<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 Section 240.14a-11(c) or Section
240.14a-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:
------------------------------------------------------------------------
<PAGE>
[LOGO]
ST. JOSEPH LIGHT & POWER COMPANY
520 FRANCIS STREET, P. O. BOX 998
ST. JOSEPH, MISSOURI 64502-0998
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 1996
------------------------
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 15, 1996 for the following
purposes:
(1) To elect three Class III directors to serve until the 1999 Annual
Meeting of Shareholders and until their successors have been elected and
qualified;
(2) To approve the Long-Term Stock Incentive Plan for Non-Employee
Directors;
(3) To approve the appointment of Arthur Andersen, LLP as independent
auditors for 1996; and
(4) 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 March 27,
1996 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 2, 1996
<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 15, 1996
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 15, 1996 and any adjournments thereof. This proxy statement and the form of
proxy will be first sent or given to shareholders on or about April 2, 1996.
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 which is voted at the
meeting 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 III director nominees, for the approval of the Long-Term
Stock Incentive Plan for Non-Employee Directors, and for the approval of Arthur
Andersen, LLP 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 March 27, 1996 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 15,
1996 and any adjournments thereof. As of March 27, 1996, 3,916,975 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.
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 III directors. Accordingly, if a quorum is present,
the three persons receiving the greatest number of votes will be elected to
serve as Class III 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.
<PAGE>
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 III expire at the 1996 Annual Meeting.
The Board of Directors, upon the recommendation of its Nominating Committee,
has nominated Messrs. Richard M. Burridge, Robert L. Simpson and Gerald R.
Sprong for election to the Board of Directors to serve as members of Class III
until the 1999 Annual Meeting of Shareholders and upon election and
qualification of their successors. Messrs. Burridge, Simpson and Sprong are
presently members of the Board and were elected to the office by vote of the
shareholders.
All proxies will be voted for the nominees below to serve as Class III
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.
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 III -- Nominees for Term Expiring in 1999:
Richard M. Burridge......................................................................... 67 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.
Robert L. Simpson........................................................................... 62 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 for the preceding 5-year period.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AND PRINCIPAL OCCUPATION AGE SINCE
- ---------------------------------------------------------------------------------------------- --- ---------------
Gerald R. Sprong............................................................................ 62 1976
<S> <C> <C>
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.
Class I -- Continuing Directors for Term Expiring in 1997:
Daniel A. Burkhardt......................................................................... 48 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............................................................................ 45 1989
President and Chief Executive Officer, Hillyard Industries, Inc. (manufacturer of
maintenance cleaning products), St. Joseph, Missouri.
Terry F. Steinbecker........................................................................ 50 1985
President and Chief Executive Officer of the Company, St. Joseph, Missouri.
Class II -- Continuing Directors for Term Expiring in 1998:
John P. Barclay, Jr......................................................................... 66 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............................................................................ 53 1995
Manager and Managing Director, Global Power Division, The Chase Manhattan Bank, N.A., New
York, New York.
David W. Shinneman.......................................................................... 57 1994
President, Shinneman Management Company (owning and operating McDonald's restaurants), St.
Joseph, Missouri.
</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.
3
<PAGE>
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 1995. Messrs.
Barclay, Burkhardt, Gremp, and Simpson 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 1995. Messrs. Burridge,
Carolus, Shinneman and Sprong 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 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 one meeting in 1995. 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 1995. During 1995, 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 33 shares of
Company Common Stock in December 1995. In addition, also due to an oversight,
Mr. Burridge did not timely file Form 5 which reflected a gift of 750 shares of
Common Stock in December 1995. Also, each member of the Board of Directors
entered into an Indemnification Agreement effective December 1, 1993 (Mr.
Shinneman's was effective July 20, 1994 and Mr. Gremp's was effective May 17,
1995). 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.
4
<PAGE>
The Board of Directors is also requesting shareholder approval of the St.
Joseph Light & Power Company Long-Term Stock Incentive Plan for Non-Employee
Directors. This proposal is discussed later in this proxy statement.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table indicates beneficial ownership of the Company's Common
Stock as of March 27, 1996 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
BENEFICIAL OWNERSHIP
NAME (1) PERCENT OF CLASS
- ------------------------------------------------------------------------ ----------------------- -------------------
<S> <C> <C>
John P. Barclay, Jr..................................................... 450 (2)
Daniel A. Burkhardt..................................................... 479 (2)
Richard M. Burridge..................................................... 575 (2)
James P. Carolus........................................................ 439 (2)
William J. Gremp........................................................ 0 (2)
Gary L. Myers........................................................... 3,104 (2)
David W. Shinneman...................................................... 263 (2)
Robert L. Simpson....................................................... 1,500 (2)
Robert L. Slater........................................................ 8,910 (2)
Gerald R. Sprong........................................................ 1,675 (2)
Terry F. Steinbecker.................................................... 7,059 (2)
Larry J. Stoll.......................................................... 6,249 (2)
John A. Stuart.......................................................... 1,709 (2)
Dwight V. Svuba......................................................... 3,953 (2)
All directors and executive officers as a group......................... 36,365 (2)
</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.
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 1995 (the "named executive officers").
