1
SCHEDULE 14A
(RULE 14a-101)14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrantregistrant [X]
Filed by a Partyparty other than the Registrantregistrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statementproxy statement. [ ] Confidential, for Useuse of the
Commission Onlyonly (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive Proxy Statementproxy statement.
[ ] Definitive Additional Materialsadditional materials.
[ ] Soliciting Material Pursuantmaterial pursuant to Rule 14a-11(c) or Rule 14a-1214a-12.
Madison Gas and Electric Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other thanOther Than the Registrant)
Payment of Filing Fee (Checkfiling fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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(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:Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, scheduleSchedule or registration statement no.Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing party:Party:
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(4) Date filed:Filed:
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MADISON GAS AND ELECTRIC COMPANY
[MG&E LOGO]
------------------------------------------------
PROXY STATEMENT
------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1999
3
MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
March 29, 1999April 13, 2001
Dear MGE Shareholder:
The directors and officers of the Company join me in extending a cordial
invitationIt is our pleasure to invite you to attend our 19992001 Annual Meeting of
Shareholders which willto be held on Tuesday, May 4, 1999,22, 2001, at 11:00 a.m., local time, inat
the Exhibition
Hall of the Dane County Exposition Center, 1919 Expo Way,Marriott Madison West, 1313 John Q. Hammons Drive, Middleton, Wisconsin (see
the map on next page)the back cover).
Our accompanying Proxy Statement requests approval ofAt the meeting we will ask you to consider and vote upon the election of
a
slate of nominees forthree Class III directors of Class I to hold office until 2002 and
approval of an amendment to the Company's Bylaws.
At the Meeting we2004. We will discuss last year's
operations,performance, comment on items of interest to you, and the Company, and give you an opportunityrespond to askyour questions.
Following the Meeting, our officers, directors, and other employeesmeeting, we will be available to answer any additional questions
you may have.
YOUR VOTE IS IMPORTANT. I ENCOURAGE YOU TO SIGN AND DATE YOUR PROXY
PROMPTLY AND MAIL IT BACK TO US even ifYou may vote using the Internet, by telephone, or
by returning the enclosed proxy card in the envelope provided. Instructions
regarding all three methods of voting are included on the proxy card. Internet
and telephone voting are being offered as a convenience to you plan toand as a step
toward reducing costs. If you attend the Meeting. Youmeeting and prefer to vote in person,
you may revoke your proxydo so.
We look forward to seeing you at the Meeting and vote your shares in person if you wish.
I hope you will be able to attend.meeting.
Very truly yours,
/s/ DAVID C. MEBANE
DAVID C. MEBANE
Chairman of the Board
/s/ GARY J. WOLTER
GARY J. WOLTER
President and Chief Executive Officer
3
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
OF MADISON GAS AND ELECTRIC COMPANY
DATE: Tuesday, May 22, 2001
TIME: 11:00 a.m., local time
PLACE: Marriott Madison West
1313 John Q. Hammons Drive
Middleton, Wisconsin
PURPOSE:
- - To elect three Class III directors to terms of office expiring at the 2004
Annual Meeting of Shareholders; and
- - To transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on March 15, 2001, are
entitled to vote at the meeting.
The matters to be acted upon at the meeting are described in the
accompanying proxy statement.
By order of the Board of Directors
MARK A. FRANKEL
Vice President, General Counsel,
and Secretary
April 13, 2001
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TABLE OF CONTENTS
PAGE
----
MADISON GAS AND ELECTRIC COMPANY............................ 1
THE ANNUAL MEETING.......................................... 1
Attending the Annual Meeting.............................. 1
This Proxy Statement...................................... 1
Voting.................................................... 2
How Street Name Holders May Vote.......................... 2
How Record Holders May Vote............................... 2
Matters to Be Considered.................................. 2
Quorum Requirement........................................ 3
The Vote Necessary for Action to Be Taken................. 3
Revocation of Proxies..................................... 3
Electronic Access to Proxy Materials and Annual Report.... 3
ELECTION OF DIRECTORS....................................... 3
BENEFICIAL OWNERSHIP OF COMMON STOCK........................ 6
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..... 7
MEETINGS AND COMMITTEES OF THE BOARD........................ 7
AUDIT COMMITTEE REPORT...................................... 8
DIRECTOR COMPENSATION....................................... 9
EXECUTIVE COMPENSATION...................................... 10
Summary Compensation Table................................ 10
Report on Executive Compensation.......................... 11
Company Performance....................................... 14
Pension Plan and Supplemental Retirement Plan............. 16
Deferred Compensation Plan................................ 17
Severance Plans........................................... 17
OTHER INFORMATION........................................... 18
Expenses of Solicitation.................................. 18
Shareholder Proposals for the 2001 Annual Meeting......... 18
Other Matters............................................. 19
Audit Committee Charter..................................... A-1
MAP IS ON BACK COVER
5
MADISON GAS AND ELECTRIC COMPANY
-------------------------
Madison Gas and Electric Company (MGE) is an investor-owned public utility
with executive offices located at 133 South Blair Street, Madison, Wisconsin
53703. Our telephone number is (608) 252-7000. Our Web site is located at
www.mge.com on the Internet.
THE ANNUAL MEETING
ATTENDING THE ANNUAL MEETING
Our annual meeting will be held on Tuesday, May 22, 2001, at 11:00 a.m.,
local time, at the Marriott Madison West, 1313 John Q. Hammons Drive, Middleton,
Wisconsin. If you plan to attend the Meeting in person,meeting, please fill out the enclosed
reservation form and return it with your proxy card so that we may have an indication
of the number of shareholders planning to attend the Meeting.meeting. If your shares are
held through a broker or its nominee and you would like to attend the meeting,
please see "Voting -- How Street Name Holders May Vote" below.
THIS PROXY STATEMENT
We are sending this proxy statement because our Board of Directors is
seeking your proxy to vote your shares at the meeting. If you own MGE common
stock in more than one account, such as individually and also jointly with your
spouse, you may receive more than one copy of this proxy statement. To assist us
in saving money and to provide you with better shareholder services, we
encourage you to have any questions, please feel free to callduplicate accounts registered in the same name and
address. You may do this by contacting our Shareholder Services Department
toll-free number. Callat 1-800-356-6423 if you are calling from within the Continental United States
and at (608) 252-4744 inif calling from the Madison area.
Map
Note: Enter the Dane County Expo Center grounds through the Main Gate off of
Rimrock Road (see inset map).
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MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, MAY 4, 1999, 11:00 A.M.
The 1999 Annual Meeting of Shareholders of Madison Gas and Electric Company
will be held in Madison, Wisconsin, in the Exhibition Hall of the Dane County
Exposition Center, 1919 Expo Way, Madison, Wisconsin, on Tuesday, May 4, 1999,
at 11:00 a.m., local time, for the purposes of:
(1) Electing three Class I directorsOn April 13, 2001, we began mailing this proxy statement to hold office until the Annual
Meeting of Shareholders in 2002 and until their successors have been
elected and qualified.
(2) Considering and voting upon a proposed amendment to the Company's
Bylaws to require any employee director of the Company to remain employed
full-time in order to continue service as a director.
(3) Transacting such other business as may properly come before the
Meeting.
Only those shareholders of Common Stock of record at the close of business
on March 1, 1999, are entitled to vote at the Meeting. All shareholders are
requested to be present at the Meeting in person or by proxy. Enclosed is a
proxy.
Your attention is directed to the Company's Proxy Statement on the
following pages.
By order of the Board of Directors
GARY J. WOLTER, Secretary
March 29, 1999
-------------------------
It is important to you and the Company that your shares be represented at
the Meeting. Even if you plan to attend the Meeting in person, you are requested
to sign, date, and mail the enclosed proxy promptly -- regardless of the size of
your stock holding.
The signature on the proxy should correspond exactly with the name of the
shareholder as it appears on the proxy. Where stock is registered in the names
of two or more persons, all such persons should sign the proxy.
If the proxy is signed as attorney, officer, personal representative,
administrator, trustee, guardian, or similar capacity, please indicate full
title as such.
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MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
PROXY STATEMENT
To the Shareholders of
MADISON GAS AND ELECTRIC COMPANY:
The Proxy Statement and accompanying proxy, mailed on or about March 29,
1999, are furnished as a part of the solicitation of proxies by the Board of
Directors (the "Board") of Madison Gas and Electric Company (the "Company"), to
be voted at the 1999 Annual Meeting of Shareholders to be held in the Exhibition
Hall of the Dane County Exposition Center, 1919 Expo Way, Madison, Wisconsin, on
Tuesday, May 4, 1999, at 11:00 a.m., local time, for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders. A shareholder who
executes a proxy may revoke it at any time before it is voted. A proxy may be
revoked by written notice to the Company, execution of a subsequent proxy which
is voted at the 1999 Annual Meeting, or attendance at the Meeting and voting in
person. Attendance at the Meeting will not automatically revoke a proxy.
