-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, igynrKWeL1jr1sGA+z4bpyRG9j/MYT6lZ8CZ/U2HGkK3yb/KW4nQ9dG/kAaNI1CR A26IIMI9DEf5nAUHg7kU4g== 0000950132-94-000107.txt : 19940331 0000950132-94-000107.hdr.sgml : 19940331 ACCESSION NUMBER: 0000950132-94-000107 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940426 FILED AS OF DATE: 19940328 SROS: MSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL ILLINOIS LIGHT CO CENTRAL INDEX KEY: 0000018651 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 370211050 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 34 SEC FILE NUMBER: 001-02732 FILM NUMBER: 94518263 BUSINESS ADDRESS: STREET 1: 300 LIBERTY ST CITY: PEORIA STATE: IL ZIP: 61602 BUSINESS PHONE: 3096725271 DEF 14A 1 PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12 CENTRAL ILLINOIS LIGHT COMPANY (Name of Registrant as Specified in its Charter) CENTRAL ILLINOIS LIGHT COMPANY (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2). [_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [_] Fee computed on table below per Exchange Act Rules 14a-6(i_(4) or 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; (4) Proposed maximum aggregate value of transaction. - ------- *Set forth the amount on which the filing is calculated and state how it was determined. [X] 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: $125 (2) Form, Schedule or Registration Statement No.: Definitive Proxy Statement, File Number 1-8946 (3) Filing Party: CILCORP 0000 762129 (4) Date Filed: 3/21/94 [LOGO OF CENTRAL ILLINOIS LIGHT COMPANY] Notice of Annual Meeting Dear Shareholders: The Annual Meeting of Shareholders of Central Illinois Light Company will be held on Tuesday, April 26, 1994 at 1:30 PM, Central Time, at the principal office of the Company, 300 Liberty Street, Peoria, Illinois, in order to elect a Board of Directors and transact such other business as may properly come before the meeting. Shareholders of record at the close of business on March 11, 1994 are entitled to vote at the meeting. By Order of the Board of Directors, John G. Sahn Secretary March 28, 1994 IMPORTANT It is important that your shares be represented at the meeting. Please mark, sign, date and return the enclosed proxy promptly in order that your shares will be voted. Proxy Statement General This statement is furnished in connection with a solicitation of proxies by the Board of Directors of Central Illinois Light Company (the "Company"), for use at the Annual Meeting of Shareholders to be held on Tuesday, April 26, 1994 at 1:30 PM, Central Time, at the Company's executive offices, 300 Liberty Street, Peoria, Illinois 61602, and any adjournment thereof. The shares represented by your proxy will be voted if the proxy is duly executed and returned prior to the meeting. You may revoke your proxy by a duly executed later proxy, or at any time before it is exercised by written notice to the Secretary of the Company, received prior to the time of the meeting, or orally at the meeting. The expense of the solicitation of proxies is being borne by the Company. In addition to solicitation by mail, officers and regular employees of the Company may solicit proxies either personally or by telephone. The Company will reimburse banks, brokers or other similar agents or fiduciaries for forwarding proxy material to their principals, the beneficial owners of the stock. The annual report of the Company for the year ended December 31, 1993 has been sent to all shareholders of record at the close of business on March 11, 1994, which is the record date for the determination of shareholders entitled to vote at the meeting. This proxy statement and accompanying proxy are to be first mailed to shareholders on March 28, 1994. Voting Securities and Principal Holders On March 11, 1994, the record date for the meeting, the Company had outstanding 191,204 shares of preferred stock, $100 par value, 470,000 shares of Class A preferred stock, no par value, and 13,563,871 shares of common stock, no par value. Each share entitles the holder thereof to one vote upon any matter coming before the meeting, except that in the election of directors, each shareholder is entitled to cumulate votes and, therefore, may give one nominee as many votes as shall equal the number of directors to be elected multiplied by the number of shares held by such shareholder, or may distribute such votes among any two or more nominees by so indicating on the proxy. Votes cast by proxy or in person at the annual meeting will be tabulated by the election inspectors appointed for the meeting and will determine whether or not a quorum is present. The election inspectors will treat abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum but as unvoted for purposes of determining the approval of any matter submitted to the shareholders for a vote. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those shares will not be considered as present and entitled to vote with respect to that matter. 1 At January 1, 1994, T. S. Romanowski, a vice president of the Company, was the beneficial owner of 5 shares of the Company's preferred stock, $100 par value, representing less than .003% of the shares of that class outstanding. No other officer or director nominee was the beneficial owner of any shares of the Company's preferred or common stock. The following information, regarding beneficial ownership on January 1, 1994 of the Company's equity securities, is furnished with respect to each person or group of persons acting together who, as of such date, is shown on the Company's stock records to be the registered owner of more than 5% of any class of the Company's voting securities and no independent inquiry has been made to determine whether any shareholder is the beneficial owner of shares not registered in the name of such shareholder or whether any shareholder is a member of a shareholder group.
