<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ ]
Filed by a party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
UNION ELECTRIC COMPANY
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
Investment Company Act Rule 20a-1(c).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes: See attached page
<PAGE> 2
Schedule 14A
Information Attachment
In accordance with the provisions of Rule 14a-6(c) of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, there is
transmitted herewith copies of the form of proxy and the Notice of Annual
Meeting and Proxy Statement for the Union Electric Company shareholder meeting
to be held April 23, 1996. Copies of such material are to be mailed or
delivered to stockholders of record and to brokers, banks, and nominees for
delivery to beneficial owners, beginning on March 14, 1996. The prescribed
filing fee of $125 is covered by our balance on deposit at Mellon Bank.
In addition to electing directors, shareholders will be voting on a shareholder
proposal concerning our nuclear power plant.
<PAGE> 3
UNION ELECTRIC COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT
Time: 9:00 A.M.
Tuesday
April 23, 1996
Place: The Saint Louis Art Museum
One Fine Arts Drive
Forest Park
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 wish to change your proxy vote, you may do so by voting in
person at the meeting. YOUR PROMPT RESPONSE WILL REDUCE EXPENSES.
<PAGE> 4
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
UNION ELECTRIC COMPANY
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Union
Electric Company will be held at The Saint Louis Art Museum, One Fine Arts
Drive, Forest Park, St. Louis, Missouri, on Tuesday, April 23, 1996, at 9:00
A.M., for the purposes of
(1) electing directors of the Company for the ensuing year;
(2) voting on a stockholder proposal described in the accompanying proxy
statement, if presented to the meeting; and
(3) transacting such other business as may properly come before the
meeting.
Stockholders of record at the close of business on Friday, March 1, 1996,
will be entitled to vote at the meeting and at any adjournment thereof.
Please vote, date, sign, and return the enclosed proxy in the reply
envelope provided, regardless of the number of shares you may hold. The prompt
return of your proxy will reduce expenses. Your cooperation is appreciated.
By order of the President and the Board of Directors,
JAMES C. THOMPSON,
Secretary.
St. Louis, Missouri
March 14, 1996
<PAGE> 5
PROXY STATEMENT OF UNION ELECTRIC COMPANY
(First sent or given to stockholders March 14, 1996)
Principal Executive Offices:
1901 CHOUTEAU AVENUE, ST. LOUIS, MO. 63103
The accompanying proxy is solicited by the Board of Directors of Union
Electric Company (the "Company") for use at the Annual Meeting of Stockholders
of the Company to be held at The Saint Louis Art Museum, One Fine Arts Drive,
Forest Park, St. Louis, Missouri, on Tuesday, April 23, 1996, and at any
adjournment thereof.
VOTING
The accompanying proxy represents all shares registered in the name(s)
shown thereon, including shares in DRPLUS. Participants in the Union Electric
Company Savings Investment Plan will receive a separate proxy for shares in the
plan.
The outstanding voting securities of the Company on March 1, 1996
consisted of 3,434,596 shares of Preferred Stock and 102,123,834 shares of
Common Stock. Only stockholders of record at the close of business on March 1,
1996 will be entitled to vote at the meeting. A majority of the outstanding
shares entitled to vote must be represented at the meeting, in person or by
proxy, to constitute a quorum. Each share is entitled to one vote on matters
to come before the meeting, except that in the election of directors the
stockholders have cumulative voting rights, which are not subject to any
condition. Under cumulative voting each stockholder has the right to cast
votes in the election of directors equal to the number of shares held of record
by such stockholder, multiplied by the number of directors to be elected; in
other words, ten votes for each share. All such votes may be cast for one
nominee or may be distributed among two or more nominees, but not among more
than ten nominees. A plurality of the votes cast is required for the election
of a director.
1
<PAGE> 6
A stockholder giving a proxy has the power to revoke it at any time
before it is exercised by delivering either a written revocation or a duly
executed proxy bearing a later date to the Secretary of the Company or by
voting in person at the meeting.
