<PAGE>
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 Section240.14a-11(c) or
Section240.14a-12
UTILICORP UNITED INC.
- --------------------------------------------------------------------------------
(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)(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):
-----------------------------------------------------------------------
(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>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 7, 1997
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of UtiliCorp
United Inc. will be held at the Kansas City Marriott Downtown, 200 West 12th
Street, Kansas City, Missouri on Wednesday, May 7, 1997, at 2:00 p.m. (Kansas
City time), on that date and thereafter as it may from time to time be
adjourned, for the following purposes:
1. To elect three Directors of the Company to hold office for three
years, and until their successors have been duly elected and qualified;
2. To consider and transact such other business as may properly come
before the meeting or any adjournment thereof.
The Company's stock transfer books will not be closed for this meeting, but
in lieu thereof the Board of Directors has fixed the close of business March 7,
1997, as the record date for the determination of the stockholders entitled to
notice of and to vote at this meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Dale J. Wolf
VICE PRESIDENT AND CORPORATE SECRETARY
March 24, 1997
IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED
PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL
BE GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
<PAGE>
UTILICORP UNITED INC.
P.O. BOX 13287
KANSAS CITY, MISSOURI 64199-3287
------------------------
PROXY STATEMENT
RELATING TO THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD MAY 7, 1997
------------------------
GENERAL
The enclosed Proxy is solicited by the Board of Directors of UtiliCorp
United Inc. (hereinafter referred to as the "Company" or "UCU") for use at the
Annual Meeting of Stockholders to be held at the Kansas City Marriott Downtown,
200 West 12th Street, at 2:00 p.m. (Kansas City time), on Wednesday, May 7,
1997, for the purposes set forth in the foregoing Notice of Annual Meeting of
Stockholders. This proxy statement and the form of proxy will be mailed to
stockholders on or about March 24, 1997. A stockholder giving a proxy has the
power to revoke it at any time prior to its exercise by notifying the Corporate
Secretary of the Company. Unless the proxy is revoked, or unless it is received
in such form as to render it invalid, the shares represented by it will be voted
in accordance with the instructions contained therein.
On March 7, 1997, there were 53,218,261 shares of common stock, par value $1
per share (hereinafter referred to as "Common Stock"), of the Company
outstanding, each share of such stock being entitled to one vote, except that
each stockholder on the vote for nominees for election of Directors is entitled
to exercise the right of cumulative voting. Cumulative voting entitles the
stockholder to cast as many votes as shall equal the number of shares owned
multiplied by the number of Directors to be elected, and to cast all of such
votes for a single Director, or to distribute the votes among those to be voted
for. The three nominees for election as Directors who receive the greatest
number of votes cast, a quorum (the majority of the shares entitled to vote)
being present in person or by proxy, shall become Directors at the conclusion of
the tabulation of votes. The abstention or failure to vote shares so present and
broker nonvotes does not have the effect of a vote "against" a nominee since
only a plurality of votes cast (rather than of votes present) is necessary to
elect a director. The votes are counted and certified by one or more inspectors
appointed by the Company in advance of the Annual Meeting of Stockholders in
accordance with Delaware Corporation Law. No shares of any other class of the
Company's stock are entitled to vote. The Board of Directors has fixed March 7,
1997, as the record date for the determination of the stockholders entitled to
notice of and to vote at the Annual Meeting or any adjournment thereof.
<PAGE>
INFORMATION WITH RESPECT TO DIRECTORS
<TABLE>
<CAPTION>
YEAR PRINCIPAL OCCUPATION YEAR FIRST
TERM OR EMPLOYMENT AND ELECTED
NAME EXPIRES POSITION WITH THE COMPANY OR APPOINTED AGE
- -------------------------------- ----------- -------------------------------------------------- --------------- ---
<S> <C> <C> <C> <C>
*Richard C. Green, Jr........... 1997 Chairman of the Board and Chief Executive Officer 1982 42
of the Company
*Avis G. Tucker................. 1997 Editor and Publisher of The Daily Star-Journal, 1973 81
Warrensburg, Missouri
*L. Patton Kline................ 1997 Retired Vice Chairman of Marsh & McLennan, Inc., 1986 68
New York, New York
John R. Baker.................. 1998 Retired Vice Chairman of the Board of the Company 1971 70
Dr. Stanley O. Ikenberry....... 1998 President of the American Council on Education, 1993 62
Washington, DC
Irvine O. Hockaday, Jr......... 1998 President and Chief Executive Officer of Hallmark 1995 60
Cards, Inc.,
Kansas City, Missouri
Robert F. Jackson, Jr.......... 1999 Retired President of CharterCorp, Kansas City, 1981 71
Missouri
Herman Cain.................... 1999 Chairman of the Board of Godfather's Pizza, Inc., 1992 51
Omaha, Nebraska
Robert K. Green................ 1999 President of the Company 1993 35
</TABLE>
- ------------------------
* Nominee for election as Director at this meeting.
Richard C. Green, Jr. has served as Chairman of the Board since February
1989 and Chief Executive Officer of the Company since May 1985 and served as
President of the Company from May 1985 through February 1996. Mr. Green is a
director of BHA Group, Inc., Kansas City, Missouri and CAT, Ltd., Bermuda.
Avis G. Tucker served as Chairman of the Board of the Company from May 1982
through February 1989 and has been editor and publisher of The Daily
Star-Journal in Warrensburg, Missouri during the past five years. Mrs. Tucker
previously served as a director of United Telecommunications, Inc.
