Notice of Annual Meeting of Stockholders
New Orleans, Louisiana
March 30, 1998
To the Stockholders of ENTERGY CORPORATION:
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
Date: Friday, May 15, 1998
Time: 10:00 a.m. Central Daylight Time
Place: The Woodlands Executive Conference Center
2301 North Millbend Drive
The Woodlands, Texas 77380-1360
MATTERS TO BE VOTED ON
1. Election of Fourteen Directors.
2. Approval of the 1998 Equity Ownership Plan.
3. Approval of the Executive Annual Incentive Plan.
4. Ratification of the appointment of Coopers & Lybrand L.L.P. as
our independent accountants for 1998.
/s/ Michael G. Thompson
Michael G. Thompson
Secretary
<PAGE>
TABLE OF CONTENTS
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS 1
MATTERS TO BE VOTED ON 1
PROXY STATEMENT 4
GENEAL INFORMATION ABOUT VOTING 4
WHO CAN VOTE 4
VOTING BY PROXIES. 4
HOW YOU MAY REVOKE YOUR PROXY INSTRUCTIONS 4
QUORUM REQUIREMENT 4
VOTES NECESSARY FOR ACTION TO BE TAKEN. 5
COST OF THIS PROXY SOLICITATION. 5
ATTENDING THE ANNUAL MEETING. 5
STOCKHOLDERS WHO OWN AT LEAST FIVE PERCENT 5
PROPOSAL 1 ELECTION OF DIRECTORS 6
GENERAL INFORMATION ABOUT NOMINEES 6
TERM OF OFFICE. 6
INFORMATION ABOUT THE NOMINEES. 6
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES 10
Audit Committee 10
Finance Committee 10
Personnel Committee 10
Nuclear Committee 11
Public Affairs Committee 11
Executive Committee 11
Director Affairs Committee 11
DIRECTOR COMPENSATION. 12
SERVICE AWARDS FOR DIRECTORS. 12
RETIREMENT FOR DIRECTORS 12
PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION 12
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS 12
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. 13
REPORT OF PERSONNEL COMMITTEE ON EXECUTIVE COMPENSATION 13
COMPARISON OF FIVE YEAR CUMULATIVE RETURN 15
EXECUTIVE COMPENSATION TABLES 16
Summary Compensation Table 16
Option Grants to the Executive Officers in 1997 17
Aggregated Option Exercises in 1997 and Option Values
as of Year End 1997 17
RETIREMENT INCOME PLAN 17
Retirement Income Plan Table 18
PENSION EQUALIZATION PAYMENTS. 18
SUPPLEMENTAL RETIREMENT PLANS. 18
SYSTEM EXECUTIVE RETIREMENT PLAN 18
System Executive Retirement Plan Table 19
EXECUTIVE MANAGMENT AGREEMENTS. 19
PROPOSAL 2 - APPROVAL OF THE 1998 EQUITY OWNERSHIP PLAN 19
MAXIMUM NUMBER OF SHARES. 19
PARTICIPANTS AND PURPOSE OF THE PLAN 19
FORMS OF AWARD 20
STOCK OPTIONS. 20
RESTRICTED SHARES. 20
PERFORMANCE SHARES. 20
EQUITY AWARDS 20
PERFORMANCE-BASED COMPENSATION 20
AMENDMENTS 21
TAX CONSEQUENCES OF THE PLAN. 21
NEW PLAN BENEFITS 21
PROPOSAL 3 - APPROVAL OF THE EXECUTIVE ANNUAL INCENTIVE PLAN 22
PARTICIPANTS AND PURPOSE OF THE PLAN. 22
PERFORMANCE GOALS 22
PERFORMANCE-BASED COMPENSATION 22
AMENDMENTS 22
NEW PLAN BENEFITS 22
PROPOSAL 4 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS 23
STOCKHOLDER PROPOSALS FOR 1999 MEETING. 23
<PAGE>
PROXY STATEMENT
Your vote is very important. For this reason, the Board of Directors
is requesting that you allow your Entergy Corporation Common Stock to
be represented at the Annual Meeting by Edwin Lupberger and Bismark A.
Steinhagen, the persons named as proxies on the enclosed proxy card.
This proxy statement has been prepared for the Board by our
management. The terms "We", "our", "Entergy" and the "Corporation"
each refers to Entergy Corporation. This proxy statement is being
sent to our stockholders on or about March 30, 1998.
GENERAL INFORMATION ABOUT VOTING
WHO CAN VOTE. You are entitled to vote your Common Stock if our
records show that you held your shares as of March 16, 1998. At the
close of business on March 16, 1998, a total of 245,881,656 shares of
Common Stock were outstanding and entitled to vote. Each share of
Common Stock has one vote. The enclosed proxy card shows the number
of shares that you are entitled to vote.
VOTING BY PROXIES. If your Common Stock is held by a broker, bank or
other nominee, you will receive instructions from them which you must
follow in order to have your shares voted in accordance with your
instructions. If you hold your shares in your own name, you may
instruct the proxies how to vote your Common Stock by using the toll
free telephone number listed on the proxy card or by signing, dating
and mailing the proxy card in the postage paid envelope provided to
you. Of course, you may come to the meeting and vote your shares in
person. When you use the telephone system, the system verifies that
you are a stockholder through the use of a Personal Identification
Number assigned to you. The procedure allows you to instruct the
proxies how to vote your shares and to confirm that your instructions
have been properly recorded. Specific directions for using the
telephone voting system are on the proxy card. Whether you mail or
telephone your instructions, the proxies will vote your shares in
accordance with those instructions. If you sign and return a proxy
card without giving specific voting instructions, your shares will be
voted as recommended by our Board of Directors. We are not currently
aware of any matters to be presented other than those described in
this proxy statement. If any other matters not described in the proxy
statement are presented at the meeting, the proxies will use their own
judgment to determine how to vote your shares. If the meeting is
adjourned, your Common Stock may be voted by the proxies on the new
meeting date as well, unless you have revoked your proxy instructions.
HOW YOU MAY REVOKE YOUR PROXY INSTRUCTIONS. To revoke your proxy
instructions, you must either advise the Secretary in writing before
your shares have been voted by the proxies at the meeting, deliver
later proxy instructions, or attend the meeting and vote your shares
in person.
QUORUM REQUIREMENT. The Annual Meeting may not be held unless a
quorum equal to a majority of the outstanding shares entitled to vote
is represented at the meeting. If you have returned valid proxy
instructions or attend the meeting in person, your shares will be
counted for the purpose of determining whether there is a quorum, even
if you wish to abstain from voting on some or all matters introduced
at the meeting. "Broker non-votes" also count for quorum purposes.
