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 Sec. 240.14a-11(c) or Sec. 240.14a-12
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $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) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions 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):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(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.:
- --------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE>
[CENTRAL LOUISIANA ELECTRIC COMPANY, INC. LOGO]
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
MARCH 8, 1995
<PAGE>
[CENTRAL LOUISIANA ELECTRIC COMPANY, INC. LOGO]
March 8, 1995
To the Shareholders of
Central Louisiana Electric Company, Inc.
The annual meeting of shareholders for 1995 will be held at the Pineville
High School Auditorium at 1511 Line Street, Pineville, Louisiana, on April 21,
1995, at 9 a.m., Pineville time. A notice of annual meeting of shareholders and
proxy statement is enclosed herewith, together with a proxy that may be used by
shareholders who are unable to attend the meeting in person.
The principal items of business to be transacted at the annual meeting are:
(1) the election of directors and (2) the appointment of independent auditors of
the Company for the year ending December 31, 1995.
The board of directors of the Company recommends election of the nominees
for directors and appointment of the independent auditors, in each case as named
or described in the accompanying proxy statement.
You are cordially invited to attend the meeting. Even if you now expect to
attend the meeting, you are requested to sign, date and return the accompanying
proxy in the enclosed addressed envelope that requires no postage if mailed in
the United States. If you attend the meeting, you may vote in person even though
you have mailed in your proxy. Your continued interest and cooperation are
greatly appreciated.
Sincerely,
GREGORY L. NESBITT
Gregory L. Nesbitt
President and Chief Executive Officer
<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1995
To the Shareholders of
Central Louisiana Electric Company, Inc.
Notice is hereby given that the annual meeting of shareholders of Central
Louisiana Electric Company, Inc. (the "Company") will be held at the Pineville
High School Auditorium at 1511 Line Street, Pineville, Louisiana, on Friday,
April 21, 1995, at 9 a.m., Pineville time, for the following purposes:
(1) To elect directors,
(2) To consider and act upon a proposal to appoint the firm of Coopers
& Lybrand L.L.P., independent certified public accountants, as
auditors of the Company for the year ending December 31, 1995, and
(3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
Holders of record of common stock and preferred stock of the Company at the
close of business on February 21, 1995 are entitled to notice of and to vote at
the annual meeting.
The bylaws of the Company require that the holders of shares of capital
stock representing a majority of the votes entitled to be cast be represented in
person or by proxy at the meeting in order to constitute a quorum for the
transaction of business. Therefore, it is important that your stock be
represented at the meeting.
Please date, sign and return the enclosed proxy in the accompanying
envelope.
By order of the board of directors.
MICHAEL P. PRUDHOMME
Michael P. Prudhomme
Secretary/Treasurer
March 8, 1995
<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
P. O. BOX 5000
PINEVILLE, LOUISIANA 71361-5000
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
The accompanying proxy is solicited on behalf of the board of directors of
Central Louisiana Electric Company, Inc. (the "Company"), to be voted at the
annual meeting of shareholders of the Company to be held at the time and place
and for the purposes set forth in the foregoing notice. In addition to the
original solicitation by mail, certain regular employees of the Company may
solicit proxies by telephone, facsimile or in person, and Morrow & Company, Inc.
("Morrow") has been retained on customary terms to assist in the solicitation of
proxies. The Company estimates that the fees and expenses to be incurred in
connection with Morrow's services will be approximately $9,000. Other than
Morrow, no specially engaged employees or solicitors will be retained to solicit
proxies. All expenses of such solicitation, including the cost of preparing and
mailing this proxy statement and the reimbursement of brokerage firms and other
nominees for their reasonable expenses in forwarding proxy material to
beneficial owners of the Company's capital stock, will be borne by the Company.
This proxy statement and the accompanying proxy are being mailed to shareholders
beginning on or about March 8, 1995.
All duly executed proxies will be voted in accordance with the
instructions thereon. Shareholders who execute proxies, however, retain the
right to revoke them at any time before they are voted. A shareholder who
attends the meeting may vote in person even though such shareholder has mailed
in a proxy. A proxy may be revoked by a proxy bearing a later date. The
revocation of a proxy will not be effective until written notice thereof has
been given to the secretary of the Company, unless the person granting such
proxy votes in person.
VOTING OF SECURITIES
As of February 21, 1995, the record date for the determination of
shareholders entitled to vote at the meeting, the Company had outstanding
22,416,708 shares of common stock, par value $2.00 per share ("Common Stock"),
and 374,387 shares of preferred stock, par value $100 per share ("$100 Preferred
Stock"), which are the only classes of stock of the Company outstanding and
entitled to vote at the meeting. Each holder of shares of Common Stock or $100
Preferred Stock is entitled to one vote for each share held, except that at an
election of directors each holder of shares of Common Stock is entitled to cast
as many votes as equal the number of such holder's shares multiplied by the
number of directors to be elected, and may cumulate all or any part of such
votes for one or more of the nominees.
Under Louisiana law and the Company's articles of incorporation and bylaws,
an abstention from voting on a matter by a shareholder present in person or
represented by proxy at the meeting is not a vote "cast" and is counted neither
"for" nor "against" the matter subject to the abstention. Broker non-votes on
matters are treated as shares as to which voting power has been
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<PAGE>
withheld by the beneficial holders of those shares and, therefore, as shares not
entitled to vote. Under Louisiana law and the Company's articles of
incorporation and bylaws, a quorum is determined based upon the number of
outstanding shares of capital stock of the Company entitled to vote on a matter,
including shares relating to abstentions.
ELECTION OF DIRECTORS
The Company's bylaws provide for the division of the board of directors into
three classes, Class I, Class II and Class III, with each class consisting, as
nearly as possible, of one-third the number of directors constituting the whole
board. The term of each directorship is three years, and the terms of the three
classes are staggered in a manner so that only one class is elected by the
shareholders annually. Those persons who served as directors of the Company
during the past year are named in the Company's 1994 annual report to
shareholders. Three Class I directors are to be elected this year to serve as
members of the board of directors until the annual meeting of shareholders in
1998, or until their successors are elected and qualified. The persons named in
the accompanying proxy may act with discretionary authority (i) with respect to
cumulative voting of shares of Common Stock and (ii) upon the unavailability of
a nominee for election, although management is unaware of any circumstances
likely to render any of the nominees unavailable for election. Unless a
shareholder specifies otherwise, the persons named in the accompanying proxy
intend to vote in favor of the nominees listed below. The affirmative vote of a
plurality of the total votes cast is required for the election of directors. All
of the nominees currently serve as directors of the Company. Directors who are
members of Classes II and III, who are continuing as directors at this time and
whose terms of office expire in 1996 and 1997, respectively, are named on pages
3 and 4 below.
The proxies solicited hereby cannot be voted for a number of persons greater
than the number of nominees named below.
DIRECTORS
The following sets forth information concerning the three nominees for
election as directors at the meeting and the continuing directors, including the
business experience of each during the past five years.
NOMINEES FOR ELECTION UNTIL 1998 ANNUAL MEETING
CLASS I DIRECTORS
SHERIAN G. CADORIA has served as president of Cadoria Speaker and
Consultancy Service since January 1992. She retired in 1990 as Brigadier General
of the United States Army after a 29-year military career. Ms. Cadoria (age 55)
has been a director of the Company since 1993 and is a member of the
compensation committee of the board of directors.
