Notice of Annual Meeting of Stockholders
New Orleans, Louisiana
March 31, 1999
To the Stockholders of ENTERGY CORPORATION:
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
Date: Friday, May 14, 1999
Time: 10:00 a.m. Central Daylight Time
Place: James M. Cain Energy Education Center
Highway 3127
Taft, Louisiana
MATTERS TO BE VOTED ON
1. Election of Fifteen Directors.
2. Stockholder proposal concerning discontinuance of
certain stock based compensation.
3. Stockholder proposal concerning tying executive
compensation to the amount of dividends paid by the company.
4. Stockholder proposal concerning the reinstitution of
quarterly reports to the stockholders.
5. Ratification of the appointment of
PricewaterhouseCoopers LLP as our independent accountants
for 1999.
/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
GENERAL 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. 4
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 11
Nuclear Committee 11
Public Affairs Committee 11
Executive Committee 11
Director Affairs Committee 12
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 13
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. 13
REPORT OF PERSONNEL COMMITTEE ON EXECUTIVE COMPENSATION 14
COMPARISON OF FIVE YEAR CUMULATIVE RETURN 16
EXECUTIVE COMPENSATION TABLES 17
Summary Compensation Table 17
Option Grants to the Executive Officers in 1998 18
Aggregated Option Exercises in 1998 and December 31,
1998 Option Values 19
Long-Term Incentive Plan Awards in 1998 19
RETIREMENT INCOME PLAN 19
Retirement Income Plan Table 20
PENSION EQUALIZATION PAYMENTS. 20
SUPPLEMENTAL RETIREMENT PLANS. 20
SYSTEM EXECUTIVE RETIREMENT PLAN 20
System Executive Retirement Plan Table 21
EXECUTIVE EMPLOYMENT CONTRACTS AND RETIREMENT AGREEMENTS. 21
PROPOSAL 2 - STOCKHOLDER PROPOSAL CONCERNING
DISCONTINUANCE OF CERTAIN STOCK BASED COMPENSATION 22
PROPOSAL 3 - STOCKHOLDER PROPOSAL CONCERNING EXECUTIVE
COMPENSATION 23
PROPOSAL 4 - STOCKHOLDER PROPOSAL CONCERNING
REINSTITUTION OF QUARTERLY REPORTS 24
PROPOSAL 5 - APPOINTMENT OF INDEPENDENT ACCOUNTANTS 24
STOCKHOLDER PROPOSALS FOR 2000 MEETING. 25
<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 J. Wayne Leonard, Paul W. Murrill and Wm.
Clifford Smith, 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 refer to Entergy Corporation.
This proxy statement is being sent to our stockholders on or
about March 31, 1999.
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 15,
1999. At the close of business on March 15, 1999, a total
of 246,494,143 shares of Common Stock was 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 that 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. Proxies granted by either of
these methods are valid under applicable state law. 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 matters to be voted
on at the Annual Meeting are routine.
VOTES NECESSARY FOR ACTION TO BE TAKEN. Fifteen directors
will be elected at the meeting, meaning that the fifteen
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. For all other
proposals to pass, they must receive a majority of the
outstanding shares entitled to vote. In those cases,
"broker non-votes" will be counted as a vote against the
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 15, 1999 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, 1998:
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Barrow, Hanley, Mewhinney &
Strauss, Inc. ("BHM&S") 29,375,128 (1) 11.9%
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75204-2429
Brinson Partners, Inc. ("BPI") 18,558,909 (2) 7.5%
209 South LaSalle
Chicago, Illinois 60604-1295
FMR Corp ("FMR") 14,516,890 (3) 5.9%
82 Devonshire Street
Boston, Massachusetts 02109
Franklin Resources, Inc. ("FRI") 18,844,700 (4) 7.6%
777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, California 94403-7777
Putnam Investments, Inc. 15,476,679 (5) 6.3%
One Post Office Square
Boston, Massachusetts 02109
Vanguard Windsor Funds-Vanguard
Windsor II Fund 21,267,400 (6) 8.62%
c/o The Vanguard Group
455 Devon Park Drive
Wayne, Pennsylvania 19087-1815
(1) Of the 29,375,128 shares, BHM&S has sole investment
power as to all 29,375,128 shares, and has sole voting power
as to 5,419,308 shares, and shared voting power as to
23,955,820 shares.
(2) BPI has shared voting and investment power as to all
18,558,909 shares. BPI is indirectly wholly owned by UBS
(USA), Inc., which is wholly owned by UBS AG. Each of the
above companies reported identical ownership of the subject
18,558,909 shares in their reports filed with the Securities
and Exchange Commission.
(3) FMR may not vote or transfer this Common Stock. The
shares are beneficially owned by two wholly owned
subsidiaries of FMR each of which may vote and transfer the
shares beneficially owned by it. Fidelity Management and
Research Company beneficially owns 12,527,940 shares and
Fidelity Management Trust Company beneficially owns
1,979,050 shares. The remaining 9,900 shares are
beneficially owned and may be voted and transferred by
Fidelity International Limited, a Bermudan joint stock
company and former majority-owned subsidiary of Fidelity
Management and Research Company.
