<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/ 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]
TERRY F. STEINBECKER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
- ----------------------------
ST. JOSEPH
- ----------------------------
LIGHT & POWER
- ----------------------------
COMPANY
- ----------------------------
April 9, 1999
Fellow share owners:
You are cordially invited to attend the Annual Meeting of Share owners
on Wednesday, May 19, 1999 at 9:00 a.m. local time. The meeting will be held
at the Albrecht-Kemper Museum of Art, 2818 Frederick Ave., St. Joseph,
Missouri. Enclosed are proxy materials for your consideration. THE COMPANY'S
PROPOSED MERGER WITH UTILICORP UNITED INC. WILL NOT BE A TOPIC OF DISCUSSION
FOR THIS MAY 19 MEETING.
A SEPARATE, SPECIAL MEETING OF SHARE OWNERS WILL BE HELD THIS SUMMER
COVERING THE APPROVAL OF THE MERGER. YOU WILL RECEIVE SEPARATE PROXY
MATERIALS IN A FEW WEEKS FOR THAT MEETING.
As always, we appreciate your continuing support and interest and if you
have any questions or concerns about the share owners meeting coming up, or
other matters involving your Company, please call our investor relations
department at 1-800-367-4562.
Sincerely,
[SIGNATURE]
- ----------------------------
520 FRANCIS STREET
- ----------------------------
P.O. BOX 998
- ----------------------------
ST. JOSEPH, MO
- ----------------------------
64502-0998
- ----------------------------
816-387-6200
- ----------------------------
FAX 816-387-6332
- ----------------------------
<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 19, 1999
------------------------
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 19, 1999 for the following
purposes:
(1) To elect three Class III directors to serve until the 2002 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 1999; 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 1,
1999 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 9, 1999
<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 19, 1999
INTRODUCTION
ST. JOSEPH LIGHT & POWER COMPANY HAS ENTERED INTO A MERGER AGREEMENT WITH
UTILICORP UNITED INC. APPROVAL OF THE MERGER WILL NOT BE CONSIDERED AT THE MAY
19, 1999 ANNUAL MEETING OF SHAREHOLDERS. A SEPARATE SET OF PROXY MATERIALS WILL
BE MAILED IN THE NEAR FUTURE FOR A SPECIAL MEETING OF SHAREHOLDERS TO CONSIDER
THE MERGER.
GENERAL INFORMATION
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 19, 1999 and any adjournments thereof. This proxy statement and the form of
proxy will be first sent or given to shareholders on or about April 9, 1999.
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 III 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 Common Stock.
The Board of Directors has fixed the close of business on April 1, 1999 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 19,
1999 and any adjournments thereof. As of April 1, 1999, there were 8,171,301
shares of Common Stock 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.
<PAGE>
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 III 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.
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 1999 Annual Meeting.
The Board of Directors, upon the recommendation of its Nominating Committee,
has nominated Deborah A. Beck, Robert L. Simpson and Gerald R. Sprong for
election to the Board of Directors to serve as members of Class III until the
2002 Annual Meeting of Shareholders and upon election and qualification of their
successors. If, however, the shareholders approve the merger with UtiliCorp
United Inc. at a special meeting of shareholders to be held in the near future,
then this Class III term will likely not extend to the year 2002 Annual Meeting.
Ms. Beck is presently a member of the Board who was appointed by the Board of
Directors in November 1997 to fill a vacancy on the Board. Messrs. 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
2
<PAGE>
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 2002:
Deborah A. Beck............................................................................. 51 1997
Senior Vice President of Insurance Operations, Northwestern Mutual Life Insurance Company
(insurance company), Milwaukee, Wisconsin.
Robert L. Simpson........................................................................... 65 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.
Gerald R. Sprong............................................................................ 65 1976
President and Chief Executive Officer, The Morris Plan Company of St. Joseph (financial
management and lending), St. Joseph, Missouri; Director, Chairman 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.
Class II -- Continuing Directors for Term Expiring in 2001:
John P. Barclay, Jr......................................................................... 69 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............................................................................ 56 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, New York, New York from 1989 to 1996; Director, Protection
One, Culver City, California.