HUGH J. KELLY is a retired president and chief executive officer of Ocean
Drilling & Exploration Company, a company which has offshore drilling operations
and explores for and produces oil and gas. Before he retired from Ocean Drilling
& Exploration Company in 1989, he had served as chief executive officer since
1977 and as president and director since 1974. He is now an oil and gas
consultant. Mr. Kelly (age 69) has been a director of the Company since 1992
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<PAGE>
and is a member of the audit committee of the board of directors. He is also a
director of Tidewater, Inc., Hibernia National Bank and Chieftain International,
Inc.
GREGORY L. NESBITT has served as chief executive officer since July 1993 and
has served as president since April 1992; he had served as chief operating
officer from July 1991 to June 1993 and as executive vice president from January
1988 to July 1991. Mr. Nesbitt (age 57) has been a director of the Company since
1988 and is a member of the executive committee of the board of directors. He
joined the Company in 1980 and served as senior vice president of the Company's
electric power supply group until January 1988.
CONTINUING DIRECTORS
CLASS III DIRECTORS
(TERMS OF OFFICE EXPIRE IN 1997)
J. PATRICK GARRETT has been engaged in the practice of law for more than
five years as a member of the law firm of Baker & Botts, L.L.P. Mr. Garrett (age
51) has served as a director of the Company since 1981.
F. BEN JAMES, JR. has been president of James Investments, Inc., a company
primarily engaged in real estate development and international marketing, for
more than five years. Mr. James (age 59) has been a director of the Company
since 1986 and is chairman of the audit committee of the board of directors. He
is also a director of First Commerce Corporation.
WILLIAM A. LOCKWOOD is a retired senior vice president of Citibank, N.A.
Before he retired in 1985, he was a senior vice president of Citibank, N.A. for
more than five years. Mr. Lockwood (age 71) has been a director of the Company
since 1982 and is chairman of the compensation committee and a member of the
executive committee of the board of directors.
A. DELOACH MARTIN, JR. has been chairman of Central Engineering & Supply
Company, a company engaged in the wholesale distribution of refrigeration and
mill supplies, for more than five years. Mr. Martin (age 65) became a director
of the Company in 1978 and is chairman of the executive committee and a member
of the audit committee of the board of directors. He is also a director of
Galveston-Houston Company.
CLASS II DIRECTORS
(TERMS OF OFFICE EXPIRE IN 1996)
ROBERT T. RATCLIFF has been chairman, president and chief executive officer
of Ratcliff Construction Company, a company primarily engaged in the design and
construction of industrial, commercial and governmental facilities, since 1975.
Mr. Ratcliff (age 52) has been a director of the Company since 1993 and is a
member of the audit committee of the board of directors. He is also a director
of Hibernia Corporation and Hibernia National Bank.
EDWARD M. SIMMONS is president and chief executive officer of McIlhenny
Company (makers of TABASCO brand products) and has served in such positions for
more than five years. Mr. Simmons (age 66) has been a director of the Company
since 1992, and he previously served on the Company's board of directors during
the period 1971-1981. He is a member of the compensation committee of the board
of directors and also serves as a director of First
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<PAGE>
Commerce Corporation, First National Bank of Commerce, Pan American Life
Insurance Company and Piccadilly Cafeterias, Inc.
ERNEST L. WILLIAMSON is a retired chairman and chief executive officer of
Louisiana Land & Exploration Company, a company primarily engaged in the
exploration for and the development and production of petroleum natural
resources. Before he retired from Louisiana Land & Exploration Company in 1988,
he had served as chairman since 1985 and as chief executive officer since 1984.
Mr. Williamson (age 70) became a director of the Company in 1989 and is a member
of the executive committee and the compensation committee of the board of
directors. He is also a director of Halliburton Company, Hibernia Corporation
and Louisiana Land & Exploration Company.
ORGANIZATION AND COMPENSATION OF THE BOARD OF DIRECTORS
The board of directors has an executive committee (the "Executive
Committee"), an audit committee (the "Audit Committee") and a compensation
committee (the "Compensation Committee"). The members of such committees are
identified under "Directors." The board of directors has no standing nominating
committee.
The Audit Committee recommends to the board of directors the appointment of
the independent auditors of the Company, reviews the scope of audits, reviews
and recommends to the board of directors financial reporting and accounting
practices, reviews the scope and results of the Company's procedures for
internal auditing and the adequacy of the system of internal accounting control
of the Company, and has responsibility with respect to audit matters generally.
During 1994, the Audit Committee held two meetings.
The Compensation Committee approves, or in some cases recommends to the
board of directors, remuneration arrangements and compensation plans involving
the Company's directors, officers and employees, and administers the granting of
restricted stock and other awards to eligible employees under the Company's
long-term incentive compensation plan and annual incentive compensation program
described below. The Compensation Committee held two meetings in 1994.
The board of directors held four regular meetings and one special meeting
during 1994. At intervals between formal meetings, members of the board are
provided with information regarding the operations of the Company and are
consulted informally from time to time with respect to pending business. During
1994, all directors attended at least 75% of the total number of meetings of the
board of directors and of all of the committees of the board of directors on
which such directors served.
The director who is a regularly employed officer of the Company receives no
fees for serving as a director of the Company. Each other director who is not
the chairman of a board committee receives an annual fee of $12,000 for serving
as a director. Each director who is the chairman of a board committee receives
an additional annual fee of $3,000. Each director receives $800 for each day he
or she attends one or more meetings of the board of directors or its committees.
The Company also reimburses directors for travel and related expenses incurred
in attending meetings of the board of directors or such committees. The Company
has in effect a deferred compensation plan for directors under which a director
may elect to defer all or part of
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<PAGE>
his or her compensation as a director. The Company has a retirement plan for its
non-employee directors under which directors with five years of service receive
at age 65 or later retirement an annual payment equal to the annual board fee in
effect at the time of retirement. Benefits are payable for life or a period
equal to the number of years of service as a director, whichever is shorter. The
Company also provides its non-employee directors $200,000 of life insurance and
permanent total disability coverage under the Company's group accidental death
and dismemberment plan, which covers all active, full-time employees.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Garrett, who served on the Compensation Committee until April 1994, is a
member of the law firm of Baker & Botts, L.L.P., which performed legal services
for the Company in 1994 and has been retained to perform such services in 1995.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock and $100
Preferred Stock beneficially owned as of February 1, 1995 by each director and
nominee, each of the executive officers named in the Summary Compensation Table
below and all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
AMOUNT AND NATURE OF NATURE OF
BENEFICIAL OWNERSHIP BENEFICIAL
OF COMMON STOCK<F1> OWNERSHIP OF
------------------------------------------------ $100 PREFERRED
OPTIONS STOCK<F2>
EXERCISABLE --------------------
WITHIN PERCENT PERCENT
DIRECT 60 DAYS OTHER OF CLASS INDIRECT OF CLASS
---------- ------------- ------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Directors
Sherian G. Cadoria................. 0 * *
J. Patrick Garrett................. 10,031 900 * *
F. Ben James, Jr................... 2,400 * *
Hugh J. Kelly...................... 2,000 * *
William A. Lockwood................ 2,794 * *
A. DeLoach Martin, Jr.............. 18,960 * *
Gregory L. Nesbitt<F3>............. 32,938 5,000 * 218 *
Robert T. Ratcliff................. 1,000 * *
Edward M. Simmons.................. 1,141 * *
Ernest L. Williamson............... 1,000 * *
Named Officers
Robert L. Duncan................... 23,024 7,600 * 194 *
David M. Eppler.................... 11,100 8,600 6 * 199 *
Leonard G. Fontenot................ 26,926 2,400 * 178 *
David K. Warner.................... 16,736 9,000 * 190 *
All directors and
executive officers
as a group (18 persons,
including those listed
above)............................. 158,556 52,900 935 .95% 1,408 *
(Footnotes on following page)
5
<PAGE>
<FN>
<F1> In accordance with Securities and Exchange Commission regulations, shares
are deemed to be "beneficially owned" by a person if such person directly
or indirectly has or shares the power to vote or to dispose of the shares,
regardless of whether such person has any economic interest in the shares.