(4) 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 Limited, Templeton
Investment Council, Inc., and Franklin Advisory Services,
Inc., may vote and transfer 6,154,800, 11,027,549, 19,851,
35,000, 7,500 and 1,600,000 shares, respectively.
(5) Putnam Investments, Inc., a wholly owned subsidiary of
Marsh & McLennan Companies, Inc., wholly owns two registered
investment advisers: Putman Investment Management, Inc. and
The Putnam Advisory Company, Inc. which beneficially own and
have shared investment power over 14,781,631 and 695,048
shares, respectively. Putnam Investments, Inc. has shared
voting power as to 460,711 shares.
(6) The Vanguard Group has sole voting power and shared
investment power as to all 21,267,400 shares.
PROPOSAL 1 ELECTION OF DIRECTORS
GENERAL INFORMATION ABOUT NOMINEES
All nominees are currently members of the Board except
Dennis H. Reilley and Thomas F. McLarty, III, who are new
nominees. 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, 1998.
W. FRANK BLOUNT Age 60 Director Since 1987
Atlanta, Georgia
- Former Chief Executive Officer of Telstra
Communications Corporation (Australian- telecommunications
company)
- Director of First Union National Bank, Atlanta,
Georgia, Caterpillar, Inc., BHP, Ltd., National Australia
Bank, Pioneer International and Adtran, Inc.
JOHN A. COOPER, JR. Age 60 Director Since 1985
Bella Vista, Arkansas
- Chairman of the Board, President and CEO of Cooper
Communities, Inc. (recreational and retirement community
development)
- Chairman of the Board 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 65 Director Since 1998
USN (Ret.)
Plymouth, Massachusetts
- Retired Director, President and Chief Operating Officer
of Boston Edison Company (utility company)
- Vice Admiral (retired) U.S. Navy and former Commander
Naval Surface Force, Pacific
DR. NORMAN C. FRANCIS Age 67 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, New York, New York, Liberty Bank & Trust, 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 for the Southern Education
Foundation, Atlanta, Georgia
- Former Chairman of the Board of Trustees, Educational
Testing Service, Princeton, New Jersey
- Member of the Board for the Local Initiative Support
Corporation (LISC), New Orleans, Louisiana and the Greater
New Orleans Education Foundation, New Orleans, Louisiana
J. WAYNE LEONARD Age 48 Director Since 1999
New Orleans, Louisiana
- Chief Executive Officer of Entergy and Entergy
Services, Inc., January 1999-present
- Director of Entergy Arkansas, Inc., Entergy Gulf
States, Inc., Entergy Louisiana, Inc., Entergy Mississippi,
Inc., Entergy New Orleans, Inc., and Entergy Services, Inc.,
June 1998-present
- Chief Operating Officer, Entergy Arkansas, Inc.,
Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy
Mississippi, Inc., and Entergy New Orleans, Inc., March-
December, 1998
ROBERT v.d. LUFT Age 63 Director Since 1992
Chadds Ford, Pennsylvania
- Chairman of the Board, Entergy
- Acting Chief Executive Officer of Entergy, May-
December, 1998
- Former Chairman of the Board 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
ADM. KINNAIRD R. MCKEE Age 69 Director Since 1990
USN (Ret.)
Oxford, Maryland
- Former Superintendent of the United States Naval
Academy
- Former Commander of the United States Third Fleet
- Former Director of Navy Nuclear Propulsion
THOMAS F. "MACK" MCLARTY, III Age 52 Nominee
Little Rock, Arkansas
- Chairman of the Board of the McLarty Companies
(automobile dealership group)
- President and CEO of Asbury Arkansas Automotive, LLC
(automobile dealership group)
- Director of Acxiom Corporation (data and information
technology)
- Former White House Special Envoy to the Americas
- Former Chief of Staff and Counselor to President
Clinton
- Former member of National Economic Council
- Former member of the St. Louis Federal Reserve Board
- Former member of the National Petroleum Council and the
National Council on Environmental Quality
- Former Chief Executive Officer of Arkla, Inc.
DR. PAUL W. MURRILL Age 64 Director Since 1993
Baton Rouge, Louisiana
- Chairman of the Board of Piccadilly Cafeterias, Inc.,
Baton Rouge, Louisiana
- Former Chancellor of Louisiana State University and A&M
College, Baton Rouge, Louisiana
- Retired Chairman of the Board and Chief Executive
Officer of Entergy Gulf States, Inc.
- 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 60 Director Since 1986
Boston, Massachusetts
- Partner, Nichols & Pratt (family trustees), Attorney
and Chartered Financial Analyst
- Life Trustee of the Boston Museum of Science
EUGENE H. OWEN Age 69 Director Since 1993
Baton Rouge, Louisiana
- Chairman and President of Utility Holdings, Inc.
