SCHEDULE 14A INFORMATION
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[LOGO]
KANSAS CITY POWER & LIGHT COMPANY
1201 WALNUT
KANSAS CITY, MISSOURI 64106
March 22, 1999
Dear Shareholder:
We are pleased to invite you to the Annual Meeting of Shareholders of
Kansas City Power & Light Company. This meeting will be held at 10:00 a.m.
(Central Daylight Time) on Tuesday, May 4, 1999, at the Gem Theater located at
1615 East 18(th) Street, Kansas City, Missouri. Parking is available around the
Gem Theater. At this meeting, you will be asked to elect nine directors and to
ratify and approve the appointment of independent accountants for 1999.
We hope you and your guest will be able to attend the meeting.
Refreshments will be available starting at 9:00 a.m.
Sincerely,
[SIG]
Drue Jennings
Chairman of the Board and
Chief Executive Officer
[LOGO]
KANSAS CITY POWER & LIGHT COMPANY
1201 Walnut
Kansas City, Missouri 64106
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: Tuesday, May 4, 1999
Time: 10:00 a.m. (Central Daylight Time)
Place: The Gem Theater
1615 East 18(th) Street
Kansas City, Missouri
The purposes of the Annual Meeting are to:
1. Elect nine directors; and
2. Ratify the appointment of independent accountants.
Shareholders of record as of the close of business on March 15, 1999, are
eligible to vote at this meeting.
- - --------------------------------------------------------------------------------
THE GEM THEATER IS ACCESSIBLE TO ALL SHAREHOLDERS. SHAREHOLDERS WITH
SPECIAL ASSISTANCE NEEDS SHOULD CONTACT THE CORPORATE SECRETARY,
KANSAS CITY POWER & LIGHT COMPANY, 1201 WALNUT, KANSAS CITY, MISSOURI
64106-2124, NO LATER THAN FRIDAY, APRIL 30, 1999.
PROXY STATEMENT
This Proxy Statement and accompanying proxy card are being mailed,
beginning March 22, 1999, to owners of common shares of Kansas City Power &
Light Company (KCPL) stock for the solicitation of proxies by the Board of
Directors for the 1999 Annual Meeting of Shareholders. The Board of Directors
encourages you to read this document carefully and take this opportunity to vote
on the matters to be decided at the Annual Meeting.
- - --------------------------------------------------------------------------------
CONTENTS
Page
-----------
Voting Procedures..................................................................... 1
Corporate Governance.................................................................. 2
Election of Directors (Item 1 on Proxy Card).......................................... 4
Submission of Shareholder Proposals and Director Nominations.......................... 6
Nominating & Compensation Committee Report on Executive Compensation.................. 8
Stock Performance Graph............................................................... 10
Security Ownership of Directors and Officers.......................................... 11
Executive Compensation................................................................ 12
Pension Plans......................................................................... 14
Severance Agreements.................................................................. 15
Change of Control..................................................................... 16
Ratification of Appointment of Independent Accountants (Item 2 on Proxy Card)......... 17
Other Business........................................................................ 17
Kansas City Power & Light Company
1201 Walnut
Kansas City, Missouri 64106-2124
i
VOTING PROCEDURES
YOUR VOTE IS VERY IMPORTANT. Your shares can only be voted at the Annual
Meeting if you are present or represented by proxy. Whether or not you plan to
attend the Annual Meeting, you are encouraged to vote by proxy to assure that
your shares will be represented. You may revoke your proxy at any time by:
- written notice to the Corporate Secretary;
- submission of a proxy bearing a later date; or
- casting a ballot during the Annual Meeting proceedings.
Properly executed proxies received by the Corporate Secretary before the Annual
Meeting's adjournment will be voted according to the directions provided. If a
proxy is returned without shareholder directions, the shares will be voted as
recommended by the Board of Directors.
WHO CAN VOTE? Shareholders who own shares of the Company's common stock
as of the close of business on March 15, 1999, are entitled to vote. On that
day, approximately 61,898,020 shares of common stock were outstanding and
eligible to vote. Each share is entitled to one vote on each matter presented at
the Annual Meeting.
Cumulative voting is allowed with respect to the election of directors.
This means each shareholder has a total vote equal to the number of shares they
own multiplied by the number of directors to be elected. These votes may be
divided among all nominees equally or may be voted for one or more of the
nominees either in equal or unequal amounts. If votes for a certain director
nominee are withheld, those votes will be distributed among the remaining
director nominees. Withholding authority to vote for all director nominees has
the same effect as abstaining from voting for any director nominee. If no
instructions are given, the shares will be voted equally for the election of all
directors.