As of March 1, 1999, the Company had outstanding 16,079,718 shares of
Common Stock. The Common Stock constitutes the only class of securities entitled
to vote at the Meeting. Only those
shareholders of record at the close of business on March 1, 1999, are15, 2001. On that date,
there were 16,729,054 shares of our common stock outstanding and entitled to
vote at the Meeting.vote.
At the 1985 Annual Meeting of Shareholders, the shareholders of the Company approved an
amendment to the Company's Restatedour Articles of Incorporation (the "Restated
Articles") limiting the voting power of any
shareholder who acquires more than 10 percent of the Company'sour outstanding voting stock.
To theour knowledge, of the
Company, this limitation does not currently apply to any shareholder.
Accordingly, at the present time, oneeach share of Common Stock will becommon stock is entitled to one vote.vote at the meeting.
For those shareholders who are participants in the Company's Investors
Plusour Dividend Reinvestment and
Direct Stock Purchase Plan, the shares you have accumulated in the Planplan are held
by the Administrator of the Planadministrator under the nominee name of WhimmMadge & Co., and those shares,
including your reinvestment shares, will be voted in accordance with theyour
direction given on your proxy.
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VOTING
HOW STREET NAME HOLDERS MAY VOTE
If you own shares through a broker, the registered holder of those shares
is the broker or its nominee. If you receive our proxy materials from your
broker, you should vote your shares by following the procedures specified by
your broker. Your broker will tabulate the votes it has received and submit a
proxy card to us reflecting the votes of the street name holders. If you plan to
attend the annual meeting and vote your street name shares in person, you should
contact your broker to obtain a broker's proxy card and MGE's Shareholder
Services (1-800-356-6423) to make a reservation for the meeting.
HOW RECORD HOLDERS MAY VOTE
You can vote in person at the meeting or by proxy. VOTING INFORMATION
A shareholder may, with respectBy giving us your proxy,
you are authorizing the individuals named on our proxy card (the proxies) to
vote your shares in the election of directors, (i)manner you indicate. If you elect to vote by proxy, you
may:
- Vote for the election of all namedthree of our director nominees;
- Withhold authority to vote for all three of our director nominees; or
- Vote for the election of one or two of our director nominees (ii)and withhold
authority to vote for all named director nominees, or (iii) vote for the election of all such nominees
other than any nominee with respect to whom the shareholder withholds authority
to votenominee(s) by so indicating on the proxy. A shareholderproxy
card.
As a convenience to you, we are providing you with the option to vote by
proxy via the Internet or via toll-free touch-tone telephone. You may with respect to the
proposal to amend the Company's Bylaws, (i)still cast
your vote for the proposal, (ii) vote
against the proposal, or (iii) abstain fromby returning your signed and dated proxy card. Instructions regarding
all three methods of voting are included on the proposal. Proxies
properly executedproxy card.
If you sign and received by the Company atreturn our proxy card without specifying any instructions
and without indicating expressly that you are not voting some or prior to the Meeting and not
revoked will be voted as directed therein. In the absenceall of a specific
direction from a shareholder, proxiesyour
shares, your shares will be voted for the election of all three director
nominees.
The signature on the named director nominees and forproxy card should correspond exactly with the proposal to amendname of
the Company's Bylaws.shareholder as it appears on the proxy card. Where stock is registered in
the name of two or more persons, each of them should sign the proxy. If you sign
a proxy indicatescard as an attorney, officer, personal representative, administrator,
trustee, guardian, or similar capacity, please indicate your full title in that
all orcapacity.
MATTERS TO BE CONSIDERED
At the meeting, shareholders will:
- Elect three Class III directors to terms of office expiring at the 2004
Annual Meeting of Shareholders; and
- Transact any other business properly raised.
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QUORUM REQUIREMENT
A quorum is necessary to hold a portionvalid meeting of shareholders. If
shareholders entitled to cast at least a majority of the votes represented by such proxy are
not being voted, such nonvotes will not be considered as votes cast with respect
to such matter, although such shares may be considered present and entitled to vote
for other purposes andat the meeting are present in person or by proxy, a quorum will count for purposes of determiningexist. In order
to assure the presence of a quorum, please vote via the Internet, telephone, or
sign and return your proxy card promptly in the enclosed postage-paid envelope
even if you plan to attend the meeting. Abstentions and broker nonvotes are
counted as present for establishing a quorum. 2
7A broker nonvote occurs when a
broker votes on one or more matters on the proxy card, but not on others because
the broker does not have the authority to do so.
THE VOTE NECESSARY FOR ACTION TO BE TAKEN
If a quorum is present, the three persons receiving the greatest number of
votes will be elected to serve as Class IIII directors. Accordingly, withholding
authority to vote for a director and nonvotes with respect to the election of
directors will not affect the outcome of the election of directors.
REVOCATION OF PROXIES
If you are a quorumregistered holder of common stock, you may revoke your proxy
by giving written revocation to MGE's Corporate Secretary at any time before
your proxy is presentvoted, by executing a later-dated proxy card which is voted at the
meeting, or by attending the meeting and voting your shares in person. If your
shares are held by a broker, you must contact your broker to revoke your proxy.
Attendance at the number of votes cast favoring the proposal to amend the
Company's Bylaws exceeds the number of votes cast opposing the proposal, the
proposal will be approved. Accordingly, abstentions and nonvotes with respect to
the proposal to amend the Company's Bylawsmeeting will not affectautomatically revoke your proxy.
ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT
Shareholders can elect to view future proxy statements and annual reports
over the outcomeInternet instead of receiving paper copies in the votemail. You can choose
this option by marking the appropriate box on that proposal.your proxy card or by calling
MGE's Shareholder Services toll-free number (1-800-356-6423).
ELECTION OF DIRECTORS
As described below, upon the retirement of Messrs. Stark and Vondrasek at
the 1999 Annual Meeting, theThe Board of Directors will consistconsists of eightten directors divided into three
classes, withtwo classes having three directors and one class having two directors and two classes
having threefour directors,
with one class being elected each year for a term of three years.
Accordingly, it is proposed thatMessrs. Blaney, Mohs, and Hastings are currently Class III directors whose
terms expire at the three nominees listed below be
elected2001 Annual Meeting. They have been nominated for reelection
to serve as Class IIII directors for three-year terms to expireexpiring at the 20022004 Annual
Meeting and upon the election and qualification of their successors.
Mrs. Biddick, Ms. Millner, and Mr. Mebane are currently Class I directors
whose terms expire at the 1999 Annual Meeting and who have been nominated for
reelection.
Each of the nominees has indicated a willingness to serve if elected, and
the Board of Directors has no reason to believe that any nominee will be unavailable. If any
of the nomineesnominee should become unable to serve, it is presently intended that the proxies solicited herebyyour proxy
will be voted for a substitute nominee designated by the Board of Directors. Under the Company's
retirement guidelines for directors, non-officer directors must retire from the
Board no later than the Annual Meeting following their 73(rd) birthday.
Mr. Stark, age 73, who has been a director for 14 years, has informed the
Board of his intention to retire from the Board and its committees at the 1999
Annual Meeting. Mr. Stark is currently a Class III director whose term would
expire at the 2001 Annual Meeting. Mr. Vondrasek, age 70, a director for 17
years, has also informed the Board of his intention to retire from the Board and
its committees at the 1999 Annual Meeting. Mr. Vondrasek is currently a Class II
director whose term would expire at the 2000 Annual Meeting. Shareholders are
not being asked to elect nominees to fill the vacancies created by the
retirement of Mr. Stark and Mr. Vondrasek.Board.
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The following table sets forth the names ofinformation about the nominees and the
current directors who will continue in office after the Meeting, their ages, information
as to their business experience for the last five years (unless otherwise
noted), and the year they first became directors of the Company.
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8meeting.
DIRECTOR
NAMES (AGES) AND BUSINESS EXPERIENCE SINCE
------------------------------------ --------
Nominees (Class I)III) -- Term Expiring in 1999
JEAN MANCHESTER BIDDICK (72), Madison, Wisconsin............ 1982
Retired Chief Executive Officer of Neesvig's Inc., a
wholesale meat company, with which she was associated for
more than 27 years.
DAVID C. MEBANE (65), Madison, Wisconsin.................... 1984
Chairman of the Board of Directors, President, and Chief
Executive Officer of the Company, of which he has been an
officer since 1980; also director of First Federal Capital
Corp., a bank holding company.
REGINA M. MILLNER (55), Madison, Wisconsin.................. 1996
Attorney, analyst and broker for more than 20 years; Her
firm, RMillner & Co., S.C., specializes in complex real
estate projects and provides consulting services for
private clients and governmental agencies; also a director
of Wisconsin State Equity Corporation.
Members of the Board of Directors Continuing in Office
Class II -- Term Expiring in 2000
H. LEE SWANSON (61), Cross Plains, Wisconsin................ 1988
Chief Executive Officer, President, and Director of the
State Bank of Cross Plains, with which he has been
associated for more than 33 years; also director of Chorus
Communications Group, MidPlains Telephone Company, and the
Federal Home Loan Bank of Chicago.