David W. Shinneman.......................................................................... 60 1994
President, Shinneman Management Company (owner and operator of McDonald's restaurants),
St. Joseph, Missouri.
Class I -- Continuing Directors for Term Expiring in 2000:
Daniel A. Burkhardt......................................................................... 51 1988
Principal, The Jones Financial Companies (investment banking and retail securities firm),
St. Louis, Missouri; Director, CIP Management, Inc., St. Louis, Missouri; Director,
Semco Energy Inc., Port Huron, Michigan.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
CONTINUOUSLY
NAME AND PRINCIPAL OCCUPATION AGE SINCE
- ---------------------------------------------------------------------------------------------- --- ---------------
<S> <C> <C>
James P. Carolus............................................................................ 48 1989
President and Chief Executive Officer, Hillyard Industries, Inc. (manufacturer of
maintenance cleaning products), St. Joseph, Missouri.
Terry F. Steinbecker........................................................................ 53 1985
President and Chief Executive Officer of the Company, 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR.
COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
The Executive Committee was established in January 1987 and has held no
meetings to date. The Executive Committee is empowered generally to act on any
item upon which the full Board may act with the exception of the declaration of
dividends. Messrs. Barclay, Carolus, Simpson, Sprong and Steinbecker comprise
the Executive Committee.
The Audit Committee reviews the work of the independent auditors. Its
functions are to: recommend to the Board of Directors independent auditors to be
selected; discuss with the independent auditors the scope and results of their
audit; discuss with the independent auditors and management the Company's
accounting principles, policies and practices and its reporting policies and
practices; and discuss with the independent auditors and internal auditors the
adequacy of the Company's internal accounting controls and the Company's
financial matters. The Audit Committee held two meetings in 1998. 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 six meetings in 1998. Ms. Beck and Messrs.
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 1998. 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,
4
<PAGE>
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. Ms. Beck and Messrs. 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 five meetings in 1998. 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 or she is a member. In addition, on the date of each 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 Common 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 outside director
is granted a restricted stock award for 1,000 shares of Common Stock at the time
of the director's election or reelection to the Board of Directors. 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 1998 and six special
meetings. During 1998, 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 has
entered into an Indemnification Agreement providing for indemnification of the
director in the event of settlement of a claim or lawsuit arising out of the
performance of the respective director's duties.
5
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table indicates beneficial ownership of Common Stock as of
April 1, 1999 of directors, nominees for director and executive officers named
in the Summary Compensation Table below and directors and executive officers as
a group and as of December 31, 1998 for BANK ONE CORPORATION.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
NAME (1) PERCENT OF CLASS
- ------------------------------------------------------------------------ ----------------------- -------------------
<S> <C> <C>
John P. Barclay, Jr..................................................... 22,900 (2)
Deborah A. Beck......................................................... 3,500 (2)
Daniel A. Burkhardt..................................................... 23,067 (2)
James P. Carolus........................................................ 23,312 (2)
William J. Gremp........................................................ 10,169 (2)
Gary L. Myers........................................................... 8,169 (2)
David W. Shinneman...................................................... 12,578 (2)
Robert L. Simpson....................................................... 25,000 (2)
Gerald R. Sprong........................................................ 25,688 (2)
Terry F. Steinbecker.................................................... 20,830 (2)
Larry J. Stoll.......................................................... 16,236 (2)
John A. Stuart, Jr...................................................... 7,283 (2)
Dwight V. Svuba......................................................... 10,162 (2)
All directors and executive officers as a group......................... 208,894 2.6
BANK ONE CORPORATION.................................................... 414,655 5.1(3)
One First National Plaza
Chicago, Illinois 60670
</TABLE>
- ------------------------
(1) Except as set forth in Note 3 below, 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. The
individuals and the group have options to purchase the following number of
shares of Common Stock: Mr. Barclay, 20,000; Ms. Beck, 3000; Mr. Burkhardt,
20,000; Mr. Carolus, 20,000; Mr. Gremp, 8000; Mr. Shinneman, 10,000; Mr.
Simpson, 20,000; and Mr. Sprong, 20,000.
(2) Less than one percent.