If you hold your Common Stock through a broker, bank or other nominee,
it may only vote those shares in accordance with your instructions.
However, if it has not received your instructions within ten days of
the meeting, it may vote on matters which the New York Stock Exchange
determines to be routine. All four proposals before the annual
meeting are routine. If a nominee cannot vote on a matter because it
is not routine or fails to vote on, there is a "broker non-vote".
VOTES NECESSARY FOR ACTION TO BE TAKEN. Fourteen directors will be
elected at the meeting, meaning that the fourteen nominees receiving
the most votes will be elected. In this case, "broker non-votes" will
not be counted as a vote for or against the election of directors.
The three other proposals require an affirmative vote of a majority of
shares entitled to vote. Therefore, abstentions and "broker non-
votes" will have the effect of being a vote cast against those three
proposals.
COST OF THIS PROXY SOLICITATION. We will pay the cost of this proxy
solicitation. In addition to soliciting proxies by mail, we expect
certain of our employees may solicit stockholders for proxies,
personally and by telephone. None of these employees will receive any
additional or special compensation for doing so. We have retained
Morrow & Co. Inc. for a fee of $12,500, plus reasonable out-of-pocket
costs and expenses, to assist in the solicitation of proxies. We
will, upon request, reimburse brokers, banks and other nominees for
their expenses in sending proxy materials to their principals and
obtaining their proxies.
ATTENDING THE ANNUAL MEETING. If you are a holder of record and you
plan to attend the Annual Meeting, please come to the registration
desk before the meeting. If you are a beneficial owner of Common
Stock held by a bank or broker (i. e., in "street name"), you will
need proof of ownership of your Common Stock as of March 16, 1998 to
be admitted to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of ownership. If you want
to vote in person your shares of Common Stock held in street name, you
must obtain a proxy in your name from the registered holder.
STOCKHOLDERS WHO OWN AT LEAST FIVE PERCENT. A stockholder
"beneficially owns" Common Stock by having the power to vote, invest
in, or acquire the common stock within 60 days. Stockholders who
beneficially own at least five percent of the Common Stock are
required to file certain reports with the Securities and Exchange
Commission. Based on these reports, the following beneficial owners
have reported their ownership as of December 31, 1997:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
<S> <C> <C>
Barrow, Hanley, Mewhinney & Strauss, Inc. ("BHM&S") 13,587,608 (1) 5.7%
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75204-2429
Brinson Partners, Inc. ("BPI") 15,503,600 (2) 6.4%
209 South LaSalle
Chicago, Illinois 60604-1295
Franklin Resources, Inc. ("FRI") 19,655,701 (3) 8.10%
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, CA 94403-7777
</TABLE>
(1) Of the 13,587,608 shares, BHM&S has sole voting power as to
3,356,458 shares, and shared voting power as to 10,231,150 shares.
(2) BPI has shared voting power as to all 15,503,600 shares. BPI is
wholly owned by Brinson Holdings, Inc., which is wholly owned by
SBC Holding (USA), Inc., which is wholly owned by Swiss Bank
Corporation. Each of the above companies reported identical
ownership of the subject 15,503,600 shares in the report filed with
the Securities and Exchange Commission.
(3) FRI may not vote or transfer this Common Stock. These shares are
beneficially owned by one or more investment companies or other
managed accounts which are advised by investment advisory
subsidiaries of FRI. Those subsidiaries, Franklin Advisors, Inc.,
Templeton Global Advisors, Limited, Templeton/Franklin Investment
Services, Inc., Templeton Investment Management (Australia)
Limited, Templeton Investment Counsel, Inc., Franklin Advisory
Services, Inc., and Franklin Mutual Advisors, Inc., may vote and
transfer 8,143,000, 10,155,800, 23,285, 25,000, 7,500, 1,300,000,
and 1,116 shares, respectively.
PROPOSAL 1 ELECTION OF DIRECTORS
GENERAL INFORMATION ABOUT NOMINEES
All nominees are currently members of the Board except Vice Admiral
George W. Davis, who has been nominated to replace Mrs. Fjeldstad, who
is not seeking re-election. Each has agreed to be named in this proxy
statement and to serve if elected. Except where authority to vote for
one or more nominee(s) is withheld, the proxies will vote all Common
Stock represented by an executed proxy equally for the election of the
nominees listed below.
TERM OF OFFICE. Directors are elected annually to serve a term of one
year and until the next annual meeting of stockholders and the
election of their successors.
INFORMATION ABOUT THE NOMINEES. The following biographical
information was supplied by each nominee. Unless stated otherwise,
all nominees have been continuously employed in their present
positions for more than five years. The age of each individual is as
of December 31, 1997.
W. FRANK BLOUNT Age 59 Director Since 1987
Sydney, Australia
- Chief Executive Officer of Telstra Communications Corporation
(Australian telecommunications company)
- Director of First Union National Bank, Atlanta, Georgia, LXE
Incorporated, and Caterpillar, Inc.
- 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 the Board of Trustees of the Rochester Institute of
Technology
- Member of the Business Council of Australia
JOHN A. COOPER, JR. Age 59 Director Since 1985
Bella Vista, Arkansas
- Chairman of the Board, President and CEO of Cooper Communities,
Inc. (recreational and retirement community development) and
of COFAM, Inc.
- Director of Wal-Mart Stores, Inc., and J. B. Hunt Transport
Services, Inc.
- Honorary Director of First National Bank of Sharp County
(Arkansas)
VADM. GEORGE W. DAVIS Age 64 Nominee
USN (Ret.)
Plymouth, Massachusetts
- Retired Director, President and Chief Operating Officer of
Boston Edison Company
- Vice Admiral (retired) U.S. Navy and former Commander Naval
Surface Force, Pacific
- Member, University of Chicago's Board of Governors for the
Argonne National Laboratory
DR. NORMAN C. FRANCIS Age 66 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 and Piccadilly Cafeterias Inc., Baton Rouge,
Louisiana
- Member of the Advisory Board of The Times Picayune Publishing
Co., New Orleans, Louisiana
- Chairman of the Board of Liberty Bank and Trust Company, New
Orleans, Louisiana
- 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
- Former Chairman of the Board of Trustees, Educational Testing
Service, Princeton, New Jersey
ROBERT v.d. LUFT Age 62 Director Since 1992
Chadds Ford, Pennsylvania
- Chairman of DuPont Dow Elastomers
- Retired Senior Vice President-DuPont and President-DuPont
Europe (industrial products, fibers, petroleum, chemicals,
and specialty products businesses)
- Retired Chairman of Dupont International
- Member of the Board of Visitors, School of Engineering,
University of Pittsburgh
EDWIN LUPBERGER Age 61 Director Since 1985
New Orleans, Louisiana
- Chairman of the Board, Chief Executive Officer, and Principal
Financial Officer of Entergy Corporation
- Chairman of the Board and Chief Executive Officer of Entergy
Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana,
Inc., Entergy Mississippi, Inc., and Entergy New Orleans,
Inc., domestic utility subsidiaries
- Chairman of the Board of System Energy Resources, Inc., a
nuclear generating subsidiary, and Entergy Operations, Inc.,
a nuclear management service subsidiary
- Chairman of the Board and Chief Executive Officer of Entergy
Services, Inc.
