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File No. 70-____
As filed with the Securities and Exchange Commission on February 17, 1998.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM U-1
DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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(Names of companies filing this statement
and addresses of principal executive offices)
Ameren Corporation
Ameren Services Company
1901 Chouteau Avenue
St. Louis, Mo. 63103
(Name of top registered holding company)
Ameren Corporation
(Names and addresses of agents for service)
The Commission is requested to send copies of all notices, orders and
communications in connection with this Declaration to:
William J. Niehoff William J. Harmon
Ameren Services Company Jones, Day, Reavis & Pogue
1901 Chouteau Avenue 77 West Wacker, Suite 3500
P.O. Box 66149, MC 1310 Chicago, IL 60601-1692
St. Louis, MO 63166-6149
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Item 1. Description of Proposed Transaction
A. Background
Ameren Corporation ("Ameren") became the holding company for Union Electric
Company ("UE"), Union Electric Development Corporation ("UEDC"), Central
Illinois Public Service Company ("CIPS"), CIPSCO Investment Company ("CIC") and
Ameren Services Company ("Ameren Services") effective December 31, 1997. Ameren
also indirectly owns 60% of the common stock of Electric Energy Incorporated
("EEI"). The transaction giving rise to this structure was approved by the
Commission in HCAR No. 35-26809 (December 30, 1997).
Subject to shareholder and regulatory approvals, Ameren has adopted the
Ameren Corporation Long-Term Incentive Plan of 1998, a stock compensation plan
("Ameren LTIP"). Ameren will submit the Ameren LTIP to shareholders for approval
at its 1998 Annual Meeting of Shareholders scheduled for April 28, 1998.
Ameren and Ameren Services seek approvals herein under Sections 6(a), 7 and
12(e) of the Public Utility Holding Company Act of 1935, as amended (the
"Act")..
B. Ameren Common Stock for Ameren LTIP.
Approval is sought for the issuance by Ameren (and/or the acquisition by or
on behalf of Ameren in open market transactions) of up to 4 million shares of
Ameren Common Stock, $.01 par value ("Common Stock") over the period ending five
years after the date of the Commission's approving order in this docket, for
purposes of awards under the Ameren LTIP. These shares will be in addition to
the shares of Ameren Common Stock proposed to be issued or acquired for other
benefit plans and the dividend reinvestment plan as approved in HCAR No.
35-26809.
Any shares of Ameren Common Stock used to fund the Ameren LTIP may be, at
the discretion of Ameren, authorized but unissued shares, treasury shares or
shares purchased on the open market by an independent plan administrator or
agent. The decision as to whether shares are to be purchased directly from
Ameren, or in the open market or in privately negotiated transactions, will be
based on Ameren's need for common equity and any other factors considered by
Ameren to be relevant. Any determination by Ameren to alter the manner in which
shares will be purchased for the Ameren LTIP, and implementation of any such
change, will comply with applicable law and Commission rules, regulations and
interpretations under the Act then in effect.
Net proceeds from new issue or treasury shares of Ameren Common Stock
received by Ameren will be added to Ameren's general funds to be available for
general corporate purposes. Ameren will not receive any proceeds from shares
acquired in the open market or in privately negotiated transactions.
Ameren will not use any proceeds from any new issue or treasury shares to
acquire the securities of or any interest in any exempt wholesale generator or
foreign utility companies (as those terms are defined in Sections 32(e) and
33(a) of the Act), until such time as such use shall
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be approved by regulation or order of the Commission, to the extent such
approval is required under the Act.
C. Solicitation of Proxies
Ameren intents to submit the Ameren LTIP to the holders of its outstanding
Common Stock for consideration and action at the Annual Meeting to be held April
28, 1998. The form of proxy materials to be mailed to Ameren's shareholders in
connection with the Annual Meeting are included herewith as Exhibits H-1 to H-2.
Ameren and/or Ameren Services will mail the proxy materials to Ameren common
shareholders on or about March 20, 1998. Accordingly, in order to accommodate
this schedule and to permit sufficient time for advance preparation and
printing, Ameren requests that the Commission issue an order by not later than
March 9, 1998 permitting Ameren to solicit proxies with respect to the Ameren
LTIP.
D. Description of Ameren LTIP.
The purpose of the Ameren LTIP is to give Ameren and its subsidiaries and
other affiliates (as defined in the Ameren LTIP) a competitive advantage in
attracting, retaining and motivating officers, employees and directors by
providing for the awarding of incentives linked to the profitability of Ameren
and its businesses and to increases in shareholder value.
The Ameren LTIP will be administered by the Human Resources Committee of
the Ameren Board of Directors (the "Committee"). The Committee will determine
the officers and employees eligible to receive awards and the amount of any
award. The Committee will interpret the Ameren LTIP and can adopt rules deemed
appropriate. No Ameren LTIP awards may be made to Committee members, except by
action of the full Board of Directors.
The maximum 4,000,000 shares of Ameren reserved for the Ameren LTIP is
subject to appropriate adjustment by the Committee to prevent dilution or
enlargement of the rights of Ameren LTIP participants. The maximum number of
shares which may be granted through options or stock appreciation rights to any
participant in a calendar year is 200,000 shares.
The following awards may be granted under the Ameren LTIP. No grant shall
be exercisable or payable before approval of Ameren shareholders and the
Commission hereunder have been obtained and all grants made prior to said
approvals are contingent upon said approvals.
A. Performance Units - rights, which may be payable in cash, shares of
Common Stock, other awards or other property, which is contingent on the
achievement of performance goals set by the Committee.
B. Restricted Stock - rights to receive shares of Common Stock awarded as
deter mined by the Committee, which shares will be subject to
transferability or other restrictions.
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C. Options - rights to purchase shares of Common Stock, or other awards or
property, at a specified price during a prescribed time period. The
exercise price for Common Stock will not be less than the fair market
value at the date of the grant. No option may provide for re-setting the
exercise price.
D. Stock Appreciation Rights - the right to receive a cash payment equal to
the excess of the fair market value of Common Stock on the date of
exercise over the grant price of the Stock Appreciation Right. The grant
price shall not be less than the fair market value of the Common Stock
on the date of the grant.
Consistent with the goals of the Ameren LTIP, the Committee may also grant other
awards based or related to the value of the Common Stock. The term of any option
or a stock appreciation right granted in tandem therewith may not exceed ten
years from the grant date. In the event of a change in control of Ameren, any
outstanding options and stock appreciation rights become fully exercisable, any
restrictions on outstanding Restricted Stock shall be deemed satisfied, and all
performance units shall be deemed earned and payable in full. Subject to
compliance with any then applicable requirement of the Act, the Ameren LTIP may
be revised by the Board of Directors of Ameren, but any such change may not
impair the rights of participants without their consent.
The Ameren LTIP is designed to comply with limits imposed by the Internal
Revenue Code of 1986, as amended (the "Code") on the ability of a public company
to claim tax deductions for compensation paid to certain highly compensated
executives. Section 162(m) of the Code generally denies a federal income tax
deduction for annual compensation exceeding $1,000,000 paid to the Chief
Executive Officer and the four other most highly compensated officers of a
public company. Certain types of compensation, including some performance-based
compensation, are generally excluded from this deduction limit. While Ameren
believes compensation payable pursuant to the Ameren LTIP will be deductible for
federal income tax purposes under most circumstances, compensation not qualified
under Section 162(m) of the Code may be payable under certain circumstances such
as death, disability and change in control (all as defined in the Ameren LTIP).
A full statement of the provisions of the Ameren LTIP is included in
Ameren's draft proxy statement (incorporated by reference as Exhibit H-1
hereto). A draft of Ameren's Form S-8 Registration Statement relating to the
Ameren LTIP is incorporated by reference as Exhibit G-1 hereto.
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Item 2. Fees, Commissions and Expenses
Estimated Legal Fees
and Expenses $ 15,000
Fees of Ameren Services 100,000
Printing and mailing of proxy
material and annual report; and
other costs associated with
Annual Meeting 1,100,000
Form S-8 registration fee 44,250
Estimated Miscellaneous
Expenses 5,750
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Total $1,265,000
Item 3. Applicable Statutory Provisions
Sections 6(a) and 7 of the Act are deemed to be applicable to the proposed
issuance of Common Stock. Section 12(e) of the Act and Rules 62(d) and 65 are
deemed applicable to the solicitation of proxies for the Annual Meeting of
Shareholders.
To the extent that the proposed transaction is considered by the
Commission to require authorization, approval or exemption under any section
of the Act or provision of the rules or regulations other than those
specifically referred to herein, request for such authorization, approval or
exemption is hereby made.
Item 4. Regulatory Approvals
No federal regulatory authority, other than the Securities and Exchange
Commission, has jurisdiction over the proposed transaction. No state
regulatory authority has jurisdiction over the proposed transaction.
Item 5. Procedure
Pursuant to the provisions of Rule 62, the Ameren requests the Commission
to issue an Order permitting the Declaration to become effective on or
before March 9, 1998, with respect to the solicitation of proxies for the
holders of Ameren's Common Stock, in order to allow sufficient time for the
preparation, printing and timely mailing of proxy solicitation materials for
Ameren's upcoming Annual Meeting of Shareholders. The Commission is requested
to issue another Order permitting the Declaration to become effective on or
before April 28, 1998, with respect to the issuance or acquisition in the open
market of Ameren's Common Stock, $.01 par
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value, options therefor, stock appreciation rights, performance units,
performance shares and other stock-based compensation.
The Applicants hereby request that there be no hearing on this Declaration.
The Commission is respectfully requested to issue and publish the requisite
notice under Rule 23 with respect to the filing of this Declaration as soon as
possible. A form of Notice is filed herewith as Exhibit H-3 .
Without prejudice to its right to modify the same if a hearing should be
ordered on this Declaration, Ameren hereby makes the following specifications
required by paragraph (b) of Item 5 of Form U-1:
1. There should not be a recommended decision by a hearing officer or any
other responsible officer of the Commission.
2. The Division of Investment Management may assist in the preparation of
the Commission's decision and/or order.
3. There should not be a 30 day waiting period between issuance of the
Commission's order and the date on which the order is to become effective.
Item 6. Exhibits and Financial Statements
A. Exhibits
A-1 Restated Articles of Incorporation of Ameren
A-2 Ameren Corporation Long-Term Incentive Plan of 1998 (included as
Appendix A to Exhibit H-1, the draft Proxy Statement).
C-1 Draft Form S-8 Registration Statement
F-1.1 Preliminary Opinion of William E. Jaudes, Esq.
F-1.2 "Past-tense" Opinion of William E. Jaudes, Esq.
G-1 Financial Data Schedule
H-1 Draft form of notice and Proxy Statement proposed to be furnished by
Ameren to holders of its common stock with respect to solicitation
of proxies.
H-2 Draft form of Proxy.