(3) BANK ONE CORPORATION has sole voting and investment discretion as to all
reported shares except for 4800 shares as to which BANK ONE CORPORATION has
shared dispositive power.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation information of the President and
Chief Executive Officer and the four other most highly compensated executive
officers during 1998 (the "named executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
PAYOUTS
-------------
ANNUAL COMPENSATION LTIP
----------------------- PAYOUTS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(A) COMPENSATION ($)(B)
- --------------------------------------------- --------- ---------- ----------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
T. F. Steinbecker............................ 1998 $ 221,009 $ 47,408 $ 0 $ 7,577
President and Chief 1997 212,100 70,676 0 6,225
Executive Officer 1996 208,325 55,676 88,099 5,614
G. L. Myers.................................. 1998 129,299 20,790 0 4,518
Vice President -- 1997 125,000 26,250 0 3,453
General Counsel & 1996 123,334 26,250 30,181 4,006
Secretary
L. J. Stoll.................................. 1998 130,495 20,790 0 4,488
Vice President -- 1997 128,100 26,901 0 3,537
Finance, Treasurer & 1996 128,100 26,901 36,808 4,149
Assistant Secretary
J. A. Stuart, Jr............................. 1998 125,302 20,003 0 4,371
Vice President -- 1997 122,600 25,746 0 2,487
Customer Services 1996 119,957 25,746 30,181 3,905
D. V. Svuba.................................. 1998 126,961 20,003 0 6,049
Vice President -- 1997 126,900 32,649 0 4,523
Energy Supply 1996 125,013 26,649 34,686 4,541
</TABLE>
- ------------------------
(A) As of December 31, 1998, the value and number of restricted shares held by
the named executive officers were as follows: $102,782 for Mr.
Steinbecker -- 5730 shares; $35,211 for Mr. Myers -- 1963 shares; $42,942
for Mr. Stoll -- 2394 shares; $35,211 for Mr. Stuart -- 1963 shares; and
$40,467 for Mr. Svuba -- 2256 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, 1998, the value and number of performance-based
restricted shares awarded under the Long-Term Incentive Plan (the "1994
Plan") were as follows: $278,175 for Mr. Steinbecker -- 15,508 shares;
$109,311 for Mr. Myers -- 6094 shares; $112,002 for Mr. Stoll -- 6244
shares; $107,195 for Mr. Stuart -- 5976 shares; and $110,926 for Mr.
Svuba -- 6184, without giving effect to the diminution in value attributable
to the performance criteria 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.
7
<PAGE>
(B) The amounts shown in this column for the last fiscal year are derived as
follows: Mr. Steinbecker -- $2,247 Company-paid term life insurance premium
in excess of $50,000 group term amount, a tax "gross-up" of $1,079 on this
excess amount, and $4,251 Company-paid 401(k) Plan match; Mr. Myers -- $724
Company-paid term life insurance premium in excess of $50,000 group term
amount, a tax "gross-up" of $348 on this excess amount, and $3,446
Company-paid 401(k) Plan match; Mr. Stoll -- $733 Company-paid term life
insurance premium in excess of $50,000 group term amount, a tax "gross-up"
of $352 on this excess amount, and $3,402 Company-paid 401(k) Plan match;
Mr. Stuart -- $697 Company-paid term life insurance premium in excess of
$50,000 group term amount, a tax "gross-up" of $335 on this excess amount,
and $3,339 Company-paid 401(k) Plan match; and Mr. Svuba -- $1,836
Company-paid term life insurance premium in excess of $50,000 group term
amount, a tax "gross-up" of $882 on this excess amount and $3,331
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 1998 for the 1998-2000 performance
cycle under the 1994 Plan.
LONG-TERM INCENTIVE PLANS -- AWARDS
IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PERFORMANCE OR PAYOUTS
OTHER UNDER NON-STOCK
NUMBER PERIOD UNTIL PRICE-BASED PLANS
OF MATURATION OR ------------------------
NAME SHARES PAYOUT THRESHOLD MAXIMUM
- ---------------------------------------------------------------- ----------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
T.F. Steinbecker................................................ 3,649 3 Years 3,649 7,298
G.L. Myers...................................................... 1,434 3 Years 1,434 2,868
L.J. Stoll...................................................... 1,469 3 Years 1,469 2,938
J.A. Stuart, Jr................................................. 1,406 3 Years 1,406 2,812
D.V. Svuba...................................................... 1,455 3 Years 1,455 2,910
</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.
