Notice of Annual Meeting of Stockholders
New Orleans, Louisiana
March 29, 1996
To the Stockholders of ENTERGY CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of
Entergy Corporation (Corporation) will be held in the auditorium of
the Reeves E. Ritchie Training Center at the Arkansas Nuclear One
Steam Electric Generating Station, 1448 S.R. 333, Russellville,
Arkansas, on Friday, May 17, 1996, at 10 a.m., Central Daylight Time,
for the following purposes:
(1) To elect a Board of Directors for the ensuing year;
(2) To ratify the appointment by the Board of Directors of the
firm of Coopers & Lybrand L.L.P. as independent accountants of
the Corporation for the year 1996;
(3) To consider and vote upon a stockholder proposal, if presented
at the meeting, as more fully described in the following Proxy
Statement; and
(4) To transact such other business as may properly come before
the meeting and any adjournment or adjournments thereof.
Only stockholders of record as of the close of business on March 18,
1996 are entitled to notice of and to vote at the meeting. A badge
for admission may be obtained at the registration desk at the meeting.
Stockholders whose shares are held in "street name", i.e., in a
brokerage account, must present a letter from their broker indicating
ownership of the Corporation's Common Stock as of March 18, 1996.
Stockholders who will not attend the meeting in person and wish their
stock voted are urged to fill in, sign, date, and return the
accompanying proxy. A return envelope, on which United States postage
has been prepaid, is enclosed for mailing proxies to the Corporation.
Michael G. Thompson
Secretary
<PAGE>
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of
the Corporation for use at the Annual Meeting of Stockholders to be
held in the auditorium of the Reeves E. Ritchie Training Center at the
Arkansas Nuclear One Steam Electric Generating Station, 1448 S.R. 333,
Russellville, Arkansas, on Friday, May 17, 1996, at 10 a.m., Central
Daylight Time, and at any adjournment of the meeting.
The entire cost of the solicitation of proxies will be borne by
the Corporation. Solicitations will be made primarily by mail, except
that, if necessary to obtain reasonable representation of stockholders
at the meeting, proxies will also be solicited by telephone or telefax
by employees of the Corporation's service subsidiary, Entergy
Services, Inc., at nominal cost. Additional solicitation of proxies
will be made in the same manner under the special engagement and
direction of Morrow & Co., Inc., at a cost to the Corporation of
approximately $12,500, plus out-of-pocket expenses. The Corporation
may reimburse brokerage houses and other custodians, nominees or
fiduciaries for their expenses in sending proxy material to their
principals.
Shares represented at the meeting by properly executed proxies in
the accompanying form will be voted at the meeting or at any
adjournment thereof. Where the stockholder specifies a choice by
means of the ballot spaces provided on the proxy, the shares will be
voted in accordance with the specifications so made. If no directions
are given by the stockholder, the proxy will be voted in the manner
specified on the proxy. Any proxy delivered pursuant to this
solicitation is revocable at the option of the person executing the
same at any time before it is exercised. Proxies may be revoked by
delivery to the Corporation of a written notice of revocation or of a
later-dated proxy, or by voting in person at the meeting.
This Proxy Statement and the form of proxy are first being sent
or given to stockholders of the Corporation on or about March 29,
1996.
Voting Securities Outstanding
Only stockholders of record as of the close of business on March
18, 1996 are entitled to notice of and to vote at the meeting. As of
February 29, 1996, the Corporation had 227,770,617 outstanding shares
of Common Stock. Each stockholder has one vote per share on all
business conducted at the meeting upon which holders of common stock
are entitled to vote. A majority of outstanding shares will
constitute a quorum at the meeting. In all matters other than the
election of directors, the affirmative vote of the majority of shares
present in person or represented by proxy at the meeting and entitled
to vote on the subject matter shall be the act of the stockholders.
Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled
to vote on the election of directors. "Withheld" votes, abstentions,
and broker non-votes are counted for determining the presence or
absence of a quorum for the transaction of business. "Withheld" votes
and abstentions are counted as such in tabulations of the votes cast
on proposals presented to stockholders, whereas broker non-votes are
not counted for purposes of determining whether a proposal has been
approved.
The information provided below is based upon Schedule 13Gs filed
with the Securities and Exchange Commission (SEC) reflecting
beneficial ownership of 5 percent or more of the Corporation's
outstanding Common Stock as of December 31, 1995.
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Barrow, Hanley, Mewhinney & Strauss, Inc. 12,848,850 5.65%
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75204-2429
The above-named beneficial owner has certified that the shares
held by it were acquired in the ordinary course of business, that such
acquisition was not for the purpose of and does not have the effect of
changing or influencing the control of the Corporation, and that such
shares were not acquired in connection with or as a participant in any
transaction having such purpose or effect.
<PAGE>
Election of Directors
At the meeting, 16 directors of the Corporation are to be elected
to serve for the ensuing year. Except where authority to vote for one
or more nominee(s) is withheld, Edwin Lupberger, John A. Cooper, Jr.,
Kaneaster Hodges, Jr., and Robert D. Pugh, the persons named as
proxies in the enclosed proxy, will vote all shares represented by an
executed proxy equally for the election of the nominees listed below.
The Corporation is not aware of any reason why any of the nominees
would be unavailable to stand for election or to serve if elected. In
case any nominee should become unavailable for election as a director,
the proxies will also have discretionary authority to vote for a
substitute.
Nominees, Principal Occupation During Last 5 Years, Directorships (1)
Certain information regarding each nominee for director is given
below. This information has been furnished to the Corporation by the
respective nominees.
W. FRANK BLOUNT Age 57 Director Since 1987
Sydney, Australia
Chief Executive Officer of Telstra Communications
Corporation (Australian telecommunications company) since
1992. Group President, Communications Products, AT&T
Company, 1989 to 1992. Director of Entergy Enterprises,
Inc., First Union National Bank, Atlanta, Georgia, New
Jersey Symphony Orchestra, and LXE Incorporated. Chairman
of National Advisory Group for the National Technical
Institute of the Deaf; Vice Chairman of the National
Advisory Board of Georgia Institute of Technology; Executive
Vice President of the A. G. Bell Association for the Deaf;
member of Board of Trustees of the Rochester Institute of
Technology; and member of the Business Council of Australia.
JOHN A. COOPER, JR. Age 57 Director Since 1985
Bella Vista, Arkansas
Chairman of the Board of Cooper Communities, Inc.
(recreational and retirement community development) and of
COFAM, Inc. Director of Wal-Mart Stores, Inc., Bentonville,
Arkansas, and J. B. Hunt Transport Services, Inc., Lowell,
Arkansas. Honorary Director of First National Bank of Sharp
County (Arkansas).
