March 12, 2004
FOLEY & LARDNER LLP
ATTORNEYS AT LAW
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202-5306
414.271.2400 TEL
414.297.4900 FAX
www.foley.com
WRITER'S DIRECT LINE
414.297.5642
jkwilson@foley.com Email
CLIENT/MATTER NUMBER
031613-0121
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
Re: Alliant Energy Corporation -
(Commission File No. 1-09894)
Ladies and Gentlemen:
On behalf of Alliant Energy Corporation, a Wisconsin corporation (the
"Company"), we are transmitting for filing pursuant to Rule 14a-6 of the
Securities Exchange Act of 1934, as amended, a preliminary copy of the Company's
notice of annual meeting, proxy statement and form of proxy (under the cover
page required by Rule 14a-6(m) and Schedule 14A), for use in conjunction with
the Company's annual meeting of shareholders scheduled to be held May 21, 2004.
To the Company's knowledge, the only substantive matters to be considered
at the 2004 annual meeting of shareholders include (i) the election of directors
and (ii) a proposal to approve an amendment to the Company's Restated Articles
of Incorporation to increase the number of authorized shares of common stock of
the Company.
The Company intends to begin mailing definitive proxy materials to its
shareholders no later than April 6, 2004.
Please contact the undersigned at (414) 297-5642 if you have any questions
or comments regarding the foregoing matter.
Very truly yours,
/s/ John K. Wilson
-----------------------
John K. Wilson
Enclosures
cc: F.J. Buri
Alliant Energy Corporation
Benjamin F. Garmer, III
Jay O. Rothman
Jessica S. Lochmann
Foley & Lardner LLP
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting under (S)240.14a-12
ALLIANT ENERGY CORPORATION
----------------------------------------------------
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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ALLIANT ENERGY CORPORATION
ANNUAL MEETING OF SHAREOWNERS
DATE: Friday, May 21, 2004
TIME: 1:00 PM, Central Daylight Time
LOCATION: Grand River Center
Exhibit Hall
500 Bell Street
Dubuque, Iowa
SHAREOWNER INFORMATION NUMBERS
LOCAL CALLS (Madison, Wis. Area). . . . 608-458-3110
TOLL FREE NUMBER . . . . . . . . . . . . 800-356-5343
[LOGO]
ALLIANT
ENERGY/R/
Alliant Energy Corporation
4902 North Biltmore Lane
P. O. Box 2568
Madison, WI 53701-2568
Phone: 608.458.3110
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
Dear Alliant Energy Corporation Shareowner:
On Friday, May 21, 2004, Alliant Energy Corporation (the "Company") will hold
its 2004 Annual Meeting of Shareowners at the Grand River Center, 500 Bell
Street, Dubuque, Iowa. The meeting will begin at 1:00 p.m. Central Daylight
Time.
Only shareowners of record at the close of business on April 1, 2004, 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 ensured. At the meeting, the
Company's shareowners will:
1. Elect one director for a term expiring at the 2006 Annual Meeting of
Shareowners and four directors for terms expiring at the 2007 Annual
Meeting of Shareowners;
2. Consider and vote upon a proposal to amend the Company's Restated
Articles of Incorporation to increase the number of authorized shares
of common stock of the Company; and
3. 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 those shares by telephone or Internet.
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 Company's 2003 Annual Report is enclosed.
By Order of the Board of Directors,
/s/ F. J. Buri
-----------------------------------------------------
F. J. Buri
Corporate Secretary
Dated, mailed and made available on the
Internet on or about April 6, 2004.
TABLE OF CONTENTS
Questions and Answers..................................................... 1
Election of Directors...................................................... 5
Meetings and Committees of the Board....................................... 8
Corporate Governance....................................................... 11
Proposal for Increase in Authorized Shares................................. 12
Compensation of Directors ................................................. 14
Ownership of Voting Securities............................................ . 16
Compensation of Executive Officers......................................... 18
Stock Options.............................................................. 20
Long-Term Incentive Awards................................................. 22
Certain Agreements......................................................... 23
Retirement and Employee Benefit Plans...................................... 24
Report of the Compensation and Personnel Committee on Executive Compensation.29
Report of the Audit Committee................................................33
Comparison of Five-Year Cumulative Total Return..............................35
Section 16(a) Beneficial Ownership Reporting Compliance......................36
Appendix A - Audit Committee Charter.........................................37
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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 Friday, May 21, 2004. As a shareowner, you are
invited to attend the Annual Meeting and are entitled to and requested
to vote on the proposals described in this proxy statement.
2. Q: What is Alliant Energy Corporation?
A: The Company is a public utility holding company whose primary first
tier subsidiaries include Interstate Power and Light Company ("IP&L"),
Wisconsin Power and Light Company ("WP&L"), Alliant Energy Resources,
Inc. ("AER") and Alliant Energy Corporate Services, Inc. ("Alliant
Energy Corporate Services").
3. Q: Who is entitled to vote at the Annual Meeting?
A: Only shareowners of record at the close of business on April 1, 2004,
are entitled to vote at the Annual Meeting. As of the record date,
_________ 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 five nominees to serve on the Company's Board of
Directors, one nominee for a term expiring at the 2006 Annual
Meeting of Shareowners and four nominees for terms expiring at
the 2007 Annual Meeting of Shareowners; and
. A proposal to amend the Company's Restated Articles of
Incorporation to increase the number of authorized shares of
common stock of the Company from 200 million to 240 million.
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 listed director nominees and FOR the proposal to amend the
Company's Restated Articles of Incorporation to increase the number of
authorized shares of common stock of the Company.
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 three options to appoint
a proxy:
. By telephone;
. By Internet; 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, then you should
understand that there might 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.
7. Q: How are votes counted?
A: In the election of directors, you may vote FOR all of the director
nominees or your vote may be WITHHELD with respect to one or more
nominees. With respect to the proposal to amend the Company's Restated
Articles of Incorporation, you may vote FOR or AGAINST or you may
ABSTAIN from voting. 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 listed director nominees and FOR the proposal to amend the
Company's Restated Articles of Incorporation.
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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 IP&L, your
proxy includes any shares held in your account under the IES Utilities
Inc. Employee Stock Ownership Plan.
10. Q: How is the Company's common stock held for employees in the
Alliant Energy Corporation 40l(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 proxy 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
April 1, 2004, may attend the Annual Meeting. You will be asked to
indicate whether you plan to attend the Annual Meeting when voting by
telephone or Internet, or you may indicate on 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 Annual Meeting other than the election of
directors and the proposal to amend the Company's Restated Articles of
Incorporation. If any other business is properly presented at the
Annual Meeting, your proxy gives Erroll B. Davis, Jr., the Company's
Chairman and Chief Executive Officer, and F. J. Buri, the Company's
Corporate Secretary, authority to vote on such matters at their
discretion.
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
2004 to be filed with the Securities and Exchange Commission ("SEC").
15. Q: Are the Company's 2003 Annual Report and these proxy materials
available on the Internet?
A: Yes. You can access the Company's Web page at www.alliantenergy.com to
view the 2003 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 website.
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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 proxy materials and the annual report
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., on-line 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 2005 Annual Meeting due?
A: All shareowner proposals to be considered for inclusion in the
Company's proxy statement for the 2005 Annual Meeting, pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934 ("Rule 14a-8"),
must be received at the principal office of the Company by Dec. 7,
2004.
In addition, any shareowner who intends to present a proposal at the
2005 Annual Meeting must comply with the requirements set forth in the
Company's Bylaws. The Company's Bylaws state, among other things, that to
bring business before an annual meeting, a shareowner must give written
notice that complies with the Bylaws to the Corporate Secretary of the
Company not later than 45 days in advance of the first annual anniversary
of the date the Company first mailed its proxy statement to shareowners for
the prior year's annual meeting. Accordingly, the Company must receive
notice of a shareowner's proposal submitted other than pursuant to Rule
14a-8 no later than Feb. 20, 2005. If the notice is received after Feb. 20,
2005, then the notice will be considered untimely and the Company is not
required to present such proposal at the 2005 Annual Meeting. If the Board
of Directors chooses to present a proposal submitted other than pursuant to
Rule 14a-8 at the 2005 Annual Meeting, then the persons named in the
proxies solicited by the Board for the 2005 Annual Meeting may exercise
discretionary voting power with respect to such proposal.
18. Q: Who are the independent auditors of the Company and how are they
appointed?
A: Deloitte & Touche LLP audited the financial statements of the Company
for the year ended Dec. 31, 2003. Representatives of Deloitte & Touche
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. The Audit Committee of the Board of Directors
expects to appoint the Company's independent auditors for 2004 later
in the year.
On June 12, 2002, the Board of Directors of the Company, upon the
recommendation of the Audit Committee, dismissed Arthur Andersen LLP as the
Company's independent auditors and contracted with Deloitte & Touche LLP to
serve as its independent auditors for 2002. Arthur Andersen's reports on
the Company's consolidated financial statements for the year ended Dec. 31,
2001 did not contain an adverse opinion, disclaimer of opinion or
qualification or modification as to uncertainty, audit scope or accounting
principles. During the year ended Dec. 31, 2001 and the subsequent interim
period, there were no disagreements between the Company and Arthur Andersen
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedures, which disagreements, if not
resolved to the satisfaction of the accounting firm, would have caused it
to make a reference to the subject matter of such disagreements in
connection with its reports.
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19. Q: Who will bear the cost of soliciting proxies for the Annual Meeting
and how will these proxies be solicited?
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 banks, brokers, nominees and other fiduciaries reasonable
charges and expenses incurred in forwarding the proxy materials to
their principals. The Company has retained Georgeson Shareholder
Communications Inc. to aid in the solicitation at an estimated cost of
$6,000 plus reimbursable out-of-pocket expenses.
20. Q: If more than one shareowner lives in my household, how can I obtain
an extra copy of the Company's 2003 Annual Report and this proxy
statement?
