<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
[X] Definitive Proxy Statement RULE 14a-6(c)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ST. JOSEPH LIGHT & POWER COMPANY
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
520 FRANCIS STREET, P. O. BOX 998,
ST. JOSEPH, MISSOURI 64502-0998
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 17, 1995
------------------
The Annual Meeting of Shareholders of St. Joseph Light & Power Company will
be held at The Albrecht-Kemper Museum of Art, 2818 Frederick Avenue, St. Joseph,
Missouri, at 9 o'clock A.M., local time, on May 17, 1995 for the following
purposes:
(1) To elect three Class II directors to serve until the 1998 Annual Meeting
of Shareholders and until their successors have been elected and
qualified;
(2) To approve the appointment of Arthur Andersen L.L.P. as independent
auditors for 1995; and
(3) To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only holders of Common Stock of record at the close of business on April 3,
1995 are entitled to notice of and to vote at the meeting or any adjournments
thereof.
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED.
By Order of the Board of Directors:
GARY L. MYERS
Secretary
St. Joseph, Missouri
April 7, 1995
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
520 FRANCIS STREET, P. O. BOX 998,
ST. JOSEPH, MISSOURI 64502-0998
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 17, 1995
The accompanying proxy is solicited by the Board of Directors of St. Joseph
Light & Power Company and is for use at the Annual Meeting of Shareholders on
May 17, 1995 and any adjournments thereof. This proxy statement and the form of
proxy will be first sent or given to shareholders on or about April 7, 1995.
A shareholder who executes a proxy may revoke it at any time before it is
voted by giving written notice of the termination thereof to the Secretary of
the Company, by executing a proxy bearing a later date or by attending the
meeting and revoking the proxy by verbal or written notice to the Secretary.
Proxies in the accompanying form, properly executed and received by the Company
prior to the meeting and not revoked, will be voted as directed therein on all
matters presented at the meeting. In the absence of a specific direction from
the shareholder, proxies will be voted for the election of the named Class II
director nominees, and for the approval of Arthur Andersen L.L.P. as independent
auditors. The Board of Directors does not know of any other matters to be
brought before the meeting; however, if other matters should properly come
before the meeting, it is intended that the persons named in the accompanying
proxy will vote thereon at their discretion.
The solicitation will be made primarily by mail, but shareholders may be
solicited personally or by telephone by employees or agents of the Company who
will not receive special compensation for such services. All costs of soliciting
proxies will be borne by the Company. Upon request, brokers and nominees will be
reimbursed for reasonable out-of-pocket expenses incurred by them in forwarding
proxy material to beneficial owners of the Company's Common Stock.
The Board of Directors has fixed the close of business on April 3, 1995 as
the record date for the determination of shareholders of the Company entitled to
receive notice of and to vote at the Annual Meeting of Shareholders on May 17,
1995 and any adjournments thereof. As of April 3, 1995, 3,906,369 shares of
Common Stock were outstanding and entitled to vote. Each such share is entitled
to one vote on all matters brought before the meeting. Any shares held in the
Automatic Dividend Reinvestment and Optional Cash Payment Plan will be voted in
accordance with the direction given on the proxy.
1
<PAGE>
VOTING INFORMATION
The affirmative vote of a plurality of the shares entitled to vote in the
election of directors and represented in person or by proxy at the meeting is
required to elect the Class II directors. Accordingly, if a quorum is present,
the three persons receiving the greatest number of votes will be elected to
serve as Class II directors. Withholding authority to vote for a director
nominee will not prevent such nominee from being elected.
For each matter other than the election of directors, if a quorum is
present, the affirmative vote of a majority of the shares entitled to vote on
such matter and represented in person or by proxy at the meeting is required for
approval. Accordingly, an abstention with respect to such matter will be treated
as a vote against such matter.
If a proxy is marked to indicate that all or a portion of the shares
represented by such proxy are not being voted with respect to one of the matters
to be considered at the meeting, such non-voted shares will not be considered
present and entitled to vote on such matter. Accordingly, non-voted shares with
respect to a matter will not affect the outcome of such matter.