In addition, a person is deemed to own beneficially any shares of which
such person has the right to acquire beneficial ownership within 60 days,
as in the case of the stock options which are set forth under the "Options
Exercisable Within 60 Days" column. Shares of Common Stock listed under the
"Direct" column are those as to which each named individual or group has
sole voting or dispositive power, including shares held under the Company's
401(k) Savings and Investment Plan (1,169 shares for Mr. Nesbitt, 128
shares for Mr. Eppler, 2,611 shares for Mr. Fontenot, and 194 shares for
other executive officers included in the amount shown for all directors and
executive officers as a group) and shares granted as restricted stock
awards under the Company's long-term incentive compensation plan described
below (7,078, 2,738, 2,984, 2,589 and 2,651 shares for Messrs. Nesbitt,
Duncan, Eppler, Fontenot and Warner, respectively, and 4,507 shares for
other executive officers included in the amount shown for all directors and
executive officers as a group). Shares listed under the "Other" column are
those as to which the named individual or group shares voting and
dispositive power with another person.
<F2> The shares of $100 Preferred Stock beneficially owned by the individuals
and group indicated in the table are shares held for the respective
accounts of executive officers under the Company's 401(k) Savings and
Investment Plan.
<F3> Mr. Nesbitt is also the President and Chief Executive Officer of the
Company.
* Less than 1% of class.
</TABLE>
Section 16(a) of the Securities Exchange Act of 1934, as amended ("Section
16(a)"), requires the Company's executive officers and directors, and persons
who beneficially own more than 10% of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission and the New York
Stock Exchange initial reports of ownership and reports of changes in ownership
of the Company's equity securities. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no year-end reports on Form 5 were required, during the
fiscal year ended December 31, 1994, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater-than-10%
shareholders were satisfied.
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<PAGE>
EXECUTIVE COMPENSATION
GENERAL
The Summary Compensation Table sets forth individual compensation
information with respect to the chief executive officer and the four other most
highly paid executive officers of the Company for services rendered in all
capacities to the Company during the fiscal years ended December 31, 1994,
December 31, 1993 and December 31, 1992. The table discloses the annual salary,
bonuses and other compensation awards and payouts to the named officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION PAYOUTS
-------------------------------------- ---------
(A) (B) (C) (D) (E) (F) (G)
- ------------------------------------------------------------------------------------------------------------------
OTHER ANNUAL
COMPENSATION LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS<F1> <F2><F3> PAYOUTS<F4> COMPENSATION<F5>
<S> <C> <C> <C> <C> <C> <C>
Gregory L. Nesbitt................... 1994 $ 242,431 $ 66,000 $ 17,530 $ 54,476 $ 6,000
President and Chief 1993 208,000 55,000 7,339 93,208 5,996
Executive Officer 1992 183,077 64,800 3,978 -- 5,819
David M. Eppler...................... 1994 $ 140,031 $ 25,300 $ 7,012 $ 27,343 $ 6,098
Vice President - Finance 1993 132,687 26,200 3,948 48,138 5,364
1992 129,885 36,600 2,165 -- 5,258
Robert L. Duncan..................... 1994 $ 124,200 $ 31,900 $ 6,584 $ 30,036 $ 6,843
Vice President - Customer 1993 125,394 24,800 3,996 50,571 5,793
Operations 1992 123,831 34,800 2,296 -- 5,767
David K. Warner...................... 1994 $ 121,300 $ 31,300 $ 5,487 $ 29,097 $ 6,099
Vice President - 1993 122,000 24,300 3,879 48,740 4,948
Administrative Services 1992 120,938 34,000 2,219 -- 4,908
Leonard G. Fontenot.................. 1994 $ 121,446 $ 22,000 $ 5,975 $ 24,695 $ 7,257
Vice President - 1993 116,222 22,700 3,591 46,793 6,062
Power Supply and 1992 113,108 31,800 2,039 -- 5,985
Energy Transmission
<FN>
<F1> The "Bonus" column includes cash awards that are payable or have been paid
to executive officers pursuant to an annual incentive compensation program
under which participants may receive incentive compensation in addition to
base compensation determined by the performance of the Company and the
individual participants, and merit lump sum payments received by certain
named officers in lieu of base salary increases.
<F2> For 1992, 1993 and 1994, the "Other Annual Compensation" column includes
long-term incentive plan compensation which represents dividends paid on
restricted stock awards. Dividends on restricted stock are paid quarterly
and at the same rate as dividends on the Common Stock. As permitted by the
rules on executive officer and director compensation
(Footnotes continued on following page)
7
<PAGE>
disclosure, restricted stock awards granted under the Company's long-term
incentive compensation plan, which are subject to performance-based vesting
requirements, are reported under the "Long-Term Incentive Plan -- Awards in
1994" table below. The number and value of the aggregate restricted stock
holdings at December 31, 1994, a portion of which is included in the "LTIP
Payouts" column, for each of the named executive officers were as follows:
Gregory L. Nesbitt, 5,581 shares with a value of $129,409; David M. Eppler,
2,801 shares with a value of $64,948; Robert L. Duncan, 2,643 shares with a
value of $61,285; David K. Warner, 2,580 shares with a value of $59,824;
and Leonard G. Fontenot, 2,455 shares with a value of $56,925.
<F3> For 1994, the "Other Annual Compensation" column includes the amount paid
to the named executive officers as reimbursement for payment of taxes
incurred relating to future benefits accrued in 1994 pursuant to the
Company's Supplemental Executive Retirement Plan.
<F4> For 1993 and 1994, the "LTIP Payouts" column includes the value of
restricted stock and opportunity shares under the Company's long-term
incentive compensation plan vested in 1994 relating to the performance
period January 1, 1991 to December 31, 1993, and in 1995 relating to the
performance period January 1, 1992 to December 31, 1994, respectively, and
related tax gross-up amounts.
<F5> For 1992, 1993 and 1994, respectively, the "All Other Compensation" column
includes: (i) amounts contributed or accrued by the Company under the
Company's 401(k) Savings and Investment Plan on behalf of the named
executive officers as follows: Gregory L. Nesbitt, $5,819, $5,996 and
$6,000; David M. Eppler, $5,188, $5,292 and $5,999; Robert L. Duncan,
$4,953, $4,977 and $6,000; David K. Warner, $4,838, $4,876 and $6,000; and
Leonard G. Fontenot, $4,524, $4,598 and $5,766; and (ii) term life
insurance premiums paid for the benefit of the named executive officers as
follows: Gregory L. Nesbitt, $0, $0 and $0; David M. Eppler, $70, $72 and
$99; Robert L. Duncan, $814, $816 and $843; David K. Warner, $70, $72 and
$99; and Leonard G. Fontenot, $1,461, $1,464 and $1,491.
</TABLE>
STOCK OPTION PLANS
The Company currently maintains two plans pursuant to which options to
purchase shares of Common Stock are outstanding or available for future grants.