(holding company for Ascension Water Company, 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., Ascension Water
Company, Baton Rouge Water Company, and Louisiana Water
Company, Baton Rouge, Louisiana
- Member and Chairman Elect, Board of Directors, Our Lady
of the Lake Regional Medical Center, Baton Rouge, Louisiana
- Chairman, Board of Directors, French Settlement Water
Company, Inc.
- Director, National Association of Water Companies
JOHN N. PALMER, SR. Age 64 Director Since 1992
Jackson, Mississippi
- Chairman of the Board of Skytel Communications, Inc.,
Jackson, Mississippi
- Director of the Foundation for the Mid-South, Jackson,
Mississippi
- Member of the Board of Trustees, Millsaps College
- Chairman of the National Trustees, National Symphony
Orchestra, Washington, D.C.
- Director Eastgroup Properties
- Director First American Corporation
DENNIS H. REILLEY Age 45 Nominee
Chadds Ford, Pennsylvania
- Senior Vice President of DuPont
- Former Vice President and General Manager of DuPont
White Pigment & Mineral Products
- Former Vice President and General Manager of DuPont
Specialty Chemicals
- Former Vice President and General Manager of DuPont
Lycrar /Terathaner
- Director of Chemical Manufacturers Association
WM. CLIFFORD SMITH Age 63 Director Since 1983
Houma, Louisiana
- President of T. Baker Smith & Son, Inc. (consultants-
civil engineering and land surveying). During 1998, T.
Baker Smith & Son, Inc. performed land surveying services
for Entergy Louisiana, Inc. and was paid approximately
$13,624. Mr. Smith's children own 100% of the voting stock
of T. Baker Smith & Son, Inc.
BISMARK A. STEINHAGEN Age 64 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 1998, the Board of Directors met thirteen times.
Reference to the "Board" means 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 meetings of the
Board and committees on which they serve.
COMMITTEES OF THE BOARD. The Board of Directors has seven
standing committees.
Audit Committee. 7 meetings in 1998
Present Members: Paul W. Murrill (Chairman)
George W. Davis
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. 7 meetings in 1998
Present Members: John A. Cooper, Jr. (Chairman)
W. Frank Blount
Robert v.d. Luft
James R. Nichols
Eugene H. Owen
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.13 meetings in 1998
Present Members: W. Frank Blount (Chairman)
James R. Nichols
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 1998
Present Members: Kinnaird R. McKee (Chairman)
George W. Davis
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. 4 meetings in 1998
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.8 meetings during 1998
Present Members: Robert v.d. Luft (Chairman)
J. Wayne Leonard
W. Frank Blount
John A. Cooper, Jr.
John N. Palmer, Jr.
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 1998
Present Members: Robert D. Pugh (Chairman)
John A. Cooper, Jr.
Robert v.d. Luft
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 a director. 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. Effective May 14, 1999,
Directors will receive only one-half the fees set forth
above for telephone attendance at Board or committee
meeting. Also, effective May 14, 1999, committee
chairpersons will receive $5,000 annually for their service.
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 separation from Board service,
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 salaries. 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), Nichols, Owen, and Dr. Francis
served during 1998 as members of the Personnel Committee of
the Board. None of these directors have ever been officers
or employees of Entergy.
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
The table below shows how much Common Stock each current
director, nominee, and executive officer named in the
"Summary Compensation Table" on page 17 beneficially owned
as of December 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,
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 of Beneficial
Ownership Ownership
Sole Other Sole Voting Other
Voting Beneficial and Beneficial
and Ownership Investment Ownership
Name Investment (a) Name Power (a)
Power
<S> <C> <C> <C> <C> <C>
W. Frank Blount 5,634 - ADM. Kinnaird R. McKee 3,367 -
John A. Cooper, Jr. 8,134 - Thomas F. McLarty, III - -
VADM. George W. Davis 300 - Dr. Paul W. Murrill 3,011 -
Dr. Norman C. Francis 1,500 - James R. Nichols 7,014 -
Frank F. Gallaher 15,223 45,000 Eugene H. Owen 4,292 -
Donald C. Hintz 3,157 55,000 John N. Palmer, Sr. 16,182 -
Jerry D. Jackson 21,804 51,911 Robert D. Pugh 6,400 6,500 (b)
J. Wayne Leonard - - Dennis H. Reilley - -
Robert v.d. Luft 8,884 - Wm. Clifford Smith 7,598 -
Edwin Lupberger 30,203 116,824 (b) Bismark A. Steinhagen 8,837 -
Jerry L. Maulden 9,453 32,500
All directors, nominees, 180,366 330,735
and executive officers
</TABLE>
(a) Includes Common Stock in the form of stock options that
are currently exercisable as follows: Mr. Gallaher,
45,000 shares; Mr. Hintz, 55,000 shares; Mr. Jackson,
51,911 shares; Mr. Lupberger, 113,824 shares; and Mr.
Maulden, 32,500 shares.