When proxies are returned properly marked and signed, the shares
represented thereby will be voted in accordance with the stockholders'
directions. If no directions are given in the election of directors, the
persons named as proxies will vote the shares, cumulatively in their
discretion, for the election of the nominees named below. If no specific
directions are given on the proposal, shares will be voted as recommended by
the Board of Directors. In determining whether a quorum is present at the
meeting, the Company includes proxies marked as abstentions but does not
include broker non-votes. In tabulating the number of votes cast, withheld
votes, abstentions, and non-votes by banks and brokers are not included.
If matters other than those referred to below are voted on at the
meeting, the persons named in the enclosed proxy will have discretionary
authority to vote on any such matter in accordance with their judgment.
The Board of Directors has adopted a confidential voting policy for
proxies.
ITEM (1): ELECTION OF DIRECTORS. At the meeting ten directors are to be
elected to serve until the next annual meeting of stockholders and until their
respective successors shall be 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 THE
COMPANY. Mr. Cornelius joined the Company 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 a director of McDonnell Douglas Corporation, General American Life
Insurance Company, and Boatmen's Bancshares, Inc. He is a member of the
Executive and Contributions Committees of the Board of Directors. Director
since November 8, 1968; Age: 64.
2
<PAGE> 7
THOMAS A. HAYS
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. He is a member of the Human Resources and Executive
Committees. Director since April 25, 1989; Age: 63.
THOMAS H. JACOBSEN
CHAIRMAN, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR OF MERCANTILE
BANCORPORATION INC., a bank holding company. Before joining Mercantile as
Chief Executive Officer in March of 1989, Mr. Jacobsen was a vice chairman and
director of Barnett Banks, Inc. He is a member of the boards of directors of
the Student Loan Marketing Association and Trans World Airlines. Mr. Jacobsen
is a member of the Auditing, Contributions, and Executive Committees. Director
since April 24, 1990; Age: 56.
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
since January 1, 1994; Age: 60.
JOHN PETERS MacCARTHY
RETIRED CHAIRMAN, CHIEF EXECUTIVE OFFICER AND A DIRECTOR OF BOATMEN'S TRUST
COMPANY which conducts a general trust business, and which is a subsidiary of
Boatmen's Bancshares, Inc. 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 a director of Boatmen's Bancshares, Inc.
and 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
since April 22, 1986; Age: 63.
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 since April 23, 1991; Age: 53.
3
<PAGE> 8
CHARLES W. MUELLER
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 is a director of Boatmen's
National Bank. Mr. Mueller is a member of the Executive and Contributions
Committees of the Board of Directors. Director since June 11, 1993; Age: 57.
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 since September 1,
1991; Age: 67.
HARVEY SALIGMAN
RETIRED CHAIRMAN OF INTERCO INCORPORATED, a major manufacturer and retailer of
consumer products and services. During his active employment in the consumer
products industry, Mr. Saligman served in various executive capacities for 25
years. He currently is managing partner of a family real estate partnership.
Mr. Saligman is a director of Mercantile Bancorporation Inc. He is Chairman of
the Auditing Committee of the Board. Director since January 1, 1989; Age: 57.
JANET McAFEE WEAKLEY
PRESIDENT OF JANET MCAFEE INC., a residential real estate company which she
founded in 1975. She is a director of Boatmen's Trust Company. 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 since April 23, 1991; Age: 66.
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.
4
<PAGE> 9
During 1995, the Board met seven times and an aggregate of eleven
committee meetings were held. Except for Mr. Quenon, all nominees attended at
least 89% of the meetings of the Board and the Board Committees of which they
were members, and aggregate attendance of the Board as a group exceeded 90%.
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.
The general functions of the Auditing Committee, which met twice during
1995, 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. The Contributions Committee, which met
three times during 1995, 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. During 1995,
the Committee met five times. 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.
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.
5
<PAGE> 10
STOCKHOLDER PROPOSAL. Proponents of the stockholder proposal described below
as Item (2) have notified the Company of their intention to attend the 1996
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 (2): REPORT ON COMPARATIVE COSTS OF DECOMMISSIONING THE CALLAWAY
PLANT.