A. Pursuant to the rules of the SEC, services that deliver the Company's
communications to shareowners that hold their stock through a bank,
broker or other holder of record may deliver to multiple shareowners
sharing the same address a single copy of the Company's 2003 Annual
Report and proxy statement. Upon written or oral request, the Company
will mail a separate copy of the 2003 Annual Report and/or proxy
statement to any shareowner at a shared address to which a single copy
of each document was delivered. You may notify the Company of your
request 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.
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ELECTION OF DIRECTORS
At the Annual Meeting, one director will be elected for a term expiring in 2006
and four directors will be elected for terms expiring in 2007. The nominees for
election as recommended by the Nominating and Governance Committee and selected
by the Board of Directors are: Ann K. Newhall, for a term expiring in 2006; and
Michael L. Bennett, Jack B. Evans, David A. Perdue and Judith D. Pyle for terms
expiring in 2007. Each of the nominees is currently serving as a director of the
Company. Each person elected as a director will serve until the Annual Meeting
of Shareowners of the Company in 2006 or 2007, as the case may be, 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 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 Dec. 31, 2003), 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
[Picture] ANN K. NEWHALL Director Since 2003
Age 52 Nominated Term Expires in 2006
Ms. Newhall is Executive Vice President, Chief Operating Officer,
Secretary and a Director of Rural Cellular Corporation, a cellular
communications corporation, located in Alexandria, Minn. She has
served as Executive Vice President and Chief Operating Officer since
August 2000, as Secretary since February 2000 and as a Director since
August 1999. Prior to assuming her current positions, she served as
Senior Vice President and General Counsel from 1999 to 2000. She
was previously a shareholder and President of the Moss & Barnett law
firm in Minneapolis, Minn. Ms. Newhall has served as a Director of
IP&L, WP&L and AER since August 2003. She was originally recommended
as a nominee in 2003 by a third-party search firm acting on behalf of
the Nominating and Governance Committee.
[Picture] MICHAEL L. BENNETT Director Since 2003
Age 50 Nominated Term Expires in 2007
Mr. Bennett has served as President and Chief Executive Officer of
Terra Industries, Inc., an international producer of nitrogen products
and methanol ingredients headquartered in Sioux City, Iowa, since
April 2001. From 1997 to 2001, he was Executive Vice President and
Chief Operating Officer of Terra Industries, Inc. He also serves as
Chairman of the Board for Terra Nitrogen Corp., a subsidiary of Terra
Industries, Inc. Mr. Bennett has served as a Director of IP&L, WP&L
and AER since August 2003. He was originally recommended as a nominee
in 2003 by a third-party search firm acting on behalf of the
Nominating and Governance Committee.
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[Picture] JACK B. EVANS Director Since 2000
Age 55 Nominated Term Expires in 2007
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, Nuveen
Institutional Advisory Corp., and Vice Chairman and a Director of
United Fire and Casualty Company. Mr. Evans has served as a Director
of IP&L (or predecessor companies), WP&L and AER since 2000. Mr. Evans
is Chairperson of the Audit Committee.
[Picture] DAVID A. PERDUE Director Since 2001
Age 54 Nominated Term Expires in 2007
Mr. Perdue is Chairman of the Board and Chief Executive Officer of
Dollar General Corporation, a retail sales organization headquartered
in Goodlettsville, Tenn. He was elected Chief Executive Officer and a
Director in April 2003 and elected Chairman of the Board in June 2003.
From July 2002 to March 2003, he was Chairman and Chief Executive
Officer of Pillowtex Corporation, a textile manufacturing company
located in Kannapolis, N. C. From 1998 to 2002, he was employed by
Reebok International Limited, where he served as President of the
Reebok Brand from 2000 to 2002. Mr. Perdue has served as a Director of
IP&L (or predecessor companies), WP&L and AER since 2001.
[Picture] JUDITH D. PYLE Director Since 1992
Age 60 Nominated Term Expires in 2007
Ms. Pyle is President of Judith Dion Pyle and Associates, a financial
services company located in Middleton, Wis. Prior to assuming her
current position in 2003, she served as Vice Chair of The Pyle Group,
a financial services company located in Madison, Wis. She previously
served as Vice Chairman and Senior Vice President of Corporate
Marketing of Rayovac Corporation, a battery and lighting products
manufacturer located in Madison, Wis. 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 IP&L (or predecessor companies) 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
[Picture] ERROLL B. DAVIS, JR. Director Since 1982
Age 59 Term Expires in 2006
Mr. Davis has served as Chairman of the Board since 2000 and as Chief
Executive Officer of the Company since 1990. He also served as
President of the Company from 1990 through 2003. Mr. Davis joined WP&L
in 1978 and served as President of WP&L from 1987 to 1998. He was
elected Chief Executive Officer of WP&L in 1988. He has also served as
Chief Executive Officer of AER and IP&L (or predecessor companies)
since 1998. He is a member of the Boards of Directors of BP 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 IP&L (or predecessor companies)
since 1998.
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[Picture] KATHARINE C. LYALL Director Since 1994
Age 62 Term Expires in 2005
Ms. Lyall is President of the University of Wisconsin System in
Madison, Wis. In addition to her administrative position, she is a
professor of economics at the University of Wisconsin-Madison. Ms.
Lyall has announced that she will retire as President of the
University of Wisconsin System no later than Aug. 31, 2004. She serves
on the Boards of Directors of 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 IP&L (or
predecessor companies) since 1998.
[Picture] SINGLETON B. MCALLISTER Director Since 2001
Age 51 Term Expires in 2005
Ms. McAllister has been a partner in the public law and policy
strategies group of the Washington, D. C. law firm office of
Sonnenschein, Nath & Rosenthal, LLP, since 2003. She previously was a
partner at Patton Boggs LLP, a Washington, D.C. law firm, from 2001 to
2003. From 1996 until 2001, Ms. McAllister was General Counsel for the
United States Agency for International Development. She was also a
partner at Reed, Smith, Shaw and McClay where she specialized in
government relations and corporate law. Ms. McAllister has served as a
Director of IP&L (or predecessor companies), WP&L and AER since 2001.
[Picture] ROBERT W. SCHLUTZ Director Since 1998
Age 67 Term Expires in 2006
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 IP&L (or predecessor companies) since 1989 and
of WP&L and AER since 1998. Mr. Schlutz is Chairperson of the
Environmental, Nuclear, Health and Safety Committee.
[Picture] ANTHONY R. WEILER Director Since 1998
Age 67 Term Expires in 2005
Mr. Weiler is Chairman and President of A. R. Weiler Co. LLC, a
consulting firm for home furnishings organizations. He was previously
a Senior Vice President of Heilig-Meyers Company, a national furniture
retailer headquartered in Richmond, Va. He is a Director of the Retail
Home Furnishings Foundation. Mr. Weiler has served as a Director of
IP&L (or predecessor companies) since 1979 and of WP&L and AER since
1998. Mr. Weiler is Chairperson of the Nominating and Governance
Committee.
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MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has standing Audit; Compensation and Personnel;
Environmental, Nuclear, Health and Safety; Nominating and Governance; and
Capital Approval Committees. The Board of Directors has adopted formal written
charters for each of the Audit, Compensation and Personnel, and Nominating and
Governance Committees, which are available on the Company's website at
www.alliantenergy.com/investors under the "Corporate Governance" caption. The
following is a description of each of these committees:
Audit Committee
----------------
The Audit Committee held seven meetings in 2003. The Committee currently
consists of J. B. Evans (Chair), A. B. Arends, M. L. Bennett, S. B. McAllister
and D. A. Perdue. Each of the members of the Committee is independent as defined
by the New York Stock Exchange ("NYSE") listing standards and SEC rules. The
Board of Directors has determined that Mr. Evans and two additional Audit
Committee members qualify as "audit committee financial experts" as defined by
SEC rules. The Audit Committee is responsible for assisting Board oversight of:
(1) the integrity of the Company's financial statements; (2) the Company's
compliance with legal and regulatory requirements; (3) the independent auditors'
qualifications and independence; and (4) the performance of the Company's
internal audit function and independent auditors. The Audit Committee is also
directly responsible for the appointment, retention, termination, compensation
and oversight of the Company's independent auditors.
Compensation and Personnel Committee
-------------------------------------
The Compensation and Personnel Committee held three meetings in 2003. The
Committee currently consists of J. D. Pyle (Chair), A. B. Arends, M. L. Bennett,
S. B. McAllister and D. A. Perdue. Each of the members of the Committee is
independent as defined by the NYSE listing standards. This Committee reviews and
approves corporate goals and objectives relevant to Chief Executive Officer
("CEO") compensation, evaluates the CEO's performance and determines and
approves as a committee or together with the other independent directors the
CEO's compensation level based on the evaluation of the CEO's performance. In
addition, the Committee has responsibilities with respect to the Company's
executive compensation and incentive programs and management development
programs.
Environmental, Nuclear, Health and Safety Committee
----------------------------------------------------
The Environmental, Nuclear, Health and Safety Committee held two meetings in
2003. The Committee currently consists of R. W. Schlutz (Chair), K. C. Lyall, A.
K. Newhall, J. D. Pyle 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.
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Nominating and Governance Committee
-------------------------------------
The Nominating and Governance Committee held four meetings in 2003. The
Committee currently consists of A. R. Weiler (Chair), K. C. Lyall, A. K. Newhall
and R. W. Schlutz. Each of the members of the Committee is independent as
defined by the NYSE listing standards. This Committee's responsibilities are to:
(1) identify individuals qualified to become Board members, consistent with the
criteria approved by the Board, and to recommend nominees for directorships to
be filled by the Board or shareowners; (2) identify and recommend Board members
qualified to serve on Board committees; (3) develop and recommend to the Board a
set of corporate governance principles; (4) oversee the evaluation of the Board
and the Company's management; and (5) advise the Board with respect to other
matters relating to corporate governance of the Company.