H-3 Proposed Form of Notice
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H-4 Ameren Corporation Current Report on Form 8-K/A dated January 12, 1998
("Ameren Form 8-K")
B. Financial Statements
FS-1 Ameren Supplemental Consolidated Balance Sheet as of September 30,
1997 and Supplemental Consolidated Statements of Income and
Supplemental Consolidated Condensed Statement of Cash Flows for the
nine months ended September 30, 1997 (see Ameren Form 8-K (Exhibit H-4
hereto))
FS-2 Ameren Supplemental Consolidated Balance Sheet at December 31, 1995
and 1996 and Supplemental Consolidated Statement of Income and
Supplemental Consolidated Statement of Cash Flows for the three years
ended December 31, 1996 (see Ameren Form 8-K (Exhibit H-4 hereto))
Item 7. Information as to Environmental Effects
None of the matters that are the subject of this Declaration involve a
"major federal action" nor do they "significantly affect the quality of the
human environment" as those terms are used in section 102(2)(C) of the National
Environmental Policy Act. The transaction that is the subject of this
Declaration will not result in changes in the operation of the company that will
have an impact on the environment. Ameren is not aware of any federal agency
that has prepared or is preparing an environmental impact statement with respect
to the transactions that are the subject of this Declaration.
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, each of the undersigned companies have duly caused this Declaration, or
amendment thereto, to be signed on its behalf by the undersigned thereunto duly
authorized.
Ameren Corporation
Ameren Services Company
Date: February 17, 1998 By: /s/ James C. Thompson
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Name: James C. Thompson
Title: Secretary
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INDEX OF EXHIBITS
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<CAPTION>
Exhibit
Number Description of Exhibit Method of Filing
<S> <C> <C>
A-1 Restated Articles of Incorporation of By Reference
Ameren (Incorporated by reference to Annex
F to Ameren's Registration Statement on
Form S-4, Registration No. 33-64165)
A-2 Ameren Corporation Long-Term Incentive By Reference
Plan of 1998 (included as Appendix A to
Exhibit H-1 hereto).
C-1 Draft Form S-8 Registration Statement By Amendment
F-1.1 Preliminary Opinion of Counsel Electronic herewith
F-1.2 Final "Past Tense" Opinion of Counsel (To By Amendment
be filed by Amendment)
G-1 Financial Data Schedule By Amendment
H-1 Draft form of notice and Proxy Statement Electronic herewith
proposed to be furnished by Ameren to
holders of its common stock with respect to
solicitation of proxies.
H-2 Draft form of Proxy. Electronic herewith
H-3 Proposed Form of Notice Electronic herewith
H-4 Ameren Corporation Current Report on By Reference
Form 8-K/A dated January 12, 1998 (File
Number 01-14756, incorporated by
reference)
FS-1 Ameren Supplemental Consolidated By Reference
Condensed Balance Sheet as of September
30, 1997 and Supplemental Consolidated
Condensed Statements of Income and
Supplemental Consolidated Condensed
Statement of Cash Flows for the nine months
</TABLE>
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ended September 30, 1997 (see Ameren
Form 8-K (Exhibit H-4 hereto))
FS-2 Ameren Supplemental Consolidated Balance By Reference
Sheet at December 31, 1995 and 1996 and
Supplemental Consolidated Statement of
Income and Supplemental Consolidated
Statement of Cash Flows for the three years
ended December 31, 1996 (see Ameren
Form 8-K (Exhibit H-4 hereto))
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EXHIBIT F-1.1
AMEREN CORPORATION
1901 Chouteau Avenue
St. Louis, Missouri 63166
314-621-3222
February 17, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Ameren Corporation
Form U-1 Declaration
(File No. 70-_____)
Ladies and Gentlemen:
I refer to the Form U-1 Declaration (the "Declaration"), under the
Public Utility Holding Company Act of 1935, as amended (the "Act"), filed with
the Securities and Exchange Commission (the "Commission") by Ameren Corporation
("Ameren"), a Missouri corporation, and Ameren Services Company ("Ameren
Services"), a Missouri corporation with respect to the proposed transactions
described therein ("Proposed Transactions"). Capitalized terms used in this
letter without definition have the meanings ascribed to such terms in the
Declaration.
The authorization requested in the Declaration relates to (i) the
issuance by Ameren (and/or the acquisition by or on behalf of Ameren in open
market transactions) of up to 4 million shares of Ameren Common Stock, $.01 par
value ("Common Stock") over the period ending five years after the date of the
Commission's approving order in this docket, for purposes of awards under the
Ameren Corporation Long-Term Incentive Plan of 1998 ("Ameren LTIP") and (ii) the
solicitation of proxies by Ameren and/or Ameren Services from the holders of
shares of Common Stock in connection with the approval by Ameren shareholders of
the Ameren LTIP.
I have acted as counsel for Ameren in connection with the Declaration
and, as such counsel, I am familiar with the corporate proceedings taken by
Ameren, in connection with the Proposed Transactions as described in the
Declaration.
I have examined originals, or copies certified to my satisfaction, of
such corporate records of Ameren, certificates of public officials, certificates
of officers and representatives of such companies, and other documents as I have
deemed it necessary to examine as a basis for the
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opinions hereinafter expressed. In such examination I have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
me as originals and the conformity with the originals of all documents submitted
to me as copies. As to various questions of fact material to such opinions I
have, when relevant facts were not independently established, relied upon
certificates of officers of Ameren and other appropriate persons and statements
contained in the Declaration and the exhibits thereto.
The opinions expressed below are subject to the following further
assumptions and conditions:
a. The Commission shall have duly entered an appropriate order or orders
with respect to the Proposed Transactions as described in the
Declaration granting and permitting the Declaration to become
effective under the Act and the rules and regulations thereunder and
the Proposed Transactions are consummated in accordance with the
Declaration.
b. Registration statements with respect to the shares of Ameren Common
Stock to be issued in connection with the Proposed Transactions shall
have become effective pursuant to the Securities Act of 1933, as
amended; no stop order shall have been entered with respect thereto;
and the issuance of securities in connection with the Proposed
Transactions shall have been consummated in compliance with the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
c. No act or event other than as described herein shall have occurred
subsequent to the date hereof which would change the opinions
expressed herein.
d. The shareholders of Ameren shall have approved the Ameren LTIP.
e. Certificates representing any shares of Common Stock issued pursuant
to the Ameren LTIP shall have been duly executed, countersigned,
registered and delivered pursuant to the terms and subject to the
conditions set forth in the Ameren LTIP and authorized for listing on
any securities exchange on which the Ameren Common Stock is then
listed.
Based upon the foregoing, and subject to the assumptions and
conditions set forth herein, and having regard to legal considerations which I
deem relevant, I am of the opinion that, in the event that the Proposed
Transactions are consummated in accordance with the Declaration:
1. All laws of the State of Missouri applicable to the Proposed
Transactions will have been complied with.
2. Each of Ameren and Ameren Services is validly organized and duly
existing under the laws of the State of Missouri.
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3. The shares of Ameren Common Stock to be issued in connection with
the Proposed Transactions will be validly issued, fully paid and
nonassessable, and the holders thereof will be entitled to the rights and
privileges appertaining thereto set forth in the Restated Articles of
Incorporation of Ameren.
4. The consummation of the Proposed Transaction will not violate the
legal rights of the holders of any securities issued by Ameren.
I hereby consent to the use of this opinion as an exhibit to the
Declaration.
Very truly yours,
William E. Jaudes
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Exhibit H-1
(Including Exhibit A-2)
AMEREN
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
Time: 9:00 A.M.
Tuesday
April 28, 1998
Place: Powell Symphony Hall
718 North Grand Boulevard
St. Louis, Missouri
IMPORTANT
Admission to the meeting will be by ticket only. If you plan to attend please
check the appropriate box on the proxy. Persons without tickets will be admitted
to the meeting upon verification of their stockholdings in the Company.
Please vote, date, sign, and return the enclosed proxy in the accompanying reply
envelope even if you own only a few shares. If you attend the meeting and want
to change your proxy vote, you can do so by voting in person at the meeting.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
Ameren Corporation
We will hold the Annual Meeting of Stockholders of Ameren Corporation at Powell
Symphony Hall, 718 North Grand Boulevard, St. Louis, Missouri, on Tuesday, April
28, 1998, at 9:00 A.M., for the purposes of
(a) electing directors of the Company for terms ending in April 1999;
(b) voting on a long-term incentive plan;
(c) considering a stockholder proposal; and
(d) acting on other proper business presented to the meeting.
If you owned Ameren Common Stock at the close of business on March 6, 1998, you
are entitled to vote at the meeting and at any adjournment thereof.
To assure that your shares are represented at this meeting, please vote, date,
sign, and return the en closed proxy in the enclosed envelope. The prompt return
of your proxy will reduce expenses.
By order of the Chairman and the Board of Directors,
James C. Thompson,
Secretary.
St. Louis, Missouri
March , 1998
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PROXY STATEMENT OF AMEREN CORPORATION
(First sent or given to stockholders March , 1998)
Principal Executive Offices:
One Ameren Plaza
1901 Chouteau Avenue, St. Louis, Mo. 63103
The enclosed proxy is solicited by the Board of Directors of Ameren Corporation
(the "Company") for use at the Annual Meeting of Stockholders of the Company to
be held on Tuesday, April 28, 1998, and at any adjournment thereof.
Because the merger which resulted in formation of the Company was not
consummated until December 31, 1997, certain information herein for 1997 relates
to Union Electric Company ("Union Electric"), and/or to CIPSCO Incorporated
("CIPSCO") and its subsidiary, Central Illinois Public Service Company ("CIPS").
VOTING
The accompanying proxy represents all shares registered in the name(s) shown
thereon, including shares in DRPlus. Participants in the Ameren Corporation
Savings Investment Plans will receive separate proxies for shares in such plans.
Only stockholders at the close of business on the Record Date, March 6, 1998,
are entitled to vote at the meeting. The voting securities of the Company on
such date consisted of shares of Common Stock. In order to conduct
the meeting, a majority of the outstanding shares entitled to vote must be
represented.
A proxy can be revoked by delivering either a written revocation or a signed
proxy bearing a later date to the Secretary of the Company or by voting in
person at the meeting.
Returned proxies which are properly marked and signed will be voted as directed.
If you sign the proxy but do not make specific choices, your shares will be
voted as recommended by the Board --FOR the Board's nominees for Director; FOR
Item 2; and AGAINST Item 3. On any other matters, the named proxies will use
their discretion.
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In determining whether a quorum is present at the meeting, shares registered in
the name of a broker or other nominee, which are voted on some but not all
matters, will be included. In tabulating the number of votes cast, withheld
votes, abstentions, and non-votes by banks and brokers are not included.
The Board of Directors has adopted a confidential voting policy for proxies.