Class of Name and Address of Amount and Nature of Percent Stock Beneficial Owner Beneficial Ownership of Class -------- ------------------- -------------------- -------- Common CILCORP Inc. 13,563,871 100 300 Hamilton Boulevard Suite 300 Peoria, IL 61602
Election as Directors Ten directors are to be elected at the annual meeting to hold office for the ensuing year or until their successors are elected and qualified. All nominees are now serving as directors of the Company and have consented to serve, if elected. To be elected a director, a nominee must be among the ten nominees receiving the highest number of votes. The nominees, along with their biographical summaries, are listed below. The Board of Directors has no reason to believe that the persons named will not be available, but in the event that a vacancy among the original nominees is occasioned by death or any other reason prior to the meeting, the proxy will be voted for a substitute nominee or nominees designated by the Board of Directors. Marcus Alexis Board of Trustees Professor of Economics and Professor of Management and Strategy Northwestern University, Evanston, Illinois Director of CILCO since 1988 Member of the Finance Committee Dr. Alexis was born at New York, New York in 1932. He graduated from Brooklyn College in 1953 with a degree in economics. Dr. Alexis received a Master of Arts degree in economics from Michigan State University in 1954, and a Ph.D degree in economics from 2 the University of Minnesota in 1959. He initially joined Northwestern University in 1970 and served as chairman of the Department of Economics from 1976-1979 and 1982-1985. During the period 1979 to 1981, he was a member, vice chairman and acting chairman of the Interstate Commerce Commission. He joined the University of Illinois at Chicago in 1985 as dean of the College of Business Administration and professor of economics. He returned to Northwestern University in 1990. He is former Chairman of the Federal Reserve Bank of Chicago and serves on the boards of CILCORP, the Teachers Insurance and Annuity Association, the Metropolitan Planning Council in Chicago, and is also a director of the Economics Club of Chicago and the Lincoln Park Zoological Society. John R. Brazil President of Bradley University, Peoria, Illinois Director of CILCO since 1993 Dr. Brazil was born at Los Angeles, California in 1946. He received a bachelor's degree in history from Stanford University in 1968 and a master's degree and Ph.D. in American studies from Yale University in 1972 and 1975, respectively. In 1980, he was a Fulbright senior scholar in English and American studies at the University of Sydney, Australia. Prior to joining Bradley University as president in January 1992, he served as chancellor and professor of English at the University of Massachusetts Dartmouth (formerly known as Southeastern Massachusetts University) from 1984 through 1991. Dr. Brazil was previously associated with San Jose' State University in California for eleven years, last serving as professor of humanities and American studies and vice president for academic affairs. He is a director of First of America Bank-Illinois, N.A. and Methodist Medical Center (both of Peoria), CILCORP, and chairs the Walter Byers Post-Graduate Scholarship Committee of the National Collegiate Athletic Association. Willard Bunn III Chairman and Chief Executive Officer of Banc One Illinois Corporation, and Chairman of Bank One, Springfield, Illinois Director of CILCO since 1991 Member of the Finance Committee Mr. Bunn was born at Springfield, Illinois in 1943. He joined Bank One, formerly Marine Bank of Springfield, in 1978 as an executive vice president. He was elected president in 1980 and chairman and chief executive officer in 1989. He was named to his present position in 1992. He was formerly associated with Chemical Bank from 1968 to 1978 serving in various capacities including vice president and group head of domestic depository institutions. Mr. Bunn graduated from Princeton University in 1966 with a degree in history. He received his master's degree in business administration from The Darden School at the University of Virginia in 1968. Mr. Bunn is a trustee of Illinois Wesleyan University, Bloomington, Illinois and serves on the boards of various local and 3 state business and civic organizations. He is a nominee for election to the Board of Directors of CILCORP at that Company's 1994 annual meeting. David E. Connor President of David E. Connor and Associates, Peoria, Illinois (financial advisor to businesses and banks) Director of CILCO since 1968 Mr. Connor was born at Omaha, Nebraska in 1925. He graduated from Yale University in 1947. Prior to his retirement in 1985, he had served as president and as a director of Midwest Financial Group, Inc. (a multi-bank holding company) since its inception in 1981, and chairman of its largest subsidiary, Commercial