PROPOSAL 1
ELECTION OF DIRECTORS
INFORMATION ABOUT NOMINEES FOR DIRECTOR
AND CONTINUING DIRECTORS
The Restated Articles of Incorporation (the "Articles") of the Company
provide that members of the Company's Board of Directors shall be divided into
three classes with each Class term to be for three years. The terms of the three
directors in Class II expire at the 1995 Annual Meeting.
The Board of Directors, upon the recommendation of its Nominating
Committee, has nominated Messrs. John P. Barclay, Jr., William J. Gremp and
David W. Shinneman for election to the Board of Directors to serve as members of
Class II until the 1998 Annual Meeting of Shareholders and upon election and
qualification of their successors. Messrs. Barclay and Shinneman are presently
members of the Board. Mr. Barclay was elected to the office by vote of the
shareholders while Mr. Shinneman was appointed by the Board of Directors in July
1994 to fill the vacancy created by the resignation of Mr. J. Douglas Esson. Mr.
Gremp is nominated to fill the upcoming vacancy of Michael A. Conway who has
chosen to not seek re-election. Mr. Conway, age 48, has been Senior Vice
President and Senior Investment Officer of Aon Corporation, an insurance and
financial services company, since 1990 and has served as a director of the
Company since 1992.
All proxies will be voted for the nominees below to serve as Class II
directors, unless authority to do so is withheld. If a nominee becomes
unavailable for election to the Board of Directors, the proxies will be voted
for the election of a substitute nominee designated by the Board of Directors.
2
<PAGE>
The following information is supplied for each person nominated for
election as a director, as well as each person whose term of office as a
director will continue after the meeting. Each nominee and continuing director
has been engaged in his principal occupation for at least the last five years
unless otherwise noted.
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AND PRINCIPAL OCCUPATION AGE SINCE
- ----------------------------- --- -----------
<S> <C> <C>
CLASS II--NOMINEES FOR TERM EXPIRING IN 1998:
John P. Barclay, Jr............................................................... 65 1974
Chairman, President and Chief Executive Officer, Wire Rope Corporation of
America, Inc. (manufacturer and distributor of wire rope and wire rope
products), St. Joseph, Missouri.
William J. Gremp.................................................................. 52
Manager and Managing Director, Global Power Division, The Chase Manhattan Bank,
N.A., New York, New York.
David W. Shinneman................................................................ 56 1994
President, Shinneman Management Company (owning and operating McDonald's
restaurants), St. Joseph, Missouri.
CLASS I--CONTINUING DIRECTORS FOR TERM EXPIRING IN 1997:
Daniel A. Burkhardt............................................................... 47 1988
General Partner, The Jones Financial Companies (investment banking and retail
securities firm), St. Louis, Missouri. Director: Essex County Gas Company,
Amesbury, Massachusetts; Galaxy Cablevision Management, Inc., Sikeston,
Missouri; Mid-America Realty Investments, Inc., Omaha, Nebraska; CIP
Management, Inc., St. Louis, Missouri.; Southeastern Michigan Gas Enterprises,
Port Huron, Michigan.
James P. Carolus.................................................................. 44 1989
President and Chief Executive Officer, Hillyard Industries, Inc. (manufacturer
of maintenance cleaning products), St. Joseph, Missouri.
Terry F. Steinbecker.............................................................. 49 1985
President and Chief Executive Officer of the Company, St. Joseph, Missouri.
CLASS III--CONTINUING DIRECTORS FOR TERM EXPIRING IN 1996:
Richard M. Burridge............................................................... 66 1987
President, The Burridge Group Inc. (money manager), Chicago, Illinois.
Director: Computer Access, Intl., Denver, Colorado; Fort Dearborn Income
Securities, Chicago, Illinois; Lincoln National Income Fund, Chicago, Illinois;
Lincoln National Convertible Fund, Chicago, Illinois; Lincoln Advisor Funds,
Inc., Fort Wayne, Indiana; Cincinnati Financial Corp., Cincinnati, Ohio.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AND PRINCIPAL OCCUPATION AGE SINCE
- ----------------------------- --- ------------
<S> <C> <C>
Robert L. Simpson................................................................. 61 1983
Consultant, Hawthorn Financial Corporation doing business as Burnham Colman
McMurray & Hatten (insurance brokers), St. Joseph, Missouri since 1993 and
General Partner, St. Joseph Riverboat Partners (riverboat casino), St. Joseph,
Missouri since 1994. President, Hawthorn Financial Corporation from 1990 to
1993.
