no less than the prime interest rate published in THE WALL
STREET JOURNAL. The balance credited to a director's Deferred Compensation
Interest Account as of any date will be the accumulated deferred cash
compensation and interest that are credited to such account as of such date.
Amounts deposited to a Company Stock Account, whether the cash portion or the
stock portion of the director's compensation, are treated as though invested in
the common stock of the Company and will be credited with dividends and those
dividends will be reinvested. Annually, the director may elect that the Deferred
Compensation Account will be paid in a lump sum or in annual installments for up
to ten years, either in a designated year or upon retirement or resignation from
the Board.
DIRECTOR'S CHARITABLE AWARD PROGRAM
The Company maintains a Director's Charitable Award Program for the members of
its Board of Directors beginning after three years of service. The purpose of
the Program is to recognize the interest of the Company and its directors in
supporting worthy institutions, and to 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
non-employee directors, beginning after three years of service, 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. The imputed income allocations reported for each
director in 2000 under the Director's Life Insurance Program were as follows:
A. B. Arends -- $50, R. G. Flowers -- $50, J. L. Hanes -- $50, K. C. Lyall --
12
$389, A. M. Nemirow -- $50, M. E. Neshek -- $975, J. D. Pyle -- $50, and A. R.
Weiler -- $50.
PENSION ARRANGEMENTS
Prior to April 1998, Mr. Liu participated in the IES Industries Inc. retirement
plan, which plan has been transferred to Alliant Energy Corporate Services.
Mr. Liu's benefits under the plan have been "grandfathered" to reflect the
benefit plan formula in effect in April 1998. See "Retirement and Employee
Benefit Plans -- IES Industries Pension Plan."
Alliant Energy Corporate Services also maintains a non-qualified Supplemental
Retirement Plan ("SRP") for eligible former officers of IES Industries Inc.
Mr. Liu participates in the SRP. The SRP generally provides for payment of
supplemental retirement benefits equal to 75% of the officer's base salary in
effect at the date of retirement, reduced by benefits receivable under the
qualified retirement plan, for a period not to exceed 15 years following the
date of retirement. The SRP also provides for certain death benefits to be paid
to the officer's designated beneficiary and benefits if an officer becomes
disabled under the terms of the qualified retirement plan.
CERTAIN AGREEMENTS
Mr. Liu had an employment agreement with the Company, pursuant to which Mr. Liu
served as Chairman of the Board of the Company until April 2000. At that time,
Mr. Liu retired as Chairman of the Board of the Company, although he continues
to serve as a director. Mr. Liu's employment agreement provided that he receive
an annual base salary of not less than $400,000, supplemental retirement
benefits and the opportunity to earn short-term and long-term incentive
compensation (including stock options, restricted stock and other long-term
incentive compensation).
Mr. Stoppelmoor entered into a three-year consulting arrangement with the
Company in April 1998. Under the terms of his consulting arrangement,
Mr. Stoppelmoor received an annual fee of $324,500 during each of the first two
years and is currently receiving a fee of $200,000 for the third year of the
consulting period. Mr. Stoppelmoor is also entitled to participate in
compensation plans equivalent to those provided the Company's Chairman of the
Board and Chief Executive Officer during the consulting period, subject to
approval by the Compensation and Personnel Committee of the Board.
Mr. Stoppelmoor is eligible to participate in the Director's Charitable Award
Program and the Director's Life Insurance Program. His consulting arrangement
provides that he will not be eligible to receive any other compensation
otherwise payable to directors of the Company until the end of the three-year
term on April 21, 2001. At that time, Mr. Stoppelmoor will be eligible to
receive the annual director's compensation.
13
OWNERSHIP OF VOTING SECURITIES
Listed in the following table are the number of shares of the Company's common
stock beneficially owned by the executive officers listed in the Summary
Compensation Table and all nominees and directors of the Company, as well as the
number of shares owned by directors and executive officers as a group as of
March 1, 2001. The directors and executive officers of the Company as a group
owned less than one percent of the outstanding shares of common stock on that
date. To the Company's knowledge, no shareowner beneficially owned five percent
or more of the Company's outstanding common stock as of December 31, 2000.
SHARES
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1)
------------------------ --------------
EXECUTIVES(2)
William D. Harvey......................................... 75,815(3)
James E. Hoffman.......................................... 49,602(3)
Eliot G. Protsch.......................................... 77,715(3)
Thomas M. Walker.......................................... 36,893(3)
DIRECTOR NOMINEES
Jack B. Evans............................................. 32,402(3)
Joyce L. Hanes............................................ 6,250(3)
David A. Perdue........................................... 1,556(3)
Judith D. Pyle............................................ 9,440
DIRECTORS
Alan B. Arends............................................ 4,629(3)
Erroll B. Davis, Jr....................................... 202,015(3)
Rockne G. Flowers......................................... 16,423(4)
Lee Liu................................................... 192,773(3)
Katharine C. Lyall........................................ 11,706
Arnold M. Nemirow......................................... 14,564(3)(4)
Milton E. Neshek.......................................... 14,742(3)(4)
Robert W. Schlutz......................................... 6,729(3)
Wayne H. Stoppelmoor...................................... 128,162(3)
Anthony R. Weiler......................................... 6,962(3)
All Executives and Directors as a Group
34 people, including those listed above................... 1,263,893(3)
(1) Total shares of Company common stock outstanding as of December 31, 2000
were 79,010,114.
(2) Stock ownership of Mr. Davis is shown with the directors.
(3) Included in the beneficially owned shares shown are indirect ownership
interests with shared voting and investment powers: Mr. Harvey -- 2,210,
Mr. Protsch -- 667, Mr. Davis -- 7,028, Ms. Hanes -- 514, Mr. Liu -- 9,755
and Mr. Weiler -- 1,148; shares of common stock held in deferred
compensation plans: Mr. Arends -- 1,862, Mr. Evans -- 2,402, Ms. Hanes --
174, Mr. Nemirow -- 830, Mr. Neshek -- 1,261, Mr. Perdue -- 1,556,
Mr. Schlutz -- 1,370, Mr. Weiler -- 1,862, Mr. Davis --
14
6,187, Mr. Protsch -- 7,232, Mr. Harvey -- 4,069, Mr. Walker -- 5,166 (all
executive officers and directors as a group -- 35,072); and stock options
exercisable on or within 60 days of March 1, 2001: Mr. Davis -- 165,327,
Mr. Liu -- 148,849, Mr. Stoppelmoor -- 119,201, Mr. Harvey -- 44,258,
Mr. Hoffman -- 29,808, Mr. Protsch -- 44,258 and Mr. Walker -- 29,097 (all
executive officers and directors as a group -- 865,376).
(4) Messrs. Flowers, Nemirow and Neshek will retire as directors at the Annual
Meeting.