Item (1): Election of Directors. Fifteen directors are to be elected at the
meeting, to serve until the next annual meeting of stockholders and until their
successors are elected and qualified. The nominees designated by the Board of
Directors are listed below with information about their principal occupations
and backgrounds.
WILLIAM E. CORNELIUS
Retired Chairman of the Board of Directors and Chief Executive Officer of Union
Electric Company. Mr. Cornelius joined Union Electric in 1962, held several
management positions, and became President in 1980. In 1988 he was elected
Chairman of the Board and served in that capacity until his retirement in 1994.
Mr. Cornelius is also a director of General American Life Insurance Com pany. He
is a member of the Executive and Contributions Committees of the Board of
Directors. Director of Union Electric since 1968; Director of the Company since
December 31, 1997. Age: 66.
CLIFFORD L. GREENWALT
Retired President and Chief Executive Officer of CIPSCO Incorporated and Central
Illinois Public Service Company (CIPS). Mr. Greenwalt joined CIPS in 1963, was
elected a senior vice president in 1980, and was named President and CEO in
1989. He is also a director of First of America Bank Corporation, Kalamazoo,
Michigan and its wholly-owned subsidiary, First of American Bank -Illinois, N.A.
Mr. Greenwalt is a member of the Executive and Contributions Committees of the
Board. Director of CIPS since 1986 and CIPSCO since 1990; Director of the
Company since December 31, 1997. Age: 65.
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THOMAS A. HAYS
Retired Deputy Chairman of The May Department Stores Company a nationwide
retailing organization. Mr. Hays joined the May organization in 1969. He served
as Vice Chairman from 1982 to 1985 and President from 1985 to 1993, when he
became Deputy Chairman. Mr. Hays is a member of the Board of Directors of
Mercantile Bancorporation Inc., Leggett & Platt Incorporated and Payless Shoe
Source, Inc. He is a member of the Human Resources and Executive Committees.
Director of Union Electric since 1989; Director of the Company since December
31, 1997. Age: 65.
RICHARD A. LIDDY
Chairman, President, and Chief Executive Officer of General American Life
Insurance Company, which provides life, health, pension, annuity and related
insurance products and services. Mr. Liddy joined General American as President
and Chief Operating Officer in 1988 and was elected to his present position in
1995. He is also a director of Brown Group Inc. and Ralston Purina Company. Mr.
Liddy serves on the Auditing Committee of the Board. Director of Union Electric
since 1994; Director of the Company since December 31, 1997. Age: 62.
GORDON R. LOHMAN
President and Chief Executive Officer of AMSTED Industries Incorporated,
Chicago, Illinois. Mr. Lohman was elected President of AMSTED Industries in 1988
and became Chief Executive Officer in 1990. He is a member of the Executive and
Human Resources Committees of the Board of Directors. Director of CIPS since
1986 and CIPSCO 1990; Director of the Company since December 31, 1997. Age: 63.
RICHARD A. LUMPKIN
Chairman and Chief Executive Officer of Consolidated Telephone Company, Mattoon,
Illinois and Vice Chairman of McLeod USA Inc. Mr. Lumpkin was elected Treasurer
of Consolidated Telephone in 1968, a vice president in 1970, president in 1977,
and was named to his present position in 1990. As the result of a September 1997
merger, he also serves as Vice Chairman and a director of McLeod USA. Mr.
Lumpkin is also a director of First Mid-Illinois Bancshares, Inc. and its
subsidiary First Mid-Illinois Bank & Trust. He is a member of the Auditing
Committee of the Board. Director of CIPS and CIPSCO since 1995; Director of the
Company since December 31, 1997. Age: 62.
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JOHN PETERS MacCARTHY
Retired Chairman and Chief Executive Officer of Boatmen's Trust Company which
conducts a general trust business. Prior to being elected to the above-mentioned
position in 1988, he served as President and Chief Executive Officer of Centerre
Bank, N.A. Mr. MacCarthy is also a director of Brown Group Inc. He is Chairman
of the Human Resources and Nominating Committees of the Board and is a member of
the Executive Committee. Director of Union Electric since 1986; Director of the
Company since December 31, 1997. Age: 65.
HANNE M. MERRIMAN
Principal in Hanne Merriman Associates, retail business consultants, Washington,
D. C. From 1991 to 1992 Ms. Merriman was President and Chief Operating Officer
of Nan Duskin, Inc. a women's specialty store. She is a director of Ann Taylor
Stores Corporation, US Air Group, Inc., State Farm Mutual Automobile Insurance
Co., The Rouse Company, and T. Rowe Price Mutual Funds. Ms. Merriman is a member
of the Contributions and Nominating Committees of the Board. Director of CIPS
and CIPSCO since 1990; Director of the Company since December 31, 1997. Age: 56.
PAUL L. MILLER, JR.
President and Chief Executive Officer of P. L. Miller & Associates, a management
consultant firm which specializes in strategic and financial planning for
privately held companies and distressed businesses and in consumer research and
analysis. He is also a principal in a financial advisory firm for small to
middle market companies. Mr. Miller has served as president of an international
subsidiary of an investment banking firm, and for over 20 years was president of
consumer product manufacturing and distribution firms. He is a member of the
Auditing Committee. Director of Union Electric since 1991; Director of the
Company since December 31, 1997. Age: 55.
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CHARLES W. MUELLER
Chairman of the Board, President and Chief Executive Officer of the Company. Mr.
Mueller began his career with Union Electric in 1961 as an engineer. He was
named Treasurer in 1978 and Vice President-Finance in 1983. Mr. Mueller was
elected Senior Vice President-Administrative Services in 1988; President in
1993; and, on January 1, 1994, was also named Chief Executive Officer. He was
elected to his present position effective December 31, 1997. Mr. Mueller is a
director of Angelica Corporation. He is a member of the Executive and
Contributions Committees of the Board of Directors. Director of Union Electric
since 1993; Director of the Company since December 31, 1997. Age: 59.
ROBERT H. QUENON
Retired Chairman of Peabody Holding Company, Inc., which is engaged in mining,
marketing and transportation of coal. Mr. Quenon was elected President and Chief
Executive Officer of Peabody Coal in 1978. From 1983 to 1990 he served as
President and Chief Executive Officer of Peabody Holding and was Chairman of
that firm from 1990 until his retirement in August 1991. Mr. Quenon was Chairman
of the Federal Reserve Bank of St. Louis from 1993 to 1995 and is a director of
Newmont Gold Company and Laclede Steel Company. He is a member of the Human
Resources and Nominating Committees. Director of Union Electric since 1991;
Director of the Company since December 31, 1997. Age: 69.
HARVEY SALIGMAN
Retired managing partner of Cynwyd Investments, a family real estate
partnership. Mr. Saligman also served in various executive capacities in the
consumer products industry for 25 years. He is a director of Mercantile
Bancorporation Inc. Mr. Saligman is Chairman of the Auditing Committee of the
Board. Director of Union Electric since 1989; Director of the Company since
December 31, 1997. Age: 59.
CHARLES J. SCHUKAI
Senior Vice President - Customer Services of the Company. Mr. Schukai joined the
Company in 1957 as a student engineer. He was named Director, Regional
Operations in 1977, Vice President in 1983 and was elected to his present
position in 1988. Mr. Schukai serves on the Executive and Contributions
Committees of the Board. Director of the Company since December 31, 1997.
Age: 63.
5
<PAGE>
JANET McAFEE WEAKLEY
President of Janet McAfee Inc., a residential real estate company which she
founded in 1975. Mrs. Weakley is also on the Board of Barnes-Jewish Hospital.
She is a member of the Auditing, Executive, and Nominating Committees and is
Chairman of the Contributions Committee of the Board. Director of Union Electric
since 1991; Director of the Company since December 31, 1997. Age: 68.
JAMES W. WOGSLAND
Retired Vice Chairman of Caterpillar, Inc., Peoria, Illinois. Mr. Wogsland was
elected Executive Vice President of Caterpillar in 1987. He served as Vice
Chairman from 1990 until his retirement in 1995. Mr. Wogsland is a member of the
Auditing Committee of the Board. Director of CIPS and CIPSCO since 1992;
Director of the Company since December 31, 1997. Age: 66.
The fifteen nominees for director who receive the most votes will be elected.
The Board of Directors knows of no reason why any nominee will not be able to
serve as a director. If, at the time of the Annual Meeting, any nominee is
unable or declines to serve, the proxies may be voted for a substitute nominee
approved by the Board.
During 1997, the Union Electric Board met six times and an aggregate of nine
committee meetings were held, and the CIPSCO Board met seven times, with a total
of eight committee meetings being held. Except for Ms. Merriman, all nominees
attended at least 87% of the meetings of the Board and the Board Committees of
which they were members, and aggregate attendance of the nominees as a group
exceeded 93%.
Age Policy - Directors who attain age 72 prior to the date of an annual meeting
cannot be designated as a nominee for election at such meeting.
Board Committees - The members of the Auditing, Contributions, Human Resources
and Nominating Committees of the Board are identified in the biographies above.
The Auditing, Human Resources and Nominating Committees are comprised entirely
of outside directors. Since the Ameren Board was not constituted until December
31, 1997, there were no committee meetings held during the year.
The general functions of the Auditing Committee, include: (1) reviewing, with
management and the independent accountants, the adequacy of the Company's system
of internal accounting controls; (2) reviewing the scope and results of the
annual examination and other services performed by the independent accountants;
(3) recommending to the Board the appointment of independent accountants and
approving fees for the services they perform; and (4) reviewing the scope of
audits and annual budget of the Company's internal audit department.
6
<PAGE>
The Contributions Committee makes policies and recommendations with respect to
charitable and other contributions.
The Human Resources Committee considers the qualifications of executive
personnel and recommends changes therein, considers or recommends salary
adjustments for certain employees and considers and acts on important policy
matters affecting Company personnel.
The Nominating Committee considers and recommends for Board approval candidates
for the Board of Directors, as recommended by management, other members of the
Board, shareholders and other interested parties.
Item (2): Long-Term Incentive Plan.
To further relate compensation to performance, the Board of Directors has
adopted the Ameren Corporation Long-Term Incentive Plan of 1998 (the "Plan"),
which shall become effective upon approval by the Company's stockholders. The
Plan is substantially the same as a similar plan approved by Union Electric
shareholders in 1995 and, absent early termination, will terminate ten years
after its effective date.
Consistent with the Company's goal for executive compensation, awards granted
under the Plan are expected to be at levels that approximate the median of the
range of awards granted by similarly-situated companies.
Set forth below is a summary of Plan provisions. The summary is qualified by
reference to the full Plan attached hereto as Appendix A.
Purpose. The Plan is intended to enhance shareholder value by promoting an
increased interest in the long-term performance and profitability of the Company
and its businesses.
