<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 240.14a-11(c) or 240.14a-12
ST. JOSEPH LIGHT & POWER COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
MERRILL CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(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 21, 1997
------------------------
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 21, 1997 for the following
purposes:
(1) To elect three Class I directors to serve until the 2000 Annual Meeting
of Shareholders and until their successors have been elected and
qualified;
(2) To approve the appointment of Arthur Andersen LLP as independent
auditors for 1997; 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 2,
1997 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
Vice President, General Counsel and
Secretary
St. Joseph, Missouri
April 7, 1997
<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 21, 1997
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 21, 1997 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, 1997.
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 either voting in person or 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 I director nominees, 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 April 2, 1997 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 21,
1997 and any adjournments thereof. As of April 2, 1997, 7,968,369 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.
VOTING INFORMATION
If a quorum is present, the affirmative vote of a majority 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 each Class I director. Accordingly,
withholding authority to vote for a director nominee will not prevent such
nominee from being elected. In accordance with the Missouri General and Business
Corporation Law, the Company's Bylaws do not permit cumulative voting in the
election of directors.
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 of such matter. 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 I expire at the 1997 Annual Meeting.
The Board of Directors, upon the recommendation of its Nominating Committee,
has nominated Messrs. Daniel A. Burkhardt, James P. Carolus and Terry F.
Steinbecker for election to the Board of Directors to serve as members of Class
I until the 2000 Annual Meeting of Shareholders and upon election and
qualification of their successors. Messrs. Burkhardt, Carolus and Steinbecker
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 I
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 I -- Nominees for Term Expiring in 2000:
Daniel A. Burkhardt......................................................................... 49 1988
General Partner, The Jones Financial Companies (investment banking and retail securities
firm), St. Louis, Missouri. Director: Essex County Gas Company, Amesbury, Massachusetts;
Mid-America Realty Investments, Inc., Omaha, Nebraska; CIP Management, Inc., St. Louis,
Missouri; Southeastern Michigan Gas Enterprises, Port Huron, Michigan.
James P. Carolus............................................................................ 46 1989
President and Chief Executive Officer, Hillyard Industries, Inc. (manufacturer of
maintenance cleaning products), St. Joseph, Missouri.
Terry F. Steinbecker........................................................................ 51 1985
President and Chief Executive Officer of the Company, St. Joseph, Missouri.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AND PRINCIPAL OCCUPATION AGE SINCE
- ---------------------------------------------------------------------------------------------- --- ---------------
Class II -- Continuing Directors for Term Expiring in 1998:
<S> <C> <C>
John P. Barclay, Jr......................................................................... 67 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............................................................................ 54 1995
Managing Director and Senior Vice President, First Union Capital Markets Group (banking),
Charlotte, North Carolina since 1996; Manager and Managing Director, The Chase Manhattan
Bank Global Power Division from 1989 to 1996.
David W. Shinneman.......................................................................... 58 1994
President, Shinneman Management Company (owner and operator of McDonald's restaurants),
St. Joseph, Missouri.
Class III -- Continuing Directors for Term Expiring in 1999:
Richard M. Burridge......................................................................... 68 1987
Chairman, The Burridge Group Inc. (money manager), Chicago, Illinois. Director: Fort
Dearborn Income Securities, Chicago, Illinois; Lincoln National Income Fund, Chicago,
Illinois; Lincoln National Convertible Fund, Chicago, Illinois; Cincinnati Financial
Corp., Cincinnati, Ohio.
Robert L. Simpson........................................................................... 63 1983
General Partner, St. Joseph Riverboat Partners (riverboat casino), St. Joseph, Missouri
since 1994. Consultant, Hawthorn Financial Corporation doing business as Burnham Colman
McMurray Hatten & Squires (insurance brokers), St. Joseph, Missouri from 1993 to 1996;
President, Hawthorn Financial Corporation for the preceding 5-year period.
Gerald R. Sprong............................................................................ 63 1976
President and Chief Executive Officer, The Morris Plan Company of St. Joseph (financial
management and lending), St. Joseph, Missouri; Director, President and Chief Executive
Officer, First Savings Bank, F.S.B., Manhattan, Kansas; President and Chief Executive
Officer, Noble Properties of Iowa, L.L.C. (ownership & management of hotels), Des
Moines, Iowa since 1996.
</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 1996. 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 two meetings in 1996. 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 no meetings in 1996. 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.
Burridge, Carolus, Shinneman and Simpson comprise the Nominating Committee.