(b) Includes 6,500 shares of Common Stock held by Mrs. Pugh
as to which Mr. Pugh disclaims beneficial ownership and
2,500 shares held by Mrs. Lupberger of which Mr. Lupberger
disclaims beneficial ownership. In addition, Mr. Lupberger
owns 500 shares in joint tenancy with his mother, for which
he disclaims beneficial ownership.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Directors and certain executive 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 1998, all directors and officers filed the
necessary reports on time except William D. Bandt, a former
officer of the corporation, was late in reporting his
exercise of 2,500 stock options and the subsequent sale of
the shares in December 1998; Edwin Lupberger, a former
executive officer of the Corporation, was late in reporting
his receipt of 4,828 shares in September 1998 under the
Company's Equity Awards Program and subsequent sale of 2,897
shares (the remaining 1,931 shares sold to cover tax
withholding); and Louis E. Buck, a former officer of the
Corporation, was late in reporting his receipt of 2,593
shares in January 1999 under the Company's Equity Awards
Program and subsequent sale of 1,556 shares (the remaining
1,037 shares sold to cover tax withholding). 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 amendment 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. In 1998, the Committee used similar-sized electric
utility companies (based on revenue) as the peer group for
assessing the competitiveness of its compensation programs.
In 1998, this peer group was 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 above or
below the 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 group. The Board of Directors did not
grant Mr. Lupberger a 1998 increase as reflected in the
"Summary Compensation Table" on page 17. Mr. Luft assumed
Mr. Lupberger's responsibilities as Chairman and Acting CEO
on May 28, 1998 and was paid $473,846 in base salary.
Benefits and Perquisites
Executives were provided pension plan benefits, medical and
life insurance, and long-term disability insurance. In
addition for part of 1998, executives received special
executive remuneration including perquisites. In August
1998 Entergy eliminated all perquisites for executive
officers.
Annual Incentive Compensation
Each executive's annual incentive compensation is based on
the attainment of key strategic goals and objectives
including improvement in earnings per share and operating
cash flows, 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 1998, Mr. Lupberger received a cash incentive award of
$441,336, a prorated share for the portion of the year he
was employed by Entergy prior to his retirement on August 1,
1998. Mr. Luft received a cash incentive award of $760,925.
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. Mr. Lupberger's
grant in 1998 for 1997 performance of 5,000 options is
outlined in the stock options table on page 13. In
addition, Mr. Lupberger and Mr. Luft received 126,000 and
135,000 options, respectively, for performance in 1998 under
the Equity Ownership Plan. Finally, restrictions were
lifted on 12,766 shares as a result of Mr. Luft achieving
performance goals under the 1998 Betterment Plan.
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 spanned the 1996 through 1998 performance period.
Under this Long-Term Incentive Plan, the corporation was
required to achieve pre-set levels of performance in the
area of total return to shareholders, compared to the peer
group over the three-year performance period. The
corporation did not achieve its performance goals under this
plan. Therefore, no shares were earned under this plan.<FN1>
In 1998, the Board of Directors adopted a three-year Long-
Term Incentive Plan, which spans a 1998 through 2000
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, as well as pre-set levels of
return on capital over the three year performance period.
_______________________________
<FN1> Had the plan achieved its target, the shares earned under
the plan would have been prorated to 2/3 of the three-year
amount, so as not to overlap with the 1998 through 2000 plan
discussed in the next paragraph.
Total Compensation
As reported in the "Summary Compensation Table," in 1998, Mr.
Lupberger's participation in each compensation component was as
follows:
o Salary 51%
o Bonus 39%
o Other Annual Compensation 8%
o Long-Term Incentive Compensation 0%
o All Other Compensation* 2%
* Excludes $11,060,311 related to a retirement lump sum payment
($9,721,849) and severance payments ($1,338,462).
As reported in the "Summary Compensation Table," in 1998, Mr. Luft's
participation in each compensation component was as follows:
o Salary 31%
o Bonus 49%
o Other Annual Compensation 20%
o Long-Term Incentive Compensation 0%
o All Other Compensation 0%
Mr. Lupberger's total 1998 compensation level was below the target
compensation level when compared to the compensation peer group
companies. Mr. Luft's total 1998 compensation level was also 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. Key requirements include 1) that compensation
over $1 million must be performance-based, 2) that incentive plans
must be approved by shareholders.
All Entergy incentive plans meet the requirements of the Internal
Revenue Code for deductibility. As a result, no executive officers
earned compensation in excess of $1 million in 1998 that was not
deductible.
Members of the Personnel Committee:
W. Frank Blount, Chairman
Norman C. Francis
James R. Nichols
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
1993 1994 1995 1996 1997 1998
Entergy $100 66 200 94 108 118
S&P 500 (2) $100 101 139 170 227 291
S&P EUI (2) $100 87 113 113 141 162
(1) Assumes $100 invested on December 31, 1993, in Common Stock, the
S&P 500, and the S&P Electric Utilities Index, and reinvestment of
all dividends.
(2) Cumulative total returns calculated from the S&P 500 Index and
S&P Electric Utilities Index maintained by Standard & Poor's
Corporation.