- Chairman of the Board and President of Entergy Enterprises,
Inc., a non-utility subsidiary
- Chief Executive Officer of Entergy Power, Inc., Entergy Power
Development Corporation, and Entergy-Richmond Power Corporation
and Entergy Pakistan, Ltd. and Entergy Power Asia, Ltd., also
subsidiaries
- Director of First Commerce Corporation, First National Bank of
Commerce; International Shipholding Corporation, New Orleans,
Louisiana, and Pennington Biomedical Research Foundation
- Member of the Board of Trustees of Millsaps College
- Member of the Board of Administrators of Tulane University
- Chairman of the Foundation for the Mid-South
- Former Chairman of the U. S. Chamber of Commerce
ADM. KINNAIRD R. MCKEE Age 68 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 63 Director Since 1993
Baton Rouge, Louisiana
- Retired Chairman of the Board and Chief Executive Officer of
Entergy Gulf States, Inc.
- Chairman of the Board of Piccadilly Cafeterias, Inc., Baton
Rouge, Louisiana
- Director of ChemFirst, Inc., Jackson, Mississippi; Tidewater,
Inc., New Orleans, Louisiana; Zygo Corporation, Middlefield,
Connecticut; and Howell Corporation, Houston, Texas
- Chairman of Trustees, Burden Foundation
JAMES R. NICHOLS Age 59 Director Since 1986
Boston, Massachusetts
- Partner, Nichols & Pratt (family trustees), Attorney and
Chartered Financial Analyst
- Life Trustee of the Boston Museum of Science
- Director, Babson-United, Inc.
EUGENE H. OWEN Age 68 Director Since 1993
Baton Rouge, Louisiana
- Chairman and President of Utility Holdings, Inc. (holding
company for Baton Rouge Water Company, Parish Water Company,
Inc., and Louisiana Water Company)
- Chairman and Chief Executive Officer of Owen and White, Inc.
(engineering consulting firm), Baton Rouge, Louisiana
- President of Parish Water Company Inc., Baton Rouge Water
Company, and Louisiana Water Company, Baton Rouge, Louisiana
- Member, Board of Directors, Our Lady of the Lake Regional
Medical Center, Baton Rouge, Louisiana
JOHN N. PALMER, SR. Age 63 Director Since 1992
Jackson, Mississippi
- Chairman of the Board of Mobile Telecommunication Technologies
Corp., Jackson, Mississippi
- Director of Deposit Guaranty National Bank, Jackson,
Mississippi
- Director of the University of Mississippi Foundation
- 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 68 Director Since 1977
Portland, Arkansas
- Chairman of the Board of Portland Gin & Warehouse, Inc.
(agricultural and agri-business company), Portland Bank,
and Portland Bankshares, Inc., Portland, Arkansas
- Former Director of Winrock International
- Former Chairman of the Board of Trustees of the University of
Arkansas
- Former President of Cotton Council International
- Former Board of Trustees of Chatham Hall School, Chatham,
Virginia
WM. CLIFFORD SMITH Age 62 Director Since 1983
Houma, Louisiana
- President of T. Baker Smith & Son, Inc. (consultants-civil
engineering and land surveying). During 1997, T. Baker Smith
& Son, Inc. performed land surveying services for Entergy
Louisiana, Inc. and was paid approximately $80,985.
Mr. Smith's children own 100% of the voting stock of T.
Baker Smith & Son, Inc.
BISMARK A. STEINHAGEN Age 63 Director Since 1993
Beaumont, Texas
- Chairman of the Board of Steinhagen Oil Company, Inc. (oil and
gasoline distributor), Beaumont, Texas
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
In 1997, the Board of Directors met seven times. Reference to the
"Board" refers to the Board of Directors. In addition to meetings of
the Board, directors attended meetings of separate Board Committees.
All nominees who are now directors attended at least 75% of the Board
meetings and committee meetings on which they serve.
COMMITTEES OF THE BOARD. The Board of Directors has seven standing
committees.
Audit Committee. 3 meetings in 1997
Present Members: Paul W. Murrill (Chairman)
Lucie J. Fjeldstad
James R. Nichols
Eugene H. Owen
Bismark A. Steinhagen
Functions: Discusses the audit results with independent
accountants.
Reviews internal controls, financial reporting and
other financial matters.
Reports to the Board and makes recommendations relevant
to the audit.
Finance Committee. 6 meetings in 1997
Present Members: Robert v.d. Luft (Chairman)
W. Frank Blount
John A. Cooper, Jr.
James R. Nichols
John N. Palmer, Sr.
Function: Reviews all financial, budgeting and banking policies.
Makes recommendations to the Board concerning
financial transactions and the sale of securities.
Personnel Committee.7 meetings in 1997
Present Members: W. Frank Blount (Chairman)
Robert v.d. Luft
Eugene H. Owen
Norman C. Francis
Functions: Reviews major employee relations matters, employment
practices, compensation and employee benefit plans.
Reviews officer performance and makes
recommendations to the Board concerning officer
compensation.
Nuclear Committee. 6 meetings in 1997
Present Members: Kinnaird R. McKee (Chairman)
Lucie J. Fjeldstad
Robert D. Pugh
Wm. Clifford Smith
Functions: Provides non-management oversight and review of all the
Corporation's nuclear generating plants, focusing on
safety, operating performance, operating costs,
staffing and training.
Consults with management concerning internal and
external nuclear related issues.
Reports to the Board with respect to the
Corporation's nuclear facilities.
Public Affairs
Committee. 3 meetings in 1997
Present Members: Norman C. Francis (Chairman)
John N. Palmer, Sr.
Wm. Clifford Smith
Bismark A. Steinhagen
Functions: Advises and counsels management regarding governmental,
regulatory and public relations matters.
Makes recommendations to the Board regarding
public policy issues and equal opportunity in all
corporate relationships.