National Bank of Peoria. Mr. Connor had been associated with the bank since 1952, and advanced through various areas of responsibilities to vice president in 1956. He was elected a director in 1959, senior vice president in 1964, president in 1967 and chairman in 1985. Mr. Connor formed David E. Connor and Associates in 1985. Other directorships include CILCORP, CILCORP Investment Management Inc., Keystone Consolidated Industries, Inc., Agricultural Research and Development Corporation, Peoria Development Corporation and First Bankers Trust Shares, Quincy, Illinois. He is a member of the board of trustees of Bradley University and was formerly chairman of that board. He also serves on the boards of various local and state business and civic organizations. William M. Shay Vice President of CILCO Director of CILCO since 1991 Mr. Shay was born at Peoria, Illinois in 1952. He was initially employed by CILCO in 1974 as an accountant and later as a budget analyst following graduation from Bradley University with a degree in accounting. He left CILCO in 1975 to attend the University of Illinois College of Law. Upon graduation from law school in 1978, he served for two years as a judicial clerk to a justice of the Illinois Supreme Court. He was then associated with the Chicago law firm of Isham, Lincoln & Beale until June 1982 when he rejoined the Company as attorney, subsequently becoming general counsel. In February 1987, Mr. Shay joined the Peoria office of Keck, Mahin & Cate, a law firm based in Chicago, as a partner. He was named vice president and chief financial officer of CILCORP in 1988 and to his present position effective January 1, 1993. He is also a certified public accountant. Mr. Shay is a director of CILCORP Investment Management Inc., the Illinois State Chamber of Commerce, Greater Peoria YMCA, the Peoria Area Chamber of Commerce, Agricultural Research and Development Corporation, and the Bradley University College of Business National Advisory Council. In addition, he is a member of the community bank board of Norwest Bank of Peoria and the advisory board of the Children's Hospital of Illinois at Saint Francis Medical Center. 4 R. Wayne Slone Chairman, President and Chief Executive Officer of CILCO Director of CILCO since 1988 Member of the Executive Committee Mr. Slone was born in Fulton County, Illinois in 1935. He joined CILCO in 1958 and held various positions related to sales and operations until he was appointed commercial activities manager in 1974. He was appointed general manager, suburban division in 1976, manager of rates and regulatory affairs in 1981 and group manager in 1982. He was elected vice president (customer service group) in 1983, senior vice president of the Company and CILCORP in 1986, president and chief executive officer of CILCO in 1988 and chairman in 1991. Mr. Slone is a director of the Edison Electric Institute, CILCORP, the Heartland Partnership, and the Agricultural Research and Development Corporation. Mr. Slone is a former chairman of the board of trustees of Proctor Hospital and Proctor Health Care Inc. He is a trustee of Eureka College. He is a retired Lieutenant Colonel of the Illinois Air National Guard, past president of the Elmwood, Illinois Community Unit School Board and is active in civic organizations. Katherine E. Smith Vice President, Consumer Affairs, U.S. Grocery Products Division, The Quaker Oats Company, Chicago, Illinois Director of CILCO since 1985 Member of the Finance Committee Ms. Smith was born at Chicago, Illinois in 1940. She is a 1961 graduate of Oregon State University with a degree in home economics. Ms. Smith has been associated with The Quaker Oats Company since 1982 as vice president, consumer affairs, U.S. Grocery Products Division. She was formerly with The Great Atlantic & Pacific Tea Company, Inc. from 1976 to 1982 as vice president, consumer affairs and marketing services and prior to that, she was associated with The Pillsbury Company. She began her business career with Southern California Gas Company, a division of Pacific Lighting Corporation, where she advanced through various positions related to customer services. Ms. Smith is active in a number of professional and civic associations including Grocery Manufacturers of America, Society of Consumer Affairs Professionals in Business and the American Home Economics Association. She is a director of CILCORP and a trustee of Oregon State University Foundation. 