L. Patton Kline retired as Vice Chairman of Marsh & McLennan, Incorporated
(an international insurance brokerage company), a subsidiary of Marsh & McLennan
Companies, Inc., in 1988, a position he held for four years. He was President of
Marsh & McLennan Companies, Inc. from 1980 to 1984. Mr. Kline served as a
director of Marsh & McLennan Companies, Inc. from 1975 to 1988. He is also a
director of PHH Group, Inc.
John R. Baker retired as Vice Chairman of the Board in December 1995, a
position he held since May 1991. He also served as Senior Vice President of the
Company from May 1985 through December 1992.
Stanley O. Ikenberry, Ph.D., is President of the American Council on
Education and Regent Professor and President Emeritus of the University of
Illinois. He previously served as President of the University from 1979 to 1995.
Dr. Ikenberry serves as a director for Pfizer, Inc. Dr. Ikenberry also serves as
Chairman of the Board for the Carnegie Foundation for the Advancement of
Teaching.
Irvine O. Hockaday, Jr. has served as President and Chief Executive Officer
of Hallmark Cards, Inc. since January 1986 and served as Executive Vice
President of Hallmark Cards, Inc. from 1983 through
2
<PAGE>
December 1985. Mr. Hockaday serves as Trustee of the Hall Foundation and the
Aspen Institute and is a director of the Ford Motor Company and Dow Jones, Inc.
Robert F. Jackson, Jr. retired as President of CharterCorp (a bank holding
company) in 1985. Mr. Jackson has served as a director on the boards of various
Missouri banks.
Herman Cain is Chairman of the Board of Godfather's Pizza, Inc. in Omaha,
Nebraska. He has been with Godfather's Pizza, Inc. for the past ten years. Mr.
Cain also serves as Chief Executive Officer of the National Restaurant
Association and as director of Nabisco Holdings Corp., SUPERVALU, INC. and the
Whirlpool Corporation.
Robert K. Green has served as President of the Company since February 1996,
and earlier served as Managing Executive Vice President of the Company from
January 1993 to February 1996. He has held several executive positions at the
Company's Missouri Public Service division since 1988, including two years as
President. Mr. Green is Chairman of the Kansas City Metropolitan YMCA, President
of the Heart of America Council, Boy Scouts of America and a director of UMB
Bank, n.a.
Richard C. Green, Jr. and Robert K. Green are brothers and are nephews of
Avis G. Tucker.
The Audit Committee of the Board of Directors presently consists of Dr.
Stanley O. Ikenberry, L. Patton Kline and Robert F. Jackson, Jr. The function of
the committee is to make recommendations concerning the selection each year of
independent auditors of the Company, to review the effectiveness of the
Company's internal auditing methods and procedures, to determine through
discussions with the independent auditors whether any instructions or
limitations have been placed upon them in connection with either the scope of
the audit or its implementation, to review the financial statements and related
notes with the independent auditors to ensure such statements and notes fully
disclose all material affairs of the Company and to recommend approval or
non-approval of such financial statements and related notes.
The Pension Committee consists of Avis G. Tucker, John R. Baker and Robert
K. Green. The function of the committee is to establish and administer the
Company's retirement plan and certain other related employee benefit plans.
The Compensation Committee presently consists of L. Patton Kline, Dr.
Stanley O. Ikenberry and Herman Cain. The function of the committee is to review
and make recommendations to the Board of Directors regarding policies, practices
and procedures relating to compensation of key employees and the establishment
and administration of compensation plans.
The Nominating Committee consists of Avis G. Tucker, Dr. Stanley O.
Ikenberry, and Herman Cain. The function of the committee is to receive, review
and maintain files of individuals qualified to be recommended as nominees for
election as Directors of the Company. The Nominating Committee will consider
candidates for the Board of Directors suggested by stockholders. Stockholders
desiring to suggest candidates should advise the Secretary of the Company in
writing by December 31 of the year preceding the annual meeting of stockholders
and include sufficient biographical material to permit an appropriate
evaluation.
During 1996, the Board of Directors met seven times, the Audit Committee met
three times, the Pension Committee met two times and the Compensation Committee
met two times. The Nominating Committee did not meet during 1996. All Directors
attended at least 75% of the meetings of the Board and the committees on which
they served.
Each non-employee Director receives an annual fee of $20,000. Additionally,
each non-employee Director annually receives $10,000 in shares of Company Common
Stock pursuant to the 1990 Non-Employee Director Stock Plan. Directors who are
employees receive no annual fee for serving on the Board or any of its
committees. Non-employee Directors are paid a fee of $1,000 for each Board of
Directors' meeting attended plus reimbursement by the Company for all travel
expenses incurred in attending such meetings. Non-employee Directors who are
members of the Pension and Executive Committees receive an annual fee of $2,500
plus reimbursement for all travel expenses. Members of the
3
<PAGE>
Audit, Compensation and Nominating Committees receive an annual fee of $2,500
plus reimbursement for travel expenses.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
Furnished below is information as to the beneficial ownership of Common
Stock as of January 31, 1997, for (a) each Director of the Company, (b) the five
named Executive Officers and (c) Executive Officers as a group. The beneficial
owner has sole voting and investment power over the shares shown, unless
otherwise indicated.