Executive Committee.2 meetings during 1997
Present Members: Edwin Lupberger (Chairman)
W. Frank Blount
Robert v.d. Luft
John N. Palmer, Jr.
Robert P. Pugh
Functions: May exercise Board powers with respect to management
and the business affairs of the Corporation between
Board meetings.
Reports all actions to the Board.
Director Affairs
Committee. 6 meetings in 1997
Present Members: Robert D. Pugh (Chairman)
John A. Cooper, Jr.
Kinnaird R. McKee
Paul W. Murrill
Functions: Advises and counsels the Board on all matters
concerning Directors, including committee memberships,
compensation and performance.
Searches for and screens new nominees for
positions on the Board.
DIRECTOR COMPENSATION. Directors who are Entergy officers do not
receive any fee for service as directors. Each non-employee director
receives a fee of $1,500 for attendance at Board meetings, $1,000 for
attendance at committee meetings scheduled in conjunction with Board
meetings, and $2,000 for attendance at committee meetings not
scheduled in conjunction with a Board Meeting. Directors also receive
$1,000 for participation in any inspection trip or conference not held
in conjunction with a Board or Committee meeting. In addition,
committee chairpersons are paid an additional $3,000 annually. All
non-employee directors receive 150 shares of Common Stock and one-half
the value of the 150 shares in cash on a quarterly basis.
SERVICE AWARDS FOR DIRECTORS. All non-employee directors are credited
with 800 "phantom" shares of Common Stock for each year of service on
the Board up to a maximum of ten years. The "phantom" shares are
credited to a specific account for each director that is maintained
solely for accounting purposes. After retirement, these directors
receive in cash the value of their accumulated "phantom" shares which
has the same value as the same number of shares of Common Stock at the
time of each payment. Payments are made in at least five but no more
than 15 annual payments.
RETIREMENT FOR DIRECTORS. Before Entergy Gulf States, Inc. became a
subsidiary, it established a deferred compensation plan for its
officers and non-employee directors. A director could defer a maximum
of 100% of his salary, and an officer could defer up to a maximum of
50% of his salary. Both Dr. Murrill, as an officer, and Mr.
Steinhagen, as a director, deferred their salary. The directors'
right to receive compensation is an unsecured obligation of the
Corporation, which is held in the Corporation's general funds, and
accrues simple interest compounded annually at the rate set by Entergy
Gulf States, Inc. in 1985. In addition to payments received prior to
1997, on the January 1 after Dr. Murrill turns 65, he will receive an
annual benefit for 15 years and on the January 1 after Mr. Steinhagen
turns 70, he will receive an annual benefit for 10 years.
PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Blount (Chairman), Luft, Owen, and Dr. Francis served during
1997 as members of the Personnel Committee of the Board. None of
these directors during 1997, or prior to 1997, were an officer or
employee of the Corporation or any of its subsidiaries.
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
The table below shows how much Common Stock each current director, nomin
ee, and executive officer named in the Summary Compensation Table on
page 16 beneficially owned as of January 31, 1998, as well as how much
they and the other executive officers beneficially owned as a group.
This information has been furnished by each individual. Each
individual has sole voting and investment power, and the power to
dispose of, unless otherwise indicated. The amount of Common Stock
owned by all directors, nominees and executive officers as a group
totals less than 1% of the outstanding Common Stock.
<TABLE>
<CAPTION>
Entergy Corporation Common Stock
Amount and Nature Amount and Nature
of Beneficial Ownership of Beneficial Ownership
Sole Voting Other Sole Voting Other
and Beneficial and Beneficial
Investment Power Ownership Investment Ownership
Name (a) Name Power (a)
<S> <C> <C> <C> <C> <C>
W. Frank Blount 5,034 - ADM. Kinnaird R. McKee 3,067 -
John A. Cooper, Jr. 7,534 - Dr. Paul W. Murrill 2,985 -
VADM. George W. Davis - - James R. Nichols 6,065 -
Lucie J. Fjeldstad 3,984 - Eugene H. Owen 3,692 -
Dr. Norman C. Francis 1,200 - John N. Palmer, Sr. 16,481 -
Frank F. Gallaher 19,641 17,500 Robert D. Pugh 8,300 6,500 (b)
Donald C. Hintz 11,318 27,500 Wm. Clifford Smith 6,621 -
Jerry D. Jackson 29,500 24,411 Bismark A. Steinhagen 8,237 -
Robert v.d. Luft 4,284 -
Edwin Lupberger 36,583 63,324 (b)
Jerry L. Maulden 27,165 30,000
Gerald D. McInvale 10,901 20,000
All directors, 262,891 244,235
nominees, and executive
officers
</TABLE>
(a) Includes Common Stock in the form of stock options that are
currently exercisable as follows: Mr. Gallaher, 17,500 shares; Mr.
Hintz, 27,500 shares; Mr. Jackson, 24,411 shares; Mr. Lupberger,
58,824 shares; Mr. Maulden, 30,000 shares; and Mr. McInvale, 20,000
shares.
(b) Includes Common Stock held by their spouses. The named persons
disclaim beneficial ownership as follows: Mr. Lupberger, 2,500
shares; and Mr. Pugh, 6,500 shares. In addition, Mr. Lupberger
owns 2,000 shares in joint tenancy with his mother, for which he
disclaims beneficial ownership.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Directors
and officers must file reports with the Securities and Exchange
Commission indicating their ownership of any equity securities of the
Corporation at the time they became a director or executive officer.
Thereafter, reports must be filed to update any changes in ownership.
In 1997, all directors and officers filed the necessary reports except
that reports of the acquisition and sale of Common Stock acquired by
conversion of phantom shares, were not filed on time by Michael R.
Niggli (765 shares), Gerald D. McInvale (855 shares), Charles L. Kelly
(7,937 shares), Michael B. Bemis (2,657 shares), Edwin Lupberger
(2,232 shares), Jerry D. Jackson (1,873 shares) and Donald C. Hintz
(2,428 shares). Additionally, Terry Ogletree, a former officer of the
Corporation, was late in reporting his receipt during 1996 of 22,500
restricted shares, Louis Buck was late in reporting his receipt during
1996 of 488 phantom shares and Edwin Lupberger was late in reporting
the acquisition in 1994 and 1997 of a total of 2,000 shares of Common
Stock held jointly with his mother. All reports have now been filed.
REPORT OF PERSONNEL COMMITTEE ON EXECUTIVE COMPENSATION
The Personnel Committee of the Board reviews and makes recommendations
to the Board about all aspects of executive compensation including the
adoption or amendment1 of the various compensation, incentive, and
benefit plans as well as programs maintained for officers and other
key employees of the Corporation.