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION RESTRICTED
----------------------- STOCK AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(A) COMPENSATION ($)(B)
- --------------------------------------------- --------- ---------- ----------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
T. F. Steinbecker............................ 1995 $ 199,307 $ 25,263 $ 0 $ 4,980
President and Chief 1994 194,522 51,109 19,479 4,656
Executive Officer 1993 191,522 0 41,756 4,610
G. L. Myers.................................. 1995 103,113 10,500 0 3,399
Vice President- 1994 100,900 21,000 6,005 3,306
General Counsel & Secretary 1993 97,700 0 13,651 3,225
R. L. Slater................................. 1995 125,981 12,700 0 5,848
Vice President-Administration 1994 124,300 26,103 9,351 5,836
1993 122,460 0 20,915 5,780
L. J. Stoll.................................. 1995 125,798 0 0 4,000
Vice President-Finance 1994 122,436 25,620 9,172 3,966
Treasurer & Assistant Secretary 1993 118,742 0 19,893 3,868
D. V. Svuba.................................. 1995 119,296 12,190 0 4,443
Vice President-Energy Supply 1994 115,000 24,150 8,634 4,314
1993 111,891 0 18,761 4,220
</TABLE>
- ------------------------
(A) The Restricted Stock Plan adopted by the Company's shareholders at the 1992
Annual Meeting was terminated by the Board of Directors on March 16, 1994.
As a result, no awards were made for 1995 or 1996. Each remaining award from
previous years 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, 1995, the value and number of restricted shares held by the named
executive officers were as follows: $28,968 for Mr. Steinbecker -- 816
shares; $9,195 for Mr. Myers -- 259 shares; $14,200 for Mr. Slater -- 400
shares; $13,739 for Mr. Stoll -- 387 shares; and $12,922 for Mr. Svuba --
364 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 $4,458 Company-paid 401(k) Plan
match; Mr. Myers -- $306 Company-paid term life insurance premium in excess
of $50,000 group term amount and $3,093 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 $3,742 Company-paid 401(k) Plan match; Mr.
Stoll -- $306 Company-paid term life insurance premium in excess of $50,000
group term amount and $3,694 Company-paid 401(k) Plan match; and Mr. Svuba
-- $864 Company-paid term life insurance premium in excess of $50,000 group
term amount and $3,579 Company-paid 401(k) Plan match.
6
<PAGE>
The following table sets forth the number of shares of restricted stock,
including the value thereof as of January 1, 1995, which are subject to Stock
Awards granted in 1995 for the Second Performance Cycle under the Plan.
LONG-TERM INCENTIVE PLANS -- AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PERFORMANCE PAYOUTS UNDER
OR OTHER NON-STOCK
PERIOD UNTIL PRICE-BASED PLANS
NUMBER OF MATURATION OR ------------------------
NAME SHARES PAYOUT THRESHOLD MAXIMUM
- ----------------------------------------------------------------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
T.F. Steinbecker................................................. 2,095 3 Years 2,095 4,190
G.L. Myers....................................................... 717 3 Years 717 1,434
R.L. Slater...................................................... 892 3 Years 892 1,784
L.J. Stoll....................................................... 875 3 Years 875 1,750
D.V. Svuba....................................................... 825 3 Years 825 1,650
</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 a 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:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
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.
7
<PAGE>
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 1995 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 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, 1995, Messrs. Steinbecker, Myers, Slater, Stoll
and Svuba had 21, 16, 17, 21 and 29 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. These contracts were
amended again on November 19, 1993. Each of the above contracts was amended
effective March 20, 1996 generally to re-assign job functions and titles in
accordance with the Company's February 1 re-organization. Each 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 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 $527,424, $333,344, $338,656, $341,600 and
$325,056, respectively. In addition, the above contracts 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.
8
<PAGE>
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") adopted a new salary matrix for
the officer group at its March 19, 1996 meeting. The matrix was developed in
conjunction with Watson Wyatt Worldwide. The matrix reflects base pay market
comparables for each officer's salary grade. In addition, the Committee in
consultation with Watson Wyatt Worldwide examined market data for the two other
components of officer salary -- annual bonus and long-term incentive -- and made
its evaluation and adjustments to the total salary package accordingly.
1995 PERFORMANCE APPRAISAL AND BASE PAY 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 1995. 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 1995, 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 1995 performance.
Following this appraisal process, the Committee met with the president for
discussion.
CASH AWARDS FOR 1995
The Committee also considered cash awards to the officers in accordance with
the Annual Bonus Plan (the "Plan") approved by the Board of Directors in March
1994. 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 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 1995, the Company met
its target for return on equity but did not for controllable expenses. Further,
the Company increased its Common Stock dividend rate per share during the year.
As a result, an award equal to fifty percent of the maximum was made for the
covered employees. Each award was then adjusted in accordance with the ratepayer
protection factor contained
9
<PAGE>
in the Plan. This factor for 1995 was 1.00 which corresponds to the Company's
third to the lowest ranking in the 82 percentile of residential rates as
compared with the other MVEA companies. In regard to the President, this award
equalled $25,263.
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 500 Index is utilized.
The Committee at its March 19, 1996 meeting terminated the Plan and adopted
a new one in substantially the same form. The primary change allows the
President and the Committee to award an additional cash bonus of up to 20
percent of the total of all cash awards given for a plan year to an officer or
group of officers who have exhibited extraordinary performance for that year.
Discretionary awards, if any, will be made at the sole and final discretion of
the Committee.
LONG-TERM INCENTIVE PLAN (LTIP)
The LTIP was 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 each key employee. This
product is then converted to a 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 Committee at its March 19, 1996 meeting amended the "award as a % of
threshold goal" downward which is intended to place even greater emphasis on
shareholder value: Company's relative performance will have to increase for an
officer to receive an award of the same value prior to this amendment. The
amendment is effective for the Performance Cycles beginning January 1, 1996 and
subsequently.
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
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<PAGE>
continuing success of the Company. The Committee believes that this commitment
is being met and that the Company's compensation structure and benefits package
are reasonable and serve the shareholder well.
Respectfully submitted,
The Compensation Committee:
Richard M. Burridge
James P. Carolus
David W. Shinneman
Gerald R. Sprong
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following line graph depicts information on total shareholder return
over the last five years.