<TABLE>
<CAPTION>
NUMBER
NAME OF INDIVIDUAL OR GROUP OF SHARES PERCENT OF CLASS(1)
- --------------------------------------------------- ---------- ---------------------------------
<S> <C> <C>
Richard C. Green, Jr............................... 746,018 1.4%(2)(3)(4)(9)
Avis G. Tucker..................................... 361,936 (2)(5)--(6)
L. Patton Kline.................................... 6,112 --
John R. Baker...................................... 161,839 (4) --
Dr. Stanley O. Ikenberry........................... 3,431 --
Irvine O. Hockaday, Jr............................. 1,736 --
Robert F. Jackson, Jr.............................. 18,979 --
Herman Cain........................................ 2,882 --
Robert K. Green.................................... 151,510 (7)(9)--
Terry G. Westbrook................................. 337 --
Charles K. Dempster................................ 71,274 (9) --
James G. Miller.................................... 89,279 (9) --
Directors and Executive Officers--as a group (18
persons)......................................... 1,501,675 2.8%(2)(3)(4)(5)(7)(8)(9)
</TABLE>
- ------------------------
(1) Percentages are omitted for Directors and Executive Officers who own less
than 1% of Common Stock.
(2) Includes 88,287 shares held in trust under the will of Richard C. Green, of
which Mr. Richard C. Green, Jr. and Mrs. Tucker are trustees with shared
voting and investment power.
(3) Includes 73,221 shares held in trust for the benefit of Ann G. Green, mother
of Mr. Richard C. Green, Jr. and Mr. Robert K. Green, of which Mr. Richard
C. Green, Jr. is a co-trustee with shared voting and investment power.
Excludes 116,348 shares held in trust for the benefit of Mr. Richard C.
Green, Jr. as to which Mr. Richard C. Green, Jr. has power to replace the
trustees.
(4) Includes 128,726 shares held in trust for the benefit of Mrs. Tucker, of
which Mr. Richard C. Green, Jr. and Mr. Baker are trustees with voting and
investment power.
(5) Includes 5,751 shares held in various trusts of which Mrs. Tucker is trustee
with voting and investment power.
(6) Excludes 128,726 shares held in trust for the benefit of Mrs. Tucker, of
which Mr. Richard C. Green, Jr. and Mr. Baker are trustees with voting and
investment power and 376,035 shares held in trust for the benefit of Mrs.
Tucker of which a bank is sole trustee.
(7) Excludes 217,836 shares held in trust for the benefit of Mr. Robert K. Green
as to which he has power to replace the trustees.
(8) Excludes 376,035 share held in trust for the benefit of Mrs. Tucker of which
a bank is sole trustee.
(9) Includes shares which may be acquired through the exercise of vested
employee stock options as follows: Mr. Richard C. Green, Jr., 210,865
shares; Mr. Robert K. Green, 82,644 shares; Mr. Dempster, 61,432 shares; Mr.
Miller, 54,472 shares; and Directors and Executive Officers as a group,
610,243 shares.
4
<PAGE>
Richard C. Green, Jr., Kansas City, Missouri, Robert K. Green, Shawnee
Mission, Kansas, Avis G. Tucker, Warrensburg, Missouri, members of their family
and trusts for the benefit of members of the Green family owned as of January
31, 1997, 2,141,021 shares or approximately 4.0% of the outstanding shares of
Common Stock of the Company. This number includes shares shown in the preceding
table as being owned beneficially by Mr. Richard C. Green, Jr., Mr. Robert K.
Green and Mrs. Tucker, and those specifically excluded in Notes (3), (6), (7)
and (8), preceding.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
UCU's Compensation Committee is comprised of three non-employee members of
the UCU Board and has overall responsibility to review and approve the Company's
executive compensation programs. They assist UCU in recruiting, motivating and
retaining high caliber executives. The Committee has approved a compensation
policy that pays key executives for superior results. The current compensation
program for executive officers consists of three major elements: Base Salary,
Annual Incentive and Long-Term Incentive. UCU uses an independent compensation
consultant to advise on executive compensation issues.
The Compensation Committee continues to review the appropriateness of
executive compensation in view of the changing business environment and changing
responsibility of the top executive team. These reviews and changes are designed
to tie the compensation of executives more to the performance of UCU and the
interests of the stockholders. Top executives have an objective to own at least
one to two times their annual base salary in UCU stock. The Compensation
Committee retains the discretion to review and take appropriate action
consistent with Company performance and market conditions with respect to
compensation of executives to the extent such actions are not inconsistent with
the Annual Incentive and Long-Term Incentive Plans of UCU.
BASE SALARY
It is the policy of the Company to review executive officer base salaries
each year in relation to comparable positions of responsibility in companies
with revenues of approximately $4 billion. This does not ensure an increase in
salary. At the present time, executive salaries are, on average, at or below the
median level of compensation for companies with revenues of approximately $4
billion and actual salaries paid reflect this policy. The companies in the data
are not necessarily reflected in the Edison Electric Institute Combination Gas
and Electric Utilities Index nor the Wilshire Utility Index, but would be
included in the S&P 500 Index. In establishing base salary levels, the Committee
has considered the competitiveness of the entire compensation package.
ANNUAL INCENTIVE PLAN
The Annual Incentive Plan is the second major compensation element for
executive officers. The incentive plan provides three levels of award
opportunities. The incentive will approximate the 75th percentile in companies
with revenues in the range of $1.5 billion to $5 billion at target, the 90th
percentile at maximum and the 50th percentile at the minimum. The actual award
is based on a target dollar amount that is at the 75th percentile as established
annually in consultation with the independent compensation consultant for
companies with revenues in the range of $1.5 billion to $5 billion. The
performance target is based on earnings per share. The award, if any, is paid in
cash.