8
<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............................................. $ 62,266 $ 70,000 $ 70,000 $ 70,000 $ 70,000
150,000............................................. 79,928 105,000 105,000 105,000 105,000
200,000............................................. 97,959 130,612 140,000 140,000 140,000
250,000............................................. 113,709 151,612 175,000 175,000 175,000
300,000............................................. 129,459 172,608 210,000 210,000 210,000
</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 base salary plus cash bonus and includes
substantially all compensation shown in the salary and bonus columns of the
Summary Compensation Table. The pension benefits shown above assume retirement
at age 65 in 1998 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 70 percent of the benefit otherwise payable under the Pension
Plan without the limitations of the Code calculated on the basis of the
officer's final pay. Benefits are calculated at three percent per year of final
pay to a maximum of 70 percent of final pay. Final pay is calculated as the
monthly average of compensation paid during the highest thirty-six months out of
the sixty months preceding termination of employment. Amounts awarded under the
Officers' Annual Bonus Plan are included.
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 (subject to the 70 percent
maximum). At December 31, 1998, Messrs. Steinbecker, Myers, Stoll, Stuart and
Svuba had 24, 19, 24, 4 and 34 years, respectively, of service.
Messrs. Steinbecker, Myers, Stoll, Stuart and Svuba have entered into
employment contracts with the Company. All contracts were amended January 7,
1999, except Mr. Svuba's, establishing a new change of control definition and
including the target bonus in the formula for base pay in the event of a change
of control. If the merger with UtiliCorp United Inc. is approved by
shareholders, this would constitute a change of control. 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
9
<PAGE>
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 $602,000, $352,000, $352,000, $392,000 and $339,000, 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.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee"), composed of directors who are
not current or former officers or employees of the Company, is responsible for
making recommendations to the Board of Directors with respect to the Company's
officer compensation programs. The Committee has retained the services of
executive compensation consultants to provide professional assistance, data, and
advice regarding pay practices at the Company. This report describes the basis
on which 1998 compensation determinations and recommendations were made by the
Committee concerning executive officers.
Section 162(m) of the Code limits to $1,000,000 in a taxable year, the
deduction publicly held companies may claim for compensation paid to certain
executive officers, unless certain requirements are met. The Company has
reviewed this provision and has determined that the Company is not affected by
Section 162(m) because no compensation paid to any officer currently approaches
or is expected to approach $1,000,000 in the near term.
COMPENSATION PHILOSOPHY AND OVERALL OBJECTIVE OF EXECUTIVE COMPENSATION PROGRAMS
Each year, the Committee, in making compensation decisions and
recommendations, and the Board of Directors, in approving base salaries, review
the performance of the Company and compare it to specified internal and external
performance standards. The Committee has developed the following general
compensation guidelines which impart a philosophy that Company compensation
should:
- Provide variable compensation opportunities that are linked to the
financial performance of the Company and that align executive compensation
with the interests of shareholders.
- Provide incentives to increase corporate performance and shareholder value
relative to other companies.
- Establish executive officer base pay levels, and incentive awards (from
the annual and long-term plans) at the competitive market provided that
performance objectives are achieved.
- Provide a competitive total compensation package that is "at-risk" driven
and enables the Company to attract and retain key executives.
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<PAGE>
1998 PERFORMANCE APPRAISAL AND BASE SALARY DETERMINATION
In regard to the President's compensation, the Committee makes an evaluation
in March 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 1998. 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 1998, 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 1998 performance. Following this appraisal process,
the Committee met with the President for discussion about the compensation of
other officers.
CASH AWARDS FOR 1998
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 1998. 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 as measured against
a peer group of regional utilities and controllable expenses. The Plan also
encompasses an objective ratepayer protection provision that compares the
Company's residential electric rates to the same peer group of regional
utilities. 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 1998, the Company met
the maximum level for controllable expenses and the threshold level for return
on equity. Further, the Company increased its Common Stock dividend rate per
share during the year. Each award was then adjusted in accordance with the
ratepayer protection factor contained in the Plan. This factor for 1998 was 1.05
which corresponds to the Company's second to the lowest ranking in the 94th
percentile of residential rates as compared with the other regional companies.