LUCIE J. FJELDSTAD Age 52 Director Since 1992
Portland, Oregon
President - Video and Networking Division of Tektronix, Inc.
(electronic instrumentation and printer manufacturer),
January 1995 to date. Vice President and General Manager,
Multimedia, IBM Corporation (computer company) 1992 to 1993;
President, Multimedia and Education Division of IBM
Corporation, 1990 to 1992. Director of Entergy Enterprises,
Inc., KeyCorp, PPG Industries, Inc., Recognition
International, Inc., and Bolt, Beranek & Newman, Inc.
Chairman of the Board of Regents for Santa Clara University
and member of Board of Trustees for UCLA.
DR. NORMAN C. FRANCIS Age 65 Director Since 1994
New Orleans, Louisiana
President of Xavier University of Louisiana, New Orleans,
Louisiana. Director of The Equitable Life Assurance Society
of the United States, First National Bank of Commerce, New
Orleans, Louisiana, The Foundation for the Mid-South, and
the Advisory Board of The Times Picayune Publishing Co.
Chairman of the Board of Liberty Bank and Trust Company, New
Orleans, Louisiana. Member of the Board of the Carnegie
Foundation for the Advancement of Teaching; Chairman of the
Board for the Southern Education Foundation, Atlanta,
Georgia; Fellow, The American Academy of Arts and Sciences,
Cambridge, Massachusetts; Member of the Board of Brandeis
University, Waltham, Massachusetts; Member of the Board of
the National Foundation for Improvement in Education; and
Former Chairman of the Board of Trustees, Educational
Testing Service, Princeton, New Jersey.
KANEASTER HODGES, JR. Age 57 Director Since 1984
Newport, Arkansas
Attorney-at-Law, Sole Practitioner, Newport, Arkansas.
Director of Worthen Banking Corporation, Little Rock,
Arkansas, Newport Federal Savings and Loan Association,
Newport, Arkansas, and Jackson-Griffin Insurance Company.
Director of the University of Arkansas-Fayetteville Law
School Board of Visitors and President of the Newport
Campus: ASU/Beebe Charitable Foundation, Inc. Former United
States Senator (Arkansas) 1977-1979. Former Chairman of the
Board of Trustees of the University of Arkansas.
ROBERT v.d. LUFT Age 60 Director Since 1992
Geneva, Switzerland
Senior Vice President - DuPont and President - DuPont Europe
(industrial products, fibers, petroleum, chemicals and
specialty products businesses), 1993 to date (will retire
from DuPont effective March 31, 1996); Senior Vice President
-DuPont Chemicals, 1990 to 1993. Director of Entergy
Enterprises, Inc., Chemical Manufacturers Association, and
Delaware Trust Company. Member of Board of Visitors, School
of Engineering, University of Pittsburgh.
EDWIN LUPBERGER Age 59 Director Since 1985
New Orleans, Louisiana
Chairman of the Board and Chief Executive Officer of the
Corporation, 1985 to date. President of the Corporation from
1995 to present. Chairman of the Board and Chief Executive
Officer of Arkansas Power & Light Company, Louisiana Power &
Light Company, Mississippi Power & Light Company, and New
Orleans Public Service Inc., 1993 to date. Chairman of the
Board and Chief Executive Officer of Gulf States Utilities
Company since 1994. Chairman of the Board of System Energy
Resources, Inc., 1986 to date. Chairman of the Board of
Entergy Operations, Inc., 1990 to date. Chairman of the
Board of Entergy Services, Inc., 1985 to date, President,
1994 to date, and Chief Executive Officer, 1991 to date.
Chairman of the Board of Entergy Enterprises, Inc., 1986 to
date, President, 1994 to date, and Chief Executive Officer,
1991-1994. Chief Executive Officer of Entergy Power, Inc.,
Entergy Power Development Corporation, and Entergy-Richmond
Power Corporation, 1993 to date. Chief Executive Officer of
Entergy Pakistan, Ltd. and Entergy Power Asia, Ltd., 1994 to
date. Chairman of the Board of Entergy Power, Inc., 1990 to
1993. Director of First Commerce Corporation, First
National Bank of Commerce, and International Shipholding
Corporation, New Orleans, Louisiana, and Pennington
Biomedical Research Foundation. Member of Board of Trustees
of Millsaps College and of Board of Administrators of Tulane
University. Chairman of the Foundation for the Mid-South
and Chairman of the U. S. Chamber of Commerce.
ADM. KINNAIRD R. MCKEE Age 66 Director Since 1990
USN (Ret.)
Oxford, Maryland
Director of PECO Energy Company (formerly Philadelphia
Electric Company). Former Superintendent of the United
States Naval Academy. Former Commander of the United States
Third Fleet. Former Director of Navy Nuclear Propulsion.
DR. PAUL W. MURRILL Age 61 Director Since 1993
Baton Rouge, Louisiana
Chairman of the Board and Director of Piccadilly Cafeterias,
Inc. (restaurants), Baton Rouge, Louisiana. Director of
First Mississippi Corporation, Jackson, Mississippi;
Tidewater, Inc., New Orleans, Louisiana; Zygo Corporation,
Middlefield, Connecticut; and Howell Corporation, Houston,
Texas. Chairman of Trustees, Burden Foundation; member of
Advisory Board, Oak Ridge National Laboratories; and
Consulting Editor, Instrument Society of America. Retired
Chairman of the Board and Chief Executive Officer of Gulf
States Utilities Company.
JAMES R. NICHOLS Age 57 Director Since 1986
Boston, Massachusetts
Partner, Nichols & Pratt (family trustees), Attorney and
Chartered Financial Analyst. Director of United Business
Services, Inc. Life Trustee of the Boston Museum of
Science.
EUGENE H. OWEN Age 66 Director Since 1993
Baton Rouge, Louisiana
Chairman and Chief Executive Officer of Owen and White, Inc.
(engineering consulting firm) and Chairman and President of
Utility Holdings, Inc. (holding company for Baton Rouge
Water Company, Parish Water Company, Inc., and Louisiana
Water Company), Baton Rouge, Louisiana. Director of Premier
Bancorp, Inc. and its wholly-owned subsidiary, Premier Bank,
Baton Rouge, Louisiana; President of Parish Water Company
Inc.; President of Baton Rouge Water Company and Louisiana
Water Company, Baton Rouge, Louisiana. Director of Entergy
Enterprises, Inc. Member, Board of Directors, Our Lady of
the Lake Regional Medical Center; member of Board of
Directors, Baton Rouge Area Foundation.