In the event an employee elects to take part of the annual incentive award
in restricted stock of the Company, the employee receives a bonus of 33% of the
value of shares taken in restricted stock and the bonus shares awarded are also
in restricted stock. Example: Executive receives an incentive award of $50,000
and elects to take $20,000 in restricted stock. The executive receives a "bonus"
worth $6,600 of shares in restricted stock.
5
<PAGE>
LONG-TERM INCENTIVE PLAN
The Long-Term Incentive Plan is the third major element of executive
compensation. The 1994 to 1996 cycle is based on performance units and is
designed to reward long term success in earnings available and a threshold
return on equity at the end of the 1994 to 1996 cycle. The cycle for the years
1995 to 1997 and 1996 to 1998 is based on a combination of economic value added
("EVA") and earnings available for common shareholders.
For the 1994 to 1996 cycle of the Long-Term Plan, the actual earnings
available under the plan and threshold return on equity did not warrant a
payment under the plan.
The targeted amounts of the three-year performance awards and stock option
grants for the executives under the Long-Term Incentive Plan are established
annually based on competitive survey data from companies with revenues in the
range of $1.5 billion to $5 billion, in consultation with UCU's independent
compensation consultant. The target payout under this plan is at the 75th
percentile for the companies with revenues in the range of $1.5 billion to $5
billion.
Any payments made under the three-year performance cycle awards are in
restricted stock until such time that the executive has accumulated
shareholdings of the Company from any source, excluding unexercised stock
options, of at least one to two times his or her annual base salary. At such
time that the executive has exceeded the targeted share ownership, compensation,
if any, from this plan will be paid in cash. If payments are made in cash, the
employee may elect to take any portion of his cash award in restricted stock and
said stock will receive a bonus of 25% in restricted stock along the terms
outlined above under Annual Incentive Plan.
Stock option grants may also be granted under the Long-Term Incentive Plan.
The option grants have a vesting schedule in which 0% vests on the first
anniversary of the grant, 25% vests on the second anniversary of the grant, an
additional 25% vests on the third anniversary of the grant, and the final 50%
vests on the fourth anniversary of the grant.
This long-term plan is limited to executives who have a continuing corporate
wide impact on UCU.
To foster long-term success the Company also issues stock options to select
executives not participating in 1996 in the Long-Term Incentive Plan described
above. Thus, the executive officer's realized increases in value from the stock
option will occur only if the stock price, and thus stockholder value, also
increases. Under the Company Plan, options are considered for grant annually.
The number of shares granted are based on the executive's level of
responsibility, and targeted value of the stock if assumptions about the growth
of UCU stock are realized. Options are granted at 100% of fair market value on
the date of grant, and can be exercised (following a one-year holding period) at
any time over a ten-year period. Executives who are eligible for the Long-Term
Incentive Plan may also receive new stock option grants under the Company Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
It is the policy of the Compensation Committee to review the Chief Executive
Officer's base salary each year in relation to comparable positions of
responsibility in companies with revenues of approximately $4 billion. This does
not assure an increase in salary. At the present time, Mr. Green's salary is
below the median level of compensation for companies with revenues of
approximately $4 billion. Mr. Green's base salary effective February 1, 1997 has
been increased to $680,000 reflecting economic adjustments for chief executive
officers.
Annual incentive awards are based on actual UCU results and quality of
management. The actual earnings per share were $2.20. The incentive payment of
$598,500 has been authorized by the Compensation Committee to Mr. Green
according to the earnings per share and growth goals set by the Compensation
Committee for 1996. Mr. Green elected to take his incentive payment in the form
of restricted stock.
6
<PAGE>
Pursuant to the terms of the plan, he received a bonus of 33% of the value of
the shares, which was also paid in restricted stock.
Mr. Green was awarded performance units under the Long-Term Incentive Plan
for the period 1994 to 1996. The minimum performance levels under the Long-Term
Incentive Plan for earnings available and return on equity at the end of the
1994 to 1996 cycle were not met. A long-term incentive payment has not been
authorized by the Compensation Committee to Mr. Green according to the
provisions of the plan for years 1994, 1995 and 1996.
In addition to the three-year performance measurements, Mr. Green was
granted 141,400 stock options at a price of $27.75. Stock option grants under
the Long Term Incentive Plan have the following vesting schedule; 0% vests on
the first anniversary of the grant, 25% vests on the second anniversary of the
grant, an additional 25% vests on the third anniversary of the grant, and the
final 50% vests on the fourth anniversary of the grant.
A new three-year performance cycle was started in 1995 and will extend
through 1997. These grants were determined based on the market data targeting a
payout equal to the 75th percentile for long-term incentive compensation for
chief executive officers of billion dollar revenue companies. If the minimum
performance target is not met under this plan, no payments will be made.
A new three-year performance cycle was started in 1996 and will extend
through 1998. These grants were determined based on the market data targeting
payout equal to the 75th percentile for long-term incentive compensation for
chief executive officers of billion dollar revenue companies. If the minimum
performance targets are not met under this plan, no payments will be made.
During 1996, the Committee discussed and approved the terms of an employment
contract with the Chief Executive Officer. For a description of the arrangement
agreed to by the Committee see "Severance and Employment Agreements" on page 9.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Code enacted in 1993 generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
corporation's Chief Executive Officer and the other four most highly compensated
executive officers. Qualifying performance based compensation will not be
subject to the deduction limit if certain requirements are met. The Company's
performance based portion of the compensation of its executive officers (which
currently consists of an annual incentive program and a long-term program)
complies with Section 162(m).