The Company's 1981 Incentive Stock Option Plan (the "Stock Option Plan"),
covering an aggregate of 800,000 shares of Common Stock, expired in 1991 and no
future grants can be made under this plan. As of February 1, 1995, options
covering 58,450 shares remained to be exercised pursuant to grants made under
the Stock Option Plan. The Company has in effect a long-term incentive
compensation plan pursuant to which certain officers and key employees may
receive stock options or stock appreciation rights. This plan is discussed in
greater detail under the section "Long-Term Incentive Plan" below. No stock
options were granted under the long-term incentive compensation plan in 1994.
Although the long-term incentive compensation plan permits grants of stock
appreciation rights, no such rights had been granted as of December 31, 1994.
8
<PAGE>
The following table sets forth, for each of the persons listed in the
Summary Compensation Table, certain information concerning stock options
exercised during 1994. The table also discloses information concerning
unexercised stock options held at December 31, 1994.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN 1994 AND 1994 YEAR-END OPTION VALUES
(A) (B) (C) (D) (E)
- ---------------------------------------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1994(#) DECEMBER 31, 1994
ACQUIRED ON VALUE -------------------------- -----------------------------
NAME EXERCISE (#) REALIZED<F1> EXERCISABLE UNEXERCISABLE EXERCISABLE<F1> UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
Gregory L. Nesbitt................... 1,000 $ 7,345 5,000 0 $ 32,038 $ 0
David M. Eppler...................... 2,500 21,250 8,600 0 60,383 0
Robert L. Duncan..................... 2,000 16,875 8,380 0 55,278 0
David K. Warner...................... 2,000 19,750 9,000 0 61,728 0
Leonard G. Fontenot.................. 2,600 14,872 2,400 0 15,378 0
<FN>
<F1> Based on the closing price of the Common Stock on the New York Stock
Exchange -- Composite Transactions on the exercise date and at year-end,
respectively, minus the exercise price.
</TABLE>
LONG-TERM INCENTIVE PLAN
The Company has in effect a long-term incentive compensation plan (the
"Long-Term Plan"), pursuant to which certain officers and key employees may
receive stock incentives and/or cash incentives based on the value of the Common
Stock. Five types of awards may be granted under the Long-Term Plan: (i) stock
awards consisting of restricted stock and "opportunity shares" which may be
awarded in connection with restricted stock awards; (ii) restricted unit awards
consisting of Common Stock equivalent units and "opportunity units" which may be
awarded in connection with restricted unit awards; (iii) nonstatutory stock
options or incentive stock options; (iv) stock appreciation rights attached to
stock options; and (v) stock appreciation rights not attached to stock options.
An aggregate of 800,000 shares of Common Stock, or cash equivalents of Common
Stock, may be issued pursuant to the Long-Term Plan (such number being subject
to antidilution adjustments under certain circumstances). Plan participants,
awards to participants, performance measurement periods and performance goals
are determined by the Compensation Committee. Upon a change of control of the
Company or merger or similar transaction involving the Company, all restrictions
imposed on awards under the Long-Term Plan will lapse, all unvested rights will
vest, and all stock options and similar rights granted under the plan will
become fully exercisable, subject to certain limitations imposed by the
Long-Term Plan.
9
<PAGE>
The following table sets forth, for each of the persons listed in the
Summary Compensation Table, information as to long-term incentive plan awards
granted under the Long-Term Plan during 1994.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLAN-AWARDS IN 1994
ESTIMATED FUTURE PAYOUTS
(C) ---------------------------------------------
(E) (F)
PERFORMANCE OR (D) NUMBER OF NUMBER OF
(B) OTHER PERIOD UNTIL NUMBER OF TARGET MAXIMUM
(A) NUMBER OF MATURATION OR THRESHOLD SHARES SHARES
NAME SHARES (#)<F1> PAYOUT SHARES (#)<F2> (#)<F2> (#)<F3>
<S> <C> <C> <C> <C> <C>
Gregory L. Nesbitt................... 1,974 1/1/94-12/31/96 494 1,974 2,961
David M. Eppler...................... 853 1/1/94-12/31/96 213 853 1,280
Robert L. Duncan..................... 753 1/1/94-12/31/96 188 753 1,129
David K. Warner...................... 735 1/1/94-12/31/96 184 735 1,103
Leonard G. Fontenot.................. 740 1/1/94-12/31/96 185 740 1,110
<FN>
<F1> The amounts under column (B) "Number of Shares" represent the target level
of performance-based restricted stock awards granted to the named executive
officers in 1994, as reflected in column (E) "Number of Target Shares." For
further information concerning these awards and the award of "opportunity
shares" granted in connection with the restricted stock, see the discussion
under footnotes 2 and 3 below.
<F2> The amounts under columns (D) "Number of Threshold Shares" and (E) "Number
of Target Shares" represent performance-based restricted stock awards
granted to the named executive officers in 1994 that will vest under the
threshold and target levels established by the Compensation Committee. The
restricted stock awards vest based on total return to shareholders (Common
Stock price appreciation plus dividends paid during performance cycle) in
relation (by percentile) to a peer group of other utilities ("Total Return
to Shareholders"). The vesting (payout) schedule for the restricted stock
awards set forth under these two columns, based on the Company's Total
Return to Shareholders ranking, is as follows:
(a) No awards vest if the Company's ranking is below 25th
percentile.
(b) Threshold performance provides 25% award payout at 25th
percentile.
(c) Target performance provides 100% award payout from 45th
percentile to 55th percentile.
Performance awards above the threshold level and below the target level will
be prorated.
The recipient of a restricted stock award is the record owner of the number
of target shares awarded, which are issued in the name of the recipient but
held in escrow by the Company until delivery to or forfeiture by the
recipient. The recipient may vote the shares covered by the award and
receives dividends with respect thereto, but generally may not sell, pledge
or otherwise transfer such shares until the restriction period imposed by the
Compensation Committee comes to an end and the performance goals established
by the committee have been met. The recipient may, at the end of the
restriction period, forfeit all or a portion of the restricted shares awarded
depending on the performance level achieved. The restriction period for
restricted stock awarded during 1994 is three years from the date of grant
(January 1997). The restricted stock awards require an additional three-year
holding period following vesting before any shares may be sold.
(Footnotes continued on following page)
10
<PAGE>
<F3> The amounts under column (F) "Number of Maximum Shares" represent the
number of performance-based restricted stock awards that vest at the target
level set forth under column (E) "Number of Target Shares" PLUS the number
of performance-based "opportunity shares" granted to the named executive
officers in 1994 that will vest between the target and maximum levels
established by the Compensation Committee. The "opportunity shares" vest
based on Total Return to Shareholders and will be issued when the
restriction period on the associated restricted stock awards lapses. The
vesting (payout) schedule for the "opportunity shares" included in this
column, based on the Company's Total Return to Shareholders ranking, is as
follows:
(a) No awards of "opportunity shares" vest if the Company's ranking
is at or below the 55th percentile.
(b) Maximum performance provides 100% "opportunity share" award
payout (equal to 50% of number of target shares of restricted
stock) at 75th percentile.
Performance awards of "opportunity shares" above the target level and below
the maximum level will be prorated.
"Opportunity shares" awarded in connection with a restricted stock award will
not be issued until the lapse of restrictions on the related restricted stock
and do not entitle the recipient to the rights of a shareholder with respect
to the "opportunity shares" until the time of issuance of the Common Stock
representing the "opportunity shares." Provisions of the "opportunity share"
awards require an additional three-year holding period following vesting
before any of the shares may be sold.