JOHN R. NEVIN (56), Madison, Wisconsin...................... 1998
Director, Grainger Center for Distribution Management, and
Grainger Wisconsin Distinguished Professor, School of
Business, University of Wisconsin-Madison, where he has
been a faculty member for 28 years.
Class III -- Term Expiring in 20012004
RICHARD E. BLANEY (62)(65), Madison, Wisconsin.................. 1974
Retired President of Richard Blaney Seeds Inc., sellers of
hybrid seed corn, with which he was associated for more
than 9 years.
FREDERIC E. MOHS (62)(64), Madison, Wisconsin................... 1975
Partner in the law firm of Mohs, MacDonald, Widder &
Paradise, of which he has been a member since 1968.1968; also
director of UW System Board of Regents and UW Hospitals
and Clinics.
F. CURTIS HASTINGS (53)(55), Madison, Wisconsin................. 1999
President of J. H. Findorff & Son, Inc., and Findorff,
Inc., commercial and industrial general contractors and
design builders, with which he has been associated for 2830
years; also director of National Guardian Life Insurance
Co.
Members of the Board of Directors Continuing in Office
Class I -- Term Expiring in 2002
JEAN M. BIDDICK (74), Middleton, Wisconsin.................. 1982
Retired Chief Executive Officer of Neesvig's Inc., a
wholesale meat company, with which she was associated for
more than 27 years.
DAVID C. MEBANE (67), Madison, Wisconsin.................... 1984
Chairman of the Board of Directors of MGE, of which he has
been an officer since 1980; also director of First Federal
Capital Corp., a bank holding company.
REGINA M. MILLNER (57), Madison, Wisconsin.................. 1996
Attorney, analyst and broker for more than 22 years; her
firm, The RMillner Company, S.C., specializes in complex
real estate projects and provides consulting services for
private clients and governmental agencies; also director
of Meriter Hospital and Meriter Health Services.
DONNA K. SOLLENBERGER (52), Middleton, Wisconsin............ 2000
President and Chief Executive Officer of UW Hospitals and
Clinics since December, 1999; Executive Vice President and
Chief Operating Officer of City of Hope National Medical
Center, Los Angeles, California, January, 1997, to
December, 1999; Vice President for Hospitals and Clinics
at M.D. Anderson Cancer Center, Houston, Texas, June,
1991, to December, 1996.
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DIRECTOR
NAMES (AGES) AND BUSINESS EXPERIENCE SINCE
------------------------------------ --------
Class II -- Term Expiring in 2003
H. LEE SWANSON (63), Cross Plains, Wisconsin................ 1988
Chairman of the Board, Chief Executive Officer, and
Director of the State Bank of Cross Plains, with which he
has been associated for more than 35 years; also director
of National Guardian Life Insurance
Co.Chorus Communications Group and the Federal Home Loan
Bank of Chicago.
JOHN R. NEVIN (58), Madison, Wisconsin...................... 1998
Associate Dean of Master's Programs; Executive Director,
Grainger Center for Supply Chain Management, and Grainger
Wisconsin Distinguished Professor, School of Business,
University of Wisconsin-Madison, where he has been a
faculty member for 30 years.
GARY J. WOLTER (46), Madison, Wisconsin..................... 2000
President and Chief Executive Officer of MGE, of which he
has been an officer since 1989 and an employee since 1984.
45
910
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table lists the beneficial ownership of Common Stockcommon stock of each
director and nominee, the individuals named in the Summary Compensation Table,summary compensation table,
the directors and executive officers as a group, and each person known by the
CompanyMGE to
be the beneficial owner of more than 5 percent of the outstanding shares of Common Stock.our
common stock. In each case, the indicated owner has sole voting power and sole
investment power with respect to the shares shown except as noted.
PERCENT OF
NUMBER OF SHARES OUTSTANDING
NAME BENEFICIALLY OWNED COMMON STOCK
- ---- ------------------ ------------
Jean Manchester Biddick................ 3,936M. Biddick....................... 4,543 *
Richard E. Blaney...................... 1,414Blaney..................... 1,632 *
Terry A. Hanson........................ 2,477(1)Hanson....................... 4,249(1)(2) *
F. Curtis Hastings..................... 1,088Hastings.................... 1,846 *
Thomas R. Krull........................ 10,178(2)Krull....................... 13,803(1)(2) *
David C. Mebane........................ 8,947(1)Mebane....................... 11,025(1)(2) *
Regina M. Millner......................Millner..................... 924 *
Frederic E. Mohs....................... 1,872(3)Mohs...................... 12,064(3) *
John R. Nevin.......................... 900Nevin......................... 961 *
Donna K. Sollenberger................. 995 *
H. Lee Swanson......................... 3,150Swanson........................ 4,080 *
Mark C. Williamson..................... 2,614(1)Williamson.................... 4,454(1)(2) *
Gary J. Wolter......................... 3,888(1)Wolter........................ 6,090(1)(2) *
All directors and executive officers
as a group (18)........................ 52,979(2)(20 persons)............ 83,276(2) *
Marshall & Ilsley Corporation.......... 910,798(4) 5.66
770 North Water StreetCorporation......... 877,708(4) 5.31
Milwaukee, Wisconsin 53202
Systematic Financial Management LP.... 1,047,349(5) 6.30
Glenpoint East, 7th Floor
300 Frank W. Burr Blvd
Teaneck, NJ 07666
- -------------------------
* Less than 1 percent.
(1) Messrs. Hanson, Krull, Mebane, Williamson, and Wolter are directors of
Madison Gas and Electric Company Foundation, Inc., and as such have shared
voting and investment power in an additional 12,000 shares of Common Stockcommon stock
held thereby.by the Foundation.
(2) Includes Common Stockcommon stock held under the two Employee Stock Ownership Plans of
the Companyemployee stock ownership plans for
the account of executive officers of the CompanyMGE with respect to which such persons
have sole voting but no investment power: Mr. Hanson, 425491 shares; Mr. Krull,
6,3447,324 shares; Mr. Mebane, 5,4536,295 shares; Mr. Williamson, 1416 shares; Mr.
Wolter, 88101 shares; and directors and executive officers as a group, 18,30218,032
shares.
(3) Includes 628 shares of Common Stockcommon stock with respect to which Mr. Mohs is
trustee of a trust for the benefit of his children.
(4) Marshall & Ilsley Trust Company is the Trustee of the Company's Employee
Stock Ownership Plans.MGE employee stock
ownership plans. Marshall & Ilsley Corporation (M&I), as a parent holding
company, filed a Schedule 13G to report beneficial ownership by it and four
subsidiaries of shares of Common Stock.common stock. Based on information contained in
the Schedule 13G, thisthe number shown in the table includes shares as to which
M&I has or shares voting and investment power as follows: sole voting power
as to 87,14488,332 shares; shared
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11
voting power as to 823,501789,376 shares (as to which beneficial ownership is
disclaimed as to 782,535781,014 shares held in one or more employee benefit plans);
sole investment power as to 82,54692,007 shares; and shared investment power as to
828,252785,701 shares (as to which beneficial ownership is disclaimed as to 782,535781,014
shares held in one or more employee benefit plans).
5
10(5) Information contained on Form 13F filed with the Securities and Exchange
Commission for year ended December 31, 2000. Percent shown in table is based
on outstanding shares of common stock as of December 31, 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires MGE's
directors, executive officers, and persons who own more than ten percent of
MGE's common stock to file reports of ownership and changes in ownership with
the Securities and Exchange Commission. Those persons are also required to
furnish MGE with copies of all such reports.
Based solely on its review of the copies of the reports received by MGE and
written representations from certain reporting persons, MGE notes that its
directors and executive officers (MGE does not have any greater than ten percent
shareholders) filed all required reports during or with respect to the year
ended December 31, 2000, on a timely basis, except for Harold L. Swanson who
filed one report late relating to the purchase of stock and Jean M. Biddick who
filed one report late relating to the sale of stock.
MEETINGS AND COMMITTEES OF THE BOARD
COMMITTEES
The CompanyMGE has an Audit Committee, a Compensation Committee, an Executive
Committee, and a Personnel Committee.
DuringThe following table sets forth the year ended December 31, 1998, a totalmembership of 11each committee and the
number of meetings of theheld during 2000:
AUDIT COMPENSATION EXECUTIVE PERSONNEL
NAME COMMITTEE COMMITTEE COMMITTEE COMMITTEE
---- --------- ------------ --------- ---------
Jean M. Biddick................................. X X X
Richard E. Blaney............................... X X X
F. Curtis Hastings.............................. X X
David C. Mebane................................. X X
Regina M. Millner............................... X X
Frederic E. Mohs................................ X X X X
John R. Nevin................................... X X
Donna K. Sollenberger........................... X X
H. Lee Swanson.................................. X X X
Gary J. Wolter.................................. X X
Number of Meetings.............................. 2 1 1 1
The Board of Directors were held.met 12 times during 2000. All of the directors attended in excess ofat
least 75 percent of the aggregate number of these meetings and (if they were members of the
Audit, Compensation, Executive, or Personnel Committee) the meetings of the Audit, Compensation, Executive,Board and Personnel Committees.
