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 ss.240.14a-11(c) or ss.240.14a-12
SIGCORP, INC.
AND
SOUTHERN INDIANA GAS & ELECTRIC 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):
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4) Proposed maximum aggregate value of transaction:
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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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
SIGCORP, INC.
AND
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
20 N.W. FOURTH STREET
EVANSVILLE, INDIANA 47741-0001
NOTICE OF JOINT ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 27, 1999
TO THE STOCKHOLDERS OF SIGCORP, INC. and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY:
NOTICE IS HEREBY GIVEN THAT THE JOINT ANNUAL MEETING OF STOCKHOLDERS OF
SIGCORP, INC. ("SIGCORP") AND SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
("SIGECO") IS CALLED AND WILL BE HELD ON TUESDAY, THE 27TH DAY OF APRIL, 1999,
AT 3:00 P.M., AT THE NORMAN P. WAGNER CENTER ADMINISTRATION BUILDING, ONE NORTH
MAIN STREET, EVANSVILLE, INDIANA, FOR THE FOLLOWING PURPOSES:
1. To elect three directors of SIGCORP and three directors of SIGECO
to serve a term of three years and until their successors are duly elected
and qualified;
2. To ratify the appointment of Arthur Andersen LLP as auditors for
1999; and
3. To transact any and all business in connection with the foregoing
and any other business that may properly come before the meeting and any
adjournment or adjournments thereof.
By Order of the Boards of Directors,
/s/T.L. Burke
-------------
T.L. Burke
Secretary
Evansville, Indiana
March 22, 1999
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING IN ORDER THAT
A QUORUM WILL BE ASSURED. STOCKHOLDERS, WHETHER OR NOT THEY EXPECT TO BE PRESENT
AT THE MEETING, ARE REQUESTED TO FILL IN, DATE AND SIGN THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY IN THE ACCOMPANYING ADDRESSED ENVELOPE, WHICH REQUIRES NO
POSTAGE. IF YOU ATTEND THE MEETING AND SO REQUEST, THE PROXY WILL NOT BE VOTED.
<PAGE>
LOCATION OF APRIL 27, 1999
ANNUAL SHAREHOLDERS' MEETING
[The map in the printed piece has been omitted.]
NORMAN P. WAGNER OPERATIONS CENTER
Southern Indiana Gas and Electric Company
One N. Main Street 465-4153
Parking for shareholders will be provided in the Employee and Visitors'
parking lot on the corner of North Main and Division Streets. Please use the
entrance marked "Main Street Entrance" on the above map. Entry to the building
will be through the doors indicated by the arrow.
YOUR VOTE IS IMPORTANT
PLEASE READ THE PROXY STATEMENT AND SIGN, DATE AND MAIL THE PROXY IN THE
PREPAID ENVELOPE WITHOUT DELAY, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
YOU MAY REVOKE YOUR PROXY PRIOR TO OR AT THE MEETING AND VOTE IN PERSON IF YOU
WISH. IF YOUR SHARES ARE HELD BY A BROKER, BANK OR NOMINEE, IT IS IMPORTANT THAT
THEY RECEIVE YOUR VOTING INSTRUCTIONS.
<PAGE>
SIGCORP, INC.
AND
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
20 N.W. FOURTH STREET
EVANSVILLE, INDIANA 47741-0001
JOINT PROXY STATEMENT
FOR
JOINT ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 1999
INTRODUCTION
This Joint Proxy Statement is provided to the shareholders of SIGCORP, Inc.
("SIGCORP") and Southern Indiana Gas and Electric Company ("SIGECO") in
connection with their annual meetings of shareholders and any adjournments or
postponements thereof. The annual meetings are scheduled to be held at 3:00
p.m., Central Daylight Time, at the Norman P. Wagner Center Administration
Building, One North Main Street, Evansville, Indiana. The SIGCORP and SIGECO
annual meetings will be held in conjunction with each other at the same time and
location.
GENERAL INFORMATION
SOLICITATION OF PROXIES
The management solicits your proxy for use at the joint annual meeting.
Shares held in your name and represented by your proxy will be voted as you
instruct if your proxy is duly executed and returned prior to the meeting.
Shares represented by proxies that are returned signed but without instructions
for voting will be voted as recommended by the management. Shares represented by
proxies that are returned unsigned or improperly marked will be treated as
abstentions for voting purposes. Abstentions and broker non-votes are not
counted in the tally of shares voted at the meeting. You may revoke your proxy
at any time before it is exercised by written notice to SIGCORP or SIGECO, as
the case may be, received prior to the time of the meeting, or orally at the
meeting. Dissenting stockholders in connection with any item presented do not
have rights of appraisal. The proxy and this statement were first mailed to
stockholders on or about March 22, 1999.
If you are a participant in the SIGCORP Automatic Dividend Reinvestment and
Stock Purchase Plan (the "Plan"), your proxy card will represent the number of
shares registered in your name and the number of shares credited to your Plan
account. For those shares held in the Plan, your proxy card will serve as
direction to the Plan Administrator as to how your account is to be voted.