In making recommendations to the Company's Board of Directors of nominees to
serve as directors, the Nominating and Governance Committee will examine each
director nominee on a case-by-case basis regardless of who recommended the
nominee and take into account all factors it considers appropriate, which may
include strength of character, mature judgment, career specialization, relevant
technical skills or financial acumen, diversity of viewpoint and industry
knowledge. However, the Committee believes that, to be recommended as a director
nominee, each candidate must:
. display the highest personal and professional ethics, integrity
and values.
. have the ability to exercise sound business judgment.
. be highly accomplished in his or her respective field, with
superior credentials and recognition and broad experience at the
administrative and/or policy-making level in business,
government, education, technology or public interest.
. have relevant expertise and experience, and be able to offer
advice and guidance to the CEO based on that expertise and
experience.
. be independent of any particular constituency, be able to
represent all shareowners of the Company and be committed to
enhancing long-term shareowner value; and
. have sufficient time available to devote to activities of the
Board of Directors and to enhance his or her knowledge of the
Company's business.
The Committee also believes the following qualities or skills are necessary for
one or more directors to possess:
. At least one director should have the requisite experience and
expertise to be designated as an "audit committee financial
expert" as defined by the applicable rules of the SEC.
. Directors generally should be active or former senior executive
officers of public companies or leaders of major and/or complex
organizations, including commercial, governmental, educational
and other non-profit institutions.
. Directors should be selected so that the Board of Directors is a
diverse body, with diversity reflecting age, gender, race and
political experience.
-10-
The Nominating and Governance Committee will consider nominees recommended by
shareowners in accordance with the Company's Nominating and Governance Committee
Charter and the Corporate Governance Principles.
The Company and the Committee maintain a file of recommended potential director
nominees which is reviewed at the time a search for a new director needs to be
performed. To assist the Committee in its identification of qualified director
candidates, the Committee may engage an outside search firm.
Any shareowner wishing to make a recommendation should write to the Corporate
Secretary of the Company and include appropriate biographical information
concerning each proposed nominee. The Corporate Secretary will forward all
recommendations to the Committee. The Company's Bylaws also set forth certain
requirements for shareowners wishing to nominate director candidates directly
for consideration by shareowners. 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 2003. The Committee currently
consists of M. L. Bennett, J. B. Evans and A. R. Weiler. Mr. Davis is the Chair
and a non-voting member of this Committee. The purpose of this Committee is to
evaluate certain investment proposals where (1) an iterative bidding process is
required, and/or (2) 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 nine meetings during 2003. Each director attended at
least 75% of the aggregate number of meetings of the Board and Board committees
on which he or she served.
The Board and each committee conduct performance evaluations annually to
determine their effectiveness and suggest improvements for consideration and
implementation. In addition, the Compensation and Personnel Committee evaluates
Mr. Davis' performance as CEO on an annual basis.
Board members are expected to attend the Company's Annual Meeting of
Shareowners. All Board members, with the exception of Ms. Pyle, were present for
the Company's 2003 Annual Meeting of Shareowners.
-11-
CORPORATE GOVERNANCE
Corporate Governance Principles
--------------------------------
The Board of Directors has adopted Corporate Governance Principles that, in
conjunction with the Board committee charters, establish processes and
procedures to help ensure effective and responsive governance by the Board. The
Corporate Governance Principles are available on the Company's website at
www.alliantenergy.com/investors under the "Corporate Governance" caption.
The Board of Directors has adopted certain categorical standards of independence
to assist it in making determinations of director independence under the NYSE
listing standards. These categorical standards appear as Appendix A of the
Corporate Governance Principles. Based on these standards, the Board of
Directors has affirmatively determined by resolution that each of the Company's
directors (other than Mr. Davis, the Company's Chairman and CEO) has no material
relationship with the Company and, therefore, is independent in accordance with
the NYSE listing standards. The Board of Directors will regularly review the
continuing independence of the directors.
The Corporate Governance Principles provide that at least 75% of the members of
the Board of Directors must be independent directors under the NYSE listing
standards. The Audit, Nominating and Governance and Compensation and Personnel
Committees must consist of all independent directors.
Lead Independent Director; Executive Sessions
----------------------------------------------
The Corporate Governance Principles provide that the chairperson of the
Nominating and Governance Committee shall be the designated "Lead Independent
Director" or "Presiding Independent Director" and will preside as the chair at
meetings or executive sessions of the independent directors. As the Chairperson
of the Nominating and Governance Committee, Mr. Weiler is currently designated
as the Lead Independent Director. At every regular meeting of the Board of
Directors, the independent directors meet in executive session with no member of
Company management present.
Communication with Directors
-----------------------------
Shareowners and other interested parties may communicate with the full Board,
non-management directors as a group or individual directors, including the
Presiding Independent Director, by providing such communication in writing to
the Company's Corporate Secretary, who will post such communications directly to
the Company's Board of Directors' website.
Ethical and Legal Compliance Policy
------------------------------------
The Company has adopted a Code of Ethics that applies to all employees,
including its CEO, Chief Operating Officer, Chief Financial Officer and Chief
Accounting Officer, as well as its Board of Directors. The Company makes its
Code of Ethics available free of charge on the Company's website, at
www.alliantenergy.com/investors, under the "Corporate Governance" caption and
such Code of Ethics is available in print to any shareowner who requests it from
the Company's Corporate Secretary. The Company intends to satisfy the disclosure
requirements under Item 10 of Form 8-K regarding amendments to, or waivers from,
the Code of Ethics by posting such information on its website address stated
above under the Corporate Governance caption.
-12-
PROPOSAL FOR INCREASE IN AUTHORIZED SHARES
PROPOSAL TO AMEND THE RESTATED ARTICLES OF INCORPORATION OF THE
COMPANY TO INCREASE THE NUMBER OF AUTHORIZED SHARES
The Board of Directors recommends that shareowners vote FOR the proposal for the
amendment of the Company's Restated Articles of Incorporation to increase the
number of authorized shares to 240,000,000 for the following reasons:
Currently, the Company's authorized capital stock under its Restated Articles of
Incorporation is 200,000,000 shares of common stock. The Company is not
authorized to issue preferred stock under its Restated Articles of
Incorporation. As of April 1, 2004, of the 200,000,000 shares of the Company's
common stock presently authorized, _____________ shares were issued and
outstanding, _____________ shares were reserved for issuance under the Company's
Shareowner Direct Plan, ___________shares were reserved for issuance under the
Company's 401(k) Plan, ___________shares were reserved for issuance under the
Company's Long-Term Incentive Plan, _____________ shares were reserved for
issuance under the Company's 2002 Equity Incentive Plan and _____________ shares
were reserved for issuance under the Company's Rights Agreement. As a result,
there are now only ____________ authorized shares of the Company's common stock
that are not reserved and that may be issued for any future business purposes by
the Company.
Accordingly, the Board of Directors has approved for submission to the Company's
shareowners, and recommends that the Company's shareowners approve, an amendment
to the Company's Restated Articles of Incorporation to increase the number of
authorized shares of common stock from 200,000,000 to 240,000,000.
The additional 40,000,000 authorized shares of the Company's common stock may be
issued for any proper corporate purpose approved by the Company's Board of
Directors. The availability of additional authorized shares will enable the
Company's Board of Directors to act with flexibility when and as the need arises
to issue additional shares in the future without the delays necessitated by
having to obtain a shareowner vote and to take advantage of changing market and
financial conditions in a more timely manner. Among the reasons for issuing
additional shares would be to increase the Company's capital through sales of
the Company's common stock, to engage in other types of capital transactions,
and to satisfy contractual commitments.
The Company anticipates that it will require in the future a greater number of
authorized shares of common stock than is currently available under its Restated
Articles of Incorporation to issue new equity to fund, among other things, its
recently announced domestic generation build-out program. The Company's
management regularly reviews a range of possible financing transactions,
including the issuance of the Company's common stock. Subject to market and
other conditions, the Company intends to sell additional equity in 2004. These
equity sales may involve traditional underwritten offerings, continuous equity
offerings or other transactions. Such offerings will be made from a portion of
the __________ of existing authorized shares of the Company's common stock that
are currently not reserved and that may be issued for the purposes described
above.
-13-
If the amendment to the Company's Restated Articles of Incorporation is
approved, while the Company's Board of Directors generally may issue such
additional authorized shares of the Company's common stock without further
shareowner approval, such issuances will generally require the approval of the
Securities and Exchange Commission under the Public Utility Holding Company Act
of 1935.
In some instances, shareowner approval for the issuance of additional shares may
be required by law or by the requirements of the New York Stock Exchange, or the
obtaining of such approvals may be otherwise necessary or desirable. In
particular, under the listing standards of the New York Stock Exchange, an
increase in shares reserved for issuance under equity compensation plans for the
Company's employees or in a transaction including the issue of more than 20% of
the outstanding shares would be subject to shareowner approval. In such cases,
further shareowner authorization will be solicited.
The Company's Board of Directors has not proposed the increase in the amount of
authorized shares with the intention of discouraging tender offers or takeover
attempts of the Company. However, the availability of additional authorized
shares for issuance could render more difficult or discourage a merger, tender
offer, proxy contest or other attempt to obtain control of the Company, which
may adversely affect the ability of the Company's shareowners to obtain a
premium for their shares of the Company's common stock.
To approve this proposal, the number of votes cast in favor of the proposal must
exceed the number of votes cast in opposition to it. Abstentions and broker
non-votes will be counted for purposes of determining the presence of a quorum,
as noted above, but do not constitute a vote "for" or "against" any matter and
will be disregarded in the calculations of "votes cast."
The Board of Directors unanimously recommends that shareowners vote FOR approval
of the proposal to amend the Company's Restated Articles of Incorporation to
increase the number of authorized shares to 240,000,000.
