8-KLeadership ChangesExhibits & Filings

AMEREN CORP 8-K Report, Executive Changes (Dec 5, 2006)

Filed December 5, 2006For Securities:AEE

Summary

Ameren Corporation (AEE) filed an 8-K on December 5, 2006, to announce the adoption of two new deferred compensation plans, effective January 1, 2007. The first, the Ameren Deferred Compensation Plan, allows executive officers and certain key employees to defer a portion of their salary and cash incentive awards. The second, the Ameren Deferred Compensation Plan for Members of the Board of Directors, permits non-management directors to defer cash retainers and meeting fees. Both plans aim to comply with Section 409A of the Internal Revenue Code and outline specific deferral percentages, interest rates, and distribution provisions. These plans introduce a new framework for executive and director compensation deferrals. Notably, deferred amounts will earn interest based on a benchmark corporate bond yield index, with a premium for active employees/directors. The terms also detail distribution options, including lump sum payments upon retirement or cessation of service, with accelerated lump-sum payouts in cases of termination before age 55 or following a Change of Control, which could have implications for future cash flow and employee retention strategies.

Key Highlights

  • 1Ameren adopted new Deferred Compensation Plans for executives and directors, effective January 1, 2007.
  • 2The executive plan allows deferral of salary (up to 50%) and cash incentive awards (up to 100%).
  • 3The director plan allows deferral of cash retainers and meeting fees (up to 100%).
  • 4Deferred amounts earn interest at 150% of the average Mergent's Seasoned AAA Corporate Bond Yield Index while employed/serving, and the average rate thereafter.
  • 5For 2006, 150% of the average Mergent's Index rate was 7.86%, with the average rate at 5.24%.
  • 6Distributions can be made in lump sum or installments up to 15 years, with accelerated lump-sum payouts triggered by termination before age 55 or a Change of Control.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Ameren Corporation's adoption of two new deferred compensation plans: one for executive officers and key employees, and another for non-management directors. These plans are designed to provide new ways for participants to defer compensation and are effective starting January 1, 2007.

Deferred amounts will earn interest. While an executive is employed by Ameren or its subsidiaries, or a director is a member of the Board, the deferred amounts earn interest at 150% of the average Mergent's Seasoned AAA Corporate Bond Yield Index. After employment termination or cessation of board membership (under certain conditions), the deferred amounts earn the average Mergent's Index rate.

The executive plan allows deferral of up to 50% of salary and up to 100% of cash incentive awards. The director plan allows non-management directors to defer up to 100% of their cash retainers and meeting fees.

For executives, a lump sum payout occurs if employment terminates before age 55, or if termination before age 55 occurs after a Change of Control. For directors, a lump sum payout occurs if they cease to be a board member before age 55, or if they cease board membership before age 55 and after a Change of Control.