</TABLE>
PENSION PLAN
The Company has in effect a pension plan and related trust (the "Pension
Plan"), covering substantially all employees of the Company, under which the
Company makes such contributions as are actuarially necessary to provide for the
retirement benefits established under the plan. Benefits are based on employees'
earnings, length of service, age at retirement, payment form elected,
application of statutory benefit limits, and certain other factors, and are
payable upon normal retirement at age 65, upon early retirement beginning at age
55, or after termination of employment under certain circumstances. Annual
benefits under the Pension Plan are limited to the maximum amount prescribed by
sections 415 and 401(a)(17) of the Internal Revenue Code of 1986, as amended
(the "Code"). For 1995, the annual compensation of each employee which is to be
taken into account under the Pension Plan cannot exceed $150,000, and the
maximum allowable pension benefit for the plan is limited to $120,000. Payments
to retired employees under the Pension Plan are not reduced for Social Security
benefits or other offsetting amounts.
In addition, effective July 1, 1992, the Company established a Supplemental
Executive Retirement Plan (the "SERP") for the benefit of certain participants
designated by the Compensation Committee. The SERP provides participants who
have completed ten years of service and terminated employment after reaching age
65 with a right to monthly payments for the life of the participant and
surviving spouse equal to 65% of final average compensation, reduced by the
Pension Plan benefit and benefits under other previous employer pension plans.
The SERP also provides adjusted benefits for early retirement on or after age 55
with ten years of service, for termination of service due to disability, and for
beneficiaries in the event of the death of the participant. Benefits under the
SERP are payable out of the Company's general funds. The
11
<PAGE>
SERP participants in 1994 were the five individuals named in the Summary
Compensation Table and three other executive officers of the Company.
Under the Pension Plan, eligible remuneration for purposes of determining
the annual pension benefit payable to a participant upon retirement is based
upon the average of the five consecutive years (of the participant's last ten
years of employment) during which the participant received his or her highest
amount of remuneration from the Company. Under the SERP, eligible remuneration
is based on the sum of the highest annual salary paid during the five years
prior to termination of employment, and the average of three highest annual
incentive compensation program awards paid to the participant during the
preceding five years. The remuneration covered by the Pension Plan and the SERP
consists of salaries and bonuses paid to Pension Plan and SERP participants,
including the salaries and bonuses set forth in columns (C) and (D) of the
Summary Compensation Table. The estimated annual benefits payable upon
retirement at normal retirement age under the Pension Plan and the SERP for
Messrs. Nesbitt, Eppler, Duncan, Warner and Fontenot would be approximately
$197,837, $111,322, $106,535, $104,217 and $96,793, respectively. These amounts
are based on the assumption that these executive officers will continue to work
for the Company until their normal retirement age and that their earnings in the
five years prior to such retirement will be the same, respectively, as their
earnings during the past five years.
LONG-TERM DISABILITY PLAN
The Company maintains a long-term disability plan that provides disability
benefits up to 60% of salary or a maximum of $7,500 per month for all active
full-time employees with two or more years of service. These benefits are
provided for the first 24 months out of the Company's general funds, and
thereafter pursuant to an insurance contract under which premiums are paid by
the Company.
SEVERANCE AGREEMENTS
The Company has severance agreements with Messrs. Nesbitt, Eppler, Duncan,
Warner and Fontenot and three other executive officers of the Company. The
agreement for each such officer provides generally for payment of a minimum
annual salary equal to such executive officer's current annual base salary,
participation in all Company benefit plans and programs applicable to the
Company's executive officers and reimbursement of employment-related expenses
incurred while performing such officer's duties. Under the severance agreements,
the base salaries for 1995 for Messrs. Nesbitt, Eppler, Duncan, Warner and
Fontenot are $260,000, $140,800, $127,900, $121,300 and $122,100, respectively.
The severance agreements have an initial term of three years ending on July 1,
1995, with continuously renewing one-year extensions thereafter, unless either
the Company or the executive officer gives notice prior to such extension that
such officer's term of employment will not be extended.
The severance agreements include provisions governing reductions in salary
or duties, termination of employment and change in control. Generally, if the
executive's employment is terminated (i) by the Company for any reason other
than a material breach by the executive (as defined in the agreements) or (ii)
by the executive following a reduction in base salary (other than a reduction in
pay uniformly applicable to all officers) or a significant reduction in the
12
<PAGE>
executive's authority, duties or responsibilities, the executive is entitled
to receive, as severance pay, an amount equal to his or her annual base salary
at the time of termination. The executive is also entitled to continued health
plan coverage for up to 18 months after such termination. The executive is also
entitled to require the Company to (i) purchase his or her principal residence
(if it is located within 60 miles of the Company's Pineville office) for an
amount equal to the greater of (x) the purchase price of the residence plus the
cost of capital improvements or (y) the fair market value of the residence, and
(ii) pay or reimburse the executive for relocation costs.
Generally, in the event a change in control occurs and within three years
after such change in control the executive's employment is terminated by the
Company for reasons other than a material breach by the executive (as defined in
the agreements) or the executive terminates his or her employment for good
reason (as defined in the agreements), the Company will pay the executive, in
lieu of any severance obligation otherwise payable under the severance
agreement, an amount equal to three times the executive's average compensation
paid during the five calendar years preceding the change in control. In the
event of a change in control, payments under the agreements for the individuals
named in the Summary Compensation Table, using compensation for the years 1990
through 1994, would be approximately as follows: Mr. Nesbitt, $564,203; Mr.
Eppler, $374,864; Mr. Duncan, $375,575; Mr. Warner, $359,924; and Mr. Fontenot,
$340,172. However, the severance agreements limit the amount payable upon a
change in control to an amount that would not result in the disallowance of a
deduction to the Company under the "golden parachute" provisions of the Code or
the imposition of an excise tax on the employee under Section 4999 of the Code.
The severance agreements also generally require the executives not to
disclose confidential information relating to the Company and, for a period of
one year after termination, not to hire Company officers, employees or agents or
solicit or divert any customer or supplier of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (in this report, the "Committee") has prepared
its report of 1994 executive compensation. The Committee, composed entirely of
directors who are not current or former officers or employees of the Company, is
responsible for implementing, or making recommendations to the board of
directors with respect to, the Company's officer compensation programs. The
Committee has retained the services of executive compensation consultants to
provide professional assistance, data, and advice regarding pay practices at the
Company. This report describes the basis on which such 1994 compensation
determinations or recommendations were made by the Committee with respect to the
Company's executive officers. This report, required by rules of the Securities
and Exchange Commission, provides specific information regarding compensation of
the Company's President and Chief Executive Officer (the "Chief Executive
Officer") and general information regarding compensation of the Company's
executive officers as a group. The Chief Executive Officer and four other most
highly compensated executive officers are sometimes referred to as the "Named
Executives."
Section 162(m) of the Code limits to $1,000,000 in a taxable year the
deduction publicly held companies may claim for compensation paid to an
executive officer, unless certain
13
<PAGE>
requirements are met. The Company has reviewed this provision and has determined
that the Company is not affected by Section 162(m) because no compensation paid
to any executive officer currently approaches or is expected to approach
$1,000,000 in the near term. Accordingly, no change to any of the compensation
plans are contemplated at this time.
COMPENSATION PHILOSOPHY AND OVERALL OBJECTIVE OF EXECUTIVE COMPENSATION
PROGRAMS
The Company seeks to ensure that executive compensation is directly linked
to corporate performance and shareholder value, as well as comparable pay
practices in the industry. Each year, the Committee, in making compensation
decisions and recommendations, and the board of directors, in approving base
salaries, review the performance of the Company and compare such performance to
specified internal and external performance standards. The Committee has
developed the following compensation guidelines as the principles upon which
compensation decisions and recommendations are made:
o Provide a competitive total compensation package that enables the
Company to attract and retain key executives.
o Provide variable compensation opportunities that are linked to the
financial performance of the Company and that align executive
compensation with the interests of shareholders.
o Provide incentives to increase corporate performance and shareholder
value relative to those of other electric utilities.