COST AND METHOD OF SOLICITATION
The cost of preparing, assembling, printing, and mailing this proxy
statement, the enclosed proxy and any other material which may be furnished to
the stockholders in connection with the solicitation of proxies for the meeting
will be borne by SIGCORP and SIGECO. In order to be assured that a quorum of
outstanding stock will be represented at the meeting, proxies may be solicited
by officers and regular employees of SIGCORP or SIGECO, personally, by
telephone, telegraph, fax, or mail. In addition, Continental Stock Transfer &
Trust Co., 2 Broadway, New York, New York 10004 and/or D.F. King & Co., Inc., 77
Water Street, New York, New York 10005 may assist SIGCORP and SIGECO in the
solicitation of proxies. It is anticipated that the cost of such solicitations
will not exceed $10,000 plus reasonable out-of-pocket expenses. Brokers, banks,
nominees and other fiduciaries will be reimbursed for postage and other
reasonable out-of-pocket expenses incurred in sending this Joint Proxy Statement
and other materials to, and obtaining instructions relating to such materials
from, beneficial owners of SIGCORP and SIGECO stock.
1
<PAGE>
MATTERS TO BE VOTED UPON
As of this date, the only known business to be presented at the 1999 joint
annual meeting of stockholders is (1) the election of three directors of SIGCORP
and three directors of SIGECO to serve for a term of three years and until their
successors are duly elected and qualified, and (2) the ratification of the
appointment of Arthur Andersen LLP as auditors for 1999. However, the enclosed
proxy authorizes the proxy holders named therein to vote on all matters that may
properly come before the Annual Meetings and it is the intention of the proxy
holders to take such action in connection therewith as shall be in accordance
with their best judgment. Only shares held by those present at the meeting or
for which proxies are returned will be considered to be represented at the
meeting. For the purpose of determining a quorum, shares represented at the
meeting are counted without regard to abstentions or broker non-votes as to any
particular item.
RECORD DATE
The Boards of Directors have fixed March 12, 1999, as the date for the
determination of stockholders entitled to notice of and to vote at the meeting.
Only stockholders of record at the close of business on March 12, 1999 will be
entitled to vote at the meeting or at any adjournments thereof, unless the
Boards of Directors fix a new record date for the adjourned meeting which must
be done if the adjourned meeting date is after August 25, 1999.
VOTING SECURITIES
As of the record date, there were 23,630,568 shares of Common Stock of
SIGCORP outstanding and entitled to vote. SIGECO's voting securities outstanding
on the record date consisted of 85,895 shares of 4.8% Preferred Stock, 25,000
shares of 4.75% Preferred Stock, 75,000 shares of 6.50% Preferred Stock, and
15,754,826 shares of Common Stock owned by SIGCORP. Each share of the respective
companies is entitled to one vote on each question presented to a vote of the
stockholders of that company at its annual meeting. However, unless the holder
personally appears at the meeting, shares for which no proxy is returned
(whether registered in the name of the actual holder thereof or in nominee or
street name) will not be voted.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of December 31, 1998, each of the following stockholders was known to
the management to be the beneficial owner of more than five percent of the
outstanding shares of any class of voting securities as set forth below.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------- ------------------ ---------- -------
<S> <C> <C> <C>
$100 Par Preferred SALKELD & CO. 18,000 Shares 9.7%
Stock of SIGECO P.O. Box 704 Registered Owner
Church Street Station
New York, NY 10008
IDS Certificate Company 75,000 Shares 40.3%
c/o IDS Financial Registered Owner
Services, Inc.
3000 IDS Tower 10
Minneapolis, MN 55440
Common Stock of SIGECO SIGCORP, Inc. 15,754,826 Shares 100%
20 N.W. Fourth Street Registered Owner
P.O. Box 3606
Evansville, IN 47735-3606
</TABLE>
2
<PAGE>
ELECTION OF DIRECTORS
SIGCORP's and SIGECO's Boards of Directors each consist of 9 members of
whom one-third are elected each year to serve terms of three years or until the
director's earlier retirement pursuant to the respective Boards of Directors'
Retirement Policy. It is intended that the enclosed form of proxy will be voted
for the election of Messrs. John M. Dunn, John D. Engelbrecht and Robert L. Koch
II, all of whom are now members of the Boards, as directors of SIGCORP and
SIGECO, respectively, for three year terms or until the director's earlier
retirement. In any election of directors, the persons receiving a plurality of
the votes cast are elected to the vacancies to be filled.
Each of the nominees has signified his willingness to serve if elected. If,
however, any situation should arise under which any such person should be unable
to serve, the authority granted in the enclosed proxy card may be exercised by
the proxy holders for the purpose of voting for a substitute nominee. Set forth
below is information with respect to the nominees and the other members of the
Boards of Directors. If not otherwise indicated, the principal occupation listed
for any individual has been the same for at least five years. THE BOARDS OF
DIRECTORS RECOMMEND A VOTE "FOR" ALL OF THE NOMINEES LISTED BELOW.
NOMINEES FOR ELECTION FOR TERMS TO EXPIRE IN 2002
[PHOTO]
John M. Dunn
John M. Dunn, 60, President and Chief Executive Officer of Dunn Hospitality
Group, Evansville, Indiana, hotel development and management company. He is also
a director of Old National Bank of Evansville. He has been a director of SIGECO
and SIGCORP since 1996.
[PHOTO]
John D. Engelbrecht
John D. Engelbrecht, 47, President and Chief Executive Officer of South Central
Communications, Evansville, Indiana, owner and operator of radio and television
stations in Indiana, Kentucky and Tennessee and MUZAK franchises in 14 U.S.
cities. He is also a director of CNB Bancshares, Evansville, Indiana. He has
been a director of SIGECO and SIGCORP since 1996.