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards
Restricted Securities
Other Annual Stock Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Awards Options Compensation(a)
<S> <C> <C> <C> <C> <C> <C> <C>
J. Wayne Leonard 1998 $412,843 $1,145,416 $65,787 $796,860(b)(c) 0 shares $18,125
Chief Operating Officer, Domestic
Utility Companies and
Chief Executive Officer (d)
Robert v.d. Luft 1998 $473,846 $760,925 $1,190 $303,959(b)(c) 40,000 shares $ 0
Chairman of the Board and Acting
Chief Executive Officer (d)
Edwin Lupberger 1998 $589,231 $441,336 $94,867 (b) 5,000 shares $11,081,645(e)
Former Chairman of the Board and 1997 785,385 0 271,422 (b) 10,000 23,562
Former Chief Executive Officer (d) 1996 735,577 448,794 123,601 (b) 10,000 23,567
Frank F. Gallaher 1998 $382,829 $350,934 $89,137 (b) 2,500 shares $12,396
Group President and Chief 1997 327,385 0 11,132 (b) 5,000 9,822
Utility Operating Officer 1996 276,538 130,150 35,641 (b) 5,000 10,321
Donald C. Hintz 1998 $423,379 $269,846 $28,508 (b) 2,500 shares $14,236
President 1997 365,077 0 18,245 (b) 5,000 10,952
1996 343,269 231,299 12,516 (b) 5,000 14,197
Jerry D. Jackson 1998 $408,456 $348,156 $59,630 (b) 2,500 shares $13,849
Executive Vice President 1997 342,077 0 56,359 (b) 5,000 10,262
1996 332,115 209,489 37,928 (b) 5,000 13,862
Jerry L. Maulden 1998 $476,287 $388,022 $42,712 (b) 2,500 shares $17,782
Vice Chairman 1997 445,615 0 67,485 (b) 5,000 13,369
1996 435,000 260,301 27,056 (b) 5,000 14,550
</TABLE>
(a) Includes the following:
(1) 1998 benefit accruals under the Defined Contribution Restoration
Plan as follows: Mr. Gallaher $6,908; Mr. Hintz $8,748; Mr.
Jackson $8,361; Mr. Lupberger $16,131; and Mr. Maulden $12,982.
(2) 1998 employer contributions to the Entergy Stock Ownership Plan of
$688 each for Mr. Gallaher, Mr. Hintz, and Mr. Jackson, and $403
for Mr. Lupberger.
(3) 1998 employer contributions to the System Savings Plan as follows:
Mr. Gallaher $4,800; Mr. Hintz $4,800; Mr. Jackson $4,800; Mr.
Lupberger $4,800; and Mr. Maulden $4,800.
(b) Restricted stock awards in 1998 are reported under the "Long-Term
Incentive Plan Awards" table. Reference is made to this table for
information on the aggregate number of restricted shares awarded during
1998 and the vesting schedule for such shares. At December 31, 1998, the
number and value of the aggregate restricted stock holdings were as
follows: Mr. Gallaher 7,497 shares, $233,344; Mr. Hintz 27,006 shares,
$840,562; Mr. Jackson 27,000 shares, $840,375; Mr. Leonard 85,080 shares,
$2,648,115; Mr. Luft 12,766 shares, $397,342; Mr. Lupberger 13,056 shares,
$406,368; and Mr. Maulden 13,500 shares, $420,188. Accumulated dividends
are paid on restricted stock when vested. No restrictions were lifted in
1998, 1997, and 1996. The value of restricted stock holdings as of
December 31, 1998 are determined by multiplying the total number of shares
awarded by the closing market price of Entergy Corporation common stock on
the New York Stock Exchange Composite Transactions on December 31, 1998
($31.125 per share).
(c) In addition to the restricted shares granted under the Long Term
Incentive Plan, Mr. Leonard was granted 30,000 additional restricted
shares. Restricted shares awarded will vest incrementally over a three-
year period, beginning in 1999, based on continued service with Entergy.
Restrictions will be lifted annually. The value Mr. Leonard may realize is
dependent upon both the number of shares that vest and the future market
price of Entergy common stock. Accumulated dividends are not paid on Mr.
Leonard's restricted stock when vested. Mr. Luft was granted 12,766
additional restricted shares. The restrictions on the shares were lifted
on January 1, 1999. Accumulated dividends will be paid on Mr. Luft's
restricted stock when vested.
(d) Mr. Luft and Mr. Lupberger are included in the compensation table
because they served as acting and former Chief Executive Officers of
Entergy in 1998, respectively. As of January 1, 1999, Mr. Leonard is the
Chief Executive Officer of Entergy.
(e) Includes $1,338,461 of severance payments; $9,553,226 of a lump sum
distribution under the System Executive Retirement Plan (SERP); and a
$168,623 payment under the Defined Contribution Restoration Plan.