HOW DO I VOTE? Other than by attending the Annual Meeting and voting in
person, there are three ways registered shareholders may vote their shares:
- By Mail
- By Telephone
- By Internet
TO VOTE BY MAIL, simply mark, sign and date the enclosed proxy card and return
it in the postage-paid envelope provided. TO VOTE BY TELEPHONE OR INTERNET, 24
hours a day, 7 days a week, refer to the enclosed proxy card for voting
instructions. If you hold your shares through a broker, bank or other nominee,
you will receive separate instructions from the nominee describing how to vote
your shares. If you are an employee participating in the KCPL Employee Savings
Plus Plan (KCPL 401-k Plan),
1
you will receive separate instructions from the Plan's Trustee, UMB Bank, n.a.,
describing how to vote your shares.
WHAT SHARES ARE INCLUDED IN THE PROXY CARD? The proxy card represents all
the shares registered to your account including full shares held in your KCPL
Dividend Reinvestment and Stock Purchase Plan account.
HOW ARE VOTES COUNTED? The Annual Meeting will be held if a quorum,
consisting of a majority of outstanding shares of common stock entitled to vote,
is represented. Broker non-votes, votes withheld and abstentions will be counted
for purposes of determining whether a quorum has been reached.
IS MY VOTE CONFIDENTIAL? KCPL has a policy of voting confidentiality.
Proxies, ballots and voting tabulations are available for examination only by
the independent Inspector of Election and Tabulators. Your vote will not be
disclosed to the KCPL Board or management of KCPL except as may be required by
law and in other limited circumstances.
WHO IS THE PROXY SOLICITOR? Morrow & Company, 445 Park Avenue, New York,
New York 10022, has been retained by KCPL to assist in the distribution of proxy
materials and solicitation of votes for a fee of $8,500 plus reimbursement of
out-of-pocket expenses.
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CORPORATE GOVERNANCE
The Company's business, property and affairs are managed under the
direction of the Board of Directors. This is in accordance with Missouri General
Corporation Law and the KCPL Restated Articles of Incorporation and By-Laws.
Although Directors are not involved in the day-to-day operating details, they
are kept informed of the Company's business through written reports and
documents regularly provided to them. In addition, Directors receive operating,
financial and other reports presented by the Chairman and other officers of the
Company at meetings of the Board of Directors and committees of the Board.
MEETINGS OF THE BOARD. The Board of Directors held nine meetings in 1998.
Each of the incumbent Directors attended at least 75% of the Board and committee
meetings to which he or she was assigned.
COMMITTEES OF THE BOARD. The Board of Directors' five standing committees
for 1999 are described below. Directors' committee memberships are included in
their biographical information beginning on page 4.
2
EXECUTIVE COMMITTEE - exercises the full power and authority of the
Board to the extent permitted by Missouri law. The committee generally
meets when action is necessary between scheduled Board meetings. The
committee met twice in 1998.
AUDIT COMMITTEE - monitors the auditing, accounting and financial
reporting of the Company. The committee makes recommendations to the Board
concerning the accounting firm to be employed as independent accountants
and consults with these accountants regarding the adequacy of internal
controls and the scope and results of their audits. The committee met twice
in 1998.
COMMUNITY DEVELOPMENT COMMITTEE - establishes guidelines for
corporate policy and provides guidance and perspective to the Board on the
execution of a corporate policy on community development. The committee
approves an annual report on community development activities and
expenditures. The committee met twice in 1998.
NOMINATING & COMPENSATION COMMITTEE - is responsible for overseeing
the management of human resources activities of the Company including:
- selection of nominees to the Board of Directors;
- management succession planning;
- determination of the amounts and forms of senior management
compensation;
- administration of KCPL's incentive plans for senior officers; and
- recommendation for compensation to be paid to Board members.
The committee met three times in 1998.
NUCLEAR AFFAIRS COMMITTEE - monitors, reviews, evaluates and makes
recommendations to the Board with respect to nuclear matters and affairs.
The committee met once in 1998.
DIRECTOR COMPENSATION. Compensation is paid to non-employee members of
the KCPL Board. An annual retainer of $20,000 was paid in 1998 ($5,000 of which
was used to acquire shares of KCPL Common Stock through the Company's Dividend
Reinvestment Plan on behalf of each non-employee member of the Board).
Attendance fees of $750 for each Board meeting and $750 for each committee
meeting attended were also paid in 1998. Directors may defer the receipt of all
or part of the cash retainers and meeting fees.