[PHOTO]
Robert L. Koch II
Robert L. Koch II, 60, President and Chief Executive Officer of Koch
Enterprises, Inc., Evansville, Indiana, holding company comprised of
manufacturers of industrial painting systems and wholesale distributors of
heating and air conditioning equipment. He is a director of CNB Bancshares, Inc.
of Evansville and Bindley Western Industries, Inc. of Indianapolis, Indiana. He
has been a director of SIGECO since 1986 and a director of SIGCORP since 1996.
3
<PAGE>
CURRENT DIRECTORS WHOSE TERMS EXPIRE IN 2000
[PHOTO]
Ronald G. Reherman
Ronald G. Reherman, 63, Chairman, President and Chief Executive Officer of
SIGCORP since January 1996; Chairman of SIGECO since September 1997; Chairman,
President and Chief Executive Officer of SIGECO 1991-1997; President and Chief
Executive Officer of SIGECO 1990-1991; President and Chief Operating Officer of
SIGECO 1988-1990; Executive Vice President and General Manager of SIGECO
1985-1988. He is also a director of Ohio Valley Electric Corp., Indiana-Kentucky
Electric Corp., National City Bancshares and the National City Bank of
Evansville. He has been a director of SIGECO since 1985 and a director of
SIGCORP since 1996.
[PHOTO]
Donald E. Smith
Donald E. Smith, 72, President and Chief Executive Officer of First Financial
Corporation, Terre Haute, Indiana; Chairman and director of Terre Haute First
National Bank, Terre Haute, Indiana; President and director of Terre Haute Oil
Corp., Chairman and director of Princeton Mining Co., Inc., Chairman and
director of Deep Vein Coal Company and Chairman and director of R.J. Oil Co.,
all of Terre Haute, Indiana; and a director of Blackhawk Coal Corporation. He
has been a director of SIGECO since 1964 and a director of SIGCORP since 1996.
[PHOTO]
James S. Vinson
James S. Vinson, 57, President and Professor of Physics at the University of
Evansville in Evansville, Indiana since 1987. Vice President of Academic Affairs
and Professor of Physics at Trinity University at San Antonio, Texas 1983-1987.
He has been a director of SIGECO since 1989 and a director of SIGCORP since
1996.
CURRENT DIRECTORS WHOSE TERMS EXPIRE IN 2001
[PHOTO]
Andrew E. Goebel
Andrew E. Goebel, 51, Executive Vice President of SIGCORP since September 1997;
Secretary and Treasurer of SIGCORP 1996-1997; President and Chief Executive
Officer of SIGECO since September 1997; Senior Vice President, Chief Financial
Officer and Secretary of SIGECO 1996-1997; Senior Vice President, Chief
Financial Officer, Secretary & Treasurer of SIGECO 1989-1996; and Vice
President, Secretary and Treasurer of SIGECO 1984-1989. He is also a director of
Old National Bank of Evansville. He has been a director of SIGCORP and SIGECO
since September 1997.
4
<PAGE>
[PHOTO]
Donald A. Rausch
Donald A. Rausch, 68, Chairman of the Board, President and Chief Executive
Officer 1990-1995, of UF Bancorp, Inc., Evansville, Indiana; Chairman of the
Board and President, 1985-1995, of Union Federal Savings Bank, Evansville,
Indiana. He is also a director of The Citizens National Bank of Evansville. He
has been a director of SIGECO since 1982 and a director of SIGCORP since 1996.
[PHOTO
Richard W. Shymanski
Richard W. Shymanski, 62, Chairman of the Board since 1995, and President
1983-1995, of Harding Shymanski & Company, Professional Corporation, Certified
Public Accountants, Evansville, Indiana. He has been a director of SIGECO since
1989 and a director of SIGCORP since 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Richard W. Shymanski is Chairman of the Board of Harding Shymanski &
Company, Certified Public Accountants, which firm in 1998 performed certain
consulting and accounting services for SIGCORP subsidiaries, and is expected to
perform such services in 1999. During 1998, the cost of such services was
$524,284, which the Company believes to be a fair and reasonable price for the
services rendered.
Andrew E. Goebel is Executive Vice President of SIGCORP and President and
Chief Executive Officer of Southern Indiana Gas and Electric Company. During
1998, Hasgoe Cleaning Systems, a cleaning company owned by Mr. Goebel's brother,
performed certain cleaning services for SIGCORP subsidiaries and is expected to
perform such services in 1999. During 1998, the cost of such service was
$81,678, which the Company believes to be a fair and reasonable price for the
services rendered.
COMMITTEES AND COMPENSATION OF THE BOARDS OF DIRECTORS
The committees of each of the SIGCORP and SIGECO Boards are the Executive
Committee, the Audit Committee, the Compensation Committee and the Strategic
Planning Committee. With the exception of the Executive Committees, the members
of the committees are the same individuals for both SIGCORP and SIGECO.
The Executive Committees act on behalf of the Board of Directors of SIGCORP or
SIGECO, as applicable, when the respective Boards are not in session, except on
those matters which require action of the full Boards. The Executive Committees
meet as required. The members of the SIGCORP Executive Committee are Ronald G.
Reherman, (Chairman) Donald E. Smith, John M. Dunn, John D. Engelbrecht and
James S. Vinson. The members of the SIGECO Executive Committee are Andrew E.
Goebel (Chairman), Ronald G. Reherman, Donald E. Smith, John M. Dunn, John D.
Engelbrecht and James S. Vinson. The SIGCORP and SIGECO Executive Committees met
12 times in 1998.
