SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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 Section 240.14a-11(c) or Section 240.14a-12
THE EMPIRE DISTRICT ELECTRIC COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (Check the appropriate box):
[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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(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:
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(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>
THE EMPIRE DISTRICT ELECTRIC COMPANY
602 JOPLIN STREET
JOPLIN, MISSOURI 64801
March 21, 1997
Dear Stockholder:
You are cordially invited to attend the Company's Annual Meeting of
Stockholders to be held at 10:30 a.m., Joplin time, on Thursday, April 24, 1997
at the Holiday Inn, 3615 South Range Line, Joplin, Missouri.
At the meeting, stockholders will be asked to elect four persons to the
Company's Board of Directors for three-year terms.
Your participation in this meeting either in person or by proxy is important.
Even if you plan to attend the meeting, please sign, date and return the
enclosed proxy promptly. At the meeting, if you desire to vote in person, you
may withdraw your proxy.
Sincerely,
/s/ R.L. Lamb
R.L. Lamb
President
<PAGE>
THE EMPIRE DISTRICT ELECTRIC COMPANY
602 JOPLIN STREET
JOPLIN, MISSOURI 64801
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Holders of Common Stock:
Notice is hereby given that the Annual Meeting of Stockholders of The Empire
District Electric Company (the "Company") will be held on Thursday the 24th of
April, 1997, at 10:30 a.m., Joplin time, at the Holiday Inn, 3615 South Range
Line, Joplin, Missouri, for the following purposes:
1. To elect four Directors for terms of three years.
2. To transact such other business as may properly come before the meeting,
or any adjournment or adjournments thereof.
Any of the foregoing may be considered or acted upon at the first session of
the meeting or at any adjournment or adjournments thereof.
Holders of Common Stock of record on the books of the Company at the close of
business on March 3, 1997 will be entitled to vote on all matters which may come
before the meeting or any adjournment or adjournments thereof. A complete list
of the stockholders entitled to vote at the meeting will be open at the office
of the Company, 602 Joplin Street, Joplin, Missouri, to examination by any
stockholder for any purpose germane to the meeting, for a period of ten days
prior to the meeting, and also at the meeting.
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND IN PERSON ARE REQUESTED, REGARDLESS
OF THE NUMBER OF SHARES OF STOCK OWNED, TO SIGN AND DATE THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED
IF MAILED IN THE UNITED STATES.
Joplin, Missouri
Dated: March 21, 1997
J.S. Watson
Secretary-Treasurer
<PAGE>
THE EMPIRE DISTRICT ELECTRIC COMPANY
602 JOPLIN STREET
JOPLIN, MISSOURI 64801
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 1997
This proxy statement is furnished in connection with the solicitation on
behalf of the Board of Directors of The Empire District Electric Company, a
Kansas corporation (the "Company"), of proxies to be voted at the Annual Meeting
of Stockholders of the Company to be held on Thursday, April 24, 1997, and at
any and all adjournments of the meeting.
A form of proxy is enclosed for execution by stockholders. Any stockholder
giving a proxy has the right to revoke it at any time before the proxy is
exercised by written notice to the Secretary-Treasurer of the Company, or a duly
executed proxy bearing a later date or voting in person at the meeting.
A copy of the Annual Report of the Company for the year ended December 31,
1996 has been mailed to each stockholder of record on the record date for the
meeting. You are urged to read the entire Annual Report.
The entire cost of the solicitation of proxies will be borne by the Company.
Solicitation, commencing on or about March 21, 1997, will be made by use of the
mails, telephone, telegraph and by regular employees of the Company without
additional compensation therefor. The Company will request brokers or other
persons holding stock in their names, or in the names of their nominees, to
forward proxy material to the beneficial owners of such stock or request
authority for the execution of the proxies and will reimburse such brokers or
other persons for their expense in so doing.
