<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [X]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UNION ELECTRIC COMPANY
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
UNION ELECTRIC COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND
PROXY STATEMENT
Time: 9:00 A.M.
Tuesday
April 22, 1997
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 wish to change your proxy vote, you may do so by voting in
person at the meeting. YOUR PROMPT RESPONSE WILL REDUCE EXPENSES.
<PAGE> 3
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
UNION ELECTRIC COMPANY
The Annual Meeting of Stockholders of Union Electric Company will be
held at Powell Symphony Hall, 718 North Grand Boulevard, St. Louis, Missouri,
on Tuesday, April 22, 1997, at 9:00 A.M., for the purposes of
(a) electing directors of the Company for terms ending in April 1998;
(b) voting on a stockholder proposal, if presented to the meeting; and
(c) transacting such other business as may properly come before the
meeting.
Stockholders of record at the close of business on Monday, March 3,
1997, will be entitled to vote at the meeting and at any adjournment thereof.
Please vote, date, sign, and return the enclosed proxy in the enclosed
envelope. The prompt return of your proxy will reduce expenses.
By order of the President and the Board of Directors,
JAMES C. THOMPSON,
Secretary.
St. Louis, Missouri
March 17, 1997
<PAGE> 4
PROXY STATEMENT OF UNION ELECTRIC COMPANY
(First sent or given to stockholders March 17, 1997)
Principal Executive Offices:
1901 CHOUTEAU AVENUE, ST. LOUIS, MO. 63103
The enclosed 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 on Tuesday, April 22, 1997, 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 voting securities of the Company on March 3, 1997 consisted of
2,795,095 shares of Preferred Stock and 102,123,834 shares of Common Stock.
Only stockholders of record at the close of business on March 3, 1997 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 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.
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.
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<PAGE> 5
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, 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.
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 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 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 and General American
Life Insurance Company. He is a member of the Executive and Contributions
Committees of the Board of Directors. Director since November 8, 1968; Age:
65.
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
2
<PAGE> 6
Incorporated and Payless Shoe Source, Inc. He is a member of the Human
Resources and Executive Committees. Director since April 25, 1989; Age: 64.
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: 57.
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: 61.
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 a director of Boatmen's Trust
Company 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: 64.
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
3
<PAGE> 7
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:
54.
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 and Angelica Corporation. Mr. Mueller is a member of the
Executive and Contributions Committees of the Board of Directors. Director
since June 11, 1993; Age: 58.
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: 68.
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 a partner in 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: 58.
4
<PAGE> 8
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: 67.
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 1996, the Board met six times and an aggregate of eight
committee meetings were held. All nominees attended at least 75% 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 92%.
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
1996, 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 1996, 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 1996,
the
5
<PAGE> 9
Committee met twice. 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.
STOCKHOLDER PROPOSAL. Proponents of the stockholder proposal described below
as Item (2) have notified the Company of their intention to attend the 1997
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;
6
<PAGE> 10
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 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;
7
<PAGE> 11
- 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.
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 trending downward;
- The range of decommissioning cost estimates for other nuclear plants
similar to Callaway is consistent with our estimate;
8
<PAGE> 12
- 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 (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.
9
<PAGE> 13
SECURITY OWNERSHIP OF MANAGEMENT
AS OF FEBRUARY 1, 1997:
<TABLE>
<CAPTION>
Shares of Common Stock
Name Beneficially Owned *
---- ---------------------------
<S> <C>
Donald E. Brandt 961
William E. Cornelius 18,160
Thomas A. Hays 5,309
Thomas H. Jacobsen 2,764
Richard A. Liddy 1,884
John Peters MacCarthy 3,210
Paul L. Miller, Jr. 1,410
Charles W. Mueller 7,122
Robert O. Piening 6,791
Robert H. Quenon 2,157
Harvey Saligman 2,210
Donald F. Schnell 8,220
Charles J. Schukai 4,304
Janet McAfee Weakley 2,916
All Directors and executive officers as a group 110,846
</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 9,016 shares held in a trust account
in his wife's name for which he serves as trustee. In addition to shares
shown, 3,313 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> 14
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
X Data UEP S&P 500 EEI INDEX
- -------------- ------------ -------- ----------
<S> <C> <C> <C>
100 100 100
1992 103 108 108
1993 115 118 120
1994 111 120 106
1995 139 165 139
1996 137 203 140
</TABLE>
11
<PAGE> 15
STOCKHOLDER PROPOSALS
Any stockholder proposal intended for inclusion in the proxy material
for the Company's 1998 annual meeting of stockholders must be received by
November 17, 1997.
