SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ( X ) Filed by a Party other than the Registrant ( )
Check the appropriate line:
____ 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 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, if other than the Registrant
Payment of Filing Fee (Check the appropriate line):
_X__ No fee required.
____ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-
11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
____ Fee paid previously with preliminary materials.
____ Check line 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>
UNION ELECTRIC COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of
Union Electric Company
We will hold the Annual Meeting of Stockholders of Union Electric
Company 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) acting on other proper business presented to the meeting.
If you owned shares of the Company's capital 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 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.
Admission to the meeting will be by ticket only. Persons without
tickets will be admitted to the meeting upon verification of their stockholdings
in the Company.
St. Louis, Missouri
March 31, 1998
<PAGE>
PROXY STATEMENT OF UNION ELECTRIC COMPANY (First sent or given to stockholders
March 31, 1998)
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 28, 1998, and at any adjournment
thereof.
As information, the meeting will be held in conjunction with the
meetings of the Company's parent, Ameren Corporation ("Ameren"), and Central
Illinois Public Service Company ("CIPS").
VOTING
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 102,123,834 shares of Common Stock, all of which were
owned by Ameren, and 2,795,095 shares of Preferred Stock. In order to conduct
the meeting, a majority of the outstanding shares entitled to vote must be
represented. 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, five 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 five nominees.
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. 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. At the meeting five 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, all of whom are executive officers of the Company or its
affiliates, are listed below with information about their principal occupations
and backgrounds.
The five nominees for director who receive the most votes will be elected.
PAUL A. AGATHEN
Senior Vice President - Energy Supply Services of the Company. Mr. Agathen was
employed by the Company in 1975 as an attorney. He was named General Attorney of
the Company in 1982 and was elected Vice President, Environmental and Safety in
1994. He was elected to his present position in 1996. He is also a director of
CIPS. Age: 50.
DONALD E. BRANDT
Senior Vice President - Finance and Corporate Services of the Company. Mr.
Brandt worked for Price Waterhouse from 1975 until his appointment as Controller
of the Company in 1983. He was elected Vice President in 1985; Senior Vice
President in 1988; and was named to his present position in 1993. Mr. Brandt is
also a director of Huntco, Inc., The ARCH Fund, Inc., and CIPS. Age: 43.
CHARLES W. MUELLER
President and Chief Executive Officer of the Company. Mr. Mueller began his
career with the Company 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
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1993; and, on January 1, 1994, was also named Chief Executive Officer. Mr.
Mueller is also a director of Angelica Corporation, Ameren and CIPS. Director
since 1993. Age: 59.
GARY L. RAINWATER
President and Chief Executive Officer and director of CIPS, an electric and gas
utility serving portions of Illinois. Mr. Rainwater was elected Executive Vice
President of CIPS in January 1997 and was named to his present position in
December 1997. Before joining CIPS he worked for the Company for 17 years and
was elected a vice president in 1993. Director since 1997. Age: 51.
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 1981, Vice President of Regional Operations in 1983, Vice
President of Transmission and Distribution in 1985, and was elected to his
present position in 1988. He is a director of Ameren. Age: 63.
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 Company's Board met six times and an aggregate of nine
committee meetings were held. During the year, each director attended at least
88% 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 97%.
Board Committees - The Board committees of the Company's parent,
Ameren, perform committee duties for the Company's Board.
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.
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<PAGE>
Item (2): Other Matters. The Board of Directors does not know of any
matters, other than the election of directors, which may be presented to the
meeting.
Security Ownership. The 102,123,834 outstanding shares of the Company's
Common Stock are owned by Ameren. Of the 2,795,095 shares of the Company's
outstanding Preferred Stock, 300 shares are owned by an executive officer of the
Company.
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<PAGE>
PERFORMANCE GRAPH
5 Tear Cumulative Total Return UE, S&P 500, EEI Index*
*Edison Electric Institute Index of 100 investor-owned electric utilities
Value of $100 invested on 12/31/92, including reinvestment of dividends
DATA UE S&P 500 EEI INDEX
---- -- ------- ---------
1993 111 110 111
1994 107 111 98
1995 135 153 129
1996 133 189 130
1997 159 252 166
5
<PAGE>
COMPENSATION
All nominees for director are executive officers of Ameren or its
subsidiaries, and they will not receive compensation for their services as a
director.
Human Resources Committee Report on Executive Compensation
for 1997:
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 Company's (now Ameren Corporation's) Board of
Directors, which Committee 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:
o Base salary,
o A performance-based incentive plan, and
o 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 Graph on page 5.
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
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<PAGE>
encourage achievement of goals and, for 1997, measurable stockholder and
customer-related objectives -- specifically goals pertaining to return on equity
and control of operating and maintenance expenses and wages -- were set by the
Human Resources Committee. At the end of each 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.