15
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 2000, 1999
and 1998 to the Chief Executive Officer and the four other most highly
compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------------------------------------------------
AWARDS PAYOUTS
---------------------------------
SECURITIES
RESTRICTED UNDERLYING
NAME AND OTHER ANNUAL STOCK OPTIONS LTIP ALL OTHER
PRINCIPAL POSITION YEAR BASE SALARY BONUS(1) COMPENSATION(2) AWARDS(3) (SHARES)(4) PAYOUTS COMPENSATION(5)
----------------------------------------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 2000 $637,692 $895,200 $11,875 -- 111,912 $196,711 $52,619
Chairman, President and 1999 580,000 440,220 12,526 -- 77,657 84,870 53,188
Chief Executive Officer 1998 540,000 -- 13,045 -- 36,752 -- 50,996
----------------------------------------------------------------------------------------------------------------------------
William D. Harvey 2000 264,615 206,541 4,234 -- 21,063 47,474 42,230
Executive Vice 1999 254,423 116,535 4,565 $255,004 17,071 31,365 37,005
President 1998 233,846 -- 4,699 -- 11,406 -- 21,642
----------------------------------------------------------------------------------------------------------------------------
James E. Hoffman 2000 264,615 233,147 -- -- 21,063 47,474 22,094
Executive Vice 1999 254,423 159,350 -- 255,004 17,071 -- 24,625
President 1998 230,455 -- -- -- 11,406 -- 17,119
----------------------------------------------------------------------------------------------------------------------------
Eliot G. Protsch 2000 264,615 214,942 1,423 -- 21,063 47,474 38,058
Executive Vice 1999 254,423 152,898 1,909 255,004 17,071 31,365 32,941
President 1998 233,846 -- 2,443 -- 11,406 -- 18,065
----------------------------------------------------------------------------------------------------------------------------
Thomas M. Walker 2000 254,616 190,026 -- -- 20,268 47,474 6,166
Executive Vice 1999 244,808 148,960 -- -- 16,402 -- 6,531
President & Chief 1998 229,846 -- 814 -- 11,406 -- 15,026
Financial Officer
----------------------------------------------------------------------------------------------------------------------------
(1) No bonuses were paid for 1998. The 1999 bonuses were earned in 1999 and
paid in 2000. The 2000 bonuses were earned in 2000 and paid in 2001.
(2) Other Annual Compensation for 2000 consists of income tax gross-ups for
reverse split-dollar life insurance.
(3) In 1999, restricted stock was awarded under the Alliant Energy Corporation
Long-Term Incentive Plan as follows: Mr. Harvey -- 9,294 shares,
Mr. Hoffman -- 9,294 shares and Mr. Protsch -- 9,294 shares. Dividends on
shares of restricted stock granted under the Long-Term Equity Incentive Plan
are held in escrow and reinvested in shares of common stock pending vesting
of the underlying restricted stock. If such restricted stock vests, then the
participant is also entitled to receive the common stock into which the
dividends on the restricted stock were reinvested. The amounts shown in the
table above represent the market value of the restricted stock on the date
of grant. The number of shares of restricted stock held by the officers
identified in the table and the market value of such shares as of
December 31, 2000 were as follows: Mr. Harvey -- 9,294 shares ($296,293),
Mr. Hoffman -- 9,294 shares ($296,293) and Mr. Protsch -- 9,294 shares
($296,293).
16
(4) Awards made in 2000 were in combination with performance share awards as
described in the table entitled "Long-Term Incentive Awards in 2000".
(5) The table below shows the components of the compensation reflected under
this column for 2000:
------------------------------------------------------------------------------------------------------------------------------
ERROLL B. DAVIS, JR. WILLIAM D. HARVEY JAMES E. HOFFMAN ELIOT G. PROTSCH THOMAS M. WALKER
------------------------------------------------------------------------------------------------------------------------------
A. $19,131 $ 7,938 $ 1,700 $ 7,938 $5,250
------------------------------------------------------------------------------------------------------------------------------
B. 18,952 8,524 0 7,956 0
------------------------------------------------------------------------------------------------------------------------------
C. 12,969 5,345 0 1,852 0
------------------------------------------------------------------------------------------------------------------------------
D. 1,567 320 624 209 916
------------------------------------------------------------------------------------------------------------------------------
E. 0 20,103 19,770 20,103 0
------------------------------------------------------------------------------------------------------------------------------
Total $52,619 $42,230 $22,094 $38,058 $6,166
------------------------------------------------------------------------------------------------------------------------------
A. Matching contributions to 401(k) Plan and Deferred Compensation Plan
B. Split-dollar life insurance reportable income (the split-dollar insurance
premiums are calculated using the "foregone interest" method)
C. Reverse split-dollar life insurance
D. Life insurance coverage in excess of $50,000
E. Dividends on restricted stock
17
STOCK OPTIONS
The following table sets forth certain information concerning stock options
granted during 2000 to the executives named below:
STOCK OPTION GRANTS IN 2000
------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
--------------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR
OPTIONS IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED(1) YEAR ($/SHARE) DATE 5% 10%
------------------------------------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 111,912 12.4% $28.5938 1/18/10 $5,212,861 $8,300,513
------------------------------------------------------------------------------------------------------------------------
William D. Harvey 21,063 2.3% 28.5938 1/18/10 981,115 1,562,243
------------------------------------------------------------------------------------------------------------------------
James E. Hoffman 21,063 2.3% 28.5938 1/18/10 981,115 1,562,243
------------------------------------------------------------------------------------------------------------------------
Eliot G. Protsch 21,063 2.3% 28.5938 1/18/10 981,115 1,562,243
------------------------------------------------------------------------------------------------------------------------
Thomas M. Walker 20,268 2.3% 28.5938 1/18/10 944,083 1,503,278
------------------------------------------------------------------------------------------------------------------------
(1) Consists of non-qualified stock options to purchase shares of Company
common stock granted pursuant to the Company's Long Term Equity Incentive
Plan. Options were granted on January 19, 2000, and will have a three-year
vesting schedule with one-third becoming exercisable on January 2, 2001,
one-third becoming exercisable on January 2, 2002 and the final one-third
becoming exercisable on January 2, 2003. Upon a "change in control" of the
Company as defined in the Plan or upon retirement, disability or death of
the option holder, the options will become immediately exercisable.
(2) The hypothetical potential appreciation shown for the named executives is
required by rules of the Securities and Exchange Commission ("SEC"). The
amounts shown do not represent the historical or expected future
performance of the Company's common stock. In order for the named
executives to realize the potential values set forth in the 5% and 10%
columns in the table above, the price per share of the Company's common
stock would be $46.58 and $74.17, respectively, as of the expiration date
of the options.
18
The following table provides information for the executives named below
regarding the number and value of exercisable and unexercised options. None of
the executives exercised options in fiscal 2000.
OPTION VALUES AT DECEMBER 31, 2000
------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS
UNEXERCISED OPTIONS AT FISCAL YEAR END AT YEAR END(1)
----------------------------------------------------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 165,327 100,494 $363,360 $297,362
------------------------------------------------------------------------------------------------------------
William D. Harvey 44,258 19,732 95,168 57,607
------------------------------------------------------------------------------------------------------------
James E. Hoffman 29,808 19,732 49,539 57,607
------------------------------------------------------------------------------------------------------------
Eliot G. Protsch 44,258 19,732 95,168 57,607
------------------------------------------------------------------------------------------------------------
Thomas M. Walker 29,097 18,979 47,773 55,416
------------------------------------------------------------------------------------------------------------
(1) Based on the closing per share price of Company common stock on
December 31, 2000 of $31.88.