March 3, 1997 has been fixed as the record date for the determination of
stockholders entitled to vote at the meeting and at any adjournment or
adjournments thereof. The stock transfer books will not be closed. As of the
record date, there were 16,448,309 shares of Common Stock outstanding. Holders
of Common Stock will be entitled to one vote per share on all matters presented
to the meeting.
No person to the knowledge of the Company is the beneficial owner of 5% or
more of any class of the Company's voting securities.
1. ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with the directors in
each class serving for a term of three years. The term of office of one class of
directors expires each year in rotation so that one class is elected at each
Annual Meeting for a full three-year term. Unless otherwise specified, the
persons named in the accompanying proxy intend to vote the shares represented by
such proxies for the election of Mr. R.D. Hammons, Mr. J.R. Herschend, Mr. M.W.
McKinney, and Mrs. M.M. Posner as Class I Directors, all of whom are members of
the current Board of Directors. Directors will be elected by a plurality of the
votes of the stockholders present in person or represented by proxy at the
meeting with any abstentions being treated as shares not voted.
While it is not expected that any of the nominees will be unable to qualify
for or accept office, if for any reason one or more shall be unable to do so,
proxies will be voted for nominees selected by the Board of Directors.
The name, age, principal occupation for the last five years, period of
service as a Director of the Company and certain other directorships of each
Director of the Company are set forth below.
<PAGE>
CLASS I DIRECTORS
(TERMS EXPIRE IN 1997, NOMINEES FOR ELECTION
AT THE ANNUAL MEETING OF STOCKHOLDERS FOR
TERMS TO EXPIRE IN 2000)
R.D. Hammons, 63, Chief Executive Officer, Chairman and Director of Hammons
Products Company (food processing). Director of the Company since 1983.
J.R. Herschend, 64, Co-owner, co-founder and Chairman of the Board of
Directors of Silver Dollar City, Inc. (entertainment attractions). Director of
the Company since January 1994. Director of Ozark Mountain Bank, Branson,
Missouri; Director of Central Bancompany, Jefferson City, Missouri.
M.W. McKinney, 52, Executive Vice President-Commercial Operations of the
Company since 1995. Executive Vice President of the Company from 1994 to 1995.
Vice President-Customer Services of the Company from 1982 to 1994. Director of
the Company since 1991. Mr. McKinney will become President and Chief Executive
Officer of the Company effective April 1, 1997.
M.M. Posner, 57, President and Principal of Posner McCleary Inc., an
international advertising, marketing and communications firm. Director of the
Company since 1991. Director of United Missouri Bank of Jefferson City,
Jefferson City, Missouri.
CLASS II DIRECTORS
(TERMS EXPIRE IN 1998)
V.E. Brill, 55, Vice President-Energy Supply of the Company since 1995. Vice
President-Finance of the Company from 1983 to 1995. Director of the Company
since 1989.
R.C. Hartley, 49, President of The Hartley Agency (independent insurance
agency); Chairman and Vice President of Kansas Information Consortium, Inc.
(network manager of the Information Network of Kansas). Director of the Company
since 1988.
F.E. Jeffries, 66, Chairman and Director of Phoenix Duff & Phelps Corporation
(financial services firm). Director of the Company since 1984. Director of Duff
& Phelps Utilities Income Inc., Chicago, Illinois; Duff & Phelps Utilities
Tax-Free Income Inc., Chicago, Illinois; Duff & Phelps Utility and Corporate
Bond Trust Inc., Chicago, Illinois.
CLASS III DIRECTORS
(TERMS EXPIRE IN 1999)
M.F. Chubb, Jr., 63, Senior Vice President of Eagle-Picher Industries Inc.
(diversified industrial products) until 1996 (retired). Director of the Company
since 1991. Director of Eagle-Picher Industries Inc., Cincinnati, Ohio until
1996 (retired).
