Business Context and Reporting Period
This Form 8-K Current Report was filed by Ameren Corporation on November 29, 2006. The filing addresses Item 5.02 regarding the adoption of new compensatory arrangements for executive officers, key employees, and members of the Board of Directors.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the terms of new deferred compensation plans rather than operational financial performance.
Material Changes
On November 29, 2006, Ameren Corporation adopted two new deferred compensation plans effective January 1, 2007:
- Ameren Deferred Compensation Plan: Merges post-2004 deferral provisions for the Ameren Leadership Team. It allows deferrals of up to 50% of salary (waivable) and up to 100% of cash incentive awards.
- Ameren Deferred Compensation Plan for Members of the Board of Directors: Amends and restates provisions subject to Section 409A of the Internal Revenue Code. It allows non-management directors to defer up to 100% of cash retainers and meeting fees.
Guidance, Outlook, and Plan Terms
Management commentary is limited to the mechanics of the new plans. Key terms include:
- Interest Rates: Deferred amounts earn 150% of the average Mergent's Seasoned AAA Corporate Bond Yield Index while the participant is employed or serving on the Board. Post-termination, the rate drops to 100% of the index. For 2006, the index rate was 5.24%, resulting in a 7.86% credit rate for active participants.
- Distribution: Participants may choose lump-sum or installment payments (up to 15 years) upon retirement. Termination prior to age 55 triggers a mandatory lump-sum distribution within 30 days.
- Change of Control: If a participant terminates prior to age 55 following a Change of Control, the balance (including interest at 150% of the index) is distributed in a lump sum within 30 days.
Investor Verification Checklist
- Review Exhibit 10.1 for the full text of the Ameren Deferred Compensation Plan.
- Review Exhibit 10.2 for the full text of the Ameren Deferred Compensation Plan for Members of the Board of Directors.
- Verify the impact of the 150% interest rate credit on future compensation expense relative to the Mergent's Index.
- Confirm the definition of "Change of Control" referenced in the filing against the plan filed on February 16, 2006.