COMPARISON OF ST. JOSEPH LIGHT & POWER COMPANY
COMMON STOCK, S&P 500 INDEX AND EEI 100 INDEX*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
SAJ 100 126.9 135.53 120.62 126.24 166.64
S&P 500 100 130.47 140.41 154.56 156.6 215.45
EEI 100 100 128.87 138.69 154.11 136.28 178.56
</TABLE>
*Assumes (i) $100 invested on December 31, 1990 in each of the Company's Common
Stock, the S&P 500 Index and EEI 100 Index and (ii) quarterly reinvestment of
dividends.
11
<PAGE>
PROPOSAL 2
APPROVAL OF LONG-TERM STOCK INCENTIVE PLAN
FOR NON-EMPLOYEE DIRECTORS
GENERAL
The Board of Directors is proposing for shareholder approval the St. Joseph
Light & Power Company Long-Term Stock Incentive Plan for Non-Employee Directors
(the "Plan"). The purposes of the Plan are (i) to align the interests of the
Company's shareholders and the non-employee directors of the Company
("Non-Employee Directors") by increasing the proprietary interest of the
Non-Employee Directors in the Company's growth and success, (ii) to advance the
interests of the Company by attracting and retaining well-qualified persons for
service as Non-Employee Directors and (iii) to motivate Non-Employee Directors
to act in the long-term best interests of the Company's shareholders.
Under the Plan, as described more fully below, Non-Employee Directors will
automatically be granted non-qualified options to purchase shares of Common
Stock and restricted stock awards. The Board of Directors recommends that the
shareholders approve the adoption of the Plan. The affirmative vote of a
majority of the shares entitled to vote on the proposal and represented in
person or by proxy at the meeting is required to approve the Plan. A copy of the
Plan is attached as Exhibit A to this Proxy Statement.
PRINCIPAL FEATURES OF THE PLAN
ADMINISTRATION. The Plan will be administered by the Compensation Committee
of the Board of Directors or any other committee designated by the Board (the
"Committee"). Awards of options and restricted stock will be automatic under the
Plan. The Committee will have authority to prescribe rules and regulations for
administering the Plan and to decide questions of interpretation or application
of any provision of the Plan. Each award will be evidenced by a written
agreement between the Company and the holder of the award.
AVAILABLE SHARES. Under the Plan, 150,000 shares of Common Stock will be
available for awards, subject to adjustment in the event of a stock split, stock
dividend, recapitalization, reorganization, merger, spin-off or other similar
change or event. The number of shares available under the Plan will be reduced
by the sum of the aggregate number of shares of Common Stock (i) that are issued
upon the grant of restricted stock and (ii) which become subject to outstanding
options. To the extent that shares of Common Stock subject to an outstanding
restricted stock award or option are not issued or delivered by reason of the
expiration, termination, cancellation or forfeiture of such restricted stock
award or option or by reason of the delivery or withholding of shares of Common
Stock to pay all or a portion of the exercise price of such option, then such
shares of Common Stock will again be available under this Plan.
EFFECTIVE DATE, TERMINATION AND AMENDMENT. If approved by shareholders, the
Plan will become effective as of January 17, 1996, the date the Plan was adopted
by the Board of Directors. The Plan will terminate when shares are no longer
available under the Plan, unless terminated earlier by the Board of Directors.
The Board of Directors may amend the Plan at any time, subject to any
requirement of shareholder approval required by applicable law, rule or
regulation and provided that no amendment may be made without shareholder
approval if such amendment would increase the maximum number of shares of Common
Stock available under the Plan or reduce the minimum purchase price of a share
of Common Stock subject to an option.
STOCK OPTIONS. Under the Plan, Non-Employee Directors will automatically be
granted, on the date of the 1996 Annual Meeting (the "1996 Meeting"), options to
purchase 1,000 shares of
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<PAGE>
Common Stock for each full year such person has served as a Non-Employee
Director through the date of the 1996 Meeting; provided that no Non-Employee
Director may receive an option to purchase more than 7,000 shares. In addition,
Non-Employee Directors will automatically be granted, on the date of each annual
meeting of shareholders beginning with the 1996 Meeting, options to purchase
1,000 shares of Common Stock. Immediately after the 1996 Meeting, Messrs.
Barclay, Burkhardt, Burridge, Carolus, Simpson and Sprong would each be granted
options to purchase 8,000 shares of Common Stock while Messrs. Gremp and
Shinneman would be granted options to purchase 2,000 and 3,000 shares,
respectively.
All options will have a purchase price per share equal to the fair market
value of a share on the date of grant. Options will be exercisable in full on
the date of grant and will expire ten years after the date of grant. Upon
exercise of an option, the purchase price may be paid in cash, by delivery of
previously owned shares of Common Stock or by authorizing the Company to
withhold shares of Common Stock which would otherwise be delivered upon exercise
of the option.
If a Non-Employee Director ceases to be a director by reason of disability,
each of such director's options may be exercised for a period of three years
thereafter, but in no event after the expiration of the option. If a
Non-Employee Director ceases to be a director by reason of death, each of such
director's options may be exercised for a period of one year after the date of
such director's death, but in no event after the expiration of the option. If a
Non-Employee Director ceases to be a director for any reason other than ceasing
to be a director of the Company by reason of disability or death, each of such
director's options may be exercised for a period of six months thereafter, but
in no event after the expiration of the option. In the event a Non-Employee
Director dies during the three-year period after ceasing to be a director by
reason of disability, or if a Non-Employee Director dies during the six-month
period after ceasing to be a director for any reason other than ceasing to be a
director of the Company by reason of disability, each of such director's options
may be exercised for a period of six months after the date of death, but in no
event after the expiration of the option.