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 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.
12
<PAGE> 16
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 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 35% of base salary.
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<PAGE> 17
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 1996 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 given to the favorable level of 1995 earnings per share, which
was achieved despite a rate reduction, rate credits to Missouri customers, and
expenses related to the proposed merger with CIPSCO Incorporated. Further, the
reported compensation reflects a high level of achievement in meeting 1996
performance targets for return on equity and control of labor costs and other
operating and maintenance expenses. 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> 18
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 1996 441,000 165,000 17,700 39,306*
President and Chief 1995 420,000 157,000 15,000 33,935
Executive Officer 1994 400,000 120,000 -0- 21,906
D. E. Brandt 1996 242,000 69,000 6,800 24,278*
Senior Vice 1995 228,000 67,000 5,600 17,254
President 1994 216,000 49,000 -0- 16,848
R. O. Piening 1996 237,000 53,000 6,800 29,049*
Senior Vice 1995 228,000 48,000 5,600 27,073
President 1994 220,000 27,000 -0- 19,756
D. F. Schnell 1996 250,000 71,000 6,800 34,661*
Senior Vice 1995 240,000 66,000 5,600 30,591
President 1994 230,000 53,000 -0- 21,022
C. J. Schukai 1996 258,000 76,000 6,800 33,506*
Senior Vice 1995 246,000 72,000 5,600 31,708
President 1994 235,000 54,000 -0- 23,455
* 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 $4,500 $34,806
D. E. Brandt 4,500 19,778
R. O. Piening 3,790 25,259
D. F. Schnell 4,500 30,161
C. J. Schukai 4,071 29,435
</TABLE>
15
<PAGE> 19
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
Number of Grant
Shares % of Total Date
Underlying Options Exercise Present
Options Granted to Price Expiration Value(3)
Name Granted(1)(2) Employees ($/Sh) Date ($)
- --------------------- ------------- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
C. W. Mueller . . . . 17,700 10.69 43 2/7/06 74,871
D. E. Brandt . . . . 6,800 4.11 43 2/7/06 28,764
R. O. Piening . . . . 6,800 4.11 43 2/7/06 28,764
D. F. Schnell . . . . 6,800 4.11 43 2/7/06 28,764
C. J. Schukai . . . . 6,800 4.11 43 2/7/06 28,764
</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 7, 1998.
(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 13.67%, dividend yield of 6.32%, risk-free
interest rate of 5.87%, and a vesting restrictions discount rate of 3% per
year over the five-year vesting period.
16
<PAGE> 20
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 1996
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 32,700 39,375
D. E. Brandt . . . . 0 0 12,400 14,700
R. O. Piening . . . . 0 0 12,400 14,700
D. F. Schnell . . . . 0 0 12,400 14,700
C. J. Schukai . . . . 0 0 12,400 14,700
</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 . . . . $ 28,460 $ 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>
17
<PAGE> 21
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 36; Mr. Schnell 43; Mr. Schukai 39; Mr. Piening 36; and Mr. Brandt 14.
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 1997. 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 independent accountants for the Company for 1997 and
the fees to be paid for the regular annual audit.
18
<PAGE> 22
Price Waterhouse LLP served as the Company's independent accountants in
1996. 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 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.ue.com/
19
<PAGE> 23
[UNION ELECTRIC LETTERHEAD]
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 22, 1997
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 Powell
Symphony Hall, 718 North Grand Boulevard, St. Louis, Missouri, on April 22,
1997 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
-- THANK YOU FOR YOUR PROMPT ATTENTION --
FOLD AND DETACH HERE
<TABLE>
<S><C>
/ X / Please mark votes This proxy will be voted as specified below. If no direction is made, this proxy will be
as in this example. 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
except as noted all nominees ATTENDANCE CARD
FOR AGAINST ABSTAIN REQUESTED
ITEM 1 / / / / ITEM 2 / / / / / / / /
ELECTION OF CALLAWAY
DIRECTORS DECOMMISSIONING
REPORT
SEE
REVERSE
DATED______________________________________1997 SIDE
________________________________________________________________
SIGNATURE - Please sign exactly as name appears hereon.
________________________________________________________________
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>