5 Richard N. Ullman President of Federal Companies, Peoria, Illinois (commercial warehousing, local and long distance moving) Director of CILCO since 1988 Member of the Finance Committee Mr. Ullman was born at Peoria, Illinois in 1934. He graduated from DePauw University in 1956 with a liberal arts degree. He joined Federal Warehouse Company in 1957. In 1973 he was named president of that company and of Federal Companies. He is a director of First of America Bank-Illinois, N.A. (of Peoria) and Keystone Consolidated Industries, Inc. and the Peoria Medical Research Corporation. Mr. Ullman is a member of the Saint Francis Medical Center Advisory Board, a member of the advisory board of Children's Hospital of Illinois at Saint Francis Medical Center, and serves as a trustee of Bradley University. He is active in a number of professional and civic associations. Mr. Ullman is a director of CILCORP. James F. Vergon Vice President of CILCO Director of CILCO since 1991 Mr. Vergon was born at Peoria, Illinois in 1948. He joined CILCO in 1971 and advanced through various positions in engineering. He was appointed gas engineering manager in 1981, director-rates and regulatory affairs in 1982, and elected vice president in 1986. He was vice president and chief financial officer of CILCORP from January 1, 1993 through February 28, 1993. He was again elected a vice president of the Company effective March 1, 1993. Mr. Vergon graduated from Bradley University in 1971 with a degree in mechanical engineering and is a registered professional engineer. He received a master's degree in business administration from Bradley University in 1981. He is chairman and president of CILCORP Investment Management Inc. and a member of the board of directors of Bank One, Peoria, The Economic Development Council for the Peoria Area, Greater Peoria YMCA, and the Heart of Illinois United Way. In addition, he is a member of the Board of Trustees of Proctor Hospital and the Bradley University Associate Board and the advisory boards of Forest Park Foundation, The Institute of Public Utilities and the Bradley University College of Engineering and Technology. 6 Murray M. Yeomans Chairman and Chief Executive Officer of Yeomans Distributing Company, Peoria, Illinois (wholesale appliances and central heating and cooling equipment) Director of CILCO since 1987 Member of the Executive Committee Mr. Yeomans was born at Philadelphia, Pennsylvania in 1935. He is a graduate of Miami University (Ohio) with a degree in business administration. He joined Yeomans Distributing Company in 1960 and was named president in 1972 and to his present position in 1991. He is a director of CILCORP, First of America Bank-Illinois, N.A. (of Peoria), Peoria Area Community Foundation and serves as a trustee of Bradley University. In addition, he is a member of the Saint Francis Medical Center Advisory Board and the board of directors of the Illinois Neurological Institute. Mr. Yeomans is active in civic and charitable activities. Committees and Meetings of the Board of Directors The Board of Directors has Executive and Finance Committees. The Executive Committee has all the powers of the Board to the extent permitted by law. The Committee also reviews and recommends to the Board of Directors nominees to serve on the Board. The Committee considers nominees brought to its attention by other members of the Board, by members of management and by shareholders. Shareholders may submit recommendations to the Committee with respect to nominees by writing to the Secretary of the Company. Directors serving as members of the Committee are Messrs. Slone, Yeomans and H. Safford Peacock. Mr. Peacock is not a nominee for re-election. During 1993, the Committee held two meetings. The Finance Committee is responsible for reviewing and making recommendations to the Board of Directors with respect to (1) the compensation of the executive officers of the Company and (2) the Company's financial policies. Directors serving as members of the Committee are Messrs. Alexis, Bunn, Ullman, Ms. Smith and James M. Unland. Mr. Unland is not a nominee for re-election. During 1993, the Committee held nine meetings. During 1993, the Board of Directors held a total of twelve meetings. Proposals of Shareholders Proposals of shareholders to be presented at the April 25, 1995 annual meeting must be received not later than November 28, 1994 for inclusion in the proxy statement and form of proxy relating to that meeting. Proposals should be sent to the Secretary, Central Illinois Light Company, 300 Liberty Street, Peoria, Illinois 61602. 7 Independent Auditors Upon the recommendation of its Audit Committee, the Board of Directors of the Company's parent, CILCORP Inc., has appointed Arthur Andersen & Co., independent public accountants, to audit the accounts of the Company for 1994. Arthur Andersen & Co. is not expected to be represented at the annual meeting. Executive Compensation The following table sets forth the compensation earned for the years 1993, 1992 and 1991 for the Chief Executive Officer and the four highest compensated executive officers of the Company whose total annual compensation exceeded $100,000: SUMMARY COMPENSATION TABLE