The Strategic Planning Committee reviews management's strategic planning
processes; reviews the Company's annual Strategic Plan; provides input
concerning specific strategies to provide long-term growth; meets with
management to discuss the Strategic Plan and to monitor management's progress;
and makes an annual report to the Board of Directors. The Strategic Planning
Committee held three meetings in 1996. Messrs. Barclay, Burkhardt, Gremp and
Sprong comprise the Strategic Planning 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. Each outside
director also receives $600 for attendance at each meeting of a board committee
of which he is a member. In addition, in accordance with the St. Joseph Light &
Power Company Long-Term Incentive Plan for Non-Employee Directors, approved at
the May 15, 1996 Annual Meeting of Shareholders, on the date of each annual
meeting of shareholders beginning with the 1996 Annual Meeting of Shareholders,
each person who is an outside director immediately after the meeting is granted
a stock option to purchase 2,000 shares of Company common
4
<PAGE>
stock at a purchase price per share equal to the fair market value of a share of
common stock on the date of grant. Each option is fully exercisable on its date
of grant and expires ten years after its date of grant. Also, each person who is
elected a director at an annual meeting of shareholders is granted a restricted
stock award for 1,000 shares of common stock. The restriction period on the
restricted stock award expires on the first to occur of the third anniversary of
the date of grant and the date the holder of the award ceases to serve as a
director.
The Board of Directors held six regular meetings in 1996. During 1996, 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. 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.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table indicates beneficial ownership of the Company's Common
Stock as of April 2, 1997 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..................................................... 1,900 (2)
Daniel A. Burkhardt..................................................... 1,949 (2)
Richard M. Burridge..................................................... 3,275 (2)
James P. Carolus........................................................ 1,976 (2)
William J. Gremp........................................................ 1,045 (2)
Gary L. Myers........................................................... 8,365 (2)
David W. Shinneman...................................................... 1,210 (2)
Robert L. Simpson....................................................... 5,000 (2)
Gerald R. Sprong........................................................ 5,441 (2)
Terry F. Steinbecker.................................................... 19,920 (2)
Larry J. Stoll.......................................................... 15,234 (2)
John A. Stuart, Jr. .................................................... 5,858 (2)
Dwight V. Svuba......................................................... 10,162 (2)
All directors and executive officers as a group......................... 81,335 (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 1996 (the "named executive officers").
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
------------------------
AWARDS PAYOUTS
------------- ---------
ANNUAL COMPENSATION RESTRICTED LTIP
----------------------- STOCK AWARDS PAYOUTS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(A) ($)(B) COMPENSATION ($)(C)
- ---------------------------------- --------- ---------- ----------- ------------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C>
T. F. Steinbecker................. 1996 $ 208,325 $ 55,676 $ 0 $ 88,099 $ 5,614
President and Chief 1995 199,307 25,263 0 0 4,980
Executive Officer 1994 194,522 51,109 19,479 0 4,656
G. L. Myers....................... 1996 123,334 26,250 0 30,181 4,006
Vice President- 1995 103,113 10,500 0 0 3,399
General Counsel & Secretary 1994 100,900 21,000 6,005 0 3,306
L. J. Stoll....................... 1996 128,100 26,901 0 36,808 4,149
Vice President- 1995 125,798 0 0 0 4,000
Finance, Treasurer & Assistant 1994 122,436 25,620 9,172 0 3,966
Secretary
J. A. Stuart, Jr.................. 1996 119,957 25,746 0 30,181 3,905
Vice President- 1995 112,353 11,560 0 0 2,874
Customer Services 1994 91,086 0 0 0 255
D. V. Svuba....................... 1996 125,013 26,649 0 34,686 4,541
Vice President- 1995 119,296 12,190 0 0 4,443
Energy Supply 1994 115,000 24,150 8,634 0 4,314
</TABLE>
- ------------------------
(A) As of December 31, 1996, the value and number of restricted shares held by
the named executive officers were as follows: $94,803 for Mr. Steinbecker --
6166 shares; $32,241 for Mr. Myers -- 2097 shares; $39,975 for Mr. Stoll --
2600 shares; $30,181 for Mr. Stuart -- 1963 shares; and $37,669 for Mr.
Svuba -- 2450 shares, without giving effect to the diminution in value
attributable to the restrictions on such shares. Dividends are paid on these
restricted shares at the same rate and at the same time as on shares of
Common Stock.
As of December 31, 1996, the value and number of performance-based
restricted shares awarded under the Long-Term Incentive Plan (the "Plan")
which was adopted at the May 18, 1994 Annual Meeting of Shareholders were as
follows: $234,623 for Mr. Steinbecker -- 15,260 shares; $87,699 for Mr.
Myers -- 5704 shares; $98,523 for Mr. Stoll -- 6408 shares; $87,576 for Mr.