The third component of the 1997 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 1997 compensation of the Chief Executive
Officer, as well as compensation for the other executive officers, the Human
Resources Committee considered and applied the factors discussed above. Specific
recognition was given to the generally favorable level of 1996 earnings per
share, which was achieved despite a rate reduction, significant rate credits to
Missouri customers, and continuing expenses related to the merger with CIPSCO
Incorporated. Further, the reported compensation reflects an above-average level
of achievement in meeting 1997 performance targets for return on equity and
control of labor costs and other operating and maintenance expenses. The 1997
salary of the Chief Executive Officer also recognizes the additional experience
he has gained in the position since his election on 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
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<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Name ------------
and Annual Securities All Other
Principal Compensation Underlying Compen-
Position Year Salary($) Bonus($) Options(#) sation($)
- -------- ---- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
C. W. Mueller, 1997 500,000 155,000 23,000 45,723*
President and 1996 441,000 165,000 17,700 39,306
Chief Executive Officer 1995 420,000 157,000 15,000 33,935
C. J. Schukai 1997 269,000 68,000 7,800 36,839*
Senior Vice 1996 258,000 76,000 6,800 33,506
President 1995 246,000 72,000 5,600 31,708
D. E. Brandt 1997 254,000 64,000 7,800 27,580*
Senior Vice 1996 242,000 69,000 6,800 24,278
President 1995 228,000 67,000 5,600 17,254
P. A. Agathen 1997 215,000 51,000 7,800 18,045*
Senior Vice 1996 200,000 55,000 6,800 15,257
President 1995 142,000 29,000 2,100 13,544
C. A. Bremer 1997 214,000 36,000 3,400 25,978*
Vice 1996 207,000 42,000 2,500 22,623
President 1995 200,000 40,000 5,600 20,050
* 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 $ 4,750 $ 40,973
C. J. Schukai 4,071 32,768
D. E. Brandt 4,610 22,970
P. A. Agathen 4,705 13,340
C. A. Bremer 4,750 21,228
</TABLE>
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<PAGE>
OPTION GRANTS IN 1997
<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 79,453
C. J. Schukai....... 7,800 3.98 38 1/2 2/10/07 26,598
D. E. Brandt........ 7,800 3.98 38 1/2 2/10/07 26,598
P. A. Agathen....... 7,800 3.98 38 1/2 2/10/07 26,598
C. A. Bremer........ 3,400 1.74 38 1/2 2/10/07 11,594
</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, 1997 to December 31,
1999. 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 13.17%, dividend yield of 6.53%, risk-free interest
rate of 5.70%, and a vesting restrictions discount rate of 3% per year over
the five-year vesting period.
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<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 27,656 198,069
C. J. Schukai 0 0 1,400 18,800 10,325 69,725
D. E. Brandt 0 0 1,400 18,800 10,325 69,725
P. A. Agathen 0 0 525 16,175 3,872 50,356
C. A. Bremer 0 0 1,400 10,100 10,325 47,750
</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
--------------------------
Average
Base Salary 15 20 25 30 35
- ----------- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$150,000.......... $ 34,366 $ 45,821 $ 57,276 $ 68,732 $ 80,187
$200,000.......... 46,367 61,822 77,278 92,733 108,189
$250,000.......... 58,365 77,820 97,275 116,730 136,185
$300,000.......... 70,366 93,821 117,276 140,732 164,187
$400,000.......... 94,365 125,820 157,275 188,730 220,185
$500,000.......... 118,367 157,822 197,278 236,733 276,189
$600,000.......... 142,366 189,821 237,276 284,732 332,187
</TABLE>
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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 Compen- sation 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; Mr. Agathen 23; and Mr. Bremer
31.
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 merger with CIPSCO Incorporated or
another transaction that meets the definition of "change of control". Severance
benefits are based upon a period of two or three years, depending on position. 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 1998. This
selection will be made by the Board of Directors of Ameren Corporation after the
Auditing Committee of that Board 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 that Board for its approval the
selection of independent accountants for 1998 and the fees to be paid for the
regular annual audit.
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Price Waterhouse LLP served as the Company'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.
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
December 1, 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.
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.
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<PAGE>
UNION ELECTRIC COMPANY
P. O. BOX 66149, ST. LOUIS, MISSOURI 63166-6149 PROXY
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 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 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 - PAUL A. AGATHEN, DONALD E. BRANDT, CHARLES W.
MUELLER, GARY L. RAINWATER AND CHARLES J. SCHUKAI
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
/ x / Please mark votes This proxy will be voted as specified
as in this example. below. If no direction is made, this proxy
will be voted FOR all nominees listed on the
reverse side.
THE BOARD OF DIRECTORS RECOMMENDS VOTING FOR ITEM 1.
FOR all nominees WITHHOLD AUTHORITY
(except as listed all nominees ATTENDANCE CARD
below) REQUESTED
/ /
ITEM 1 / / / /
ELECTION OF
DIRECTORS
FOR ALL EXCEPT:______________________________
SEE
DATED________________1998 REVERSE
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.