-14-
COMPENSATION OF DIRECTORS
No retainer fees are paid to Mr. Davis for his service on the Company's Board of
Directors. In 2003, all other directors (the "non-employee directors"), each of
whom served on the Boards of the Company, IP&L, WP&L and AER, received an annual
retainer for service on all four Boards consisting of $47,137 in cash. Of this
cash amount, each Director voluntarily elected to use $17,137 to purchase 1,000
shares of Company common stock pursuant to the Company's Shareowner Direct Plan
or to defer such amount through the Company Stock account in the Directors'
Deferred Compensation Plan. Travel expenses are paid for each meeting day
attended.
In 2004, the Board of Directors will receive a cash retainer of $70,000. The
Directors are encouraged to make a voluntary election to use not less than 50%
of this cash retainer to purchase shares of the Company's common stock pursuant
to the Company's Shareowner Direct Plan or to defer through the Company Stock
account in the Directors' Deferred Compensation Plan. In 2004, the Chairperson
of the Audit Committee will receive an additional $7,500 cash retainer and the
Chairpersons of the Nominating and Governance, Compensation and Personnel, and
Environmental, Nuclear, Health, and Safety Committees will receive an additional
$5,000 cash retainer.
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, provided that the return may not be greater than 12% or less
than 6%. Amounts deposited to a Company Stock Account are treated as though
invested in the common stock of the Company and will be credited with dividends,
which will be treated as if reinvested. The director may elect that the Deferred
Compensation Account be paid in a lump sum or in annual installments for up to
10 years beginning in the year of or one tax year after 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 five 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.
-15-
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 2003 under the Director's Life Insurance Program were as follows: A.
B. Arends - $50, J. B. Evans - $2, K. C. Lyall - $488, J. D. Pyle - $24, W. H.
Stoppelmoor - $987 and A. R. Weiler - $50.
In November 2003, the Board of Directors terminated this insurance benefit for
any director not already having the required vesting period of three years of
service and for all new directors.
-16-
OWNERSHIP OF VOTING SECURITIES
Listed in the following table are the number of shares of the Company's common
stock beneficially owned by the (1) executive officers listed in the Summary
Compensation Table, (2) all director nominees and directors of the Company, and
(3) all director nominees, directors and executive officers as a group as of
Feb. 27, 2004. The directors and executive officers of the Company as a group
owned 1.4% of the outstanding shares of common stock on that date. No individual
director or officer owned more than 1% of the outstanding shares of common stock
on that date.
SHARES
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED (1)
---------------------------- -------------------------
Executives (2)
William D. Harvey.................................. 167,236(3)
James E. Hoffman................................... 127,449(3)
Eliot G. Protsch................................... 173,717(3)
Pamela J. Wegner................................... 124,470(3)
Thomas M. Walker..................................... 1,478(5)
Director Nominees
Ann K. Newhall....................................... 4,116(3)
Michael L. Bennett................................... 1,803(3)
Jack B. Evans....................................... 39,028(3)
David A. Perdue...................................... 5,558(3)
Judith D. Pyle ..................................... 13,065
Directors
Alan B. Arends...................................... 10,867(3)(4)
Erroll B. Davis, Jr................................ 556,063(3)
Katharine C. Lyall.................................. 15,941
Singleton B. McAllister.............................. 4,251(3)
Robert W. Schlutz................................... 18,990(3)
Wayne H. Stoppelmoor................................ 14,851(4)
Anthony R. Weiler.................................... 7,022(3)
All Executives and Directors as a Group
21 people, including those listed above.......... 1,556,757(3)
(1) Total shares of Company common stock outstanding as of Feb. 27,
2004, were 111,274,686.
(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.
Davis - 8,981, Mr. Evans - 2,000, Mr. Weiler - 1,389, Mr. Harvey
- 2,717, and Mr. Protsch - 820; shares of common stock held in
deferred compensation plans: Mr. Arends - 5,605, Mr. Bennett -
1,415, Mr. Davis - 48,303, Mr. Evans - 7,028, Ms. McAllister -
1,415, Ms. Newhall - 2,829, Mr. Perdue - 5,558, Mr. Schlutz -
7,959, Mr. Weiler - 5,841, Mr. Harvey - 27,716, Mr. Hoffman -
16,479, Mr. Protsch - 33,879, and Ms. Wegner - 18,767 (all
executive officers and directors as a group - 210,729); and stock
options exercisable on or within 60 days of Feb. 27, 2004: Mr.
Davis - 451,687, Mr. Harvey - 112,431, Mr. Hoffman - 97,981, Mr.
Protsch - 112,431 and Ms. Wegner - 89,419 (all executive officers
and directors as a group - 1,094,060).
(4) Messrs. Arends and Stoppelmoor will retire as Directors at the
2004 Annual Meeting.
(5) Mr. Walker resigned from the Company effective Nov. 15, 2003.
-17-
The following table sets forth information, as of Dec. 31, 2003 regarding
beneficial ownership by the only person known to the Company to own more than 5%
of the Company's common stock. The beneficial ownership set forth below has been
reported on a Schedule 13G with the Securities and Exchange Commission by the
beneficial owner.
Amount and Nature of Beneficial Ownership
--------------------------------------------
Voting Power Investment Power
--------------- -------------------
Percent
Name and Address of
of Beneficial Owner Sole Shared Sole Shared Aggregate Class
------------------------ -------- -------- --------- ------- ----------- ---------
Franklin Resources, Inc.
(and certain affiliates)
One Franklin Parkway
San Mateo, CA 94403 6,451,800 0 6,451,800 0 6,451,800 5.8%
-18-
COMPENSATION OF EXECUTIVE OFFICERS
----------------------------------------
The following Summary Compensation Table sets forth the total compensation
paid by the Company and its subsidiaries to the Chief Executive Officer and
certain other executive officers of the Company for all services rendered
during 2003, 2002 and 2001.
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term-Compensation
----------------------------------------------------------------------------------------------
Awards Payouts
-------------------------------
Securities
Other Underlying
Name and Base Annual Options LTIP All Other
Principal Position Year Salary Bonus Compensation(1) (Shares)(2) Payouts Compensation(4)
-----------------------------------------------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 2003 $685,000 $ 0 $14,949 151,687 $ 0 $45,253
Chairman and 2002 685,000 0 17,582 151,687 0 45,485
Chief Executive Officer 2001 683,269 489,364 11,265 108,592 359,605 50,284
------------------------------------------------------------------------------------------------------------------------------
William D. Harvey 2003 290,000 0 5,954 26,642 0 15,562
President and 2002 282,500 0 7,707 26,642 0 17,599
Chief Operating Officer 2001 274,616 161,233 4,061 21,798 92,209 42,944
------------------------------------------------------------------------------------------------------------------------------
James E. Hoffman 2003 290,000 0 9,133 26,642 0 16,497
Executive Vice President 2002 282,500 0 11,510 26,642 0 16,970
2001 274,616 135,795 0 21,798 92,209 23,455
------------------------------------------------------------------------------------------------------------------------------
Eliot G. Protsch 2003 290,000 0 4,825 26,642 0 15,605
Senior Executive Vice President 2002 282,500 0 6,131 26,642 0 16,318
and Chief Financial Officer 2001 274,616 143,688 893 21,798 92,209 38,372
------------------------------------------------------------------------------------------------------------------------------
Pamela J. Wegner 2003 275,000 0 7,282 25,673 0 19,641
Executive Vice President 2002 270,000 0 9,263 25,673 0 19,178
2001 264,615 124,312 2,267 21,005 88,597 35,371
------------------------------------------------------------------------------------------------------------------------------
Thomas M. Walker (3) 2003 267,692 680,000 13,895 25,673 0 27,669
2002 277,500 0 17,543 25,673 0 27,297
2001 264,615 133,852 0 21,005 88,597 6,207
------------------------------------------------------------------------------------------------------------------------------
-19-
(1) Other Annual Compensation consists of income tax gross-ups for reverse
split-dollar life insurance.
(2) Awards made in 2003 were in addition to performance share awards as
described in the table entitled "Long-Term Incentive Awards in 2003."
(3) Mr. Walker, the Company's former Executive Vice President and Chief
Financial Officer, resigned from the Company effective Nov. 15, 2003. In
connection with such resignation, Mr. Walker entered into a Severance
Agreement and Release with the Company, pursuant to which he was paid
$680,000, which is reflected in the "Bonus" column above. See "Certain
Agreements."
(4) The table below shows the components of the compensation reflected under
this column for 2003:
-----------------------------------------------------------------------------------------------------
Erroll B. William D. James E. Eliot G. Pamela J. Thomas M.
Davis, Jr. Harvey Hoffman Protsch Wegner Walker
-----------------------------------------------------------------------------------------------------
A. $20,550 $6,000 $2,000 $7,450 $7,375 $6,000
-----------------------------------------------------------------------------------------------------
B. 19,656 8,497 13,446 7,104 10,393 19,830
-----------------------------------------------------------------------------------------------------
C. 5,047 1,065 1,051 1,051 1,873 1,839
-----------------------------------------------------------------------------------------------------
Total $45,253 $15,562 $16,497 $15,605 $19,641 $27,669
-----------------------------------------------------------------------------------------------------
A. Matching contributions to 401(k) Plan and Deferred Compensation Plan
B. Reverse split-dollar life insurance
C. Life insurance coverage in excess of $50,000
-20-
STOCK OPTIONS
The following table sets forth certain information concerning stock options
granted during 2003 to the executives named below:
STOCK OPTION GRANTS IN 2003
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term (2)
---------------------------------------------------------------------------------------------------------------------------
Number of % of Total Exercise
Securities Options Granted or Base
Underlying to Employees Price Expiration
Name Options Granted (1) in Fiscal Year ($/Share) Date 5% 10%
---------------------------------------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 151,687 15.8% $16.82 1/21/2013 $1,604,848 $4,066,728
--------------------------------------------------------------------------------------------------------------------------
William D. Harvey 26,642 2.8% 16.82 1/21/2013 281,872 714,272
--------------------------------------------------------------------------------------------------------------------------
James E. Hoffman 26,642 2.8% 16.82 1/21/2013 281,872 714,272
--------------------------------------------------------------------------------------------------------------------------
Eliot G. Protsch 26,642 2.8% 16.82 1/21/2013 281,272 714,272
--------------------------------------------------------------------------------------------------------------------------
Pamela J. Wegner 25,673 2.7% 16.82 1/21/2013 271,620 688,293
--------------------------------------------------------------------------------------------------------------------------
Thomas M. Walker(3) 25,673 2.7% 16.82 11/15/2003 0 0
-----------------------------------------------------------------------------------------------------------------------------
(1) Consists of non-qualified stock options to purchase shares of Company
common stock. Options were granted on January 21, 2003 and have a
three-year vesting schedule pursuant to which one-third of the options will
become exercisable on each of Jan. 2, 2004, Jan. 2, 2005, and Jan. 2, 2006.