3
KCPL also provides life and medical insurance coverage for each
non-employee member of the KCPL Board. The total premiums paid by the Company
for this coverage for all participating non-employee directors in 1998 was
$15,731.52.
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ELECTION OF DIRECTORS
ITEM 1 ON PROXY CARD
The KCPL Board will consist of nine members. The nine nominees named below
have been recommended to the Board by the Nominating & Compensation Committee to
serve as Directors until the next Annual Meeting of Shareholders and until their
successors are elected and qualified. Each nominee has consented to stand for
election and the Board does not anticipate any nominee will be unavailable to
serve. In the event that one or more of the director nominees should become
unavailable to serve at the time of the Annual Meeting, shares represented by
proxy may be voted for the election of a nominee to be designated by the Board.
All of the nominees listed below were Directors in 1998 with the exception of
Mr. Beaudoin, who joined the Board January 1, 1999. Arthur J. Doyle is retiring
from the Board of Directors after providing over 22 years of service to the
Board. Proxies cannot be voted for a greater number of persons than nine.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE LISTED NOMINEES.
NOMINEES FOR DIRECTORS
BERNARD J. BEAUDOIN Director since 1999
Mr. Beaudoin, 58, is President of KCPL. He is also director and past
Co-Chairperson of Carondelet Health. Mr. Beaudoin will serve as a member of the
Nuclear Affairs Committee.
DAVID L. BODDE Director since 1994
Dr. Bodde, 56, holds the Charles N. Kimball Professor of Technology and
Innovation at the Bloch School of Business, University of Missouri-Kansas City.
Dr. Bodde formerly served as Vice President of the Midwest Research Institute
("MRI") and President of its subsidiary, MRI-Ventures. He also serves on the
Board of Trustees of The Commerce Funds. Dr. Bodde will serve as a member of the
Nuclear Affairs Committee.
WILLIAM H. CLARK Director since 1983
Mr. Clark, 67, is President of The Urban League of Greater Kansas City, a
community service agency which focuses on intergroup relations and human
services. Mr. Clark will serve as a member of the Executive and Community
Development Committees.
4
ROBERT J. DINEEN Director since 1987
Mr. Dineen, 69, is Chairman of the Board of Layne Christensen Company, the
nation's largest provider of drilling services for the water supply,
environmental and minerals exploration markets. He is also a director of
Owens-Illinois Inc. Mr. Dineen will serve as a member of the Executive,
Nominating & Compensation, and Nuclear Affairs Committees.
W. THOMAS GRANT II Director since 1989
Mr. Grant, 48, is Chairman of the Board, President and Chief Executive Officer
of LabOne Inc., a centralized laboratory that markets clinical, substance abuse
and insurance laboratory services nationwide. He is also a director of Business
Men's Assurance Company of America, Response Oncology, Inc., Commerce
Bancshares, Inc. and AMC, Inc. Mr. Grant will serve as a member of the Audit and
Community Development Committees.
A. DRUE JENNINGS Director since 1987
Mr. Jennings, 52, is Chairman of the Board and Chief Executive Officer of KCPL.
He is also a director of Business Men's Assurance Company of America. Mr.
Jennings will serve as a member of the Executive Committee.
GEORGE E. NETTELS, JR. Director since 1980
Mr. Nettels, 71, is Chairman of the Board of Midwest Minerals, Inc., a
Kansas-based company involved in construction mineral processing and quarry
operations. He is also President of Yampa Resource Associates, Inc., a mined
land reclamation operation. Mr. Nettels will serve as a member of the Nominating
& Compensation and Nuclear Affairs Committees.
LINDA HOOD TALBOTT Director since 1983
Dr. Talbott, 58, is President of Talbott & Associates, international consultants
in strategic planning, philanthropic management, and development to foundations,
corporations, and the nonprofit sector. She is Chairman of the Center for
Philanthropic Leadership and Adjunct Professor in the School of Graduate Studies
at the University of Missouri, Kansas City. Dr. Talbott will serve as a member
of the Audit and Community Development Committees.
ROBERT H. WEST Director since 1980
Mr. West, 60, is Chairman of the Board of Butler Manufacturing Company, a
supplier of non-residential building systems, specialty components, and
construction services. He is also a director of Burlington Northern Santa Fe
Corporation and Commerce Bancshares, Inc. Mr. West will serve as a member of the
Executive, Audit, and Nominating & Compensation Committees.