Annual Long-Term Compensation Compensation ------------ ------------ All Other Name and Principal Position Year Salary LTIP Payouts(1) Compensation(2) - --------------------------- ---- ------ --------------- --------------- R. W. Slone 1993 $205,500 $88,635 $28,611 Chairman, President and Chief 1992 195,250 60,976 22,371 Executive Officer 1991 183,350 61,849 22,262 W. M. Shay (3) 1993 150,437 34,864 17,953 Vice President 1992 143,250 30,851 25,821 1991 135,350 42,953 24,092 J. F. Vergon (4) 1993 134,564 57,114 11,635 Vice President 1992 121,205 40,796 9,310 1991 113,714 38,425 9,091 T. S. Romanowski 1993 121,705 55,162 10,894 Vice President 1992 115,914 39,922 8,886 1991 111,269 36,938 8,723 T. S. Kurtz 1993 118,120 53,012 8,022 Vice President 1992 111,434 38,249 15,946 1991 105,127 36,406 16,617
- --------- (1) Amounts paid pursuant to the Company's EVA-Based Incentive Compensation Plan. (2) The amounts shown in this column for 1993 represent (a) Company contributions under the Employees' Savings Plan: Mr. Slone $4,497, Mr. Shay $4,062, Mr. Vergon $4,037, Mr. Romanowski $3,651 and Mr. Kurtz $3,544, and (b) earnings on deferred compensation: Mr. Slone $24,114, Mr. Shay $13,891, Mr. Vergon $7,598, Mr. Romanowski $7,243 and Mr. Kurtz $4,478. 8 (3) Elected vice president of the Company effective January 1, 1993. Previously Mr. Shay was a vice president of CILCORP. (4) Re-elected vice president of the Company effective March 1, 1993. Mr. Vergon served as vice president and chief financial officer of CILCORP from January 1, 1993 through February 28, 1993. Finance Committee Report on Executive Compensation Background and Policies. The Finance Committee of the Board of Directors (the "Committee") is comprised of five non-employee members of the Board. The Committee considers and makes recommendations to the Board with respect to the compensation of the executive officers (the president and vice presidents) of the Company. The Committee's compensation policies with respect to the executive officers are as follows: 1. Compensation levels should be established which are internally fair and equitable, bearing in mind (a) past practices, patterns and relationships, an (b) the relationship between officer level compensation and the compensation provided for top level managers throughout the Company. 2. Compensation should be comparable and reasonable in relation to similar positions in other utility companies of like size, structure and characteristics. 3. Compensation of the executive officers should be directly related to the economic value created for shareholders. 4. A compensation program should be designed to attract and retain superior management. Executive Officer Compensation Program. The Company's current executive officer compensation program is comprised of two major components: base salary and incentive compensation. Base salary levels for the Company's executive officers are set by the Committee relative to other utility companies of similar size and characteristics. In addition, the Committee also considers the individual officer's experience and performance. Salaries of the executive officers are reviewed each year by the Committee and may be adjusted based on the individual's contribution to the Company's performance and competitive pay levels. Incentive compensation is awarded in accordance with the Company's EVA-Based Incentive Compensation Plan ("EVA Plan") and the CILCORP Shareholder Return Incentive Compensation Plan ("Shareholder Return Plan") approved by CILCORP shareholders on April 27, 1993. The purpose of the EVA Plan is to provide an incentive to eligible officers to increase and maintain shareholder value by rewarding the achievement of this objective. EVA is a measure of profitability that is based on the difference between the return earned on the capital invested in an enterprise and the cost of that capital. This difference can be either positive or negative. The resulting award is added to or deducted 9 from balances accumulated from prior years. Each year, one third of the net balance accumulated is paid to the participant. That portion of the incentive compensation which has been deferred is "at risk" so that a negative EVA in a subsequent year may eliminate previously accumulated balances. The award payment is based, in part, on a fixed percent of the improvement in EVA from the prior year plus a fixed percent of the maintenance of EVA over the preceding three years. Participants in the Shareholder Return Plan may include employees of CILCORP and its subsidiaries, including CILCO, who make or influence policy decisions which impact the overall long term success of the holding company. The purposes of the Shareholder Return Plan are to promote long-term growth in the value of CILCORP common stock, to attract and retain executives of outstanding ability, to encourage teamwork among the executives of CILCORP and its subsidiaries, and to reward performance based on the successful achievement of pre-established corporate financial goals. Shares may be granted to eligible key employees of CILCORP or its