Administration. The Plan will be administered by the Human Resources Committee
of the Board of Directors (the "Committee"). The Committee shall determine the
officers, employees and directors eligible to receive awards and the amount of
any award. The Committee shall interpret the Plan and can adopt rules deemed
appropriate. No Plan awards may be made to Committee members, except by action
of the full Board of Directors.
Shares. A maximum of 4,000,000 shares of the Company's Common Stock, $ .01 par
value, ("Common Stock") will be reserved for Plan purposes, subject to
appropriate adjustment by the Committee to prevent dilution or enlargement of
the rights of Plan participants. The reserved shares constitute approximately
2.9% of the Company's outstanding Common Stock. The maximum number of shares
which may be granted through options or stock appreciation rights to any
participant in a calendar year is 200,000 shares.
7
<PAGE>
Award Alternatives.
A. Performance Units - rights, which may be payable in cash, shares of
Common Stock, other awards or other property, which is contingent on the
achievement of performance goals set by the Committee.
B. Restricted Stock - rights to receive shares of Common Stock awarded as
determined by the Committee, which shares will be subject to transferability or
other restrictions.
C. Options - rights to purchase shares of the Company's Common Stock, or
other awards or property, at a specified price during a prescribed time period.
The exercise price for Common Stock will not be less than the fair market value
at the date of the grant. No option may provide for re-setting the exercise
price.
D. Stock Appreciation Rights - the right to receive a cash payment equal
to the excess of the fair market value of the Company's Common Stock on the date
of exercise over the grant price of the Stock Appreciation Right. The grant
price shall not be less than the fair market value of the stock on the date of
the grant.
Tax Aspects of the Plan. The federal tax consequences of an award under the
Plan depend on the nature of the award. The grant of a Restricted Stock or
Performance Award does not immediately result in taxable income to a recipient
or a tax deduction to the Company unless the recipient makes a special election.
At the time the shares of Common Stock are awarded and become free of any
restrictions, a recipient will recognize taxable ordinary income in an amount
equal to the fair market value of the Common Stock, and the Company will be
entitled to a corresponding income tax deduction. Generally, during a
restriction period, any dividends received with respect to an award will be
taxed as additional compensation to the recipient, and the Company will be
entitled to a corresponding income tax deduction.
Generally, an incentive stock option will not result in taxable income on
the date of grant or exercise, and the Company will not be entitled to an income
tax deduction. Provided any minimum holding periods are satisfied, any gain on a
disposition of stock so acquired will be taxable to a recipient as a capital
gain, and the Company will not be entitled to any corresponding income tax
deduction. If minimum holding periods are not satisfied, a recipient will
generally recognize ordinary income in the amount of the excess of the fair
market value of the Common Stock on the date of the exercise (or if less, on the
date of sale) over the option price, and the Company will be entitled to a
corresponding income tax deduction. Also, certain recipients may be subject to
alternative minimum tax on the excess of the fair market value of the shares
over the option price when the incentive stock option is exercised. The grant of
a nonqualified stock option does not result in taxable income to a recipient or
a tax deduction for the Company. Upon exercise, a recipient will generally
recognize taxable ordinary income in an amount equal to the excess of the fair
market value of the Common Stock on the date of the exercise over the cash paid,
and the Company will be entitled to a corresponding income tax deduction.
General. Consistent with the goals of the Plan, the Committee may also
grant other awards based or related to the value of the Common Stock. The term
of any option or a stock appreciation right
8
<PAGE>
granted in tandem therewith may not exceed ten years from the grant date. In the
event of a change in control of the Company, any outstanding options and stock
appreciation rights become fully exercisable, any restrictions on outstanding
Restricted Stock shall be deemed satisfied, and all performance units shall be
deemed earned and payable in full. The Plan may be revised by the Board, but any
such change may not impair the rights of participants without their consent.
The closing price of the Company's Common Stock on March 1, 1998, was $ .
The Board recommends a vote FOR Item 2. Adoption of the Plan requires the
affirmative vote of a majority of the Common Stock.
Stockholder Proposal.
Proponents of the stockholder proposal described below as Item (3) notified
Union Electric of their intention to attend the 1998 Annual Meeting to present
the proposal for consideration and action. The names and addresses of the
proponents and the number of shares they hold will be furnished by the Secretary
of the Company upon receipt of any oral or written request therefor.
Item (3): Assessment of Decommissioning Costs.
WHEREAS Union Electric is responsible for and liable for the ultimate
dismantling of the Callaway Nuclear Power Plant and the return of the plant site
to its original, non-radioactive, greenfield condition;
WHEREAS estimates for decommissioning a reactor the size of Callaway range all
the way from $130 million to $3 billion, according to a 1988 U. S. Government
Accounting Office report;
WHEREAS Callaway's Nuclear Regulatory Commission license would allow the plant
to operate for 40 years (until 2024), accidents and/or age-related degradation
of vital safety components have caused reactors to be shut down years before
their licenses' expiration;
WHEREAS the longer Callaway operates, the greater will be the accumulation of
radioactivity there, and the higher will be the radiation fields within which
demolition workers will have to work to dismantle the plant, thereby increasing
costs, liability, and occupational hazards;
WHEREAS the longer the plant operates, the greater will be the accumulation of
irradiated fuel rods which must be stored at the plant in a fuel pool or dry
casks requiring surveillance and maintenance into the infinite future. The fuel
rods may someday be transported to a federal deep-geologic repository though
none has been finally sited or constructed, and may never be;
9
<PAGE>
WHEREAS chelating agents are used in the chemical decontamination of nuclear
plants -- to dissolve radioactive corrosion products in the reactor vessel,
coolant systems, piping and other components --and we believe the long term
effects of the chelating agents make them unacceptable; they are known to cause
the accelerated migration of dissolved radioactive wastes out of burial trenches
into the surrounding environment;
WHEREAS we believe that no known safe technology exists as yet for the remote-
controlled segmenting of Callaway's 330-ton, 40-foot-high reactor vessel
contaminated with some substances that will remain radioactive for thousands of
years and longer;
WHEREAS even if safe technologies were to be developed for the dismantling of
the Callaway buildings and reactor vessel, no safe disposal site may ever be
found for these radioactive wastes, and no railroad or other transportation
corridors may exist which would be deemed acceptable to the public.
RESOLVED: the shareholders request that the Company (1) provide for
shareholders a financial assessment of the comparative costs of decommissioning
Callaway before its 40-year operating license expires versus operating it for
the full licensed duration, including such costs as:
-- the stockpiling of high- and low-level radioactive wastes for which the
company may remain morally and financially liable for an indefinite time;
-- the need for a greater number of workers to replace worn-out, embrittled,
malfunctioning or obsolete components in locations within the plant that
become increasingly radioactive as the plant ages; and/or
-- potential accidents;
(2) provide a summary of this assessment in the next annual report and provide a
copy of the full assessment to shareholders on request.
SUPPORTING STATEMENT
We believe an assessment of these comparative costs is essential for realistic
and responsible economic and ethical planning.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM (3).
In light of the extensive information on estimated decommissioning costs
currently available, the Board is of the opinion that developing additional
information in the form requested is unnecessary and would increase expenses
without a commensurate increase in relevant information.
10
<PAGE>
. Information on decommissioning cost estimates is included in the Company's
published financial statements.
. The Missouri Public Service Commission requires updated decommissioning
cost studies every three years, and copies of the studies are available to
the public.
. Nuclear Regulatory Commission regulations require the Company to fund
decommissioning of Callaway Plant at prescribed levels, which are reviewed
and updated periodically.
. Internal reviews are made annually.
Contrary to assumptions and assertions included in the proposal -
. Individual and collective radiation exposure to workers at Callaway Plant
is trending downward;
. The range of decommissioning cost estimates for other nuclear plants
similar to Callaway is consistent with our estimate;
. The performance of vital safety components is not allowed to degrade and,
with proper maintenance, age does not threaten continued plant operation;
. As stated in the government's General Accounting Office report referred to
in the proposal, "Technology exists to decommission nuclear power plants;"
. Through use of advanced technologies, decommissioning after 40 or more
years of operation will not result in higher occupational hazards to
workers.
The Board believes that, in the absence of any compelling reasons to make
additional studies of Callaway decommissioning costs, additional expenditures
for such information would be imprudent, and therefore recommends voting AGAINST
ITEM (3).
Passage of the proposal requires the affirmative vote of a majority of the votes
cast.
Item (4): Other Matters.
The Board of Directors does not know of any matters, other than the election
of directors and the proposals set forth above, which may be presented to the
meeting.
11
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
AS OF FEBRUARY 1, 1998:
Shares of Common Stock
Name Benficially Owned *
---- ----------------------
Donald E. Brandt
William E. Cornelius
Clifford L. Greenwalt
Thomas A. Hays
Richard A. Liddy
Gordon R. Lohman
Richard A. Lumpkin
John Peters MacCarthy
Hanne M. Merriman
Paul L. Miller, Jr.
Charles W. Mueller
Robert H. Quenon
Harvey Saligman
Charles J. Schukai
Janet McAfee Weakley
James W. Wogsland
All Directors and executive officers as a group
* Includes shares held jointly and shares issuable within 60 days upon the
exercise of outstanding stock options.
Reported shares include those for which a nominee or executive officer has
voting or investment power because of joint or fiduciary ownership of the shares
or a relationship with the record owner, most commonly a spouse, even if such
nominee or executive officer does not claim beneficial ownership. Shares
reported for William E. Cornelius include 9,016 shares held in a trust account
in his wife's name for which he serves as trustee.
In addition to shares shown, shares have been reported as beneficially owned by
family members and/or household members of the parties, and shares of preferred
stock are owned by an executive officer of the Company.
Shares beneficially owned by nominees and executive officers as a group do not
exceed one percent of any class of equity securities outstanding.
12
<PAGE>
PERFORMANCE GRAPH(S)
STOCKHOLDER PROPOSALS
Any stockholder proposal intended for inclusion in the proxy material for the
Company's 1999 annual meeting of stockholders must be received by November ,
1998.
In addition, under the Company's By-Laws, shareholders who intend to submit a
proposal in person at an Annual Meeting, or who intend to nominate a director at
a Meeting, must provide advance written notice along with other prescribed
information. In general, said notice must be received by the Secretary of the
Company not later than 60 nor earlier than 90 days prior to the Meeting. A copy
of the By-Laws can be obtained by written request to the Secretary of the
Company.
COMPENSATION
Directors who are active employees of the Company do not receive compensation
for their services as a director.
Directors who are not active employees of the Company each receive an annual
retainer of $20,000 and an annual award of 300 shares of the Company's Common
Stock. They also receive fees of $1,000 for each Board meeting and each Board
Committee meeting attended.