JOHN N. PALMER, SR. Age 61 Director Since 1992
Jackson, Mississippi
Chairman of the Board and Chief Executive Officer of Mobile
Telecommunication Technologies Corp. (telecommunications
company). Director of Entergy Enterprises, Inc. and Deposit
Guaranty National Bank, Jackson, Mississippi. Director and
former President of the University of Mississippi
Foundation, and former President of Cellular
Telecommunications Industry Association. Member of the
President's Export Council advising the Secretary of
Commerce; formerly an advisor to the Office of the U. S.
Trade Representative. Director of the Foundation for the
Mid-South, Jackson, Mississippi. Member of the Board of
Trustees, Millsaps College. National Trustee, National
Symphony Orchestra, Washington, D.C.
ROBERT D. PUGH Age 67 Director Since 1977
Portland, Arkansas
Chairman of the Board of Portland Gin & Warehouse, Inc.
(agricultural and agri-business), Portland Bank (banking),
and Portland Bankshares, Inc. (banking), Portland, Arkansas.
Director of Entergy Enterprises, Inc., Boatmen's National
Bank of Pine Bluff, Pine Bluff, Arkansas. Director of
Winrock International; former Chairman of the Board of
Trustees of the University of Arkansas; former President of
Cotton Council International, and Board of Trustees of
Chatham Hall School, Chatham, Virginia.
H. DUKE SHACKELFORD Age 69 Director Since 1981
Bonita, Louisiana
Planter. President and Director of Shackelford Co., Inc.,
Bonita Gin, Inc. and Louisiana Cotton Warehouse Co. Inc.;
President of Shackelford Gin, Inc., 1976-1991 (all
agricultural and agri-businesses). Director of Hibernia
Corporation and Hibernia National Bank, New Orleans,
Louisiana; Yazoo Valley Minter City Oil Mill, Inc.; and
Council for a Better Louisiana. Trustee of Public Affairs
Research Council of Louisiana. Member of Committee of 100
for Economic Development Incorporated. Former President of
National Cotton Ginners Association and Louisiana Cotton
Producers Association.
WM. CLIFFORD SMITH Age 60 Director Since 1983
Houma, Louisiana
President of T. Baker Smith & Son, Inc. (consultants-civil
engineer and land survey). Director of American Bancshares
of Houma, Inc. (banking). Director of American Bank & Trust
Company of Houma, Houma, Louisiana.
BISMARK A. STEINHAGEN Age 61 Directo Since 1993
Beaumont, Texas
Chairman and Director of Steinhagen Oil Company, Inc. (oil
and gasoline distributor), Beaumont, Texas.
_______________
(1) The Corporation and its various direct and indirect subsidiaries
comprise the Entergy System (System). The principal operating
subsidiaries of the Corporation, of which the Corporation owns all of
the common stock, are Arkansas Power & Light Company (AP&L), Gulf
States Utilities Company (GSU), Louisiana Power & Light Company
(LP&L), Mississippi Power & Light Company (MP&L), and New Orleans
Public Service Inc. (NOPSI). The Corporation also owns all of the
capital stock of Entergy Services, Inc., a service company subsidiary,
System Energy, a nuclear generating company subsidiary, and Entergy
Operations, Inc., a nuclear management service company subsidiary.
The Corporation also owns all of the capital stock of Entergy Power,
Inc., a subsidiary that owns and markets capacity and energy external
to the System, and Entergy Enterprises, Inc., a non-utility company
subsidiary. In addition, the Corporation has various other
subsidiaries that participate in the energy management services
business and in utility projects outside of the System's retail
service territory, both domestically and internationally, including
Entergy Power Development Corporation and CitiPower, Ltd.
On September 14, 1979, Final Judgments of Permanent Injunction
were issued against Dr. Norman C. Francis (Francis) and another former
member of the Starr Broadcasting Group, Inc. (SBG). Francis has
served as a director of Entergy Corporation since 1994. The Final
Judgments were issued pursuant to a civil injunctive action filed by
the SEC on February 7, 1979. Francis was one of the several
defendants named in this civil action. Francis served as a director
of SBG during a time period when, according to the SEC's claim, SBG
did not comply with applicable rules of the federal securities laws
when filing reports with the SEC. The SEC alleged that as a director
of SBG, Francis had the responsibility to insure such compliance.
Therefore, the Final Judgment of Permanent Injunction ordered Francis,
while serving as an officer or director of any publicly held reporting
company (which would include Entergy Corporation), to insure that such
companies file reports with the SEC that comply with the applicable
reporting requirements of the Securities Exchange Act of 1934, as
amended (Exchange Act).
Certain Transactions
Other than as provided under applicable corporate laws, the
Corporation does not have policies whereby transactions involving
executive officers and directors and the Corporation are approved by a
majority of disinterested directors. However, pursuant to the
Corporation's Code of Conduct, transactions involving the Corporation
and its executive officers must have prior approval by the next higher
reporting level of that individual, and transactions involving the
Corporation and its directors must be reported to the secretary of the
Corporation.
Share Ownership of Directors and Officers
The directors, nominees for directors, the executive officers
named in the Summary Compensation Table below, and all directors,
nominees for directors, and executive officers of the Corporation as a
group beneficially owned directly or indirectly the following Common
Stock of the Corporation and cumulative preferred stock of a System
company:
<TABLE>
<CAPTION>
As of December 31, 1995
Entergy Corporation Common Stock
Amount and Nature Amount and Nature
of Beneficial of Beneficial
Ownership (a) Ownership (a)
--------------------------------- -------------------------
Sole Voting Other Sole Voting Other
and Beneficial and Beneficial
Investment Ownership Investment Ownership
Name Power (b) (c)(d)(e)(f) Name Power (b) (c)(d)(e)(f)
--------- ---------- ------------ -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
W. Frank Blount * 3,734 - James R. Nichols * 4,179 -
John A. Cooper, Jr. *(g) 6,334 - Eugene H. Owen *(g) 2,392 -
Lucie J. Fjeldstad * 2,684 - John N. Palmer, Sr. * 15,000 -
Dr. Norman C. Francis * 1,000 - Robert D. Pugh * 6,000 10,000(h)
Donald C. Hintz ** 40,451 50,151 H. Duke Shackelford * 8,750 3,950(h)
Kaneaster Hodges, Jr. * 3,517 - Wm. Clifford Smith * 4,670 -
Jerry D. Jackson ** 40,290 48,148 Bismark A. Steinhagen * 7,037 -
Robert v.d. Luft * 2,984 -
Edwin Lupberger *** 83,552 111,381(h)(i)
Jerry L. Maulden ** 77,924 61,816
Gerald D. McInvale ** 37,005 39,920
Adm. Kinnaird R. McKee * 2,167 -
Dr. Paul Murrill * 2,754 - All directors,
nominees and executive 371,483 371,631
officers
</TABLE>
* Director of the Corporation or Nominee
** Officer of the Corporation
*** Officer and Director of the Corporation
(a) Based on information furnished by the respective individuals.