R.L. Lamb, 64, President of the Company since 1982. Executive Vice President
of the Company from 1978 to 1982. Vice President-Customer Services of the
Company from 1974 to 1978. Director of the Company since 1978. Mr. Lamb will
retire as President of the Company effective March 31, 1997, but will continue
as a Director of the Company.
R.E. Mayes, 62, Chairman, President and Chief Executive Officer of Carmar
Group Inc. (underground storage). Director of the Company since 1991. Director
of United Missouri Bancshares, Kansas City, Missouri.
DIRECTOR COMPENSATION
Each Director of the Company who is not an officer or full-time employee of
the Company is paid a monthly retainer for his or her services as a Director at
a rate of $12,000 per annum. In addition, a fee of $750 is paid to each such
Director for each regular meeting or any special meeting of Directors and for
each meeting of a Committee of the Board (the chairman of each Committee
receives an additional
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$250 for each such Committee meeting) which such Director attends in person or
by telephone. During 1996, the Board of Directors held eight meetings. The
Company's 1996 Stock Incentive Plan permits Directors of the Company to receive
shares of Common Stock in lieu of all or a portion of any cash payment for
services rendered as a Director. In addition, a Director may defer all or part
of any compensation payable for his or her services as such under the terms of
the Company's Deferred Compensation Plan for Directors. Amounts so deferred are
credited to an account for the benefit of the Director and accrue an interest
equivalent at a rate equal to the prime rate. A Director is entitled to receive
all amounts deferred in a number of annual installments following retirement, as
elected by him or her.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has an Audit Committee of the Board of Directors. The Audit
Committee reviews with the Company's independent auditors the scope and results
of its auditing procedures, meets with the Company's internal auditors regarding
internal auditing procedures and establishes procedures to assure the adequacy
of the accounting practices and internal controls of the Company. The Audit
Committee held two meetings during 1996. The members of the Audit Committee are
Messrs. Chubb, Hartley and Jeffries and Mrs. Posner.
The Company has a Compensation Committee of the Board of Directors. The
Compensation Committee fixes the compensation of each of the senior officers of
the Company and administers certain of the Company's employee benefit plans. The
Committee held one meeting during 1996. The members of the Compensation
Committee are Messrs. Herschend, Jeffries and Mayes and Mrs. Posner.
The Company has a Nominating Committee of the Board of Directors which meets
to suggest to the Board nominees to fill vacancies on the Board of Directors
when they occur. The Committee met one time in 1996. The members of the
Nominating Committee are Messrs. Chubb, Hammons, Herschend and Mayes. The
Nominating Committee will consider nominees recommended by stockholders for
election to the Board of Directors. Recommendations of nominees for election
should be submitted in writing to the Secretary-Treasurer of the Company.
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<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table shows information with respect to the number of shares of
Common Stock of the Company beneficially owned as of March 3, 1997 by the Chief
Executive Officer, the three other most highly compensated executive officers of
the Company, each Director and the Directors and executive officers of the
Company, as a group. The shares reported as beneficially owned include (a)
shares owned by certain relatives with whom the Directors or officers are
presumed for proxy statement reporting purposes to share voting or investment
power and (b) shares accrued for the benefit of certain officers under certain
employee benefit plans of the Company.
<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK BENEFICIALLY
NAME POSITION OWNED
---------------- ---------------------------- -------------------
<S> <C> <C>
R.L. Lamb ...... President 19,640
M.W. McKinney .. Executive Vice President- 17,010
Commercial Operations
V.E. Brill...... Vice President-Energy Supply 6,607
R.B. Fancher ... Vice President-Finance 1,657
M.F. Chubb, Jr. Director 2,975
R.D. Hammons ... Director 2,688
R.C. Hartley ... Director 5,186*
J.R. Herschend . Director 1,500
F.E. Jeffries .. Director 15,218
R.E. Mayes ..... Director 1,000
M.M. Posner ... Director 10,800
Directors and executive officers, as a group.. 87,679
</TABLE>
* Mr. Hartley also beneficially owns 2,000 shares of the Company's 8 1/8 %
Cumulative Preferred Stock.