subsidiaries. At CILCO, only the Chief Executive Officer of the Company is currently participating in the Plan. He has been granted a designated number of shares to be distributed based upon achievement of pre-established financial objectives for the first performance period which commenced on January 1, 1993 and ends on December 31, 1997. The financial objectives are based upon CILCORP's total shareholder return. In 1993, the vice presidents of the Company received salary increases averaging 6.7% based upon 1992 performance. The Company's return on average common equity for 1992 was 11.3%. President's Compensation. In April 1993, Mr. Slone's base salary was increased from $198,000 to $208,000, a 5% increase based on his performance during 1992. In evaluating Mr. Slone's performance, the Committee considered the following factors: (1) The Company's performance substantially met the objectives that were established in the Company's 1992 Business Plan. (2) During 1992, several matters of particular significance were accomplished which should enhance the Company's future performance. These included: -- additional refinancing of the Company's long-term debt, resulting in significant interest savings -- construction of a 30-mile natural gas pipeline which diversifies supply sources and increases storage opportunities -- significant reduction in personal injury accidents -- purchase of additional electric generating capacity to offset the need for construction of additional generating capacity -- three-year labor agreements with the Company's collective bargaining units 10 The Committee noted that, due to mild weather conditions, electric and natural gas revenues declined 4.6% in 1992. The Committee further recognized the increase in capital expenditures and operating costs incurred by the Company in the renewal of its cast iron gas distribution system in Springfield, Illinois. Mr. Slone was paid an award of $88,635 in 1993 pursuant to the Company's EVA-Based Incentive Compensation Plan, based on the Company's continued positive performance during the twelve months ended September 30, 1993. Following approval of the CILCORP Shareholder Return Incentive Compensation Plan at the Annual Meeting of Shareholders on April 27, 1993, Mr. Slone was granted 2,000 shares of CILCORP common stock for the performance period beginning January 1, 1993. Actual distribution of the shares granted to Mr. Slone will occur only in the event that pre-established financial objectives based on total shareholder return are achieved during the performance period which expires December 31, 1997. Finance Committee Richard N. Ullman, Chairman Marcus Alexis Willard Bunn III Katherine E. Smith James M. Unland Certain Plans Benefit Replacement Plan. The Board of Directors has established a Benefit Replacement Plan (the "Plan"). The Plan provides for payments to Plan participants from the Company's general funds to restore the retirement benefit under the Company's Pension Plan when such benefit is restricted by (1) the maximum defined benefit limitation of Section 415(b) of the Internal Revenue Code of 1986, as amended (the "Code"), (2) the index compensation limitation of Code Section 401(a)(17), and (3) participation in certain of the Company's deferred compensation plans. The Plan generally covers all CILCO Pension Plan participants affected by these restrictions and provides for payment at the times and in the forms of the Pension Plan. Pension Plan. Pension benefits are provided through the Company's non- contributory Pension Plan for Management, Office and Technical Employees. Directors who are not employees do not participate in this Plan. Pension benefits are determined using a formula based on years of service and highest average rate of monthly earnings for any sixty consecutive month period. The normal retirement date specified in the Pension Plan is age 65. Retirement prior to age 62 results in an appropriate reduction in pension benefits. 11 The following table shows the aggregate annual benefits payable upon retirement at normal retirement age under the Pension Plan and under the Benefit Replacement Plan discussed above. The amounts shown are not subject to any deduction for Social Security benefits or other offset amounts other than that for an optional survivorship provision. Pension Plan Table
Years of Service --------------------------------------------------------- Remuneration 15 years 20 years 25 years 30 years 35 years ------------ -------- -------- -------- -------- -------- $175,000 $37,406 $49,875 $ 62,344 $ 74,813 $ 87,281 200,000 42,750 57,000 71,250 85,500 99,750 225,000 48,094 64,125 80,156 96,188 112,219 250,000 53,438 71,250 89,063 106,875 124,688 275,000 58,781 78,375 97,969 117,563 137,156 300,000 64,125 85,500 106,875 128,250 149,625