The Audit Committees of SIGCORP and SIGECO meet at least twice each year with
the independent auditors and internal auditing staff to review audit procedures
and recommendations for improvements in internal controls. The members of the
SIGCORP and SIGECO Audit Committees are John M. Dunn (Chairman), John D.
Engelbrecht, Robert L. Koch II and Donald A. Rausch. The Audit Committees met
twice in 1998.
The Compensation Committees of SIGCORP and SIGECO advise and recommend to the
Board of Directors the salaries to be paid to the Chairman of the Board (when
also serving as an employee), the Chief Executive Officer, the President, and
the Chief Operating Officer of the respective companies. The Compensation
Committees of SIGCORP and SIGECO also administer the Corporate Performance Plan
and 1994 Stock Option Plan. The members of the Compensation Committees are
Donald A. Rausch (Chairman), Richard W. Shymanski, Robert L. Koch II and Donald
E. Smith. The Compensation Committees met four times in 1998.
5
<PAGE>
The Strategic Planning Committees of SIGCORP and SIGECO assist the Chairman
of the Board in evaluation of strategic alternatives for the Corporations. The
members of the Strategic Planning Committees are Ronald G. Reherman (Chairman),
Robert L. Koch II, Donald A. Rausch and Donald E. Smith. The Strategic Planning
Committees met three times in 1998.
The Boards of Directors of SIGCORP and SIGECO had 15 meetings in 1998. No
director attended fewer than 75% of the Boards of Directors meetings or the
aggregate of such meetings and meetings of the committees of the Boards of which
he is a member.
During 1998, each director who was not an employee of SIGECO or SIGCORP
received $18,000 (which includes $6,000 in SIGCORP, Inc. common stock) and $700
for each Board meeting and each Committee meeting attended prior to July 1, 1998
and $1,000 for each Board meeting and each Committee meeting attended after July
1, 1998. Directors are reimbursed for ordinary expenses incurred in performance
of their duties.
Since each director serves on both the SIGCORP and SIGECO Boards and on the
same committees of each Board (except in the case of Mr. Goebel who is a member
of one but not both Executive Committees), the yearly retainer applies to
service on both Boards and separate meeting fees are paid only if the meeting of
the SIGCORP or SIGECO Board, as the case may be, or one of the Committees
thereof, is not held in conjunction with a meeting of the corresponding Board or
committee. The usual practice of SIGCORP and SIGECO is to hold meetings of the
SIGCORP and SIGECO Boards, and the corresponding committees, in conjunction with
each other in order to limit each director to a single meeting fee for each set
of meetings. This is also true for the Executive Committees even though their
membership is not identical. During 1998, there were no board or committee
meetings that deviated from that practice.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the beneficial ownership, as of December 31,
1998, of SIGCORP Common Stock, by each director, the Chief Executive Officer,
and each of the other executive officers named in the Compensation Table found
under "Executive Compensation" below. Also shown is the total ownership for such
persons and other executive officers as a group. No member of the group is the
beneficial owner of any of SIGECO's Preferred Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(2)
--------------------------------------------------------
NAME OF BENEFICIAL OWNER(1) DIRECT INDIRECT TOTAL PERCENT OF CLASS
- ------------------------ ------ -------- ----- ----------------
<S> <C> <C> <C> <C>
John M. Dunn........................................... 2,427 -- 2,427 .01
John D. Engelbrecht.................................... 799 -- 799 --
Robert L. Koch II...................................... 3,408 -- 3,408 .01
Donald A. Rausch....................................... 12,543 -- 12,543 .05
Ronald G. Reherman..................................... 12,197 559 12,756 .05
Richard W. Shymanski................................... 2,256 8,464 10,720 .05
Donald E. Smith(3) .................................... 21,402 1,676 23,078 .10
James S. Vinson........................................ 735 -- 735 --
Andrew E. Goebel....................................... 6,801 -- 6,801 .03
J. Gordon Hurst........................................ 1,944 -- 1,944 .01
Ronald G. Jochum....................................... 400 -- 400 --
Jeffrey L. Davis....................................... 162 -- 162 --
All of the above and other executive officers
as a group (14)........................................ 79,637 .34
</TABLE>
- ----------
(1) Beneficial ownership includes those shares over which an individual has
sole or shared voting, or investment powers, such as shares in which the
spouse, minor children or other relatives living in the home of the named
person have a beneficial interest, and shares held in SIGCORP's Dividend
Reinvestment Plan and other trust accounts.
(2) Includes shares held jointly or in other capacities, as to which in some
cases beneficial ownership is disclaimed. Does not include shares which the
named individual has the right to acquire under the 1994 Stock Option Plan.
See Table 3 for the number of shares that can currently be acquired.
6
<PAGE>
(3) Donald E. Smith is a director and President of Princeton Mining Company,
which owns 360,186 shares of Common Stock; director and President of R.J.
Oil and Refining Co., Inc., which owns 129,331 shares of Common Stock;
director of Blackhawk Coal Corporation, which owns 188,599 shares of Common
Stock; Chairman, CEO, President and director of Terre Haute First National
Bank, which holds 40,663 shares of Common Stock as trustee; and President
and director of Terre Haute Oil Corporation, which owns 3,199 shares of
Common Stock. The aggregate number of such shares represents 3.06 percent
of Common Stock outstanding.
EXECUTIVE COMPENSATION
GENERAL. The following three tables set forth compensation paid by SIGCORP
and SIGECO to the five highest paid executive officers of SIGCORP or SIGECO
during the past three years whose total cash compensation for the calendar year
1998 exceeded $100,000. The tables include a Summary Compensation Table (Table
1); a table showing Option Grants in Last Fiscal Year (Table 2), and a table
showing Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values (Table 3).