Submitted by the Compensation Committee of the UCU Board:
L. Patton Kline Dr. Stanley O. Ikenberry Herman Cain
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
----------------------------------- ---------------------------------------------------------
OTHER RESTRICTED
ANNUAL STOCK STOCK LONG-TERM ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARD(S) OPTIONS INCENTIVE PLAN COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($) (1)($) (#) ($) ($)
- ------------------------- ---- --------- -------- ------------ ---------- ------- -------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard C. Green, 1996 618,057 0 15,423 796,009 141,400 0 35,968(2)(3)(4)
Jr., .................. 1995 495,000 0 53,730(5) 330,010 120,565 550,017 46,810
Chairman and CEO 1994 495,000 0 38,776 511,312 0 0 13,500
Robert K. Green, ........ 1996 466,731 0 10,764 756,493 113,120 0 54,741(2)(3)(4)(6)
President 1995 306,054 0 55,025(7) 177,778 74,194 266,537 42,533
1994 245,597 0 25,596 275,347 0 0 13,500
Terry G. Westbrook, ..... 1996 262,500 216,125 5,822 0 109,786 0 17,147(2)(3)(4)
Senior Vice President 1995(8) -- -- -- -- -- -- --
and CFO 1994(8) -- -- -- -- -- -- --
Charles K. Dempster, .... 1996 283,638 0 3,285 399,523 34,100 0 67,270(2)(3)(4)(6)(9)
Chairman and CEO, 1995 240,185 276,672 0 28,968 29,032 20,460 26,446
UtiliCorp U.K., Inc. 1994 231,000 93,083 9,448 23,271 12,500 0 13,500
James G. Miller, ........ 1996 215,576 141,634 4,543 0 29,600 0 24,000(2)(3)(4)(6)
Senior Vice President 1995 208,550 267,016 7,454 0 25,222 44,379 21,978
1994 216,775 41,700 57,050 52,125 6,800 0 31,705
</TABLE>
- ------------------------------
(1) Restrictions lapse at various times following the third year after date of
grant. Dividends are paid on restricted stock awards at the same rate as
paid to all stockholders. On December 31, 1996, Mr. Richard C. Green, Jr.
held 64,042 shares of restricted stock having a market value of $1,725,131;
Mr. Robert K. Green held 34,889 shares of restricted stock having a market
value of $939,822; Mr. Dempster held 5,831 shares of restricted stock having
a market value of $157,072; and Mr. Miller held 4,293 shares of restricted
stock having a market value of $115,642. All market values are determined as
of December 31, 1996. Grants made on February 4, 1997 for 1996 service are
not included in the market value totals described in this footnote. These
grants are, however, included in the "Restricted Stock Award(s)" column
above for the year 1996. The February stock grants were valued using the
fair market value on February 4, 1997 of $27.75 per share.
(2) Consists of employer contributions to the UtiliCorp United Restated Savings
Plan. Mr. Richard C. Green, Jr., $13,500; Mr. Robert K. Green, $9,258; Mr.
Westbrook, $9,750; Mr. Dempster, $9,385; and Mr. Miller, $9,557.
(3) Lump-sum payment of prerequisite allowance for 1996. Mr. Richard C. Green,
Jr., $20,000; Mr. Robert K. Green, $15,000; Mr. Westbrook, $5,000; Mr.
Dempster, $5,000; and Mr. Miller, $5,000.
(4) Premium paid for term life insurance equivalent to three times salary in the
following amounts: Mr. Richard C. Green, Jr., $4,752; Mr. Robert K. Green,
$983; Mr. Westbrook, $2,397; Mr. Dempster, $2,610; and Mr. Miller, $1,259.
(5) $40,527 is attributable to one-time financial planning services.
(6) Consists of employer contributions to the Supplemental Contributory
Retirement Plan. Mr. Robert K. Green, $29,500; Mr. Dempster, $7,816; and Mr.
Miller, $8,185.
(7) $45,098 is attributable to one-time financial planning services.
(8) Mr. Westbrook was not an officer of the company in 1994 and 1995.
(9) Includes a foreign service premium of $42,460.
8
<PAGE>
SEVERANCE AND EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Mr. Richard C.
Green, Jr. and Mr. Robert K. Green (the "Employment Agreements") which provide
for, among other things, a base salary in an amount not less than $630,000 for
Mr. Richard C. Green, Jr. and not less than $480,000 for Mr. Robert K. Green;
the continuation of Mr. Richard C. Green, Jr.'s employment as Chairman and Chief
Executive Officer of the Company and Mr. Robert K. Green's employment as
President of the Company during the continuation of employment under their
respective Employment Agreements; and participation in the Company's benefit and
incentive plans. Each Employment Agreement provides that in the event of
termination without cause or by the employee for good reason, the Company will
continue salary payments at the minimum annual base salary rate for three years
following the date of termination and pay a lump sum equal to three times the
maximum incentive compensation benefit that would be paid to the employee for
the year during which the termination occurs if all the targeted goals in effect
on the date of termination were exceeded, along with payment of certain other
amounts.
The Company has entered into severance agreements with the individuals named
in the Summary Compensation Table, other than Mr. Richard C. Green, Jr. and Mr.