<TABLE>
<CAPTION>
Option Grants to the Executive Officers in 1998
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(c)
Name Granted 1998 share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
J. Wayne Leonard - - - - -
Robert v. d. Luft 40,000(b) 32.3% $31.1 1/01/09 $782,974 $1,984,209
Edwin Lupberger 5,000(a) 4.0% 28.6 1/22/08 90,011 228,104
Frank F. Gallaher 2,500(a) 2.0% 28.6 1/22/08 45,005 114,052
Donald C. Hintz 2,500(a) 2.0% 28.6 1/22/08 45,005 114,052
Jerry D. Jackson 2,500(a) 2.0% 28.6 1/22/08 45,005 114,052
Jerry L. Maulden 2,500(a) 2.0% 28.6 1/22/08 45,005 114,052
</TABLE>
(a) Options were granted on January 22, 1998, pursuant to the Equity
Ownership Plan. All options granted on this date have an exercise price
equal to the closing price of Entergy common stock on the New York Stock
Exchange Composite Transactions on January 22, 1998. These options became
exercisable on July 22, 1998.
(b) Options were granted on December 31, 1998 and will become exercisable
on January 1, 2000.
(c) Calculation based on the market price of the underlying securities
assuming the market price increases over a ten-year option period and
assuming annual compounding. The column presents 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 1998 and December 31, 1998 Option Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
Shares Acquired Value as of December 31, 1998 as of December 31, 1998(b)
Name on Exercise Realized (a) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
J. Wayne Leonard - - - - - -
Robert v.d. Luft - - - 40,000 - -
Edwin Lupberger - - 113,824 - $674,329 -
Frank F. Gallaher - - 45,000 - 313,750 -
Donald C. Hintz - - 55,000 - 336,875 -
Jerry D. Jackson - - 51,911 - 298,413 -
Jerry L. Maulden 25,000 $221,875 32,500 - 84,375 -
</TABLE>
(a) Based on the difference between the closing price of Common Stock on
the New York Stock Exchange Composite Transactions on the exercise date
and the option exercise price.
(b) Based on the difference between the closing price of Common Stock on
the New York Stock Exchange Composite Transactions on December 31, 1998,
and the option exercise price.
Long-Term Incentive Plan Awards in 1998
The following table summarizes awards of restricted shares of Common Stock
under the Equity Ownership Plan in 1998 to the executive officers named in
the compensation table on page 17.
<TABLE>
<CAPTION>
Performance Estimated Future Payouts Under
Number Period Until Non-Stock Price-Based Plans (a)(b)
Name of Shares Maturation or Payout Threshold Target Maximum
<S> <C> <C> <C> <C> <C>
J. Wayne Leonard 55,080 1/1/98-12/31/00 18,360 36,720 55,080
Edwin Lupberger 13,056 1/1/98-12/31/00 4,352 8,704 13,056
Frank F. Gallaher 7,497 1/1/98-12/31/00 2,499 4,998 7,497
Donald C. Hintz 27,006 1/1/98-12/31/00 9,002 18,004 27,006
Jerry D. Jackson 27,000 1/1/98-12/31/00 9,000 18,000 27,000
Jerry L. Maulden 13,500 1/1/98-12/31/00 4,500 9,000 13,500
</TABLE>
(a) Restricted shares awarded under the Equity Ownership Plan will vest at
the end of a three-year period, subject to the attainment of approved
performance goals for Entergy. Restrictions are lifted upon the
achievement of the cumulative result of these goals for the performance
period. The value any executive officer may realize is dependent upon both
the number of shares that vest and the future market price of Common Stock.
(b) The threshold, target, and maximum levels correspond to the
achievement of 50%, 100%, and 150%, respectively, of Equity Ownership Plan
goals. Achievement of a threshold, target, or maximum level would result
in the award of the numbers of shares indicated in the respective column.
Achievement of a level between these three specified levels would result in
the award of a number of shares calculated by means of interpolation.
RETIREMENT INCOME PLAN. The Corporation has a defined benefit plan for
employees, including executive officers, 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, 1998, for the
following executive officers were Mr. Gallaher (29), Mr. Leonard (1), and
Mr. Maulden (33). Because they entered into supplemental retirement
agreements, the credited years of service under this plan for the following
executive officers were Mr. Hintz (27), Mr. Jackson (19), and
Mr. Lupberger (35).
The following table shows the annual retirement benefits that would be paid
at normal retirement (age 65 or later) and includes covered pay for the
executive officers included in the summary compensation table on page 17.
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
and are indicated in the above referenced pension table.
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. The plan was amended this year to
provide that covered pay is the average of the highest three years annual
base pay and incentive compensation earned by the executive during the ten
years immediately preceding his 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. The amended plan provides that the single
employee receives a lifetime annuity and a married employee receives the
reduced 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 the
executive retirement plan are as follows: Mr. Gallaher (29), Mr. Lupberger
(35), Mr. Maulden (33), Mr. Hintz (27), and Mr. Jackson (25). Mr.
Maulden's retirement benefits are discussed below. His benefits will be
calculated based on his final annual base pay and incentive awards, with no
reduction on the surviving spouse annuity, the provisions in effect prior
to the amendment to the plan.