19
LONG-TERM INCENTIVE AWARDS
The following table provides information concerning long-term incentive awards
made to the executives named below in 2000.
LONG-TERM INCENTIVE AWARDS IN 2000
--------------------------------------------------------------------------------------------------------------
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
NUMBER OF PERFORMANCE ---------------------------------------------
SHARES, OR OTHER
UNITS OR PERIOD UNTIL
OTHER RIGHTS MATURATION THRESHOLD TARGET MAXIMUM
NAME (#)(1) OR PAYOUT (#) (#) (#)
--------------------------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 19,025 1/1/03 9,513 19,025 38,050
--------------------------------------------------------------------------------------------------------------
William D. Harvey 3,707 1/1/03 1,854 3,707 7,414
--------------------------------------------------------------------------------------------------------------
James E. Hoffman 3,707 1/1/03 1,854 3,707 7,414
--------------------------------------------------------------------------------------------------------------
Eliot G. Protsch 3,707 1/1/03 1,854 3,707 7,414
--------------------------------------------------------------------------------------------------------------
Thomas M. Walker 3,567 1/1/03 1,784 3,567 7,134
--------------------------------------------------------------------------------------------------------------
(1) Consists of performance shares awarded under the Company's Long-Term Equity
Incentive Plan. The payout from the performance shares is based on two
equally-weighted performance components: the Company's three-year Total
Shareholder Return (TSR) relative to an investor-owned utility peer group,
and annualized earnings per share growth versus internally set performance
hurdles contained in the Alliant Energy Strategic Plan during the
performance cycle ending December 31, 2002. Payouts are subject to
modification pursuant to a performance multiplier that ranges from 0 to
2.00, and will be made in shares of Company common stock or a combination
of common stock and cash.
20
CERTAIN AGREEMENTS AND TRANSACTIONS
Mr. Davis has an employment agreement with the Company, pursuant to which
Mr. Davis will serve as the Chief Executive Officer of the Company until
April 21, 2003. Mr. Davis also began serving as the Chairman of the Company
effective April 21, 2000. Following the expiration of the initial term of
Mr. Davis' employment agreement, his agreement will automatically renew for
successive one-year terms, unless either Mr. Davis or the Company gives prior
written notice of his or its intent to terminate the agreement. Mr. Davis will
also serve as Chief Executive Officer of each subsidiary of the Company until at
least April 21, 2001 and as a director of such companies during the term of his
employment agreement. Pursuant to Mr. Davis' employment agreement, he is paid an
annual base salary of not less than $450,000. Mr. Davis' current salary under
his employment agreement is $685,000. Mr. Davis also has the opportunity to earn
short-term and long-term incentive compensation (including stock options,
restricted stock and other long-term incentive compensation) and receive
supplemental retirement benefits (including continued participation in the WP&L
Executive Tenure Compensation Plan) and life insurance providing a death benefit
of three times his annual salary. If the employment of Mr. Davis is terminated
without cause (as defined in the employment agreement) or if Mr. Davis
terminates his employment for good reason (as defined in the employment
agreement), the Company or its affiliates will continue to provide the
compensation and benefits called for by the employment agreement through the end
of the term of such employment agreement (with incentive compensation based on
the maximum potential awards and with any stock compensation paid in cash), and
all unvested stock compensation will vest immediately. If Mr. Davis dies or
becomes disabled, or terminates his employment without good reason, during the
term of his respective employment agreement, the Company or its affiliates will
pay to Mr. Davis or his beneficiaries or estate all compensation earned through
the date of death, disability or such termination (including previously deferred
compensation and pro rata incentive compensation based upon the maximum
potential awards). If Mr. Davis is terminated for cause, the Company or its
affiliates will pay his base salary through the date of termination plus any
previously deferred compensation. Under Mr. Davis' employment agreement, if any
payments thereunder constitute an excess parachute payment under the Internal
Revenue Code (the "Code"), the Company will pay to Mr. Davis the amount
necessary to offset the excise tax and any applicable taxes on this additional
payment.
The Company currently has in effect key executive employment and severance
agreements (the "KEESAs") with certain executive officers of the Company
(including Messrs. Davis, Harvey, Hoffman, Protsch and Walker). The KEESAs
provide that each executive officer who is a party thereto is entitled to
benefits if, within five years after a change in control of the Company (as
defined in the KEESAs), the officer's employment is ended through
(i) termination by the Company, other than by reason of death or disability or
for cause (as defined in the KEESAs), or (ii) termination by the officer due to
a breach of the agreement by the Company or a significant change in the
officer's responsibilities, or (iii) in the case of Mr. Davis' agreement,
termination by Mr. Davis following the first anniversary of the change of
control. The benefits provided are (i) a cash termination payment of two or
three times (depending on which executive is involved) the sum of the officer's
annual salary and his or her average annual bonus during the three years before
the termination and (ii) continuation for up to five years of equivalent
hospital, medical, dental, accident, disability and life insurance coverage as
in effect at the time of termination. Each KEESA for executive officers below
the level of Executive Vice President provides that if any portion of the
benefits under the KEESA or under any other agreement for the officer would
constitute an excess parachute payment for purposes of the Code, benefits will
be reduced so that the officer will be entitled to receive $1 less
21
than the maximum amount which he or she could receive without becoming subject
to the 20% excise tax imposed by the Code on certain excess parachute payments,
or which the Company may pay without loss of deduction under the Code. The
KEESAs for the Chief Executive Officer and the Executive Vice Presidents
(including Messrs. Davis, Harvey, Hoffman, Protsch and Walker) provide that if
any payments thereunder or otherwise constitute an excess parachute payment, the
Company will pay to the appropriate officer the amount necessary to offset the
excise tax and any additional taxes on this additional payment. Mr. Davis'
employment agreement as described above limits benefits paid thereunder to the
extent that duplicate payments would be provided to him under his KEESA.
22
RETIREMENT AND EMPLOYEE BENEFIT PLANS
ALLIANT ENERGY CORPORATE SERVICES RETIREMENT PLANS
Salaried employees (including officers) of the Company are eligible to
participate in a Retirement Plan maintained by Alliant Energy Corporate
Services. In 1998, the Retirement Plan was amended to implement a cash balance
format, thereby changing the benefit calculation formulas and adding a lump sum
distribution option for eligible participants. The Alliant Energy Cash Balance
Pension Plan bases a participant's defined benefit pension on the value of a
hypothetical account balance. For individuals participating in the Plan as of
August 1, 1998, a starting account balance was created equal to the present
value of the benefit accrued as of December 31, 1997, under the Plan's benefit
formula prior to the change to a cash balance approach. That formula provided a
retirement income based on years of credited service and final average
compensation for the 36 highest consecutive months, with a reduction for a
Social Security offset. In addition, individuals participating in the Plan as of
August 1, 1998 received a special one-time transition credit amount equal to a
specified percentage varying with age multiplied by credited service and base
pay.