The Corporation's executive compensation programs provide competitive
rewards intended to attract, retain, and motivate key employees
critical to the Corporation's success. The Committee has historically
used similarly-sized electric utility companies as the peer group for
assessing the competitiveness of its compensation programs. The
electric utility companies included in this group are of similar
revenue size. The Committee also uses a selected group of similar-
sized telecommunications companies as an additional peer group.
In 1997, these peer groups were utilized for all components of
compensation including base salary, annual incentives, and long-term
incentives. The executive total compensation package was targeted at
the median of total compensation within the peer group. Incentive
plans provided opportunities for executives to earn compensation in
excess of peer group medians based on performance targets approved by
the Board. The total executive compensation package consisted of the
following four major components.
Base Salary
Base salary was set through a comparison with companies in the
compensation peer groups. The Board of Directors granted Mr. Lupberger
a 1997 increase as reflected in the "Summary Compensation Table" on
page 16.
Benefits and Perquisites
Executives are provided benefits such as pension plan, medical
insurance, life insurance, and long-term disability insurance. In
addition, executives receive special executive remuneration including
perquisites.
Annual Incentive Compensation
Each executive's annual incentive compensation is based on the
attainment of key strategic goals and objectives including improvement
in consolidated operational economic value added, control of operation
and maintenance costs, customer satisfaction, and transition to a
competitive environment. These measures have varying weights and are
specifically tailored to each executive's responsibilities. For 1997,
Mr. Lupberger received no cash incentive award. Stock option grants
are considered on an annual cycle, in January of each year, based on
the Corporation's prior year performance as reviewed by the Committee.
Long-Term Incentive Compensation
Long-term incentive compensation opportunities are tied to long-term
shareholder value. In 1996, the Board of Directors adopted a three
year Long-Term Incentive Plan which spans the 1996-1998 performance
period. Under this Long-Term Incentive Plan, the corporation must
achieve pre-set levels of performance against a selected group of
other companies in the area of total return to shareholders over the
three year performance period.
Total Compensation
As reported in the "Summary Compensation Table," in 1997, Mr.
Lupberger's participation in each compensation component was as
follows:
- Salary 73%
- Bonus 0%
- Other Annual Compensation 25%
- Long-Term Incentive Compensation 0%
- All Other Compensation 2%
Mr. Lupberger's total 1997 compensation level was below the target
compensation level when compared to the compensation peer group
companies.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for individual compensation over one
million dollars paid to the Company's Chief Executive Officer and to
the four other most highly paid executives, unless certain
requirements are met. One of these requirements is that compensation
over $1 million must be performance-based.
In 1997, Mr. Lupberger earned slightly in excess of $1 million, but
the tax effects of that amount were immaterial. None of the other
five highest paid executives were compensated in excess of $1 million
dollars.
Members of the Personnel Committee:
W. Frank Blount, Chairman
Norman C. Francis
Robert v.d. Luft
Eugene H. Owen
COMPARISON OF FIVE YEAR CUMULATIVE RETURN. 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
1992 1993 1994 1995 1996 1997
Entergy $100 $114 $74 $107 $108 $125
S&P 500 (1) $100 $110 $111 $153 $189 $251
S&P EUI (1) $100 $113 $98 $128 $128 $161
Assumes $100 invested on December 31, 1992, in 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.
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payouts
Restricted Securities (a)
Other Annual Stock Underlying LTIP All Other
Name and Principal Year Salary Bonus Compensation Awards Options Payouts Compensation(b)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edwin Lupberger 1997 $ 785,385 $ 0 $271,422 $0 10,000 shares $ 0 $23,562
Chairman of the Board and 1996 735,577 448,794 123,601 (c) 10,000 0 23,567
Chief Executive Officer 1995 700,000 568,400 89,163 (c) 60,000 781,337 21,000
Frank F. Gallaher 1997 $ 327,385 $ 0 $11,132 $0 5,000 shares $ 0 $ 9,822
Group President and Chief 1996 276,538 130,150 35,641 (c) 5,000 0 10,321
Utility Operating Officer 1995 240,000 198,360 61,360 (c) 27,500 324,398 7,638
Donald C. Hintz 1997 $ 365,077 $ 0 $18,245 $0 5,000 shares $ 0 $10,952
Group President and Chief 1996 343,269 231,299 12,516 (c) 5,000 0 14,197
Nuclear Operating Officer 1995 325,000 265,049 13,394 (c) 30,000 409,414 9,750
Jerry D. Jackson 1997 $ 342,077 $ 0 $56,359 $0 5,000 shares $ 0 $10,262
Executive Vice President - 1996 332,115 209,489 37,928 (c) 5,000 0 13,862
External Affairs and Chief 1995 325,000 256,838 43,054 (c) 30,000 422,438 9,750
Administrative Officer
Jerry L. Maulden 1997 $ 445,615 $ 0 $67,485 $0 5,000 shares $ 0 $13,369
Vice Chairman 1996 435,000 260,301 27,056 (c) 5,000 0 14,550
1995 435,000 353,220 26,248 (c) 30,000 422,438 13,050
Gerald D. McInvale (d) 1997 $ 331,154 $ 0 $17,389 $0 5,000 shares $ 0 $9,923
Former Executive Vice 1996 271,730 179,576 13,995 (c) 5,000 0 12,051
Chairman 1995 255,481 186,739 12,525 (c) 27,500 294,282 7,664
</TABLE>
(a) Includes the value of restricted shares that vested in 1997,
1996, and 1995 (see note (c) below).
(b) Includes the employer contributions under Section 401(k) plans
and related defined benefit plans as follows: Mr. Lupberger $23,562;
Mr. Gallaher $9,822; Mr. Hintz $10,952; Mr. Jackson $10,262; Mr.
Maulden $13,369; and Mr. McInvale $9,923.
(c) There were no restricted stock awards in 1997. At December
31, 1997, the number and value of the aggregate restricted stock
holdings were as follows: Mr. Lupberger 60,000 shares, $1,796,250;
Mr. Gallaher 30,000 shares, $898,125; Mr. Hintz 30,000 shares,
$898,125; Mr. Jackson 30,000 shares, $898,125; Mr. Maulden 37,500
shares, $1,122,656; and Mr. McInvale 30,000 shares, $898,125.
Accumulated dividends are paid on restricted stock when vested.