- - --------------------------------------------------------------------------------
5
- - --------------------------------------------------------------------------------
SUBMISSION OF SHAREHOLDER PROPOSALS AND
DIRECTOR NOMINATIONS
SHAREHOLDER PROPOSALS
Shareholders wishing to have a proposal included in the Proxy Statement
for the KCPL 2000 Annual Meeting must submit a written proposal to the Corporate
Secretary by November 23, 1999. Securities and Exchange Commission rules set
standards for shareholder proposal requirements to be included in a proxy
statement.
If a shareholder intends to bring a matter before a shareholder meeting,
other than by submitting a proposal for inclusion in the Company's proxy
statement for that meeting, the shareholder must give the Company notice at
least 60 days, but no more than 90 days, prior to the date of the shareholder
meeting. If KCPL gives shareholders less than 70 days' notice of a shareholder
meeting date, the shareholder's notice must be received by the Corporate
Secretary no later than the close of business on the tenth (10) day following
the day public disclosure was made.
To be in proper written form, a shareholder's notice must set forth as to
each matter the shareholder proposes to bring before the shareholder meeting:
- a brief description of the business to be brought before the
shareholder meeting and the reasons for conducting the business at
the shareholder meeting;
- the shareholder's name and record address;
- class and number of shares of Company stock the shareholder owns
beneficially or of record;
- a description of all arrangements or understandings between the
shareholder and any other person or persons (including their names)
in connection with the proposal of the business by the shareholder,
and any material interest of the shareholder in such business; and
- the shareholder's representation that they intend to appear in
person or by proxy at the annual meeting to bring such business
before the meeting.
6
DIRECTOR NOMINATIONS
KCPL's By-Laws also require shareholders wishing to make a director
nomination at a shareholder meeting give the Company notice at least 60 days,
but no more than 90 days, prior to the date of the shareholder meeting. If KCPL
gives shareholders less than 70 days' notice of a shareholder meeting date, the
shareholder's notice must be received by the Corporate Secretary no later than
the close of business on the tenth (10) day following the day public disclosure
was made.
For a director nominee election to be in proper written form, a
shareholder's notice to the Corporate Secretary must include:
the Shareholder's
- name and shareholder record; and
- class or series of KCPL stock and number of shares
beneficially held;
and
the Nominee's
- name, age, business address and residence address;
- principal occupation or employment;
- class or series of KCPL stock and number of shares
beneficially held; and
- written consent of the nominee to serve as a director, if
elected.
The notice must also provide:
- a description of all arrangements or understandings between
the shareholder and the nominee;
- a representation that the shareholder intends to appear in
person or by proxy at the shareholders' meeting to nominate
the nominee; and
- any other information relating to the shareholder and the
nominee that is required to be reported in a proxy statement
or other filings as required by Securities and Exchange
Commission rules.
No person shall be eligible for election as a director unless nominated
according to procedures described in the Company's By-Laws. Shareholders may
request a copy of these By-Laws by contacting the Corporate Secretary, Kansas
City Power & Light Company, 1201 Walnut, Kansas City, Missouri 64106-2124.
- - --------------------------------------------------------------------------------
7
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NOMINATING & COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
This Nominating & Compensation Committee of the Board (the "Compensation
Committee") is composed of three independent outside Directors. The Compensation
Committee establishes and administers the policies and plans that govern
compensation for the executive officers listed in the compensation tables in
this proxy statement. The Compensation Committee's recommendations are subject
to approval by non-employee members of the Board. The Compensation Committee has
not adopted a policy concerning the Internal Revenue Service's rules on the
deductibility of compensation in excess of $1,000,000.
Executive compensation for KCPL's executive officers include base salary
and incentive pay. The package is designed to attract and keep talented, key
executives critical to KCPL's long-term success in a deregulated market and to
support a performance-oriented environment. Base salaries are established on the
basis of:
- job responsibilities and complexity;
- individual performance under established guidelines; and
- competitiveness for comparable positions in companies of similar size
within the industry.
The Compensation Committee also compares total executive compensation packages
with several national compensation surveys including data prepared by the Edison
Electric Institute ("EEI").
The Long- and Short-Term Incentive Compensation Plan for executive
officers based on Economic Value Added (EVA-Registered Trademark-)(1) aligns the
interests of management with shareholders. If shareholder value is increased by
the amount of the annual EVA-Registered Trademark-goal, bonuses are paid at a
target level that varies to reflect a participant's level of responsibility. A
minimum level of EVA-Registered Trademark- improvement must be achieved before
any bonus is awarded. EVA-Registered Trademark- improvement above the annual
goal results in payouts above the target level, and EVA-Registered Trademark-
improvement below the minimum level results in a negative bonus. A bonus bank is
established for each participant. One half of each positive bonus is deposited
in the bank. The remaining one half of any positive bonus is paid in cash. Any
negative bonus is also deposited in the bank. When the bonus bank balance is
positive, one-half of the amount of the bonus bank balance is also paid to the
participant. For 1998, the EVA-Registered Trademark- goal was exceeded and
bonuses were earned in the amounts set forth in the compensation tables.