The ownership amounts shown for each individual and for all
directors, nominees, and executive officers as a group do not
exceed one percent of the outstanding securities of any class of
security so owned.
(b) Includes all shares as to which the individual has the sole
voting power and powers of disposition, or power to direct the
voting and disposition.
(c) Includes, for the named persons, shares of Common Stock of the
Corporation held in the Employee Stock Ownership Plan of the
Corporation as follows: Mr. Hintz, 810 shares; Mr. Jackson, 810
shares; Mr. Lupberger, 886 shares; Mr. Maulden, 856 shares; and Mr.
McInvale, 118 shares.
(d) Includes, for the named persons, shares of Common Stock of the
Corporation held in the System Savings Plan Company Account as
follows: Mr. Hintz, 1,412 shares; Mr. Jackson, 2,427 shares; Mr.
Lupberger, 6,771 shares; Mr. Maulden, 10,460 shares; and Mr.
McInvale 802 shares.
(e) Includes, for the named persons, unvested restricted shares of
the Corporation's Common Stock held in the Equity Ownership Plan as
follows: Mr. Hintz, 5,429 shares; Mr. Jackson, 5,500 shares; Mr.
Lupberger, 10,900 shares; Mr. Maulden, 5,500 shares; and Mr.
McInvale, 4,000 shares.
(f) Includes, for the named persons, shares of the Corporation's
Common Stock in the form of unexercised stock options awarded
pursuant to the Equity Ownership Plan as follows: Mr. Hintz,
42,500 shares; Mr. Jackson, 39,411 shares; Mr. Lupberger, 88,824
shares; Mr. Maulden, 45,000 shares ; and Mr. McInvale, 35,000
shares.
(g) Mr. Cooper has sole voting and investment power over 6,000 shares
of AP&L's $0.01 Par Value ($25 liquidation value) Preferred Stock
owned by John A. Cooper Trust. Mr. Cooper disclaims any personal
interest in these shares. Mr. Owen is co-trustee of 3,500 shares
of AP&L's $0.01 Par Value ($25 liquidation value) Preferred Stock
which are held by the trustees of the Baton Rouge Water Company and
Louisiana Water Company Retirement Plan.
(h) Includes, for the named persons, shares of the Corporation's
Common Stock held by their spouses. The named persons disclaim any
personal interest in these shares as follows: Mr. Lupberger 2,500
shares; Mr. Pugh, 10,000 shares; and Mr. Shackelford, 3,950 shares.
(i) Includes 1,500 shares of Entergy Corporation Common Stock held
jointly between Edwin Lupberger and Ms. E. H. Lupberger.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act and Section 17(a) of the Public
Utility Holding Company Act of 1935, as amended, require the
Corporation's officers, directors and persons who own more than 10% of
a registered class of the Corporation's equity securities to file
reports of ownership and changes in ownership concerning the
securities of the Corporation and its subsidiaries with the SEC and to
furnish the Corporation with copies of all Section 16(a) and 17(a)
forms they file. Terry L. Ogletree, an officer of Entergy
Enterprises, Inc., filed a Form 3 in March of 1995 which inadvertently
failed to report ownership of 5,000 restricted shares of the
Corporation's stock. This has now been correctly reported.
Meetings and Committees of the Board of Directors
The Board of Directors of the Corporation has six standing
committees.
Audit Committee. The members of this committee are Mrs.
Fjeldstad (Chairperson), Messrs. Nichols and Shackelford, and Dr.
Francis. The function of the Audit Committee is to discuss with the
independent accountants of the Corporation the accountants' general
findings as to accounts, records, and systems of internal control of
the Corporation and its subsidiaries and to consult with the
accountants on any matter which the Committee may deem relevant to the
audit or which the accountants may desire to bring to the attention of
the Audit Committee. The Committee reports to the Board of Directors
the results of these discussions and makes recommendations. This
Committee held four meetings in 1995.
Executive Committee. The members of this committee are Messrs.
Lupberger (Chairman), Blount, Cooper, and Palmer, and Dr. Murrill.
The Executive Committee, during the intervals between the meetings of
the Board of Directors, may, except as expressly limited by state law,
exercise all powers of the Board of Directors in the management and
direction of the business affairs of the Corporation. The Committee
is required to report all of its actions to the Board of Directors
which may revise the same. This Committee held two meetings in 1995.
Finance Committee. The members of this committee are Messrs.
Cooper (Chairman), Luft, Nichols, and Steinhagen and Adm. McKee. The
function of the Finance Committee is to review the Corporation's
financial and budgetary policies and cash flow projections, to make
policy recommendations to the Board of Directors with respect to the
sale of securities, and to review the Corporation's policies on
banking and other financial relations. This Committee held five
meetings in 1995.
Personnel Committee. The members of this committee are named
below under "Personnel Committee Interlocks and Insider
Participation." The function of the Personnel Committee is to review
major employee relations matters, employment practices and forms of
compensation, including employee benefit plans. The Committee reviews
the performance of the Corporation's officers and makes compensation
recommendations to the Board of Directors. The Committee establishes
compensation policies with respect to members of the Board of
Directors. This Committee held six meetings in 1995.
Nuclear Committee. The members of this committee are Adm. McKee
(Chairman), Messrs. Hodges, Pugh, and Smith, and Dr. Murrill. The
function of the Nuclear Committee is to provide non-management
oversight and review of Arkansas Nuclear One, Grand Gulf, River Bend,
and Waterford 3 Steam Electric Generating Stations, focusing on
matters such as safety, operating performance, costs of operations,
staffing, and training. The Committee interfaces on a regular basis
with the System's senior nuclear management in order to maintain an
awareness of current internal and external nuclear related issues
affecting the System's nuclear facilities. The Committee reports to
the Board of Directors with respect to major organizational and
operational aspects of the System's nuclear facilities directed toward
maintaining or improving safe, cost effective, and efficient
operations. This Committee held three meetings in 1995.
Public Affairs Committee. The members of this committee are
Messrs. Palmer (Chairman), Hodges, Shackelford, Smith, and Steinhagen,
and Dr. Francis. The function of the Public Affairs Committee is to
provide advice and counsel to management with respect to governmental,
regulatory, and public relations matters. The Committee makes
recommendations to the Board of Directors with respect to the
Corporation's position on public policy issues and to the System's
commitment to equal opportunity in all corporate relationships. This
Committee held five meetings in 1995.
In 1995, there were nine meetings of the Board of Directors. All
directors, except Mrs. Fjeldstad, attended at least 75% of the total
number of meetings of the Board of Directors and the committees on
which they serve that were held during the periods in which such
persons were directors in 1995. Mrs. Fjeldstad attended 73% of such
meetings.
