<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [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 Rule 14a-11(c) or Rule 14a-12
CONSUMERS POWER COMPANY
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(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):
[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 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[CONSUMERS ENERGY LOGO]
CONSUMERS ENERGY COMPANY
CALL AND NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1998
To the Shareholders of Consumers Energy Company:
The annual meeting of shareholders of Consumers Energy Company will be held
on Friday, the 22nd day of May 1998, at 10:30 A.M., Eastern Daylight Savings
Time, at the Dearborn Inn, 20301 Oakwood Boulevard, Dearborn, Michigan 48124.
The meeting is for the following purposes:
(1) Electing a Board of Directors of 10 members;
(2) Ratifying the appointment of Arthur Andersen LLP, independent public
accountants, to audit the financial statements of Consumers Energy
Company for the year ending December 31, 1998; and
(3) Transacting such other business as may properly come before the meeting.
The annual report to the shareholders for the year 1997, including financial
statements, has been furnished to you.
The Board of Directors has fixed March 25, 1998 as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting.
All shareholders are cordially invited to attend the annual meeting. WE ARE NOT
ASKING YOU FOR A PROXY.
By order of the Board of Directors,
Thomas A. McNish, Secretary
Consumers Energy Company
212 West Michigan Avenue
Jackson, Michigan 49201
April 20, 1998
<PAGE> 3
INFORMATION STATEMENT
------------------------
INTRODUCTION
This Information Statement is furnished by the Board of Directors of
Consumers Energy Company ("Consumers") in connection with the Annual Meeting of
Shareholders to be held on May 22, 1998.
As of December 31, 1997, Consumers' outstanding Common Stock ($10 par value)
and Preferred Stock ($100 par value) consisted of 84,108,789 shares of Common
Stock held by CMS Energy Corporation and 441,599 shares of Preferred Stock.
Holders of Preferred and Common Stock are entitled to 1 vote for each share and
shareholders have cumulative voting rights for the election of directors; that
is, holders of preferred and common shares are entitled to as many votes as
equal the number of shares held multiplied by the number of directors to be
elected, and they may cast all of such votes for a single nominee or distribute
them among any two or more nominees as they choose.
While all shareholders are cordially invited to attend the annual meeting,
WE ARE NOT ASKING YOU FOR A PROXY. We have been advised that all 84,108,789
Consumers shares held by CMS Energy Corporation (99.5% of the Consumers shares
entitled to vote) will be voted in favor of the proposed directors and in favor
of the appointment of the auditor, thus assuring the adoption of these
proposals.
To the knowledge of management, no person except CMS Energy owns
beneficially more than 5% of any class of the Company's outstanding voting
securities.
The determination of approval of corporate action by the shareholders is
based on votes "for" and "against". Abstentions and broker non-votes are not
counted as "against" votes but are counted in the determination of a quorum.
INCORPORATION BY REFERENCE -- CMS ENERGY CORPORATION PROXY STATEMENT
Please refer to the proxy statement of CMS Energy Corporation, which is
dated April 20, 1998 and is furnished to you herewith, for information with
respect to the nominees for directors, meetings and committees of the Board of
Directors, compensation of directors and executive officers and various other
1998 proxy statement information. This information appears beginning with the
heading "Nominees for Election as Members of the Board of Directors" on Page 2
of CMS Energy Corporation's proxy statement, and is incorporated by reference
herein.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The federal securities laws require Consumers' directors and designated
executive officers, and persons who own more that 10% of Consumers' stock, to
file with the Securities and Exchange Commission reports of ownership and
changes in ownership of any securities or derivative securities of Consumers. To
Consumers' knowledge, during the year ended December 31, 1997 all Consumers'
directors and designated executive officers made all required filings.
RATIFICATION OF THE APPOINTMENT OF AUDITORS
Subject to approval at the Annual Meeting, the Board of Directors has
appointed Arthur Andersen LLP, independent public accountants, to audit the
financial statements of Consumers for the year 1998. Arthur Andersen LLP also
served as Consumers' auditors for the year 1997. A representative of Arthur
Andersen LLP will be present at the annual meeting of shareholders and will have
an opportunity to make a statement and respond to appropriate questions.
<PAGE> 4
EXECUTIVE COMPENSATION
The following charts contain information concerning annual and long-term
compensation and awards of stock options and restricted stock under CMS Energy's
Performance Incentive Stock Plan for Mr. Michael G. Morris who resigned as
Consumers' President and CEO effective August 22, 1997. The years of service for
Mr. Morris for purpose of determining an annual pension benefit under the
Pension Plan table shown in the CMS Energy Proxy Statement were 18.54.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION(1)
-----------------------
AWARDS PAYOUTS
ANNUAL ---------- ----------
COMPENSATION SECURITIES LONG-TERM
-------------------------- UNDERLYING INCENTIVE ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS PAYOUTS(2) COMPENSATION(3)
--------------------------- ---- ------ ----- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Michael G. Morris.............. 1997 $350,000 $ 0 30,000 $374,828 $10,500
President and CEO 1996 490,000 398,130 24,000 205,905 14,700
1995 451,000 314,780 20,000 72,220 13,530
</TABLE>
- -------------------------
(1) Mr. Morris owned beneficially as of December 31, 1997 20,577 shares of CMS
Energy Common Stock, for which he has or shares voting and investment
powers. All non-performance based restricted stock shares previously held
were forfeited upon his termination of employment.
(2) Market value of Common Stock paid under CMS Energy's Performance Incentive
Stock Plan for three-year performance periods.
(3) Employer matching contribution to defined contribution plans.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING PERCENTAGE OF TOTAL EXERCISE GRANT DATE
OPTIONS OPTIONS GRANTED TO PRICE PER EXPIRATION PRESENT
NAME GRANTED EMPLOYEES IN 1997 SHARE DATE VALUE(1)
---- ---------- ------------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Michael G. Morris.................... 30,000 6.75 $35.9375 8/23/07 $191,400
</TABLE>
- -------------------------
(1) Based on the Black-Scholes Model described in the footnote to the comparable
table in the CMS Energy Proxy Statement.
3
<PAGE> 5
AGGREGATED OPTIONS/SARS EXERCISES IN 1997 AND YEAR-END OPTIONS/SARS VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES EXERCISED
UNDERLYING IN-THE-MONEY
SHARES ACQUIRED VALUE UNEXERCISED OPTIONS/ OPTIONS/SARS AT
NAME ON EXERCISE REALIZED SARS AT YEAR END YEAR END
---- --------------- -------- -------------------- ---------------
<S> <C> <C> <C> <C>
Michael G. Morris................. 135,000 $1,404,462 0 0
</TABLE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1997
<TABLE>
<CAPTION>
NUMBER OF PERIOD UNTIL
NAME SHARES PAYOUT(1)
---- --------- ------------
<S> <C> <C>
Michael G. Morris........................................... 19,500 2-5 years
</TABLE>
- -------------------------
(1) The shares were forfeited under terms of the CMS Energy Performance
Incentive Stock Plan upon Mr. Morris' termination of employment.
4
