<PAGE>
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
[X] Definitive Proxy Statement RULE 14C-5(D)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
CILCO
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
^--Enter Company Name Here--^
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF CILCO]
300 LIBERTY ST., PEORIA, IL 61602-1404
NOTICE OF ANNUAL MEETING
Dear Shareholders:
The Annual Meeting of Shareholders of Central Illinois Light Company will be
held on Tuesday, April 25, 1995 at 1:30 PM, Central Time, at the principal
office of the Company, 300 Liberty Street, Peoria, Illinois, in order to elect a
Board of Directors and transact such other business as may properly come before
the meeting.
Shareholders of record at the close of business on March 10, 1995 are entitled
to vote at the meeting.
By Order of the Board of Directors,
John G. Sahn
Secretary
March 28, 1995
IMPORTANT
It is important that your shares be represented at the meeting. Please mark,
sign, date and return the enclosed proxy promptly in order that your shares will
be voted.
<PAGE>
PROXY STATEMENT
GENERAL
This statement is furnished in connection with a solicitation of proxies
by the Board of Directors of Central Illinois Light Company (the "Company"), for
use at the Annual Meeting of Shareholders to be held on Tuesday, April 25, 1995
at 1:30 PM, Central Time, at the Company's executive offices, 300 Liberty
Street, Peoria, Illinois 61602, and any adjournment thereof. The shares
represented by your proxy will be voted if the proxy is duly executed and
returned prior to the meeting. You may revoke your proxy by a duly executed
later proxy, or at any time before it is exercised by written notice to the
Secretary of the Company, received prior to the time of the meeting, or orally
at the meeting.
The expense of the solicitation of proxies is being borne by the Company.
In addition to solicitation by mail, officers and regular employees of the
Company may solicit proxies either personally or by telephone. The Company will
reimburse banks, brokers or other similar agents or fiduciaries for forwarding
proxy material to their principals, the beneficial owners of the stock.
The annual report of the Company for the year ended December 31, 1994 is
being sent, along with the Notice of Annual Meeting, this Proxy Statement and
the accompanying Proxy, to all shareholders of record at the close of business
on March 10, 1995, which is the record date for the determination of
shareholders entitled to vote at the meeting. These items are to be first mailed
to shareholders on March 28, 1995.
VOTING SECURITIES AND PRINCIPAL HOLDERS
On March 10, 1995, the record date for the meeting, the Company had
outstanding 191,204 shares of preferred stock, $100 par value, 470,000 shares of
Class A preferred stock, no par value, and 13,563,871 shares of common stock, no
par value. Each share entitles the holder thereof to one vote upon any matter
coming before the meeting, except that in the election of directors, each
shareholder is entitled to cumulate votes and, therefore, may give one nominee
as many votes as shall equal the number of directors to be elected multiplied by
the number of shares held by such shareholder, or may distribute such votes
among any two or more nominees by so indicating on the proxy. Votes cast by
proxy or in person at the annual meeting will be tabulated by the election
inspectors appointed for the meeting and will determine whether or not a quorum
is present. The election inspectors will treat abstentions as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum but as unvoted for purposes of determining the approval of any matter
submitted to the shareholders for a vote. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a
particular matter,
1
<PAGE>
those shares will not be considered as present and entitled to vote with respect
to that matter.
At January 1, 1995, T. S. Romanowski, a vice president of the Company, was
the beneficial owner of 5 shares of the Company's preferred stock, $100 par
value, representing less than .003% of the shares of that class outstanding. No
other officer or director nominee was the beneficial owner of any shares of the
Company's preferred or common stock.
The following information, regarding beneficial ownership on January 1,
1995 of the Company's equity securities, is furnished with respect to each
person or group of persons acting together who, as of such date, is shown on the
Company's stock records to be the registered owner of more than 5% of any class
of the Company's voting securities and no independent inquiry has been made to
determine whether any shareholder is the beneficial owner of shares not
registered in the name of such shareholder or whether any shareholder is a
member of a shareholder group.