Gerald R. Sprong.................................................................. 61 1976
President and Chief Executive Officer, The Morris Plan Company of St. Joseph
(financial management and lending), St. Joseph, Missouri, and Director,
President and Chief Executive Officer, First Savings Bank, F.S.B., Manhattan,
Kansas, since 1990. President and Chief Executive Officer of Ameribanc, Inc.,
St. Joseph, Missouri from 1985 to October 1990.
</TABLE>
- ---------
The Company has transactions in the ordinary course of business with firms,
including borrowings from banks, in which various members of its Board of
Directors hold directorships.
COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
The Executive Committee was established in January 1987 and has held no
meetings to date. The Executive Committee is empowered generally to act on any
item upon which the full Board may act with the exception of the declaration of
dividends. Messrs. Barclay, Carolus, Simpson, Sprong and Steinbecker comprise
the Executive Committee.
The Audit Committee reviews the work of the independent auditors. Its
functions are to: recommend to the Board of Directors independent auditors to be
selected; discuss with the independent auditors the scope and results of their
audit; discuss with the independent auditors and management the Company's
accounting principles, policies and practices and its reporting policies and
practices; and discuss with the independent auditors and internal auditors the
adequacy of the Company's internal accounting controls and the Company's
financial matters. The Audit Committee held two meetings in 1994. Messrs.
Barclay, Burkhardt, Conway, and Sprong comprise the Audit Committee.
The Compensation Committee reviews management's evaluation of the
performance of Company officers and officers' compensation arrangements;
recommends to the Board at each annual meeting of the Board a slate of officers
to be elected for the following year and the compensation level of each; and
recommends the compensation to be paid to outside directors for the following
year. The Compensation Committee held four meetings in 1994. Messrs. Burridge,
Carolus, Shinneman and Simpson comprise the Compensation Committee.
The Nominating Committee establishes criteria and procedures for the
election of directors; reviews management's evaluation of any officers proposed
for nomination to the Board; reviews the qualifications
4
<PAGE>
of and, when necessary and appropriate, interviews candidates who may be
proposed for nomination; recommends to the full Board not less than 90 days
prior to each Annual Meeting of Shareholders directors to be elected at such
Annual Meeting of Shareholders; recommends to the Board any changes in the
structure, size or function of the Board as such Committee deems appropriate;
and performs such other duties in connection with the election or termination of
directors as the Board may request. The Nominating Committee held three meetings
in 1994. Although the Committee does not actively solicit recommendations from
shareholders, the Board of Directors has adopted procedures whereby shareholders
may nominate candidates for positions on the Board of Directors. These
procedures are contained in the Company's Bylaws and, among other requirements
contained therein, require the shareholder making the nomination to do so in
writing to the Company's corporate secretary at least 30 days but no more than
90 days prior to the anniversary date of the record date for the determination
of shareholders entitled to vote in the immediately preceding annual meeting of
shareholders. Any nomination made in accordance with such procedures will be
considered by the Committee. Messrs. Barclay, Burkhardt, Simpson and Sprong
comprise the Nominating Committee.
All outside directors are compensated for services as a director at the
rate of $1,000 per month plus $600 for each board meeting attended. In addition,
each outside director receives $600 for attendance at each meeting of a board
committee of which he is a member. The Board of Directors held six regular
meetings in 1994. During 1994, all members of the Board of Directors attended at
least 75 percent of the aggregate number of meetings of the Board and of
meetings of Committees on which they served. Mr. Shinneman, however, due to an
oversight, did not timely file on Form 4 with the SEC a purchase of 50 shares of
Company Common Stock in December, 1994. In addition, each member of the Board of
Directors entered into an Indemnification Agreement effective December 1, 1993
(Mr. Shinneman's was effective July 20, 1994). Each agreement provides for
indemnification of the director in the event of settlement of a claim or lawsuit
arising out of the performance of the respective director's duties.