- - --------------
(1) EVA-Registered Trademark- is a registered trademark of Stern Stewart &
Co. in the United States of America, France, the United Kingdom, Canada,
Australia and Mexico.
8
CHIEF EXECUTIVE OFFICER COMPENSATION
In determining the base salary for A. Drue Jennings, the Chief Executive
Officer, the Compensation Committee considered:
- financial performance of the Company;
- cost and quality of services provided;
- leadership in enhancing the long-term value of KCPL; and
- relevant salary data including information supplied by the EEI.
Incentive awards to Mr. Jennings under the Long- and Short-Term Incentive
Plan are determined in the same manner as the other executive officers.
COMPENSATION COMMITTEE
Robert H. West
George E. Nettels, Jr.
Robert J. Dineen
- - --------------------------------------------------------------------------------
9
STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS*
KCPL, S&P 500 INDEX, AND EEI INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
FISCAL YEARS ENDED DECEMBER 31
KCPL S&P 500 EEI Index
1993 $100.00 $100.00 $100.00
1994 $109.04 $101.32 $88.43
1995 $130.54 $139.40 $115.86
1996 $150.25 $171.40 $117.25
1997 $164.80 $228.58 $149.34
1998 $174.32 $293.91 $170.09
DOLLARS
* Total return assumes reinvestment of dividends.
Assumes $100 invested on December 31, 1993 in KCPL Common Stock, S&P 500
Index, and EEI Index
10
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SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table shows ownership of the Company's Common Stock by the
named executive officers, other Directors and all Directors and officers as a
group. The total of all combined shares represents less than one percent of the
outstanding shares of the Company's Common Stock. Management of KCPL has no
knowledge of any person (as defined by the Securities and Exchange Commission)
who owns beneficially more than 5% of KCPL Common Stock.
Shares of
Common Stock
Name of Beneficial Owner Beneficially Owned
- - ------------------------------------------- --------------------
NAMED EXECUTIVE OFFICERS
Bernard J. Beaudoin 3,635(1)
Frank L. Branca 33,575(1)(2)
Marcus Jackson 10,004(1)(2)
A. Drue Jennings 22,732(1)
Jeanie S. Latz 15,911(1)(2)
OTHER DIRECTORS
David L. Bodde 2,289(3)
William H. Clark 1,933
Robert J. Dineen 2,511
Arthur J. Doyle 18,481
W. Thomas Grant II 1,511
George E. Nettels, Jr. 9,395(4)
Linda Hood Talbott 4,823
Robert H. West 2,203
---------------------
ALL OFFICERS AND DIRECTORS AS A GROUP 206,577(1)(2)
(20 persons)
--------------------------
(1) Includes shares held in the KCPL's Employee Savings Plus Plan.
(2) Includes exercisable non-qualified stock options granted under the
Long-Term Incentive Plan in the following amounts: Branca, 30,000;
Jackson, 6,000; Latz, 13,375; All Other Officers As A Group, 48,500.
(3) The nominee disclaims beneficial ownership of 500 shares reported and
held by nominee's mother.
(4) The nominee disclaims beneficial ownership of 3,400 shares reported
and owned by nominee's wife.