<TABLE>
<CAPTION>
CLASS OF NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
STOCK BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C> <C>
Common CILCORP Inc. 13,563,871 100
300 Hamilton Boulevard
Suite 300
Peoria, IL 61602
</TABLE>
The Company has received a copy of a Schedule 13G filed with the
Securities and Exchange Commission by Chancellor Capital Management, Inc. and
Chancellor Trust Company, 1166 Avenue of the Americas, New York, New York 10036
which indicates that Chancellor Capital Management, Inc. and Chancellor Trust
Company, as investment advisers for various fiduciary accounts, hold 15,000
shares of the Company's 5.85% Series Class A preferred stock. This represents
6.8% of that series.
ELECTION AS DIRECTORS
Eleven directors are to be elected at the annual meeting to hold office
for the ensuing year or until their successors are elected and qualified. All
nominees, except Mr. Viets, are now serving as directors of the Company and have
consented to serve, if elected. To be elected a director, a nominee must be
among the eleven nominees receiving the highest number of votes. The nominees,
along with their biographical summaries, are listed below.
The Board of Directors has no reason to believe that the persons named
will not be available, but in the event that a vacancy among the original
nominees is occasioned by death or any other reason prior to the meeting, the
proxy will be voted for a substitute nominee or nominees designated by the Board
of Directors.
2
<PAGE>
MARCUS ALEXIS
Board of Trustees Professor of Economics
and Professor of Management and Strategy
Northwestern University, Evanston, Illinois
Director of CILCO since 1988
Member of the Finance Committee
Dr. Alexis was born at New York, New York in 1932. He graduated from
Brooklyn College in 1953 with a degree in economics. Dr. Alexis received a
Master of Arts degree in economics from Michigan State University in 1954, and a
Ph.D. degree in economics from the University of Minnesota in 1959. He initially
joined Northwestern University in 1970 and served as chairman of the Department
of Economics from 1976-1979 and 1982-1985. During the period 1979 to 1981, he
was a member, vice chairman and acting chairman of the Interstate Commerce
Commission. He joined the University of Illinois at Chicago in 1985 as dean of
the College of Business Administration and professor of economics. He returned
to Northwestern University in 1990. He is former Chairman of the Federal Reserve
Bank of Chicago and serves on the boards of CILCORP, the Teachers Insurance and
Annuity Association, the Metropolitan Planning Council in Chicago, and is also a
director of the Lincoln Park Zoological Society.
JOHN R. BRAZIL
President of Bradley University, Peoria, Illinois
Director of CILCO since 1993
Member of the Finance Committee
Dr. Brazil was born at Los Angeles, California in 1946. He received a
bachelor's degree in history from Stanford University in 1968 and a master's
degree and Ph.D. in American studies from Yale University in 1972 and 1975,
respectively. In 1980, he was a Fulbright senior scholar in English and American
studies at the University of Sydney, Australia. Prior to joining Bradley
University as president in January 1992, he served as chancellor and professor
of English at the University of Massachusetts Dartmouth (formerly known as
Southeastern Massachusetts University) from 1984 through 1991. Dr. Brazil was
previously associated with San Jose' State University in California for eleven
years, last serving as professor of humanities and American studies and vice
president for academic affairs. He is a director of First of America
Bank-Illinois, N.A., First of America Bank-Illinois, N.A. Peoria Regional
Advisory Board, Methodist Medical Center and CILCORP. He chairs the Walter Byers
Post-Graduate Scholarship Committee of the National Collegiate Athletic
Association.
3
<PAGE>
WILLARD BUNN III
Senior Vice President and Managing
Director in the Financial Services Unit
The Chicago Corporation,
Chicago, Illinois
Director of CILCO since 1991
Member of the Finance Committee
Mr. Bunn was born at Springfield, Illinois in 1943. He joined Marine Bank
of Springfield in 1978 as an executive vice president. He was elected president
in 1980, chairman and chief executive officer in 1989. In 1992, Mr. Bunn became
chairman and chief executive officer of Banc One Illinois Corporation which
merged with Marine Bank. He was formerly associated with Chemical Bank from 1968
to 1978 serving in various capacities including vice president and group head of
domestic depository institutions. Mr. Bunn graduated from Princeton University
in 1966 with a degree in history. He received his master's degree in business
administration from The Darden School at the University of Virginia in 1968. Mr.