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 large reactor vary 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; and the rods and other
highly radioactive components may then someday be transported to a
federal deep-geologic repository which has neither been finally sited
nor constructed, and may never be;
WHEREAS chelating agents are used in the chemical decontamination of nuclear
plants -- to dissolve radioactive
6
<PAGE> 11
corrosion products in the reactor vessel, coolant systems, piping and
other components -- and we believe the long term effects of the
chelating agents are unacceptable; they are known to cause an
accelerated migration of the 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 the
shareholders with 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 mounting amounts in volume and radioactivity
of high- and low-level radioactive wastes for which the company
may remain morally and financially liable for an indefinite time;
- the greater number of workers needed to replace worn-out,
malfunctioning or obsolete components because of the increasing
buildup of radiation levels within the plant;
- a potential major accident;
(2) provide a summary of this assessment to shareholders in the next annual
report and 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.
7
<PAGE> 12
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM (2).
In light of the extensive information on the Company's 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.
- 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.
- The Company makes internal reviews annually.
Contrary to assumptions and assertions included in the proposal -
- Individual and collective radiation exposure to workers at
Callaway Plant is decreasing, not increasing;
- 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;"
8
<PAGE> 13
- 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 2.
Passage of the proposal requires the affirmative vote of a majority of
the votes cast.
ITEM (3): OTHER MATTERS. The Board of Directors does not know of any
matters, other than the election of directors and the proposal set forth above,
which may be presented to the meeting.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended for inclusion in the proxy material
for the 1997 annual meeting of stockholders must be received by the Company by
November 14, 1996.
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.
9
<PAGE> 14
SECURITY OWNERSHIP OF MANAGEMENT
AS OF FEBRUARY 1, 1996:
<TABLE>
<CAPTION>
Shares of Common Stock
Name Beneficially Owned *
---- ---------------------------
<S> <C>
Donald E. Brandt 893
William E. Cornelius 18,344
Thomas A. Hays 4,516
Thomas H. Jacobsen 2,003
Richard A. Liddy 1,642
John Peters MacCarthy 2,916
Paul L. Miller, Jr. 1,136
Charles W. Mueller 6,637
Robert O. Piening 6,330
Robert H. Quenon 1,847
Harvey Saligman 1,916
Donald F. Schnell 7,634
Charles J. Schukai 4,117
Janet McAfee Weakley 2,641
All Directors and executive officers
as a group 112,516
</TABLE>
* Includes shares held jointly
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 9,916 shares held in a trust account
in his wife's name for which he serves as trustee. In addition to shares
shown, 3,141 shares have been reported as beneficially owned by family members
and/or household members of the parties, and 300 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.
10
<PAGE> 15
5 YEAR CUMULATIVE TOTAL RETURN
UNION ELECTRIC, S&P 500, EEI INDEX*
*EDISON ELECTRIC INSTITUTE INDEX OF 100 INVESTOR-OWNED ELECTRIC UTITLITIES
Value of $100 invested 12/31/90 Includes reinvestment of dividends
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
X Axis
Name UEP S&P 500 EEI INDEX
- -------- ----- --------- -----------
<S> <C> <C> <C>
100 100 100
1991 138.67 130.55 128.87
1992 142.86 140.59 138.69
1993 158.79 154.53 154.11
1994 153.4 156.5 136.28
1995 193.03 215.3 178.55
</TABLE>
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<PAGE> 16
COMPENSATION
Directors who are not active employees of the Company each receive an
annual retainer of $20,000 and an annual award of 200 shares of the Company's
Common Stock. They also receive fees of $1,000 for each Board meeting and each
Board Committee meeting attended. Directors who are active employees of the
Company do not receive such retainer, award, or fees.
A 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. As an alternative for those non-employee directors
who elect not to participate in the deferred compensation plan, the Company
offers an unfunded, nonqualified retirement plan. Under the retirement plan, a
director retiring after at least ten years of service is entitled to an annual
benefit equal to 60% of the annual retainer in effect for the year in which
distributions begin. Vesting of benefits begins at 50% of the benefit upon
completion of five years of service and continues to accrue at the rate of 10%
annually until full vesting occurs when ten years of service have been
completed.
12
<PAGE> 17
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 reviews, the Committee authorizes
appropriate changes as determined by the three basic components of the
Company's executive compensation program.