RESTRICTED STOCK AWARDS. All Non-Employee Directors will automatically be
granted, on the date of the 1996 Meeting, restricted stock awards for 500 shares
of Common Stock ("Initial Awards"). Initial Awards will vest on the first to
occur of (i) re-election to the Board of Directors after the 1996 Meeting of the
Non-Employee Director who holds such award and (ii) the date that the Non-
Employee Director who holds such award ceases to serve as a director of the
Company for any reason. In addition, beginning on the date of the 1996 Meeting,
each Non-Employee Director who is elected a Non-Employee Director at an annual
meeting, will automatically be granted restricted stock awards for 500 shares of
Common Stock ("Annual Awards"). Annual Awards will vest in full on the third
anniversary of the date of grant of such award. Messrs. Barclay, Burkhardt,
Carolus, Gremp and Shinneman would each be granted 500 shares of restricted
stock immediately after the 1996 Meeting and, if elected at the 1996 Meeting,
Messrs. Burridge, Simpson and Sprong would each be granted 1,000 shares of
restricted stock immediately after the 1996 Meeting.
The holder of a restricted stock award will have voting rights and will have
the right to receive regular cash dividends with respect to the shares of
restricted stock.
With respect to Initial and Annual Awards, termination of service as a
director for any reason prior to a Non-Employee Director's re-election to the
Board of Directors will result in a lapse of restrictions.
CHANGE IN CONTROL. In the event of certain acquisitions of 20% or more of
the Common Stock, a change in a majority of the Board of Directors, or the
approval by shareholders of a
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<PAGE>
reorganization, merger or consolidation or sale or disposition of all or
substantially all of the assets of the Company (unless, among other conditions,
the Company's shareholders receive 60% or more of the stock of the surviving
company) or the approval by shareholders of a liquidation or dissolution of the
Company, all restricted stock awards will vest.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of certain U.S. federal income tax
consequences generally arising with respect to options and restricted stock
awards under the Plan.
A Non-Employee Director will not recognize any income upon the grant of an
option. A Non-Employee Director will recognize compensation taxable as ordinary
income upon exercise of an option equal to the excess of the fair market value
of the shares purchased over their exercise price, and the Company will be
entitled to a corresponding deduction.
A Non-Employee Director will not recognize taxable income at the time of the
grant of a restricted stock award, and the Company will not be entitled to a tax
deduction at such time, unless the Non-Employee Director makes an election to be
taxed at the time restricted stock is granted. If such election is not made, the
Non-Employee Director will recognize taxable income at the time the restrictions
lapse in an amount equal to the fair market value of the shares at such time.
The amount of ordinary income recognized by a Non-Employee Director by making
the above-described election or upon the lapse of the restrictions is deductible
by the Company as compensation expense. In addition, a Non-Employee director
receiving dividends with respect to restricted stock for which the above-
described election has not been made and prior to the time the restrictions
lapse will recognize taxable compensation, rather then dividend income, in an
amount equal to the dividends paid and the Company will be entitled to a
corresponding deduction.
The following table sets forth (i) the number of shares of Common Stock
subject to options and restricted stock awards which would be granted initially
to Non-Employee Directors on the date of the 1996 Meeting and (ii) the number of
shares of Common Stock subject to options and restricted stock which would be
granted on the date of each annual meeting of shareholders beginning with the
1996 Meeting.
LONG-TERM STOCK INCENTIVE PLAN
FOR NON-EMPLOYEE DIRECTORS
<TABLE>
<CAPTION>
SHARES OF
-------------------------------------------------------------------------
STOCK OPTIONS(1) RESTRICTED STOCK
---------------------- -------------------------------------------------
INITIAL ANNUAL INITIAL DOLLAR ($) ANNUAL DOLLAR ($)
POSITION GRANTS GRANTS AWARDS VALUE (2) AWARDS VALUE (2)
- -------------------------------------------------- --------- ----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
All Non-Employee Directors as a Group............. 53,000 8,000 5,500 $ 177,375 1,500 $ 48,375
(eight persons)
</TABLE>
- ------------------------
(1) The purchase price per share will be the closing price of the Common Stock
as reported in the New York Stock Exchange Composite Transactions on the
date of grant.
(2) The dollar value is based on the closing price of $32.25 per share of Common
Stock on March 20, 1996, as reported in the New York Stock Exchange
Composite Transactions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN.
A copy of the Plan is attached as Exhibit A.
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<PAGE>
PROPOSAL 3
APPOINTMENT OF AUDITORS
The firm of Arthur Andersen, LLP 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 1996 following the favorable recommendation of
the Audit Committee.
A representative of Arthur Andersen, LLP 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.
SUBMISSION OF SHAREHOLDER PROPOSALS
FOR THE 1997 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy materials for
the 1997 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
2, 1996.
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, 1995, 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)
387-6434].
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 2, 1996
15
<PAGE>
EXHIBIT A
ST. JOSEPH LIGHT & POWER COMPANY
LONG-TERM STOCK INCENTIVE PLAN
FOR NON-EMPLOYEE DIRECTORS
I. INTRODUCTION
1.1 PURPOSES. The purposes of the Long-Term Stock Incentive Plan for
Non-Employee Directors (the "PLAN") of St. Joseph Light & Power Company (the
"COMPANY") are (i) to align the interests of the Company's shareholders and the
non-employee directors of the Company ("NON-EMPLOYEE DIRECTORS") by increasing
the proprietary interest of the Non-Employee Directors in the Company's growth
and success, (ii) to advance the interests of the Company by attracting and
retaining well-qualified persons for service as Non-Employee Directors and (iii)
to motivate Non-Employee Directors to act in the long-term best interests of the
Company's shareholders.
1.2 CERTAIN DEFINITIONS.
"AGREEMENT" shall mean the written agreement between the Company and a
Non-Employee Director evidencing a Stock Option or Restricted Stock Award.