COMPENSATION PROGRAM COMPONENTS
The compensation program for executive officers is currently comprised of
base salary, annual performance-related incentives and performance-based awards
of restricted stock and related "opportunity shares" granted under the Long-Term
Plan, as discussed above under "Long-Term Incentive Plan." In addition, certain
of the executive officers have stock options outstanding that were granted under
the Stock Option Plan, which expired in 1991 and under which no future grants
can be made. See "Stock Option Plans." The compensation programs for the
Company's executive officers are further explained below.
o BASE SALARY -- Base pay levels recommended by the Committee are largely
determined through comparisons with those of other electric utilities
of similar size and complexity to the Company. These companies, as well
as other electric utilities, are included in the Edison Electric
Institute Index of 100 investor-owned electric utilities (the "Edison
Electric Institute Index") graphed in the performance graph shown
elsewhere. Actual salaries are based on individual performance
contributions within a salary structure that is established through
market comparisons. While the actual relationship may vary from year to
year, it is the Company's policy to have base pay levels for the
Company's executive officers, including the Named Executives, to be at
or slightly below the average of the competitive market. Including 1994
base salary increases, actual base pay levels for the Company's
executive officers, including the Named Executives, are consistent with
this policy. Increases in base salary for 1994 to continuing executive
officers were recommended by the Committee and approved by the board of
directors in January 1994. In 1994 the base salaries of the executive
officers, other than the Chief
14
<PAGE>
Executive Officer (see "1994 Compensation for the President and Chief
Executive Officer -- Base Salary" below) and two other executive
officers, were increased from between 3% to 9.6%. The two other
executive officers did not receive base salary increases in 1994.
o ANNUAL INCENTIVE COMPENSATION -- The Company's executive officers are
eligible to participate in an annual incentive compensation program
with awards generally based on earnings per share goals and the
Company's actual return on equity in relation to that of the Edison
Electric Institute Index, a peer group of approximately 100 electric
utilities. Earnings per share and return on equity goals are generally
of equal weight. Based on actual results, awards from 0% to 150% of
target incentive levels may be made. For 1994, the earnings per share
target was $2.00 and the Company's return on equity target was the 50th
to 59th percentile of the Edison Electric Institute Index. The
Company's 1994 return on equity performance was in the 60th to 74th
percentile of the Edison Electric Institute Index and its primary
earnings per share in 1994 was $1.92. Based on the earnings per share
and return on equity financial performance, the Committee approved
actual awards for 1994 at 90% of target annual bonus levels. The
objective of the annual incentive compensation program is to deliver
competitive levels of compensation (I.E., average award levels
comparable to the Company's competitive peer group) for the attainment
of short-term financial objectives that the Committee believes are
primary determinants of shareholder value over time, and to reinforce
behaviors that contribute to consistent growth of the enterprise. The
Committee bases target annual bonus levels on average competitive bonus
levels among other electric utility companies of similar size and
complexity. These companies are included in the Edison Electric
Institute Index. Targeted awards for executive officers of the Company
under this program range from 10% to 30% of base salary. Awards are
paid in the first quarter of the year following the year for which the
award is earned. The amounts of actual awards are further subject to
the discretion of the Committee, within established program guidelines
(I.E., the ability of the Committee to make adjustments to reflect
extraordinary items of income or expense).
Two executive officers, whose base salaries were already at the average
of the competitive market, received merit lump sum payments in 1994 in
lieu of increases in base salary. The merit lump sum payments for 1994
to such executive officers were recommended by the Committee and
approved by the board of directors in January 1994. These merit lump
sum payments averaged 8% of base salary and were paid in February 1994
in order to recognize the individual performance and team contributions
of each of these executive officers.
o LONG-TERM INCENTIVE COMPENSATION PLAN -- The Committee supports
increased stock ownership by key executives of the Company and favors
awards to key executives of stock and/or cash based on the Company's
stock price appreciation and other measures of performance. The basis
for such position is the Committee's belief that the Company benefits
by providing those persons who have substantial responsibility for the
management and growth of the Company with additional incentives by
increasing their proprietary interest in the success of the Company or
by awarding those persons for increases in the Company's stock price or
the achievement of other long-term performance goals for the Company.
Thus, under the Long-Term Plan, executive officers may be eligible to
receive performance-based grants of restricted stock, related
"opportunity shares,"
15
<PAGE>
restricted unit grant awards, related "opportunity units," stock
options and stock appreciation rights, giving them the right to receive
or purchase shares of Common Stock under specified circumstances or to
receive cash awards based on the Company's stock price appreciation or
the achievement of pre-established long-term performance goals. The
Committee believes that such programs are also important as a means of
retaining senior management over the long term. The number of shares of
stock and other awards granted to executive officers under the
Long-Term Plan is based on competitive compensation practices (i.e.,
compensation practices of other utilities that constitute the Edison
Electric Institute Index).
Grants of restricted stock and awards of related "opportunity shares"
under the Long-Term Plan were made to all executive officers in 1994.
Awards to executive officers are based on a competitive compensation
analysis (i.e., target levels comparable to compensation levels of
other utilities that constitute the Edison Electric Institute Index).
Awards actually earned are based on the Company's performance during a
performance cycle compared to the other electric utilities in the
Edison Electric Institute Index. The first grants of restricted stock
and "opportunity shares" under the Long-Term Plan were made in 1991;
such grants vested in 1994. For the second three-year performance
cycle, which ended December 31, 1994, the Company's Total Return to
Shareholders placed it at the 54th percentile compared to the Edison
Electric Institute Index, thus meeting the objectives, as specified in
the Long-Term Plan, for such performance cycle. Provisions of the
restricted stock and "opportunity share" grants require an additional
three-year holding period following vesting before any shares may be
sold. No other types of awards under the Long-Term Plan were made to
executive officers in 1994.
OTHER EXECUTIVE COMPENSATION PLANS
The Company also provides executive officers with certain executive
benefits, such as a supplemental retirement plan and severance agreements. The
Committee considers each of these programs to be reasonably competitive and
appropriate for executive officers of the Company.
1994 COMPENSATION FOR THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
In light of the Committee's stated philosophy and compensation plans which
it administers on behalf of key executives, the Committee believes that the role
of the Chief Executive Officer is particularly important in reaching corporate
goals and accomplishing organizational objectives. As such, for fiscal year
1994, the Committee made the following recommendations or determinations
regarding the compensation for Mr. Nesbitt:
o BASE SALARY -- Mr. Nesbitt's base salary was increased in January 1994
from $220,000 to $244,300, an increase of approximately 11%. The amount
of this increase was based on the continued performance of Mr. Nesbitt
as evaluated by the Committee. Even with this adjustment, his base pay
is significantly below peers in the industry.
o ANNUAL INCENTIVE -- Mr. Nesbitt was eligible to participate in 1994 in
the Company's annual incentive compensation program discussed in this
report above (see "Annual Incentive Compensation"). The Chief Executive
Officer's 1994 target award was 30% of
16
<PAGE>
his base salary and his actual award of $66,000 was 27% (90% of his
target) of his base salary.
o LONG-TERM INCENTIVE -- Awards were made to Mr. Nesbitt under the
Long-Term Plan during 1994. The number of shares of stock and other
awards granted to the Chief Executive Officer under the Long-Term Plan
is based on competitive practices within the industry. Administration
is consistent with the provisions of the plan as described above in
"Long-Term Incentive Plan." For the three-year performance cycle ended
December 31, 1994, the Chief Executive Officer's award was 100% of
target or 1,306 shares.