An optional deferred compensation plan available to directors permits non-
employee directors to defer all or part of their annual retainer. Deferred
amounts, plus an interest factor, are used to provide payout distributions
following completion of Board service and certain death benefits. Costs of the
deferred compensation plan are expected to be recovered through the purchase of
life insurance on the participants, with the Company being the owner and
beneficiary of the insurance policies.
Human Resources Committee Report on Executive Compensation:
The Company's goal for executive salaries is to approximate the median of the
range of salaries paid by similarly-situated companies. Accordingly, the Human
Resources Committee of the Board of Directors, which is comprised entirely of
non-employee directors, makes annual reviews of the compensation paid to the
Company's executive officers. The Committee's salary decisions with respect to
the five highest paid officers are subject to approval by the Board of
Directors. Following the annual reviews, the Committee authorizes appropriate
changes as determined by the three basic components of the Company's executive
compensation program, which are:
. Base salary,
. A performance-based incentive plan, and
13
<PAGE>
. Long-term stock-based awards.
First, in evaluating and setting base salaries for the Company's executive
officers, including the Chief Executive Officer, the Committee considers:
individual responsibilities, including changes which may have occurred since the
prior review; individual performance in fulfilling responsibilities, including
the degree of competence and initiative exhibited; relative contribution to the
results of Company operations; the impact of conditions under which the Company
operated; the effect of economic changes on the Company's salary structure; and
comparisons with compensation paid by similarly-situated companies. Such
considerations are subjective, and specific measures are not used in the review
process. The "similarly-situated companies" used for salary comparisons are
included in the EEI Index referred to in the Performance Graphs on page .
The second component of the Company's executive compensation program is a
performance-based Executive Incentive Compensation Plan established by the
Board, which provides specific, direct relationships between corporate results
and Plan compensation. The Plan is designed to encourage achievement of goals
to provide shareholders with a fair return and to supply low cost energy to the
Company's customers. Accordingly, each year measurable stockholder and
customer-related objectives -- specifically goals pertaining to return on equity
and control of operating and maintenance expenses and wages -- are set by the
Human Resources Committee. At the end of the year the Committee compares
results of operations with the targeted objectives. If the objectives are met,
the Committee authorizes incentive payments within prescribed ranges based on
individual performance and degree of responsibility. If basic corporate
objectives are not achieved, no payments are made. Under the Incentive Plan, it
is expected that payments to the Chief Executive Officer will range from zero to
37% of base salary, and during the past three years actual payments have
averaged % of base salary.
The third component of the executive compensation program is the Long-Term
Incentive Plan
In determining the reported 1997 compensation of the Chief Executive Officer, as
well as compensation for the other executive officers, the Human Resources
Committee considered the matters discussed above.
/s/ John Peters MacCarthy, Chairman
Thomas A. Hays
Robert H. Quenon
14
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Name Annual Securities All Other
and Compensation Underlying Compen-
Principal ----------------- Options(#) sation($)
Position Year Salary($) Bonus($) ----------- ---------
- -------- ---- --------- --------
<S> <C> <C> <C> <C> <C>
C. W. Mueller, 1997 500,000 23,000 *
Chairman, President 1996 441,000 165,000 17,700 39,306
and Chief Executive 1995 420,000 157,000 15,000 33,935
Officer
C. J. Schukai 1997 269,000 7,800 *
Senior Vice 1996 258,000 76,000 6,800 33,506
President, subsidiary 1995 246,000 72,000 5,600 31,708
D. E. Brandt 1997 254,000 7,800 *
Senior Vice 1996 242,000 69,000 6,800 24,278
President 1995 228,000 67,000 5,600 17,254
</TABLE>
* Amounts include (a) matching contributions to the 401(k) plan and (b)
above-market earnings on deferred compensation, as follows:
(a) (b)
C. W. Mueller
C. J. Schukai
D. E. Brandt
15
<PAGE>
OPTION GRANTS IN 1997 - FORMER UNION ELECTRIC OFFICERS
<TABLE>
<CAPTION>
Number of Grant
Shares % of Total Date
Underlying Options Exercise Present
Options Granted to Price Expiration Value(3)
Name Granted(1)(2) Employees ($/Sh) Date ($)
- ------------------ ------------- --------- ------ ---- ---
<S> <C> <C> <C> <C> <C>
C. W. Mueller..... 23,300 11.90 38 1/2 2/10/07
C. J. Schukai..... 7,800 3.98 38 1/2 2/10/07
D. E. Brandt...... 7,800 3.98 38 1/2 2/10/07
</TABLE>
(1) For the options shown above, an equal number of dividend rights ("rights")
were granted. The rights, which were granted pursuant to the Long-Term
Incentive Plan of 1995, provide the opportunity to earn an amount equal to
a percentage of the dividends that would have been paid had the participant
acquired the shares underlying the stock options. Awards based on the
rights are paid, as determined by the Human Resources Committee, based on
the Company's results measured over a three-year performance period. The
performance period for these rights is from January 1, 1996 to December 31,
1998. The performance measure associated with the rights is the Company's
total shareholder return compared to such return for a comparison group
consisting of the "Edison Electric Institute Index of 100 Investor-Owned
Electrics." Total shareholder return ("TSR") is defined as the sum of the
percentage change in the price of the Company's Common Stock and dividends
paid (assuming reinvestment) over the performance period. Award payouts,
if any, will be determined at the end of the performance period, based upon
the Company's three-year TSR ranking against the three-year TSR of the
comparison group. Award payouts may range from 50% of dividends paid
during the performance period (if the Company's TSR is equal to or greater
than 50% of the companies in the comparison group) to 150% of such
dividends (if the Company's TSR is equal to or greater than 90% of the
companies in the comparison group). If the Company's TSR during the
performance period is less than 50% of the companies in the comparison
group no awards will be made.
(2) Options vest 25% annually beginning February 10, 1999.
(3) The Grant Date Present Values were determined using the binomial option
pricing model, a derivative of the Black-Scholes option pricing model.
Assumptions used for the model are as follows: an option term of ten
years, stock volatility of dividend yield of %, risk-free interest
rate of %, and a vesting restrictions discount rate of % per year over
the five-year vesting period.
16
<PAGE>
The Grant Date Present Value calculation is presented in accordance with SEC
proxy requirements, and the Company has no way to determine whether the pricing
model can properly determine the value of an option. There is no assurance that
the value, if any, that may be realized will be at or near the value estimated
by the model. No value will be realized by the optionees unless the stock price
increases from the exercise price, in which case shareholders would benefit
commensurately.
AGGREGATED OPTION EXERCISES IN 1997
AND YEAR-END VALUES
<TABLE>
<CAPTION>
Value of
Unexercised In-the-Money
Shares Options Options
Acquired Value at Year End(#) at Year End($)
on Realized -------------- --------------
Name Exercise $ Exercisable Unexercisable Exercisable Unexercisable
- ------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. W. Mueller 0 0 3,750 52,250
C. J. Schukai 0 0 1,400 18,800
D. E. Brandt 0 0 1,400 18,800
</TABLE>
Retirement Plan:
The following table shows estimated annual benefits payable under the Company's
defined benefit retirement plan:
<TABLE>
<CAPTION>
Years of Service at Age 65
Final --------------------------
Average
Base Salary 15 20 25 30 35
- ----------- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$125,000..... $ 28,460 $ 37,946 $ 47,433 $ 56,920 $ 66,406
$150,000..... 34,463 45,950 57,438 68,926 80,413
$175,000..... 40,462 53,950 67,437 80,924 94,412
$200,000..... 46,460 61,946 77,433 92,920 108,406
$225,000..... 52,463 69,950 87,438 104,926 122,413
$250,000..... 58,462 77,950 97,437 116,924 136,412
$300,000..... 70,463 93,950 117,438 140,926 164,413
$400,000..... 94,462 125,950 157,437 188,924 220,412
$500,000..... 118,460 157,946 197,433 236,920 276,406
</TABLE>
Benefits shown in the schedule are computed on a straight life annuity basis and
do not have a primary Social Security offset or other offset amounts. Covered
remuneration consists of base wages only, which is equivalent to amounts
reported under "Salary" in the Summary Compensation Table. Years of accredited
service for the officers named in the Compensation Table are as follows: Mr.
Mueller 37; Mr. Schukai 40; and Mr. Brandt 15.
17
<PAGE>
Severance Plan:
The Union Electric Board has approved adoption of the Change of Control
Severance Plan, pursuant to which designated officers, including the former
Union Electric officers named in the Summary Compensation Table, are entitled to
receive certain severance benefits if their employment is terminated under
certain defined circumstances within three years after the merger with CIPSCO
Incorporated or another transaction that meets the definition of "change of
control". Severance benefits for the named officers are based upon a period of
three years. A designated officer who becomes entitled to severance will
receive the following: a lump sum cash payment of salary and unpaid vacation
pay through the date of termination, a pro rata bonus for the year of
termination, and base salary and bonus for the defined severance period;
continued employee welfare benefits for the severance period; a lump sum
payment equal to the actuarial value of the additional benefits under Union
Electric's qualified and supplemental retirement plans the party would have
received had they remained employed for the severance period; and outplacement
services at a cost of not more than $30,000. They will also be eligible for an
additional payment, if necessary, to make them whole for any excise tax on
excess payments imposed.
INDEPENDENT ACCOUNTANTS
The Company has not selected its independent accountants for 1998. This
selection is normally made by the Board of Directors after the Auditing
Committee of the Board of Directors, the members of which are identified under
"Item (1): Election of Directors," has reviewed the prior year's audit report
with representatives of the independent accountants for such year. After such
review, the Auditing Committee will recommend to the Board of Directors for its
approval the selection of inde pendent accountants for the Company for 1998 and
the fees to be paid for the regular annual audit.
Price Waterhouse LLP served as Union Electric's independent accountants in 1997.
Representatives of that firm are expected to be present at the annual meeting
with the opportunity to make a statement if they so desire and are expected to
be available to respond to appropriate questions.
MISCELLANEOUS
In addition to the use of the mails, proxies may be solicited by personal
interview, or by telephone or other means, and banks, brokers, nominees and
other custodians and fiduciaries will be reimbursed for their reasonable out-of-
pocket expenses in forwarding soliciting material to their principals, the
beneficial owners of stock of the Company. Proxies may be solicited by
officers, directors and key employees of the Company on a voluntary basis
without compensation therefor. The Company will bear the cost of soliciting
proxies on its behalf.
--------------------
18
<PAGE>
A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K WILL BE FURNISHED, WITHOUT CHARGE, TO STOCKHOLDERS OF
THE COMPANY UPON WRITTEN REQUEST TO JAMES C. THOMPSON, SECRETARY, P.O. BOX
66149, ST. LOUIS, MISSOURI 63166-6149.