Upon a "change in control" of the Company 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 $27.40 and $43.63, respectively, as of the expiration date
of the options.
(3) Pursuant to his Severance Agreement and Release, Mr. Walker's stock options
were cancelled in November 2003. See "Certain Agreements."
-21-
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 2003.
OPTION VALUES AT DEC. 31, 2003
----------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year End In-the-Money Options at Year End(1)
-------------------------------------------------------------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 388,778 289,009 $0 $1,225,631
----------------------------------------------------------------------------------------------
William D. Harvey 87,403 51,669 0 215,267
----------------------------------------------------------------------------------------------
James E. Hoffman 72,953 51,669 0 215,267
----------------------------------------------------------------------------------------------
Eliot G. Protsch 87,403 51,669 0 215,267
----------------------------------------------------------------------------------------------
Pamela J. Wegner 73,859 49,790 0 207,438
----------------------------------------------------------------------------------------------
Thomas M. Walker 0 0 0 0
----------------------------------------------------------------------------------------------
(1) Based on the closing per share price of Company common stock on Dec. 31,
2003 of $24.90.
-22-
LONG-TERM INCENTIVE AWARDS
The following table provides information concerning long-term incentive awards
made to the executives named below in 2003.
LONG-TERM INCENTIVE AWARDS IN 2003
---------------------------------------
LONG-TERM INCENTIVE AWARDS IN 2003
Estimated Future Payouts Under
Non-Stock Price-Based Plans
-------------------------------------------------------------------------------------------------------------------------
Performance or
Number of Other Period
Shares, Units Until Maturation
Name or Other Rights or Payout Threshold Target Maximum
(#)(1) (#) (#) (#)
------------------------------------------------------------------------------------------------------------------
Erroll B. Davis, Jr. 57,135 1/1/2006 28,568 57,135 114,270
------------------------------------------------------------------------------------------------------------------
William D. Harvey 12,108 1/1/2006 6,054 12,108 24,216
------------------------------------------------------------------------------------------------------------------
James E. Hoffman 12,108 1/1/2006 6,054 12,108 24,216
------------------------------------------------------------------------------------------------------------------
Eliot G. Protsch 12,108 1/1/2006 6,054 12,108 24,216
------------------------------------------------------------------------------------------------------------------
Pamela J. Wegner 11,416 1/1/2006 5,708 11,416 22,832
------------------------------------------------------------------------------------------------------------------
Thomas M. Walker(2) 12,263 N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------
(1) Consists of performance shares awarded under the Company's Long-Term Equity
Incentive Plan. The payout from the performance shares is based on the
Company's three-year Total Shareowner Return (TSR) relative to an
investor-owned utility peer group during the three-year performance cycle
ending Dec. 31, 2005. 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.
(2) Pursuant to his Severance Agreement and Release, Mr. Walker's awards were
cancelled in November 2003. See "Certain Agreements."
-23-
CERTAIN AGREEMENTS
Mr. Davis has an employment agreement with the Company, pursuant to which he
will serve as the Chairman and Chief Executive Officer of the Company until the
expiration of the current term of the agreement on April 21, 2005. The agreement
automatically renews 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 the Chief Executive Officer and a
director of each subsidiary of the Company 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 and key employees of
the Company (including Messrs. Davis, Harvey, Hoffman, and Protsch and Ms.
Wegner). The KEESAs provide that each executive officer who is a party thereto
is entitled to benefits if, within a period of up to three years (depending on
which executive is involved) after a change in control of the Company (as
defined in the KEESAs) (the "Employment Period"), the officer's employment is
ended through (a) termination by the Company, other than by reason of death or
disability or for cause (as defined in the KEESAs); or (b) termination by the
officer due to a breach of the agreement by the Company or a significant change
in the officer's responsibilities; or (c) in the case of Mr. Davis' agreement,
termination by Mr. Davis following the first anniversary of the change of
control. The benefits provided are (a) a cash termination payment of up to 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 (b) continuation for up to the end of the Employment Period of
equivalent hospital, medical, dental, accident 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 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, President, Senior Executive Vice President and the Executive
Vice Presidents (including Messrs. Davis, Harvey, Hoffman, and Protsch and
Ms.Wegner) 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.
The Company entered into a Severance Agreement and Release with Mr. Walker in
connection with the conclusion of his employment with the Company as of November
15, 2003. The Company (a) paid Mr. Walker $680,000, (b) paid $10,000 towards his
legal fees associated with the agreement and (c) agreed to provide him with up
to $20,000 for either outplacement services or tuition reimbursement. Mr. Walker
ceased to be eligible to participate under any of the Company's stock option,
bonus, equity, incentive compensation, non-qualified supplemental retirement
plan, medical, dental, life insurance, retirement, pension and other
compensation or benefit plans upon his termination of employment, except that he
retained vested rights under the Company's qualified retirement plans and his
rights under the Company's Key Employee Deferred Compensation Plan, and he is
eligible for COBRA continuation for his medical and dental plans. If Mr. Walker
elects COBRA continuation, the Company will pay for this coverage for up to 18
months. Under the agreement, Mr. Walker agreed to a two-year covenant not to
compete and agreed to keep Company information confidential. In connection with
the agreement, Mr. Walker provided the Company a general liability release.
-24-
RETIREMENT AND EMPLOYEE BENEFIT PLANS
Alliant Energy Cash Balance Pension Plan
Salaried employees (including officers) of the Company are eligible to
participate in the Alliant Energy Cash Balance Pension Plan (the "Pension Plan")
maintained by Alliant Energy Corporate Services. The Pension Plan bases a
participant's defined benefit pension on the value of a hypothetical account
balance. For individuals participating in the Pension Plan as of Aug. 1, 1998, a
starting account balance was created equal to the present value of the benefit
accrued as of Dec. 31, 1997, under the applicable prior benefit formula. In
addition, such individuals received a special one-time transition credit amount
equal to a specified percentage varying with age multiplied by credited service
and 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 potential share of the gain on the investment return on assets in
the trust investment for the year.
The life annuity payable under the Pension Plan is determined by converting the
hypothetical account balance credits into annuity form. Individuals who were
participants in the Pension Plan on Aug. 1, 1998, are in no event to receive any
less than what would have been provided under the prior formula that was
applicable to them, had it continued, if they terminate on or before Aug. 1,
2008, and do not elect to commence benefits before the age of 55.
All of the individuals listed in the Summary Compensation Table participate in
the Plan and are "grandfathered" under the applicable prior plan benefit
formula. Because their estimated benefits under the applicable prior plan
benefit formula are higher than under the Pension Plan formula, utilizing
current assumptions, their benefits would currently be determined by the
applicable prior plan benefit formula. The following tables illustrate the
estimated annual benefits payable upon retirement at age 65 under the applicable
prior plan 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.
-25-
WP&L Plan A Prior Formula. One of the applicable prior plan formulas provided
retirement income based on years of credited service and final average
compensation for the 36 highest consecutive months, with a reduction for Social
Security offset. The individuals listed in the Summary Compensation Table
covered by this formula are Messrs. Davis, Protsch and Harvey and Ms. Wegner.
The benefits would be as follows:
WP&L Plan A Prior Plan Formula Table
Average Annual Benefit After Specified Years in Plan
Annual -----------------------------------------------------
Compensation 15 20 25 30+
-----------------------------------------------------------------------
$ 200,000 $ 55,000 $ 73,333 $ 91,667 $ 110,000
300,000 82,500 110,000 137,500 165,000
400,000 110,000 146,667 183,333 220,000
500,000 137,500 183,333 229,167 275,000
600,000 165,000 220,000 275,000 330,000
700,000 192,500 256,667 320,833 385,000
800,000 220,000 293,333 366,667 440,000
900,000 247,500 330,000 412,500 495,000
1,000,000 275,000 366,667 458,333 550,000
1,100,000 302,500 403,333 504,167 605,000
For purposes of the Pension Plan, compensation means payment for services
rendered, including vacation and sick pay, and is substantially equivalent to
the salary amounts reported in the Summary Compensation Table. Pension Plan
benefits depend upon length of Pension Plan service (up to a maximum of 30
years), age at retirement and amount of compensation (determined in accordance
with the Pension 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 Pension Plan for covered persons
named in the Summary Compensation Table are as follows: Erroll B. Davis, Jr., 24
years; Eliot G. Protsch, 24 years; William D. Harvey, 16 years; and Pamela J.
Wegner, 9 years.
-26-
IES Industries Pension Plan Prior Formula. Another of the applicable prior plan
formulas provided retirement income based on years of service and final average
compensation for the highest consecutive 36 months out of the last 10 years of
employment. Mr. Hoffman is the only individual listed in the Summary
Compensation Table covered by this formula. The benefits would be as follows:
IES Industries Pension Plan Prior Formula Table
Average Annual Benefit After Specified Years in Plan
Annual -----------------------------------------------------
Compensation 15 20 25 30 35
------------------------------------------------------------------------------------
$ 200,000 $ 43,201 $ 57,601 $ 72,001 $ 86,401 $ 100,801
300,000 66,451 88,601 110,751 132,901 155,051
400,000 89,701 119,601 149,501 179,401 209,301
500,000 112,951 150,601 188,251 225,901 263,551
600,000 136,201 181,601 227,001 272,401 317,801
For purposes of the Pension Plan, compensation means payment for services
rendered, including vacation and sick pay, and is substantially equivalent to
the salary amounts reported in the Summary Compensation Table. Pension Plan
benefits depend upon length of Pension Plan service (up to a maximum of 35
years), age at retirement and amount of compensation (determined in accordance
with the Pension 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. Mr. Hoffman has eight credited years of service under
the Pension Plan. At the time of his resignation from the Company in November
2003, Mr. Walker had a vested balance of $68,056 in the Pension Plan.