5
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
The following table indicates beneficial ownership of the Company's Common
Stock as of April 3, 1995 of directors, nominees for director and executive
officers named in the Summary Compensation Table below and directors and
executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS
- ---- ------------------------ ----------------
<S> <C> <C>
John P. Barclay, Jr. 450 (2)
Daniel A. Burkhardt 457 (2)
Richard M. Burridge 1,500 (2)
James P. Carolus 413 (2)
Michael A. Conway 500 (2)
William J. Gremp 0 (2)
G. L. Myers 3,036 (2)
David W. Shinneman 150 (2)
Robert L. Simpson 1,500 (2)
R. L. Slater 7,946 (2)
Gerald R. Sprong 3,004 (2)
T. F. Steinbecker 7,785 (2)
L. J. Stoll 6,037 (2)
John A. Stuart 1,450 (2)
D. V. Svuba 3,953 (2)
All directors and executive (2)
officers as a group 37,851
</TABLE>
- ---------
(1) In each case, the individual and each member of the group has sole voting
and investment discretion with respect to the shares beneficially owned by
such individual or member.
(2) Less than one percent.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation information of the President
and Chief Executive Officer and the four other most highly compensated executive
officers during 1994 (the "named executive officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------- --------------
RESTRICTED
NAME AND STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) AWARDS ($) (A) COMPENSATION ($) (B)
------------------ ---- ---------- --------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
T. F. Steinbecker 1994 $194,700 $51,109 $19,479 $4,656
President and Chief Executive 1993 191,522 0 41,756 4,610
Officer 1992 182,218 0 39,840 2,271
G. L. Myers 1994 100,900 21,000 6,005 3,306
General Counsel & Secretary 1993 97,700 0 13,651 3,225
1992 91,490 0 12,704 2,810
R. L. Slater 1994 124,300 26,103 9,351 5,836
Vice President--Administration 1993 122,460 0 20,915 5,780
1992 117,376 0 19,968 5,487
L. J. Stoll 1994 122,000 25,620 9,172 3,966
Vice President-- 1993 118,742 0 19,893 3,868
Finance, Treasurer & Assistant 1992 110,411 0 18,464 3,378
Secretary
D. V. Svuba 1994 115,000 24,150 8,634 4,314
Vice President--Power Supply 1993 111,891 0 18,761 4,220
1992 103,371 0 17,088 3,475
</TABLE>
- ---------
(A) A total of 2,883 restricted shares was awarded to officers and certain key
employees on March 15, 1994 in accordance with the Restricted Stock Plan
adopted by the Company's shareholders at the 1992 Annual Meeting. Each
award vests one-third of the total each year after the date of grant with
total vesting occurring at the 3-year anniversary. As of December 31, 1994,
the value and number of restricted shares held by the named executive
officers was as follows: $52,155 for Mr. Steinbecker--1,830 shares;
$16,616 for Mr. Myers--583 shares; $25,736 for Mr. Slater--903 shares;
$24,596 for Mr. Stoll--863 shares; and $23,085 for Mr. Svuba--810 shares,
without giving effect to the diminution of value attributable to the
restrictions on such shares. The amount reported in the table represents
the market value of the shares at the date of grant. Dividends are paid on
restricted shares at the same rate and at the same time as on shares of
Common Stock.
(B) The amounts shown in this column for the last fiscal year are derived as
follows: Mr. Steinbecker--$522 Company-paid term life insurance premium in
excess of $50,000 group term amount and $4,134 Company-paid 401(k) Plan
match; Mr. Myers--$306 Company-paid term life insurance premium in
7
<PAGE>
excess of $50,000 group term amount and $3,000 Company-paid 401(k) Plan
match; Mr. Slater--$2,106 Company-paid term life insurance premium in
excess of $50,000 group term amount and $3,730 Company-paid 401(k) Plan
match; Mr. Stoll--$306 Company-paid term life insurance premium in excess
of $50,000 group term amount and $3,660 Company-paid 401(k) Plan match; Mr.
Svuba--$864 Company-paid term life insurance premium in excess of $50,000
group term amount and $3,450 Company-paid 401(k) Plan match.
The following table sets forth the number of shares of restricted stock,
including the value thereof as of January 1, 1994, which are subject to Stock
Awards granted in 1994 for the First Performance Cycle under the Plan.