<TABLE>
<CAPTION>
TABLE 1
SUMMARY COMPENSATION TABLE
(a) (b) (c) (d) (e) (f)
LONG TERM
COMPENSATION
AWARDS:
SHARES
NAME AND PRINCIPAL ANNUAL COMPENSATION UNDERLYING
-------------------------------------- OPTIONS(2) ALL OTHER
POSITION AT SIGCORP OR SIGECO YEAR SALARY BONUS(1) (#)(3) COMPENSATION
- ----------------------------------- ------ --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Ronald G. Reherman 1998 $363,467 $150,500 None None
Chairman, President and Chief 1997 346,875 67,000 52,955 None
Executive Officer of SIGCORP and 1996 331,875 64,000 None None
Chairman of the Board of SIGECO
Andrew E. Goebel 1998 220,436 65,625 7,007 None
Executive Vice President of SIGCORP 1997 190,208 35,000 20,993 None
and President and Chief 1996 173,542 33,600 None None
Executive Officer of SIGECO
J. Gordon Hurst 1998 196,637 59,375 1,974 None
Executive Vice President 1997 177,083 32,800 19,858 None
and Chief Operating Officer of SIGECO 1996 162,333 31,200 None None
Ronald G. Jochum 1998 128,127 18,750 4,055 None
Vice President 1997 123,958 18,000 4,728 None
Power Supply of SIGECO 1996 118,958 11,500 5,162 None
Jeffrey L. Davis 1998 107,213 15,000 3,431 None
Vice President 1997 98,125 13,650 3,783 None
Support Services of SIGECO 1996 87,603 8,250 3,914 None
</TABLE>
- ----------
(1) These amounts are cash awards under the Corporate Performance Plan based on
performance for the prior plan year as described in the report of the
Compensation Committee below.
(2) See "Compensation Committee Report on Executive Compensation" beginning on
page 9, and the information provided in Tables 2 and 3, for a discussion of
the 1994 Stock Option Plan applicable to certain officers, staff and
managers.
(3) Options granted in 1996 are restated to reflect 3 for 2 common stock split
on March 27, 1997.
7
<PAGE>
<TABLE>
<CAPTION>
TABLE 2
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE
SHARES UNDERLYING OPTIONS EXERCISE VALUE AT ASSUMED
OPTIONS GRANTED TO OR BASE ANNUAL RATES OF STOCK
GRANTED(1) EMPLOYEES IN PRICE(2) EXPIRATION PRICE APPRECIATION
NAME (#) FISCAL YEAR (PER SHARE) ($) DATE FOR OPTION TERM ($)
----- -------------- ------------ ------------- ----------- --------------------------
5%(3) 10%(3)
----------- -----------
<S> <C> <C> <C> <C> <C> <C>
R.G. Reherman -- -- -- -- -- --
A.E. Goebel 7,007 9.34 32.0625 07/15/2008 141,287 358,052
J.G. Hurst 1,974 2.63 32.0625 07/15/2008 39,803 100,869
R.G. Jochum 4,055 5.41 32.0625 07/15/2008 81,763 207,207
J.L. Davis 3,431 4.57 32.0625 07/15/2008 69,181 175,321
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The options were granted July 15, 1998.
(2) Equal to market price on grant date.
(3) These values are not a prediction of what SIGCORP believes the market value
of its common stock will be in the next 10 years. They are merely assumed
values required to be calculated in accordance with SEC Rules.
<TABLE>
<CAPTION>
TABLE 3
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF
SECURITIES
SHARES UNDERLYING UNDERLYING VALUE OF
ACQUIRED UNEXERCISED UNEXERCISED UNEXERCISED
ON VALUE OPTIONS AT IN-THE-MONEY
EXERCISE REALIZED(1) YEAR-END(2) OPTIONS AT YEAR-END(3)
YEAR NAME (#) ($) (#) ($)
----- ----- ------------ ------------ ----------- --------------------
EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
<S> <C> <C> <C> <C> <C>
1998 R.G. Reherman 14,000 $228,666 110,213/26,478 1,691,097/244,921
1998 A.E. Goebel 0 0 49,593/17,504 772,323/122,496
1998 J.G. Hurst 0 0 45,606/11,903 708,012/98,997
1998 R.G. Jochum 1,000 16,520 19,747/4,055 266,905/14,698
1998 J.L. Davis 0 0 13,088/3,431 168,696/12,436
</TABLE>
- ----------
(1) Market value of underlying securities at time of exercise minus the
exercise price.
(2) Options granted in 1996 are restated to reflect 3 for 2 common stock split
on March 27, 1997.
(3) Market value of underlying securities at fiscal year-end (December 31,
1998) of $35.6875 per share minus the exercise price.
CHANGE OF CONTROL AGREEMENTS. In order to insure SIGCORP and SIGECO
continuity of management and operations in the event of a change of control of
SIGCORP or SIGECO, agreements have been entered into between SIGCORP, SIGECO and
Messrs. Reherman, Goebel, Hurst, Jochum and Davis. The agreements provide that
in the event of a change of control of SIGCORP or SIGECO, the salary of the
named officers will continue for the lesser of a period of three years, or until
retirement age, at their existing compensation levels (unless a lesser amount is
the maximum amount deductible by SIGCORP for United States Federal income tax
purposes, in which case the continued salary would be at such lesser amount).