The annual and long-term compensation shown for the individuals listed in the above Summary Compensation Table is substantially compensation as covered by the Pension Plan and the Benefit Replacement Plan. At January 1, 1993, the credited years of service under the Pension Plan for the officers named in the above table are as follows: R. W. Slone--35 years, W. M. Shay--11 years, J. F. Vergon--22 years, T. S. Romanowski--22 years, and T. S. Kurtz--18 years. Compensation Protection Plan. The Company's Board of Directors has established a Compensation Protection Plan providing severance benefits to eligible employees, including all individuals named in the Summary Compensation Table above, in the event of (i) a termination of employment resulting directly or indirectly from a sale of substantially all or certain assets of the Company or (ii) a termination of employment within two years after a change in control occurring involuntarily for a reason other than unacceptable performance or occurring voluntarily with good reason as defined in the plan. A change in control includes the sale of all or part of the business of the Company to a person not controlled by CILCORP, a merger or consolidation of CILCORP in which CILCORP does not survive or in which its common stock is converted, the acquisition of 30% of the beneficial ownership of CILCORP by a person together with the failure of continuing directors to constitute a majority of its Board of Directors, or a sale of all or substantially all of the assets of CILCORP. Upon a covered termination, a participant is entitled to a continuation of base salary and benefit plan coverage for two years (or a shorter period for participants below the position of vice president with less than 30 years of service) after such termination. Directors' Compensation. No fees are paid to directors who are officers of the Company. Non-employee members of the Board receive a single annual retainer fee of $13,000 for serving on the Company's Board and on CILCORP's Board. Non-employee members of the Board who are not members of the Board of the Company's parent 12 receive an annual retainer fee of $9,800 for serving on the Company's Board. These fees are prorated for less than a year's service. Non-employee directors also receive an attendance fee of $750 for attending meetings of the Board of Directors of the Company or CILCORP and an attendance fee of $750 for each meeting attended of committees of those Boards. A single Board or committee attendance fee is payable to each director in the event the Boards of this Company and CILCORP or committees of the Boards of the Company and CILCORP meet on the same day. Directors are also reimbursed for their travel expenses for each Board or committee meeting attended. Other Matters. The Board has no knowledge of any business to be presented for consideration at the Annual Meeting other than that discussed above. Should any other business properly come before the meeting or any adjournment thereof, it is intended that the shares represented by proxies will be voted with respect thereto in accordance with the best judgment of the persons named in such proxies. By Order of the Board of Directors, John G. Sahn Secretary March 28, 1994 13 [LOGO OF CENTRAL ILLINOIS LIGHT COMPANY] THIS PROXY IS SOLICITATED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints D.E. Connor, R.W. Slone, and J.G. Sahn, and each of them, attorneys and proxies with power of substitution to each, with authority to vote, all shares which the undersigned would be entitled to vote if personally present, at the 1994 annual meeting of shareholders of Central Illinois Light Company, or at any adjournment thereof, upon the election of directors as set forth in the notice of meeting and proxy statement dated March 28, 1994, and, in their discretion, upon any other matter which may properly come before the meeting. The shares represented hereby will be voted as directed on the reverse of this card. IF NOT OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS --- (CONTINUED AND TO BE SIGNED ON THE OTHER SIDE) PROXY. PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS BELOW. EACH JOINT OWNER SHOULD SIGN. ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR OTHERS SIGNING IN A REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL TITLES. DATE__________________, 1994 ____________________________ SIGNATURE/S ____________________________ ELECTION OF DIRECTORS [___] WITHHOLD AUTHORITY [___] FOR all nominees listed to vote for all nominees below (except as marked listed below to the contrary below) M. Alexis, J.R. Brazil, W. Bunn III, D.E. Connor, W.M. Shay, R.W. Slone, K.E. Smith, R.N. Ullman, J.F. Vergon, and M.M. Yeomans. Instruction: To withhold authority to vote for any individual nominee, write that nominee's name in the space provided below. -------------------------------------------------------------------- NO POSTAGE REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE UNITED STATES -----END PRIVACY-ENHANCED MESSAGE-----