- - --------------------------------------------------------------------------------
11
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EXECUTIVE COMPENSATION
The following tables contain compensation data for the Chief Executive
Officer and the five other highest compensated executive officers.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term
-------------------- Compensation
--------------
Awards
--------------
Securities
Underlying All Other
Name and Salary Bonus Options/SARs Compensation
Principal Position Year $ ($) (#) ($)(1)
- - ------------------------------ --------- --------- --------- -------------- ---------------
A. Drue Jennings 1998 450,000 169,093 0 shares 62,755
Chairman of the Board and 1997 430,000 0 0 shares 61,287
Chief Executive Officer 1996 415,000 71,795 13,750 shares 58,415
Bernard J. Beaudoin 1998 215,000 72,614 0 shares 20,195
President 1997 206,000 0 0 shares 20,023
1996 206,000 80,000 0 shares 21,057
Frank L. Branca 1998 144,000 37,823 0 shares 17,847
Vice President, 1997 138,000 0 0 shares 17,269
Generation Services 1996 134,000 23,182 5,500 shares 17,015
Marcus Jackson 1998 220,000 76,163 0 shares 17,633
Executive Vice President and 1997 200,000 0 0 shares 15,088
Chief Financial Officer 1996 160,000 27,680 6,000 shares 14,748
Jeanie S. Latz 1998 146,000 43,814 0 shares 17,393
Senior Vice President 1997 140,000 0 0 shares 18,661
Corporate Services, Corporate 1996 135,000 58,335 5,000 shares 16,573
Secretary and Chief Legal
Officer
J. Turner White(2) 1998 140,152 50,000 0 shares 345,815
Executive Vice President 1997 175,000 0 0 shares 10,562
Corporate Development 1996 145,000 75,085 6,000 shares 9,867
12
(1) For 1998, amounts include:
- FLEX DOLLARS UNDER THE FLEXIBLE BENEFITS PLAN: Jennings - $15,902;
Beaudoin - $10,798; Branca - $12,462; Jackson - $12,608; Latz - $9,128;
and White - $6,782.
- DEFERRED FLEX DOLLARS: Jennings - $20,796; Beaudoin - $2,158.
- ABOVE-MARKET INTEREST PAID ON DEFERRED COMPENSATION: Jennings - $12,558;
Beaudoin - $2,228; Branca - $1,065; and Latz - $3,885.
- KCPL CONTRIBUTION UNDER THE KCPL EMPLOYEE SAVINGS PLUS PLAN: Jennings -
$4,799; Beaudoin - $5,011; Branca - $4,014; Jackson - $5,025; Latz -
$4,242; and White - $3,400.
- KCPL CONTRIBUTION TO DEFERRED COMPENSATION AND SUPPLEMENTAL RETIREMENT
PLAN: Jennings - $8,700; Branca - $306; and Latz - $138.
(2) Mr. White terminated his employment with the Company effective September
11, 1998. Annual compensation includes salary paid to him until that date.
All Other Compensation includes $335,633 paid to him upon termination.
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
Shares Number of Value of
Acquired Exercisable In-the-Money
on Value Options/SARs at Options/SARs at
Exercise(1) Realized(1) Fiscal Year-End Fiscal Year-end(2)
Name (#) ($) (#) ($)
- - --------------------- ------------- ----------- ----------------- ------------------
A. Drue Jennings 97,146 1,123,677 0 0
Bernard J. Beaudoin 31,792 446,952 0 0
Frank L. Branca 0 0 30,000 198,250
Marcus Jackson 14,589 153,607 6,000 20,250
Jeanie S. Latz 2,931 44,130 13,375 79,945
J. Turner White 5,862 84,964 0 0
- - ----------------
(1) Includes dividends that accrued on options and were reinvested.
(2) Does not include dividends that may be paid under exercise.
- - --------------------------------------------------------------------------------
13
- - --------------------------------------------------------------------------------
PENSION PLANS
KCPL has a non-contributory pension plan (the "KCPL Pension Plan") for its
management employees, including executive officers, providing for benefits upon
retirement, normally at age 65. In addition, an unfunded deferred compensation
plan provides a supplemental retirement benefit for executive officers. The
following table shows examples of single life option pension benefits (including
unfunded supplemental retirement benefits) payable upon retirement at age 65 to
the named executive officers:
Annual Pension for
Average Annual Base Years of Service Indicated
Salary for Highest ---------------------------------------------
36 Months 15 20 25 30 or more
- - ----------------------------- --------- --------- --------- ------------
150,000 45,000 60,000 75,000 90,000
200,000 60,000 80,000 100,000 120,000
250,000 75,000 100,000 125,000 150,000
300,000 90,000 120,000 150,000 180,000
350,000 105,000 140,000 175,000 210,000
400,000 120,000 160,000 200,000 240,000
450,000 135,000 180,000 225,000 270,000
500,000 150,000 200,000 250,000 300,000
550,000 165,000 220,000 275,000 330,000
Each eligible employee with 30 or more years of credited service in the
KCPL Pension Plan is entitled to a total monthly annuity at their normal
retirement date equal to 50% of their average base monthly salary for the period
of 36 consecutive months in which their earnings were highest. The monthly
annuity will be proportionately reduced if their years of credited service are
less than 30. The compensation covered by the KCPL Pension Plan - base monthly
salary - excludes any bonuses and other compensation. The KCPL Pension Plan
provides that pension amounts are not reduced by Social Security benefits. The
estimated credited years of service for the named executive officers in the
Summary Compensation table are as follows:
Credited
Officer Years of Service
- - ------------- -----------------------
Jennings 24
Beaudoin 18
Branca 28
Jackson 21
Latz 18
14
Eligibility for supplemental retirement benefits is limited to officers
selected by the Nominating & Compensation Committee of the KCPL Board; all the
named executive officers are participants. The annual target retirement benefit
payable at the normal retirement date is equal to 2% of highest average
earnings, as defined, for each year of credited service up to 30 (maximum of 60%
of highest average earnings). The actual retirement benefit paid equals the
target retirement benefit less retirement benefits payable under the management
pension plan. A liability accrues each year to cover the estimated cost of
future supplemental benefits.