Robert K. Green. These agreements are intended to provide for continuity of
management in the event of a change in control of UCU. The agreements provide
that covered executives would be entitled to certain severance benefits
following a change of control of UCU. If, following a change of control, the
executive's employment with UCU is terminated for any reason, then the executive
is entitled to a severance payment that will be 2.99 times the executive's
average annual compensation for the five years preceding the change in control,
unless such termination is as a result of death, disability, retirement, for
cause or if such executive terminates employment for other than good reason (as
this term is defined in the agreement). The severance payment is made in the
form of a lump sum cash payment.
The Company and Mr. Westbrook have entered into a letter agreement dated
February 5, 1996 pursuant to which Mr. Westbrook serves as Senior Vice President
and Chief Financial Officer of the Company. The letter provides for an annual
salary of $325,000 per year as well as certain bonus potentials under the
Company's Annual and Long Term Incentive Plans. The letter also provides for the
grant to Mr. Westbrook of options to purchase an aggregate of 50,086 shares of
Common Stock pursuant to the Company's Stock Incentive Plan. The letter also
provides for Mr. Westbrook's participation in customary employee benefit plans
and programs.
Effective as of January 1, 1996, Mr. Dempster entered into a three-year
employment agreement with UCU whereby he serves as Chairman and Chief Executive
Officer of UtiliCorp U.K., Inc. The employment agreement provides Mr. Dempster
with an annual salary of $252,000, a maximum bonus opportunity at 45% of base
salary at target and 70% of base salary at maximum, participation in the
Company's long-term incentive program and participation in other employment
benefit plans of UCU. The employment agreement also provides various benefits to
Mr. Dempster as a result of his assignment in the U.K. In the event of
involuntary termination, Mr. Dempster will receive a lump sum payment equal to
2.99 times the average of his last five years' base salary.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS GRANT DATE
OPTIONS GRANTED TO EXERCISE OR PRESENT
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION VALUE(1)
NAME (#) FISCAL YEAR ($/SH) DATE $
- ---------------------------------------- -------- ------------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
Richard C. Green, Jr., ................. 141,400(2) 11.7 27.75 2007 323,806
Chairman and CEO
Robert K. Green, ....................... 113,120(2) 9.3 27.75 2007 259,045
President
Terry G. Westbrook, .................... 50,086(3) 4.1 27.50 2006 111,692
Senior Vice President and CFO 59,700(2) 4.9 27.75 2007 136,713
Charles K. Dempster, ................... 34,100(2) 2.8 27.75 2007 78,089
Chairman and CEO,
UtiliCorp U.K., Inc.
James G. Miller, ....................... 29,600(2) 2.4 27.75 2007 67,784
Senior Vice President
</TABLE>
- ------------------------
(1) BLACK SCHOLES ASSUMPTION
The estimated grant date present value reflected in the above table is
determined using the Black-Scholes model. The material assumptions and
adjustments incorporated in the Black-Scholes model in estimating the value
of the options reflected in the above table include the following:
- An exercise price on the option of $27.75, equal to the fair market value
of the underlying stock on the date of grant.
- An option term of 10 years.
- An interest rate of 6.58 percent that represents the interest rate on a
U.S. Treasury security on the date of grant with a maturity date
corresponding to that of the option term.
- Volatility of 14.29 percent calculated using daily stock prices for the
one-year period prior to the grant date.
- Dividends at the rate of $1.76 per share representing the annualized
dividends paid with respect to a share of common stock at the date of
grant.
- Reductions of approximately 11.49 percent to reflect the probability of
forfeiture due to termination prior to vesting, and approximately 8.08
percent to reflect the probability of a shortened option term due to
termination of employment prior to the option expiration date.
The ultimate values of the options will depend on the future market price
of the Company stock, which cannot be forecast with reasonable accuracy.
The actual value, if any, an optionee will realize upon exercise of an
option will depend on the excess of the market value of the Company's
common stock over the exercise price on the date the option is exercised.
(2) Options granted on February 4, 1997 and have the following vesting schedule:
25% vests on the second anniversary of the grant, an additional 25% vests on
the third anniversary and the final 50% vests on the fourth anniversary of
the grant.
(3) Options granted on May 20, 1996 have an exercise price of $27.50 and have
the same vesting schedule as described in footnote (2).
10
<PAGE>
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS
SHARES FY-END (#) AT FY-END ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE (1) UNEXERCISABLE
- ------------------------------------------ ----------------- ----------------- ---------------------- -------------------
<S> <C> <C> <C> <C>
Richard C. Green, Jr., ................... 0 0 210,865/0 0/0
Chairman and CEO
Robert K. Green, ......................... 0 0 82,644/0 8,606/0
President
Terry G. Westbrook, ...................... 0 0 50,086/0 0/0
Senior Vice President and CFO
Charles K. Dempster, ..................... 0 0 61,432/0 0/0
Chairman and CEO,
UtiliCorp U.K., Inc.....................
James G. Miller, ......................... 0 0 54,472/0 24,806/0
Senior Vice President
</TABLE>
- ------------------------
(1) Vesting period of options granted in September 1995 was accelerated. All
options currently 100% vested.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE
OR OTHER
PERIOD
NUMBER OF SHARES, UNTIL
UNITS OR OTHER MATURATION THRESHOLD TARGET
NAME RIGHTS (#) OR PAYOUT ($) ($) MAXIMUM ($)
- --------------------------------------------------- ------------------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Richard C Green, Jr., ............................. 1 12-31-98 136,000 442,000 884,000
Chairman and CEO
Robert K. Green, .................................. 1 12-31-98 102,000 331,500 663,000
President
Terry G. Westbrook, ............................... 1 12-21-98 65,000 121,875 243,750
Senior Vice President and CFO
Charles K. Dempster, .............................. 1 12-31-98 54,000 101,250 202,500
Chairman and CEO,
UtiliCorp U.K., Inc.