For 1998 and thereafter, a participant receives annual credits to the account
equal to 5% of base pay (including certain incentive payments, pre-tax deferrals
and other items), plus an interest credit on all prior accruals equal to 4% plus
a share of the gain on the investment return on assets in the trust investment
for the year.
The life annuity payable under the Plan is determined by converting the
hypothetical account balance credits into annuity form. Individuals who were
participants in the Plan on August 1, 1998 are in no event to receive any less
than what would have been provided under the prior formula, had it continued, if
they terminate on or before August 1, 2008, and do not elect to commence
benefits before the age of 55.
All of the individuals listed in the Summary Compensation Table who participate
in the Plan (Messrs. Davis, Protsch and Harvey) are "grandfathered" under the
prior plan benefit formula. Since their estimated benefits under that formula
are higher than under the Plan formula, utilizing current assumptions, their
benefits would currently be determined by the prior plan benefit formula. The
following table illustrates the estimated annual benefits payable upon
retirement at age 65 under the prior formula based on average annual
compensation and years of service. To the extent benefits under the Plan are
limited by tax law, any excess will be paid under the Unfunded Excess Plan
described below.
23
RETIREMENT PLAN TABLE
AVERAGE ANNUAL BENEFIT AFTER SPECIFIED YEARS IN PLAN
ANNUAL ---------------------------------------------
COMPENSATION 15 20 25 30+
-------------- --------- --------- --------- ---------
$ 200,000 $ 55,000 $ 73,300 $ 91,700 $110,000
300,000 82,500 110,000 137,500 165,000
400,000 110,000 146,700 183,300 220,000
500,000 137,500 183,300 229,100 275,000
600,000 165,000 220,000 275,000 330,000
700,000 192,500 256,700 320,800 385,000
800,000 220,000 293,300 366,700 440,000
900,000 247,000 330,000 412,500 495,000
1,000,000 275,000 366,700 458,300 550,000
1,100,000 302,500 403,300 504,100 605,000
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. 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% of Social Security benefits. The estimated benefits
in the table above do not reflect the Social Security offset. The estimated
benefits are computed on a straight-life annuity basis. Benefits will be
adjusted if the employee receives one of the optional forms of payment. Credited
years of service under the Plan for covered persons named in the foregoing
Summary Compensation Table are as follows: Erroll B. Davis, Jr., 21 years; Eliot
G. Protsch, 21 years; and William D. Harvey, 13 years.
IES INDUSTRIES PENSION PLAN
Prior to April 1998, Messrs. Hoffman and Walker participated in the IES
Industries Inc. retirement plan (which plan has been transferred to Alliant
Energy Corporate Services). Plan benefits payable to Messrs. Hoffman and Walker
have been "grandfathered" to reflect the benefit plan formula in effect at that
time. Since their estimated benefits under that formula are higher than under
the Plan formula, utilizing current assumptions, their benefits would currently
be determined by the prior plan benefit formula. The following table illustrates
the estimated annual benefits payable upon retirement at age 65 under the prior
formula for the average annual compensation and years of service. To the extent
benefits under the Plan are limited by tax law, any excess will be paid under
the Unfunded Excess Plan described below.
PENSION PLAN TABLE
AVERAGE ANNUAL BENEFIT AFTER SPECIFIED YEARS IN PLAN
ANNUAL ---------------------------------------------------------
COMPENSATION 15 20 25 30 35
-------------- --------- --------- --------- --------- ---------
$200,000 $ 43,868 $ 58,490 $ 73,113 $ 87,735 $102,358
300,000 67,118 89,490 111,863 134,235 156,608
400,000 90,367 120,490 150,612 180,735 210,857
500,000 113,618 151,490 189,363 227,235 265,108
600,000 136,868 182,490 228,113 273,735 319,358
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. Plan benefits
depend upon length of Plan service (up
24
to a maximum of 35 years), age at retirement and amount of compensation
(determined in accordance with the Plan). The estimated benefits are computed on
a straight-life annuity basis. Benefits will be adjusted if the employee
receives one of the optional forms of payment. Credited years of service under
the Plan for covered persons named in the foregoing Summary Compensation Table
are as follows: Mr. Hoffman, five years and Mr. Walker, four years.
UNFUNDED EXCESS PLAN -- Alliant Energy Corporate Services maintains an Unfunded
Excess Plan that 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. The Unfunded
Excess Plan provides an amount equal to the difference between the actual
pension benefit payable under the pension plan and what such pension benefit
would be if calculated without regard to any limitation imposed by the Code on
pension benefits or covered compensation.
UNFUNDED EXECUTIVE TENURE COMPENSATION PLAN -- Alliant Energy Corporate Services
maintains an Unfunded Executive Tenure Compensation Plan to provide incentive
for key executives to remain in the service of the Company by providing
additional compensation which is payable only if the executive remains with the
Company until retirement (or other termination if approved by the Board of
Directors). In the case of the Chief Executive Officer only, in the event that
the Chief Executive Officer (1) is terminated under his employment agreement
with the Company as described above other than for cause, death or disability
(as those terms are defined in the employment agreement), (2) terminates his
employment under the employment agreement for good reason (as such term is
defined in the employment agreement), or (3) is terminated as a result of a
failure of the employment agreement to be renewed automatically pursuant to its
terms (regardless of the reason for such non-renewal), then for purposes of the
plan, the Chief Executive Officer shall be deemed to have retired at age 65 and
shall be entitled to benefits under the plan. Participants in the plan must be
designated by the Chief Executive Officer of the Company and approved by its
Board of Directors. Mr. Davis was the only active participant in the plan as of
December 31, 2000. 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% 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% of such amount for
120 months in the case of death before retirement, or if the participant dies
after retirement, 50% of such amount for the balance of the 120 months. Annual
benefits of $160,000 would be payable to Mr. Davis upon retirement, assuming he
continues in Alliant Energy Corporate Services' service until retirement at the
same salary as was in effect on December 31, 2000.
ALLIANT ENERGY CORPORATE SERVICES SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company maintains an unfunded Supplemental Executive Retirement Plan to
provide incentive for key executives to remain in the service of the Company by
providing additional compensation which is payable only if the executive remains
with the Company until retirement, disability or death. Participants in the plan
must be approved by the Compensation and Personnel Committee of the Board. The
plan provides for payments of 60% of the participant's average annual earnings
(base salary and bonus) for the highest paid three years out of the last ten
years of the participant's employment reduced by the sum of benefits payable to
the officer from the officer's defined benefit plan and the Unfunded Excess
Plan. The normal retirement date under the plan is age 62 with at least ten
years of service and early retirement is at age 55 with at least ten years of
service. If a participant retires prior to age 62, the 60% payment under the
plan is reduced by 3% per year for each year the participant's retirement date
precedes his/her normal retirement date. The actuarial reduction factor will be
waived for senior officers who have attained age 55 and have a minimum of ten
years of service in a senior executive position with the Company. Benefit
payments under the plan will be made for the lifetime of the senior
25
officer, with a minimum of 12 years of payments if the participant dies after
retirement. A postretirement death benefit of one times the senior executive
officer's final average earnings at the time of retirement will be paid to the
designated beneficiary. Messrs. Davis, Harvey, Hoffman, Protsch and Walker are
participants in this plan. The following table shows payments under the plan,
assuming a minimum of ten years of service at retirement age.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE
AVERAGE ANNUAL BENEFIT AFTER SPECIFIED YEARS IN PLAN
ANNUAL ---------------------------------------------
COMPENSATION < 10 YEARS > 10 YEARS*
-------------- -------------------- ----------------------
$ 200,000 0 $120,000
300,000 0 180,000
400,000 0 240,000
500,000 0 300,000
600,000 0 360,000
700,000 0 420,000
800,000 0 480,000
900,000 0 540,000
1,000,000 0 600,000
1,100,000 0 660,000
------------
* Reduced by the sum of the benefit payable from the applicable retirement or
pension benefit plan and the Unfunded Excess Plan.