SUMMARY
The Committee believes that base-pay levels and increases, and performance-
based awards, are reasonable and competitive with the compensation programs
provided to officers and other executives by electric utilities of similar size
and complexity to the Company. The Committee believes further that the degree of
performance sensitivity in the annual incentive program continues to be
reasonable, yielding awards that are directly linked to the annual financial and
operational results of the Company. The Long-Term Plan continues to provide, in
the view of the Committee, financial opportunities to participants and retention
features for the Company that are consistent with the relative returns that are
generated on behalf of the Company's shareholders.
The Compensation Committee
William A. Lockwood, Chairman
Sherian G. Cadoria,
Brig. General (retired)
Edward M. Simmons
Ernest L. Williamson
17
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of the Common Stock
to the S&P 500 Index and to the Edison Electric Institute Index (which includes
the Company) for the Company's last five fiscal years. The graph assumes that
the value of the investment in the Common Stock and each index was $100 at
December 31, 1989 and that all dividends were reinvested.
[LINE GRAPH PLOTTED FROM POINTS IN TABLE BELOW]
ASSUMES $100 INVESTED ON DECEMBER 31, 1989 IN CLECO COMMON STOCK, S&P 500
INDEX AND EEI INDEX.
DECEMBER 31,
-----------------------------------------------------------
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
CLECO............ $100 $108 $157 $163 $177 $177
S&P 500 Index.... $100 $ 97 $126 $136 $150 $152
EEI Index<F1>.... $100 $101 $131 $141 $156 $138
<F1> The EEI Index is comprised of: Allegheny Power System, Inc.; American
Electric Power Company, Inc.; Atlantic Energy, Inc.; Baltimore Gas &
Electric Company; Bangor Hydro-Electric Company; Black Hills Corporation;
Boston Edison Company; Carolina Power & Light Company; Centerior Energy
Corporation; Central & South West Corporation; Central Hudson Gas &
Electric; Central Louisiana Electric Company, Inc.; Central Maine Power
Company; Central Vermont Public Service Corporation; Cilcorp Inc.; CINergy
Corp.
18
<PAGE>
(formed by the merger of Cincinnati Gas & Electric Co. and PSI Resources,
Inc.); Cipsco Inc.; CMS Energy Corp.; Commonwealth Energy System;
Consolidated Edison Company of New York, Inc.; Delmarva Power & Light Co.;
Detroit Edison Company; Dominion Resources, Inc.; DPL Inc.; DQE Inc.; Duke
Power Company; Eastern Utilities Associates; El Paso Electrical Company;
Empire District Electric Company; Entergy Corporation; ESELCO Inc.; Florida
Progress Corporation; FPL Group, Inc.; General Public Utilities
Corporation; Green Mountain Power Corporation; Hawaiian Electric
Industries, Inc.; Houston Industries Incorporated; Idaho Power Company; IES
Industries, Inc.; Illinova Corp. (newly formed holding company of Illinois
Power Company); Interstate Power Co.; Iowa-Illinois Gas & Electric Co.;
IPALCO Enterprises Inc.; Kansas City Power & Light Company; KU Energy
Corp.; LG&E Energy Corp.; Long Island Lighting Company; Madison Gas &
Electric Co.; Maine Public Service Company; Midwest Resources Inc.;
Minnesota Power & Light Co.; Montana Power Co.; Nevada Power Company; New
England Electric System; New York State Electric & Gas Corporation; Niagara
Mohawk Power Corp.; NIPSCO Industries, Inc.; Northeast Utilities; Northern
States Power Co.; Northwestern Public Service Co.; Ohio Edison Company;
Oklahoma Gas & Electric Company; Orange & Rockland Utilities, Inc.; Otter
Tail Power Company; Pacific Gas & Electric Co.; Pacificorp; Peco Energy Co.
(formerly Philadelphia Electric Company); Pennsylvania Power & Light
Company; Pinnacle West Capital Corp.; Portland General Corporation; Potomac
Electric Power Corporation; Public Service Co. of Colorado; Public Service
Company of New Mexico; Public Service Enterprise Group, Incorporated; Puget
Sound Power & Light Company; Rochester Gas & Electric Corporation; San
Diego Gas & Electric Co.; SCANA Corp.; SCECORP; Sierra Pacific Resources;
Southern Company; Southern Indiana Gas & Electric Co.; Southwestern Public
Service Company; St. Joseph Light & Power Co.; TECO Energy, Inc.; Texas
Utilities Company; TNP Enterprises, Inc.; Tucson Electric Power Company;
Unicom Corp. (newly formed holding company of Commonwealth Edison Co.);
Union Electric Co.; United Illuminating Company; Unitil Corp.; Upper
Peninsula Energy Corp.; Utilicorp United Inc.; Washington Water Power Co.;
Western Resources, Inc.; Wisconsin Energy Corporation; WPS Resources Corp.
(newly formed holding company of Wisconsin Public Service Corporation); and
WPL Holdings Inc. Gulf States Utilities Co., which was acquired by Entergy
Corporation during 1994, was deleted from the EEI Index that was used in
the Company's proxy statement relating to its 1994 annual meeting of
shareholders.
APPOINTMENT OF AUDITORS
The firm of Coopers & Lybrand L.L.P., independent certified public
accountants, has served as auditors for the Company continuously since 1952. The
board of directors, upon recommendation of the Audit Committee, proposes to
continue such firm's services as auditors for the Company for the year ending
December 31, 1995. Neither such firm nor any of its associates has any
relationship with the Company except in their capacity as auditors. The persons
named in the accompanying proxy will vote in accordance with the choice
specified thereon, or, if no choice is properly indicated, in favor of the
appointment of Coopers & Lybrand L.L.P. as auditors of the Company.
A representative of Coopers & Lybrand L.L.P. is expected to attend the
annual meeting. If present, the representative will have an opportunity to make
a statement during the meeting if he or she so desires and will respond to
appropriate questions raised during the meeting.
19
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the knowledge of the Company based on a
review of the information and as of the dates indicated, certain information
with respect to each person who is the beneficial owner of more than 5% of the
outstanding shares of Common Stock or $100 Preferred Stock of the Company.
<TABLE>
<CAPTION>
SHARES OF SHARES OF
COMMON STOCK $100 PREFERRED STOCK
BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------------- -------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
BENEFICIAL PERCENTAGE BENEFICIAL PERCENTAGE
NAME AND ADDRESS OWNERSHIP OF CLASS OWNERSHIP OF CLASS
<S> <C> <C> <C> <C>
The Prudential Insurance Company
of America
Prudential Plaza
Newark, NJ 07102-3777.............. 1,147,372<F1> 5.12%
State Street Bank and Trust Company,
Trustee of the ESOP Trust
225 Franklin Street
Boston, MA 02110................... 297,188<F2> 79.4%
<FN>
<F1> As of December 31, 1994, based on a Schedule 13G filed with the Securities
and Exchange Commission. Reporting entity states that it has sole voting
and dispositive power with respect to 12,412 shares and shared voting and
dispositive power with respect to 1,134,960 shares.