In 1998 directors who were not employees of the
Company received an annual
retainer of $11,500, plus $650 for each Board meeting attended and $350 for each
Audit, Compensation, Executive, or Personnel Committee meeting attended. Mr.
Mebane does not receive additional compensation for serving as a director.committees on which the director served.
The membersfunction of the Audit Committee are Mrs. Biddick, Ms. Millner, and
Messrs. Blaney, Hastings, Mohs, Nevin, Stark, Swanson, and Vondrasek. The Audit
Committee held two meetings during 1998. The Audit Committee's function is to meet with the Company'sMGE's internal auditors
and independent public accountants and discuss with them the scope and results
of their
7
12
audits, the Company's accounting practices, and the adequacy of the Company'sMGE's internal controls. The
Audit Committee also approves services performed by the Company'sMGE's independent public
accountants. The membersAudit Committee consists of eight independent directors as
defined in Rule 4200(a)(15) of the CompensationNational Association of Securities Dealers'
listing standards. The Audit Committee are Messrs. Blaney, Mohs, and
Stark. The Compensation Committee held one meetingadopted a new charter during 1998.2000.
The function of the Compensation Committee is to review the salaries, fees,
and other benefits of officers and directors and recommend compensation
adjustments to the Board of
Directors.
The members of the Executive Committee are Mrs. Biddick and Messrs. Blaney,
Mebane, Mohs, and Vondrasek.Board.
The Executive Committee did not meet during 1998.
The Executive Committee provides a means of taking prompt action when a quorumacts in lieu of the full Board and between meetings
of Directors cannot be readily assembled. When the Board of
Directors is not in session, theBoard. The Executive Committee has the powers of the Board in the
management of the business and affairs of the Company,MGE, except action with respect to
dividends to shareholders, election of principal officers, or the filling of
vacancies on the Board of Directors or committees created by the Board of Directors.
The members of the Personnel Committee are Mrs. Biddick, Ms. Millner, and
Messrs. Mebane, Mohs, Swanson, and Vondrasek. The Personnel Committee held one
meeting during 1998.Board.
The Personnel Committee makes recommendations with respect to the election
of MGE directors and officers of the Company.officers. Nominations for the Board of Directors by shareholders, which
are submitted to the Chief Executive Officer and/or President of the Company,MGE in the
manner previously described under "Other Information -- Shareholder Proposals for the 2001
Meeting" will be considered by the Personnel Committee, the Board, or the Chief
Executive Officer.
Messrs. Stark and Vondrasek will be retiring from the above committees at
the 1999 Annual Meeting.
6
11
PROPOSED AMENDMENT TO BYLAWS TO REQUIRE EMPLOYEE DIRECTORS TO REMAIN
EMPLOYED IN ORDER TO CONTINUE TO HOLD OFFICEAUDIT COMMITTEE REPORT
The Board of Directors has unanimously approved and recommended to the
shareholders an amendment (the "Proposed Amendment") toAudit Committee oversees the Company's Bylaws
which reads as follows:
"3.02(b) Qualifications. Each Director who is a full-time employee of the
Corporation or a subsidiary of the Corporation shall cease to hold office as a
Director upon a termination of employment with the Company and its subsidiaries
for any reason other than retirement with the consentfinancial reporting process on
behalf of the Board of Directors by a resolution(the Board). The Audit Committee consists of
eight independent directors. Its duties and responsibilities are set forth in
the Audit Committee Charter adopted by directors constituting not less than 70 percentthe Board. The Audit Committee Charter is
included in this proxy statement as Exhibit A.
In the course of fulfilling its responsibilities, the numberAudit Committee has:
- Reviewed and discussed with management the audited financial statements
for the year ended December 31, 2000;
- Discussed with the representatives of directors ofour Independent Accountants,
PricewaterhouseCoopers LLP (PwC), all matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit
Committees;
- Received the Corporation fixedwritten disclosures and the letter from PwC required by
theIndependence Standards Board of Directors in
accordanceStandard No. 1, Independence Discussions
with Section 3.01. Each Director must be a shareholder of the
Corporation. This Section 3.02(b) may be amended or repealed by the shareholders
in accordanceAudit Committees;
- Discussed with Section 11.01 or by the Board of Directors by a resolution
adopted by directors constituting not less than 70 percent of the number of
directors of the Corporation fixed by the Board of Directors in accordance with
Section 3.01."
DESCRIPTION
Currently, the only qualification that the Bylaws impose on directors is
that a director must be a shareholder of the Company. If the Proposed Amendment
is approved, a second qualification will be added: a director who is a full-time
employee of the Company must relinquish his or her position as director when
that employment ceases for any reason unless, after a cessation of employment by
reason of retirement, 70 percent of the Board approves his or her retention in
office.
The Board believes that the proposed director qualification requirement is
in the best interest ofPwC their independence from the Company and itsmanagement;
and
8
13
- Considered whether the provision by PwC of nonaudit services is
compatible with maintaining their independence.
AMOUNT
--------
INDEPENDENT ACCOUNTANT FEES DISCLOSURE
AUDIT FEES........................................... $139,500
========
FINANCIAL INFORMATION SYSTEMS DESIGN AND
IMPLEMENTATION FEES................................ $ 0
========
Financial Analysis for Special Projects.............. $320,500
Tax Services......................................... $ 38,500
Issuance of Comfort Letters for Debt Financing....... $ 29,000
Financial Accounting Standard 133 Implementation..... $ 25,000
--------
ALL OTHER FEES....................................... $413,000
========
Based on the foregoing, the Audit Committee recommended to the Board that
the audited financial statements referred to above be included in the Company's
annual report on Form 10-K and the annual report to shareholders because it promotesfor the efficiencyfiscal
year ended December 31, 2000.
Jean M. Biddick Regina M. Millner Donna K. Sollenberger
Richard E. Blaney Frederic E. Mohs H. Lee Swanson
F. Curtis Hastings John R. Nevin
-------------------------
DIRECTOR COMPENSATION
Directors who are not employees of MGE will receive an annual retainer of
$14,000, plus $900 for each Board meeting attended and continuity$350 for each Audit,
Compensation, Executive, or Personnel Committee meeting attended. Neither Mr.
Mebane nor Mr. Wolter receive additional compensation for serving as a director.
The chairperson of the operations of the Board in the event thatAudit Committee will receive an employee director is terminated or otherwise leaves the Company. If, however, a
director's employment with the Company ceases by reason of retirement, the
proposed director qualification requirement would enable the Board to weigh the
merits of retaining that director against any possible disruption on the Board.
The Proposed Amendment also provides that the Board may amend or repeal
this provision only if 70 percent of the Board agrees to do so. Generally, the
Bylaws permit Board amendment or repeal of any provision by a simple majority
vote. The supermajority voting requirement of the Proposed Amendment is designed
to ensure that the full force and effect of the proposed director qualification
requirement is not diluted by the general Bylaw amendment provision. Since a 70
percent vote is required for the Board to approve the retention of a retiring
employee as a director, the same vote should be required to amend or repeal the
provision altogether.
REQUIRED VOTE
The vote of shares cast in favor of the Proposed Amendment must exceed the
votes cast against it in order to approve the Proposed Amendment.
THE BOARD RECOMMENDS VOTES "FOR" THE PROPOSED AMENDMENT TO THE BYLAWS.
7additional $2,000
retainer.
9
1214
EXECUTIVE COMPENSATION
The following table summarizes thesets forth compensation information for 1996, 1997,1998, 1999, and
1998 of
the2000 for our Chief Executive Officer and our four other most highly compensated
executive officers serving as executive officerssuch on December 31, 1998,2000, whose salary exceeded
$100,000 for 1998.2000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------- ---------------------------------
AWARDS PAYOUTS
----------------------- -------
RESTRICTED SECURITIES
OTHER ANNUAL STOCKRESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDSSTOCK OPTIONS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($AWARDS($) (#) ($) ($)(3)(6)
------------------ ---- ------ ----- ------------ ---------- ---------- ------- ------------
David C. Mebane..........Mebane(1).......... 2000 311,674 29,000 0 0 0 0 23,115
Chairman of the Board 1999 323,036 17,500 0 0 0 0 10,892
1998 303,736 14,000 0 0 0 0 8,226
Chairman, President, 1997 287,316Gary J. Wolter(2)........... 2000 251,674 29,000 0 0 0 0 0 8,85710,018
President and Chief Executive 1996 270,7561999 205,780 17,500 0 0 0 0 0 12,2638,677
Chief Executive Officer
Gary J. Wolter........... 1998 192,356 14,000 0 0 0 0 7,584
Senior Vice President - 1997 176,612Mark C. Williamson(3)....... 2000 223,574 29,000 0 0 0 0 0 6,171
Administration and 1996 160,5169,461
Executive Vice President 1999 205,604 17,500 0 0 0 0 0 4,412
Secretary
Mark C. Williamson.......8,733
and Chief Strategic 1998 191,528 14,000 0 0 0 0 8,325
Senior Vice President - 1997 174,984Officer
Thomas R. Krull(4).......... 2000 149,413 24,000 0 0 0 0 0 3,114
Energy Services 1996 158,0924,612
Group Vice President 1999 137,332 15,000 0 0 0 0 0 395
Thomas R. Krull(1).......4,268
1998 131,204 12,000 0 0 0 0 3,981
Vice President - Gas 1997 120,764Terry A. Hanson(5).......... 2000 144,544 24,000 0 0 0 0 0 2,7366,959
Vice President and Electric Operations 1996 114,612Chief 1999 136,776 15,000 0 0 0 0 0 1,742
Terry A. Hanson(2).......6,632
Financial Officer 1998 130,260 12,000 0 0 0 0 6,450
Vice President - 1997 122,416 0 0 0 0 0 5,089
Finance 1996 114,068 0 0 0 0 0 3,8366,450
- -------------------------
(1) Chairman, President and Chief Executive Officer until February 1, 2000.