Compensation of Directors
Directors of the Corporation who are not employees of a System
company are paid an attendance fee of $1,000 for attendance at
meetings of the Board of Directors, $1,000 for attendance at meetings
of committees of the Board (except for the committee chairmen who are
paid $1,500), $2,000 for attending committee meetings of the Board of
Directors when scheduled during a time or at a location not in
association with a scheduled Board of Directors meeting (except for
committee chairmen who are paid $2,500), and $1,000 for participation
on behalf of the Corporation in any inspection trip or conference not
held on the same day as a Board or committee meeting. All nonemployee
directors are also compensated on a quarterly basis in the form of
fixed awards of the Corporation's Common Stock pursuant to the Stock
Plan for Outside Directors (Directors Plan) and cash based on 1/2 the
value of the stock awarded pursuant to the Directors Plan. This level
of directors' compensation is set to enable the Corporation to attract
and retain persons of outstanding competence to serve on the Board of
Directors. Directors are paid a portion of their compensation in the
form of the Corporation's Common Stock in order to assure that
directors will have a personal interest in the performance of the
stock of the Corporation. Nonemployee directors of the Corporation
are awarded 150 shares of the Corporation's Common Stock quarterly,
consisting of authorized but unissued shares, treasury shares, or
shares acquired on the open market.
Retired nonemployee directors of the Corporation with a minimum
of five years of service on the Board of Directors of the Corporation
are paid 100% of their annual retainer at retirement for a term
corresponding to the number of years of service or until death,
whichever occurs first. Retired nonemployee directors with over ten
years of service receive a lifetime benefit. However, nonemployee
directors who were also formerly directors of GSU, i.e., Messrs. Owen
and Steinhagen and Dr. Murrill, pursuant to the terms of the agreement
consolidating Entergy Corporation (a Florida corporation) and GSU, may
choose either the director retirement benefits offered by the
Corporation or the director retirement benefits formerly offered to
directors of GSU. Under the GSU retirement plan for directors, the
retirement benefit will be 30 percent of the retainer fee for service
of not less than five nor more than nine years, 40 percent for service
of not less than ten nor more than fourteen years, and 50 percent for
fifteen or more years of service. For those directors who retire
prior to the retirement age, the benefits will be reduced. The plan
also provides disability retirement benefits if the director has
served at least five years prior to the disability.
On certain occasions the Corporation provides personal
transportation services for the benefit of nonemployee directors.
During 1995, the value of such transportation services provided by the
Corporation was approximately $49,000.
Report of Personnel Committee on Executive Compensation
The Personnel Committee of the Board of Directors of the
Corporation is responsible for, among other things, reviewing and
recommending to the Board of Directors the adoption, or amendment, of
the various compensation, incentive, and benefit plans as well as
programs maintained for officers and other key employees of the
Corporation. The Committee takes an active role in executive
compensation by recommending to the Board of Directors executive
compensation levels.
The Corporation has established its executive compensation
programs to provide competitive rewards intended to attract, retain,
and motivate key employees critical to the success of the System. The
Corporation has historically used similarly-sized electric utility
companies as the peer group for assessing the competitiveness of its
compensation programs. The seventeen electric utility companies in
this compensation comparison group are selected based on revenue size.
With the growth of the System to one of the largest in the industry,
the Committee also uses a selected group of similar-sized
telecommunications companies as an additional peer group for assessing
the competitiveness of the executive compensation programs.
These peer groups are utilized for all components of compensation
including base, annual incentives, and long-term incentives. The
executive total compensation package is targeted at the median of
total compensation within the peer group, with incentive plans
designed to enable executive compensation to exceed the peer group
median based on Board-approved performance targets. The total
executive compensation package consists of the following four major
components.
Base Salary
Base salary is set through a comparison with companies in the
compensation peer groups. In 1995, the Board of Directors did not
increase Mr. Lupberger's salary.
Benefits and Perquisites
Employee benefits are provided such as pension, medical
insurance, life insurance, and long-term disability insurance, which
provide for income continuation and protection against dissipation of
income for unexpected reasons, and special executive remuneration
including perquisites.
Annual Incentive Compensation
Annual incentive compensation is based on the attainment of key
strategic goals and objectives including net cash flow, controlling
operation and maintenance costs, electric generation, employee
satisfaction, and customer service measures. These measures have
varying weights and are specifically tailored to each executive's
responsibilities.
Long-Term Incentive Compensation
Long-term incentive compensation opportunities are tied to long-
term shareholder value. Option grants and performance restrictions
lapsed on stock are typically considered on an annual cycle, in
January of each year, based on the Corporation's prior year
performance as reviewed by the Committee, including specific threshold
performance measures. These performance measures are consistent with
those used in the other incentive plans.
The mix of the compensation components is designed to reward the
achievement of strategic goals and objectives which lead to the
protection and increase of shareholder value. Equity ownership is
offered to key executives to encourage the purchase of common stock
and to increase their interest in total return to shareholders. As
other forms of equity ownership, restricted stock and stock options
may be offered to key executives as approved by the Board.
Mr. Edwin Lupberger, Chairman, President and Chief Executive
Officer of the Corporation, participated in each compensation
component in the following distribution in 1995:
Base Salary 33%
Benefits and Perquisites 3%
Annual Incentive Compensation 27%
Long-Term Incentive Compensation 37%
Mr. Lupberger's 1995 long-term compensation included restricted
stock earned over a two year performance period of 1994-1995. In
1995, Mr. Lupberger's incentive plan performance scales included
financial measures and customer service measures, with proportionately
more weight given to the financial measures. In the aggregate, Mr.
Lupberger's incentive plan performance results exceeded the target
level of performance for 1995. This resulted in Mr. Lupberger's total
compensation exceeding the target compensation level compared to the
compensation peer group companies.
Members of the Personnel Committee:
Eugene H. Owen, Chairman
W. Frank Blount
John A. Cooper, Jr.
Dr. Paul W. Murrill
Personnel Committee Interlocks and Insider Participation
Messrs. Owen (Chairman), Blount, and Cooper, and Dr. Murrill
served during 1995 as members of the Personnel Committee of the Board
of Directors of the Corporation. None of these persons during 1995,
or prior to 1995, was an officer or employee of the Corporation or any
of its subsidiaries.
Corporate Performance
The following graph compares the performance of the Common Stock
of the Corporation to the S&P 500 Index and the S&P Electric Utilities
Index (each of which includes the Corporation) for the last five
years.