No Director or officer owns more than 0.5% of the outstanding shares of the
Company's Common Stock or 8 1/8 % Cumulative Preferred Stock. No Director or
officer owns any shares of the Company's 5% Cumulative Preferred Stock or 4 3/4
% Cumulative Preferred Stock. The Directors and executive officers as a group
own less than 1% of the outstanding shares of the Company's Common Stock and of
its 8 1/8 % Cumulative Preferred Stock.
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<PAGE>
2. EXECUTIVE COMPENSATION
Set forth below is information concerning the various forms of compensation
of each person who was at December 31, 1996 (i) the Chief Executive Officer of
the Company or (ii) one of the three most highly compensated executive officers
of the Company, other than the Chief Executive Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- --------------
NAME AND RESTRICTED ALL OTHER
PRINCIPAL OTHER ANNUAL STOCK COMPEN-
POSITION YEAR SALARY BONUS COMPENSATION AWARD(S)(1) SATION(2)
- - ------------------- ------- ---------- --------- -------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
R.L. Lamb(3)....... 1996 $230,000 $10,124 $ 125 $10,116 $5,910
President......... 1995 220,000 21,788 -- 21,772 4,410
1994 208,500 11,341 91 11,332 4,308
M.W. McKinney(3) .. 1996 140,000 5,806 222 5,814 4,470
Executive Vice.... 1995 127,000 9,019 930 9,016 3,365
President-........ 1994 114,500 2,691 143 2,686 3,744
Commercial
Operations
V.E. Brill......... 1996 123,000 3,879 -- 3,870 4,327
Vice President-... 1995 114,500 6,185 -- 6,187 3,763
Energy Supply..... 1994 109,000 2,612 212 2,620 3,749
R.B. Fancher....... 1996 113,000 2,942 -- 2,934 4,055
Vice President-... 1995 103,667 4,788 180 4,800 3,685
Finance........... 1994 98,000 2,346 1,228 2,358 3,360
</TABLE>
- - ----------
(1) As of December 31, 1996, Messrs. Lamb, McKinney, Brill and Fancher had been
awarded 2132, 729, 569 and 470 shares, respectively, of unvested restricted
stock which on such date had values of $39,975, $13,669, $10,669 and
$8,813, respectively. Messrs. Lamb, McKinney, Brill and Fancher were
awarded 562, 323, 215 and 163 shares, respectively, for 1996. Dividend
equivalents are paid on such shares. All of the foregoing shares were
awarded pursuant to either the Company's 1986 or 1996 Stock Incentive Plan.
(2) Includes for 1996: (a) Company matching contributions under the Company's
401(k) Retirement Plan in the amounts of $3,750, $4,204, $3,686 and $3,395
for Messrs. Lamb, McKinney, Brill and Fancher, respectively, and (b)
Company payments of premiums for term life insurance on behalf of Messrs.
Lamb, McKinney, Brill and Fancher in the amount of $2,160, $266, $641 and
$660, respectively.
(3) R.L. Lamb will retire as President of the Company effective March 31, 1997.
M.W. McKinney will become President and Chief Executive Officer of the
Company effective April 1, 1997. Mr. Lamb will continue as a Director of
the Company.
RETIREMENT PLANS
The Company maintains a Retirement Plan covering substantially all employees.
The Retirement Plan is a noncontributory, trusteed pension plan designed to meet
the requirements of Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). Each covered employee is eligible for retirement at normal
retirement date (age 65), with early retirement permitted under certain
conditions. The Company also maintains a Supplemental Executive Retirement Plan
(the "SERP") which covers officers of the Company who are participants in the
Retirement Plan. The SERP is intended to provide benefits which, except for the
application of the limits of Section 415 and Section 401(a)(17) of the Code,
would have been payable under the Retirement Plan. The SERP is not qualified
under the Code and benefits payable thereunder are paid out of the general funds
of the Company.