In regard to the President, this award equaled $47,408.
Regional 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 peer utility group consists of regional utilities comprised of: Ameren,
Entergy Corp., CILCORP, Unicom, Empire District Electric, Illinova, Alliant,
Kansas City Power & Light, MidAmerican Energy Holding Company, OGE Energy Corp.,
Central and Southwest, New Century Energies, UtiliCorp, and Western Resources.
11
<PAGE>
The Plan also 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.
LONG-TERM INCENTIVE PLAN (LTIP)
A new LTIP was adopted by the shareholders in 1998 replacing the former LTIP
which was adopted in 1994. Two outstanding cycles remain under the 1994 plan.
The LTIP establishes overlapping three-year performance cycles (the first cycle
under the new plan running from January 1, 1999 to December 31, 2001, the second
cycle from January 1, 2000 to December 31, 2002 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 is 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, 1998 under the old LTIP. It
determined the Company's total shareholder return to be below the 50th
percentile which equates to an earned restricted stock award for each officer of
zero.
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 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:
Deborah A. Beck
James P. Carolus
David W. Shinneman
Gerald R. Sprong
12
<PAGE>
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following line graph depicts information on total shareholder return*
over the last five years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AMOUNT ($) SAJ S&P 500 EEI 100
<S> <C> <C> <C>
1993 $100.00 $100.00 $100.00
1994 104.66 101.32 88.43
1995 138.15 139.40 115.86
1996 127.14 167.64 117.25
1997 129.98 219.62 149.34
1998 138.56 278.20 170.09
</TABLE>
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
SAJ....................................................... 100 104.66 138.15 127.14 129.98 138.56
S&P 500................................................... 100 101.32 139.40 167.64 219.62 278.20
EEI 100................................................... 100 88.43 115.86 117.25 149.34 170.09
</TABLE>
*Assumes (i) $100 invested on December 31, 1993 in each of the Company's Common
Stock, the S&P 500 Index, and EEI 100 Index and (ii) quarterly reinvestment of
dividends.
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 1999 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.
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<PAGE>
SHAREHOLDER PROPOSALS
FOR THE 2000 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy materials for
the 2000 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
10, 1999. In addition, the Company's Bylaws establish an advance notice
procedure for shareholder proposals to be brought before the 2000 Annual Meeting
of Shareholders, including proposed nominations of persons for election to the
Board of Directors. The 2000 Annual Meeting of Shareholders is expected to be
held on May 17, 2000. A shareholder proposal or nomination intended to be
brought before the 2000 Annual Meeting of Shareholders must be received by the
Secretary on or after January 2, 2000 and on or prior to March 2, 2000.
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, 1998, 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 9, 1999
14
<PAGE>
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PROXY PROXY
ST. JOSEPH LIGHT & POWER COMPANY
FOR ANNUAL MEETING OF SHAREHOLDERS MAY 19, 1999
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 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 19, 1999 and any adjournments thereof
all shares of Common Stock which the undersigned would be entitled to vote if
personally present.
PLEASE MARK, SIGN, DATE AND MAIL THE 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/
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE For Withhold For All
FOR PROPOSALS 1 AND 2. All All Except*
1. ELECTION OF DIRECTORS OF CLASS III (3-YEAR TERM / / / / / /
EXPIRING IN 2002). NOMINEES: Ms. Deborah A Beck,
Mr. Robert L. Simpson and Mr. Gerald R. Sprong.
--------------------------------------------------
*those nominee(s) written above.
2. The appointment of Arthur Andersen LLP as auditors For Against Abstain
for 1999. / / / / / /
3. In their discretion with respect to such other
matters as may properly come before such meeting
or any adjournments thereof.
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.
Dated:____________________________________ , 1999
_________________________________________________
(Signature)
_________________________________________________
(Signature, if held jointly)
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.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE
ENCLOSED ENVELOPE.