RETIREMENT PLANS. All officers participate in SIGECO's trusteed,
noncontributory tax qualified Pension Plan for Salaried Employees (the "Pension
Plan"). Retirement income, as defined in the Pension Plan, is based on an
employee's average monthly earnings during the highest paid five consecutive
years in the Pension Plan of the employee's final 10 years of continuous service
prior to retirement or other termination of employment and is calculated in two
increments: 1.42 percent of such average monthly earnings for each year of
accredited service or part thereof up to a maximum of 30 years; plus .69 percent
of such average monthly earnings for each year of accredited service or part
thereof in excess of 30 years to a maximum of 10 years. Amounts payable under
the Pension Plan are not subject to social security or other offset.
8
<PAGE>
The years of service in the Pension Plan credited to officers named in the
compensation table above are R.G. Reherman-35 years, 6 months; A.E. Goebel-26
years, 1 month; J.G. Hurst-29 years; R.G. Jochum-4 years, 3 months; and J.L.
Davis-18 years, 3 months.
The following table illustrates the estimated retirement income payable
under the Pension Plan, based on the specific remuneration levels and years of
service classification shown.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
YEARS OF SERVICE
---------------------------------------------------------------------
COVERED
REMUNERATION 15 20 25 30 35
------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$100,000.................... $22,800 $30,400 $38,000 $45,600 $49,050
125,000.................... 28,500 38,000 47,500 57,000 61,300
160,000* and above......... 36,480 48,640 60,800 72,960 78,480
</TABLE>
- ----------
* As of January 1, 1999, the OMNIBUS Budget Reconciliation Act of 1993 (OBRA
'93) limited annual compensation to $160,000 for purposes of pension
calculations under tax qualified pension plans.
SIGECO has a non-qualified Supplemental Retirement Plan (the "Supplemental
Plan") covering certain senior officers of SIGECO who qualify under the
applicable length of service and other eligibility provisions. It is presently
anticipated that Messrs. Goebel, Hurst, Jochum and Davis will qualify for
benefits under the Supplemental Plan. The Supplemental Plan provides for
supplemental retirement income to be paid such that, when combined with benefits
receivable under SIGECO's Pension Plan, total retirement benefits paid will be
equal to 50 percent of the average of the senior officer's final three years
base salary excluding bonuses. In the case of death, survivor benefits are
payable to surviving spouse, if any, at an actuarially adjusted level. SIGECO
has entered into an agreement with Mr. Reherman that is similar to the
Supplemental Plan except that the retirement income paid is equal to 70 percent
of his highest annualized salary as Chief Executive Officer or Chairman of
SIGECO. SIGECO has purchased life insurance on the participants sufficient in
amount to fund actuarially all of SIGECO's future liabilities under the
Supplemental Plan and the Agreement.
DEATH BENEFITS PLAN. SIGECO has a Supplemental Post-Retirement Death
Benefits Plan for officers and other senior executives to provide retired
participants with the equivalent of 25-35 percent of the pre-retirement group
life insurance benefit under SIGECO's group insurance plan for salaried
employees. SIGECO has purchased insurance on the lives of the participants,
which is projected to allow SIGECO to recover the entire cost of this plan.
STOCK OPTION PLAN. The 1994 Stock Option Plan was adopted by the Board of
Directors at its meeting held December 21, 1993, and by SIGECO's shareholders at
their meeting held March 22, 1994. Pursuant to the exchange whereby SIGECO
common stockholders became stockholders of SIGCORP, SIGECO's common
stockholders, by agreeing to the exchange, also agreed to the amendment of the
1994 Stock Option Plan to provide for the issuance of SIGCORP shares. The 1994
Stock Option Plan authorizes the granting of options to officers and key
employees of SIGCORP and SIGECO to purchase up to 750,000 shares of SIGCORP
Common Stock (adjusted for 3 for 2 stock split on March 27, 1997). Options
granted under the 1994 Stock Option Plan may constitute incentive stock options
(within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, or nonqualified stock options (collectively, "options"). To date, a
total of 545,361 options have been granted.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Program is administered and monitored by the
Compensation Committees. The Compensation Committees are composed entirely of
independent, nonemployee directors. The main objectives of the program are to:
o attract and retain an outstanding management team,
o motivate and reward outstanding performance results, and
o focus attention on plans, goals and initiatives which enhance value to
shareholders and customers.
9
<PAGE>
In order to achieve these objectives, the Executive Compensation Program
consists of three elements: a base salary plan, an annual corporate performance
incentive plan and a long-term stock option plan. The key elements of the
compensation package for executive officers are addressed in greater detail
below.
BASE SALARY PLAN. The Compensation Committees determine the annual base
salaries for senior officers and the salary ranges for all officer positions.
The determination of officer salaries and salary ranges is based upon
competitive norms (averages) for similar positions in reasonably comparable
electric and combination utility companies. An independent consultant is
retained to provide such information to the Compensation Committees.
Adjustments to actual base salaries take into consideration two key
variables: 1) the performance of the officer, and 2) the level of actual salary
compared with the midpoint of the applicable salary range, where midpoint is
defined as the competitive salary norm for the position. In general, individuals
whose performance is deemed fully competent over several years would be expected
to achieve a base salary at the midpoint level. Continued superior performance
could result in a base salary up to the maximum level of the salary grade.
CORPORATE PERFORMANCE INCENTIVE PLAN. Approximately 23 officers and senior
management personnel participate in the Performance Plan (the "Performance
Plan"). During 1997, the Performance Plan was revised to reflect changes in the
industry and to refocus on goals which are key to the success of the Companies.