The value of stock for which restrictions were lifted in 1997,
1996, and 1995, and the applicable portion of accumulated cash
dividends, are reported in the LTIP Payouts column in the above
table. The value of restricted stock awards as of December 31,
1997 is determined by multiplying the total number of shares
awarded by the closing market price of Common Stock on the New York
Stock Exchange Composite Transactions on December 31, 1997
($29.9375 per share).
(d) Gerald D. McInvale is a former Executive Officer. He is
included in the table because, had he been an executive officer at
the end of the year, he would have been one of the four most highly
compensated executive officers.
<TABLE>
<CAPTION>
Option Grants to the Executive Officers in 1997
Individual Grants
Potential Realizable
% of Total Value
Number of Options at Assumed Annual
Securities Granted to Exercise Rates of Stock
Underlying Employees Price Price Appreciation
Options in (per Expiration for Option Term
Name Granted (a) 1997 share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Edwin Lupberger 10,000 3.9% $ 26.5 01/30/07 $ 166,657 $ 422,342
Frank F. Gallaher 5,000 2.0% 26.5 01/30/07 83,329 211,171
Donald C. Hintz 5,000 2.0% 26.5 01/30/07 83,329 211,171
Jerry D. Jackson 5,000 2.0% 26.5 01/30/07 83,329 211,171
Jerry L. Maulden 5,000 2.0% 26.5 01/30/07 83,329 211,171
Gerald D. McInvale 5,000 2.0% 26.5 01/30/07 83,329 211,171
</TABLE>
(a) These options became exercisable on July 30, 1997.
Aggregated Option Exercises in 1997 and Option Values as of Year End 1997
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
as of December 31, 1997 as of December 31, 1997
Name Exercisable Unexercisable Exercisable Unexercisable
Edwin Lupberger 58,824 50,000 $ 107,308 $ 453,125
Frank F. Gallaher 17,500 25,000 36,406 226,563
Donald C. Hintz 27,500 25,000 53,594 226,563
Jerry D. Jackson 24,411 25,000 20,841 226,563
Jerry L. Maulden 30,000 25,000 54,375 226,563
Gerald D. McInvale 20,000 25,000 37,188 226,563
RETIREMENT INCOME PLAN. The Corporation has a defined benefit plan
for employees that provides for a retirement benefit calculated by
multiplying the number of years of employment by 1.5% which is then
multiplied by the final average pay. A single employee receives a
lifetime annuity and a married employee receives a reduced benefit
with a 50% surviving spouse annuity. Retirement benefits are not
subject to any deduction for social security or other offset amounts.
The credited years of service under the plan, as of December 31, 1997,
for the following executive officers were: Mr. Gallaher (28) and
Mr. Maulden (32). Because they entered into supplemental retirement
agreements, the credited years of service under this plan for the
following executive officers were: Mr. Hintz (26); Mr. Jackson (18);
Mr. Lupberger (34); and Mr. McInvale (25).
The following table shows the annual retirement benefits that would be
paid at normal retirement (age 65 or later).
Retirement Income Plan Table (1)
Annual
Covered Years of Service
Compensation 15 20 25 30 35
$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
650,000 146,250 195,000 243,750 292,500 341,250
950,000 213,750 285,000 356,250 427,500 498,750
(1) Benefits are shown for various rates of final average pay,
which is the highest salary earned in any consecutive 60 months
during the last 120 months of employment.
PENSION EQUALIZATION PAYMENTS. Supplemental retirement benefits are
provided to all executive officers and other participants whose
benefits are limited under the qualified plans by applicable Federal
tax laws and regulations equal to the difference between the benefits
that would have been payable under the qualified plans but for the
applicable limitations.
SUPPLEMENTAL RETIREMENT PLANS. Two other supplemental plans are
offered to executive officers. Executives may participate in one or
the other of these supplemental plans at the invitation of the
Corporation. These plans provide that a participant may receive a
monthly payment for 120 months. The amount of monthly payment shall
not exceed 2.5% or 3.33%, depending upon the plan, of the
participant's average basic annual pay. Current estimates indicate
that the annual payments to any executive officer under either of
these two plans would be less than the payments to that officer under
the System Executive Retirement Plan discussed below.
SYSTEM EXECUTIVE RETIREMENT PLAN. This executive plan is an unfunded
defined benefit plan for senior executives, that includes all of the
executive officers named in the Summary Compensation Table. Executive
officers can choose, at retirement, between the retirement benefits
paid under provisions of this plan or those payable under the
supplemental retirement plans discussed above. Under this plan,
covered pay includes final annual base pay and the target for
incentive awards in effect at retirement. Benefits are calculated by
multiplying the covered pay times the maximum pay replacement ratios
of 55%, 60%, or 65% (dependent on job rating at retirement) that are
attained at 30 years of credited service. The ratios are reduced for
each year of employment below 30 years. A single employee receives a
lifetime annuity and a married employee receives the benefit with a
50% surviving spouse annuity. These retirement payments are
guaranteed for ten years but are offset by any and all defined benefit
plan payments from the Corporation and from prior employers. These
payments are not subject to social security offsets.
Receipt of benefits under any of the supplemental retirement plans
described above are contingent upon several factors. The participant
must agree not to take any employment after retirement with any entity
that is in competition with or similar in nature to the Corporation or
any affiliated company. Benefits are forfeitable for various reasons,
including a violation of an agreement with the Corporation or
resignation or termination of employment for any reason without the
Corporation's permission.
The credited years of service for the executive officers under this
plan are as follows: Mr. Gallaher (28), Mr. Lupberger (34), Mr.
Maulden (32), Mr. Hintz (26), Mr. Jackson (24), and Mr. McInvale (16).
The following table shows the annual retirement benefits that would be
paid at normal retirement (age 65 or later).
System Executive Retirement Plan Table (1)
Annual
Covered Years of Service
Compensation 10 15 20 25 30+
$ 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
(1) Covered pay includes final average base pay and the incentive
awards target in effect at retirement. Benefits shown are based
on a replacement ratio of 50% based on the years of service and
covered salary 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.
EXECUTIVE MANAGEMENT AGREEMENTS. In connection with the resignation
of his position as Vice Chairman, Mr. McInvale entered into a contract
under which he will receive approximately $33,300 a month through May
31, 2001, subject to certain terms and conditions. Mr. McInvale will
also receive comparable benefits under the benefit plans, including
retirement plans in which he participated as an employee. In
addition, he will not lose any awards previously granted under the
incentive plans. In the event Mr. McInvale's death occurs prior to
May 31, 2001, his surviving spouse or estate will receive a lump sum
equal to the net present value of all monetary base payments due from
the date of his death to May 31, 2001, together with the benefits
lost, or the comparable value.