The following table shows estimated maximum annual benefits payable following
retirement (assuming payments on a normal life annuity basis and not including
any survivor benefit) to an employee in specified remuneration and Years of
Credited Service classifications. These amounts are based on
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<PAGE>
an assumed final rate of compensation and retirement at normal retirement age of
65 and are approximated without consideration of any reduction which would
result from various options which may be elected prior to actual retirement.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
AVERAGE YEARS OF CREDITED SERVICE(b)
ANNUAL ---------------------------------------------------------------------
EARNINGS(a) 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- - ---------------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
100,000........ 22,725 30,300 37,875 45,450 53,025 61,150
125,000........ 28,825 38,425 48,025 57,650 67,250 77,400
150,000........ 34,925 46,550 58,200 69,825 81,475 93,650
175,000........ 41,000 54,675 68,350 82,025 95,700 109,900
200,000........ 47,100 62,800 78,500 94,200 109,900 125,000
225,000........ 53,200 70,925 88,650 106,400 124,125 125,000
250,000........ 59,300 79,050 98,825 118,575 125,000 125,000
</TABLE>
- - ----------
(a) "Average Annual Earnings" is the average annual compensation over the five
consecutive years within the ten-year period prior to termination of
employment which produces the highest average. The compensation used to
calculate such average for a salaried employee is the aggregate of the
employee's annual compensation which generally corresponds with the
employee's salary and incentive compensation. The earnings of Messrs. Lamb,
McKinney, Brill and Fancher covered by the plans correspond substantially
to such amounts shown for them in the Summary Compensation Table.
(b) As of December 31, 1996, Messrs. Lamb, McKinney, Brill and Fancher had
accrued 39, 29, 34 and 25 Years of Credited Service, respectively, under
the Retirement Plans.
SEVERANCE PAY PLAN
The Company has a severance pay plan (the "Severance Plan") which provides
certain key employees with severance benefits following a change in control of
the Company. A change in control generally includes: (i) certain events relating
to the continued existence of the Company in its current form; (ii) an
acquisition by any person of 10% or more of the securities entitled to vote in
the election of directors or (iii) the current Directors, or their approved
successors, no longer constitute a majority of the Board of Directors. Certain
executive officers and senior managers of the Company have been selected by the
Compensation Committee of the Board of Directors to enter into one-year
agreements pursuant to the Severance Plan which are automatically extended for
one-year terms unless the Company has given prior notice of termination.
A participant in the Severance Plan is entitled to receive certain benefits
in the event of certain involuntary terminations of employment occurring within
three years after a change in control, or a voluntary termination of employment
occurring between twelve and eighteen months after a change in control. A senior
officer participant would be entitled to receive benefits of three times such
participant's annual compensation, as determined by the Board of Directors and
set forth in the applicable agreement. A participant who is not a senior officer
would receive approximately two weeks of severance compensation for each full
year of employment with the Company with a minimum of 17 weeks. Payments to
participants resulting from involuntary terminations are to be paid in a lump
sum within 30 days following termination, while payments resulting from
voluntary termination are paid in monthly installments and cease if the
participant becomes otherwise employed. In addition, participants who qualify
for payments under the Severance Plan will continue to receive benefits for a
specified period of time under health, insurance and other employee benefit
plans of the Company in existence at the time of the change in control.
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<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation policies are designed to enable the
Company to attract and retain high caliber individuals for key positions while
at the same time linking their compensation to the Company's financial
performance and their own performance. The linkage between compensation and
performance is accomplished by dividing executive compensation into two
components: a base salary that is set at the beginning of the year and incentive
compensation that is determined at the end of the year based on the extent to
which specific, predetermined goals were achieved. Depending on the extent to
which these goals are met, the Company's senior executives can earn total
compensation which is above, at or below the level of senior executive
compensation at comparable electric utilities.