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 Graph on page 11.
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
13
<PAGE> 18
within prescribed ranges based on individual performance and degree of
responsibility. If basic corporate objectives are not achieved, no such
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 29% of base salary.
The third component of the executive compensation program is the Long-Term
Incentive Plan of 1995, which also ties compensation to performance. The Plan
was approved by shareholders at the 1995 Annual Meeting and provides for the
grant of options, performance dividend rights, and/or other awards. The Human
Resources Committee determines who participates in the Plan and the number and
types of awards to be made. They also set the terms, conditions, performance
requirements and limitations applicable to each award under the Plan. Awards
are expected to be at levels that approximate the median of the range of awards
granted by similarly-situated companies.
In determining the reported 1995 compensation of the Chief Executive
Officer, as well as compensation for the other executive officers, the Human
Resources Committee considered the matters discussed above. Specific
recognition was also given to: the level of 1994 earnings per share of common
stock (which ranked with the Company's best), and the degree to which 1995
performance targets for return on equity and control of labor costs and other
operations and maintenance expenditures were met or exceeded. In addition,
Mr. Mueller's base salary in 1994 reflects his election as Chief Executive
Officer effective January 1, 1994. Authorized salaries for the Company's
executive officers fell within the ranges of those paid by similarly-situated
companies.
/s/John Peters MacCarthy, Chairman
Thomas A. Hays
Robert H. Quenon
14
<PAGE> 19
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Name Annual ------------
and Compensation Securities All Other
Principal ------------ Underlying Compen-
Position Year Salary($) Bonus($) Options(#) sation($)
- -------- ---- --------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C>
C. W. Mueller 1995 420,000 157,000 15,000 33,935*
President and Chief 1994 400,000 120,000 21,906
Executive Officer 1993 237,000 55,000 22,382
D. E. Brandt 1995 228,000 67,000 5,600 17,254*
Senior Vice 1994 216,000 49,000 16,848
President 1993 197,000 33,000 16,783
R. O. Piening 1995 228,000 48,000 5,600 27,073*
Senior Vice 1994 220,000 27,000 19,756
President 1993 211,000 30,000 19,886
D. F. Schnell 1995 240,000 66,000 5,600 30,591*
Senior Vice 1994 230,000 53,000 21,022
President 1993 217,000 36,000 21,254
C. J. Schukai 1995 246,000 72,000 5,600 31,708*
Senior Vice 1994 235,000 54,000 23,455
President 1993 215,000 35,000 24,475
</TABLE>
* Amounts include (a) matching contributions to the 401(k) plan and (b)
above-market earnings on deferred compensation, as follows:
<TABLE>
<CAPTION>
(a) (b)
<S> <C> <C>
C. W. Mueller $4,500 $29,435
D. E. Brandt - 17,254
R. O. Piening 4,500 22,573
D. F. Schnell 4,500 26,091
C. J. Schukai 4,489 27,219
</TABLE>
15
<PAGE> 20
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
Number of Grant
Shares % of Total Date
Underlying Options Exercise Present
Options Granted to Price Expiration Value(3)
Name Granted(1)(2) Employees ($/Sh) Date ($)
- ------------------ ------------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
C. W. Mueller....... 15,000 10.53 35 7/8 4/25/05 61,200
D. E. Brandt........ 5,600 3.93 35 7/8 4/25/05 22,848
R. O. Piening....... 5,600 3.93 35 7/8 4/25/05 22,848
D. F. Schnell....... 5,600 3.93 35 7/8 4/25/05 22,848
C. J. Schukai....... 5,600 3.93 35 7/8 4/25/05 22,848
</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, 1995 to December 31, 1997. 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 April 25, 1997.
(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 12.93%, dividend yield of 6.24%, risk-free
interest rate of 7.20%, and a vesting restrictions discount rate of 3% per
year over the five-year vesting period.
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<PAGE> 21
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 all shareholders would benefit commensurately.