James G. Miller, .................................. 1 12-31-98 44,000 82,500 165,000
Senior Vice President
</TABLE>
- ------------------------
The long-term awards are expressed as a percentage of current base salary;
Messrs. Green, 20% - Threshold; 65% - Target and 130% - Maximum; Messrs.
Dempster, Westbrook and Miller, 20% - Threshold; 37.5% - Target and 75% -
Maximum. The actual amounts paid will be a percentage of their base salary in
effect at the end of the performance cycle.
11
<PAGE>
The value of long-term incentive awards is a targeted amount annually based
on competitive survey data from billion dollar revenue companies, in
consultation with the Company's independent compensation consultant. The awards
for the 1996 to 1998 cycle are determined based on targeted amounts in earnings
available at the end of the cycle and a threshold for return on equity. The
targeted amount will produce a payout equal to the 75th percentile for long-term
bonus awards of billion dollar revenue companies.
RETIREMENT PLAN
The Company maintains the UtiliCorp United Inc. Restated Retirement Income
Plan (the "Retirement Plan") a non-contributory defined benefit retirement plan.
Final average compensation is defined in this Retirement Plan as total base
salary excluding overtime payments, bonuses, amounts deferred to non-qualified
deferred income plans and any other extraordinary compensation, but including
employee contributions made to the UtiliCorp United Inc. Savings Plan and the
flexible spending arrangement maintained by the Company, and corresponds to
salary in the summary compensation table. This amount is computed as the high
four consecutive years.
Benefits payable from the Retirement Plan are limited by provisions of the
Internal Revenue Code. The Company maintains an unfunded Supplemental Retirement
Plan to provide for the payment of retirement benefits calculated in accordance
with the Retirement Plan which would otherwise be limited by the provisions of
the Internal Revenue Code.
The years of credited service for each officer named in the Summary
Compensation Table are as follows: Mr. Richard C. Green, Jr., 18 years; Mr.
Robert K. Green, 8 years; Mr. Westbrook, 1 year; Mr. Dempster, 4 years and Mr.
Miller, 13 years.
The following table sets forth the estimated annual benefits payable to
persons in specified remuneration and service classifications assuming
retirement in 1997 at age 62:
ESTIMATED TOTAL ANNUAL RETIREMENT BENEFITS UNDER THE UTILICORP UNITED INC.
RESTATED RETIREMENT INCOME PLAN AND THE UTILICORP UNITED INC.
RESTATED EXCESS BENEFIT PLAN
<TABLE>
<CAPTION>
YEARS OF PENSION SERVICE
----------------------------------------------------------------
FINAL AVERAGE COMPENSATION 15 20 25 30 35 40
- ---------------------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$200,000.................... 40,812 57,116 73,420 89,724 94,224 98,724
250,000.................... 51,537 72,091 92,645 113,199 118,824 124,449
300,000.................... 62,262 87,066 111,870 136,674 143,424 150,174
350,000.................... 72,987 102,041 131,095 160,149 168,024 175,899
400,000.................... 83,712 117,016 150,320 183,624 192,624 201,624
450,000.................... 94,437 131,991 169,545 207,099 217,224 227,349
500,000.................... 105,162 146,966 188,770 230,574 241,824 253,074
550,000.................... 115,887 161,941 207,995 254,049 266,424 278,799
600,000.................... 126,612 176,916 227,220 277,524 291,024 304,524
650,000.................... 137,337 191,891 246,445 300,999 315,624 330,249
700,000.................... 148,062 206,866 265,670 324,474 340,224 355,974
750,000.................... 158,787 221,841 284,895 347,949 364,824 381,699
</TABLE>
These benefits are applicable to employees retiring after December 31, 1996
at age 62 and have been computed on the basis of a straight-life annuity.
The Company also maintains a supplemental retirement agreement with James G.
Miller generally providing for the payment of an annual retirement benefit of
$40,000 in addition to the benefit provided in the above table.
12
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
UTILICORP UNITED INC., WILSHIRE UTILITY INDEX, EDISON ELECTRIC INSTITUTE
COMBINATION GAS AND ELECTRIC UTILITIES INDEX & S&P 500 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
UTILICORP S & P WILSHIRE EEI
<S> <C> <C> <C> <C>
Total Fund 500 Index Utility Index
12/91 $100.00 $100.00 $100.00 $100.00
03/92 94.29 97.47 94.19 95.37
06/92 85.23 99.33 99.40 101.57
09/92 99.76 102.46 104.69 106.82
12/92 102.57 107.62 111.94 110.51
03/93 106.89 112.32 117.00 120.95
06/93 111.23 112.86 122.39 123.78
09/93 126.12 115.78 128.66 129.85
12/93 124.40 118.46 121.50 123.48
03/94 115.27 113.97 111.23 111.77
06/94 114.93 114.45 110.59 102.87
09/94 111.53 120.04 113.52 103.39
12/94 110.28 120.02 111.87 107.50
03/95 118.78 131.71 118.03 113.21
06/95 120.57 144.28 126.11 122.65
09/95 122.49 155.75 142.18 130.54
12/95 129.91 165.13 148.58 136.94
03/96 128.48 174.00 145.70 130.62
06/96 125.42 181.80 150.99 134.34
09/96 127.91 187.42 141.82 129.59
12/96 127.07 203.05 153.14 136.00
</TABLE>
The Company is replacing the Wilshire Utility Index with the Edison Electric
Institute Combination Gas and Electric Utilities Index ("EEI Index") because the
Company feels the companies contained in the EEI Index more closely represent
the core business activities of UCU. (UCU is one of the companies comprising the
EEI Index.)