At the beginning of each year, the Committee determines a target total
compensation amount for each senior executive, including the President. To
determine this amount, the Committee first takes the mid-point of the range of
total compensation paid to executives in positions comparable to that of the
Company's President at other utilities. The Committee then determines a
corresponding amount for each other senior officer based on a comparison of the
officer's responsibilities with those of the President. The resulting amount is
adjusted for each senior officer to reflect the officer's experience and
performance. In determining the appropriate mid-point amounts in 1996, the
Committee used an industry compensation study prepared by a management
consulting firm and took into account increases in compensation for businesses
generally in 1996 predicted by various consulting firms and recent compensation
increases received by the Company's employees. A greater number of companies
were included in the management consulting firm's study than are included in the
Standard & Poor's Electric Companies Index used in the Performance Chart. The
companies included in that study are, for the most part, either electric or
electric and gas utilities.
The Company's total compensation package for senior executives, including the
President, has an incentive compensation component. Executives can earn
incentive compensation based on the extent to which Company and personal
performance goals are met. In 1996, the areas in which performance was measured
in determining incentive compensation and the relative weighting of each area
were: (1) the Company's return on common equity compared to that of all other
electric utilities reported in an industry survey of approximately 165 electric
and gas utilities over a five-year period (40%), (2) reduction of controllable
expenses over a five-year period (20%), (3) control of fuel and purchase power
expenses (20%) and (4) for each senior officer, the achievement of predetermined
personal goals for the year (20%).
In each of these four areas, three performance levels, "threshold," "par" and
"maximum," are set at the beginning of the year. For executives to receive any
incentive compensation based on any particular performance measure, at least the
"threshold" level of performance must have been achieved. Greater incentive
compensation is payable if the "par" or "maximum" performance level is achieved.
If the par level objective in each of the four performance areas is achieved,
each senior executive would receive incentive compensation which, when added to
base salary, would equal the individual's target total compensation. In 1996,
the Company did not meet the threshold level of performance for control of fuel
and purchase power expenses. It also did not meet the "threshold" level of
performance for return on equity. The Company did meet the "par" level, and came
close to the "maximum" level, of performance for reduction of controllable
expenses.
Regardless of the extent to which the four performance criteria are met in
any year, no incentive compensation is payable in any year in which the Company
does not pay dividends per share of Common Stock at least equal to the dividends
per share paid in the preceding year. In 1996, the dividends paid on each share
of the Company's Common Stock were equal to those paid in 1995.
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<PAGE>
The Company's incentive compensation policy also seeks to encourage senior
executives to hold down the Company's electric rates so that the Company can
remain competitive with alternate energy suppliers by adjusting incentive
compensation otherwise payable to reflect the level of the Company's residential
electric rates compared to those of the 12 other utilities in the Company's
geographic area. The adjustment ranges from a 10% increase in incentive
compensation if the Company has the lowest rates in the comparison group to
elimination of incentive compensation if the Company is one of the four
companies in the comparison group with the highest rates. In 1996, Empire had
the fourth lowest retail electric rates of the 13 utilities, which resulted in
no adjustment to incentive compensation.
Incentive compensation is typically paid one-half in cash at the end of the
year and one-half in Common Stock. The Common Stock portion of incentive
compensation is restricted stock that generally is not issued unless the
recipient continues to be employed by the Company for three years after the
stock is awarded. The three-year vesting period is intended to encourage
continuity among the Company's senior executives. In addition, by increasing the
stock ownership of senior management, it is hoped that these individuals will
have an even greater incentive to advance the interests of the Company's
stockholders.