Section 415 of the Internal Revenue Code imposes certain limitations on
pensions that may be paid under tax qualified pension plans. In addition to the
supplemental retirement benefits, the amount by which pension benefits under the
Plan computed without regard to Section 415 exceed such limitations will be paid
outside the qualified plan and accounted for by KCPL as an operating expense.
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SEVERANCE AGREEMENTS
KCPL has entered into severance agreements ("Severance Agreements") with
certain of its senior executive officers, including the named executives, to
ensure their continued service and dedication to KCPL and their objectivity in
considering on behalf of KCPL any transaction which would change the control of
KCPL. Under the KCPL Severance Agreements, a senior executive officer would be
entitled to receive a lump-sum cash payment and certain insurance benefits
during the three-year period after a Change in Control, (or, if later, the
three-year period following the consummation of a transaction approved by KCPL's
shareholders constituting a Change in Control) if the officer's employment was
terminated by:
- KCPL other than for cause or upon death or disability;
- the senior executive officer for "Good Reason" (as defined therein); and
- the senior executive officer for any reason during a 30-day period
commencing one year after the Change in Control or, if later, commencing
one year following consummation of a transaction approved by KCPL's
shareholders constituting a change in control (a "Qualifying
Termination").
A Change in Control is defined as:
- an acquisition by a person or group of 20% or more of the KCPL Common
Stock (other than an acquisition from or by KCPL or by a KCPL benefit
plan);
- a change in a majority of the KCPL Board; and
15
- approval by the shareholders of a reorganization, merger or
consolidation (unless shareholders receive 60% or more of the stock of
the surviving company) or a liquidation, dissolution or sale of
substantially all of KCPL's assets.
Upon a Qualifying Termination, KCPL must make a lump-sum cash payment to
the named executive officers of:
- the officer's base salary through the date of termination;
- a pro-rated bonus based upon the average of the bonuses paid to the
officer for the last five fiscal years;
- any accrued vacation pay;
- two or three times the officer's highest base salary during the prior 12
months;
- two or three times the average of the bonuses paid to the officer for
the last five fiscal years;
- the actuarial equivalent of the excess of the officer's accrued pension
benefits including supplemental retirement benefits computed without
reduction for early retirement and including two or three additional
years of benefit accrual service, over the officer's vested accrued
pension benefits; and
- the value of any unvested KCPL contributions for the benefit of the
officer under the KCPL Employee Savings Plus Plan.
In addition, KCPL must offer health, disability and life insurance plan
coverage to the officer and his dependents on the same terms and conditions that
existed immediately prior to the Qualifying Termination for two or three years,
or, if earlier, until the officer is covered by equivalent plan benefits. KCPL
must make certain "gross-up" payments regarding tax obligations relating to
payments under the KCPL Severance Agreements as well as provide reimbursement of
certain expenses relating to possible disputes that might arise.
Payments and other benefits under the KCPL Severance Agreements are in
addition to balances due under the KCPL Long- and Short-Term Incentive Plan.
Upon a Change in Control (as defined in the KCPL Long-Term Incentive Plan), all
stock options granted in tandem with limited stock appreciation rights will be
automatically exercised.
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CHANGE OF CONTROL
An Amended and Restated Agreement and Plan of Merger by and Among Western
Resources, Inc., Kansas Gas and Electric Company, NKC, Inc., and Kansas City
Power & Light Company, was entered into March 18, 1998. The Agreement was
approved by shareholders on July 30, 1998. A change of control of the Company
under the Agreement would occur at the consummation of the merger proceedings.
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16
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RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
ITEM 2 ON PROXY CARD
Subject to shareholder ratification, the Board of Directors, at the
recommendation of the Audit Committee, has appointed PricewaterhouseCoopers LLP,
who served as independent accountants during 1998, as independent accountants to
examine the financial statements of KCPL for the fiscal year 1999. Ratification
requires the affirmative vote of a majority of eligible and voted shares
present, in person or by proxy, at the Annual Meeting. If this appointment is
not ratified by shareholders, the Board will reconsider the selection of
independent accountants.