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
Pay 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 the average of the three highest years of annual
base pay and incentive awards earned by the executive during the ten year
immediately preceding his retirement. Benefits shown are based on a
replacement ratio of 50% based on the years of service and covered pay
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 EMPLOYMENT CONTRACTS AND RETIREMENT AGREEMENTS. In connection
with his retirement, Mr. Lupberger entered into an agreement with the
Corporation, which provided that he would receive, subject to certain
conditions, a severance payment of $1,338,462 paid in a lump sum. In
addition, Mr. Lupberger received all benefits he would have received under
the incentive plans, pro rated through July 31, 1998, the last day of his
employment. All amounts paid or earned are included in the compensation
table above, except for 93,333 stock options with an exercise price of
$29.94 that he received at his pro rata share of the 1998 Long Term
Incentive Award. Mr. Lupberger has until January 31, 2009 to exercise
these options. Mr. Lupberger will receive all retirement benefits pursuant
to the retirement plans in which he participated.
In connection with his early retirement, Mr. Maulden entered into an
agreement with Entergy. Beginning on April 1, 1999, Mr. Maulden will
continue to serve as Vice Chairman, and will continue to receive his base
salary, incentive pay and all other benefits but will be no longer be
responsible for any organizational responsibilities. On April 1, 2000, his
retirement date, Mr. Maulden will receive retirement benefits as though he
had continued as an active employee until age 65 without the application of
2% per year early retirement discount factor. In addition, the Company has
agreed to fund a named chair to honor Mr. Maulden at the University of
Arkansas at Little Rock for $1,000,000. The funding will be made in four
equal installments to be paid directly to the university beginning on April
1, 1999, and thereafter on April 1, 2000, 2001, 2002.
In connection with Mr. Leonard's employment, the Company entered into a
agreement with him that provided for an annual salary of $600,000 and a
potential annual incentive payout of 70%. In addition to participation in
the incentive and stock option plans, Mr. Leonard received a signing bonus
of $500,000 and a retention award of 30,000 restricted shares of Common
Stock. As long as Mr. Leonard remains employed, the restrictions will be
lifted 10,000 shares per year beginning on his first employment
anniversary. In lieu of participation in Entergy Executive Retirement
Plans, Entergy agreed to provide Mr. Leonard with a retirement benefit
comparable to the one provided by his previous employer. This benefit will
be calculated on the basis of 60% of his highest three year average base
salary and annual incentive payments, and will be offset by Mr. Leonard's
vested retirement benefit from his previous employment. This retirement
benefit can begin at age 55.
If Mr. Leonard should resign prior to age 55 without permission, he will
forfeit this replacement benefit and receive only regular accrued pension
benefits. If he should resign prior to age 55 with the Corporation's
permission, he will receive the replacement benefit, but discounted at the
rate of 6.5% for each year before age 55. This benefit would not be
payable until age 62. Mr. Leonard's agreement contains a "change of
control" provision that provides for an immediate vesting of the 60%
replacement pension benefit plus a lump sum payment of 2.99 times the
average of his most recent three years base pay.
PROPOSAL 2 - 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 to
the 1999 Annual Meeting of Stockholders:
"That the Officers and Directors consider the discontinuance of all
bonuses immediately, and options, rights, SAR's, etc. after termination
of any existing programs for top management. This does not include any
programs for employees."
STATEMENT OF SECURITY HOLDER. Reasons: Management and Directors are
compensated enough to buy on open market, just as you and I, if they are
motivated. Management is already well paid with base pay, life insurance,
retirement plans, paid vacations, free use of vehicles, etc. Options,
rights, SAR;s, etc. are available elsewhere, and a higher offer would
induce transfers, not necessarily "hold and retain" qualified persons.
Comparison with "peer groups", [other similar companies] pay is unfair, as
other management could be better or worse. Would they also accept mistakes
of others? "Align management with shareowners" is a repeated ploy or
"line" to lull us as to continually increasing their take of our assets.
Do we get any purchase options at previous rates? Please vote YES for this
proposal. If officers filled out a daily work sheet, what would the output
show?
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
stockholders to link compensation to corporate performance and increase in
stockholder 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 stockholders in 1998, was
developed under the auspices of the Personnel Committee (which is comprised
exclusively of outside independent directors) to link rewards to
achievement of both corporate and individual performance goals designed to
increase stockholder value.
The Corporation currently grants no SAR's or rights to its directors or
executives, but does grant stock options to non-employee directors,
executives and key employees. The Board believes that stock options are an
excellent performance based incentive that can reward recipients if and
when stockholder value increases. As such, options are an important
feature of an overall compensation package that reinforces the common
interests of stockholders and management in the vitality of the
Corporation. Additionally, almost all of the Corporation's employees can
benefit from an increase in value 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 stockholder 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.