The President's compensation is determined in the same manner as the
compensation for the other senior executives. In 1996, the President's base
salary was increased 4.55% above its 1995 level reflecting in part the
President's leadership in connection with the steps taken by the Company to
improve its competitiveness. These steps included changing the way various
options for meeting the Company's future capacity requirements are analyzed to
take into account anticipated competition and determining to restructure the
Company's organizational structure to promote efficiency and effectiveness, a
determination which led to the continued implementation of the Company's
Competitive Positioning Process in 1996, a program first instituted in the fall
of 1995. In setting the President's 1996 target total compensation, the
Committee also took into account the Company's ongoing efforts to obtain cost
effective sources of energy to meet anticipated future demand and the
President's involvement in local economic development activities and his
membership on the board of directors of two industry organizations. The
President's incentive compensation is based on the same factors as the incentive
compensation of the other senior executive officers, although a greater
percentage of the President's target total compensation is comprised of
incentive compensation. As a result of the level of attainment of performance
goals, the sum of Mr. Lamb's base salary and his incentive compensation for 1996
was approximately 91.2% of his target total compensation.
Based on the Company's current level of executive compensation, the Committee
does not believe it necessary to adopt a policy with respect to Section 162(m)
of the Internal Revenue Code at this time.
F.E. Jeffries, Chairman
J.R. Herschend
R.E. Mayes
M.M. Posner
8
<PAGE>
COMPARISON OF STOCKHOLDER RETURNS
Set forth below is a graph indicating the value at the end of the specified
years of a $100 investment made on December 31, 1991 in Company Common Stock and
similar investments made in the securities of the companies in the Standard &
Poor's 500 Composite Index ("S&P 500 Composite") and the Standard & Poor's
Electric Companies Index ("Electric Companies"). The graph assumes that
dividends were reinvested when received.
IMAGE OMITTED
(Performance graph -- Total return to stockholders from December 31, 1991 to
December 31, 1996 for the Company, S$P 500 Composite and the S&P Electric
Companies index).
The Empire
District S&P 500 Electric
Electric Company Composite Companies
1991 ... $ 100.00 $ 100.00 $ 100.00
1992 ... 94.04 107.62 105.88
1993 ... 97.15 118.46 119.23
1994 ... 80.64 120.03 103.65
1995 ... 96.75 165.13 135.87
1996 ... 108.78 203.05 135.65
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers to file with the Securities and Exchange
Commission and the New York Stock Exchange reports of changes in ownership of
the Company's equity securities. Securities and Exchange Commission regulations
require that Directors and executive officers furnish to the Company copies of
all Section 16(a) forms they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended December 31, 1996, all its officers and directors complied with applicable
Section 16(a) filing requirements.
9
<PAGE>
3. OTHER MATTERS
Price Waterhouse LLP has been the Company's independent auditors since 1992.
Representatives of Price Waterhouse LLP are expected to be present at the
meeting for the purpose of answering questions which any stockholder may wish to
ask and such representatives will have an opportunity to make a statement at the
meeting.
The Company knows of no other matter to come before the meeting. If, however,
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the same in accordance with their
judgment on such other matters.
4. STOCKHOLDER PROPOSALS
The Company will not consider including a stockholder's proposal for action
at its 1998 Annual Meeting in the proxy material to be mailed to its
stockholders in connection with such meeting unless such proposal is received at
the principal office of the Company no later than November 21, 1997.
Dated: March 21, 1997
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
WHO DO NOT EXPECT TO ATTEND IN PERSON ARE URGED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.
10
<PAGE>
CAHILL GORDON & REINDEL
80 PINE STREET
NEW YORK, NEW YORK 10005
March 21, 1997
(212) 701-3135
Re: The Empire District Electric Company;
Definitive Proxy Statement
-------------------------------------
Ladies and Gentlemen:
On behalf of The Empire District Electric Company, we are filing, via EDGAR,
under the Securities Exchange Act of 1934, as amended, a copy of the Company's
notice of meeting, proxy statement and form of proxy, to be used in connection
with the Company's Annual Meeting of Stockholders to be held on April 24, 1997.
Copies of the material filed herewith are intended to be released to
stockholders on or about March 21, 1997.