FOR UP-TO-DATE INFORMATION ABOUT YOUR COMPANY, PLEASE VISIT THE COMPANY'S HOME
PAGE ON THE INTERNET - - http://www.ameren.com
19
<PAGE>
APPENDIX A
AMEREN CORPORATION
LONG-TERM INCENTIVE PLAN OF 1998
Section 1. Purpose. The purpose of the Plan is to give Ameren Corporation, its
subsidiaries and certain affiliates a competitive advantage in attracting,
retaining and motivating officers, employees and directors by providing for the
awarding of incentives linked to the profitability of the Corporation and its
businesses and to increases in shareholder value.
Section 2. Definitions. In addition to the terms defined elsewhere in the
Plan, the following terms shall have the meanings set forth below:
"Affiliate" means a corporation or other entity controlled by the Corporation
and designated by the Committee from time to time as such.
"Award" means any Performance Unit, Option, Stock Appreciation Right,
Restricted Stock, Dividend Equivalent or Other Stock-Based Award, or any other
right or interest relating to Shares or cash, granted to a Participant under the
Plan.
"Award Agreement" means any written agreement, contract or other instrument or
document evidencing an Award.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
including successor provisions thereto and regulations thereunder.
"Committee" means the Human Resources Committee of the Board, or such other
Board committee as may be designated by the Board to administer the Plan, or any
subcommittee of either; provided, however, that the Committee (a) shall be
composed solely of two or more non-employee directors, as defined in Rule 16(b)-
3(b)(3) under the Exchange Act, each of whom shall be an "outside director" for
purposes of Section 162(m) of the Code, and (b) shall be constituted to permit
Awards under the Plan to qualify for exemption under Rule 16b-3 under the
Exchange Act and for the Section 162(m) Exemption.
"Corporation" means Ameren Corporation, a Missouri corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time, including successor provisions thereto and regulations thereunder.
"Fair Market Value" means, with respect to Shares, Awards or other property,
the fair market value of such Shares, Awards or other property determined by
such methods or procedures as shall be established from time to time by the
Committee. Unless otherwise determined by the Committee, the Fair Market Value
of Shares as of any date shall be the closing sale price on that date of a Share
as reported on the New York Stock Exchange Composite Tape.
"Incentive Stock Option" means an Option that is designated as such by the
Committee and meets the requirements of Section 422 of the Code.
"Non-Qualified Stock Option" means an Option that is not an Incentive Stock
Option.
"Participant" means a person who, as an officer, employee or director of the
Corporation, a Subsidiary or an Affiliate, has been granted an Award under the
Plan.
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"Plan" means the Ameren Corporation Long-Term Incentive Plan of 1998, as set
forth herein and as hereinafter amended from time to time.
"Qualified Performance-Based Award" means an Award of Performance Units or
Restricted Stock, or other Award, designated as such by the Committee at or
prior to the time of grant, based upon a determination that the Committee
intends for such Award to qualify for the Section 162(m) Exemption.
"Rule 16b-3" means Rule 16b-3, as from time to time amended and applicable to
Participants, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.
"Section 162(m) Exemption" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C) of the Code.
"Shares" means the Common Stock, $.01 par value per share, of the Corporation
and such other securities of the Corporation as may be substituted for Shares
pursuant to Section 10 of the Plan.
"Subsidiary" means any company (other than the Corporation) with respect to
which the Corporation owns, directly or indirectly, 50% or more of the total
combined voting power of all classes of stock. In addition, any other related
entity may be designated by the Board as a Subsidiary, provided such entity
could be considered as a subsidiary according to generally accepted accounting
principles.
"Year" means a calendar year.
In addition to the foregoing, the terms "Performance Unit", "Option", "Stock
Appreciation Right", "Restricted Stock", "Dividend Equivalent" and "Other Stock-
Based Award" shall mean as described in Section 6 of the Plan.
Section 3. Administration.
3.01. Authority of the Committee. The Plan shall be administered by the
Committee on behalf of the Board. The Committee shall have full power to
interpret the Plan, to establish, modify and grant waivers of Award restrictions
and to adopt such rules, regulations and guidelines for carrying out the Plan as
it deems necessary or appropriate. All determinations by the Committee shall be
final and binding upon all parties affected thereby. Any authority granted to
the Committee may also be exercised by the full Board, except to the extent that
the grant or exercise of such authority would cause any Award or transaction to
fail to qualify for exemption under Rule 16b-3.
3.02. Manner of Exercise of Committee Authority. The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee. A
memorandum signed by all members of the Committee shall constitute the act of
the Committee without the necessity, in such event, to hold a meeting. The
Committee may delegate to officers or managers of the Corporation or any
Subsidiary or Affiliate the authority, subject to such terms as the Committee
shall determine, to perform administrative functions under the Plan. Only the
Committee or the full Board may select, and grant Awards to, Participants who
are subject to Section 16 of the Exchange Act.
Section 4. Shares Subject to the Plan. Subject to adjustment as provided in
the Plan, the total number of Shares that may be issued or delivered pursuant to
Awards under the Plan shall be 4,000,000, which shall consist of (a) Shares
which have been authorized and issued and have been acquired by or on behalf of
the Corporation or the Plan and are available for Awards under the Plan or (b)
if the Board shall so authorize, authorized and unissued Shares. The Committee
may adopt procedures for the counting of Shares relating to any Award for which
the number of Shares to be distributed or with respect to which payment will be
made cannot be fixed at the date of grant to ensure appropriate counting, avoid
double counting (in the case of tandem or substitute awards), and provide for
adjustments in any case in which the number of Shares actually distributed or
with respect to which payments are actually made differs from the number of
Shares previously counted in
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connection with such Award. In the event that any Shares to which an Award
relates are forfeited or the Award is settled or terminates without a
distribution of Shares (whether or not cash, other Awards or other property are
distributed with respect to such Award), any Shares counted against the number
of Shares reserved and available under the Plan with respect to such Award shall
again be available for Awards under the Plan. The maximum number of Shares with
respect to which Options or Stock Appreciation Rights may be granted to any one
Participant under the Plan during any Year is _______ Shares.
Section 5. Eligibility. Awards may be granted only to individuals who are
officers, employees or directors of the Corporation, a Subsidiary or an
Affiliate; provided, however, that no Award shall be granted to any member of
the Committee except by action of the full Board and subject to such other
restrictions as the Board may require.
Section 6. Specific Terms of Awards.
6.01. General. The Committee may grant Awards as described in this Section.
The Committee shall determine who may participate in the Plan and the number and
types of Awards to be made to each Participant and shall determine and set forth
in the Award or the related Award Agreement the terms, conditions, performance
requirements (if any) and limitations (which need not be limited to those
referred to below) applicable to each Award. Awards may be granted singly, in
combination or in tandem.
6.02. Performance Units. An Award of Performance Units shall confer upon the
Participant a right to receive cash, Shares, other Awards or other property
contingent upon the achievement of performance goals specified by the Committee.
A Performance Unit shall be denominated in Shares and may be payable in cash,
Shares, other Awards or other Property, and have such other terms as shall be
determined by the Committee.
6.03. Restricted Stock. Restricted Stock shall confer upon the Participant the
right to receive Shares subject to such restrictions on transferability and
other restrictions as the Committee may impose (including, without limitation,
forfeiture if such restrictions are not satisfied, limitations on the right to
vote and limitations on the right to receive dividends), which restrictions may
expire at such times and under such circumstances as the Committee shall
determine.
6.04. Options. An Option shall confer upon the Participant the right to
purchase Shares, other Awards or property, subject to the following terms and
conditions:
(a) Exercise Price. The exercise price per share purchasable under an
Option shall not be less than the Fair Market Value of a Share on the date of
grant of such Option.
(b) Time and Method of Exercise. The Committee shall determine the time
during which an Option may be exercised in whole or in part, the methods by
which the exercise price may be paid and the methods by which Shares will be
delivered to Participants. Options shall expire not later than ten years after
the date of grant.
(c) Terms Applicable to Incentive Stock Options. The terms of any Incentive
Stock Option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code which, among other limitations, provides
that the aggregate Fair Market Value (determined at the time the Option is
granted) of Shares for which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year shall not exceed $100,000.
The number of Shares that shall be available for Incentive Stock Options granted
under the Plan is limited to 500,000. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock Options, other
than Section 9, shall be applied, interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as to disqualify
the Plan under Section 422 of the Code or, without the consent of the
Participant affected, to disqualify any Incentive Stock Option under such
Section 422.
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(d) Limitation on Re-Pricing and Replacement. No Option shall provide by
its terms for the re-setting of its exercise price, or for its replacement, in
whole or in part, upon its exercise or expiration; provided that the foregoing
shall not limit the authority of the Committee to grant additional Options in
any such event or circumstances.
(e) Cash Out by Committee. Upon receipt of written notice of exercise, the
Committee may elect to cash out all or part of the portion of the Shares for
which an Option is being exercised by paying the optionee an amount, in cash or
Shares, equal to the excess of the Fair Market Value of Shares over the option
price times the number of Shares for which the Option is being exercised on the
effective date of such cash-out.
(f) Change in Control Cash-Out Right. Notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), unless the Committee shall determine otherwise at the time
of grant, a holder of an Option to purchase Shares shall have the right, whether
or not the Option is fully exercisable and in lieu of the payment of the
exercise price for the Shares being purchased under the Option and by giving
notice to the Corporation, to elect (within the Exercise Period) to surrender
all or part of the Option to the Corporation and to receive cash, within 30 days
of such notice, in an amount equal to the amount by which the Change in Control
Price per Share on the date of such election shall exceed the exercise price per
Share under the Option (the "Spread") multiplied by the number of Shares granted
under the Option as to which the right granted under this Section 6.04(f) shall
have been exercised. Notwithstanding the foregoing, if any right granted
pursuant to this Section 6.04(f) would make a Change in Control transaction
ineligible for pooling-of-interests accounting under APB No. 16 that but for the
nature of such grant would otherwise be eligible for such accounting treatment,
the Committee shall have the ability to substitute for the cash payable pursuant
to such right Shares or other securities with a Fair Market Value equal to the
cash that would otherwise be payable hereunder.
6.05. Stock Appreciation Rights. A Stock Appreciation Right shall confer upon
the Participant a right to receive the excess of (a) the Fair Market Value of
one Share on the date of exercise (or, except in the case of a Stock
Appreciation Right related to an Incentive Stock Option, the Fair Market Value
of one Share at any time during a specified period before or after the date of
exercise) over (b) the grant price of the Stock Appreciation Right, which shall
be not less than the Fair Market Value of one Share on the date of grant. A
Stock Appreciation Right may be granted as a Limited Stock Appreciation Right
which may be exercised only upon the occurrence of a Change in Control. Stock
Appreciation Rights shall expire not later than ten years after the date of
grant.
6.06. Dividend Equivalents. A Dividend Equivalent shall confer upon the
Participant a right to receive cash, Shares, other Awards or other property
equal in value to dividends paid with respect to a specified number of Shares.