PROPOSAL 3 - STOCKHOLDER PROPOSAL CONCERNING TYING EXECUTIVE COMPENSATION
TO THE AMOUNT OF DIVIDENDS PAID BY THE COMPANY
The Corporation has been advised that Mr. Emil Rossi, P.O. Box 249,
Boonville, California 95415, a holder of 558 shares of the Corporation's
Common Stock, proposes to submit the following resolution to the 1999
Annual Meeting of Stockholders:
"The shareholders of Entergy Corporation request the Board of Directors
take the necessary steps to amend the company's governing instruments to
adopt the following: Beginning on the 2000 Entergy fiscal year the
policy of the company shall be to tie at least half of Executive
Management's compensation to the amount of common shareholder's dividend
paid out each year."
STATEMENT OF SECURITY HOLDER. Dividends are the real gauge of how a
corporation is doing and it behooves management to pay out at least a
certain percentage of earnings in dividends to the shareholders who have
faithfully held on to their shares. There has to be a reward. That's what
the whole American economic system is all about. Management wants big
money up front. They don't want promises or total return or other hocus
pocus. They want cash so they can go forth and enjoy the finer things of
life. Like limousines, mansions and yachts. The little things of life
that make one's existence bearable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL FOR THE
FOLLOWING REASONS:
As discussed in this Proxy Statement, the Personnel Committee has designed
the compensation program for management to provide total compensation that
emphasizes long-term performance to increases stockholder value. This
compensation structure is designed to attract and retain highly capable
executives to manage the Corporation's businesses. The Corporation
competes for executive personnel in a national marketplace, which is highly
competitive. In order to retain its current management team and to attract
new management talent, the Corporation must be in a position to offer such
persons compensation that is competitive with that of other major
companies.
The foregoing proposal seeks to link at least half of executive
management's compensation to the amount of dividends paid by the
Corporation. The Board of Directors opposes the establishment of this
linkage because tying executive compensation to one single measure, such as
dividends, would create a very narrow short-term focus for the executive
management team. The Board believes that the overall interests of
stockholders will best be met by maintaining its current criteria for
executive compensation.
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.
PROPOSAL 4 - STOCKHOLDER PROPOSAL CONCERNING THE REINSTITUTION OF QUARTERLY
REPORTS TO THE STOCKHOLDERS
The Corporation has been advised that Ms. Rita Warren, 20120 N. E. Second
Avenue, North Miami Beach, Florida 33179, a holder of 600 shares of the
Corporation's Common Stock, proposes to submit the following resolution to
the 1999 Annual Meeting of Stockholders:
"WHEREAS no publicly held, stockholder owned, corporation should be
permitted to function secretly, with no information forthcoming to the
stockholders for one entire year; with stockholders having no knowledge
of nor information on any and all matters pertaining to the
corporation's activities, investments, profits, losses, and/or salary
increases, bonuses, stock options, retirement benefits, etc. being
granted to the executive officers.while dividend payments remain static
for years on end;
"THEREFORE, BE IT RESOLVED that Entergy Corporation be compelled to
resume issuing Quarterly Stockholders Reports without further delay and
to continue same in a timely fashion as long as this corporation remains
in existence as a publicly held, stockholder owned corporation!"
STATEMENT OF SECURITY HOLDER: See WHEREAS statement in above proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL FOR THE
FOLLOWING REASONS:
Entergy files all required annual, quarterly and periodic reports required
of a registrant pursuant to the Securities Exchange Act of 1934 and those
required of a listed company by the New York Stock Exchange. All such
reports are publicly available and, in case of reports filed with the
Securities and Exchange Commission, are available for free on the
Commission's internet database. Additionally, Entergy stockholders are
notified each year in Entergy's Annual Report that they may dial a toll
free number and receive by either mail or fax all dividend and earnings
information that was previously included in quarterly reports. Also
available on Entergy's Internet home page are, among other things,
Entergy's stock price, press releases and the full text of Entergy's
filings with the Securities and Exchange Commission (including Form 10-K's,
Form 10-Q's, Proxy Statements and Annual Reports) since May of 1994. These
sources provide to shareholders precisely the information this proposal
seeks to obtain by reinstituting the quarterly reports. Additionally, the
discontinuance of the distribution of paper quarterly reports has resulted
in saving to the Corporation of the related postage and printing expenses.
For the reasons stated above, the Board of Directors recommends a vote
"AGAINST" this proposal.
Approval of this stockholder 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.
PROPOSAL 5 - 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 PricewaterhouseCoopers LLP (formerly Coopers & Lybrand LLP) as
independent accountants for the Corporation for the year 1999.
PricewaterhouseCoopers LLP has been the Corporation's auditors since 1994,
and of Entergy Gulf States, Inc., an operating subsidiary, since 1933. A
representative of PricewaterhouseCoopers 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 PRICEWATERHOUSECOOPERS LLP
STOCKHOLDER PROPOSALS FOR 2000 MEETING. For a stockholder proposal to be
included in the proxy statement for our next annual meeting, including a
proposal for the election of a director, the proposal must be received by
the Corporation at its principal offices no later than December 2, 1999.
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 15, 2000 and not earlier than
February 18, 2000.
By order of the Board of Directors,
/s/ Robert v.d. Luft
Robert v.d. Luft
Chairman of the Board
Dated: March 31, 1999