(2) Senior Vice President-Electric TransmissionPresident -- Administration and DistributionSecretary until NovemberFebruary 1,
1997,2000, when he was promoted to President and Chief Executive Officer.
(3) Senior Vice President-GasPresident -- Energy Services until February 1, 2000, when he was
promoted to Executive Vice President and Chief Strategic Officer.
(4) Vice President -- Gas and Electric Operations.
(2) TreasurerOperations until OctoberFebruary 1, 1996,2000, when
he was promoted to Group Vice President.
(5) Vice President -- Finance until May 1, 2000, when he was promoted to Vice
President and Treasurer. Promoted to Vice President-Finance on November 1, 1997.
(3) AllChief Financial Officer.
(6) Amounts shown for all other compensation for 1998 amounts2000 are Companycompany contributions
to a 401(k) defined contribution plan, $130 for value attributable to a
holiday gift, and pay for unused vacation. The 401(k) Companycompany contribution
for 19982000 was $4,800$5,100 for Mr. Mebane, $4,032$5,080 for Mr. Wolter, $4,800$5,100 for Mr.
Williamson, $3,936$4,482 for Mr. Krull, and $3,981$4,156 for Mr. Hanson; the residual
for each person in 19982000 was pay for unused vacation for each officer, except
Mr. Krull.
8AGREEMENT WITH EXECUTIVE OFFICER
In 1999, David C. Mebane indicated an intention to retire from MGE. The
Board desired to continue Mr. Mebane's employment as an officer of MGE and
advisor to the Board and senior management. The Board then entered into a
contract with Mr. Mebane. The agreement provides for him to continue as an
employee and serve as Chairman of the MGE Board, consultant and advisor to the
Board and senior management, and Chairman of the MGE Foundation. Mr. Mebane has
agreed to act
10
1315
as Chairman of the monthly Board meetings and the annual meetings. He will also
review and approve official communications with shareholders and review major
operational, financial, regulatory, public policy, and public affairs activities
of MGE and provide the Board with a monthly assessment of the same. He will be
responsible for corporate governance issues at the Board level. Mr. Mebane is
prohibited from engaging in any other aspect of the gas and electric utility
business in the state of Wisconsin during the term of the contract and for two
years thereafter. The initial agreement ran from February 1, 2000, through
February 1, 2001, and was extended during 2000 for an additional year through
February 1, 2002. The Chairman will be paid $310,000, plus standard benefits.
REPORT ON EXECUTIVE COMPENSATION
CORPORATE MISSION
The mission of Madison Gas and Electric CompanyMGE is to provide qualityreliable gas and electric utility service to itsour
customers at competitive rates; to meet all customers' gas, electric, and
related energy needs; and to earn a reasonable return for investors. MGE is
committed to the communities we serve and to maintaining the highest standards
of corporate citizenshipcitizenship. MGE is committed to treat employees fairly and fair treatment for all employees.provide
equal opportunity.
COMPENSATION PHILOSOPHY
The principal goal of the Madison Gas and Electric CompanyMGE compensation program is to pay employees,
including executive officers, at levels which are:
- reflectiveReflective of how well the CompanyMGE is achieving its corporate missionmission;
- consistentConsistent with the Company'sMGE's current financial condition, earnings, rates, total
shareholder return, and projected Consumer Price IndexIndex;
- reflectiveReflective of individual performance and experienceexperience;
- competitiveCompetitive in the marketplacemarketplace; and
- administeredAdministered in a fair and consistent manner.
Executive salaries are established within a salary range that reflects competitive
salary levels for similar positions in similar-sized gas and electric utilities,
similar-sized companies outside of the utility industry, and other Wisconsin
utilities. The utilities used for salary comparison are not the same companies
included in the performance graph peer group in this Proxy Statement. The Upper Midwest combination utilities included
in the performance graph peer group were selected to reflect utilities facing
similar weather and economic conditions. Many of these companies are larger than
MGE with much higher compensation structures.proxy statement. When
examining compensation peer groups, it was determined more appropriate to
consider similar-sized utilities, other similar-sized companies, and other
Wisconsin utilities.
The midpoint (or middle) of an executive's salary range is approximately
equal to the median salary level of the surveyed utilities. An executive's
position in the range reflects his or her performance over a period of years in
that position, the executive's experience in that position, and CompanyMGE performance.
11
16
Specific individual or Companycompany performance targets are not set. Instead, an
executive's salary within the salary range is determined by subjectively
evaluating the individual's performance and experience and the Company'sMGE's performance.
While MGE's current compensation program has functional adequacy to retain
and fairly compensate the Company's executives, the Compensation Committee and the full Board
review the objectives of the executive compensation program on a continuing
basis. Each year, the Compensation Committee reviews and recommends to the Board
annual salaries, salary grades and ranges, and the overall salary program design
for the Company'sMGE's executives.
9
14
From time to time the Compensation Committee considers awarding bonuses to
the Company'sMGE's executives in the form of cash and/or stock. These bonuses may be made for
extraordinary Companycompany or individual performance, a desire to retain an executive
by making that executive's compensation more competitive, aligning the long-term
interests of executives with shareholders, and other reasons.
EXECUTIVE COMPENSATION
Company performancePerformance factors such as earnings, rates, shareholder return, and other
available financial criteria were used in determining the CEO's and other
executive officers' positions in his or her salary range. Other criteria such as
gas and electric reliability, customer service, and responsiveness to industry
change were also examined.
In 1998,Officer salaries were set effective May 1, 2000. Among the Company achieved solidsignificant
achievements the Compensation Committee considered in setting the salary of the
CEO and other senior executives were the following: 1999 earnings exceeded the
budget forecast, despite substantially lower gas salesmargins because of another warm winter and
the higher electric fuel costs resulting from oneColumbia Plant outages and higher
purchased power costs. MGE was instrumental in shaping Wisconsin's energy policy
through the Governor's Reliability 2000 Act which will provide fair access for
all to the transmission grid. MGE developed a new gas purchasing incentive
program which will allow shareholders to receive up to $750,000 of additional
earnings in future years. MGE had the warmest years on record. MGE addressedhighest ten-year average annual return
among the four major Wisconsin combination utilities. The Company's bond rating
was fourth out of 307 electric, reliability concerns by taking a leadership rolegas, and water utilities in the passagecountry. MGE met
customer needs by implementing a backup generator program for commercial
customers, beginning construction of the
Wisconsin Electric Reliability Act of 1998an 83-megawatt natural gas peaking plant
and taking steps to add electric
generation. The Company positioned itself for the future by merging gas and
electric field operations and restructuring its major pipeline contract.
Implementing innovative measures such as a gas margin hedge helped earningsbuilding an additional reporting site in 1998, and putting in place gas purchasing incentives provides an opportunity to
increase future earnings and shareholder return.Fitchburg.
A compensation study was performed for the CompanyMGE in 19961999 and updated in 2000 by
aan independent compensation consultant. The study compared the pay level of key
MGE executives to pay levels of general industry and pay levels of other
utilities with revenues of approximately $250 million. The study showed that pay
levels for MGE executives were generally below the median of salary and
incentive compensation for both general industry and similar-sized utilities.
Salary adjustments were made which moved CompanyMGE executives closer to the market
median for their positions. In May of 1998,2000, the CEO's annual salary was set at
$309,108$257,508.
12
17
A stock and cash bonus was granted to MGE officers based on 19982000
performance. The bonus granted to the CEO and several other senior officers was
$14,000.$29,000. When determining whether to grant the bonus, the Compensation Committee
in particular considered the performance factors noted above, together with the
further alignment of the long-term interests of the executive officers and
shareholders created by the stock portion of the bonus.
Jean M. Biddick
Richard E. Blaney
Frederic E. Mohs
Phillip C. Stark
1013
1518
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the Company, S&P 500, Russell 2000, and a Peer Groupthe EEI Investor-owned Electric
Index, weighted according to each company's market capitalization as of the
beginning of each year.