One or more representatives of PricewaterhouseCoopers LLP are expected to
be at the Annual Meeting. They will have an opportunity to make a statement and
will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.
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OTHER BUSINESS
The Company is not aware of any other matters that will be presented for
shareholder action at the Annual Meeting. If other matters are properly
introduced, the persons named in the accompanying proxy will vote the shares
they represent according to their judgment.
By Order of the Board of Directors
[SIG]
Jeanie Sell Latz
Senior Vice President, Corporate
Secretary
and Chief Legal Officer
Kansas City, Missouri
March 22, 1999
17
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[LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KANSAS CITY POWER & LIGHT COMPANY
ANNUAL MEETING OF SHAREHOLDERS, MAY 4, 1999
The undersigned hereby appoints A.D. Jennings, B.J. Beaudoin, and J.S. Latz,
and each or any of them, proxies for the undersigned, with power of
substitution, to vote the stock of the undersigned at the Annual Meeting of
Shareholders on May 4, 1999, and any adjournment or postponement thereof, on
the proposed items, and in their discretion upon such other matters as may
properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY SIGNED PROXY IS RETURNED,
SUCH SHARES WILL BE VOTED "FOR" THE PROPOSALS.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- - -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
1. Call TOLL FREE 1-888-698-8062 on a Touch-tone telephone and follow the
instructions on the reverse side. There is NO CHARGE for this call.
OR
2. Vote by Internet at our Internet Address: http://www.proxyvoting.com/kcpl
OR
3. Mark, sign and date your proxy card and return it promptly in the
enclosed envelope.
PLEASE VOTE
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
- - --------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PLEASE MARK
PROPOSALS 1 AND 2. YOUR VOTE AS /X/
- - -------------------------------------------- INDICATED IN
THIS EXAMPLE
1. Election of Directors - Nominees: For All
For Withhold Except
01 B.J. Beaudoin / / / / / /
02 D.L. Bodde
03 W.H. Clark
04 R.J. Dineen
05 W.T. Grant II
06 A.D. Jennings
07 G.E. Nettels, Jr.
08 L.H. Talbott
09 R.H. West
- - ----------------------------------------------------------------
Except Nominee(s) written above
FOR AGAINST ABSTAIN
2. Appointment of PricewaterhouseCoopers / / / / / /
LLP as independent accountants for 1999.
------------------------------------------------
***IF YOU WISH TO VOTE BY TELEPHONE OR INTERNET,
PLEASE READ THE INSTRUCTIONS BELOW***
------------------------------------------------
DATE / /1999
- - ---------------------------------------
- - ----------------------------------------------------
Signature
- - ----------------------------------------------------
Signature, if Jointly Held
IF ACTING AS ATTORNEY, EXECUTOR, TRUSTEE OR IN OTHER
REPRESENTATIVE CAPACITY, PLEASE SIGN NAME AND TITLE
- - -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
[LOGO] INSTRUCTIONS IF VOTING BY TELEPHONE OR INTERNET [LOGO]
QUICK * * * EASY * * * IMMEDIATE
Your telephone or Internet vote authorizes the named proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy
card.
VOTE BY PHONE:
- - - There is NO CHARGE for this call.
- - - On a TOUCH-TONE Telephone call TOLL FREE 1-888-698-8082 24 hours per day --
7 days a week.
- - -------------------------------------------------------------------------------
OPTION A: To vote as the Board of Directors recommends on ALL proposals,
Press 1.
- - -------------------------------------------------------------------------------
When asked, please confirm your vote by Pressing 1.
- - -------------------------------------------------------------------------------
OPTION B: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
- - -------------------------------------------------------------------------------
Item 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9. To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and
listen to the instructions.
Item 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
When asked, please confirm your vote by pressing 1.
VOTE BY INTERNET: THE WEB ADDRESS IS www.proxyvoting.com/kcpl
IF YOU VOTE BY PHONE OR INTERNET - DO NOT MAIL THE PROXY CARD
THANK YOU FOR VOTING.
CALL * * TOLL FREE * * ON A TOUCH-TONE TELEPHONE
1-888-698-8082 - ANYTIME
There is NO CHARGE to you for this call.
- - -----------------------------
- - -----------------------------
CONTROL NUMBER
FOR TELEPHONE/INTERNET VOTING
- - -----------------------------
- - -----------------------------
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