LONG-TERM INCENTIVE PLANS--AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PERFORMANCE OR PAYOUTS
OTHER UNDER NON-STOCK
NUMBER PERIOD UNTIL PRICE-BASED PLANS
OF MATURATION OR ---------------------
NAME SHARES(1) PAYOUT THRESHOLD MAXIMUM
---- --------- -------------- --------- -------
<S> <C> <C> <C> <C>
T.F. Steinbecker 2,032 3 Years 2,032 4,064
G.L. Myers 696 3 Years 696 1,392
R.L. Slater 865 3 Years 865 1,730
L.J. Stoll 849 3 Years 849 1,698
D.V. Svuba 800 3 Years 800 1,600
</TABLE>
- ---------
(1) For each Stock Award, a Threshold Goal for each participant is established
by applying a formula of 30 percent of base pay in the case of the
President, 20 percent for all other officers and up to 20 percent for each
key employee. This product is then converted to number of shares of Common
Stock by dividing this product by the closing price of the Common Stock as
of the first business day of a Performance Cycle. At the end of a
Performance Cycle, the Company's Total Shareholder Return will be compared
to that of the peer group and the amount of a Stock Award which is earned,
if any, will be determined based on the Company's "Percentile Performance"
measured against the peer group. The percentage of the Threshold Goal for a
participant which is earned will range from (i) 0 percent (no payout) if
the Company's percentile ranking of its Total Shareholder Return is less
than the 50th percentile to (ii) 200 percent if the Company's percentile
ranking of its Total Shareholder Return is at the 80th percentile or
greater.
The following table shows estimated annual pension benefits payable to the
named executive officers under the Company's non-contributory defined benefit
pension plan (the "Pension Plan") and the Supplemental Retirement Plan:
8
<PAGE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
-------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$100,000 $75,000 $75,000 $75,000 $75,000 $75,000
125,000 93,750 93,750 93,750 93,750 93,750
150,000 112,500 112,500 112,500 112,500 112,500
175,000 131,155 131,250 131,250 131,250 131,250
200,000 148,109 150,000 150,000 150,000 150,000
225,000 165,064 168,750 168,750 168,750 168,750
250,000 187,500 187,500 187,500 187,500 187,500
</TABLE>
Directors who are not employees of the Company are excluded from
participating in the Pension Plan and Supplemental Retirement Plan.
Covered compensation is salary and includes substantially all compensation
shown in the salary column of the Summary Compensation Table. The pension
benefits shown above assume retirement at age 65 in 1994 and that the retiree
has elected a 50 percent qualified joint and survivor benefit and the spouse is
age 63. The pension benefits shown above are not subject to any deduction for
social security benefits received by employees or for any other offset amounts,
except as noted in the next paragraph.
The Supplemental Retirement Plan provides executive officers of the Company
a supplement to the benefits payable under the Pension Plan as limited by the
Internal Revenue Code up to the amount, which when aggregated with payments made
from the Pension Plan and Social Security benefits would equal a maximum of 75
percent of the benefit otherwise payable under the Plan without the limitations
of the Code calculated on the basis of the officer's final annual salary.
Benefits are calculated at three percent per year of final annual salary up to a
maximum of 25 years of service. The Supplemental Retirement Plan also provides
that in the event of a change in control of the Company generally defined as,
subject to certain exceptions, the acquisition by an entity of 20 percent or
more of the outstanding Common Stock of the Company, a change in the majority of
the individuals who comprise the Board of Directors or approval by the
shareholders of a merger of the Company or sale of substantially all of its
assets, a participant will be credited with three additional years of service
(with total credited years not to exceed 25). At December 31, 1994, Messrs.
Steinbecker, Myers, Slater, Stoll and Svuba had 20, 15, 16, 20 and 28 years,
respectively, of service.
Messrs. Steinbecker, Myers, Slater and Stoll entered into employment
contracts with the Company on January 17, 1986. These contracts were amended
effective December 1, 1990 and a contract entered into on the same date with Mr.