MADISON GAS AND ELECTRIC COMPANY
FINANCIAL PERFORMANCE
CUMULATIVE FIVE-YEAR TOTAL RETURN COMPARISON
PERFORMANCE GRAPH
1998
MGE - $135
S&P 500 - $294
Russell 2000 - $179
Peer Group - $182[PERFORMANCE GRAPH]
MGE S&P 500 RUSSELL 2000 PEER GROUPEEI INDEX
--- ------- ------------ -------------------
'1993'1995 100.00 100.00 100.00
100.00
'1994' 102.001996 92.00 116.00 101.00
98.00 95.00
'1995'1997 111.00 143.00 129.00
1998 116.00 139.00 126.00 124.00
'1996' 107.00 171.00 147.00
128.00
'1997' 129.00 229.00 180.00 166.00
'1998' 135.00 294.00 179.00 182.001999 109.00 168.00 120.00
2000 131.00 147.00 177.00
Assumes $100 invested on December 31, 1993,1995, in each of the Company's Common
Stock, S&P 500, Russell 2000, and the Peer Group.
*TotalEEI Index.
Total return assumes reinvestment of dividends
---------------------------------------
S&P----------------------------
RUSSELL PEEREEI
MGE 500 2000 GROUP
----------------------------------INDEX
-------------------------
19931995 $100 $100 $100
$100
1994 $1021996 $92 $116 $101
$ 98 $ 95
19951997 $111 $143 $129
1998 $116 $139 $126 $124
1996 $107 $171 $147
$128
1997 $129 $229 $180 $166
1998 $135 $294 $179 $1821999 $109 $168 $120
2000 $131 $147 $177
The Company has decided to use the Russell 2000 for the broad equity market
index comparison. Given the Company's market capitalization relative to the
companies included in the S&P 500 and the Russell 2000, the Company believes the
Russell 2000 companies are a more representative investment alternative than the
S&P 500 companies.
1114
16
The Peer Group selected by the Company is composed of 19 Upper Midwest
combination utilities:
Cilcorp Inc. MidAmerican Energy Holding
Cinergy Corp. Minnesota Power & Light
Cipsco Inc. Nipsco Industries Inc.
CMS Energy Corp. Northern States Power-MN
DPL Inc. SIGCORP. Inc.
IES Industries Inc. St. Joseph Light & Power
Illinova Corp. Utilicorp United Inc.
*Interstate Energy Corp. Wisconsin Energy Corp.
Interstate Power Co. WPS Resources Corp.
**Iowa-Illinois Gas &
Elec.
*WPL Holdings merged with IES Industries and Interstate Power, which
formed Interstate Energy, which later changed its name to Alliant
Energy Corp.
**Merged with Midwest Resources on 7/17/95
12
17
MADISON GAS AND ELECTRIC COMPANY
FINANCIAL PERFORMANCE
MGE VERSUS WISCONSIN PEER GROUP
Note: This graph is for comparison purposes only. It is to show how the
Company's Five-YearMGE's Five-
Year Total Return compares to the other Wisconsin utilities.
PERFORMANCE GRAPH
1998
MGE = $135
Wisconsin
Peer Group = $146[PERFORMANCE GRAPH]
MGE WI PEER GROUP
--- -------------
'1993'1995 100.00 100.00
'1994' 102.00 95.00
'1995'1996 92.00 93.00
1997 111.00 110.00
1998 116.00 118.00
'1996' 107.00 110.00
'1997' 129.00 130.00
'1998' 135.00 146.00123.00
1999 109.00 94.00
2000 131.00 121.00
Assumes $100 invested on December 31, 1993,1995, in each of the Company'sMGE's Common Stock and
the
Wisconsin Utility Peer Group AverageAverage.
The Wisconsin Peer Group average is weighted based on market capitalization at
the beginning of eachthe year.
*
Total return assumes reinvestment of dividends
------------------------------------------
WI
MGE PEER
GROUP
----------------------------------------
1993 $100 $100
1994 $1021995 $100.00 $100.00
1996 $ 95
1995 $116 $118
1996 $107 $11092.00 $ 93.00
1997 $129 $130$111.00 $110.00
1998 $135 $146$116.00 $123.00
1999 $109.00 $ 94.00
2000 $131.00 $121.00
Wisconsin Peer Group: Wisconsin Energy Corp.
InterstateAlliant Energy Corp.
WPS Resources Corp.
* WPL Holdings merged with IES Industries,
and Interstate Power, which formed Interstate Energy;
which interchanged its name to Alliant Energy Corp.
1315
1820
PENSION PLAN AND SUPPLEMENTAL RETIREMENT PLAN
The CompanyMGE has a noncontributory qualified defined benefit Pension Planpension plan covering
its salaried employees. The amount of pension is based upon years of service and
finalhigh 60-month average earnings in the ten years prior to retirement.
The following table indicates the estimated maximum retirement benefits
payable (unreduced for survivor protection) at the normal retirement age of 65
for specified compensation and years of service classifications. Substantially
all compensation shown in the salary column of the summary compensation table is
included in compensation under the Pension Plan,pension plan, subject to any statutory
regulations imposed by the Internal Revenue Code. Information in this table is
based on the Pension Planpension plan formula for years of service credit earned in 1986 and
subsequent years. The retirement benefits are not subject to any reduction for
Social Security benefits received by the employees or for any other offset
amounts.
PENSION PLAN TABLE(1)
ANNUAL PENSION AT NORMAL RETIREMENT AGE OF 65
AFTER YEARS OF SERVICE INDICATED BELOW(2)
----------------------------------------------------------------------------------------------------------------
FINAL FIVE-YEAR 2530 YEARS
AVERAGE ANNUAL SALARY 10 YEARS 15 YEARS 20 YEARS 25 YEARS OR MORE
- --------------------- -------- -------- -------- -------- --------
$100,000.............. $12,500 $18,750 $25,000 $31,250
$125,000.............. $15,625 $23,438 $31,250 $39,063
$160,000.............. $20,000 $30,000 $40,000 $50,000$14,000 $21,000 $28,000 $35,000 $42,000
$140,000.............. $19,600 $29,400 $39,200 $49,000 $58,800
$170,000.............. $23,800 $35,700 $47,600 $59,500 $71,400
- -------------------------
(1) The retirement benefits reflect limits imposed by the Internal Revenue Code
on benefit amounts and covered compensation.
(2) The Pension Plan Tablepension plan table does not reflect service credit prior to 1986 when
the Pension Planpension plan required employee contributions. The normal retirement
pension for employees with service credits prior to 1986 will exceed the
amounts shown in the Pension Plan Table,pension plan table, depending on their years of
pre-
1986pre-1986 service and contributions made to the Pension Plan.pension plan.
The estimated annual retirement benefit payable at normal retirement age of
65 under the Pension Planpension plan formula (assuming continuation of 19982000 compensation
levels through retirement and taking into account employee contributions and
service credits for 1985 and prior years) is $57,380 to Mr. Mebane, $49,845$78,205 to Mr. Wolter, $51,025$72,986 to
Mr. Williamson, $66,837$92,588 to Mr. Krull, and $48,042$66,725 to Mr. Hanson. At December 31,
2000, the annual retirement benefit payable to Mr. Mebane is $71,562.
The full credited years of service under the Pension Planpension plan are 2224 for Mr.
Mebane, 17 for Mr. Wolter, 15 for Mr. Wolter, 13 for Mr. Williamson, 2528 for Mr. Krull, and 1719 for
Mr. Hanson.
Officers of the CompanyMGE are also covered under a nonqualified supplemental
retirement plan which provides a supplemental retirement benefit. The
supplemental retirement benefit is a designated percentage ranging from 55 to 70
percent of the final 60-month average earnings less the benefit payable from the
Pension Planpension plan described above. The designated percentage is based on the
officer's age at retirement. The estimated supplemental annual retirement
benefit payable at normal retirement age of 65 under the supplemental retirement
plan (assuming continuation of 19982000 compensation levels
16
21
through retirement) is $135,472$102,051 to Mr. Mebane, $88,293 to
14
19
Mr. Wolter, $86,743$85,639 to Mr. Williamson,
$26,344$13,479 to Mr. Krull, and $44,610$36,402 to Mr. Hanson. At December 31, 2000, the
annual supplemental retirement benefit payable to Mr. Mebane was $143,905.
DEFERRED COMPENSATION PLAN
Officers of the CompanyMGE are permitted to defer a portion of their current salary
under a nonqualified deferred compensation plan initiated in 1984. TwoThree
officers contributed to the plan during 1998.2000. Participants in the plan are
entitled to receive deferred compensation upon termination of active employment.
Deferred compensation under this plan does not constitute compensation as
defined under the Pension Planpension plan described above.
The CompanyMGE has entered into a trust agreement for the purpose of assuring the
payment of the Company'sits obligations under the supplemental retirement plan and deferred
compensation plan. Under the trust agreement, in the event of a change in
control or potential change in control of the Company, the CompanyMGE, MGE will be obligated to deliver
to the trustee cash or marketable securities having a value equal to the present
value of the amounts which the CompanyMGE is obligated to pay under such plans and the
costs of maintaining the trust. "Change in control" is defined generally as the
acquisition by any person, subject to certain exceptions, of beneficial
ownership of 20 percent or more of the Common
Stock;MGE's common stock; a change in the majority
of the Board of Directors; certain mergers or similar transactions involving
the Company'sMGE's assets where, among other conditions, the current shareholders do not
constitute at least 60 percent of the shareholders of the resulting or acquiring
entity; or a liquidation of the
Company.MGE.