KEY EMPLOYEE DEFERRED COMPENSATION PLAN -- The Company maintains an unfunded Key
Employee Deferred Compensation Plan under which participants may defer up to
100% of base salary or incentive compensation. Participants who have made the
maximum allowed contribution to the Company-sponsored 401(k) Plan may receive an
additional credit to the Deferred Compensation Plan. The credit will be equal to
50% of the lesser of (i) the amount contributed to the 401(k) Plan plus the
amount deferred under this Plan, or (ii) 6% of base salary reduced by the amount
of any matching contributions in the 401(k) Plan. The employee may elect to have
his deferrals credited to an Interest Account or a Company Stock Account.
Deferrals and matching contributions to the Interest Account receive an annual
return based on the A-Utility Bond Rate with a minimum return no less than the
prime interest rate published in THE WALL STREET JOURNAL. Deferrals and matching
contributions credited to the Company Stock Account are treated as though
invested in the common stock of the Company and will be credited with dividends
and those dividends will be reinvested. The shares of common stock identified as
obligations under the plan as of December 31, 2000 are held in a rabbi trust
established in 2000. Payments from the plan may be made in a lump sum or in
annual installments for up to ten years at the election of the participant.
Participants are selected by the Chief Executive Officer of Alliant Energy
Corporate Services. Messrs. Davis, Harvey, Protsch and Walker participate in the
plan.
26
REPORT OF THE COMPENSATION AND PERSONNEL
COMMITTEE ON EXECUTIVE COMPENSATION
TO OUR SHAREOWNERS:
The Compensation and Personnel Committee (the "Committee") of the Board of
Directors of the Company is currently comprised of four non-employee directors.
The Committee assesses the effectiveness and competitiveness of, approves the
design of, and administers executive compensation programs within a consistent
total compensation framework for the Company. The Committee also reviews and
approves all salary arrangements and other remuneration for executives,
evaluates executive performance, and considers related matters. To support the
Committee in carrying out its mission, an independent consultant is engaged to
provide assistance to the Committee.
The Committee is committed to implementing an overall compensation program for
executives that furthers the Company's mission. Therefore, the Committee adheres
to the following compensation policies, which are intended to facilitate the
achievement of the Company's business strategies:
- Total compensation should enhance the Company's ability to attract, retain
and encourage the development of exceptionally knowledgeable and
experienced executives, upon whom, in large part, the successful operation
and management of the Company depends.
- Base salary levels should be targeted at a competitive market range paid
to executives of comparable companies. Specifically, the Committee targets
the median (50th percentile) of base salaries paid by a selected group of
utility and general industry companies.
- 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, business unit
and individual performance goals. In addition, incentive levels are
targeted at the median (50th percentile) of incentive compensation paid by
a selected group of utility and general industry companies.
COMPONENTS OF COMPENSATION
The major elements of the Company's executive compensation program are base
salary, short-term (annual) incentives and long-term (equity) incentives. These
elements are addressed separately below. In setting the level for each major
component of compensation, the Committee considers all elements of an
executive's total compensation package, including employee benefit and
perquisite programs. The Committee's goal is to provide an overall compensation
package for each executive officer that is competitive to the packages offered
other similarly situated executives. The Committee has determined that total
executive compensation, including that for Mr. Davis, is in line with
competitive compensation of the comparison group of companies.
BASE SALARIES
The Committee annually reviews each executive's base salary. Base salaries are
targeted at a competitive market range (i.e., at the median level) when
comparing both utility and non-utility (general industry) data. Base salaries
are adjusted annually by the Committee to recognize changes in the market,
varying levels of responsibility, prior experience and breadth of knowledge.
Increases to base salaries are driven primarily by market adjustments for a
particular salary level, which generally limit across-the-board increases.
Individual performance factors are not considered by the Committee in setting
base salaries. The Committee reviewed executive salaries for market
comparability using utility and general industry data contained in compensation
surveys published by Edison Electric Institute, American Gas Association and
several compensation consulting firms. Based on the foregoing, the
27
annual salary for Mr. Davis was fixed at $640,000 for the 2000 fiscal year.
SHORT-TERM INCENTIVES
The goal of the Company's short-term (annual) incentive programs is to promote
the Committee's pay-for-performance philosophy by providing executives with
direct financial incentives in the form of annual cash or stock based bonuses
based on the achievement of corporate, subsidiary, business unit and individual
performance goals. Annual bonus opportunities allow the Committee to communicate
specific goals that are of primary importance during the coming year and
motivate executives to achieve these goals. The Committee on an annual basis
reviews and approves the programs' performance goals and the relative weight
assigned to each goal as well as targeted and maximum award levels. A
description of the short-term incentive programs available during 2000 to
executive officers follows.
ALLIANT ENERGY CORPORATION MANAGEMENT INCENTIVE COMPENSATION PLAN -- In 2000,
the Alliant Energy Corporation Management Incentive Compensation Plan (the
"MICP") covered executives and was based on achieving annual targets in
corporate performance that included earnings per share ("EPS"), safety and
environmental targets for the utility businesses, and business unit and
individual performance goals. Target and maximum bonus awards under the MICP in
2000 were set at the median of the utility and general industry market levels.
Targets were considered by the Committee to be achievable, but required
above-average performance from each of the executives. The level of performance
achieved in each category determines actual payment of bonuses, as a percentage
of annual salary. Weighting factors are applied to the percentage achievement
under each category to determine overall performance. If a pre-determined EPS
target is not met, there is no bonus payment associated with the MICP. If the
threshold performance for any other performance target is not reached, there is
no bonus payment associated with that particular category. Once the designated
maximum performance is reached, there is no additional payment for performance
above the maximum level. The actual percentage of salary paid as a bonus, within
the allowable range, is equal to the weighted average percent achievement for
all the performance categories. Potential MICP awards range from 0% to 90% of
annual salary for eligible executives other than Mr. Davis. The amounts paid
under the MICP to eligible officers included in the Summary Compensation Table
are reflected in that table.