"ANNUAL RESTRICTED STOCK AWARDS" shall have the meaning set forth in Section
3.1(a).
"BOARD" shall mean the Board of Directors of the Company.
"CHANGE IN CONTROL" shall have the meaning set forth in Section 4.7(b).
"COMMITTEE" shall mean the Compensation Committee of the Board or any other
committee designated by the Board to administer the Plan.
"COMMON STOCK" shall mean the common stock, no par value, of the Company.
"COMPANY" has the meaning specified in Section 1.1.
"CORPORATE TRANSACTION" shall have the meaning set forth in Section
4.7(b)(3).
"DISABILITY" shall mean the inability of a Non-Employee Director to perform
substantially such Non-Employee Director's duties and responsibilities for a
continuous period of at least six months, as determined solely by the Committee.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" shall mean the closing price of a share of Common Stock
as reported in the New York Stock Exchange Composite Transactions on the date as
of which such value is being determined, or, if the Common Stock is not listed
on the New York Stock Exchange, the closing price of a share of Common Stock on
the principal national stock exchange on which the Common Stock is traded on the
date as of which such value is being determined, or, if there shall be no
reported transaction for such date, on the next preceding date for which a
transaction was reported; provided, however, that if Fair Market Value for any
date cannot be so determined, Fair Market Value shall be determined by the
Committee by whatever means or method as the Committee, in the good faith
exercise of its discretion, shall at such time deem appropriate.
"INCUMBENT BOARD" shall have the meaning set forth in Section 4.7(b)(2).
"INITIAL RESTRICTED STOCK AWARDS" shall have the meaning set forth in
Section 3.1(a).
<PAGE>
"MATURE SHARES" shall mean shares of Common Stock for which the holder
thereof has good title, free and clear of all liens and encumbrances and which
such holder either (i) has held for at least six months or (ii) has purchased on
the open market.
"NON-EMPLOYEE DIRECTOR" shall have the meaning set forth in Section 1.1.
"OUTSTANDING COMMON STOCK" shall have the meaning set forth in Section
4.7(b)(1).
"PERSON" shall have the meaning set forth in Section 4.7(b)(1).
"RESTRICTED STOCK" shall mean shares of Common Stock which are subject to a
Restriction Period.
"RESTRICTED STOCK AWARD" shall mean an award of Restricted Stock under this
Plan.
"RESTRICTION PERIOD" shall mean, with respect to any Restricted Stock Award,
the period during which such Restricted Stock Award may not be sold,
transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed
of, except as provided in this Plan or the Agreement relating to such Restricted
Stock Award; provided, however, that the holder of a Restricted Stock Award may,
with the written consent of the Board, tender the shares of Common Stock subject
to such Award for sale or exchange in the event of any tender offer within the
meaning of Section 14(d) of the Exchange Act.
"STOCK OPTIONS" shall mean non-statutory options to purchase shares of
Common Stock granted in accordance with Article II.
"1996 MEETING" shall have the meaning set forth in Section 2.1(a).
1.3 ADMINISTRATION. This Plan shall be administered by the Committee. The
Committee shall, subject to the terms of this Plan, interpret this Plan and the
application thereof, establish rules and regulations it deems necessary or
desirable for the administration of this Plan. All such interpretations, rules
and regulations shall be conclusive and binding on all parties. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to this Plan or any Stock Option or Restricted Stock Award.
A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (i) acts of a majority of the members of the Committee
present at any meeting at which a quorum is present or (ii) acts approved in
writing by a majority of the members of the Committee without a meeting.
1.4 ELIGIBILITY. Only Non-Employee Directors shall be eligible to
participate in this Plan.
1.5 SHARES AVAILABLE. Subject to adjustment as provided in Section 4.6,
150,000 shares of Common Stock shall be available under this Plan, reduced by
the sum of the aggregate number of shares of Common Stock (i) that are issued
upon the grant of a Restricted Stock Award and (ii) which become subject to
outstanding Stock Options. To the extent that shares of Common Stock subject to
an outstanding Restricted Stock Award or Stock Option are not issued or
delivered by reason of the expiration, termination, cancellation or forfeiture
of such Restricted Stock Award or Stock Option or by reason of the delivery or
withholding of shares of Common Stock to pay all or a portion of the exercise
price of such Stock Option, then such shares of Common Stock shall again be
available under this Plan.
2
<PAGE>
Shares of Common Stock to be delivered under this Plan shall be made
available from authorized and unissued shares of Common Stock, or issued shares
of Common Stock reacquired and held as treasury shares or otherwise or a
combination thereof.
1.6 MINIMUM HOLDINGS. The Board believes each director should be a holder
of Common Stock. As a result, on the date of the 1996 annual meeting of
shareholders of the Company (the "1996 MEETING"), the Board shall establish a
requirement of a minimum director stockholding. The Board, however, shall retain
the authority to reduce or waive this minimum requirement for any director due
to an extraordinary circumstance to be determined in the absolute discretion of
the Board.
II. STOCK OPTIONS
2.1 ELIGIBILITY. Each Non-Employee Director shall be granted Stock Options
as follows:
(a) TIME OF GRANT. On the date of the 1996 Meeting, each person who is a
Non-Employee Director immediately after the 1996 Meeting shall be granted a
Stock Option to purchase 1,000 shares of Common Stock for each full year such
person has served as a Non-Employee Director through the date of the 1996
Meeting at a purchase price per share equal to the Fair Market Value of a share
of Common Stock on the date of grant of such Stock Option; provided, however,
that the maximum number of shares of Common Stock subject to a Stock Option
granted pursuant to this sentence shall be 7,000. In addition, on the date of
the 1996 Meeting (or, if later, on the date on which a person is first elected
or begins to serve as a Non-Employee Director other than by reason of
termination of employment), and, thereafter, on the date of each annual meeting
of shareholders of the Company, each person who is a Non-Employee Director
immediately after such meeting of shareholders shall be granted a Stock Option
to purchase 1,000 shares of Common Stock (which amount shall be pro-rated if
such Non-Employee Director is first elected or begins to serve as a Non-Employee
Director on a date other than the date of an annual meeting of shareholders) at
a purchase price per share equal to the Fair Market Value of a share of Common
Stock on the date of grant of such Stock Option.