SEVERANCE PLANS
The CompanyMGE has entered into severance agreements with certain key employees,
including Messrs. Mebane, Wolter, Williamson, Krull, and Hanson. Under these
agreements, each such employee is entitled to a severance payment following a
change in control of the CompanyMGE as defined above if, within 24 months after such change
in control, employment with the CompanyMGE is terminated by (i) the Company,MGE, (ii) the employee for
good reason, or (iii) the employee for any reason during the 30-day period
commencing one year after the date of change in control. Each agreement has a
three-year initial term, but on the first anniversary of execution and each
anniversary thereafter, the agreement is extended for an additional year, unless
either the CompanyMGE or the employee gives notice not to extend the agreement or a change
in control of the CompanyMGE has occurred. Severance payments will be equal to three times
the employee's annual base salary plus three times the highest bonus paid during
any of the five years preceding a change in control. If the employee receives
severance benefits following a change in control, health, life, and disability
benefits are continued for up to three years, and the employee will also be
grossed up for any excise taxes the employee may incur. In circumstances not
involving a change in control of the Company,MGE, Messrs. Mebane, Wolter, Williamson, Krull,
and Hanson, like other salaried employees, are entitled under the Company'sMGE's general
severance plan to a payment
15
20 equal to two weeks of compensation plus the
employee's weekly compensation multiplied by the number of years of employment,
not exceedingto exceed 24.
17
22
OTHER INFORMATION
EXPENSES OF SOLICITATION
OF PROXIES
TheMGE will bear the cost of soliciting proxies for the annual meeting.
Proxies will be borne by the Company. In addition to
solicitationsolicited by mail and may be solicited personally by directors,
officers, andor employees of the Company may
solicit proxies from the shareholders of the Company personally or by telephone.
The CompanyMGE who will not receive special compensation for such
services. MGE has retained Morrow & Co., Inc., to aid in the solicitation ofsolicit proxies at a fee of
$6,000 plus expenses.
SHAREHOLDER PROPOSALS AND
NOMINATIONS FOR NEXTTHE 2001 ANNUAL MEETING
In order to be considered for inclusion in the Company'sMGE's proxy materials for the
2000 Annual Meeting,2002 annual meeting, a shareholder proposal must be received by the
CompanyMGE no later
than November 25, 1999.December 14, 2001. In addition, regardless of whethereven if a shareholder proposal is set forth
in the Company's 1999 Proxy StatementMGE's 2001 proxy statement as a matter to be considered by shareholders,
the Company'sMGE's Bylaws establish an advance notice procedure for shareholder proposals to
be brought before any meeting of shareholders, including proposed nominations of
persons for election to the Board of Directors. Shareholders at the 1999 Annual Meeting2001 annual
meeting may consider a proposal or nomination brought by a shareholder of record
on March 1, 1999,15, 2001, who is entitled to vote at the 1999 Annual Meeting2001 annual meeting and who
has given the CompanyMGE timely written notice, in proper form, of the shareholder's
proposal or nomination. A shareholder proposal or nomination intended to be
brought before the 1999 Annual Meeting2001 annual meeting must have been received by the CompanyMGE after the
close of business on January 25, 1999,29, 2001, and prior to the close of business on
February 19, 1999. The Company23, 2001. MGE did not receive notice of any shareholder proposal or
nomination relating to the 1999 Annual Meeting.2001 annual meeting. The 2000 Annual Meeting2002 annual meeting is
expected to be held on May 9, 2000.14, 2002. A shareholder proposal or nomination
intended to be brought before the 2000 Annual Meeting2002 annual meeting must be received by the
CompanyMGE
after the close of business on January 24, 2000,February 11, 2002, and prior to the close of
business on February 18, 2000.March 8, 2002. All proposals and nominations should be directed to
the Company'sMGE's principal executive offices at 133 South Blair Street, Post Office Box
1231, Madison, Wisconsin 53701-1231, Attention: Corporate Secretary.
18
23
OTHER MATTERS
The Company'sOur Annual Report for the year 19982000 has been mailed to shareholders.
The management has no knowledgeBoard does not know of any other matters tothat will be brought beforepresented at the
Annual Meeting.annual meeting. If however, any other matters properly come before the Annual Meeting,meeting, it is the
intention of the persons named in the proxy to vote the proxies in accordance
with their judgment on such matters.
The Board of Directors has selected PricewaterhouseCoopers LLP to audit the consolidated
financial statements of the CompanyMGE and its subsidiaries for 1999.
16
212001.
PricewaterhouseCoopers LLP, the Company'sMGE's independent public accountant in 1998,2000, is
expected to have a representative present at the 2001 annual meeting who may
make a statement and will be available to respond to appropriate questions.
Madison Gas and Electric CompanyMADISON GAS AND ELECTRIC COMPANY
/s/ DAVID C. MEBANE
DAVID C. MEBANE
Chairman of the Board
/s/ GARY J. WOLTER
GARY J. WOLTER
President and
Chief Executive Officer
Dated March 29, 1999
17April 13, 2001
19
22
MADISON GAS AND ELECTRIC COMPANY
POST OFFICE BOX 1231
MADISON, WISCONSIN 53701-1231
[MG&E LOGO]
This proxy24
EXHIBIT A
AUDIT COMMITTEE -- CHARTER
The charter identifies the purpose, authority, composition, and
responsibilities of the Madison Gas and Electric Company Audit Committee of the
Board of Directors (the "Committee").
PURPOSE
The purpose of the Committee is solicited on behalf ofto assist the Board of Directors of Madison
Gas and Electric Company. MGE's Annual Meeting willCompany (the "Company") in fulfilling its oversight
responsibilities to the shareholders, potential shareholders, and the investment
community relating to financial reporting and accounting practices, the system
of internal controls, and all audit processes.
AUTHORITY
The Committee reports to the Board of Directors and has unrestricted access
and authorization to obtain assistance from Company personnel to accomplish its
purpose. In addition, the Committee has the discretion to initiate and supervise
investigations within the scope of its duties as it may deem appropriate and to
employ whatever additional advisors and consultants it deems necessary for the
fulfillment of its duties.
COMPOSITION
The Committee shall consist of three or more outside directors, as
determined by the Board of Directors. Each member shall be held at 11:00 a.m., local time,
on Tuesday, May 4, 1999,an independent
director, defined as a person other than an officer or employee of the Company
or its subsidiaries or any other individual having a relationship which, in the
Exhibition Hallopinion of the Company's Board of Directors, would interfere with the exercise
of independent judgment in carrying out the responsibilities of a director. All
members of the Committee shall have a working familiarity with basic finance and
accounting practices and be able to read and understand balance sheet, income
and cash flow statements. At least one member of the Committee shall have
accounting or related financial management expertise.
GENERAL RESPONSIBILITIES
1. The Committee shall provide open avenues of communication with the
director -- internal audit, the independent accountants, management, and
the Board of Directors.
2. The Committee shall report committee actions to the full Board of
Directors and may make appropriate recommendations.
3. The Committee shall meet at least two times each year. The Committee
chair has the Dane County Exposition
Center, 1919 Expo Way, Madison, Wisconsin (see mappower to call a committee meeting whenever he or she
thinks there is a need. A Committee member should not vote on back).
YOUR VOTE IS IMPORTANT. PLEASE SIGNany matter
in which he or she is not independent. The Committee may ask members of
management or
A-1
25
others to attend the meeting and is authorized to receive all pertinent
information from management.
RESPONSIBILITIES FOR ENGAGING INDEPENDENT ACCOUNTANTS AND DATEAPPOINTING THE
ATTACHED PROXY PROMPTLYDIRECTOR -- INTERNAL AUDIT
1. The ultimate accountability of the independent accountants shall be to
the full Board of Directors and the Committee, as representatives of the
shareholders. The full Board of Directors, with the recommendations of
the Committee, shall have ultimate authority to select, evaluate, and
replace the independent accountants.
2. The Committee shall recommend the engagement of independent accountants
to the full Board of Directors for approval and shall review the fees
paid to the independent accountants.
3. The Committee shall review and have veto power over the appointment,
replacement, reassignment or dismissal of the director -- internal
audit.
4. The Committee shall assure the objectivity of the director -- internal
audit and the independence, as defined by Independence Standards Board
(ISB) Standard No. 1, of the independent accountants, including a review
of management consulting services provided by the independent
accountants and the fees paid for them.
5. The Committee shall consider, in consultation with the independent
accountants and the director -- internal audit, the audit scope and plan
of the director -- internal audit and the independent accountants.
6. The Committee shall make sure that the director -- internal audit and
the independent accountants coordinate the internal and external audits.
RESPONSIBILITIES FOR REVIEWING INTERNAL AUDITS, THE ANNUAL EXTERNAL AUDIT AND
MAIL IT BACK TO US EVEN IF YOU PLAN TO ATTEND THE MEETING.REVIEW OF QUARTERLY AND ANNUAL FINANCIAL STATEMENTS
1. The Committee shall ensure that the independent accountants are
available to the full Board of Directors at least annually, and shall
provide the Committee with a timely analysis of significant financial
reporting issues.