In 2000, Mr. Davis was covered by the MICP. Awards for Mr. Davis under the MICP
in 2000 were based on corporate and strategic goal achievement in relation to
predetermined goals. For each plan year, the Committee determines the
performance apportionment for Mr. Davis. In 2000, that apportionment was 70% for
corporate performance and 30% for strategic goal performance. Corporate
performance is measured based on Company-wide EPS and environmental and safety
targets established at the beginning of the year. Strategic goals are measured
based on the achievement of certain specific goals, which included strategy
development and implementation, established for Mr. Davis by the Committee. The
2000 MICP award range for Mr. Davis was from 0% to 150% of annual salary. The
award earned by Mr. Davis under the MICP for 2000 is set forth in the Summary
Compensation Table under the heading "Bonus".
LONG-TERM INCENTIVES
The Committee strongly believes compensation for executives should include
long-term, at-risk pay to strengthen the alignment of the interests of the
shareowners and management. In this regard, the Alliant Energy Corporation
Long-Term Equity Incentive Plan permits grants of stock options, restricted
stock and performance unit/shares with respect to the Company's common stock.
The Committee believes the Long-Term Equity Incentive Plan balances 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. A description of the long-term incentive programs available during
2000 to executive officers under the Long-Term Equity Incentive Plan is set
forth below.
28
ALLIANT ENERGY CORPORATION LONG-TERM INCENTIVE PROGRAM -- The Alliant Energy
Corporation Long-Term Incentive Program covered executives and consisted of the
following components in 2000: stock options and performance shares. Stock
options provide a reward that is directly tied to the benefit shareowners
receive from increases in the price of the Company's common stock. The payout
from the performance shares is based on two equally-weighted performance
components: the Company's three-year total return to shareowners relative to an
investor-owned utility peer group, and annualized EPS growth versus internally
set performance hurdles contained in the Alliant Energy Strategic Plan. Thus,
the two components of the Long-Term Incentive Program (i.e., stock options and
performance shares) provide incentives for management to produce superior
shareowner returns on both an absolute and relative basis. During 2000, the
Committee made a grant of stock options and performance shares to various
executive officers, including Messrs. Davis, Harvey, Hoffman, Protsch and
Walker. All option grants had per share exercise prices equal to the fair market
value of a share of Company common stock on the date the grants were approved.
Options vest on a one-third basis at the beginning of each calendar year after
grant and have a ten-year term from the date of the grant. Executives in the
Alliant Energy Corporation Long-Term Equity Incentive Program were also granted
performance shares. Performance shares will be paid out in shares of the
Company's common stock or cash. The award will be modified by a performance
multiplier, which ranges from 0 to 2.00 based on Company performance.
In determining actual award levels under the Alliant Energy Corporation
Long-Term Equity Incentive Program, the Committee was primarily concerned with
providing a competitive total compensation level to officers. As such, award
levels (including awards made to Mr. Davis) were based on a competitive analysis
of similarly sized utility companies that took into consideration the market
level of long-term incentives, as well as the competitiveness of the total
compensation package. Award ranges, as well as individual award levels, were
then established based on responsibility level and market competitiveness. No
corporate or individual performance measures were reviewed in connection with
the awards of options and performance shares. Award levels were targeted to the
median of the range of such awards paid by comparable companies. The Committee
did not consider the amounts of options and performance shares already
outstanding or previously granted when making awards for 2000. Mr. Davis' awards
in 2000 under the Long-Term Incentive Program are shown in the Stock Option
Grants in 2000 Table and the Long-Term Incentive Awards in 2000 Table.
STOCK OWNERSHIP GUIDELINES
In January 1999, the Company established stock ownership guidelines for
executive officers as a way to better align the financial interests of its
officers with those of its shareowners. These officers are expected to make
continuing progress towards compliance with these guidelines and to comply fully
with the guidelines within five years of implementation. Officers are required
to own stock with a value equal to a specified multiple of their base salaries.
Under these guidelines, the requisite multiples are three for the Chief
Executive Officer and Executive Vice Presidents and 1.5 for Vice Presidents. The
Chief Executive Officer retains the right to grant special dispensation for
hardship, promotions or new hires.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
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 such compensation is based upon performance
objectives meeting certain regulatory criteria or is otherwise excluded from the
limitation. Based on the Committee's commitment to link compensation with
performance as described in this report, the Committee currently intends to
qualify future compensation paid to the Company's executive officers for
deductibility by the Company under Section 162(m) except in limited appropriate
circumstances.
CONCLUSION
The Committee believes the existing executive compensation policies and programs
provide the appropriate level of competitive compensation
29
for the Company's executives. In addition, the Committee believes that the long
and short term performance incentives effectively align the interests of
executives and shareowners toward a successful future for the Company.
COMPENSATION AND PERSONNEL COMMITTEE*
Arnold M. Nemirow (Chair)
Alan B. Arends
Judith D. Pyle
Anthony R. Weiler
* Members of the Compensation and Personnel Committee on December 31, 2000 who
approved this Report.
30
REPORT OF THE AUDIT COMMITTEE
The Audit Committee (the "Committee") of the Board of Directors of the Company
is composed of five independent directors, each of whom is independent as
defined in the New York Stock Exchange's listing standards. The Committee
operates under a written charter adopted by the Board of Directors, which is
attached to this proxy statement as Exhibit A. The Committee recommends to the
Board of Directors the selection of the Company's independent auditors.
The Company's management ("management") is responsible for the Company's
internal controls and the financial reporting process, including the system of
internal controls. The Company's independent auditors are responsible for
expressing an opinion on the conformity of the Company's audited consolidated
financial statements with generally accepted accounting principles. The
Committee has reviewed and discussed the audited consolidated financial
statements with management and the independent auditors. The Committee has
discussed with the independent auditors matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication With Audit Committees).
The Company's independent auditors have provided to the Committee the written
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent auditors their independence. The Committee considered
whether the independent auditors provision of non-audit services is compatible
with maintaining the independent auditors independence. The fees to the
independent auditors for 2000 were as follows:
Audit Fees.................. $ 840,000
Financial Information
Systems Design and
Implementation Fees......... 0
All Other Fees.............. 1,145,000
The Committee discussed with the Company's internal and independent auditors the
overall scopes and plans for their respective audits. The Committee meets with
the internal and independent auditors, with and without management present, to
discuss the results of their examinations, the evaluation of the Company's
internal controls and overall quality of the Company' financial reporting.
Based on the Committee's reviews and discussions with management, the internal
auditors and the independent auditors referred to above, the Committee
recommended to the Board of Directors that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000 for filing with the SEC.
AUDIT COMMITTEE
Jack B. Evans (Chair)
Alan B. Arends
Katharine C. Lyall
Milton E. Neshek
Judith D. Pyle
31
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Rules of the SEC 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, 1995, with like returns for the S&P 500 and S&P Utilities
indices. Pursuant to SEC rules, the table reflects only information regarding
the common stock of the Company (formerly known as WPL Holdings, Inc.).