-27-
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 selected key executives to remain in
the service of the Company by providing additional compensation that 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 (a) 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); (b) terminates his employment under the employment
agreement for good reason (as such term is defined in the employment agreement);
or (c) 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. Any participant in the Plan must be approved by the Board of Directors.
Mr. Davis was the only active participant in the Plan as of Dec. 31, 2003. 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 $171,250 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 Dec. 31, 2003.
Supplemental Executive Retirement
Plan
The Company maintains an unfunded Supplemental Executive Retirement Plan
("SERP") to provide incentive for key executives to remain in the service of the
Company by providing additional compensation that is payable only if the
executive remains with the Company until retirement, disability or death. While
the SERP provides different levels of benefits depending on the executive
covered, this summary reflects the terms applicable to all of the individuals
listed in the Summary Compensation Table. Participants in the SERP must be
approved by the Compensation and Personnel Committee of the Board. The SERP
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 10 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 SERP is age 62 with at least 10 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 SERP 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
participants who have attained age 55 and have a minimum of 10 years of service
in a senior executive position with the Company after April 21, 1998. At the
timely election of the participant, benefits under the SERP will be made in a
lump sum, in installments over a period of up to 10 years, or for the lifetime
of the participant. If the lifetime benefit is selected and the participant dies
prior to receiving 12 years of payments, payments continue to any surviving
spouse or dependent children of a deceased participant who dies while still
employed by the Company, payable for a maximum of 12 years. A post-retirement
death benefit of one times the participant's final average earnings at the time
of retirement will be paid to the designated beneficiary. Messrs. Davis, Harvey,
Hoffman, and Protsch and Ms. Wegner are participants in the SERP. The following
table shows the amount of retirement payments under the SERP, assuming a minimum
of 10 years of service at retirement age and payment in the annuity form.
-28-
Supplemental Executive Retirement Plan Table
Annual Benefit After Specified Years
in Plan
Average 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 defined
benefit pension 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, incentive compensation
and eligible SERP payments. 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 (a) the amount contributed to the 401(k) Plan plus the amount deferred
under this Plan; or (b) 6% of base salary, reduced by the amount of any matching
contributions in the 401(k) Plan. The employee may elect to have his or her
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, provided that the return may
not be greater than 12% or less than 6%. 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, which will be
treated as if reinvested. The shares of common stock identified as obligations
under the Plan are held in a rabbi trust. Payments from the Plan may be made in
a lump sum or in annual installments for up to 10 years at the election of the
participant. Participants are selected by the Chief Executive Officer of Alliant
Energy Corporate Services. Messrs. Davis, Harvey, Hoffman and Protsch and Ms.
Wegner are participants in the Plan.
-29-
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 five independent 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. It also makes
recommendations to the Nominating and Governance Committee regarding Director
compensation. To support it in carrying out its mission, the Committee engages
an independent consultant to provide assistance.
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:
* Executive management compensation (and particularly, long-term
incentive compensation) should be closely and strongly aligned
with the long-term interests of the Company's shareowners.
* 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 of base salaries paid to executives of comparable
companies. Specifically, the Committee targets the median (50th)
percentile of base salaries paid by companies within the utility
and general industries.
* 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, the Committee targets incentive
levels at the median (50th percentile) of incentive compensation
paid by similarly sized companies within the utility and general
industries.
-30-
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 at target levels, including that for Mr. Davis, is in
line with competitive compensation of comparative 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. The Committee
annually adjusts base salaries 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 limits across-the-board increases. The Committee
considers individual performance factors in setting base salaries. The Committee
reviewed executive salaries for market comparability using utility and general
industry data contained in compensation surveys published by The Edison Electric
Institute, The American Gas Association and several compensation consulting
firms.
In consideration of industry conditions and Company performance, the Committee
did not increase the base salaries of the Chief Executive Officer and the
Executive Vice Presidents in 2003.
Short-Term Incentives
The Company's short-term (annual) incentive program promotes the Committee's
pay-for-performance philosophy by providing executives with direct financial
incentives in the form of annual cash bonuses tied to the achievement of
Company, 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 program's
performance goals, the relative weight assigned to each goal and the targeted
and maximum award levels. A description of the short-term incentive programs
available during 2002 to executive officers follows.
-31-
Alliant Energy Corporation Management Incentive Compensation Plan - In 2003, the
Alliant Energy Corporation Management Incentive Compensation Plan (the "MICP")
covered executives and was based on achieving annual targets in Company
performance that included earnings per share ("EPS"), cash flow, safety,
diversity and environmental targets for the utility businesses, and business
unit (including customer service and reliability) and individual performance
goals. Target and maximum bonus awards under the MICP in 2003 were set at the
median of the utility and general industry market levels. The Committee
considered these targets to be achievable, but to require 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 100% of
annual salary for eligible executives.
Due to industry and market conditions, the Committee determined that the Chief
Executive Officer and Executive Vice Presidents were not eligible to receive
MICP awards for 2003 plan year performance.
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 Company maintains plans that
permit grants of stock options, restricted stock and performance units/shares
with respect to the Company's common stock. The Committee believes that the
incentive plans balance the Company's annual compensation programs by
emphasizing compensation based on the long-term, successful performance of the
Company from the perspective of the Company's shareowners. A description of the
long-term incentive programs available during 2003 to executive officers is set
forth below.
Alliant Energy Corporation Long-Term Incentive Program - The Alliant Energy
Corporation Long-Term Incentive Program covered executives and consisted of the
following components in 2003: non-qualified stock options and performance
shares. Non-qualified 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. Until 2003, the payout from the performance shares was based on
two equally-weighted performance components: the Company's three-year total
return to shareowners relative to an investor-owned utility peer group (TSR),
and annualized EPS growth versus internally set performance hurdles contained in
the Alliant Energy Strategic Plan. Beginning in 2003, total return to
shareowners was used as the sole measure of the performance share 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 2003, the
Committee made a grant of stock options and performance shares to various
executive officers, including Messrs. Davis, Harvey, Hoffman and Protsch and Ms.
Wegner. All option grants had per share exercise prices equal to the fair market
value of a share of Company common stock on the day following 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 10-year term from the date of the grant.
Such executives were also granted performance shares. Performance shares will be
paid out in a combination of common stock and cash. The award will be modified
by a performance multiplier, which ranges from 0 to 2.00 based on Company
performance.
-32-
In determining actual award levels under the Alliant Energy Corporation
Long-Term Incentive Program, the Committee was primarily concerned with
providing a competitive total compensation opportunity level to officers. As
such, award levels (including awards made to Mr. Davis) were based on a
competitive analysis of similarly sized utility and general industry companies
that took into consideration the market level of long-term incentives, as well
as the competitiveness of the total compensation package. The Committee then
established award ranges and individual award levels 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 2003. Mr. Davis' awards in 2003 under the Long-Term Incentive
Program are shown in the tables under "Stock Option Grants in 2003" and
"Long-Term Incentive Awards in 2003."
Due to the EPS and TSR goals not being achieved, there was no payout for the
performance share portion of the Long-Term Incentive Program's three-year cycle
that ended in December 2003.
Share Ownership Guidelines
The Company has established share 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 toward
compliance with these guidelines. Under these guidelines, the requisite
ownership numbers are 85,000 shares for the Chief Executive Officer, 36,000
shares for Executive Vice Presidents, and 12,000 shares for Vice Presidents.
Attainment of these ownership levels is reviewed regularly by the Committee. 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 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 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 an appropriate level of competitive compensation 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
Judith D. Pyle (Chairperson)
Alan B. Arends
Michael L. Bennett
Singleton B. McAllister
David A. Perdue
-33-
REPORT OF THE AUDIT COMMITTEE
To Our Shareowners:
The Audit Committee of the Board of Directors of the Company is composed of five
directors, each of whom is independent under the NYSE listing standards and SEC
rules. The Committee operates under a written charter adopted by the Board of
Directors. The Audit Committee charter as amended by the Board of Directors on
March 11, 2004, is attached as Appendix A to this proxy statement.
The Company's management is responsible for the Company's internal controls and
the financial reporting process, including the system of internal controls. The
independent auditors are responsible for expressing an opinion on the conformity
of the Company's audited consolidated financial statements with accounting
principles generally accepted in the United States of America. 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 has adopted a policy that requires advance approval of all audit,
audit-related, tax and other permitted services performed by the independent
auditor. The policy provides for pre-approval by the Committee of specifically
defined audit and non-audit services after the Committee is provided with the
appropriate level of details regarding the specific services to be provided. The
policy does not permit delegation of the Committee's authority to management. In
the event the need for specific services arises between Committee meetings, the
Committee has delegated to the Chairperson of the Committee authority to approve
permitted services provided that the Chairperson reports any decisions to the
Committee at its next scheduled meeting.
The fees the Company paid to its independent auditors for 2002 and 2003 were as
follows:
2002 2003
------------- -------------
Audit Fees $2,843,000* $2,293,000
Audit-Related Fees 19,000 332,000
Tax Fees 1,125,000 435,000
All Other Fees 297,000 54,000
-34-
Audit-Related Fees
----------------
consisted of the fees billed for Sarbanes-Oxley Section 404 planning in 2003,
employee benefits plan audits, and attest services required by statute or
regulations.