PROPOSAL 2 - APPROVAL OF THE 1998 EQUITY OWNERSHIP PLAN
The Board of Directors adopted, subject to stockholder approval, the
1998 Equity Ownership Plan of Entergy Corporation and Subsidiaries
("Equity Plan"). This Equity Plan replaces the plan previously
approved by shareholders in 1991. There are no material differences
between the Equity Plan and the prior plan except that the awards
granted under the Equity Plan are intended to qualify as performance
based compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended. Subject to shareholder approval, the Equity Plan
will be effective as of January 1, 1998.
MAXIMUM NUMBER OF SHARES. A maximum of 12,000,000 shares of Common
Stock will be available for awards. The value of each share of Common
Stock on December 31, 1997 was $29.9375. Common Stock awarded may be
authorized but unissued shares or shares acquired on the open market.
Those stock awards which are forfeited, terminated, or expire, will
again be available for subsequent awards. Any Common Stock
surrendered by a participant to pay withholding taxes shall become
available for subsequent awards.
PARTICIPANTS AND PURPOSE OF THE PLAN. The plan's purpose is to link a
participant's performance to shareholder value and reward effective
leadership with equity incentives. Only those officers and non-
employee directors having significant responsibility for continued
growth, development and financial success shall be eligible to
participate. The Equity Plan will be administered by the Personnel
Committee of the Board which will select the participants and
determine the forms of award. Approximately 150 employees will be
eligible for awards of stock options. For all other forms of awards,
approximately 50 employees will be eligible to participate. The
committee has no plans for any outside directors to participate in the
Equity Plan at this time but does anticipate that all executive
officers and current officers will participate.
FORMS OF AWARD. The Equity Plan provides for several different forms
of award including: (1) stock options to purchase Common Stock, which
may be either non-statutory stock options or incentive stock options
as defined by Federal tax laws, (2) restricted shares, which vest over
time, (3) performance shares pursuant to which Common Stock is awarded
upon reaching specific performance goals, and (4) equity awards in the
form of phantom stock units convertible into Common Stock and/or cash.
STOCK OPTIONS. When granting stock options, the committee will set
the exercise price at not less than fair market value of the Common
Stock on the date the award is granted. Options will not be
exercisable for 6 months and will expire 10 years after the date of
the award. Non-statutory stock options may be transferred to family
members or charities. Incentive stock options must comply with
applicable tax requirements and may not be exercised by a participant
in an amount that exceeds $100,000 in any one year. The total number
of stock options granted to a single participant shall not exceed
480,000 shares.
RESTRICTED SHARES. At the time of an award of restricted shares, the
committee will establish a period during which the restricted shares
will be subject to certain restrictions and provide for the lapse or
termination of restrictions upon the satisfaction of other conditions.
Holders of restricted shares generally have the right to vote and
receive dividends.
PERFORMANCE SHARES. Common Stock may be awarded in the form of
performance shares. The receipt of the Common Stock shall be
contingent upon the participant meeting specified performance goals
during a performance period. Performance goals can be based on one or
more business criteria that apply to either the participant, a
business unit or the Corporation. The performance goals may be stated
in terms of absolute levels or relative to its subsidiaries or to an
index or indices. The number of performance shares payable to a
single participant shall not exceed 480,000 shares.
EQUITY AWARDS. Equity awards in the form of phantom stock units may
be awarded. The value of these units is related to the value of
Common Stock. The committee shall determine the number of phantom
stock units to be awarded and all other terms, restrictions and
conditions of such awards. Each phantom stock unit will be credited
to each participant's account for accounting purposes. Each matured
phantom stock unit may be settled in cash, Common Stock or a
combination of both, as determined by the committee. The committee
may also permit participants to purchase phantom stock units, each of
which represents one share of Common Stock, the purchase price of
which shall not be less than 80% of the fair market value on the date
such award is purchased.
PERFORMANCE-BASED COMPENSATION. Section 162(m) of the Internal
Revenue Code of 1986, as amended, prevents public corporations from
deducting as a business expense that portion of compensation exceeding
$1,000,000 paid to the Chief Executive Officer and any of the other
four most highly compensated executive officers. This deduction limit
does not apply, however, to "performance-based compensation."
Performance-based compensation is compensation paid solely because a
participant met one or more pre-established, objective performance
goals. All awards of stock options and performance shares made to
executive officers will be deemed to be performance-based
compensation.
Stock options are considered performance-based compensation because
the exercise price of such option may not be less than the fair market
value of a share of Common Stock on the date of the award.
Performance shares are considered performance-based compensation
because the goals, the period, and the objective formula for computing
the number of performance shares which are payable when performance
goals are met will be established by the committee in writing prior to
the beginning of the performance period. Once performance goals are
set, the committee may lower an award but may not increase an award.
The performance goals for such executive officers shall be based upon
or may relate to one or any combination of the following business
criteria: Earnings before income taxes, depreciation and amortization
(EBITDA), Earnings before income taxes (EBIT), net income, earnings
per share, operating cash flow, cash flow, return on equity, sales,
budget achievement, productivity, price of Common Stock, market share,
total return to shareholder, return on capital, net cash flow, cash
available to parent, net operating profit after taxes (NOPAT),
economic value added (EVA), expense spending, operation and
maintenance (O&M) expense, expense, O&M or capital/kWh, capital
spending, gross margin, net margin, market capitalization, market
value, debt ratio, equity ratio, return on assets, profit margin,
customer growth or customer satisfaction.
AMENDMENTS. The committee may amend or terminate the Equity Plan
unless shareholder approval is required for an amendment to comply
with any tax or regulatory requirements, or to ensure that the
applicable requirements for deductibility of the performance based
compensation are met.
TAX CONSEQUENCES OF THE PLAN. The grant of a stock option will not
result in taxable income for the optionee or the Corporation at the
time of the grant. Upon the exercise of a non-statutory stock option,
the optionee will recognize ordinary income in the amount by which the
fair market value exceeds the option price. The Corporation will be
entitled to a deduction for the same amount. The optionee will have
no taxable income upon the exercise of an incentive stock option
(except that the alternative minimum tax may apply), and the
Corporation will receive no deduction when an incentive stock option
is exercised. The tax treatment to an optionee of a disposition of
shares acquired by the exercise of an option depends on the length of
time the shares have been held and whether such shares were acquired
by the exercise of an incentive stock option or non-statutory stock
option. Generally, there will be no tax consequence to the
Corporation in connection with the disposition of shares acquired
under a stock option except that the Corporation may be entitled to a
deduction in the case of a disposition of shares acquired upon
exercise of an incentive stock option before the applicable incentive
stock option holding periods have been satisfied.