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP was retained by the Company as independent
public accountants for the year 1996. Arthur Andersen LLP has performed the
audit of the Company's financial statements since May 1992.
Representatives of Arthur Andersen LLP are expected to be present at the
annual meeting and will have the opportunity to make a statement, if they desire
to do so, and to respond to appropriate questions.
The Audit Committee of the Board of Directors will make its recommendations
with respect to retention of an independent public accounting firm for the year
1997 at the annual meeting of the Board of Directors.
OTHER BUSINESS
Management does not know of any matters to be presented at the meeting other
than those specifically referred to in the Notice of Meeting. However, if any
other matters shall properly come before the meeting, it is the intention of the
persons named in the proxy to vote them in accordance with their judgment.
- ------------------------
* Assumes that the value of the investment in UCU stock and each index was $100
on January 1, 1992 and that all dividends were reinvested.
13
<PAGE>
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders intended to be presented at the next annual
meeting scheduled for May 6, 1998, must be received by the Company no later than
November 25, 1997, in order to be considered for inclusion in the proxy
statement and form of proxy relating to that meeting. It is anticipated that the
proxy statement and form of proxy relating to that meeting will be mailed to
stockholders on or before March 24, 1998.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies, which will be
principally conducted by the use of the mails; however, certain officers,
employees and friends of the Company may also solicit by telephone, telegram or
personal interview and the Company may reimburse brokerage firms and others for
their expenses in forwarding soliciting material to the beneficial owners. The
Company has retained Morrow & Co. to assist in the solicitation of proxies from
brokers, nominees, fiduciaries and other custodians at a fee of $15,000, plus
reimbursement of out-of-pocket expenses.
PROPOSAL 1
ELECTION OF DIRECTORS
Three Directors of the Company are to be elected, in "Class C," to hold
office for three years. The following persons have been designated as nominees
for the office: Richard C. Green, Jr., Avis G. Tucker and L. Patton Kline. It is
the intention of the persons named in the enclosed proxy to vote such proxy for
the election of the said nominees unless otherwise specified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL.
UTILICORP UNITED INC.
[SIGNATURE]
RICHARD C. GREEN, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Dated: March 24, 1997
Kansas City, Missouri
14
<PAGE>
UTILICORP UNITED INC.
PROXY/VOTING INSTRUCTION CARD
Proxy Solicited on Behalf of the Board of Directors of the Company for the
Annual Meeting on May 7, 1997. The undersigned hereby constitutes and
appoints Robert F. Jackson, Stanley O. Ikenberry and Robert K. Green and each
of them, true and lawful agents and proxies with full power of substitution
in each, to represent and to vote, as designated below, all of the shares of
common stock of UtiliCorp United Inc. held of record by the undersigned on
March 7, 1997, at the Annual Meeting of Stockholders to be held at the Kansas
City Marriott Downtown, 200 W. 12th Street, Kansas City, Missouri on
Wednesday, May 7, 1997, at 2:00 p.m. (Kansas City time) and at any
adjournments thereof, on all matters coming before said meeting. IF NO
DIRECTION AS TO THE MANNER OF VOTING THE PROXY IS MADE, THE PROXY WILL BE
VOTED FOR THE PROPOSAL.
COMMENTS
Election of Directors, Nominees: _____________________________
Richard C. Green, Jr. _____________________________
Avis G. Tucker _____________________________
L. Patton Kline _____________________________
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this card)
You are encouraged to specify your choices by marking the appropriate boxes
(SEE REVERSE SIDE) but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. However, the Proxies
cannot vote your shares unless you sign and return this card.
FOLD AND DETACH HERE
UTILICORP UNITED INC.
ANNUAL
MEETING OF
SHAREHOLDERS
May 7, 1997, 2:00 p.m.
Kansas City Marriott Downtown
Count Basie Ballroom C
200 W. 12th Street
Kansas City, MO
<PAGE>
/x/ Please mark your votes as in this example. 4941
The Board of Directors recommends a vote FOR the Proposal.
1. Election of Directors (except as withheld below)
WITHHOLD authority to vote for all Nominees / / For / /
For, except vote withheld from the following nominees(s):
__________________________________________________________________________
Shareholder name and address
Signature(s)_________________________ Date_____________________
Please check this box if you have written comments on the reverse side. / /
NOTE: Please sign exactly as name appears on this form. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
FOLD AND DETACH HERE
Your vote is important to us!
Please follow these steps to ensure that your proxy is properly executed and
returned in time to be counted:
1. Mark your vote for Proposal 1 in one of the two boxes to the right of
Proposal 1. If you wish to withhold authority to vote for any individual
nominee, write the name of each such nominee on the lines provided.
2. Sign at bottom left in the space provided, exactly as your name appears on
the form. Joint owners should each sign. Also enter the date.
3. Check the box right of your signature if you are adding comments on the
other side.
4. Tear off at perforation and mail the completed card with signature(s) in
the enclosed reply envelope to:
UtiliCorp United Inc.
P.O. Box 8621
Edison, NJ 08818-9128