<F2> As of December 31, 1994, based upon a Schedule 13G filed with the
Securities and Exchange Commission. Reporting entity states that it has
shared dispositive power with respect to 297,188 shares and shared voting
power with respect to 297,188 shares. Such 297,188 shares are held by State
Street Bank and Trust Company as the ESOP trustee ("ESOP Trustee") under
the ESOP trust ("ESOP Trust") established pursuant to the Company's 401(k)
Savings and Investment Plan ("Savings Plan"). Such 297,188 shares are
convertible under certain circumstances pursuant to the Company's Restated
Articles of Incorporation and the governing instruments of the ESOP Trust
and the Savings Plan into 1,426,503 shares of Common Stock, subject to
antidilution adjustment, or approximately 6.4% of the Common Stock
outstanding as of December 31, 1994. Participants in the Savings Plan have
voting rights with respect to $100 Preferred Stock (or Common Stock into
which such stock has been converted) allocated to their accounts. The ESOP
Trustee is required to vote unallocated shares, and allocated shares as to
which it has received no voting instructions from participants, in the same
proportion as allocated shares as to which it has received voting
instructions from participants. Participants in the Savings Plan have, in
the event of a tender or exchange offer, investment discretion with respect
to shares of $100 Preferred Stock (or Common Stock into which such stock
has been converted) allocated to their accounts. In such an event, the ESOP
Trustee is required to tender unallocated shares in the same proportion
that it tenders allocated shares as to which it has received investment
instructions, but has no power to tender allocated shares as to which it
has received no investment instructions. Reporting entity also states that
it, as trustee of various collective investor funds for employee benefit
plans and other index accounts and various personal trust accounts, has
sole voting power with respect to 73,124 shares of Common Stock, shared
voting power with respect to 3,400 shares of Common Stock, sole dispositive
power with respect to 72,060 shares of Common Stock and shared dispositive
power with respect to 824 shares of Common Stock.
</TABLE>
20
<PAGE>
ANNUAL REPORT
The 1994 annual report to shareholders, including financial statements as of
and for the year ended December 31, 1994, is currently being mailed to
shareholders. No part of the 1994 annual report to shareholders is to be deemed
to be a part of the proxy solicitation material.
PROPOSALS BY SHAREHOLDERS
Proposals of shareholders intended to be presented at the Company's annual
meeting of shareholders to be held in 1996, and otherwise eligible, must be
received by the Company (at the address indicated on the first page of this
proxy statement) no later than November 8, 1995 (subject to certain provisions
of the Company's bylaws which require that certain proposals be submitted 180
days before such meeting) to be included in the Company's proxy material and
form of proxy relating to such meeting.
OTHER MATTERS
Management does not intend to bring any other matters before the meeting and
has not been informed that any other matters are to be presented to the meeting
by others. If other matters properly come before the meeting or any adjournments
thereof, the persons named in the accompanying proxy and acting thereunder
intend to vote in accordance with their best judgment.
ALL SHARES THAT A SHAREHOLDER OWNS, NO MATTER HOW FEW, SHOULD BE REPRESENTED
AT THE ANNUAL MEETING OF SHAREHOLDERS. THE ACCOMPANYING PROXY SHOULD THEREFORE
BE COMPLETED, SIGNED, DATED AND RETURNED AS SOON AS POSSIBLE.
By order of the board of directors.
GREGORY L. NESBITT
Gregory L. Nesbitt
President and Chief Executive Officer
March 8, 1995
21
<PAGE>
DIRECTION CARD FRONT
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
ANNUAL MEETING ON APRIL 21, 1995
VOTING DIRECTION TO CENTRAL LOUISIANA ELECTRIC COMPANY, INC. 401(K) SAVINGS AND
INVESTMENT PLAN TRUSTEES
As a participant in the Central Louisiana Electric Company, Inc. 401(k) Savings
and Investment Plan, I hereby direct Merrill Lynch Trust Company, Trustee, to
vote those shares of Central Louisiana Electric Company, Inc. Common Stock and
State Street Bank Trust Company, Trustee, to vote those shares of Central
Louisiana Electric Company, Inc. Convertible Preferred Stock allocated to my
account as follows at the annual meeting of shareholders of Central Louisiana
Electric Company, Inc., to be held at the Pineville High School Auditorium, 1511
Line Street, Pineville, Louisiana, on Friday, April 21, 1995, and at any
adjournments thereof, on all matters coming before said meeting. Receipt of the
notice of the meeting and the proxy statement, both dated March 8, 1995, is
acknowledged. The following items of business will be considered at the
aforesaid annual meeting:
1. Election of three Class I Directors. Nominees: Sherian G. Cadoria, Hugh J.
Kelly and Gregory L. Nesbitt, whose terms of office expire in 1998.
2. Proposal to approve appointment of Coopers & Lybrand L.L.P. as auditors.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE TRUSTEE CANNOT VOTE YOUR
SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
<PAGE>
DIRECTION CARD BACK
___ Please mark your
| X | votes as in this
|___| example. 1628
This direction card when executed will be voted in the manner directed herein.
IF NO DIRECTION IS MADE, THIS DIRECTION CARD WILL BE VOTED "FOR" ITEMS 1 AND 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
1. ELECTION OF DIRECTORS. (SEE REVERSE) FOR WITHHELD
___ ___
| | | |
|___| |___|
For, except vote withheld from the following nominee(s):
____________________________________________
2. PROPOSAL TO APPROVE APPOINTMENT OF FOR AGAINST ABSTAIN
COOPERS & LYBRAND L.L.P. AS AUDITORS. ___ ___ ___
| | | | | |
|___| |___| |___|
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, trustee or guardian, please
give full title as such.
_________________________________________
_________________________________________
SIGNATURE(S) DATE
<PAGE>
PROXY CARD FRONT
P CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR THE
R ANNUAL MEETING ON APRIL 21, 1995
O The undersigned hereby constitutes and appoints Gregory L. Nesbitt, David M.
Eppler and Michael P. Prudhomme, and each of them (the "Proxy Committee"),
his or her true and lawful agents and proxies, with full power of
X substitution in each, to represent the undersigned at the annual meeting of
shareholders of Central Louisiana Electric Company, Inc., to be held at the
Pineville High School Auditorium, 1511 Line Street, Pineville, Louisiana, on
Y Friday, April 21, 1995, and at any adjournments thereof, on all matters
coming before said meeting. Receipt of the notice of the meeting and the
proxy statement, both dated March 8, 1995, is acknowledged. The following
items of business will be considered at the aforesaid annual meeting:
1. Election of three Class I Directors. Nominees:
Sherian G. Cadoria, Hugh J. Kelly and Gregory L. Nesbitt, whose terms of
office expire in 1998.
2. Proposal to approve appointment of Coopers & Lybrand L.L.P. as auditors.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES (SEE
REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY COMMITTEE CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. ACTION TAKEN PURSUANT TO THIS
PROXY CARD WILL BE EFFECTIVE AS TO ALL THE SHARES (WHETHER COMMON OR PREFERRED,
AND, IF PREFERRED, OF ANY CLASS OR SERIES) THAT YOU OWN.
<PAGE>
PROXY CARD BACK
___ Please mark your
| X | votes as in this
|___| example. 1628
This proxy when executed will be voted in the manner directed herein.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
1. ELECTION OF DIRECTORS. (SEE REVERSE) FOR WITHHELD
___ ___
| | | |
|___| |___|
For, except vote withheld from the following nominee(s):
____________________________________________
2. PROPOSAL TO APPROVE APPOINTMENT OF FOR AGAINST ABSTAIN
COOPERS & LYBRAND L.L.P. AS AUDITORS. ___ ___ ___
| | | | | |
|___| |___| |___|
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, trustee or guardian, please
give full title as such.
_________________________________________
_________________________________________
SIGNATURE(S) DATE
<PAGE>