CUMULATIVE TOTAL SHAREHOLDER RETURN
ALLIANT ENERGY CORPORATION
[GRAPH]
------------------------------------------------------------------------------------
DECEMBER 31,
----------------------------------------------------
1995 1996 1997 1998 1999 2000
------------------------------------------------------------------------------------
Alliant Energy Corporation
(LNT) $100.00 $ 98.00 $123.79 $128.60 $117.59 $145.94
------------------------------------------------------------------------------------
S&P Utilities Index 100.00 98.14 116.40 128.16 112.16 173.07
------------------------------------------------------------------------------------
S&P 500 Index 100.00 120.26 157.56 199.57 238.54 214.36
------------------------------------------------------------------------------------
32
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
The Company's directors, its executive officers and certain other officers are
required to report their ownership of the Company's common stock and subsidiary
preferred stock and any changes in that ownership to the SEC and the New York
Stock Exchange. To the best of the Company's knowledge, all required filings in
2000 were properly made in a timely fashion. In making the above statements, the
Company has relied on the representations of the persons involved and on copies
of their reports filed with the SEC.
By Order of the Board of Directors
/s/ Edward M. Gleason
Edward M. Gleason
Vice President -- Treasurer
and Corporate Secretary
33
EXHIBIT A
AUDIT COMMITTEE CHARTER
The Audit Committee shall be comprised of three or more directors as determined
by the Board, each of whom shall be independent directors in accordance with the
requirements of the New York Stock Exchange listing standards. All members of
the Committee shall be financially literate and at least one member of the
Committee shall have accounting or related financial management expertise. The
Chair and the members of the Audit Committee shall be elected annually by a
majority vote of the members of the Board of Directors. The Audit Committee
shall meet at the call of any one of its members, but in no event shall it meet
less than twice a year. Subsequent to each Audit Committee meeting, a report of
the actions taken by the Audit Committee shall be made to the Board of
Directors.
The Audit Committee will review and update this Charter periodically, at least
annually, as conditions dictate.
The functions and responsibilities of the Audit Committee shall be to:
1. Evaluate the performance of independent auditors and recommend to the
Board of Directors the appointment of the independent auditors, who are
ultimately accountable to the Audit Committee and the Board. Where
appropriate, recommend that the Board of Directors replace the
independent auditors.
2. Discuss with the independent auditors the scope of their audit.
3. Discuss with the independent auditors and management the Company's
accounting principles, policies and practices and its reporting policies
and practices.
4. Review and discuss with the independent auditors and Company management
the Company's audited annual financial statements and the results of the
annual audit. Determine whether to recommend to the Board of Directors
that the audited consolidated financial statements be included in the
Company's Annual Report on Form 10-K.
5. Consider the independent auditors' judgements about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
6. Discuss with the independent auditors and the Company's internal auditor
the adequacy of the Company's or any of its subsidiaries accounting,
financial and operational controls.
7. Discuss with the Company's internal auditor the scope and results of
internal audits and initiate such accounting principles, policies and
practices, and reporting policies and practices as it may deem necessary
or proper.
8. Consider whether the independent auditors provision of non-audit
services is compatible with maintaining the independent auditors
independence.
9. Annually review and verify the effectiveness of the Company's Legal
Compliance Program.
10. Annually review and verify the effectiveness of the Company's Risk
Management Program including the use of financial derivative
instruments.
34
11. As a whole, or through the Audit Committee Chair, review with the
independent auditors the Company's interim financial results included in
the Quarterly Reports on Form 10-Q prior to filing with the Securities
and Exchange Commission.
12. Submit appropriate reports required by the SEC to the shareowners in the
Company's annual proxy statements and provide appropriate certification
to the NYSE as required.
13. Ensure that the independent auditors submit periodic reports to the
Audit Committee delineating all relationships between the independent
auditor and the Company, consistent with Independence Standards Board
Standard No. 1; discuss such reports with the independent auditors; and
recommend that the Board of Directors take appropriate action to satisfy
itself of the independence of the independent auditors.
14. Discuss with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61.
While the Audit Committee has the responsibilities and functions set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent auditors. Nor is it
the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditors or to
assure compliance with laws and regulations.
35
[ALLIANT ENERGY LOGO]
WE'RE ON FOR YOU.
(C) 2001 Alliant Energy
[ALLIANT ENERGY LOGO]
Shareowner Services
P.O. Box 2568
Madison, WI 53701-2568
SHAREOWNER INFORMATION NUMBERS
Local Madison, WI......1-608-252-3110
All Other Areas........1-800-356-5343
Thank you for being an Alliant Energy shareowner.
Please take a moment now to vote your shares for the upcoming Annual Meeting of
Shareowners. You can access our home page at www.alliant-energy.com to view the
Annual Report and Proxy Statement. You can vote in one of four ways:
OPTION #1: VOTE BY TELEPHONE: Call TOLL FREE 1-800-660-7580 using a touch tone
phone 24 HOURS A DAY, 7 DAYS A WEEK. You will be asked to enter the
Control Number below.
If you wish to vote "For All Directors" as recommended by the Board
of Directors, simply press 1. Please wait for your confirmation. If
you do not wish to vote as the Board recommends, you need only
respond to a few simple prompts. THERE IS NO CHARGE FOR THIS CALL.
--------------------------------
Your Control Number is:
[TELEPHONE ICON] [PC ICON]
For Telephone/Internet Voting
--------------------------------
(Your telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner as if you had marked, signed and returned your proxy
card.)
OPTION #2: VOTE BY INTERNET: Access WWW.PROXYVOTING.COM/ALLIANT and by using
the Control Number above, respond to a few simple prompts.
OPTION #3: VOTE BY FAX: Please mark, sign, date and FAX this proxy card to
608-252-3321.
OPTION #4: VOTE BY MAIL: If you do not desire to vote by touch tone phone,
Internet or fax, please mark, sign, date and return the proxy card
below.
YOUR TELEPHONE, INTERNET OR FAX vote must be received by 5 p.m. CST
on May 21, 2001 to be counted in the final tabulation.
(IF YOU VOTE BY TELEPHONE, INTERNET OR FAX, PLEASE DO NOT MAIL THIS CARD.)
Please Fold and Detach Proxy Card at Perforation if Voting by Mail.
-----------------------------------------------------------------------------
PROXY
/ / I (WE) WILL ATTEND THE ANNUAL MEETING.
/ / I (WE) CONSENT TO ACCESS FUTURE NOTICES OF ANNUAL MEETINGS, PROXY STATEMENTS
AND ANNUAL REPORTS ELECTRONICALLY ON THE INTERNET, INSTEAD OF RECEIVING
THESE MATERIALS BY MAIL.
P
R
O
X
Y
Indicate your vote by an (x) in the appropriate boxes.
ELECTION OF DIRECTORS:
For All Withhold for All For All Except*
Nominees for terms
ending in 2004: / / / / / /
01 JACK B. EVANS
02 JOYCE L. HANES
03 DAVID A. PERDUE
04 JUDITH D. PYLE
(*) TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE AND MARK AN (X) IN THE "For All
Except" BOX.
PLEASE DATE AND SIGN YOUR NAME(S) EXACTLY AS SHOWN ABOVE AND MAIL PROMPTLY
IN THE ENCLOSED ENVELOPE.