Stuart -- 5696 shares; and $93,296 for Mr. Svuba -- 6068, without giving
effect to the diminution in value attributable to the performance and
restrictions on such shares. Dividends are not paid on these shares of
restricted stock so long as they are subject to performance-based
conditions.
(B) Reflects performance-based restricted stock awards earned under the Plan.
These awards were earned for the first performance cycle -- January 1, 1994
through December 31, 1996. The dollar figures shown equate into actual
shares as follows: Mr. Steinbecker 5730 shares; Mr. Myers 1963 shares; Mr.
Stoll 2394 shares; Mr. Stuart 1963 shares; and Mr. Svuba 2256 shares. These
shares vest at the end of three years from the date of award, i.e., March
17, 2000, and are reflected in the restricted stock holdings set forth in
the first paragraph of Note (A).
6
<PAGE>
(C) The amounts shown in this column for the last fiscal year are derived as
follows: Mr. Steinbecker -- $864 Company-paid term life insurance premium in
excess of $50,000 group term amount and $4,750 Company-paid 401(k) Plan
match; Mr. Myers -- $306 Company-paid term life insurance premium in excess
of $50,000 group term amount and $3,700 Company-paid 401(k) Plan match; Mr.
Stoll -- $306 Company-paid term life insurance premium in excess of $50,000
group term amount and $3,843 Company-paid 401(k) Plan match; Mr. Stuart --
$306 Company-paid term life insurance premium in excess of $50,000 group
term amount and $3,599 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 $3,677 Company-paid 401(k) Plan match.
The following table sets forth the number of shares of restricted stock,
which are subject to Stock Awards granted in 1996 for the 1996-1998 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................................................. 3,440 3 Years 3,440 6,880
G.L. Myers....................................................... 1,418 3 Years 1,418 2,836
L.J. Stoll....................................................... 1,454 3 Years 1,454 2,908
J.A. Stuart, Jr.................................................. 1,312 3 Years 1,312 2,624
D.V. Svuba....................................................... 1,384 3 Years 1,384 2,768
</TABLE>
- ------------------------
(1) For each Stock Award, a Threshold Goal for each participant is established
by applying a formula of 30 percent of base salary in the case of the
President and 20 percent for all other officers. 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.
7
<PAGE>
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 Executive 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 Executive 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 1996 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 Executive 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 Executive
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, 1996, Messrs.
Steinbecker, Myers, Stoll, Stuart and Svuba had 22, 17, 22, 2 and 30 years,
respectively, of service.
Messrs. Steinbecker, Myers, 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. Mr. Stuart entered into a contract effective May 18, 1994,
the date on which he was made an officer. Each of the above contracts were
amended effective March 20, 1996 generally to re-assign job functions and titles
in accordance with the Company's February 1, 1996 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
8
<PAGE>
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, Stoll, Stuart
and Svuba would be approximately $565,600, $333,344, $341,600, $378,029 and
$338,400, 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.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee (the "Committee"), in conjunction with the
Company's Human Resources department, has established and oversees the Company's
salary administration program. The program 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 appraisal process. The Committee
also consulted with Watson Wyatt Worldwide throughout the year concerning
officer compensation issues.
Base salary continues to be an integral part of officer compensation. The
annual bonus and long term incentive plans are also critical components of the
compensation package and focus on short and long term shareholder value issues.
While traditional employee benefits packages and perquisites are not considered
by the Committee to be key components of officer compensation, the Committee
examines these on an annual basis.
1996 PERFORMANCE APPRAISAL AND BASE 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 1996. Such
objectives and goals contained in the Company's strategic plan include items
such as return on equity and increase in dividend rate. The Company's stock
performance and earnings and expense control were also considered. The Committee
also considered major challenges faced by the Company during 1996, 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
9
<PAGE>
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
1996 performance. Following this appraisal process, the Committee met with the
president for discussion.
CASH AWARDS FOR 1996
The Committee also considered cash awards to the officers in accordance with
the Officers' Annual Bonus Plan (the "Plan") approved by the Board of Directors
in March 1996. Cash awards to officers of up to 25 percent in the case of the
President and 20 percent for all other officers 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 1996, the Company met
its maximum targets for return on equity and for controllable expenses. Further,
the Company increased its Common Stock dividend rate per share during the year.
As a result, an award equal to one-hundred percent of the maximum was made for
the covered employees. Each award was then adjusted in accordance with the
ratepayer protection factor contained in the Plan. This factor for 1996 was 1.05
which corresponds to the Company's second to the lowest ranking in the 91
percentile of residential rates as compared with the other MVEA companies. In
regard to the President, this award equaled $55,676.
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 Board, based upon the recommendation of the Committee, at its March 19,
1997 meeting amended the Plan to establish a new set of peer group utilities to
replace the MVEA group. MVEA was disbanded in late 1996. The new peer group
consists of regional utilities of which eight were in the former MVEA group.