With respect to other awards granted under the Equity Plan that are
settled either in cash, in Common Stock or other property and are
either transferable or not subject to a substantial risk of
forfeiture, the participant must recognize ordinary income equal to
the cash or fair market value of shares or property received; the
Corporation will be entitled to a deduction for the same amount. For
awards that are settled in Common Stock or property and are restricted
as to the transferability and subject to substantial risk of
forfeiture, the participant must recognize ordinary income equal to
the fair market value of the shares or other property received at the
first time the shares or other property become transferable or not
subject to substantial risk of forfeiture, whichever occurs earlier;
the Corporation will be entitled to a deduction for the same amount.
NEW PLAN BENEFITS. Providing that you approve the Equity Plan, stock
options will be awarded in January 1999 and performance shares will be
awarded in January 1998 based on performance goals set by the
committee for 1998. Under applicable treasury regulations, the
committee may set these performance goals no later than March 31, 1998
for the 1998 performance period as long as the attainment of the
specific goals is still undeterminable. The performance goals will be
based on one of the business criteria discussed above under the
heading "Performance-Based Compensation." The Corporation is unable
to provide meaningful disclosure as to what benefits will be payable
under this plan for 1998, because the performance goals have not been
set and the number of participants and the amount of stock options or
performance shares to be awarded has not been determined. Under the
1991 plan, however, in January 1996 the committee granted performance
shares at the superior target level as follows: Mr. Lupberger, 40,000
shares; Mr. Gallaher, 20,000 shares; Mr. Hintz, 20,000 shares; Mr.
Jackson, 20,000 shares; Mr. Maulden, 25,000 shares; Mr. McInvale,
20,000 shares; all executive officers as a group, 163,000 shares; and
all non-executive officers and employees as a group, 256,750 shares.
These awards are subject to a three year performance period. It is
impossible to determine, at this time, whether any or all awards will
be earned. In January 1998, under the 1991 plan, the committee
granted 71,250 options to all executive officers as a group and 50,000
options to all non-executive officers and employees as a group with an
exercise price of $26.50. Options granted to the named executive
officers are reported on the Option Grant Table
on page 17. These options are currently exercisable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
1998 EQUITY OWNERSHIP PLAN.
PROPOSAL 3 - APPROVAL OF THE EXECUTIVE ANNUAL INCENTIVE PLAN
The Board of Directors adopted, subject to stockholder approval, an
Executive Annual Incentive Plan effective January 1, 1998. This
Incentive Plan will be administered by the Personnel Committee of the
Board which has broad authority to determine performance goals, the
amount to be paid when performance goals are met and that the specific
performance goals have been satisfied.
PARTICIPANTS AND PURPOSE OF THE PLAN. The Incentive Plan is intended
to provide incentive pay to executive employees based on the
achievement of company-wide, business unit and/or individual
performance goals. Participants shall include executive employees who
are responsible for the establishment of the strategic direction of
the Corporation and/or business units, the execution of tactical
action plans, or achievement of bottom line results. Approximately 50
executives may participate in the plan. The maximum amount a single
participant may be paid pursuant to this plan for any single calendar
year performance period is $2,000,000.
PERFORMANCE GOALS. Performance goals shall be established by the
committee in writing prior to the beginning of the calendar year
during which performance will be measured or by such later date as
permitted under applicable Federal tax laws and regulations. Once
performance goals are set, the committee may not increase an award,
but may lower an award. The committee shall certify in writing prior
to payment of any award that the performance goals have been
satisfied.
PERFORMANCE BASED COMPENSATION. Awards under the Incentive Plan are
intended to qualify as performance based compensation under Section
162(m) of the Internal Revenue Code, as amended, of 1986. The payment
of such awards would then be deductible by the Corporation as a
business expense. The performance goals for executive officers under
this plan will be based on the identical business criteria as
specified for the Equity Plan on page 19.
AMENDMENTS. The Committee may amend or terminate the Incentive Plan
at any time, unless shareholder approval is necessary to comply with
any tax or regulatory requirements or to ensure that the applicable
requirements for deductibility of performance based compensation are
met.
NEW PLAN BENEFITS. The Incentive Plan is similar to the incentive
plan currently in effect. The major difference is that you are being
asked to approve the compensation payable under this plan as
performance-based. Based on the performance targets set by the
committee for 1997 under the prior plan, none of the executive
officers earned any incentive awards for 1997. All non-executive
officers and employees earned $1,262,093 under the current plan for
1997. If you assume, however, that the executive officers had met the
1997 performance goals under the current plan at the median target
percent level, Mr. Lupberger would have received $464,000; Mr.
Gallaher $168,200; Mr. Hintz $203,000; Mr. Jackson $200,100; and Mr.
Maulden $261,000. All executive officers as a group would have
received $1,797,176, and all non-executive officers and employees as a
group would have received $5,152,469.
The benefits that would be payable to executive officers and all other
current officers and employees for 1998 are not determinable at this
time because the committee has not set the performance goals for 1998
or the target percentages of base pay that a participant can earn as
incentive compensation. Under applicable treasury regulations, the
committee may set these performance goals no later than March 31, 1998
for the 1998 performance period as long as the attainment of the
specific goals is still undeterminable. The performance goals will be
based on one of the business criteria discussed above under the
heading "Performance-Based Compensation".
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
EXECUTIVE ANNUAL INCENTIVE PLAN.
PROPOSAL 4 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Unless otherwise specified by the stockholders, votes will be cast
pursuant to the proxies in favor of the ratification of the
appointment by the Board of Coopers & Lybrand L.L.P. as independent
accountants for the Corporation for the year 1998. Coopers & Lybrand
LLP has been the Corporation's auditors since 1994, and of Entergy
Gulf States, Inc., an operating subsidiary, since 1933. Coopers &
Lybrand LLP does not have any other relationship with the Corporation
or any of its subsidiaries. A representative of Coopers & Lybrand LLP
will be present at the meeting and will be available to respond to
questions by stockholders and will be given an opportunity to make a
statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P.
STOCKHOLDER PROPOSALS FOR 1999 MEETING. For a stockholder proposal to
be included in the proxy statement for our next annual meeting, the
proposal must be received by the Corporation at its principal offices
no later than November 30, 1998. Also, under our Bylaws, stockholders
must give advance notice of nominations for director or other business
to be addressed at the meeting not later than the close of business on
March 16, 1999 and not earlier than February 19, 1999.
By order of the Board of Directors,
/s/ Edwin Lupberger
Edwin Lupberger
Chairman of the Board and Chief Executive Officer
Dated: March 30, 1998