Years Ended December 31
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
Entergy $100 $139 $162 $185 $121 $174
S&P 500 (1) $100 $130 $140 $154 $156 $215
S&P EUI (1) $100 $130 $137 $157 $136 $179
Assumes $100 invested on December 31, 1990 in Entergy Corporation
Common Stock, the S&P 500, and the S&P Electric Utilities Index, and
reinvestment of all dividends.
(1) Cumulative total returns calculated from the S&P 500 Index and
S&P Electric Utilities Index maintained by Standard & Poor's
Corporation.
<PAGE>
Executive Compensation
Summary Compensation Table
The following table includes the Chief Executive Officer, as well
as each of the four other most highly compensated executive officers
of the Corporation based on total annual base salary and bonuses
(including bonuses of an extraordinary and nonrecurring nature) from
all System sources awarded to, earned by, or paid to each officer
during 1995.
<TABLE>
<CAPTION>
Long-Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
-------------------------------- -------------------------- -------
Other Restricted Securities (b) (c)
(a) Annual Stock Underlying LTIP All Other
Name and Principal Position Year Salary Bonus Compensation Awards Options Payouts Compensation
---------------------------- ---- ------ ------ ----------- ------ --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edwin Lupberger 1995 $700,000 $568,400 $28,624 (d) 60,000 shares $781,337 $33,142
Chairman of the Board, 1994 681,539 218,789 39,961 (d) 10,000 139,525 29,457
President, and Chief 1993 542,077 437,610 20,327 (d) 13,438 248,313 32,957
Executive Officer
Donald C. Hintz 1995 $325,000 $265,049 $13,394 (d) 30,000 shares $409,414 $23,569
Executive Vice President and 1994 320,769 142,749 52,389 (d) 5,000 48,379 23,056
Chief Nuclear Officer 1993 265,386 166,560 48,548 (d) 5,000 85,774 24,462
Jerry D. Jackson 1995 $325,000 $256,838 $43,054 (d) 30,000 shares $422,438 $24,794
Executive Vice President - 1994 323,711 106,155 29,598 (d) 5,000 56,550 23,370
Marketing and External Affairs 1993 288,559 217,287 36,166 (d) 6,719 100,250 25,961
Jerry L. Maulden 1995 $435,000 $353,220 $26,248 (d) 30,000 shares $422,438 $28,504
Vice Chairman 1994 426,134 135,962 63,994 (d) 5,000 56,550 25,690
1993 385,000 286,985 84,655 (d) 5,000 100,250 25,639
Gerald D. McInvale 1995 $255,481 $186,739 $12,525 (d) 27,500 shares $294,282 $21,263
Executive Vice President and 1994 244,165 66,227 14,146 (d) 2,500 28,275 19,581
Chief Financial Officer 1993 221,696 141,811 48,805 (d) 2,500 50,125 22,667
</TABLE>
(a)Includes bonuses earned pursuant to the Annual Incentive Plan.
(b)Amounts include the value of restricted shares that vested in 1995,
1994, and 1993 (see note (d) below) under the Equity Ownership
Plan.
(c)Includes the following:
(1)1995 Executive Medical Plan premiums as follows: Mr. Hintz
$3,019; Mr. Jackson $3,019; Mr. Lupberger $3,019; Mr. Maulden
$3,019; and Mr. McInvale $3,019.
(2)1995 employer contributions to the Defined Contribution
Restoration Plan as follows: Mr. Hintz $5,250; Mr. Jackson
$5,250; Mr. Lupberger $16,500; Mr. Maulden $8,550; and Mr.
McInvale $3,164.
(3)There were no company contributions to the Employee Stock
Ownership Plan for 1995. Any plan growth was attributable to
reinvested dividends and other plan income.
(4)1995 employer contributions to the System Savings Plan as
follows: Mr. Hintz $4,500; Mr. Jackson $4,500; Mr. Lupberger
$4,500; Mr. Maulden $4,500; and Mr. McInvale $4,500.
(5)1995 reimbursements under the Executive Financial Counseling
Program as follows: Mr. Jackson $1,225; Mr. Lupberger $3,100;
Mr. Maulden $2,715; and Mr. McInvale $680.
(6)1995 payments for personal use under the Private Ownership
Vehicle Plan as follows: Mr. Hintz $10,800; Mr. Jackson $10,800;
Mr. Lupberger $6,023; Mr. Maulden $9,720; and Mr. McInvale
$9,900.
(d)There were no restricted stock awards in 1995 under the Equity
Ownership Plan. At December 31, 1995, the number and value of the
aggregate restricted stock holdings were as follows: Mr. Hintz:
5,429 shares, $158,798; Mr. Jackson: 5,500 shares, $160,875; Mr.
Lupberger: 10,900 shares, $318,825; Mr. Maulden: 5,500 shares,
$160,875; and Mr. McInvale: 4,000 shares, $117,000. Accumulated
dividends are paid on restricted stock when vested. The value of
stock for which restrictions were lifted in 1995, and the
applicable portion of accumulated cash dividends, are reported in
the LTIP Payouts column in the table. The value of restricted
stock awards, at December 31, 1995, is determined by multiplying
the total number of shares awarded by the closing market price of
the Corporation's Common Stock on the New York Stock Exchange
Composite Transactions on December 29, 1995 ($29.25 per share).
Option Grants in 1995
The following table summarizes option grants during 1995 to the
executive officers named in the Summary Compensation Table above.
<TABLE>
<CAPTION>
Individual Grants Potential Realizable
------------------------------------------ Value
% of Total at Assumed Annual
Number of Options Rates of Stock
Securities Granted to Exercise Price Appreciation
Underlying Employees Price for Option Term(c)
Options in (per Expiration ------------------
Name Granted 1995 share) Date 5% 10%
--------- --------- ------- --------- --------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Edwin Lupberger 10,000 (a) 3.2% $23.375(a) 01/26/05 $147,004 $372,537
50,000 (b) 15.9% 20.875(b) 03/31/05 656,409 1,663,469
Donald C. Hintz 5,000 (a) 1.6% 23.375(a) 01/26/05 73,502 186,269
25,000 (b) 7.9% 20.875(b) 03/31/05 328,204 831,734
Jerry D. Jackson 5,000 (a) 1.6% 23.375(a) 01/26/05 0 0
25,000 (b) 7.9% 20.875(b) 03/31/05 328,204 831,734
Jerry L. Maulden 5,000 (a) 1.6% 23.375(a) 01/26/05 73,502 186,269
25,000 (b) 7.9% 20.875(b) 03/31/05 328,204 831,734
Gerald D. McInvale 2,500 (a) 0.8% 23.375(a) 01/26/05 36,751 93,134
25,000 (b) 7.9% 20.875(b) 03/31/05 328,204 831,734
</TABLE>
(a) Options were granted on January 26, 1995, pursuant to the Equity
Ownership Plan. All options granted on this date have an
exercise price equal to the closing price of Entergy Corporation
common stock on the New York Stock Exchange Composite Transactions
on January 26, 1995. These options became exercisable on July
26, 1995.