This new set of peer group utilities is comprised of: Arkansas Power & Light
(Entergy), CILCORP, CIPSCO, Commonwealth Energy Systems, Empire District
Electric, IES, Illinova, Interstate Power, Kansas City Power & Light,
MidAmerican Energy, Oklahoma Gas and Electric, Public Service Co. of Oklahoma
(Central and Southwest), Southwestern Electric Power (Texas Utilities), Union
Electric, Utilicorp, and Western Resources.
The Plan was also amended to allow the President and the Committee to award
an additional cash bonus of up to 25 percent of an officer's base compensation.
This award may be granted to an officer or group of officers who have exhibited
extraordinary performance for that year. No such additional awards were made for
1996 performance.
10
<PAGE>
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.
For each Stock Award, a Threshold Goal for each participant is established
by applying a formula of 30 percent of base salary in the case of the President
and 20 percent for all other officers. 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 Committee examined the Company's "Percentile Performance" for the
three-year performance cycle ended December 31, 1996. It determined the
Company's Total Shareholder Return to be in the 69th percentile which equates to
an earned restricted stock award for each officer at 141% of the Threshold Goal.
The first cycle restricted stock awards were therefore made as follows: Mr.
Steinbecker--5,730 shares; Mr. Myers--1,963 shares; Mr. Stoll--2,394 shares; Mr.
Stuart--1,963 shares; and Mr. Svuba--2,256 shares. These restricted stock awards
will vest on the earliest to occur of March 17, 2000, termination of employment
by reason of death, total disability or retirement or a change in control of the
Company. These restricted stock awards will be forfeited if the grantee's
employment is terminated prior to March 17, 2000 or prior to a change in control
for any reason other than death, total disability or retirement.
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 officer team and its integral role in the 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
11
<PAGE>
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>
SAJ S&P 500 EEI 100
<S> <C> <C> <C>
1991 $100.00 $100.00 $100.00
1992 106.80 107.62 107.62
1993 95.05 118.47 119.59
1994 99.48 120.03 105.75
1995 131.32 165.14 138.56
1996 120.85 198.60 140.22
</TABLE>
*Assumes (i) $100 invested on December 31, 1991 in each of the Company's Common
Stock, the S&P 500 Index, and EEI 100 Index and (ii) quarterly reinvestment of
dividends.
12
<PAGE>
PROPOSAL 2
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 1997 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 2.
SHAREHOLDER PROPOSALS
FOR THE 1998 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy materials for
the 1998 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
4, 1997. In addition, the Company's Bylaws establish an advance notice procedure
for shareholder proposals to be brought before the 1998 Annual Meeting of
Shareholders, including proposed nominations of persons for election to the
Board of Directors. The 1998 Annual Meeting of Shareholders is expected to be
held on May 20, 1998. A shareholder proposal or nomination intended to be
brought before the 1998 Annual Meeting of Shareholders must be received by the
Secretary on or after January 2, 1998 and on or prior to March 3, 1998.
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, 1996, 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
Vice President, General
Counsel & Secretary
St. Joseph, Missouri
April 7, 1997
13
<PAGE>
PROXY PROXY
ST. JOSEPH LIGHT & POWER COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS -- MAY 21, 1997
The undersigned hereby appoints T. F. STEINBECKER, G. L. MYERS and L. J.
STOLL, and each of them, attorneys and proxies for the undersigned with full
power of substitution to vote at the Annual Meeting of Shareholders of St.
Joseph Light & Power Company on May 21, 1997 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 PROPOSAL. 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, DATE, SIGN 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. /X/
FOR WITHHELD FOR ALL
1. ELECTION OF CLASS I DIRECTORS ALL ALL (Except Nominee(s)
(3-YEAR TERM EXPIRING IN 2000) -- written below)
NOMINEES: Daniel A. Burkhardt, / / / / / /
James P. Carolus and
Terry F. Steinbecker
_______________________________________________________________________________
FOR AGAINST ABSTAIN
2. The appointment of Arthur Andersen,
LLP as auditors for 1997. / / / / / /
3. In their discretion with respect to such other matters as may properly
come before such meeting or any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ABOVE PROPOSALS.
Dated: ___________________________, 1997
Signature(s)_______________________________________________
_______________________________________________
Please sign exactly as your name appears on this
card. For joint accounts each owner should sign.
THIS IS A PROXY -- SEE REVERSE When signing as corporate officer, attorney,
executor, administrator, trustee or guardian,
please give full title as such.
-arrow- FOLD AND DETACH HERE -arrow-
YOUR VOTE IS IMPORTANT!
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