Bunn is a director of CILCORP and serves on the boards of various local and
state business and civic organizations. He retired on December 31, 1994 as
chairman and chief executive officer of Banc One Illinois Corporation and
chairman of Bank One, Springfield, Illinois. He remains on the boards of Bank
One, Springfield and Bank One, Chicago.
DAVID E. CONNOR
President of David E. Connor and Associates, Peoria, Illinois
(financial advisor to businesses and banks)
Director of CILCO since 1968
Mr. Connor was born at Omaha, Nebraska in 1925. He graduated from Yale
University in 1947. Prior to his retirement in 1985, he had served as president
and as a director of Midwest Financial Group, Inc. (a multi-bank holding
company) since its inception in 1981, and chairman of its largest subsidiary,
Commercial National Bank of Peoria. Mr. Connor had been associated with the bank
since 1952, and advanced through various areas of responsibility to vice
president in 1956. He was elected a director in 1959, senior vice president in
1964, president in 1967 and chairman in 1985. Mr. Connor formed David E. Connor
and Associates in 1985. Other directorships include CILCORP, CILCORP Investment
Management Inc., Keystone Consolidated Industries, Inc., Peoria Development
Corporation and First Bankers Trust Shares, Quincy, Illinois. He is a member of
the board of trustees of Bradley University and was formerly chairman of that
board. He also serves on the boards of various local and state business and
civic organizations.
4
<PAGE>
WILLIAM M. SHAY
Vice President of CILCO
Director of CILCO since 1991
Mr. Shay was born at Peoria, Illinois in 1952. He was initially employed
by CILCO in 1974 as an accountant and later as a budget analyst following
graduation from Bradley University with a degree in accounting. He left CILCO in
1975 to attend the University of Illinois College of Law. Upon graduation from
law school in 1978, he served for two years as a judicial clerk to a justice of
the Illinois Supreme Court. He was then associated with the Chicago law firm of
Isham, Lincoln & Beale until June 1982 when he rejoined the Company as an
attorney, subsequently becoming general counsel. In February 1987, Mr. Shay
joined the Peoria office of Keck, Mahin & Cate, a law firm based in Chicago, as
a partner. He was named vice president and chief financial officer of CILCORP in
1988 and to his present position effective January 1, 1993. He is also a
certified public accountant. Mr. Shay is a director of CILCORP Investment
Management Inc., the Illinois State Chamber of Commerce, the Peoria Area Chamber
of Commerce, Bradley University College of Business National Advisory Council,
Norwest Bank of Peoria, Children's Hospital of Illinois at Saint Francis Medical
Center and is a member of the Peoria Riverfront Business District Commission.
Effective April 1, 1995, he will become Group President of the Company.
R. WAYNE SLONE
Chairman, President and Chief Executive Officer of CILCO
Director of CILCO since 1988
Member of the Executive Committee
Mr. Slone was born in Fulton County, Illinois in 1935. He joined CILCO in
1958 and held various positions related to sales and operations until he was
appointed commercial activities manager in 1974. He was appointed general
manager, suburban division in 1976, manager of rates and regulatory affairs in
1981 and group manager in 1982. He was elected vice president (customer service
group) in 1983, senior vice president of the Company and CILCORP in 1986,
president and chief executive officer of CILCO in 1988 and chairman in 1991. Mr.
Slone is a director of CILCORP, Edison Electric Institute, the Heartland
Partnership and Peoria Development Corporation. He is a former chairman of the
board of trustees of Proctor Hospital and Proctor Health Care Inc. and is a
trustee of Eureka College. He is a retired Lieutenant Colonel of the Illinois
Air National Guard, past president of the Elmwood, Illinois Community Unit
School Board and is active in civic organizations. Effective April 1, 1995, Mr.
Slone will retire as chairman, president and chief executive officer of the
Company.
5
<PAGE>
KATHERINE E. SMITH
Vice President
The Quaker Oats Company, Chicago, Illinois
Director of CILCO since 1985
Member of the Executive Committee
Ms. Smith was born at Chicago, Illinois in 1940. She is a 1961 graduate of
Oregon State University with a degree in home economics. From 1982 to December
1994, Ms. Smith was vice president, consumer affairs, U.S. Grocery Products
Division of The Quaker Oats Company. She was formerly with The Great Atlantic &
Pacific Tea Company, Inc. from 1976 to 1982 as vice president, consumer affairs
and marketing services and prior to that, she was associated with The Pillsbury
Company. She began her business career with Southern California Gas Company, a
division of Pacific Lighting Corporation, where she advanced through various
positions related to customer services. Ms. Smith is active in a number of
professional and civic associations including the Society of Consumer Affairs
Professionals in Business and the American Association of Family & Consumer
Science. She serves as a trustee of Oregon State University Foundation. She is a
director of CILCORP.
RICHARD N. ULLMAN
President of Federal Companies, Peoria, Illinois
(commercial warehousing, local and long distance moving)
Director of CILCO since 1988
Member of the Finance Committee
Mr. Ullman was born at Peoria, Illinois in 1934. He graduated from DePauw
University in 1956 with a liberal arts degree. He joined Federal Warehouse
Company in 1957. In 1973 he was named president of that company and of Federal
Companies. He is a director of First of America Bank-Illinois, N.A., First of
America Bank-Illinois, N.A. Peoria Regional Advisory Board, Keystone
Consolidated Industries, Inc. and the Peoria Medical Research Corporation. Mr.
Ullman is a member of the Saint Francis Medical Center Advisory Board, a member
of the advisory board of Children's Hospital of Illinois at Saint Francis
Medical Center, and serves as a trustee of Bradley University. He is active in a
number of professional and civic associations. Mr. Ullman is a director of
CILCORP.
6
<PAGE>
JAMES F. VERGON
Vice President of CILCO
Director of CILCO since 1991
Mr. Vergon was born at Peoria, Illinois in 1948. He joined CILCO in 1971
and advanced through various positions in engineering. He was appointed gas
engineering manager in 1981, director-rates and regulatory affairs in 1982, and
elected vice president in 1986. He was vice president and chief financial
officer of CILCORP from January 1, 1993 through February 28, 1993. He again was
elected a vice president of the Company effective March 1, 1993. Mr. Vergon
graduated from Bradley University in 1971 with a degree in mechanical
engineering and is a registered professional engineer. He received a master's
degree in business administration from Bradley University in 1981. He is
chairman of the board of CILCORP Investment Management Inc., a member of the
board of directors of Bank One, Peoria, The Economic Development Council for the
Peoria Area, and the Heart of Illinois United Way. In addition, he is a member
of the board of trustees of Proctor Hospital and the Bradley University
Associate Board and the advisory boards of Forest Park Foundation, The Institute
of Public Utilities and the Bradley University College of Engineering and
Technology. Effective April 1, 1995, he will become Group President of the
Company.
ROBERT O. VIETS
President and Chief Executive Officer of CILCORP Inc.
Director of CILCO from 1988 to 1991
Mr. Viets was born at Girard, Kansas in 1943. He graduated from Washburn
University in 1965 with a degree in economics and received his law degree from
Washington University School of Law in 1969. He is a certified public accountant
and has had experience with a national accounting firm. Mr. Viets joined CILCO
in 1973 as manager of special studies and was appointed manager of rates and
regulatory affairs in 1976. He was elected assistant vice president, regulatory
and legislative affairs, in 1980, vice president, financial services, in 1981,
vice president (finance group) in 1983 and senior vice president of the Company
and CILCORP in 1986. He was elected president and chief executive officer of
CILCORP in 1988. Mr. Viets is a director of First of America Bank-Illinois,
N.A., First of America Bank-Illinois, N.A. Peoria Regional Advisory Board, RLI
Corp., Lincoln Office Supply Co., Incorporated, the Peoria Medical Research
Corporation and Methodist Health Services Corporation. He serves as chairman of
the board of trustees of Bradley University. He is also chairman of the board of
Environmental Science & Engineering, Inc., a director of CILCORP, CILCORP
Investment Management Inc. and CILCORP Ventures Inc. Effective April 1, 1995, he
will become chairman, president and chief executive officer of the Company.
7
<PAGE>
MURRAY M. YEOMANS
Chairman and Chief Executive Officer of Yeomans Distributing Company, Peoria,
Illinois
(wholesale appliances and central heating and cooling equipment)
Director of CILCO since 1987
Member of the Executive Committee
Mr. Yeomans was born at Philadelphia, Pennsylvania in 1935. He is a
graduate of Miami University (Ohio) with a degree in business administration. He
joined Yeomans Distributing Company in 1960 and was named president in 1972 and
to his present position in 1991. He is a director of CILCORP, Peoria Area
Community Foundation and serves as a trustee of Bradley University. In addition,
he is a member of the Saint Francis Medical Center Advisory Board, the First of
America Bank-Illinois, N.A. Peoria Regional Advisory Board and president of the
Illinois Neurological Institute. Mr. Yeomans is active in civic and charitable
activities.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has Executive and Finance Committees.
The Executive Committee has all the powers of the Board to the extent
permitted by law. The Committee also reviews and recommends to the Board of
Directors nominees to serve on the Board. The Committee considers nominees
brought to its attention by other members of the Board, by members of management
and by shareholders. Shareholders may submit recommendations to the Committee
with respect to nominees by writing to the Secretary of the Company. Directors
serving as members of the Committee are Messrs. Slone, Yeomans and Ms. Smith.
During 1994, the Committee held four meetings.
The Finance Committee is responsible for reviewing and making
recommendations to the Board of Directors with respect to (1) the compensation
of the executive officers of the Company and (2) the Company's financial
policies. Directors serving as members of the Committee are Messrs. Alexis,
Brazil, Bunn and Ullman. During 1994, the Committee held five meetings.
During 1994, the Board of Directors held a total of nine meetings. All
directors except Mr. Connor attended more than 75% of the meetings of the Board
and the committees of which they were members. Mr. Connor attended 67% of such
meetings.
DIRECTORS' COMPENSATION
No fees are paid to directors who are officers of the Company.
Non-employee members of the Board receive a single annual retainer fee of
$13,000 for serving on the Company's Board and on CILCORP's Board. Non-employee
members of the Board who are not members of the Board of the Company's parent
receive an annual retainer fee of $9,800 for serving on the Company's Board.
These fees are prorated for less than
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<PAGE>
a year's service. Non-employee directors also receive an attendance fee of $750
for attending meetings of the Board of Directors of the Company or CILCORP and
an attendance fee of $750 for each meeting attended of committees of those
Boards. A single Board or committee attendance fee is payable to each director
in the event the Boards of this Company and CILCORP or committees of the Boards
of the Company and CILCORP meet on the same day. Directors are also reimbursed
for their travel expenses for each Board or committee meeting attended.
INDEPENDENT AUDITORS
Upon the recommendation of its Audit Committee, the Board of Directors of
the Company's parent, CILCORP Inc., has appointed Arthur Andersen LLP,
independent public accountants, to audit the accounts of the Company for 1995.
Arthur Andersen LLP is not expected to be represented at the annual meeting.
EXECUTIVE COMPENSATION
The following table sets forth the compensation earned for the years 1994,
1993 and 1992 for the Chief Executive Officer and the four highest compensated
executive officers of the Company whose total annual compensation exceeded
$100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY LTIP PAYOUTS(1) COMPENSATION(2)
<S> <C> <C> <C> <C>
R. W. Slone 1994 $ 226,720 $ 96,321 $ 30,977
Chairman, President and Chief 1993 205,500 88,635 28,611
Executive Officer 1992 195,250 60,976 22,371
W. M. Shay (3) 1994 156,818 49,852 19,418
Vice President 1993 150,437 34,864 17,953
1992 143,250 30,851 25,821
J. F. Vergon (4) 1994 140,270 63,012 12,513
Vice President 1993 134,564 57,114 11,635
1992 121,205 40,796 9,310
T. S. Romanowski 1994 127,795 58,775 11,751
Vice President 1993 121,705 55,162 10,894
1992 115,914 39,922 8,886
T. S. Kurtz 1994 124,309 56,820 8,622
Vice President 1993 118,120 53,012 8,022
1992 111,434 38,249 15,946
</TABLE>
9
<PAGE>
- ---------
(1) Amounts paid pursuant to the Company's EVA-Based Incentive Compensation
Plan.
(2) The amounts shown in this column for 1994 represent (a) Company
contributions under the Employees' Savings Plan: Mr. Slone $4,620, Mr. Shay
$4,234, Mr. Vergon $4,208, Mr. Romanowski $3,834 and Mr. Kurtz $3,729, and
(b) earnings on deferred compensation: Mr. Slone $26,357, Mr. Shay $15,184,
Mr. Vergon $8,305, Mr. Romanowski $7,917 and Mr. Kurtz $4,893.
(3) Elected vice president of the Company effective January 1, 1993. Previously
Mr. Shay was a vice president of CILCORP.
(4) Re-elected vice president of the Company effective March 1, 1993. Mr. Vergon
served as vice president and chief financial officer of CILCORP from January
1, 1993 through February 28, 1993.
EVA-BASED INCENTIVE COMPENSATION PLAN
Incentive compensation is awarded in accordance with the Company's EVA-
Based Incentive Compensation Plan ("EVA Plan") and the CILCORP Shareholder
Return Incentive Compensation Plan ("Shareholder Return Plan") approved by
CILCORP shareholders on April 27, 1993. The purpose of the EVA Plan is to
provide an incentive to eligible officers and senior managers and to increase
and maintain shareholder value by rewarding the achievement of these objectives.
EVA is a measure of profitability that is based on the difference between the
return earned on the capital invested in an enterprise and the cost of that
capital. This difference can be either positive or negative and results in an
addition to or a deduction from award balances accumulated from prior years.
Each year, one third of the net balance accumulated is paid to the participant.
That portion of the incentive compensation which has been deferred is "at risk"
since a negative EVA in a subsequent year may eliminate previously accumulated
balances. The calculation of the award pool is based, in part, on a fixed
percentage of the improvement in EVA from the prior year, and, in part, on a
fixed percentage of the average of EVA contributed over a three year period.
These percentages, which do not change from year to year, were determined when
the Plan was originally established. They were designed to create an award pool
of sufficient size to achieve the objectives of the Plan and are used only for
that purpose. Annually, at the outset of each plan year, the Finance Committee
determines the portion of the award pool to be allocated to each participant,
including the executive officers, based on the individual's job responsibilities
and the Committee's evaluation of the effect which that individual's performance
is expected to have on the size of the award pool. A portion of the award pool
is distributed, at the Committee's discretion, at the conclusion of each plan
year. Discretionary awards are determined on the basis of the CEO's
recommendation and the compensation policies established by the Committee.
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Both the non-discretionary and discretionary portions of an award are added to
each participant's account balance, one third of which is paid and the remainder
remains at risk in the account balance.
SHAREHOLDER RETURN INCENTIVE COMPENSATION PLAN
Participants in the Shareholder Return Plan may include employees of
CILCORP and its subsidiaries, including CILCO, who make or influence policy
decisions which impact the overall long term success of the holding company. The
purposes of the Shareholder Return Plan are to promote long-term growth in the
value of CILCORP common stock, to attract and retain executives of outstanding
ability, to encourage teamwork among the executives of CILCORP and its
subsidiaries, and to reward performance based on the successful achievement of
pre-established corporate financial goals. Under the Plan, shares are granted,
from time to time, to eligible key employees of CILCORP or its subsidiaries who,
due to the nature and scope of their positions, regularly and directly make or
influence policy decisions which impact the overall long-term results or success
of the Company and CILCORP. No awards were made in 1994.
LONG TERM INCENTIVE PLANS -- AWARDS IN 1994(1)
<TABLE>
<CAPTION>
NUMBER PERFORMANCE
OF SHARES, OR OTHER
UNITS OR PERIOD UNTIL
OTHER MATURATION ESTIMATED FUTURE PAYOUTS
NAME RIGHTS(2) OR PAYOUT(3) THRESHOLD(4) TARGET(5) MAXIMUM(6)
<S> <C> C> <C> <C> <C>
R. Wayne Slone $ 122,645 -- $ 58,467 $ 99,349 $ 175,401
William M. Shay 88,774 -- 29,435 59,026 88,304
James F. Vergon 81,301 -- 38,445 65,545 115,334
Thomas S. Romanowski 72,630 -- 35,654 59,864 106,961
Terrence S. Kurtz 70,650 -- 34,487 58,077 103,460
</TABLE>
- ---------
(1) Amounts listed are paid under the Company's EVA-Based Incentive Compensation
Plan which is described above.
(2) Amounts listed are the net increases in the 1994 plan year to previously
accumulated balances.
(3) Each year, one third of the net balance accumulated in the EVA Plan is paid
to the participant. (See Summary Compensation table for amounts paid in
1994.)
(4) Amounts listed are payable if net change in EVA in 1995 is zero.
(5) Amounts listed are payable if net change in EVA in 1995 is the same as in
1994.
(6) Amounts listed are accumulated balances at the beginning of the 1995 plan
year.
11
<PAGE>
CERTAIN PLANS
BENEFIT REPLACEMENT PLAN. The Board of Directors has established a
Benefit Replacement Plan (the "Plan"). The Plan provides for payments to Plan
participants from the Company's general funds to restore the retirement benefit
under the Company's Pension Plan when such benefit is restricted by (1) the
maximum defined benefit limitation of Section 415(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), (2) the index compensation limitation of
Code Section 401(a)(17), and (3) participation in certain of the Company's
deferred compensation plans. The Plan generally covers all CILCO Pension Plan
participants affected by these restrictions and provides for payment at the
times and in the forms of the Pension Plan.
PENSION PLAN. Pension benefits are provided through the Company's non-
contributory Pension Plan for Management, Office and Technical Employees.
Directors who are not employees do not participate in this Plan. Pension
benefits are determined using a formula based on years of service and highest
average rate of monthly earnings for any sixty consecutive month period. The
normal retirement date specified in the Pension Plan is age 65. Retirement prior
to age 62 results in an appropriate reduction in pension benefits.
The following table shows the aggregate annual benefits payable upon
retirement at normal retirement age under the Pension Plan and under the Benefit
Replacement Plan discussed above. The amounts shown are not subject to any
deduction for Social Security benefits or other offset amounts other than that
for an optional survivorship provision.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
<S> <C> <C> <C> <C> <C>
$ 175,000 $ 37,410 $ 49,878 $ 62,346 $ 74,814 $ 87,282
200,000 42,750 57,000 71,250 85,500 99,750
225,000 48,096 64,128 80,160 96,192 112,224
250,000 53,442 71,250 89,064 106,878 124,692
275,000 58,781 78,375 97,969 117,563 137,156
300,000 64,128 85,500 106,878 128,250 149,628
</TABLE>
The annual and long-term compensation shown for the individuals listed in
the above Summary Compensation Table is substantially compensation as covered by
the Pension Plan and the Benefit Replacement Plan. At January 1, 1995, the
credited years of service under the Pension Plan for the officers named in the
above table are as follows: R. W. Slone -- 36 years, W. M. Shay -- 12 years, J.
F. Vergon -- 23 years, T. S. Romanowski -- 23 years, and T. S. Kurtz -- 19
years.
12
<PAGE>
COMPENSATION PROTECTION PLAN. The Company's Board of Directors has
established a Compensation Protection Plan providing severance benefits to
eligible employees, including all individuals named in the Summary Compensation
Table above, in the event of (i) a termination of employment resulting directly
or indirectly from a sale of substantially all or certain assets of the Company
or (ii) a termination of employment within two years after a change in control
occurring involuntarily for a reason other than unacceptable performance or
occurring voluntarily with good reason as defined in the plan. A change in
control includes the sale of all or part of the business of the Company to a
person not controlled by CILCORP, a merger or consolidation of CILCORP in which
CILCORP does not survive or in which its common stock is converted, the
acquisition of 30% of the beneficial ownership of CILCORP by a person together
with the failure of continuing directors to constitute a majority of its Board
of Directors, or a sale of all or substantially all of the assets of CILCORP.
Upon a covered termination, a participant is entitled to a continuation of base
salary and benefit plan coverage for two years (or a shorter period for
participants below the position of vice president with less than 30 years of
service) after such termination.
FINANCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
BACKGROUND AND POLICIES. The Finance Committee of the Board of Directors
(the "Committee") is comprised of four non-employee members of the Board. The
Committee considers and makes recommendations to the Board with respect to the
compensation of the executive officers (the president and vice presidents) of
the Company. The Committee's compensation policies with respect to the executive
officers are as follows:
1. Compensation levels should be established which are internally fair and
equitable, bearing in mind (a) past practices, patterns and
relationships, and (b) the relationship between officer level
compensation and the compensation provided for top level managers
throughout the Company.
2. Compensation should be comparable and reasonable in relation to similar
positions in other utility companies of like size, structure and
characteristics.
3. Compensation of the executive officers should be directly related to
the economic value created for shareholders.
4. A compensation program should be designed to attract and retain
superior management.
EXECUTIVE OFFICER COMPENSATION PROGRAM. The Company's current executive
officer compensation program is comprised of two major components: base salary
and incentive compensation. Base salary levels for the Company's executive
officers are set by the Committee relative to other utility companies of similar
size and characteristics. In addition, the Committee also considers the
individual officer's experience and
13
<PAGE>
performance. Salaries of the executive officers are reviewed each year by the
Committee and may be adjusted based on the individual's contribution to the
Company's performance and competitive pay levels.
PRESIDENT'S COMPENSATION. In April 1994, Mr. Slone's base salary was
increased from $208,000 to $232,960, a 12% increase based on his performance
during 1993. In evaluating Mr. Slone's performance, the Committee gave equal
consideration to the following factors:
(1) The Company's performance was substantially in compliance with the
goals established in the Company's 1993 Business Plan.
(2) During 1993, several matters of particular significance were
accomplished which should enhance the Company's future performance.
These include:
. Development and implementation of a strategy to earn an adequate
return on the Company's investment in gas operations.
. Successful completion of the gas system upgrade in Springfield.
. Identification and development of investment opportunities in
energy related products and services including cogeneration.
. Debt refinancing at lower interest rates.
The Committee recognized that the Company's customers currently pay the
lowest utility rates in Illinois. Mr. Slone has successfully established a
competitive spirit in the Company that will be critical as the utility industry
encounters more competition.
Mr. Slone was paid an award of $96,321 in 1994 pursuant to the Company's
EVA-Based Incentive Compensation Plan, based on the Company's continued positive
performance during the twelve months ended September 30, 1994.
Finance Committee
Richard N. Ullman, Chairman
Marcus Alexis
John R. Brazil
Willard Bunn III
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<PAGE>
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders to be presented at the April 23, 1996 annual
meeting must be received not later than November 21, 1995 for inclusion in the
proxy statement and form of proxy relating to that meeting. Proposals should be
sent to the Secretary, Central Illinois Light Company, 300 Liberty Street,
Peoria, Illinois 61602.
OTHER MATTERS
The Board has no knowledge of any business to be presented for
consideration at the Annual Meeting other than that discussed above. Should any
other business properly come before the meeting or any adjournment thereof, it
is intended that the shares represented by proxies will be voted with respect
thereto in accordance with the best judgment of the persons named in such
proxies.
By Order of the Board of Directors,
John G. Sahn
Secretary
March 28, 1995
15
<PAGE>
[LOGO OF CILCO]
Central Illinois Light Company
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints D.E. Connor, R.O Viets, and J.G. Sahn,
and each of them, attorneys and proxies with power of substitution to each,
with authority to vote all shares which the undersigned would be entitled
to vote if personally present at the 1995 annual meeting of shareholders
of Central Illinois Light Company, or at any adjournment thereof, upon the
election of directors as set forth in the notice of meeting and proxy statement
dated March 28, 1995, and, in their discretion, upon any other matter which
may properly come before the meeting. The shares represented hereby will
be voted as directed on the reverse of this card.
IF NOT OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
---
DIRECTORS
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
PROXY. PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS BELOW. EACH JOINT
OWNER SHOULD SIGN. ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
OTHERS SIGNING IN A REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL
TITLES.
DATE ________________________, 1995.
___________________________________
SIGNATURES
___________________________________
ELECTION OF DIRECTORS
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked to vote for all nominees
to the contrary below) listed below
M. Alexis, J.R. Brazil, W. Bunn III, D.E. Connor, W.M. Shay, R.W. Slone,
K.E. Smith, R.N. Ullman, J.F. Vergon, R.O. Viets, and M.M. Yeomans.
Instruction: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- ---------------------------------------------------------------------------
NO POSTAGE REQUIRED IF RETURNED IN THE ENCLOSED
ENVELOPE AND MAILED IN THE UNITED STATES.