AGGREGATED OPTION EXERCISES IN 1995
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 $ Unexercisable Unexercisable
- --------------------- -------- --------- -------------- ---------------
<S> <C> <C> <C> <C>
C. W. Mueller .......... 0 0 15,000 88,125
D. E. Brandt .......... 0 0 5,600 32,900
R. O. Piening .......... 0 0 5,600 32,900
D. F. Schnell .......... 0 0 5,600 32,900
C. J. Schukai .......... 0 0 5,600 32,900
</TABLE>
Note: The named persons had no options exercisable at year end.
RETIREMENT PLAN:
The following table shows estimated annual benefits payable under the
Company's defined benefit retirement plan:
<TABLE>
<CAPTION>
Final Years of Service at Age 65
Average --------------------------
Base Salary 15 20 25 30 35
- ----------- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$125,000 ........ $ 28,552 $ 38,069 $ 47,586 $ 57,103 $ 66,620
$150,000 ........ 34,553 46,070 57,588 69,106 80,623
$175,000 ........ 40,552 54,070 67,587 81,104 94,622
$200,000 ........ 46,552 62,069 77,586 93,103 108,620
$225,000 ........ 52,553 70,070 87,588 105,106 122,623
$250,000 ........ 58,552 78,070 97,587 117,104 136,622
$300,000 ........ 70,553 94,070 117,588 141,106 164,623
$400,000 ........ 94,552 126,070 157,587 189,104 220,622
$450,000 ........ 106,553 142,070 177,588 213,106 248,623
$500,000 ........ 118,552 158,069 197,586 237,103 276,620
</TABLE>
17
<PAGE> 22
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 35; Mr. Schnell 42; Mr. Schukai 38; Mr. Piening 35, and
Mr. Brandt 13.
SEVERANCE PLAN:
The Board has approved adoption of the Union Electric Company Change of
Control Severance Plan, pursuant to which designated officers, including those
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 proposed 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 the
Company'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 1996. 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
18
<PAGE> 23
review, the Auditing Committee will recommend to the Board of Directors for its
approval the selection of independent accountants for the Company for 1996 and
the fees to be paid for the regular annual audit.
Price Waterhouse LLP served as the Company's independent accountants in
1995. 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.
____________________
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 REQUEST TO JAMES C. THOMPSON, SECRETARY, P.O.
BOX 149, ST. LOUIS, MISSOURI 63166.
19
<PAGE> 24
<TABLE>
<S><C>
/x/ PLEASE MARK VOTES
AS IN THIS EXAMPLE.
This proxy will be voted as specified below. If no 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 item.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ITEM 1. THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM 2.
- ---------------------------------------------------- --------------------------------------------------------
FOR all nominees WITHHOLD AUTHORITY ATTENDANCE CARD
except as noted all noiminees FOR AGAINST ABSTAIN REQUESTED
ITEM 1 ITEM 2
ELECTION CALLAWAY
OF / / / / DECOMMISSIONING / / / / / / / /
DIRECTORS REPORT
EXCEPTIONS: ______________________________
SEE
REVERSE
SIDE
DATED ______________________________1996
-------------------------------------------------------
SIGNATURE-PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.
SHARES REGISTERED IN THE NAME OF A CUSTODIAN OR GUARDIAN -------------------------------------------------------
MUST BE SIGNED BY SUCH. EXECUTORS, ADMINISTRATORS, TRUSTEES, CAPACITY (OR SIGNATURE IF HELD JOINTLY)
ETC, SHOULD SO INDICATE WHEN SIGNING.
</TABLE>
FOLD AND DETACH HERE
--THANK YOU FOR YOUR PROMPT ATTENTION--
<PAGE> 25
UNION ELECTRIC-LOGO PROXY
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 23, 1996
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 UNION ELECTRIC COMPANY
represented hereby at the Annual Meeting of Stockholders to be held at The
Saint Louis Art Museum, One Fine Arts Drive, Forest Park, St. Louis, Missouri,
on April 23, 1996 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, THOMAS A. HAYS, THOMAS H.
JACOBSEN, RICHARD A. LIDDY, JOHN PETERS MacCARTHY,
PAUL L. MILLER, JR., CHARLES W. MUELLER, ROBERT H.
QUENON, HARVEY SALIGMAN and JANET McAFEE WEAKLEY
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