6.07. Other Stock-Based Awards. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, Shares,
as deemed by the Committee to be consistent with the purpose of the Plan.
Section 7. Certain Provisions Applicable to Awards.
7.01. Qualified Performance-Based Awards. The Committee may, at or prior to
the time of grant, designate Performance Units or Restricted Stock, or any other
Award, as a Qualified Performance-Based Award, in which event it shall take such
action with respect to such Award and the terms thereof (including the
imposition of additional requirements not otherwise required by the terms of the
Plan), and the provisions of the Plan or any Award Agreement shall be construed
or deemed amended, as shall be necessary to cause such Award to qualify for the
Section 162(m) Exemption.
7.02. Term of Awards. The term of each Award shall be for such period as shall
be determined by the Committee subject to the requirements of the Plan.
7.03. Forms of Payment. Subject to the terms of the Plan and any applicable
Award Agreement, (a) payments to be made by the Corporation, a Subsidiary or
Affiliate with respect to Awards are to be made in such forms as the Committee
shall
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determine; and (b) the timing, method, amount and nature of payments to be made
by Participants with respect to Awards (including, if permitted by the
Committee, by means of tendering Shares or Awards) shall be determined by the
Committee.
7.04. Termination of Employment. If the employment of a Participant
terminates, all unexercised, deferred and unpaid Awards shall be cancelled
immediately, unless the Award Agreement provides otherwise or unless the
Committee shall provide otherwise in connection with such termination,
including, without limitation, in the case of termination pursuant to
retirement, resignation, death or disability of a Participant.
Section 8. General Restrictions Applicable to Awards.
8.01. Restrictions Under Rule 16b-3. It is the intent of the Corporation that
any Award granted to a person who is subject to Section 16 of the Exchange Act
qualify for exemption under Rule 16b-3. Accordingly, if any provision of the
Plan or any Award Agreement would cause such an Award to fail to qualify for
such exemption, such provision shall be construed or deemed amended to the
extent necessary to enable such Award to qualify for such exemption.
8.02. Limits on Transfer of Awards; Beneficiaries. No Award may be assigned or
transferred by a Participant otherwise than by will or the laws of descent and
distribution, or payable to or exercisable by anyone other than the Participant
to whom it was granted, and no right or interest of a Participant in any Award
may be pledged, encumbered or hypothecated to or in favor of any party, or shall
be subject to any lien, obligation or liability of a Participant to any party;
provided, however, that (a) a Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to exercise the rights of
the Participant, and to receive any distribution with respect to any Award, upon
the death or disability of the Participant, (b) the Committee may provide in any
Award or the related Award Agreement that an Award (other than an Incentive
Stock Option) may be assigned, transferred, exercisable by another person or
pledged, encumbered or hypothecated, subject to the applicable requirements of
the Code, and (c) transfers of Awards may be made to the Corporation, a
Subsidiary or an Affiliate to the extent permitted under the terms of the Plan.
A beneficiary, guardian, legal representative or other person claiming any
rights under the Plan from or through any Participant shall be subject to all
terms and conditions applicable to such Participant, except to the extent the
Plan and such Award Agreement otherwise provide with respect to such person, and
to any additional restrictions deemed necessary or appropriate by the Committee.
8.03. Share Certificates. All certificates for Shares delivered under the Plan
pursuant to an Award or the exercise thereof shall be subject to such stop-
transfer orders and other restrictions as the Committee may deem advisable under
applicable federal or state laws, rules and regulations and the rules of any
national securities exchange on which Shares are listed. The Committee may cause
a legend or legends to be placed on any such certificates to make appropriate
reference to such restrictions or any other restrictions that may be applicable
to Shares. In addition, during any period in which Awards or Shares are subject
to restrictions, or during any period during which delivery or receipt of an
Award or Shares has been deferred by the Committee or a Participant, the
Committee may require the Participant to enter into an agreement providing that
certificates representing Shares issued or issuable pursuant to an Award shall
remain in the physical custody of the Corporation or such other person as the
Committee may designate.
If certificates representing Restricted Stock are registered in the name of
the Participant, such certificates shall bear an appropriate legend referring to
the terms, conditions and restrictions applicable to such Restricted Stock, the
Corporation shall retain physical possession of the certificates and the
Participant shall deliver a stock power to the Corporation, endorsed in blank,
relating to the Restricted Stock.
Section 9. Change in Control.
(a) Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control: (i) any Options and Stock
Appreciation Rights outstanding as of the date such Change in Control is
determined to have occurred, and which are not then exercisable and vested,
shall become fully exercisable and vested to the full extent of the original
grant; (ii) the restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of all
restrictions and become fully vested and transferable to the full extent of the
original
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grant; and (iii) all Performance Units shall be considered to be earned and
payable in full, and any deferral or other restriction shall lapse and such
Performance Units shall be settled in cash or other securities as promptly as is
practicable.
(b) Definition of Change in Control. For purposes of the Plan, a "Change in
Control" shall mean the happening of any of the following events:
(i) an acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (1) the then outstanding shares of common
stock of the Corporation (the "Outstanding Corporation Common Stock") or (2) the
combined voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); excluding, however, the following:
(1) any acquisition directly from the Corporation, other than an acquisition by
virtue of the exercise of a conversion privilege unless the security being so
converted was itself acquired directly from the Corporation, (2) any acquisition
by the Corporation, (3) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation controlled
by the Corporation or (4) any acquisition by any corporation pursuant to a
transaction which complies with clauses (1), (2) and (3) of subsection (iii) of
this Section 9(b); or
(ii) a change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the Board
(such Board shall be hereinafter referred to as the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board; provided, however,
for purposes of this Section 9(b), that any individual who becomes a member of
the Board subsequent to the effective date of the Plan, whose election, or
nomination for election by the Corporation's shareholders, was approved by a
vote of at least a majority of those individuals who are members of the Board
and who are also members of the Incumbent Board (or deemed to be such pursuant
to this proviso) shall be considered as though such individual were a member of
the Incumbent Board; but, provided further, that any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent Board; or
(iii) the approval by the shareholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation ("Corporate Transaction") or,
if consummation of such Corporate Transaction is subject, at the time of such
approval by shareholders, to the consent of any government or governmental
agency, obtaining of such consent (either explicitly or implicitly by
consummation); excluding however, such a Corporate Transaction pursuant to which
(1) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation which
as a result of such transaction owns the Corporation or all or substantially all
of the Corporation's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, (2) no Person
(other than the Corporation, any employee benefit plan (or related trust) of the
Corporation or such corporation resulting from such Corporate Transaction) will
beneficially own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed prior to the
Corporate Transaction, and (3) individuals who were members of the Incumbent
Board will constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate Transaction; or
(iv) the approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
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(c) Change in Control Price. For purposes of the Plan, "Change in Control
Price" means the higher of (i) the highest reported sales price, regular way, of
a Share in any transaction reported on the New York Stock Exchange Composite
Tape or other national exchange on which such Shares are listed or on NASDAQ
during the 60-day period prior to and including the date of a Change in Control
or (ii) if the Change in Control is the result of a tender or exchange offer or
a Corporate Transaction, the highest price per Share paid in such tender or
exchange offer or Corporate Transaction; provided, however, that in the case of
Incentive Stock Options and Stock Appreciation Rights relating to Incentive
Stock Options, the Change in Control Price shall be in all cases the Fair Market
Value of the Shares on the date such Incentive Stock Option or Stock
Appreciation Right (or related cash-out right under Section 6.04(f)) is
exercised. To the extent that the consideration paid in any such transaction
described above consists all or in part of securities or other noncash
consideration, the value of such securities or other noncash consideration shall
be determined in the sole discretion of the Board.
Section 10. Adjustment Provisions. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase or
share exchange, or other similar corporate transaction or event, affects the
Shares such that an adjustment is determined by the Committee to be appropriate
in order to prevent dilution or enlargement of the rights of Participants under
the Plan, then the Committee shall, in such manner as it may deem equitable,
make any adjustments it deems appropriate (including, without limitation,
adjustments to the share limitations contained in Section 4 and to the terms of
then-outstanding Awards). In addition, the Committee is authorized to make such
adjustments as it deems appropriate in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding sentence)
affecting the Corporation or any Subsidiary or Affiliate or the financial
statements of the Corporation or any Subsidiary or Affiliate, or in response to
changes in applicable laws, regulations or accounting principles.
Section 11. Changes to the Plan and Awards.
11.01. Changes to the Plan. The Board may amend, alter, suspend,
discontinue or terminate the Plan without the consent of shareholders or
Participants, except as is required by any federal or state law or regulation or
the rules of any stock exchange on which the Shares may be listed, or if the
Board in its discretion determines that obtaining such shareholder approval is
for any reason advisable; provided, however, that, without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation or
termination of the Plan may impair the rights of such Participant under any
Award theretofore granted to such Participant.
11.02. Changes to Awards. The Committee may waive any conditions or rights
under, or amend, alter, accelerate, suspend, discontinue or terminate, any Award
theretofore granted and any Award Agreement relating thereto; provided, however,
that, without the consent of an affected Participant, no such amendment,
alteration, suspension, discontinuation or termination of any Award may impair
the rights of such Participant under such Award; and provided, further, that no
amendment or alteration may be effective with respect to a Qualified
Performance-Based Award if and to the extent it would cause such Award to cease
to qualify for the Section 162(m) Exemption.
Section 12. General Provisions.
12.01. No Rights to Awards. No Participant, officer, employee or director
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants or any other persons.
12.02. No Shareholder Rights. No Award shall confer on any Participant any
of the rights of a shareholder of the Corporation unless and until Shares are
duly issued or transferred to the Participant in accordance with the terms of
the Award.
12.03. Dividends. The recipient of any Award may, if so determined by the
Committee, be entitled to receive on a current or deferred basis, dividends or
Dividend Equivalents, with respect to the number of Shares covered by the Award.
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12.04. Tax Withholding. The Corporation or any Subsidiary or Affiliate is
authorized to withhold from any award granted, any payment relating to an Award
under the Plan (including from a distribution of Shares) or any payroll or other
payment to a Participant, amounts of withholding and other taxes due with
respect thereto, its exercise or any payment thereunder, and to take such other
action as the Committee may deem necessary or advisable to enable the
Corporation and Participants to satisfy obligations for the payment of
withholding taxes and other tax liabilities relating to any Award. This
authority shall include authority to withhold or receive Shares or other
property and to make cash payments in respect thereof in satisfaction of a
Participant's tax obligations.
12.05. No Right to Employment. Nothing contained in the Plan or any Award
Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any employee any right to continue in the employ of the
Corporation or any Subsidiary or Affiliate or to interfere in any way with the
right of the Corporation or any Subsidiary or Affiliate to terminate the
employee's employment at any time or increase or decrease the employee's
compensation from the rate in existence at the time of granting of an Award.