Corporate goals were established for financial and operating results which
served as the basis for award payments granted in 1998. They include the
following:
1. earnings per share
2. overall customer satisfaction index
3. total electric operating and maintenance expense (excluding fuel
and purchased power) per Kwh sold
4. overall equivalent availability of coal fired generating units
5. reportable safety incident rate
In addition, changes were made to provide award opportunities which are
more competitive with industry practice. For the revised Plan, the following
award opportunities apply: 25-55% of base salary for the Chairman; 20-50% of
base salary for the Chief Executive Officer; 15-45% for the Chief Operating
Officer; and 5-35% of base salary for all other participants. However, total
payout under the Plan is limited to a maximum of 2% of net income.
An independent consultant is retained to assist in the process of goal
formulation and to provide an independent assessment of goal achievement to the
Compensation Committees at the end of each Performance Plan year. The annual
awards paid under the Performance Plan for years 1996, 1997 and 1998 are shown
in column (d) of the Summary Compensation Table (Table 1) for the individuals
named therein.
LONG-TERM STOCK OPTION PLAN. As indicated above, the 1994 Stock Option Plan
was approved by the stockholders during 1994. Approximately 28 officers and
senior management personnel are eligible to participate in the plan. On July 15,
1998, the Compensation Committees granted stock options to certain plan
participants. None of the options granted in 1998 are exercisable prior to July
15, 1999.
The stock option awards for executive officers along with additional
details are included in Tables 2 and 3.
DISCUSSION OF CEO PAY. Consistent with overall executive compensation
program philosophy, the Compensation Committees structured the CEOs' total
compensation during 1998 based on the overall performance of SIGCORP and SIGECO,
competitive pay levels for CEOs at comparable companies and a multi-year plan
for the CEO to achieve a base salary level at or about the established midpoint
for the position.
During 1998, the Compensation Committees took the following actions
regarding the CEO of SIGCORP:
1. Increased base salary to $370,000 per year. This represents an
increase of 5.7%, which brought the CEO's base salary to its 1998
competitive norm.
2. Provided a cash incentive of $150,500 based on results achieved
under the Corporate Performance Incentive Plan for the plan year 1997.
During 1998, the Compensation Committees also took the following
actions regarding the CEO of SIGECO:
1. Increased base salary to $225,000 per year. This represents an
increase of 7.1%, which brought the CEO's base salary closer to its 1998
competitive norm.
2. Provided a cash incentive of $65,625 based on results achieved
under the Corporate Performance Incentive Plan for the year 1997.
3. Awarded stock options shown on Table 2 above in recognition of the
increased duties and responsibilities assumed by Mr. Goebel upon becoming
CEO.
10
<PAGE>
During the Performance Plan year 1997, performance as measured against the
five corporate goals resulted in the following:
- --------------------------------------------------------------------------------
GOAL ACTUAL ACHIEVED
- --------------------------------------------------------------------------------
Earnings Per Share (SIGCORP):
Threshold $1.83
Target $1.92 $1.95 Target
Maximum $2.05
- --------------------------------------------------------------------------------
Customer Satisfaction Index: 88% 91% Yes
- --------------------------------------------------------------------------------
Total Electric O&M (Excluding fuel and
purchased power) per Kwh sold 1.304(cent) 1.138(cent) Yes
- --------------------------------------------------------------------------------
Overall Equivalent Availability 86% 84% No
- --------------------------------------------------------------------------------
Safety Record (OSHA reportable
incidents per 100 FTEs) 4.87 5.15 No
- --------------------------------------------------------------------------------
Under the Performance Plan formula, these performance ratings earned an
incentive award of 43% of base salary for the CEO of SIGCORP and 31.25% of base
salary for the CEO of SIGECO.
Compensation Committee
Donald A. Rausch R.W. Shymanski
Robert L. Koch II Donald E. Smith
PERFORMANCE COMPARISONS
Set forth below is a line graph comparing the yearly change in the
cumulative total shareholder return on SIGCORP Common Stock, assuming
reinvestment of all dividends, against the cumulative total return of the S&P
Composite 500 Stock Index and the EEI Combination Gas and Electric
Investor-Owned Utilities' Index, over the past five years.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG SIGCORP, INC., THE S&P 500 INDEX
AND THE EEI COMBINATION GAS & ELECTRIC INVESTOR-OWNED UTILITIES INDEX
[The following table represents a line graph in the printed report.]
EEI Combination Gas & Electric
SIGCORP, INC. S&P 500 Investor-Owned Utilities
12/93 100 100 100
12/94 83 101 87
12/95 115 139 111
12/96 120 171 110
12/97 161 229 143
12/98 203 294 166
* $100 INVESTED ON 12/31/93 IN STOCK OR INDEX INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
11
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Under applicable Securities and Exchange Commission Rules, there were no
interlocks or insider participation on the Compensation Committee during 1998.
RATIFICATION OF APPOINTMENT OF AUDITORS
It is intended that, unless otherwise specified by the SIGCORP and SIGECO
stockholders entitled to vote, votes will be cast pursuant to the proxies hereby
solicited in favor of the ratification of the appointment by the Boards of
Directors of Arthur Andersen LLP as independent auditors of SIGCORP and SIGECO
for the year 1999. The Arthur Andersen firm has acted for SIGECO in this
capacity since 1918 and for SIGCORP since its inception. The Companies are
advised that neither the firm nor any of its partners has any financial interest
in or any connection with SIGCORP or SIGECO except in the capacity of auditors.