(b) OPTION PERIOD AND EXERCISABILITY. Each Stock Option shall be fully
exercisable on and after its date of grant and shall expire ten years after its
date of grant. An exercisable Stock Option, or portion thereof, may be exercised
in whole or in part only with respect to whole shares of Common Stock.
(c) METHOD OF EXERCISE. A Stock Option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of Common
Stock to be purchased and accompanied by payment therefor in full (or
arrangement made for such payment to the Company's satisfaction) either (A) in
cash, (B) by delivery of Mature Shares having a Fair Market Value, determined as
of the date of exercise, equal to the aggregate purchase price payable by reason
of such exercise, (C) by authorizing the Company to withhold whole shares of
Common Stock which would otherwise be delivered upon exercise of the Stock
Option having a Fair Market Value, determined as of the date of exercise, equal
to the aggregate purchase price payable by reason of such exercise, (D) in cash
by a broker-dealer acceptable to the Company to whom the optionee has submitted
an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in
each case to the extent set forth in the Agreement relating to the Stock Option
and (ii) by executing such documents as the Company may reasonably request. The
Committee shall have sole discretion to disapprove of an election pursuant to
any of clauses (B)-(E) and the Company may require that the method of making
such payment be in compliance with Section 16 under the Exchange Act and the
rules and regulations thereunder. Any
3
<PAGE>
fraction of a share of Common Stock which would be required to pay such purchase
price shall be disregarded and the remaining amount due shall be paid in cash by
the optionee. No certificate representing Common Stock shall be delivered until
the full purchase price therefor has been paid.
2.2 TERMINATION OF DIRECTORSHIP. (a) DISABILITY. If the holder of a
Stock Option ceases to be a director of the Company by reason of Disability,
each Stock Option held by such holder may thereafter be exercised by such holder
(or such holder's legal representative or similar person) until and including
the earliest to occur of the (i) date which is three years after the effective
date of such holder's ceasing to be a director and (ii) the expiration date of
the terms of such Stock Option.
(b) DEATH. If the holder of a Stock Option ceases to be a director of the
Company by reason of death, each Stock Option held by such holder may thereafter
be exercised by such holder's executor, administrator, legal representative,
beneficiary or similar person, as the case may be, until and including the
earliest to occur of the (i) date which is one year after the date of death and
(ii) the expiration date of the term of such Stock Option.
(c) OTHER TERMINATION. If the holder of a Stock Option ceases to be a
director of the Company for any reason other than Disability or death, each
Stock Option held by such holder may thereafter be exercised by such holder (or
such holder's legal representative or similar person) until and including the
earliest to occur of the (i) date which is six months after the effective date
of such holder's ceasing to be a director and (ii) the expiration date of the
term of such Stock Option.
(d) DEATH FOLLOWING TERMINATION OF DIRECTORSHIP. If the holder of a Stock
Option dies during the period set forth in Section 2.2(a) following such
holder's ceasing to be a director of the Company by reason of Disability, or if
such holder dies during the period set forth in Section 2.2(c) following such
holder's ceasing to be a director of the Company for any reason other than
ceasing to be a director of the Company by reason of Disability, each Stock
Option held by such holder may thereafter be exercised by such holder's
executor, administrator, legal representative, beneficiary or similar person, as
the case may be, until the earliest to occur of the (i) date which is six months
after the date of death and (ii) the expiration date of the term of such Stock
Option.
III. STOCK AWARDS
3.1 ELIGIBILITY. Each Non-Employee Director shall be granted Restricted
Stock Awards as follows:
(a) TIME OF GRANT. On the date of the 1996 Meeting, each person who is a
Non-Employee Director immediately after the 1996 Meeting shall be granted a
Restricted Stock Award for 500 shares of Common Stock (the "INITIAL RESTRICTED
STOCK AWARDS"). In addition, on the date of the 1996 Meeting (or, if later, on
the date on which a person is first elected or begins to serve as a Non-Employee
Director other than by reason of termination of employment), and, thereafter, on
the date of each annual meeting of shareholders of the Company, each person who
is elected a director of the Company at such annual meeting and who is also a
Non-Employee Director shall be granted a Restricted Stock Award for 500 shares
of Common Stock (which amount shall be pro-rated if such Non-Employee Director
is first elected or begins to serve as a Non-Employee Director on a date other
than the date of an annual meeting of shareholders) ("ANNUAL RESTRICTED STOCK
AWARDS").
(b) VESTING. Subject to Section 4.7, the Restriction Period for each
Initial Restricted Stock Award shall expire on the first to occur of (i) the
re-election to the Board after the 1996 Meeting of
4
<PAGE>
the person who holds such Initial Restricted Stock Award and (ii) 5:00 p.m. on
the date that the person who holds such Initial Restricted Stock Award ceases to
serve as a director of the Company for any reason. Subject to Section 4.7, the
Restriction Period for each Annual Restricted Stock Award shall expire on the
first to occur of (i) 5:00 p.m. on the third anniversary of the date of grant of
such Annual Restricted Stock Award and (ii) 5:00 p.m. on the date that the
person who holds such Annual Restricted Stock Award ceases to serve as a
director of the Company for any reason.