Svuba, who was elected an officer on December 1, 1990. Each amended contract and
in the case of Mr. Svuba, the new contract, contains a three-year term and
automatically renews for annual renewable one-year terms unless terminated by
either party prior to its expiration date, which termination in the case of the
Company requires 30 months notice to the employee. The Company is required to
pay each named executive officer his unpaid salary (plus provide standard
benefits for a three-year period) for the remainder of a contract term if he is
terminated from employment for any reason other than "for cause". In addition,
the Company is also required to pay a "gross up" amount, equal to any Federal
excise tax levied or deemed owed, to each individual if a payment under the
contract triggers such
9
<PAGE>
an excise tax. Compensation in each case is a specified minimum generally at the
salary level shown in the Summary Compensation Table and salary adjustments may
be made at the discretion of the Board of Directors. Based on the contracts'
terms, the required termination notice and the compensation currently payable
under the existing employment contracts, the maximum amounts which would be
presently payable in the event of termination to Messrs. Steinbecker, Myers,
Slater, Stoll and Svuba would be approximately $519,200, $266,667, $331,456,
$325,344 and $306,656, respectively. In addition, the above contracts were
amended on November 17, 1993 to provide for indemnification to the executive
officers in the event of settlement of a claim or lawsuit against the executive
arising out of the performance of his corporate duties. Messr. John P. Stuart,
Jr., became Vice President-Engineering and Construction effective May 18, 1994
and entered into an employment contract with provisions similar to the ones
noted above. Mr. Stuart is also covered under a supplemental retirement plan.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") recognizes that competent,
highly motivated employees are critical to the continuing success of the
Company. The Company's salary administration program is key to retention,
attraction, motivation and reward of high quality employees which translates
directly into success for all Company constituencies as outlined in its mission
statement--shareholders, customers, communities and employees.
This salary administration program covers all salaried employees. The
program is administered by the Human Resources department and is revised and
updated taking into account national and local economic factors and the job
markets for specific job classifications. The program's key components include a
classification and grading system for every salaried Company position and an
objective measurement of individual job performance through a formal performance
appraisal.
REVIEW OF MANAGEMENT COMPENSATION
The Committee retained The Wyatt Company, an internationally known benefits
and compensation consulting firm, in July 1993 to review management's
compensation package and, specifically, its reasonableness and competitiveness.
The Committee met on several different occasions with representatives of The
Wyatt Company and received Wyatt's final report in March 1994.
It recommended that the current benefits package and the structure by which
performance is established and measured be retained but that greater emphasis be
placed on pay for performance.
The Committee agrees with the Wyatt study. It feels that to further promote
and enhance shareholder value, greater emphasis should be placed on both
short-term performance measured by "return on equity," and expense control and
longer term "total shareholder return." The Committee, as a result, recommended
to the Board of Directors adoption of a short-term cash bonus plan for Company
officers and key managers for 1994 and beyond. This short-term plan was adopted
by the full Board at its March 16, 1994 meeting effective for plan year 1994.
The plan design calls for comparisons and rewards of up to 25 percent of salary
based on the Company's objective performance in the areas of "return on equity"
and expense control, with each factor weighted equally. Any awards would be
subject to modification pursuant to an
10
<PAGE>
objective ratepayer protection provision. Also, no award shall be made for a
plan year in which the total dividends per share payable on the Common Stock are
not equal to or greater than dividends per share for the prior plan year.
The Committee also recommended termination of the Company's Restricted
Stock Plan which it felt was a hybrid of short and long-term goals. The
Committee recommended a new, Long-Term Incentive Plan ("LTIP") which would
establish incentive awards of restricted stock. The LTIP compares the Company's
total shareholder return (Common Stock appreciation/depreciation plus dividends)
over a three-year cycle to the "Edison Electric Institute Index of
Investor-Owned Electrics." For an award to be earned, the Company must achieve a
50 percentile ranking or better against its peers for a three-year performance
cycle and the total shareholder return for the cycle must be positive. The LTIP
was adopted by the shareholders at the May 18, 1994 Annual Meeting of
Shareholders.
The Committee further agrees that the Company's present salary
administration program is sound and serves the shareholder well.
1994 PERFORMANCE APPRAISAL AND SALARY DETERMINATION
The Committee meets annually with the president in regard to individual
performance plans and appraisals and makes salary adjustments for the officer
group. This meeting has traditionally been held in March of each year. The
Committee, as a part of this process, takes into account the Company's overall
financial health and performance for the preceding fiscal year.
In regard to the president's compensation, the Committee makes an
evaluation annually within the framework of the Company's salary administration
program and makes adjustments accordingly. This was the methodology used for the
last fiscal year.