(b) Options were granted on March 31, 1995, pursuant to the Equity
Ownership Plan. All options granted on this date have an exercise
price equal to the closing price of Entergy Corporation common
stock on the New York Stock Exchange Composite Transactions on
March 31, 1995. These options will become exercisable on
March 31, 1998.
(c) Calculation based on the market price of the underlying security
over a ten-year period assuming annual compounding. The columns
present estimates of potential values based on simple mathematical
assumptions. The actual value, if any, an executive officer may
realize is dependent upon the market price on the date of option
exercise.
Aggregated Option Exercises in 1995 and December 31, 1995 Option
Values
The following table summarizes the number and value of options
exercised during 1995, as well as the number and value of unexercised
options, as of December 31, 1995, held by the executive officers named
in the Summary Compensation Table above.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
as of December 31, 1995 as of December 31, 1995(b)
Shares Acquired Value -------------------------- ---------------------------
Name on Exercise Realized(a) Exercisable Unexercisable Exercisable Unexercisable
---------- ------------ ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edwin Lupberger 0 $ 0 38,824 50,000 $58,750 $418,750
Donald C. Hintz 0 0 17,500 25,000 29,375 209,375
Jerry D. Jackson 5,000 21,817 14,411 25,000 0 209,375
Jerry L. Maulden 0 0 20,000 25,000 29,375 209,375
Gerald D. McInvale 0 0 10,000 25,000 14,688 209,375
</TABLE>
(a) Based on the difference between the closing price of the
Corporation's Common Stock on the New York Stock Exchange Composite
Transactions on the exercise date of November 17, 1995, and the option
exercise price.
(b) Based on the difference between the closing price of the
Corporation's Common Stock on the New York Stock Exchange Composite
Transactions on December 29, 1995, and the option exercise price.
Pension Plan Tables
Retirement Income Plan Table
<TABLE>
<CAPTION>
Annual Years of Service
Covered ---------------------------------------------------------
Compensation 15 20 25 30 35+
- ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000 $22,500 $30,000 $37,500 $45,000 $52,500
200,000 45,000 60,000 75,000 90,000 105,000
300,000 67,500 90,000 112,500 135,000 157,500
400,000 90,000 120,000 150,000 180,000 210,000
500,000 112,500 150,000 187,500 225,000 262,500
850,000 191,250 255,000 318,750 382,500 446,250
</TABLE>
The Corporation has a Retirement Income Plan (a defined benefit
plan) that provides a benefit for employees at retirement from the
Corporation based upon (1) generally, all years of service beginning
at age 21 through termination, with a forty-year maximum, multiplied
by (2) 1.5% , multiplied by (3) the final average salary. Final
average salary is based on the highest consecutive 60 months of
covered compensation in the last 120 months of service. The normal
form of benefit for a single employee is a lifetime annuity and for a
married employee is a 50% joint and survivor annuity. Other
actuarially equivalent options are available to each retiree.
Retirement benefits are not subject to any deduction for Social
Security or other offset amounts. The amount of the named executive
officers' annual compensation covered by the plan, as of December 31,
1995, is represented by the salary column in the Summary Compensation
Table.
The maximum benefit under the Retirement Income Plan is limited
by Sections 401 and 415 of the Internal Revenue Code of 1986, as
amended; however, the Corporation has adopted a pension equalization
plan. Under this plan, certain executives, including the named
executive officers, would receive an amount equal to the benefit
payable under the Retirement Income Plan, without regard to the
limitations, less the amount actually payable under the Retirement
Income Plan.
The Retirement Income Plan was amended effective, February 1,
1991, to provide a minimum accrued benefit as of that date to any
employee who was vested as of that date. For purposes of calculating
such minimum accrued benefit, each eligible employee was deemed to
have had an additional five years of service and age as of that date.
The additional years of age did not count toward eligibility for early
retirement, but served only to reduce the early retirement discount
factor for those employees who were at least age 50 as of that date.
The credited years of service under the Retirement Income Plan
(without giving effect to the five additional years of service
credited pursuant to the February 1, 1991 amendment as discussed
above) as of December 31, 1995 for the following executive officer
named in the Summary Compensation Table was: Mr. Maulden 30.
The credited years of service under the Retirement Income Plan,
as amended, as of December 31, 1995 for the following executive
officers named in the Summary Compensation Table, as a result of
entering into supplemental retirement agreements, were as follows:
Mr. Hintz 24; Mr. Jackson 16; Mr. Lupberger 32; and Mr. McInvale 23.
In addition to the Retirement Income Plan discussed above, the
Corporation has the Supplemental Retirement Plan of Entergy
Corporation and Subsidiaries (SRP) and the Post-Retirement Plan of
Entergy Corporation and Subsidiaries (PRP). Participation is limited
to one of these two plans and is at the invitation of the Corporation.
The participant may receive from the Corporation a monthly benefit
payment not in excess of .025 (under the SRP) or .0333 (under the PRP)
times the participant's average basic annual salary (as defined in the
plans) for a maximum of 120 months. Mr. Hintz has entered into an SRP
participation contract, and all of the other executive officers named
in the Summary Compensation Table (except for Mr. McInvale) have
entered into PRP participation contracts. Current estimates indicate
that the annual payments to a named executive officer under the above
plans would be less than the payments to that officer under the System
Executive Retirement Plan.
System Executive Retirement Plan Table (1)
<TABLE>
<CAPTURE>
Annual Years of Service
Covered -----------------------------------------------------
Compensation 10 15 20 25 30+
- ------------ ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000 $ 60,000 $ 90,000 $100,000 $110,000 $120,000
300,000 90,000 135,000 150,000 165,000 180,000
400,000 120,000 180,000 200,000 220,000 240,000
500,000 150,000 225,000 250,000 275,000 300,000
600,000 180,000 270,000 300,000 330,000 360,000
700,000 210,000 315,000 350,000 385,000 420,000
1,000,000 300,000 450,000 500,000 550,000 600,000
</TABLE>
___________
(1) Benefits shown are based on a target replacement ratio of 50%
based on the years of service and covered compensation shown. The
benefits for 10, 15, and 20 or more years of service at 45% and 55%
replacement levels would decrease (in the case of 45%) or increase (in
the case of 55%) by the following percentages: 3.0%, 4.5%, and 5.0%,
respectively.
In 1993, the Corporation adopted the System Executive Retirement
Plan (SERP). The SERP is an unfunded defined benefit plan offered at
retirement to certain senior executives, which would currently include
all the executive officers named in the Summary Compensation Table.