3.2 SHARE CERTIFICATES. During the Restriction Period, a certificate or
certificates representing a Restricted Stock Award shall be registered in the
holder's name and may bear a legend, in addition to any legend which may be
required pursuant to Section 4.5, indicating that the ownership of the shares of
Common Stock represented by such certificate is subject to the restrictions,
terms and conditions of this Plan and the Agreement relating to the Restricted
Stock Award. All such certificates shall be deposited with the Company. Upon
termination of any applicable Restriction Period, a certificate or certificates
evidencing ownership of the requisite number of shares of Common Stock shall be
delivered to the holder of such Restricted Stock Award.
3.3 RIGHTS WITH RESPECT TO RESTRICTED STOCK AWARDS. The holder of a
Restricted Stock Award shall have all rights as a shareholder of the Company,
including, but not limited to, voting rights, the right to receive dividends and
the right to participate in any capital adjustment applicable to all holders of
Common Stock; provided, however, that a distribution with respect to shares of
Common Stock, other than a regular cash dividend, shall be deposited with the
Company and shall be subject to the same restrictions as the shares of Common
Stock with respect to which such distribution was made.
3.4 TERMINATION OF DIRECTORSHIP. (a) INITIAL RESTRICTED STOCK AWARDS. In
accordance with Section 3.1(b) and subject to Section 4.7, if the holder of an
Initial Restricted Stock Award ceases to be a director of the Company for any
reason prior to such holder's re-election to the Board after the 1996 Meeting,
the Restriction Period for such Award shall expire at 5:00 p.m. on the date that
such holder ceases to serve as a director of the Company.
(b) ANNUAL RESTRICTED STOCK AWARDS. In accordance with Section 3.1(b) and
subject to Section 4.7, if the holder of an Annual Restricted Stock Award ceases
to be a director of the Company for any reason prior to 5:00 p.m. on the third
anniversary of the date of grant of such Award, the Restriction Period for such
Award shall expire at 5:00 p.m. on the date that such holder ceases to serve as
a director of the Company.
IV. GENERAL
4.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
shareholders of the Company for approval and, if approved by the affirmative
vote of a majority of the shares of Common Stock entitled to vote and
represented in person or by proxy at the 1996 Meeting, shall become effective as
of the date of approval by the Board. This Plan shall terminate when shares of
Common Stock are no longer available under this Plan, unless this Plan is
terminated earlier by the Board. Termination of this Plan shall not affect the
terms or conditions of any Award granted prior to termination. In the event that
this Plan is not approved by the shareholders of the Company, this Plan and any
Awards hereunder shall be void and of no force or effect.
4.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of shareholder approval required by applicable law,
rule or regulation including Rule 16b-3 under the Exchange Act; provided,
however, that no amendment shall be made without shareholder
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approval if such amendment would (a) increase the maximum number of shares of
Common Stock available under this Plan (subject to Section 4.6) or (b) reduce
the minimum purchase price in the case of a Stock Option; provided further that,
subject to Section 4.6, the number of shares of Common Stock subject to an
Award, the purchase price of shares of Common Stock subject to a Stock Option,
the date of grant of any Award, the termination provisions relating to an Award,
and the category of persons eligible to be granted an Award shall not be amended
more than once every six months, other than to comply with changes in the
Internal Revenue Code of 1986, as amended, or the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations thereunder. No
amendment may impair the rights of a holder of an outstanding Award without the
consent of such holder.
4.3 AGREEMENT. Each Award shall be evidenced by an Agreement setting forth
the terms and conditions applicable to such Award. No Award shall be valid until
an Agreement is executed by the Company and the recipient of such Award and,
upon execution by each party and delivery of the Agreement to the Company, such
Award shall be effective as of the effective date set forth in the Agreement.
4.4 NON-TRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall be
transferable other than (i) by will, the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company or (ii)
as otherwise permitted under Rule 16b-3 under the Exchange Act. Except to the
extent permitted by the foregoing sentence, each Stock Option may be exercised
during the holder's lifetime only by the holder or the holder's legal
representative or similar person. Except to the extent permitted by the second
preceding sentence, no Stock Option may be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar process. Upon
any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of any Stock Option, such Stock Option and all rights
thereunder shall immediately become null and void.
4.5 RESTRICTIONS ON SHARES. Each Award shall be subject to the requirement
that if at any time the Company determines that the listing, registration or
qualification of the shares of Common Stock subject to such Award upon any
securities exchange or under any law, or the consent or approval of any
governmental body, or the taking of any other action is necessary or desirable
as a condition of, or in connection with, the delivery of shares thereunder,
such shares shall not be delivered unless such listing, registration,
qualification, consent, approval or other action shall have been effected or
obtained, free of any conditions not acceptable to the Company. The Company may
require that certificates evidencing shares of Common Stock delivered pursuant
to any Award bear a legend indicating that the sale, transfer or other
disposition thereof by the holder is prohibited except in compliance with the
Securities Act of 1933, as amended, and the rules and regulations thereunder.
4.6 ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Common Stock other than a regular cash
dividend, the number and class of securities available under this plan, the
number and class of securities subject to each outstanding Award, the purchase
price (if any) per security and the number of securities subject to each Award
to be granted under this plan, shall be appropriately adjusted by the Committee,
such adjustments to be made in the case of outstanding Stock Options without an
increase in the aggregate purchase price. The decision of the Committee
regarding any such adjustment shall be final, binding and conclusive. If any
such adjustment would result in a fractional security being
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(a) available under this Plan, such fractional security shall be disregarded, or
(b) subject to an Award under this Plan, the Company shall pay the holder of
such Award, in connection with the first to occur after such adjustment of (1)
the exercise or vesting of such Award in whole or in part and (2) the
expiration, cancellation, termination or forfeiture of such Award in whole or in
part, an amount in cash determined by multiplying (i) the fraction of such
security (rounded to the nearest hundredth) by (ii) the excess, if any, of (A)
the Fair Market Value on the date of exercise, vesting, expiration,
cancellation, termination or forfeiture, as the case may be, over (B) the
exercise price, if any, of such Award.