The Committee examined the Company's mission statement and strategic plan
to determine if the Company's objectives and goals were met for 1994. Such
objectives and goals contained in the Company's strategic plan include items
such as return on equity and increase in dividend. The Company's stock
performance and earnings and expense control were also considered. The Committee
also considered major challenges faced by the Company during 1994, such as the
December ice storm, work load, community service by the president, customer and
employee satisfaction as evidenced by Company surveys, as well as other
subjective factors. Based on the president's performance and the factors
outlined above, the Committee assigned a grade. The Committee did not assign a
weight to any of the objectives, goals or other factors considered by the
Committee when evaluating 1994 performance. Following this appraisal process,
the Committee met with the president for discussion.
CASH AWARDS FOR 1994
The Committee also considered cash awards to the officers in accordance
with the Short-Term Bonus Plan (the "Plan") approved by the Board of Directors
in March 1994 as recommended by Wyatt. Cash awards to officers and other key
Company employees of up to 25 percent in the case of the President, 20 percent
for all other officers and 6 percent for all other covered employees are earned
if certain objective performance levels are attained. These performance levels
are measured against two equally weighted
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<PAGE>
performance criteria, return on equity and controllable expenses. The Plan also
encompasses an objective ratepayer protection provision that compares the
Company's residential electric rates to a peer group consisting of utilities
participating in the Missouri Valley Electric Association (MVEA). In addition,
no award shall be made for a plan year in which the total dividends per share
payable on the Common Stock are not equal to or greater than dividends per share
for the prior plan year. The Committee examined the performance criteria in
regard to the incentive award formula and made its awards accordingly. With
respect to cash awards made for 1994, the Company met its targets for return on
equity and controllable expenses. Further, the Company increased its Common
Stock dividend rate per share during the year. As a result, a maximum award was
made for each covered employee. Each award was then adjusted in accordance with
the ratepayer protection factor contained in the Plan. This factor for 1994 was
1.05 which corresponds to the Company's second to the lowest ranking of average
residential rates as compared with the other MVEA companies. In regard to the
President, this award equalled $51,109.
Only one of the companies participating in the MVEA is included in the S&P
Utilities Index as set forth in the performance graph. The MVEA companies were
selected because, for purposes of the Plan, the Company believes a smaller peer
group comprised of utilities in the same region as the Company would better
reflect the weather and economic conditions facing the Company, resulting in a
more accurate basis on which to measure short-term performance. The Company
believes that shareholders consider a broader array of utilities when making
investment decisions. Accordingly, for purposes of the performance graph, the
S&P Utilities Index is utilized.
STOCK AWARDS FOR 1994
In addition, the Committee had considered at its March 1994 meeting stock
awards to the officers in accordance with the Restricted Stock Plan (the "Stock
Plan") approved by the shareholders at the 1992 Annual Meeting of Shareholders.
The features of the Stock Plan were similar to the provisions of the new
Short-Term Bonus Plan discussed in the preceding paragraphs. As noted above and
as recommended by the Wyatt Study, the Stock Plan was terminated in March 1994.
The 1994 awards for Plan year 1993 were the final awards made under the Stock
Plan. In regard to the President, this award equalled 652 shares. These will
vest at a rate of one-third of the total award each anniversary year of the
award over a three year period.
The Committee believed that return on equity and controllable expenses were
better addressed in a short-term cash bonus plan while overall stock performance
would be better considered in the LTIP. The LTIP was therefore recommended by
the Board of Directors in March 1994 and adopted by the shareholders at the May
18, 1994 Annual Meeting of Shareholders. It establishes overlapping three year
performance cycles (the first cycle running from January 1, 1994 to December 31,
1996, the second cycle from January 1, 1995 to December 31, 1997 and so on) with
the stock awards granted on the first day of a performance cycle. These awards
are not earned, however, until the Company's total shareholder return is
measured against a peer utility group (the EEI 100 Index of Investor-Owned
Electrics) and determined on the basis of its percentile ranking. The Company
officers are currently the only group eligible to participate and the earning of
the first awards will not be considered generally until March 1997.