2. The Committee shall ask management, the director -- internal audit, and
the independent accountants about significant risks and exposures and
shall assess management's responses to address them.
3. The Committee shall review the following with the independent
accountants and the director -- internal audit:
a. The adequacy of the Company's internal controls, including
computerized information system controls and security.
A-2
26
b. Any significant findings and recommendations made by the independent
accountants or the director -- internal audit, together with
management's responses to them.
4. Shortly after the annual external audit is completed by the independent
accountants, the Committee shall review the following with management
and the independent accountants:
a. The Company's annual financial statements.
b. The independent accountants' audit of and report on the annual
financial statements.
c. The independent accountants' qualitative judgment about the
appropriateness, not just the acceptability, of accounting
principles and financial disclosures, and about the degree of
aggressiveness or conservatism of the Company's accounting
principles and underlying estimates.
d. Any serious difficulties or disputes with management encountered
during the course of the audit.
e. Anything else about the audit procedures or findings that is
required to be discussed with the Committee by Statement on Auditing
Standard (SAS) No. 61, as may be modified or supplemented.
5. The Committee shall review the following with management and the
director -- internal audit:
a. Any significant findings during the year and management's responses
to them.
b. Any difficulties the director -- internal audit encountered while
conducting audits, including any restrictions on the scope of his or
her work or access to required information.
c. Any changes required to the planned scope of their audit plan.
d. The internal auditing department's budget and staffing.
e. The internal auditing department's charter.
6. The Committee shall review with management annual filings with the
Securities and Exchange Commission (SEC) and other published documents
containing the Company's annual financial statements and shall consider
whether the information in the filings is consistent with the
information in the financial statements. The Chair of the Committee may
represent the entire Committee for purposes of this review.
7. The Committee shall review the interim financial reports with management
and the independent accountants prior to filing with the SEC. The Chair
of the Committee may represent the entire Committee for purposes of this
review.
A-3
27
8. The Committee shall prepare a report for inclusion in the Company's
proxy statement that states whether:
a. The Committee reviewed and discussed the audited financial
statements with management.
b. The Committee discussed with the independent auditors all matters
required to be discussed by SAS 61, as may be modified or
supplemented.
c. The Committee received the written disclosures and the letter from
the independent accountants required by ISB Standard No. 1, as may
be modified or supplemented, and discussed with the independent
accountants the independent accountants' independence.
d. The Committee recommended to the full Board of Directors that the
audited financial statements be included in the Company's Annual
Report on Form 10-K and the annual report to shareholders.
PERIODIC RESPONSIBILITIES
1. The Committee shall review and, as necessary, update the Committee's
charter at least annually.
2. The Committee shall review with the director -- internal audit the
results of his or her examination of compliance with the Company's code
of conduct.
3. The Committee shall review with the Company's general counsel, legal and
regulatory matters that may have a material effect on the Company's
financial statements, compliance policies, and programs.
4. The Committee shall meet with the director -- internal audit, the
independent accountants, and management in separate executive sessions
to discuss any matters that the Committee or these groups believe should
be discussed privately with the Committee.
A-4
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If you do plan on
attendingto attend the meeting be sure to completein person, please fill out the
reservation form and return it with your proxy card so that we may have an
indication of the bottom two-thirdsnumber of this form inshareholders planning to attend the enclosed envelope.
Foldmeeting.
If you have any questions, please feel free to call our Shareholder
Services toll-free number. Call 1-800-356-6423 if you are calling from within
the Continental United States and Detach Here Fold and Detach Here
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PLEASE
SIGN
AND
RETURN
MADISON GAS AND ELECTRIC COMPANY PROXY
ITEM 1: Election of Directors: Class I Nominees: Jean Manchester
Biddick, David C. Mebane, and Regina M. Millner252-4744 if calling from the Madison area.
MAP
29
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Madison Gas and Electric Company [MG&E LOGO OMITTED] | Control Number |
Post Office Box 1231 YOUR VOTE IS IMPORTANT! | for Telephone and Internet Voting: |
Madison, Wisconsin 53701-1231 ---------------------------------------
| |
| |
---------------------------------------
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| | |
| | Call the Toll-Free Number 1-800-678-8548. (You will not be charged for this call.) You will be asked to enter |
| | the control number found in the box in the upper right corner of this form. |
| | |
| VOTE BY | OPTION A: To vote as the Board of Directors recommends on ALL proposals, press 1. |
| TELEPHONE | |
| | OPTION B: If you choose to vote on each item separately, press 0. You will hear these instructions: |
| | To vote FOR ALL nominees, press 1. To WITHHOLD FOR ALL nominees, press 9. To WITHHOLD |
| | FOR AN INDIVIDUAL nominee, press 0 and listen to the instructions. |
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| VOTE BY | Access our Web site HTTP://WWW.PROXYVOTING.COM/MGE |
| INTERNET | |
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IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL THE PROXY CARD. THANK YOU FOR VOTING.
Fold and Detach Here
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The Board of Directors recommends a vote "FOR" Item 1.
ITEM 1. ELECTION OF DIRECTORS
Nominees for terms ending in 2004:
01 Richard E. Blaney
02 Frederic E. Mohs
03 F. Curtis Hastings
Indicate your vote by placing an (X) in the appropriate box.
[ ]For all [ ] FORWithhold [ ] WITHHOLDFor all
nominees listed abovefor all except*
* To withhold authority to vote for (except as marked toany individual nominee, strike a Signature(s): Date:
line through the nominee's name in the list above and mark an (X)
in the "For all contrary below) nominees listed
To withhold authority to vote
for any individual nominee,
write that nominee's name here:
--------------------------------
ITEM 2: Proposal to Amend Bylaws to Require any Employee
Director to Remain Employed Full-Time in Order to Continue
Service as a Director [ ] FOR [ ] AGAINST [ ] ABSTAIN
ITEM 3: In their discretion upon such other business as may
properly come before the Meeting
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED
WITH RESPECT TO PROPOSALS NUMBERED (1) AND (2). IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR ALL
NOMINEES" AND "FOR" THE PROPOSAL TO AMEND THE COMPANY'S BYLAWS
except" box. --------------------------------------- ------------
This proxy revokes any proxy heretoforeprevious proxies given. ----------------------------------------------------
--------------------------------------------------- , ----------------------------------------------------
1999
MONTH DAY--------------------------------------- ------------
Please sign exactly as namename(s) appears hereon. Forabove and date
[ ] I/We consent to access all future proxy materials and annual this proxy. If joint accounts, all tenantsaccount, each joint owner should
reports via the Internet instead of receiving these materials sign. Executors, Administrators, Trustees, etc.,
should soby mail. indicate when signing.
(continued on reverse side)
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1999the capacity in which you are signing.
(continued on reverse side)
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2001 ANNUAL SHAREHOLDER MEETING RESERVATION
PLEASE SIGN AND RETURN IF YOU PLAN TO ATTEND THE ANNUAL
MEETING. ------------------------------------------------------------If you plan to attend the Annual Meeting, please
sign and return with your proxy vote. (IF YOU DO
NOT PLAN TO ATTEND, DO NOT RETURN THIS PORTION OF
Shareholder(s)
THE FORM.)
------------------------------------------------------------
Shareholder(s)
------------------------------------------------------------[ ] I/We will attend the annual meeting.
------------------------------------------------
Shareholder Attending
------------------------------------------------
Shareholder Attending
------------------------------------------------
Guest
23
MAP30
[MAP]
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[MG&E LOGO] PROXY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS --- MAY 4, 199922, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
[MG&E LOGO]
The aforesigned Common Stock shareholder of MADISON GAS AND ELECTRIC
COMPANY hereby appoints RICHARDI/We appoint Richard E. BLANEY, DAVIDBlaney, Frederic E. Mohs, and David C. MEBANE, and FREDERIC
E. MOHS,Mebane, as
proxies with power of substitution, to represent and to vote all shares of
stock the aforesignedI/We would be entitled to vote at the Annual Meeting to be held inat the
Exhibition Hall of the Dane County
ExpositionMarriott - Madison West, 1313 John Q. Hammons Drive, Greenway Center, 1919 Expo Way, Madison,Middleton,
Wisconsin, on Tuesday, May 4,
1999,22, 2001 at 11:0011 a.m., local time, and at all
adjournments thereof.
Shares represented by all properly executed proxies will be voted in accordance
with instructions appearing on the proxy. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
PLEASE SIGN EXACTLY AS NAME(S) APPEARAPPEARS ON THIS PROXY CARD AND DATE THIS PROXY.
IF JOINT ACCOUNT, EACH JOINT OWNER SHOULD SIGN. IF SIGNING FOR A
CORPORATION OR PARTNERSHIP OR AS AGENT, ATTORNEY, OR FIDUCIARY,EXECUTORS, ADMINISTRATORS,
TRUSTEES, ETC., INDICATE THE CAPACITY IN WHICH YOU ARE SIGNING.
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