4.7 CHANGE IN CONTROL.
(a) Notwithstanding any provision in this Plan or any Agreement, in the
event of a Change in Control the Restriction Period applicable to any
outstanding Restricted Stock Award shall lapse.
(b) "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a "PERSON"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of 20% or more of
the then outstanding shares of Common Stock (the "OUTSTANDING COMMON
STOCK"); provided that the following acquisitions shall not constitute a
Change in Control: (A) any acquisition directly from the Company (excluding
any acquisition resulting from the exercise of an exercise, conversion or
exchange privilege unless the security being so exercised, converted or
exchanged was acquired directly from the Company), (B) any acquisition by
the Company, (C) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled
by the Company or (D) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection
(3) of this Section 4.7(b); and provided further, that for purposes of
clause (B), if any Person (other than the Company or any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company) shall become the beneficial owner of
20% or more of the Outstanding Common Stock by reason of an acquisition by
the Company, and such Person shall, after such acquisition by the Company,
become the beneficial owner of any additional shares of the Outstanding
Common Stock and such beneficial ownership is publicly announced, such
additional beneficial ownership shall constitute a Change in Control;
(2) individuals who, immediately after the 1996 Meeting constitute the
Board of Directors (the "INCUMBENT BOARD"), cease for any reason to
constitute at least a majority of the Board; provided that any individual
who becomes a director of the Company subsequent to the date of the 1996
Meeting whose election, or nomination for election by the Company's
shareholders, was approved by the vote of at least 66 2/3% of the directors
then comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that no individual who was initially
elected as a director of the Company as a result of an actual or threatened
election contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than
the Board shall not be deemed a member of the Incumbent Board;
(3) approval by the shareholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially
all of the assets of the Company (a
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"CORPORATE TRANSACTION"); excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially all of the individuals or
entities who are the beneficial owners, respectively, of the Outstanding
Common Stock immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock, and the combined voting power of the
outstanding securities of such corporation entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation
which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or indirectly) in
substantially the same proportions relative to each other as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock, (ii) no Person (other than: the Company;
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; the corporation
resulting from such Corporate Transaction; and any Person which beneficially
owned, immediately prior to such Corporate Transaction, directly or
indirectly, 20% or more of the Outstanding Company Common Stock) will
beneficially own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of
directors and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of
the corporation resulting from such Corporate Transaction; or
(4) approval by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company.
4.8 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any
right to participate in this Plan. Neither this Plan nor any Award shall confer
upon any person any right to continue to serve as a director of the Company.
4.9 RIGHTS AS SHAREHOLDER. No person shall have any right as a shareholder
of the Company with respect to any shares of Common Stock or other equity
security of the Company which is subject to an Award unless and until such
person becomes a shareholder of record with respect to such shares of Common
Stock or equity security.
4.10 GOVERNING LAW. This Plan, each Award and the related Agreement, and
all determinations made and actions taken pursuant thereto, to the extent not
otherwise governed by the laws of the United States, shall be governed by the
laws of the State of Missouri and construed in accordance therewith without
giving effect to principles of conflicts of laws.
4.11 EFFECT ON OTHER BENEFITS. The value of any Awards (either on the date
granted or at the time any restrictions on shares are terminated) shall not be
included as compensation or earnings for purposes of the calculation of benefits
under any other benefit plan of the Company.
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PROXY ST. JOSEPH LIGHT & POWER COMPANY PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS MAY 15, 1996
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints T.F. STEINBECKER, G.L. MYERS and L.J. STOLL,
and each of them, attorneys adn proxies for the undersigned with full power
of substitution to vote at the Annual Meeting of Shareholdrs of St. Joseph
Light & Power Company on May 15, 1996 and any adjournments thereof all shares
of Common Stock which the undersigned would be entitled to vote if personally
present.
UNLESS A CONTRARY VOTE IS SPECIFIED THIS PROXY WILL BE VOTED FOR EACH OF THE
THREE NOMINEES FOR DIRECTOR AND FOR THE LISTED PROPOSALS. ANY SHARES HELD IN
THE AUTOMATIC DIVIDEND REINVESTMENT AND OPTIONAL CASH PAYMENT PLAN WILL BE
VOTED BY THE PLAN NOMINEE IN THE SAME MANNER AS SHARES REGISTERED IN THE
PARTICIPANT'S NAME.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
[ ]
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSALS BELOW.
<TABLE>
<S> <C>
1. The election of the three (3) nominees for FOR WITHHELD FOR ALL (EXCEPT NOMINEE(S) WRITTEN BELOW)
directors. Class III (3-year term expiring / / / / / /
in 1999) Nominees: Messrs. Richard M.
Burridge, Robert L. Simpson and Gerald R. Sprong. _______________________
2. The approval of the Long-Term Stock Incentive FOR WITHHELD ABSTAIN
Plan for Non-Employee Directors. / / / / / /
3. The appointment of Arthur Andersen, LLP FOR WITHHELD ABSTAIN
as auditors for 1996. / / / / / /
4. In their discretion with respect to such other
matters as may properly come before such meeting
or any adjournments thereof.
Dated_________________, 1996
____________________________
Signature(s)
____________________________
THIS IS A PROXY - SEE REVERSE Please sign exactly as your name
appears on this card. For joint
accounts each owner should sign.
When signing as corporate officer,
attorney, executor, administrator,
trustee or guardian, please give
full title as such.
</TABLE>