For each Stock Award, a Threshold Goal for each participant is established
by applying a formula of 30 percent of base pay in the case of the President, 20
percent for all other officers and up to 20 percent for
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<PAGE>
each key employee. This product is then converted to number of shares of Common
Stock by dividing this product by the closing price of the Common Stock as of
the first business day of a Performance Cycle. At the end of a Performance
Cycle, the Company's Total Shareholder Return will be compared to that of the
peer group and the amount of a Stock Award which is earned, if any, will be
determined based on the Company's "Percentile Performance" measured against the
peer group. The percentage of the Threshold Goal for a participant which is
earned will range form (i) 0 percent (no payout) if the Company's percentile
ranking of its Total Shareholder Return is less than the 50th percentile to (ii)
200 percent if the Company's percentile ranking of its Total Shareholder Return
is at the 80th percentile or greater.
In conclusion, the Committee believes that compensation approved by the
Committee should be a reasonable and deductible expense of the Company. Further,
the Committee affirms its commitment to the retention and recruitment of a
highly motivated, competent work force and its integral role in the continuing
success of the Company. The Committee believes that this commitment is being
met.
Respectfully submitted,
The Compensation Committee:
Richard M. Burridge
James P. Carolus
David W. Shinneman
Robert L. Simpson
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<PAGE>
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following line graph depicts information on total shareholder return
over the last five years.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG ST. JOSEPH LIGHT & POWER CO., S&P 500 INDEX, S&P UTILITIES AND EEI 100
<TABLE>
<CAPTION>
Measurement period ST. JOSEPH LIGHT
(Fiscal year Covered) & POWER CO. S&P 500 S&P UTILITIES EEI 100
- --------------------- ---------------- ------- ------------- -------
<S> <C> <C> <C> <C>
Measurement PT -
12/31/89 $100 $100 $100 $100
FYE 12/31/90 $126.10 $ 96.90 $ 97.40 $101.37
FYE 12/31/91 $160.02 $126.36 $111.72 $130.64
FYE 12/31/92 $170.90 $135.96 $120.77 $140.59
FYE 12/31/93 $152.10 $149.69 $138.16 $156.22
FYE 12/31/94 $159.19 $151.68 $120.18 $138.15
</TABLE>
PROPOSAL 2
APPOINTMENT OF AUDITORS
The firm of Arthur Andersen L.L.P. has audited the accounts of the Company
since 1945. The firm has been recommended by the Board of Directors to serve as
independent auditors for the year 1995 following the favorable recommendation of
the Audit Committee.
A representative of Arthur Andersen L.L.P. is expected to be present at the
shareholders' meeting. Such representative may make a statement and is expected
to be available to respond to appropriate questions.
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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
SUBMISSION OF SHAREHOLDER PROPOSALS
FOR THE 1996 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy materials
for the 1996 Annual Meeting of Shareholders, shareholder proposals must be
received by the Company, 520 Francis Street, P. O. Box 998, St. Joseph, Missouri
64502-0998, Attention: Office of the Corporate Secretary, no later than December
8, 1995.
OTHER MATTERS
ANYONE OWNING COMMON STOCK OF THE COMPANY AT THE RECORD DATE FOR THIS
MEETING OR WHO SHALL IN GOOD FAITH REPRESENT TO THE COMPANY THAT HE WAS A
BENEFICIAL OWNER OF COMMON STOCK ON SUCH DATE MAY, UPON WRITTEN OR ORAL REQUEST,
OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1994, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, BY DIRECTING SUCH REQUEST TO THE OFFICE OF THE SECRETARY, 520
FRANCIS STREET, P. O. BOX 998, ST. JOSEPH, MISSOURI 64502-0998 [TELEPHONE (816)
233-8888].
The Company knows of no other matters to be brought before the meeting. The
enclosed form of proxy gives the proxies named therein discretionary authority
to vote on any other matters properly presented at the meeting or any
adjournments thereof.
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IN THE ENVELOPE
PROVIDED.
By Order of the Board of Directors:
GARY L. MYERS
Secretary
St. Joseph, Missouri
April 7, 1995
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<PAGE>
NOTICE
OF
ANNUAL MEETING
OF
SHAREHOLDERS
AND
PROXY STATEMENT
[LOGO OF ST. JOSEPH
LIGHT & POWER CO.] ---------------------------------------
ST. JOSEPH
LIGHT & POWER COMPANY
---------------------------------------
Wednesday, May 17, 1995
9:00 a.m.
others$work:[52056P.BC]1