Tax Fees
--------
consisted of the fees billed for professional services rendered for tax
compliance, tax advice and tax planning, including all services performed by the
professional staff in the independent auditors' tax division, except those
rendered in connection with the audit.
All Other Fees
----------------
consisted of license fees for tax and accounting research software products and,
in 2002, fees for generation strategy consultation.
___________________________________________________
*Includes approximately $1.4 million for 2000 and 2001 re-audit fees
The Audit Committee does not consider the provision of non-audit services by the
independent auditors described above to be incompatible with maintaining auditor
independence.
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's 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 Dec. 31, 2003, for filing with the SEC.
AUDIT COMMITTEE
Jack B. Evans (Chairperson)
Alan B. Arends
Michael L. Bennett
Singleton B. McAllister
David A. Perdue
-35-
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The SEC rules require that the Company show a graphical comparison of the total
return on its common stock for the last five fiscal years with the total returns
of a broad market index and a more narrowly focused industry or group index.
(Total return is defined as the return on common stock including dividends and
stock price appreciation, assuming reinvestment of dividends.) The Company has
selected the Standard & Poor's (S&P) 500 Index for the broad market index and
the S&P 500 Utilities 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
Dec. 31, 1998, with like returns for the S&P 500 and S&P 500 Utilities indices.
Pursuant to SEC rules, the table reflects only information regarding the common
stock of the Company.
[Chart]
Cumulative Total Shareowner Return
Alliant Energy Corporation
Alliant
Energy S&P 500
Corporation Utilities S&P 500
(LNT) Index Index
1998 $100.00 $100.00 $100.00
1999 $ 91.42 $ 90.82 $121.04
2000 $113.46 $142.76 $110.02
2001 $115.49 $ 99.30 $ 96.95
2002 $ 68.93 $ 69.52 $ 75.52
2003 $109.25 $ 87.77 $ 97.18
Cumulative Total Shareowner Return
Alliant Energy Corporation
December 31,
-----------------------------------------------------------------
1998 1999 2000 2001 2002 2003
-----------------------------------------------------------------
Alliant Energy Corporation (LNT) $100.00 $ 91.42 $113.46 $115.49 $ 68.93 $109.25
S&P 500 Utilities Index $100.00 $ 90.82 $142.76 $ 99.30 $ 69.52 $ 87.77
S&P 500 Index $100.00 $121.04 $110.02 $ 96.95 $ 75.52 $ 97.18
-36-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain officers to file reports of ownership and changes in
ownership of the Company's common stock and subsidiary preferred stock with the
SEC and the NYSE. As a matter of practice, the Company's Shareowner Services
Department assists the Company's reporting persons in preparing initial reports
of ownership and reports of changes in ownership and files those reports on
their behalf. The Company is required to disclose in this proxy statement the
failure of reporting persons to file these reports when due. Based on the
written representations of the reporting persons and on copies of the reports
filed with the SEC, the Company believes that all reporting persons of the
Company satisfied these filing requirements.
By Order of the Board of Directors,
/s/ F. J. Buri
--------------------------------------
F. J. Buri
Corporate Secretary
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APPENDIX A - AUDIT COMMITTEE CHARTER
Purposes and Role of Committee
The purposes of the Audit Committee (the "Committee") of the Board of Directors
(the "Board") of Alliant Energy Corporation (the "Company") are to: (1) assist
Board oversight of (a) the integrity of the Company's financial statements, (b)
the Company's compliance with legal and regulatory requirements, (c) the
independent auditors' qualifications and independence, and (d) the performance
of the Company's internal audit function and independent auditors; and (2)
prepare the report that Securities and Exchange Commission ("Commission") rules
require to be included in the Company's annual proxy statement. While the
Committee has the responsibilities and powers set forth in this Charter, it is
not the duty of the Committee to conduct audits or determine that the Company's
financial statements and disclosures are complete and accurate and are in
accordance with accounting principles generally accepted in the United States of
America ("GAAP") and applicable laws and regulations.
Committee Membership
The Committee shall consist of three or more members of the Board, each of whom
satisfies the requirements for independence and experience under Section
10A(m)(3) of the Securities Exchange Act of 1934 (the "Exchange Act"),
Commission rules and the listing standards of the New York Stock Exchange (the
"NYSE"). The Board will endeavor to ensure that at least one Committee member
shall qualify as an "audit committee financial expert" as defined by SEC rules.
Committee members may not serve on audit committees of more than two other
public companies without the prior consent of the Board to enable the Board to
determine that such service would not impair the ability of such a member to
effectively serve on the Audit Committee.
Appointment and Removal of Committee Members
The Committee members shall be appointed by the Board annually or as necessary
to fill vacancies upon recommendation of the Company's Nominating and Governance
Committee. Each member shall serve until his or her successor is duly elected
and qualified or until such member's earlier resignation or removal. Any member
of the Committee may be removed, with or without cause, by a majority vote of
the Board upon recommendation of the Company's Nominating and Governance
Committee.
Committee Structure and Operations
The Board shall designate one member of the Committee as its Chair. The
Committee shall meet in formal session at least three times each year and, in
addition, hold quarterly meetings with the independent auditors and management
to discuss the annual audited financial statements and the quarterly financial
statements and earnings releases. Additional meetings shall be held when deemed
necessary or desirable at the request of the Chairperson of the Board, the Chief
Executive Officer or any Committee member. The Committee will meet periodically
in executive session without management present.
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Committee Responsibilities
The responsibilities of the Committee are to:
1. Be directly responsible for the appointment, compensation,
retention, termination and oversight of the Company's independent
auditors (including resolution of disagreements between
management and the independent auditors regarding financial
reporting) for the purpose of preparing or issuing an audit
report or related work. The independent auditors must report
directly to the Committee.
2. Pre-approve all audit services and permitted non-audit services
to be performed by the independent auditors, subject to the de
minimus exceptions for non-audit services described in Section
10A(i)(1)(B) of the Exchange Act that are approved by the
Committee prior to the completion of the audit. Such pre-approval
may be pursuant to pre-approval policies and procedures
established by the Committee provided such policies and
procedures are detailed as to the particular service to be
provided, require the Committee to be informed about each such
service prior to making pre-approval decisions and do not include
delegation of the Committee's responsibilities to management. The
Committee may delegate authority to grant pre-approvals of audit
services and permitted non-audit services to subcommittees
consisting of one or more of its members, provided that decisions
of such subcommittee to grant pre-approvals shall be presented to
the full Committee at its next scheduled meeting.
3. Review with the independent auditors the scope of the prospective
audit, the estimated fees therefore and such other matters
pertaining to such audit as the Committee may deem appropriate.
Receive copies of the annual comments from the independent
auditors on accounting procedures and systems of control.
4. Review and discuss with management and the independent auditors,
before filing with the Commission, the annual audited financial
statements and quarterly financial statements, including the
Company's disclosures under "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and recommend
to the Board whether the audited financial statements should be
included in the Company's Form 10-K.
5. Review and discuss with management and the independent auditors
the Company's earnings press releases (including the use of "pro
forma" or "adjusted" non-GAAP information), as well as financial
information and earnings guidance provided to analysts and rating
agencies; provided that the discussion of financial information
and earnings guidance provided to analysts and ratings agencies
may be done generally (e.g. discussion of the types of
information to be disclosed and the type of presentation to be
made) and need not occur in advance of each instance in which the
Company may provide such information or guidance.
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6. Review and discuss with management, the internal auditing
department and the independent auditors: (1) major issues
regarding accounting principles and financial statement
presentations, including any significant changes in the Company's
selection or application of accounting principles, and major
issues as to the adequacy of the Company's internal controls and
any special audit steps adopted in light of material control
deficiencies; (2) analyses prepared by management and/or the
independent auditors setting forth significant financial
reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of
the effects of alternative GAAP methods on the financial
statements; (3) the effect of regulatory and accounting
initiatives, as well as off-balance sheet structures, on the
financial statements of the Company.
7. Review and discuss quarterly reports from the independent
auditors on: all critical accounting policies and practices to be
used; all alternative treatments of financial information within
GAAP that have been discussed with management, ramifications of
the use of such alternative disclosures and treatments and the
preferred treatment by the independent auditors; other material
written communications between the independent auditors and
management, such as any management letter or schedule of
unadjusted differences.
8. Review and discuss with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No.
61 relating to the conduct of the audit, including any audit
problems or difficulties and management's response, any
restrictions on the scope of activities or access to requested
information, and any significant disagreements with management.
The review shall include a discussion of the responsibilities,
budget and staffing of the Company's internal audit function.
9. Review the action taken by management on the internal auditors'
and independent auditors' recommendations.
10. Review with the senior internal audit executive the annual
internal audit plan and scope of internal audits.
11. Make or cause to be made, from time to time, such other
examinations or reviews as the Committee may deem advisable with
respect to the adequacy of the systems of internal controls and
accounting practices of the Company and its subsidiaries and with
respect to current accounting trends and developments, and take
such action with respect thereto as may be deemed appropriate.
12. Review the appointment, reassignment and replacement of the
senior internal audit executive.
13. Set clear policies for hiring by the Company of employees or
former employees of the independent auditors.
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14. Meet in separate private sessions, on a periodic basis, with each
of the independent auditors, the internal auditors and members of
management as appropriate.
15. Review disclosures made to the Committee by the Company's Chief
Executive Officer and Chief Financial Officer during their
certification process for the Form 10-K and Form 10-Q about any
significant deficiencies or material weaknesses in the design or
operation of internal control over financial reporting or any
fraud, whether or not material, involving management or other
employees who have a significant role in the Company's internal
control over financial reporting.
16. As and when required by Commission rules, obtain, on a quarterly
basis, reports from management regarding its evaluation of the
Company's disclosure controls and procedures and internal control
over financial reporting.
17. As and when required by Commission rules, obtain, on an annual
basis, the independent auditors' attestation report on
management's assessment of the Company's internal control over
financial reporting.