Any questions or comments regarding this filing should be directed to the
undersigned at the above-listed number.
Very truly yours,
/s/ John Carey
John Carey
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
cc: Ms. Janet S. Watson
Gary W. Wolf, Esq.
Jeffrey M. Held, Esq.
<PAGE>
P R O X Y
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS OF
THE EMPIRE DISTRICT ELECTRIC COMPANY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints M.W. McKINNEY, R.B. FANCHER and J.S. WATSON, or any one of them, with
power of substitution, as attorneys and proxies to appear and vote all the
shares of Common Stock standing in the name of the undersigned, with all the
powers the undersigned would possess if personally present, at the Annual
Meeting of Stockholders of The Empire District Electric Company to be held at
the Holiday Inn, 3615 South Range Line, in the City of Joplin, State of
Missouri, on the 24th day of April, 1997, at 10:30 a.m., Joplin time, and at any
and all adjournments and postponements thereof, in the manner indicated on the
reverse hereof.
(CONTINUED ON THE REVERSE SIDE)
<PAGE>
<TABLE>
<CAPTION>
[X] Please mark
your vote
as this
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR item (1)
<S> <C>
(1) The election of directors
FOR the election of Directors in accordance with the provisions of the WITHHOLD AUTHORITY to vote
accompanying proxy statement (except as marked to the contrary below) for all nominees listed below
[ ] [ ]
(Instruction: You may withhold authority to vote for any individual nominee by striking a line through the nominee's name below:)
Class I (to serve until the 2000 Annual Meeting): R.D. Hammons, J.R. Herschend, M.W. McKinney and M.M. Posner
- - -----------------------------------------------------------------------------------------------------------------------------------
(2) Upon any other matter which may properly come before the meeting in their
discretion.
Every properly signed proxy will be voted in
the manner specified hereon and, in the
absence of specification, will be voted FOR
item (1).
The undersigned hereby acknowledges receipt of
the Notice of Annual Meeting of Stockholders
and Proxy Statement annexed thereto and of the
Company's Annual Report for 1996.
Signature(s) Date
-------------------------------------------------------------------- ----------------------------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such.
</TABLE>
<PAGE>
P R O X Y
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS OF
THE EMPIRE DISTRICT ELECTRIC COMPANY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints M.W. McKINNEY, R.B. FANCHER and J.S. WATSON, or any of them, with power
of substitution, as attorneys and proxies to appear and vote all the shares of
Common Stock standing in the name of the undersigned, with all the powers the
undersigned would possess if personally present, at the Annual Meeting of
Stockholders of The Empire District Electric Company to be held at the Holiday
Inn, 3615 South Range Line, in the City of Joplin, State of Missouri, on the
24th day of April, 1997, at 10:30 a.m., Joplin time, and at any and all
adjournments and postponements thereof, in the manner indicated on the reverse
hereof.
(CONTINUED ON THE REVERSE SIDE)
The Board of Directors recommends a vote FOR item (1).
<TABLE>
<CAPTION>
<S> <C>
(1) The election of directors
FOR the election of Directors in accordance with the provisions of the
accompanying proxy statement (except as marked to the contrary below) [ ]
WITHHOLD AUTHORITY to vote for all nominees listed below [ ]
(Instruction: You may withhold authority to vote for any individual nominee by striking a line through the nominee's name below:)
Class I (to serve until the 2000 Annual Meeting): R.D. Hammons, J.R. Herschend, M.W. McKinney and M.M. Posner.
(2) Upon any other matter which may properly come before the meeting in their discretion.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREON AND, IN THE ABSENCE OF SPECIFICATION, WILL BE VOTED FOR
ITEM (1).
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement annexed thereto
and of the Company's Annual Report for 1996.
Dated: __________________________, 1997
________________________________________
________________________________________
Signature(s) of Stockholder
NOTE: Please sign as name appears hereon.
Joint owners should each sign. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
</TABLE>