_________________________________________
Signature Date
_________________________________________
Signature
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.
"E" IS FOR EASY...AND ELECTRONIC
To access the Annual Report and Proxy Statement on the Internet, please open
our site at WWW.PROXYVOTING.COM/ALLIANT. We encourage you to check out our
site to see how easy and convenient it is. Click on the Annual Report button
for the Annual Report/Proxy Statement. You may print or just view these
materials. Electronic methods cut down on your paperwork. They also reduce
our printing and postage costs which achieves greater shareowner value. If
you would like electronic access to these reports next year and not receive
them by mail, be sure to indicate this when you vote.
Remember, whether or not you are attending the meeting, WE ENCOURAGE you to
vote your shares and again thank you for being an Alliant Energy Shareowner.
*******************************************************************************
WHERE AND WHEN
You are invited to attend the Annual Meeting of Shareowners on Wednesday, May
23, 2001 at 1:00 p.m. at the Alliant Energy Center of Dane County, 1919 Alliant
Energy Center Way, Madison, Wisconsin. A light refreshment will be served
following the meeting.
*******************************************************************************
ALLIANT ENERGY CORPORATION
P.O. BOX 2568
MADISON WI 53701-2568
ANNUAL MEETING OF SHAREOWNERS - MAY 23, 2001
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 Alliant Energy Corporation (the "Company"), held of
record in the name of the undersigned (including any shares held or credited to
the undersigned's account under the Company's Shareowner Direct Plan and ISU
Employee Stock Ownership Plan) at the close of business on March 27, 2001, at
the Annual Meeting of Shareowners of the Company to be held at the Alliant
Energy Center of Dane County in Madison, Wisconsin on May 23, 2001 at 1:00 p.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 dated April 3, 2001 and accompanying Proxy Statement,
subject to any directions indicated on the reverse side of this card.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIANT ENERGY
CORPORATION. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE SHAREOWNER. IF NO DIRECTION IS MADE, THE PROXIES WILL
VOTE "FOR" THE ELECTION OF ALL LISTED NOMINEES.
[ALLIANT ENERGY LOGO]
Shareowner Services
P.O. Box 2568
Madison, WI 53701-2568
SHAREOWNER INFORMATION NUMBERS
Local Madison, WI......1-608-252-3110
All Other Areas........1-800-356-5343
Thank you for being an Alliant Energy shareowner.
Please take a moment now to vote your shares for the upcoming Annual Meeting of
Shareowners. You can access our home page at www.alliant-energy.com to view the
Annual Report and Proxy Statement. You can vote in one of three ways:
OPTION #1: VOTE BY TELEPHONE: Call TOLL FREE: 1-800-660-7909 using a touch tone
phone 24 HOURS A DAY, 7 DAYS A WEEK. You will be asked to enter the
Control Number below.
If you wish to vote "For All Directors" as recommended by the Board
of Directors, simply press 1. Please wait for your confirmation. If
you do not wish to vote as the Board recommends, you need only
respond to a few simple prompts. THERE IS NO CHARGE FOR THIS CALL.
--------------------------------
Your Control Number is:
[TELEPHONE ICON] [PC ICON]
For Telephone/Internet Voting
--------------------------------
(Your telephone or Internet vote authorizes the Trustee to vote your shares in
the same manner as if you had marked, signed, and returned your proxy card.)
OPTION #2: VOTE BY INTERNET: Access WWW.PROXYVOTING.COM/ALLIANTEMP and by
using the Control Number above, respond to a few simple prompts.
OPTION #3: VOTE BY MAIL: If you do not desire to vote by touch tone phone or
Internet, please mark, sign, date and return the proxy card below.
YOUR TELEPHONE OR INTERNET vote must be received by 5 p.m. CST
on May 21, 2001 to be counted in the final tabulation.
(IF YOU VOTE BY TELEPHONE OR INTERNET, PLEASE DO NOT MAIL THIS CARD.)
Please Fold and Detach Proxy Card at Perforation if Voting by Mail.
-------------------------------------------------------------------------------
ALLIANT ENERGY CORPORATION CONFIDENTIAL VOTING INSTRUCTIONS
THESE CONFIDENTIAL VOTING INSTRUCTIONS ARE TO AMERICAN EXPRESS TRUST COMPANY, AS
TRUSTEE FOR THE ALLIANT ENERGY CORPORATION 401(k) SAVINGS PLAN (THE "PLAN"), AND
ARE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ALLIANT ENERGY CORPORATION
FOR THE ANNUAL MEETING OF SHAREOWNERS TO BE HELD ON MAY 23, 2001.
The undersigned, as a participant in the Plan, hereby directs the Trustee to
vote (in person or by proxy) the number of shares of Alliant Energy Corporation
common stock credited to the undersigned's account under the Plan at the Annual
Meeting of Shareowners to be held on Wednesday, May 23, 2001 at 1:00 p.m. at the
Alliant Energy Center of Dane County in Madison, Wisconsin, and at any
adjournments or postponements thereof, upon all subjects that may properly come
before the meeting, described in the proxy statement, subject to any directions
indicated on the reverse side of the card.
Sign here as name appears to the left:
_________________________________________
Please sign exactly as name appears hereon.
When signing as attorney, executor,
administrator, trustee, guardian, etc.,
give full title as such.
Date _____________________ , 2001
"E" IS FOR EASY...AND ELECTRONIC
To access the Annual Report and Proxy Statement on the Internet, please open
our site at WWW.PROXYVOTING.COM/ALLIANTEMP. We encourage you to check out our
site to see how easy and convenient it is. Click on the Annual Report button
for the Annual Report/Proxy Statement. You may print or just view these
materials. Electronic methods cut down on your paperwork. They also reduce
our printing and postage costs which achieves greater shareowner value.
Remember, whether or not you are attending the meeting, WE ENCOURAGE you to
vote your shares and again thank you for being an Alliant Energy Shareowner.
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WHERE AND WHEN
You are invited to attend the Annual Meeting of Shareowners on Wednesday,
May 23, 2001 at 1:00 p.m. at the Alliant Energy Center of Dane County, 1919
Alliant Energy Center Way, Madison, Wisconsin. A light refreshment will be
served following the meeting.
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THESE INSTRUCTIONS MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
The Trustee is directed to vote as specified below (or if no specification is
made) "FOR" the election of all listed nominees. To vote in accordance with the
Board of Directors' recommendations, just sign on the reverse side without
checking any boxes. If you fail to sign and return these instructions, the
Trustee will vote all shares deemed credited to your account as directed by the
Total Compensation Committee.
ALTHOUGH THE TRUSTEE MAKES NO RECOMMENDATION, THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ALL LISTED NOMINEES.
Indicate your vote by an (x) in the appropriate box.
Election of Directors:
Nominees for the terms ending in 2004:
(01) Jack B. Evans, (02) Joyce L. Hanes, (03) David A. Perdue,
(04) Judith D. Pyle
/ / FOR all nominees listed above (except as listed to the contrary below).
/ / WITHHOLD AUTHORITY to vote for all nominees listed above.
To withhold authority to vote for any individual nominee, write that nominee's
name below:
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