18. Review with management, the independent auditors and the senior
internal audit executive the adequacy of, and any significant
changes in, the internal controls; the accounting policies,
procedures or practices of the Company and its subsidiaries; and
compliance with corporate policies, directives and applicable
laws.
19. Annually receive from and discuss with the independent auditors a
written statement delineating all relationships between the
auditors and the Company that may have a bearing on the auditors'
independence.
20. Obtain and review, at least annually, a report by the independent
auditors describing: the independent auditors' internal
quality-control procedures; any material issues raised by the
most recent internal quality-control review, or peer review, of
the firm, Public Company Accounting Oversight Board inspection,
or by any inquiry or investigation by governmental or
professional authorities (including any material litigation),
within the preceding five years, respecting one or more
independent audits carried out by the firm, and any steps taken
to deal with any such issues; and (to assess the auditors'
independence) all relationships between the independent auditors
and the Company. Evaluate the qualifications, performance and
independence of the independent auditors taking into account the
opinions of management and the internal auditors. The Committee
shall present its conclusions with respect to the independent
auditors to the Board.
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21. Review and evaluate the lead partner of the independent auditors.
22. Ensure the rotation of lead and concurring audit partners as
required by Commission rules. Consider whether, in order to
ensure continuing auditor independence, there should be regular
rotation of the audit firm itself.
23. Establish procedures for the receipt and handling of complaints
received by the Company regarding accounting, internal accounting
controls, or auditing matters; and the confidential, anonymous
submission by employees of the Company and its affiliates of
concerns regarding questionable accounting, internal control or
auditing matters.
24. Review the status of compliance with laws, regulations, and
internal procedures, contingent liabilities and risks that may be
material to the Company, the scope and status of systems designed
to ensure Company compliance with laws, regulations and internal
procedures.
25. Discuss with management the Company's policies with respect to
risk assessment and risk management, the Company's major
financial risk exposures and the steps management has taken to
monitor and control such exposures.
26. Conduct or authorize investigations into any matters within the
Committee's scope of responsibility, consistent with procedures
to be adopted by the Committee.
27. As appropriate, obtain advice and assistance from outside legal,
accounting or other advisors.
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Committee Reports
------------------
1. Report to the Board on a regular basis on the activities of the
Committee (i) following meetings of the Committee, (ii) with
respect to such other matters as are relevant to the Committee's
discharge of its responsibilities and (iii) with respect to such
recommendations as the Committee may deem appropriate. This
report shall include a review of any issues that arise with
respect to the quality or integrity of the Company's financial
statements, the Company's compliance with legal or regulatory
requirements, the performance and independence of the Company's
independent auditors, or the performance of the internal audit
function. The report to the Board may take the form of an oral
report by the Committee's Chair or any other member of the
Committee designated by the Committee to make such report.
2. Annually produce a report on matters required by the rules of the
Commission for inclusion in the Company's annual proxy statement.
3. Maintain minutes or other records of meetings and activities of
the Committee
Annual Performance Evaluation
------------------------------
Conduct an annual performance evaluation of the Committee, which shall assess
the performance of the Committee with respect to the duties and responsibilities
of the Committee as set forth in this charter. In addition, the Committee shall
review and reassess, at least annually, the adequacy of this charter and
recommend to the Board any improvements to this charter that the Committee
considers necessary or appropriate. The Committee shall conduct such evaluations
and reviews in such manner as it deems appropriate.
Resources and Authority of the Committee
The Committee shall have the authority, as it deems necessary to carry out its
duties, to retain, discharge and approve fees and other terms for retention of
its own independent experts in accounting and auditing, legal counsel and other
independent experts or advisors. The Company shall provide for appropriate
funding, as determined by the Committee, for payment of compensation to the
independent auditors for the purpose of rendering or issuing an audit report or
related work and to any experts or advisors employed by the Committee. The
Committee may direct any officer or employee of the Company or request any
employee of the Company's independent auditors, outside legal counsel or other
consultants or advisors to attend a Committee meeting or meet with any Committee
members.
(As Amended March 11, 2004)
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[AE LOGO] Vote by Telephone
Shareowner Services Call TOLL-FREE using a
P. O. Box 2588 touch-tone telephone
Madison, WI 53701-2568 1-800-660-7580
1-800-356-5343
Vote by Internet
Access the Website and
cast your vote:
http://www.alliantenergy.com/
annualreports
Vote by Mail
Return your signed proxy
card in the postage-paid
envelope provided to:
Alliant Energy Corp.
PO Box 2568
Madison, WI 53701
Vote 24 hours a day, 7 days a week!
Your telephone or Internet vote must be received
by 11:59 p.m.Central Daylight Time
On May 20, 2004 to be counted in the final tabulation.
Please fold and detach card at perforation before mailing
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Alliant Energy Corporation PO Box 2568 Madison WI 53701
________________________________________________________________________________
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 as recommended
by the Board of Directors. The Board of Directors recommends a vote "FOR" all
listed director nominees, and "FOR" the proposal to amend the restated articles
of incorporation to increase the number of authorized shares.
1. ELECTION OF DIRECTORS
Nominee for term ending in 2006: (01) Ann K. Newhall
Nominees for terms ending in 2007: (02) Michael L. Bennett
(03) Jack B. Evans
(04) David A. Perdue
(05) Judith D. Pyle
__ FOR ALL __ WITHHOLD FOR ALL __ FOR ALL EXCEPT (*)
*To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list to the left and mark
an (x) in the "For All Except" box.
2. PROPOSAL TO AMEND THE RESTATED ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES TO 240,000,000 MILLION
__ FOR __ AGAINST __ ABSTAIN
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___ I (we) consent access future notices of annual meetings, proxy statement and
annual reports electronically through the Internet, instead of receiving these
materials by mail.
___ I (we) will attend the annual meeting in Dubuque, IA. Registration is
required at the meeting.
--------------------------------------------------------------
Signature Date
--------------------------------------------------------------
Signature Date
Please date and sign your name(s) exactly as shown herein and mail promptly
in the enclosed envelope. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title as such. In
case of Joint Holders, all should sign.
ADMISSION TICKET
Please bring this ticket to the Annual Meeting.
It will expedite your admittance when presented upon your arrival.
ALLIANT ENERGY CORPORATION
2004 Annual Meeting of Shareowners
Friday, May 21, 2004, at 1:00 p.m. (central daylight time)
Grand River Center
Exhibit Hall
500 Bell St
Dubuque, IA
Please be prepared to show picture ID
For driving directions, please consult the web at grandrivercenter.com
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- - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Please fold and detach admission ticket at perforation
ALLIANT ENERGY CORPORATION
Shareowner Services
P.O. Box 2568
Madison WI 53701
1-800-356-5343
This proxy is solicited on behalf of the Board of Directors of Alliant Energy
Corporation.
The undersigned appoints Erroll B. Davis, Jr. and F. J. Buri, 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 IES Employee Stock Ownership Plan
at the close of business on April 1, 2004, at the Annual Meeting of Shareowners
of the Company to be held at the Grand River Center, Dubuque, IA on May 21, 2004
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 6, 2004 and accompanying Proxy
Statement, subject to any directions indicated on the reverse side of this card.
NEW ON-LINE ACCOUNT ACCESS JUST A CLICK AWAY!
With 24-hour access via the web, 7 days a week, shareowners and prospective
shareowners can:
* View payment information
* View plan statements
* View and print tax information
* Examine reinvestment and certificate account details and balances.
* Change address information
* Vote proxies
* Receive future shareowner communications through the Internet.
Go to www.alliantenergy.com/shareowners click on "Access Your Account On-Line".
Follow instructions for first-time visitors.
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VOTE BY TELEPHONE
Have this form available when
you call the Toll-Free number
1-800-542-1160 using a touch-tone
telephone and follow the simple
instructions to record your vote.
VOTE BY INTERNET
Have this form available when
you access the website
http://www.votefast.com and
follow the simple instructions to
record your vote.
VOTE BY MAIL
Please mark, sign and date the
card below and return it to:
Corporate Election Services (CES)
PO Box 1150, Pittsburgh, PA 15230
Vote by Telephone Vote by Internet Vote by Mail
Call Toll-Free using a Access the Website and Return your proxy
touch-tone telephone: cast your vote: card to CES if you have
1-800-542-1160 http://www.votefast.com not voted electronically.
Vote 24 hours a day, 7 days a week!
Your telephone or Internet vote must be received by 10:59 p.m. Central Daylight Time
on May 19, 2004 to be counted in the final tabulation.
Please fold and detach card at perforation before mailing.
Alliant Energy Confidential Voting Instructions
The Trustee is directed to vote as specified below (or if no specification is
made) "FOR" the election of all listed director nominees and "FOR" the proposal
to amend the restated articles of incorporation to increase the number of
authorized shares. To vote in accordance with the Board of Directors'
recommendation, just sign below 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 director nominees and "FOR" the proposal to amend the
restated articles of incorporation to increase the number of authorized shares.
1. ELECTION OF DIRECTORS
Nominee for term ending in 2006: (01) Ann K. Newhall
Nominees for terms ending in 2007: (02) Michael L. Bennett
(03) Jack B. Evans
(04) David A. Perdue
(05) Judith D. Pyle
[__] FOR ALL [__] WITHHOLD FOR ALL [__] FOR ALL EXCEPT ( * )
* 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.
2. PROPOSAL TO AMEND THE RESTATED ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES TO 240,000,000
[__] FOR [__] AGAINST [__] ABSTAIN
---------------------------------------------------------------------
Signature Date
Please date and sign your name exactly as shown hereon and mail. When
signing as attorney, executor, administrator, trustee or guardian,
please give your full title as such
-48-
Please fold and detach card at perforation before mailing.
Please fold and detach admission ticket at perforation.
Alliant Energy 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 21, 2004. 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 Friday, May 21, 2004 at 1:00 p.m. at the
Grand River Center, 500 Bell St., Dubuque, Iowa, 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.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE.