<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
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 Section240.14a-11(c) or
Section240.14a-12
</TABLE>
CENTRAL ILLINOIS LIGHT 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):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING
Dear Shareholders:
The Annual Meeting of Shareholders of Central Illinois Light Company will be
held on Tuesday, May 23, 2000, at 1:30 PM, Central Time, at the principal office
of the Company, 300 Liberty Street, Peoria, Illinois, in order to:
1. Elect a Board of Directors; and
2. Transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on March 31, 2000, are entitled
to vote at the meeting.
By Order of the Board of Directors,
[SIGNATURE]
Craig W. Stensland
Secretary
April 17, 2000
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" or
"CILCO"), for use at the Annual Meeting of Shareholders to be held on Tuesday,
May 23, 2000, 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. If no choice has been specified, the persons
named in the proxy intend to vote for the election of the nominees listed
herein. 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, e-mail or fax.
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 on Form 10-K of the Company for the year ended
December 31, 1999, 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 31, 2000, 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 April 17, 2000.
VOTING SECURITIES AND PRINCIPAL HOLDERS
On March 31, 2000, 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 such shareholder 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 who 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
1
<PAGE>
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with respect
to that matter.
At March 31, 2000, the following officer of the Company was a beneficial
owner of shares of the Company's preferred stock, $100 par value, representing
less than .003% of the shares of that class outstanding.
<TABLE>
<CAPTION>
OFFICER NUMBER OF SHARES
- ---------------------------- ----------------------------
<S> <C>
T. S. Romanowski 5
</TABLE>
No other officer or director was the beneficial owner of any shares of the
Company's preferred or common stock.
The following information, regarding beneficial ownership of the Company's
equity securities on January 1, 2000, 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>
AMOUNT AND
NATURE OF
CLASS OF NAME AND ADDRESS OF BENEFICIAL PERCENT
STOCK BENEFICIAL OWNER OWNERSHIP OF CLASS
----- ---------------- --------- --------
<S> <C> <C> <C>
Common CILCORP Inc. 13,563,871(1) 100%
300 Hamilton Boulevard
Suite 300
Peoria, IL 61602
Class A AMVESCAP PLC 15,000(2) 6.82%
Preferred, 11 Devonshire Square
Series London EC2M 4YR
5.85 England
and
1315 Peachtree Street, N.E.
Atlanta, Georgia 30309
</TABLE>
- --------
(1) CILCORP Inc. has sole voting and dispositive power with respect to the
common shares. CILCORP Inc. is a wholly-owned subsidiary of The AES
Corporation.
(2) According to Schedule 13G dated February 10, 1999, AMVESCAP PLC, a Parent
Holding Company, has shared voting power and shared dispositive power, with
respect to these Series 5.85% Class A Preferred shares.
2
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Six 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 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 six
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.
JERRY D. CAGLE
VICE PRESIDENT OF CILCO
Director of CILCO since 1999
Mr. Cagle was born at Kewanee, Missouri, in 1950. He came to CILCO in
September of 1999 to assume responsibility as plant manager for CILCO's Indian
Trails cogeneration facility. In January of 2000, Mr. Cagle began his current
position as plant manager of CILCO's E.D. Edwards power generation facility. He
was elected vice president of the Company in October of 1999. Prior to
Mr. Cagle coming to CILCO, he was with CILCO's parent company, The AES
Corporation, since 1989 and worked at AES Warrior Run and AES Shady Point power
generation plants. Mr. Cagle has had extensive experience with gas and steam
turbines, and geothermal, nuclear and coal-fired power plants in the United
States and abroad.
SCOTT A. CISEL
VICE PRESIDENT OF CILCO
Director of CILCO since 1999
Mr. Cisel was born at Peoria, Illinois in 1953. He is a graduate of
Culver-Stockton College where he received a bachelor of science degree in
business administration and economics. He received a master's degree in liberal
studies from Bradley University in 1985. Mr. Cisel joined CILCO in 1975. He was
initially employed as a summer meter reader and advanced through various
management positions in sales and customer service. He was appointed
manager-commercial office in 1981; manager-consumer and energy services in 1984;
manager-Agricultural Research and Development Corporation ("ARDC") in 1987;
manager-rates, sales and customer service in 1988 and director-corporate sales
in 1993. Effective April 1, 1995, Mr. Cisel was elected vice president-sales and
marketing and, on November 9, 1995, he became responsible for federal and state
governmental and regulatory activities. He was promoted to his present position
as
3
<PAGE>
leader of CILCO's sales and marketing business unit in April 1999 and remains a
vice president. Mr. Cisel serves as a trustee of Eureka College, and is a member
of the board of directors of the Illinois State Chamber of Commerce and the
Tri-County Urban League. He is active in various professional and civic
organizations.
JAMES L. LUCKEY, III
VICE PRESIDENT OF CILCO
Director of CILCO since 1999
Mr. Luckey was born at Ocala, Florida, in 1960. He graduated from City
University in Bellevue, Washington, in 1993, with a bachelor of science degree
in technology/ engineering management. He was elected vice president of the
Company in December of 1999. In January 2000, Mr. Luckey became plant manager of
CILCO's Duck Creek power generation facility. Prior to coming to CILCO,
Mr. Luckey had worked with CILCO's parent company, The AES Corporation, at AES
Thames. His responsibilities at AES Thames included plant safety, water
treatment, budgeting, material handling, and control room operation. Before
joining AES in 1988, Mr. Luckey had seven years of experience with the United
States Navy in high pressure steam, electric generation and nuclear systems.
Mr. Luckey has served on the boards of local community service organizations.
GREG T. RUSSELL
VICE PRESIDENT OF CILCO
Director of CILCO since 1999
Mr. Russell was born at New London, Connecticut, in 1964. He came to CILCO
in June of 1999 to become a team leader at CILCO's E.D. Edwards power generation
facility. In December of 1999, he was elected vice president of the Company. In
January 2000, Mr. Russell became plant manager for CILCO's Indian Trails
cogeneration facility. Prior to coming to CILCO, Mr. Russell had been with
CILCO's parent company, The AES Corporation, since 1989. While at AES, he worked
at AES Southington, AES Barry Operations and AES Thames. Prior to AES, he worked
for General Dynamics Corporation in Groton, Connecticut.
ROBERT J. SPROWLS
VICE PRESIDENT OF CILCO
Director of CILCO since 1999
Mr. Sprowls was born at Kewanee, Illinois, in 1957. He graduated from Knox
College in 1979 with a bachelor of arts degree in economics and business
administration. He received a master of business administration degree from
Bradley University in 1980
4
<PAGE>
with concentration in the areas of finance and accounting. Mr. Sprowls is a
certified public accountant and a certified management accountant. He began his
career at CILCO in February of 1982 as an economic analyst. In March 1983, he
was promoted to senior budget analyst and became supervisor of budgeting and
forecasting in February 1986. In February 1988, he became CILCO treasurer and
held that position until October 1990 when he was elected CILCORP treasurer. In
April 1994, he assumed the additional responsibility of president of CILCORP
Ventures Inc. ("CVI") and became chairman of CVI's subsidiary, CILCORP Energy
Services Inc., in May 1994. On April 1, 1995, he was elected vice
president-strategic services for CILCO and in December 1995 became assistant to
the CEO of CILCORP. In August 1996, Mr. Sprowls became vice president and chief
financial officer of QST Enterprises Inc. and in April 1997 he became senior
vice president and chief financial officer of QST Enterprises Inc. In
August 1998, he became vice president and chief financial officer of CILCO. He
was promoted to his present position as leader of CILCO's energy delivery
business unit in March 1999 and remains a vice president of the Company. He is a
member of the board of directors of Goodwill Industries of Central Illinois.
PAUL D. STINSON
PRESIDENT OF CILCO
Director of CILCO since 1999
Mr. Stinson was born at Cambridge, England, in 1957. He received a
bachelor of science degree in Chemical Engineering from Texas A&M University in
1979. Mr. Stinson joined The AES Corporation in 1986 after working for seven
years in oil refining and synthetic fuels industry development for Exxon.
Mr. Stinson was initially employed by AES as a project engineer on the
construction of the 180 MW coal-fired AES Thames cogeneration power station.
After completing the construction and commissioning work, he stayed to supervise
operations. In 1991, Mr. Stinson was appointed project manager for construction
of the 250 MW coal-fired AES Cedar Bay cogeneration power station in Florida. In
1993, he moved to England to become plant manager of the 700 MW Medway Power
Station, a combined cycle gas turbine facility under construction. Mr. Stinson
became manager of AES's Silk Road Group in 1997, where he was responsible for
business development and operations in the countries of the former Soviet Union.
Operations in Kazakhstan included five coal-fired electric and combined heat and
power facilities and two hydroelectric plants with a total capacity of 5400 MW
electric and 2000 MW thermal. In the Republic of Georgia, the 360,000-customer
distribution company for the capital city of Tbilisi is majority-owned by AES.
Since April 1999, Mr. Stinson has been manager of the AES Great Plains Group
recently formed in the Central United States. The AES Great Plains Group
includes CILCORP and CILCO as well as the 320MW AES Shady Point cogeneration
facility in eastern Oklahoma and a business development
5
<PAGE>
office near Chicago. In October 1999, Mr. Stinson assumed the responsibilities
of president and director of both CILCORP and CILCO.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors functions as a Committee of the Whole and has no
committees. During 1999, the Board of Directors took action, as needed, by
unanimous written consent.
DIRECTORS' COMPENSATION
No fees are paid to directors who are officers of the Company.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation
earned for the years 1999, 1998 and 1997 for the former Chairman and Chief
Executive Officer, the current President, two highly compensated executive
officers and two former executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ------------------------
OTHER ANNUAL SECURITIES LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION UNDERLYING PAYOUTS COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($) OPTIONS(#)(1) ($)(2) ($)(3)
- --------------------- -------- --------- -------- ------------ ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul D. Stinson (4) 1999 185,000 175,000 71,892 7,369 -- 15,966
President 1998 -- -- -- -- -- --
1997 -- -- -- -- -- --
Scott A. Cisel (5) 1999 135,954 53,394 -- 1,318 -- 55,736
Vice President 1998 133,000 65,208 -- -- -- 5,749
1997 131,375 -- -- -- 92,513 5,491
Robert J. 1999 150,997 57,661 -- 1,867 -- 57,625
Sprowls (6) 1998 150,177 100,000 -- -- -- 8,985
Vice President 1997 135,916 65,000 -- -- 61,428 8,369
Robert O. Viets (7) 1999 491,460 84,795 -- -- -- 6,097,871
Former Chairman, 1998 432,292 -- -- -- 251,345 42,334
President and 1997 406,423 -- -- -- 61,272 37,817
Chief Executive
Officer
William M. Shay (8) 1999 215,867 42,488 -- -- -- 1,745,957
Former Senior Vice 1998 217,458 -- -- -- 203,651 29,856
President 1997 207,737 -- -- -- 66,497 26,844
James F. Vergon (9) 1999 212,387 42,488 -- -- -- 1,731,456
Former Senior Vice 1998 210,002 -- -- -- 197,664 18,506
President 1997 207,738 -- -- -- 65,616 16,831
</TABLE>
- --------
(1) The number of options shown as compensation as of December 31, 1999, were
for services rendered for 1999. Stock options were awarded in November of
1999 to
7
<PAGE>
Mr. Cisel and Mr. Sprowls, and stock options were awarded to
Messrs. Stinson, Cisel and Sprowls by the Compensation Committee of the AES
Board of Directors in February of 2000.
(2) LTIP payments reported previously include payments made to Messrs. Cisel,
Sprowls, Viets, Shay and Vergon pursuant to CILCORP Inc.'s
EVA-Registered Trademark--Based Incentive Compensation Plan. For
Messrs. Cisel and Sprowls, the Plan was terminated in 1997. For
Messrs. Viets, Shay and Vergon, the Plan was terminated in 1998.
(3) For Mr. Stinson, this column reports contributions to The AES Corporation's
Profit-Sharing and Stock Ownership Plan and the Employee Stock Ownership
Plan of AES and allocations to AES's Supplemental Retirement Plan.
Specifically, for Mr. Stinson in 1999, the amount contributed to the AES
Profit-Sharing and Stock Ownership Plan and Employee Stock Ownership Plan
was $8,782, and the amount allocated to the Supplemental Retirement Plan was
$7,184. For Messrs. Viets, Cisel, Sprowls, Shay and Vergon, amounts shown in
this column represent employer contributions to the CILCO Employees' Savings
Plan and earnings on deferred compensation. For the CILCO Employees' Savings
Plan, the amounts contributed in 1999 were as follows: Mr. Viets $4,800;
Mr. Shay $4,800; Mr. Vergon $4,800; Mr. Sprowls $4,321; and Mr. Cisel
$4,300. For Messrs. Viets, Shay and Vergon, this column also includes
compensation paid or entitled to be received in 1999 from the CILCORP
Shareholder Return Incentive Compensation Plan. The Plan was terminated in
1999 and all benefits payable through the Plan were paid pursuant to the
merger agreement among The AES Corporation, CILCORP and Midwest Energy Inc.
as follows: Mr. Viets $5,510,000; Mr. Shay $1,711,000; and Mr. Vergon
$1,711,000. For Mr. Viets, this column also includes $536,250 paid in 1999
upon liquidation of his account under the Company's deferred compensation
stock plans. For Messrs. Cisel and Sprowls, this column also includes a
$50,000 payment in 1999 which was made as a result of the merger among AES,
CILCORP and Midwest Energy Inc.
(4) Mr. Stinson is a vice president of The AES Corporation, which owns all the
outstanding common stock of CILCORP Inc. CILCORP owns all the common stock
of Central Illinois Light Company. Mr. Stinson is president of both CILCO
and CILCORP. In that Mr. Stinson also provides services to The AES
Corporation, his salary is allocated among CILCO, CILCORP and AES.
Mr. Stinson's salary is determined by The AES Corporation.
(5) Mr. Cisel is a vice president of CILCORP and a vice president of CILCO.
Mr. Cisel's compensation is determined by CILCO except for Securities
Underlying the Options, which is determined by The AES Corporation.
8
<PAGE>
(6) Mr. Sprowls is a vice president of CILCORP and a vice president of CILCO.
Mr. Sprowls' compensation is determined by CILCO except for Securities
Underlying the Options, which is determined by The AES Corporation.
(7) Mr. Viets' compensation related to his position as president and chief
executive officer of CILCORP. He was also chairman, president and chief
executive officer of CILCO until his resignation on October 18, 1999, the
effective date of the merger among The AES Corporation, CILCORP Inc. and
Midwest Energy Inc. Mr. Viets retired from CILCO effective November 30,
1999.
(8) Mr. Shay served as senior vice president of CILCO until his resignation on
October 18, 1999, the effective date of the merger among The AES
Corporation, CILCORP Inc. and Midwest Energy Inc. Mr. Shay left the
employment of CILCO effective October 31, 1999.
(9) Mr. Vergon served as senior vice president of CILCO until his resignation on
October 18, 1999, the effective date of the merger among The AES
Corporation, CILCORP Inc. and Midwest Energy Inc. Mr. Vergon retired from
CILCO effective October 31, 1999.
EVA-Registered Trademark- is a registered trademark of Stern Stewart & Co.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on options granted for 1999 to
the named executive officers.
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS
NUMBER OF GRANTED
SECURITIES TO ALL
UNDERLYING AES
OPTIONS PEOPLE EXERCISE GRANT DATE
GRANTED FOR FISCAL OR BASE EXPIRATION PRESENT VALUE
NAME AND PRINCIPAL POSITION (#)(1) YEAR PRICE($/SH) DATE ($)(2)
- --------------------------- ---------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Paul D. Stinson 7,369 .29% 72.63 02/04/10 350,027
Scott A. Cisel 560 .03% 57.94 11/30/09 21,706
758 .03% 72.63 02/04/10 36,005
Robert J. Sprowls 642 .03% 57.94 11/30/09 24,884
1,225 .05% 72.63 02/04/10 58,188
</TABLE>
- --------
(1) All options are for shares of common stock of The AES Corporation. Options
granted for services performed in 1999 were granted at the fair market value
on the date of grant, and vest at the rate of 50% per year through
December 2001.
9
<PAGE>
(2) The Black-Scholes stock option pricing model was used to value the stock
options on the grant dates (February 4, 2000 and November 30, 1999). AES'
assumptions under this model include an expected volatility of 46.76%, a
6.63% risk-free rate of return, no dividends, and a vesting adjustment of
4.5%. The options have 10 year terms and vest at 50% per year. No
adjustments were made for non-transferability or risk of forfeiture.
The use of such amounts and assumptions are not intended to forecast any
possible future appreciation of the AES' stock price or dividend policy.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION
VALUE
The following table provides information on option exercises in 1999 by
the named executive officers and the value of such officers' unexercised options
at December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF DOLLAR
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS AT OPTIONS AT
SHARES DOLLAR FY-END FY-END
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
EXERCISE REALIZED(1) UNEXERCISABLE UNEXERCISABLE(2)
----------- ----------- ------------- -----------------
<S> <C> <C> <C> <C>
Paul D. Stinson 13,814 763,454 93,695/11,111 5,277,382/449,996
Scott A. Cisel -- -- 0/560 0/9,415
Robert J. Sprowls -- -- 0/642 0/10,793
</TABLE>
- --------
(1) The amounts in this column have been calculated based upon the difference
between the fair market value of the securities underlying each stock option
on the date of exercise and its exercise price.
(2) The amounts in this column have been calculated based on the difference
between the fair market value on December 31, 1999, of $74.75 per share for
each security underlying such stock option and the per-share exercise price.
10
<PAGE>
MANAGEMENT CONTINUITY AGREEMENTS
The Company, with the approval of the Board of Directors, entered into
management continuity agreements with Mr. Sprowls and Mr. Cisel. The agreements
provide that, in the event of a change in control of CILCORP Inc. (as defined in
the agreement) and a subsequent termination of employment within two years of
the change in control, CILCORP Inc., or its successor, is obligated to pay
termination benefits for a period of up to two years. As a result of the change
in control of CILCORP Inc. pertaining to its merger with The AES Corporation on
October 18, 1999, the two-year period following said change in control will
expire on October 17, 2001. Termination benefits include the continuation of
salary, incentive compensation and certain employee benefits. Under the
agreement, compensation and benefits are payable for a period not to exceed two
years and termination must be involuntary or due to material changes in the
terms of employment.
CERTAIN PLANS
BENEFIT REPLACEMENT PLAN. The Board of Directors has established a
Benefit Replacement Plan (the "Benefit Replacement Plan"). The Benefit
Replacement Plan provides for payments to participants from the Company's
general funds to restore the retirement benefit under the Company's
non-contributory Pension Plan for Management, Office and Technical Employees
(the "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 indexed compensation limitation of Code
Section 401(a)(17), and (3) participation in certain of the Company's deferred
compensation plans. The Benefit Replacement Plan generally covers all 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 Pension 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 age specified in the Pension Plan is age 65. Retirement
between the ages of 55 and 62 results in an appropriate reduction in pension
benefits.
The following table shows the aggregate annual benefits payable on a
straight life annuity basis 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.
11
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
----------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$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
400,000 85,500 114,000 142,500 171,000 199,500
500,000 106,878 142,500 178,128 213,715 249,378
</TABLE>
The sum of 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 2000,
the credited years of service under the Pension Plan for such individuals are as
follows: R. O. Viets--26 years, R. J. Sprowls--18 years, S.A. Cisel--25 years,
W.M. Shay--17 years, J. F. Vergon--28 years. Mr. Stinson does not participate in
the Pension Plan.
REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PRIOR TO THE MERGER. Prior to the closure of the merger, the
compensation of the Company's chief executive officer was determined by the
Board of Directors of CILCORP Inc. The compensation of all other executive
officers of the Company was determined by CILCO's Board of Directors. The
compensation policies with respect to the executive officers were 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.
PRE-MERGER COMPENSATION. Robert O. Viets served as president and chief
executive officer of CILCORP Inc. in addition to serving as chairman and chief
executive
12
<PAGE>
officer of CILCO until the effective date of the Merger on October 18, 1999. His
compensation in his capacities as an officer of both companies was determined by
the Board of Directors of CILCORP upon recommendation of its Compensation
Committee. The Board of Directors of CILCO endorsed and adopted the
recommendation and determination for 1999 of the CILCORP Board of Directors and
its Compensation Committee whereby Mr. Viets was awarded a salary of $453,200
commencing April 1, 1999, representing an increase of 3.0% over his prior salary
level. The increase was determined on the basis of the corporate-wide payroll
increase authorized by the Merger Agreement among AES, CILCORP and Midwest
Energy, Inc. dated as of November 22, 1998. The Agreement limited the aggregate
annual increase in the payroll of CILCORP and its subsidiaries to 3%.
POST-MERGER COMPENSATION. The Company's current executive officer
compensation program is modeled after The AES Corporation compensation program.
The guidelines for compensation of executive officers are designed by The
AES Corporation ("AES") to provide fair and competitive levels of total
compensation while integrating pay with performance. Executive officers are
evaluated annually on the basis of both individual responsibilities and
contributions, as well as AES company-wide results in two related areas:
(i) corporate culture (or principles) and (ii) business or functional area
performance.
There are three elements in AES's executive officer compensation program,
which is consistent with how most people who work for AES are compensated. These
elements are base salary, annual incentive compensation and stock option
program.
Base salary is adjusted annually to account for general economic and cost
of living changes. Adjustments are also made periodically to recognize
significant new or additional responsibilities of individual executive officers.
The guidelines provide base salary compensation generally consistent with AES's
interpretation of industry averages for individuals with similar responsibility
levels.
Annual incentive compensation is based upon both objective and subjective
measures in the areas of corporate culture and business or functional area
performance, and generally takes the form of bonuses payable after year-end.
With respect to corporate culture, AES's shared principles of fairness,
integrity, fun and social responsibility are integral to its operations and
serve as its founding principles. These principles apply equally to the internal
activities of AES as well as its external relationships. Each executive
officer's individual contribution to demonstrating and nurturing these shared
values is reviewed and considered as a factor in determining annual incentive
compensation. Evaluations in this area are inherently subjective.
The second area considered in the determination of annual incentive
compensation is the individual executive officer's performance with respect to
his or her related
13
<PAGE>
business responsibilities and/or functional area. Although all aspects of an
individual's responsibilities are considered in determining annual incentive
compensation, several quantitative measures of annual performance are considered
significant, including operating margin improvements, operating reliability,
earnings per share contributions, environmental performance, and plant and AES
company-wide safety. The qualitative factors considered significant include
business and project development progress, effective strategic planning and
implementation, AES company-wide support, understanding of and adherence to
AES's values, and community relations and people development.
Important strategic successes or failures can take several years to
translate into objectively measurable results. Annual incentive compensation is
not computed using a mathematical formula of pre-determined performance goals
and objective criteria. As a result, the ultimate determination of the amount,
if any, of annual incentive compensation is made at the end of each year based
on a subjective evaluation of several quantitative and qualitative factors, with
primary emphasis given this year to those factors listed in the preceding
paragraph. There are no targeted, minimum or maximum levels of annual incentive
compensation, and such compensation does not necessarily bear any consistent
relationship to salary amounts or total compensation.
The AES stock option program is used to reward people for the corporate
responsibilities they undertake, their performance of those duties and to help
them to think and act like owners. All executive officers and approximately 51%
of the total people in the AES company located in the United States participate
in this program. Historically, because of differing legal environments in many
countries, options had been primarily granted to U.S. people. However, AES has
taken steps to incorporate those people who reside outside of the United States
into this program by qualifying its stock option plan in each country where AES
people currently reside or work, and AES expects the total participation to
increase in the future. Stock options are usually granted annually at the fair
market value on the date of grant and provide vesting periods to reward people
for continued service to AES. The determination of the number of options to be
granted to executive officers is based upon the same factors as such officer's
annual incentive compensation discussed above with additional consideration
given to the number of options previously granted.
Since 1994, AES has participated in an annual survey conducted by an
outside consulting firm which encompasses over 400 public companies. Based in
part on the survey results, guidelines were established for suggested ranges of
option grants to executive officers as well as the rest of the people at AES.
Based on the survey, the guidelines were established at ranges for eligible
participants between the 50(th) and 90(th) percentile of similar companies. As
with annual incentive compensation, the determination of an individual's grant
is subjective and although AES has established suggested guidelines, the grants
are not formula-based.
14
<PAGE>
Total compensation is reviewed to determine whether amounts are
competitive with other companies whose operations are similar in type, size and
complexity with those of AES, as well as a broad range of similarly sized
companies. Comparisons are made with published amounts, where available, and,
from time to time, AES also participates in various industry-sponsored
compensation surveys in addition to the public-company survey described above.
AES also has, in the past, engaged an independent compensation consultant to
specifically review the level and appropriateness of executive officer
compensation. Other than as described above, AES uses the results of surveys,
when available, for informational purposes only and does not target individual
elements of or total compensation to any specific range of survey results (i.e.,
high, low or median) other than the suggested guidelines for stock option grants
as discussed in the previous paragraph. Because each individual's compensation
is determined, in part, by experience and performance, actual compensation
generally varies from industry averages.
Executive officers also participate in AES's profit sharing plan (or
deferred compensation plan for executive officers) on the same terms as all
other people at AES, subject to any legal limitations on amounts that may be
contributed or benefits that may be payable under the plan. Matching
contributions and annual profit sharing contributions are made with the common
stock of AES to further encourage long-term performance. In addition, certain
individuals at AES participate in AES's supplemental retirement plan, which
provides supplemental retirement benefits to "highly compensated employees" (as
defined in the Internal Revenue Code) of any amount which would be contributed
on such individual's behalf under the profit sharing plan (or the deferred
compensation plan for executive officers) but is not so contributed because of
the limitations contained in the Internal Revenue Code.
In most cases, AES has taken steps to qualify income paid to any officer
as a deductible business expense pursuant to regulations issued by the Internal
Revenue Service pursuant to Section 162(m) of the Internal Revenue Code with
respect to qualifying compensation paid to executive officers in excess of
$1 million. Compensation earned pursuant to the exercise of options granted
under AES's former stock option plan (which was discontinued in 1991) is not
considered for purposes of the $1 million aggregate limit, and exercises under
the 1991 Plan are similarly excluded. AES will continue to consider the
implications of qualifying all compensation as a deductible expense under
15
<PAGE>
Section 162 (m), but retains the discretion to pay bonuses commensurate with an
executive officer's contributions to the success to AES, irrespective of whether
such amounts are entirely deductible.
<TABLE>
<S> <C>
CILCO Board of Directors
J. D. Cagle
S. A. Cisel
J. L. Luckey, III
G. T. Russell
R. J. Sprowls
P. D. Stinson
</TABLE>
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.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders to be presented at the May 22, 2001, Annual
Meeting must be received not later than January 19, 2001, if they are to be
included in the Company's proxy statement and form of proxy relating to that
meeting. Shareholder proposals received after that date but before April 3,
2001, will not be included in the Company's proxy statement and form of proxy
relating to the meeting and shareholder proposals received after April 3, 2001,
will be considered untimely under the rules of the Securities and Exchange
Commission governing discretionary voting on matters not covered in a proxy
statement. Proposals should be sent to the Secretary, Central Illinois Light
Company, 300 Liberty Street, Peoria, Illinois 61602.
<TABLE>
<S> <C>
By Order of the Board of Directors,
[SIGNATURE]
Craig W. Stensland
Secretary
</TABLE>
April 17, 2000
16
<PAGE>
[CILCO LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints P. D. Stinson, R. J. Sprowls, S. A.
Cisel and C. W. Stensland 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 2000 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 April 17, 2000 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)
<PAGE>
TEAR OFF THIS PORTION
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:___________________________, 2000
______________________________________
SIGNATURE/S
______________________________________
Election of Directors
/ / FOR all nominees listed / / WITHHOLD AUTHORITY
below (except as marked to vote for all nominees
to the contrary below) listed below
J. D. Cagle, S. A. Cisel, J. L. Luckey III, G. T. Russell,
R. J. Sprowls, P. D. Stinson
Instructions: 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.
REMOVE PROXY AT PERFORATION AND RETURN IN ENCLOSED BUSINESS REPLY ENVELOPE.