A representative of Arthur Andersen LLP will attend the Joint Annual Meeting and
will be available to answer any questions and may make a statement if he so
desires. THE BOARDS OF DIRECTORS RECOMMEND A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF AUDITORS.
SHAREHOLDER PROPOSALS
Proposals by shareholders to be presented at the next annual meeting of
shareholders of SIGCORP and SIGECO currently scheduled to be held on April 25,
2000 must be received by SIGCORP or SIGECO, as the case may be, on or before
November 23, 1999 for inclusion in the Proxy Statement relating to that meeting.
A shareholder who wishes to offer a proposal for consideration at the year
2000 annual meeting but not necessarily for inclusion in the proxy statement for
that meeting may do so by submitting the proposal to SIGCORP or SIGECO, as the
case may be, not later than February 6, 2000. In such a case, a reference to the
matter will be included in the proxy statement.
OTHER BUSINESS. The Joint Annual Meeting is being held for the purposes set
forth in the Notice which accompanies this Proxy Statement. The Boards of
Directors of SIGCORP and SIGECO know of no business to be transacted at the
meeting other than the election of directors and the ratification of the
appointment of auditors. However, if any other business should properly be
presented to the Joint Annual Meeting, the proxies will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
SIGCORP, INC.
and
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
By Order of the Boards of Directors,
/s/ T.L. Burke
--------------
T.L. Burke
Secretary
Evansville, Indiana
Date: March 22, 1999
12
<PAGE>
The signature should correspond with the name as it appears hereon. Where stock
is registered in the names of two or more persons, all should sign. Persons
signing as executors, administrators, trustees, etc., should so indicate. A
proxy executed by a corporation should be signed in its name by an executive
officer.
IF NOT OTHERWISE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS.
PLEASE SIGN HERE EXACTLY>----------------------- DATED:----------1999
AS NAME APPEARS BELOW ----------------------- []I PLAN TO ATTEND THE MEETING
Proxy For
Annual Meeting
of Stockholders
To Be Held
April 27, 1999
The management requests that you sign, date, and return this proxy in the
enclosed envelope which requires no postage. If you attend the meeting and so
request, the proxy will not be voted.
(CONTINUED FROM REVERSE SIDE)
SIGCORP, INC.
(PROXY - SOLICITED ON BEHALF OF THE MANAGEMENT)
The undersigned hereby appoints R.G. REHERMAN, or in the event of his absence,
A.E. GOEBEL, his attorney and proxy, in the order herein named, each with power
of substitution, to vote at the annual meeting of stockholders of SIGCORP, INC.
To be held at Evansville, Indiana on April 27, 1999 or any adjournment thereof,
according to the number of votes that the undersigned would be entitled to vote
if personally present, as follows:
(Management recommends a vote "FOR" each of the items below)
(1) ELECTION OF DIRECTORS (three-year term)
FOR all nominees listed below or any substitute [ ]
therefor if unable to serve (except as written
to the contrary below)
WITHHOLD AUTHORITY to [ ]
vote for all nominees listed below
Nominees - John M. Dunn, John D. Engelbrecht, and Robert J. Koch II
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominees name below:
- -----------------------------------------------------------------------------
(2) RATIFICATION OF APPOINTMENT OF AUDITORS: FOR[] AGAINST[] ABSTAIN[]
all as more fully set forth in the proxy statement received by the undersigned
and on all other matters that may legally come before the meeting.
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE)
<PAGE>
The signature should correspond with the name as it appears hereon. Where stock
is registered in the names of two or more persons, all should sign. Persons
signing as executors, administrators, trustees, etc., should so indicate. A
proxy executed by a corporation should be signed in its name by an executive
officer.
IF NOT OTHERWISE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR THE RATIFICATION OF THE APPOINTMENT OF AUDITORS.
PLEASE SIGN HERE EXACTLY>----------------------- DATED:----------1999
AS NAME APPEARS BELOW ----------------------- []I PLAN TO ATTEND THE MEETING
Proxy For
Annual Meeting
of Stockholders
To Be Held
April 27, 1999
The management requests that you sign, date, and return this proxy in the
enclosed envelope which requires no postage. If you attend the meeting and so
request, the proxy will not be voted.
(CONTINUED FROM REVERSE SIDE)
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY
(PROXY - SOLICITED ON BEHALF OF THE MANAGEMENT)
The undersigned hereby appoints R.G. REHERMAN, or in the event of his absence,
A.E. GOEBEL, his attorney and proxy, in the order herein named, each with power
of substitution, to vote at the annual meeting of stockholders of SOUTHERN
INDIANA GAS AND ELECTRIC COMPANY. To be held at Evansville, Indiana on April 27,
1999 or any adjournment thereof, according to the number of votes that the
undersigned would be entitled to vote if personally present, as follows:
(Management recommends a vote "FOR" each of the items below)
(1) ELECTION OF DIRECTORS (three-year term)
FOR all nominees listed below or any substitute [ ]
therefor if unable to serve (except as written
to the contrary below)
WITHHOLD AUTHORITY to [ ]
vote for all nominees listed below
Nominees - John M. Dunn, John D. Engelbrecht, and Robert J. Koch II
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominees name below:
- -----------------------------------------------------------------------------
(2) RATIFICATION OF APPOINTMENT OF AUDITORS: FOR[] AGAINST[] ABSTAIN[]
all as more fully set forth in the proxy statement received by the undersigned
and on all other matters that may legally come before the meeting.
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE)