Participating executives choose, at retirement, between the retirement
benefits paid under provisions of the SERP or those payable under the
executive retirement benefit plans discussed above. Covered pay under
the SERP includes final annual base salary (see the Summary
Compensation Table for the base salary covered by the SERP as of
December 31, 1995) plus the Target Incentive Award (i.e., a percentage
of final annual base salary) for the participant in effect at
retirement. Benefits paid under the SERP are calculated by
multiplying the covered pay times target pay replacement ratios (45%,
50%, or 55%, dependent on job rating at retirement) that are attained,
according to plan design, at 20 years of credited service. The target
ratios are increased by 1% for each year of service over 20 years, up
to a maximum of 30 years of service. In accordance with the SERP
formula, the target ratios are reduced for each year of service below
20 years. The credited years of service under this plan are identical
to the years of service for the named executive officers (other than
Mr. Jackson and Mr. McInvale) disclosed above in the Retirement Income
Plan Table discussion. Mr. Jackson and Mr. McInvale have 22 years and
14 years, respectively, of credited service under this plan.
The normal form of benefit for a single employee is a lifetime
annuity and for a married employee is a 50% joint and survivor
annuity. All SERP payments are guaranteed for ten years. Other
actuarially equivalent options are available to each retiree. SERP
benefits are offset by any and all defined benefit plan payments from
the Corporation and from prior employers. SERP benefits are not
subject to Social Security offsets.
Eligibility for and receipt of benefits under any of the
executive plans described above are contingent upon several factors.
The participant must agree that, without the specific consent of the
Corporation, he may take no employment after retirement with any
entity that is in competition with or similar in nature to the
Corporation or any affiliate thereof. Eligibility for benefits is
forfeitable for various reasons, including violation of an agreement
with the Corporation, resignation of employment, or termination for
cause.
Appointment of Independent Accountants
It is intended that, unless otherwise specified by the
stockholders, votes will be cast pursuant to the proxies hereby
solicited in favor of the ratification of the appointment by the Board
of Directors of Coopers & Lybrand L.L.P. as independent accountants of
the Corporation for the year 1996. The firm of Coopers & Lybrand has
acted for the Corporation in this capacity since 1994. The firm of
Coopers & Lybrand had acted for the Corporation's operating
subsidiary, GSU, in this capacity since 1933. The firm of Coopers &
Lybrand does not have any relationship with the Corporation or any of
its subsidiaries except that disclosed above.
A representative of the firm of Coopers & Lybrand will be present
at the meeting to respond to appropriate questions and will have an
opportunity to make a statement, if such representative desires.
Stockholder Proposal Concerning Discontinuance of Certain Stock Based
Compensation
The Corporation has been advised that Mr. Robert D. Morse, 212
Highland Avenue, Moorestown, New Jersey 08057, a holder of 600 shares
of the Corporation's Common Stock, proposes to submit the following
resolution at the 1996 Annual Meeting of Shareholders:
"That the Company discontinue use of all options, rights, SAR's,
etc., after termination of existing agreements with management
and Directors."
STATEMENT OF SECURITY HOLDER
"REASONS: These increased benefits have failed to produce the
claim that it holds and retains qualified personnel. Notice the
increasing number of management persons who have simply left because
of better corporate offers. We as shareowners are gradually
undervalued with each issuance. Call a halt by voting Yes! Many
pages of a proxy are expended to promote self-benefits; then there are
unmentioned administrative costs of distribution and record keeping.
Executives and directors are compensated enough to buy stock on the
open market, just as you and I, if we are so inclined. Again: Vote
Yes."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL FOR
THE FOLLOWING REASONS:
The Board believes it is in the best interest of the Corporation
and its shareholders to link compensation to corporate performance and
increases in shareholder value. The Corporation must have the ability
to attract, retain, and motivate high quality directors, executives,
and other employees through compensation plans that reward individuals
in relation to the performance of the Corporation and its Common
Stock. The Corporation's current Equity Ownership Plan, approved by
the shareholders in 1992, was carefully developed under the auspices
of the Personnel Committee (which is comprised exclusively of outside
independent directors) to link rewards for achievement to the
performance of corporate and individual goals designed to increase
shareholder value.
The Corporation currently grants no SAR's or rights to its
directors or executives and currently grants stock options to certain
executives and key management employees, but not to directors. The
Board believes that stock options are an excellent performance based
incentive that rewards executives, managers, and other employees when
shareholder value increases. As such, options are an important
feature of an overall compensation package that reinforces the common
interests of shareholders and management in the vitality of the
Corporation. Additionally, almost all of the Corporation employees
can benefit from an increase in the Corporation's Common Stock value
by participation in the Corporation's Savings Plan and Employee Stock
Investment Plan. The Personnel Committee and the Board must retain
maximum flexibility concerning stock-based compensation with respect
to directors, executives, and employees. This proposal would greatly
limit the Personnel Committee's flexibility. The elimination of the
stock based awards would reduce the link between compensation and
common stock performance at a time when the Board is trying to link
the two more closely.
For the reasons stated above, the Board of Directors recommends a
vote "AGAINST" this proposal.
Approval of this shareholder proposal requires an affirmative
vote of a majority of the votes cast. Unless they are marked to the
contrary, proxies received will be voted AGAINST this proposal.
Stockholder Proposals for 1997 Meeting
Any eligible holder of shares of Common Stock of the Corporation
intending to present a proposal in accordance with the rules of the
SEC for consideration at the Annual Meeting of Stockholders of the
Corporation to be held in 1997 and desiring that such proposal be
considered for inclusion in the Corporation's proxy statement and
proxy for that meeting is advised that such proposal must be received
by the Corporation at its principal offices not later than November
29, 1996.
Under the Bylaws of the Corporation, stockholders must give the
Corporation advance notice of proposed nominees for director and of
proposed business to be conducted at the meeting not less than 60 days
nor more than 85 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders. In the event that the
annual meeting is called for a date that is not within thirty (30)
days before or after such anniversary date, notice by the stockholder
to be timely must be so delivered or received not later than the close
of business on the 10th day following the earlier of the date on which
such notice or public disclosure of the date of the meeting was given
or made.
Other Business
The Board of Directors does not intend to bring any business
before the meeting other than the matters referred to in this Proxy
Statement and is not aware of any other matters that may be brought
before the meeting. However, if any other matters properly come
before the meeting, it is intended that the persons named in the
accompanying proxy will vote pursuant to the proxy in accordance with
their judgment on such matters.
By order of the Board of Directors,
/S/Edwin Lupberger
Edwin Lupberger
Chairman of the Board, President and Chief Executive Officer
Dated: March 29, 1996