12.06. Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. Nothing contained in
the Plan, any Award Agreement or any Award shall give any such Participant any
rights that are greater than those of an unsecured general creditor of the
Corporation.
12.07. Other Compensatory Arrangements. The Corporation or any Subsidiary
or Affiliate shall be permitted to adopt other or additional compensation
arrangements (which may include arrangements which relate to Awards), and such
arrangements may be either generally applicable or applicable only in specific
cases.
12.08. Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether cash,
other Awards or other property shall be issued or paid in lieu of fractional
Shares or whether such fractional Shares or any rights thereto shall be
forfeited or otherwise eliminated.
12.09. Governing Law. The validity, construction and effect of the Plan,
any rules and regulations relating to the Plan, any action taken pursuant to the
Plan and any Award Agreement shall be governed by the laws of the State of
Missouri, without giving effect to principles of conflicts of laws, and
applicable federal law.
12.10. Tax Offset Bonuses. At the time an Award is made under the Plan or
at any time thereafter, the Committee may grant to the Participant receiving
such Award the right to receive a cash payment in an amount specified by the
Committee, to be paid at such time or times (if ever) as the Award results in
compensation income to the Participant, for the purpose of assisting the
Participant to pay the resulting taxes, all as determined by the Committee and
on such other terms and conditions as the Committee shall determine.
Section 13. Laws and Regulations. The Plan, the granting and exercising of
Awards thereunder and the other obligations of the Corporation under the Plan
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any regulatory or governmental agency as may be
required. The Corporation, in its discretion, may postpone the granting and
exercising of Awards, the issuance or delivery of Shares under any Award or any
other action permitted under the Plan to permit the Corporation, with reasonable
diligence, to complete any stock exchange listing or registration or
qualification of such Shares or other required action under any federal or state
law, rule or regulation and may require any participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance of delivery of Shares in compliance with applicable
laws, rules and regulations. The Corporation shall not be obligated by virtue of
any provision of the Plan to recognize the exercise of any Award or to otherwise
sell or issue Shares in violation of any such laws, rules, or regulations; and
any postponement of the exercise or settlement of any Award under this provision
shall not extend the term of such Award, and neither the Corporation nor its
directors or officers shall have any obligation or liability to any Participant
with respect to any Award (or stock issuable thereunder) that shall lapse
because of such postponement.
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Section 14. Effective Date. The Plan shall become effective on April 28,
1998; provided that the effectiveness of the Plan shall be subject to the
approval of the Plan by the affirmative vote of the holders of a majority of the
Shares present or represented and entitled to vote at the next following meeting
of the Corporation's shareholders. The Committee shall have the authority to
grant Awards prior to such approval; provided that the effectiveness of such
Awards shall be subject to such shareholder approval of the Plan. The Plan shall
terminate ten years after its effective date, subject to earlier termination by
the Board pursuant to Section 11, after which no Awards may be made under the
Plan, but any such termination shall not affect Awards then outstanding or the
authority of the Committee to continue to administer the Plan.
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EXHIBIT H-2
--THANK YOU FOR YOUR PROMPT ATTENTION--
V FOLD AND DETACH HERE V
- --------------------------------------------------------------------------------
[X] Please mark votes This proxy will be voted as specified below. If no
as in this example. direction is made, this proxy will be voted FOR all
nominees listed on the reverse side and as
recommended by the Board on the other items listed
below.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ITEMS 1 AND 2.
FOR all nominees WITHHOLD AUTHORITY
(except as listed below) all nominees
ITEM 1
ELECTION OF [X] [X]
DIRECTORS
FOR ALL EXCEPT:
--------------------
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE AGAINST ITEM 3.
<S> <C> <C> <C> <C> <C> <C> <C>
ITEM 2 FOR AGAINST ABSTAIN ITEM 3 FOR AGAINST ABSTAIN
LONG-TERM [X] [X] [X] ASSESSMENT OF [X] [X] [X]
INCENTIVE DECOMMISSIONING
PLAN COST
ATTENDANCE CARD REQUESTED [X]
SEE
[LOGO OF AMEREN] DATED 1998 REVERSE
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SIGNATURE - Please sign exactly as name appears hereon.
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CAPACITY (OR SIGNATURE IF HELD JOINTLY)
Shares registered in the name of a Custodian or Guardian
must be signed by such. Executors, administrators,
trustees, etc. should so indicate when signing.
</TABLE>
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AMEREN CORPORATION
P.O. BOX 66149, ST. LOUIS, MISSOURI 63166-6149 PROXY
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 28, 1998
The undersigned hereby appoints CHARLES W. MUELLER and JAMES C. THOMPSON, and
either of them, each with the power of substitution, as proxy for the
undersigned, to vote all the shares of capital stock of AMEREN CORPORATION
represented hereby at the Annual Meeting of Stockholders to be held at Powell
Symphony Hall, 718 North Grand Boulevard, St. Louis, Missouri, on April 28, 1998
at 9:00 A.M., and at any adjournment thereof, upon all matters that may be
submitted to a vote of stockholders including the matters described in the proxy
statement furnished herewith, subject to any directions indicated on the reverse
side of this proxy form and in their discretion on any other matter that may be
submitted to a vote of stockholders.
NOMINEES FOR DIRECTOR - WILLIAM E. CORNELIUS, CLIFFORD L GREENWALT, THOMAS A.
HAYS, RICHARD A. LIDDY, GORDON R. LOHMAN, RICHARD A.
LUMPKIN, JOHN PETERS MacCARTHY, HANNE M. MERRIMAN, PAUL
L. MILLER, JR., CHARLES W. MUELLER, ROBERT H. QUENON,
HARVEY SALIGMAN, CHARLES J. SCHUKAI, JANET McAFEE
WEAKLEY and JAMES W. WOGSLAND
Please vote, date and sign on the reverse side hereof and return this proxy form
promptly in the enclosed envelope. If you attend the meeting and wish to change
your vote, you may do so automatically by casting your ballot at the meeting.
SEE REVERSE SIDE
<PAGE>
Exhibit H-3
Form of Notice
Ameren Corporation (70- )
Notice of Proposal to Implement Long-Term Incentive Plan; Order Authorizing
Solicitation of Proxies
Ameren Corporation ("Ameren"), 1901 Chouteau Avenue, St. Louis, Missouri, a
registered holding company, and Ameren Services Company, have filed a
declaration under Sections 6(a), 7, 12(e) of the Act and Rules 62 and 65
thereunder.
Ameren seeks approval of the Commission to implement the Ameren Corporation
Long-Term Incentive Plan of 1998 (the "Ameren LTIP") and to issue or acquire up
to 4 million shares of Ameren Common Stock, $.01 par value ("Common Stock") in
connection therewith during the five years from the date of the Commission's
order in this matter.
The purpose of the Ameren LTIP is to give Ameren and its subsidiaries and
other affiliates (as defined in the Ameren LTIP) a competitive advantage in
attracting, retaining and motivating officers, employees and directors by
providing for the awarding of incentives linked to the profitability of Ameren
and its businesses and to increases in shareholder value.
The Ameren LTIP will be administered by the Human Resources Committee of
the Ameren Board of Directors (the "Committee"). The Committee will determine
the officers and employees eligible to receive awards and the amount of any
award. The Committee will interpret the Ameren LTIP and can adopt rules deemed
appropriate. No Ameren LTIP awards may be made to Committee members, except by
action of the full Board of Directors.
The maximum 4,000,000 shares of Ameren reserved for the Ameren LTIP is
subject to appropriate adjustment by the Committee to prevent dilution or
enlargement of the rights of Ameren LTIP participants. The maximum number of
shares which may be granted through options or stock appreciation rights to any
participant in a calendar year is 200,000 shares.
The following awards may be granted under the Ameren LTIP. No grant
shall be exercisable or payable before approval of Ameren shareholders and the
Commission hereunder have been obtained and all grants made prior to said
approvals are contingent upon said approvals.
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<PAGE>
A. Performance Units - rights, which may be payable in cash, shares of
Common Stock, other awards, or other property, which is contingent on
the achievement of performance goals set by the Committee.
B. Restricted Stock - rights to receive shares of Common Stock awarded as
determined by the Committee, which shares will be subject to
transferability or other restrictions.
C. Options - rights to purchase shares of Common Stock, or other awards or
property, at a specified price during a prescribed time period. The
exercise price for Common Stock will not be less than the fair market
value at the date of the grant. No option may provide for re-setting the
exercise price.
D. Stock Appreciation Rights - the right to receive a cash payment equal to
the excess of the fair market value of Common Stock on the date of
exercise over the grant price of the Stock Appreciation Right. The grant
price shall not be less than the fair market value of the Common Stock
on the date of the grant.
Consistent with the goals of the Ameren LTIP, the Committee may also grant
other awards based or related to the value of the Common Stock. The term of any
option or a stock appreciation right granted in tandem therewith may not exceed
ten years from the grant date. In the event of a change in control of Ameren,
any outstanding options and stock appreciation rights become fully exercisable,
any restrictions on outstanding Restricted Stock shall be deemed satisfied, and
all performance units shall be deemed earned and payable in full. Subject to
compliance with any then applicable requirement of the Act, the Ameren LTIP may
be revised by the Board of Directors of Ameren, but any such change may not
impair the rights of participants without their consent.
The Ameren LTIP is designed to comply with limits imposed by the Internal
Revenue Code of 1986, as amended (the "Code") on the ability of a public company
to claim tax deductions for compensation paid to certain highly compensated
executives. Section 162(m) of the Code generally denies a federal income tax
deduction for annual compensation exceeding $1,000,000 paid to the Chief
Executive Officer and the four other most highly compensated officers of a
public company. Certain types of compensation, including some performance-based
compensation, are generally excluded from this deduction limit. While Ameren
believes compensation payable pursuant to the Ameren LTIP will be deductible for
federal income tax purposes under most circumstances, compensation not qualified
under Section 162(m) of the Code may be payable under certain circumstances such
as death, disability and change in control (all as defined in the Ameren LTIP).
Ameren and/or Ameren Services intends to solicit proxies from the Ameren
common shareholders to approve the Ameren LTIP at Ameren's Annual Meeting of
Shareholders to be held on or about April 28, 1998. Ameren requests that the
effectiveness of its declaration with respect to the solicitation of proxies
for voting by its shareholders to approve the proposed Ameren LTIP be permitted
to become effective forthwith as provided in Rule 62(d).
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<PAGE>
It appearing to the Commission that Ameren's declaration regarding the
proposed solicitation of proxies should be permitted to become effective
forthwith, pursuant to Rule 62:
IT IS ORDERED, that the declaration regarding the proposed solicitation of
proxies, be, and it hereby is, permitted to become effective forthwith, under
Rule 62, and subject to the terms and conditions as prescribed in Rule 24 under
the Act.
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
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