Notice of Annual Meeting of Stockholders
New Orleans, Louisiana
March 27, 2002
To the Stockholders of ENTERGY CORPORATION:
NOTICE OF THE ANNUAL MEETING OF STOCKHOLDERS
Date: Friday, May 10, 2002
Time: 10:00 a.m. Central Daylight Time
Place: Peabody Little Rock Hotel
3 Statehouse Plaza
Little Rock, AR 72201
MATTERS TO BE VOTED ON
1. Election of Fifteen Directors.
2. Stockholder proposal concerning certain wording on the
Corporation's proxy card.
3. Stockholder proposal concerning "poison pills."
/s/ Michael G. Thompson
Michael G. Thompson
Secretary
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 9
Audit Committee 10
Finance Committee 10
Personnel Committee 10
Nuclear Committee 10
Director Affairs/Public Affairs Committee 11
Executive 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
AUDIT COMMITTEE REPORT. 14
INDEPENDENT ACCOUNTANTS. 14
REPORT OF PERSONNEL COMMITTEE ON EXECUTIVE COMPENSATION 16
COMPARISON OF FIVE YEAR CUMULATIVE RETURN 18
EXECUTIVE COMPENSATION TABLES 19
Summary Compensation Table 19
Option Grants to the Executive Officers in 2001 20
Aggregated Option Exercises in 2001 and December 31,
2001 Option Values 20
Long-Term Incentive Plan Awards in 2001 21
RETIREMENT INCOME PLAN 21
Retirement Income Plan Table 21
PENSION EQUALIZATION PAYMENTS. 22
SUPPLEMENTAL RETIREMENT PLANS. 22
SYSTEM EXECUTIVE RETIREMENT PLAN 22
System Executive Retirement Plan Table 23
EXECUTIVE EMPLOYMENT CONTRACTS AND RETIREMENT AGREEMENTS. 23
EXECUTIVE RETENTION AGREEMENTS. 23
PROPOSAL 2 - STOCKHOLDER PROPOSAL CONCERNING CERTAIN WORDING
ON THE CORPORATION'S PROXY CARD 27
PROPOSAL 3 - STOCKHOLDER PROPOSAL CONCERNING "POISON PILLS" 28
STOCKHOLDER PROPOSALS FOR 2003 MEETING 30
PROXY STATEMENT
Your vote is very important. For this reason, the Board of Directors
is requesting that unless you are able to, and intend to vote your
shares in person at this Annual Meeting of Stockholders, that you
allow your Entergy Corporation Common Stock to be represented at the
Annual Meeting by J. Wayne Leonard, Robert v.d. Luft 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 27, 2002.
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 12, 2002. At the
close of business on March 12, 2002, 222,928,270 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. Of course, you may come to the meeting and vote
your shares in person. If your Common Stock is held by a broker, bank
or other nominee, you will receive instructions from them as to how
your shares may be voted in accordance with your instructions. Follow
those instructions carefully. If you hold your shares in your own
name, you may instruct the proxies as to how to vote your Common Stock
by using the toll free telephone number listed or accessing the
Internet address on the proxy card or by signing, dating and mailing
the proxy card in the postage paid envelope provided to you. Proxies
granted by these methods are valid under applicable state law. When
you use the telephone or Internet voting system, the system verifies
that you are a stockholder through the use of a Control Number
assigned to you. The telephone and Internet voting procedures allow
you to instruct the proxies as to how to vote your shares and confirm
that your instructions have been properly recorded. Your Control
Number and specific directions for using the telephone and Internet
voting system are on the proxy card. Whether you send your
instructions by mail, telephone or the Internet, 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 to the Annual
Meeting other than those described in this proxy statement. If any
other matters are presented at the meeting, the proxies will use their
own judgment in determining how to vote your shares. If the meeting
is adjourned, your Common Stock may be voted by the proxies on the new
meeting date.
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 to
us later proxy instructions or attend the meeting and vote your shares
in person.
QUORUM REQUIREMENT. The Annual Meeting cannot 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 to determine 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 by a specified date, it may vote on
matters that the New York Stock Exchange has determined to be 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. Abstentions will have no effect on
the outcome of the election of directors.
COST OF THIS PROXY SOLICITATION. We will pay the cost of this proxy
solicitation. In addition to soliciting proxies by mail, we expect
that certain of our employees may solicit stockholders for their
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 12, 2002 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 or
dispose of the Common Stock, or to 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,
2001:
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership of Class
Barrow, Hanley, Mewhinney & Strauss, Inc. ("BHM&S") 24,207,898(1) 11.0%
One McKinney Plaza
3232 McKinney Avenue, 15th Floor
Dallas, Texas 75204-2429
FMR Corp ("FMR") 11,272,342 (2) 5.1%
82 Devonshire Street
Boston, Massachusetts 02109
Putnam Investments, Inc. 14,925,850 (3) 6.7%
One Post Office Square
Boston, Massachusetts 02109
(1) BHM&S has indicated that it has sole voting power over 4,985,498
shares, sole investment power over all 24,207,898 shares and shared
voting power over 19,222,400 shares. BHM&S also advised Entergy that
it is a registered investment advisor and these shares are held on
behalf of various clients. These shares include 16,277,700 shares
(7.34%) held on behalf of the Vanguard Windsor Funds-Vanguard Windsor
II Fund, The Vanguard Group, 455 Devon Park Drive, Wayne, Pennsylvania
19087-1815.
(2) FMR may not vote or transfer this Common Stock. The shares are
beneficially owned by three 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
and has shared investment power over 10,566,460 shares, Fidelity
Management Trust Company beneficially owns and has shared
investment power over 646,276 shares and Strategic Advisers, Inc.
beneficially owns and has shared investment power over 206
shares. The remaining 59,400 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.
(3) Putnam Investments, Inc., a wholly-owned subsidiary of Marsh &
McLennan Companies, Inc., wholly owns two registered investment
advisers: Putman Investment Management, LLC and The Putnam Advisory
Company, LLC which beneficially own and have shared investment power
over 12,553,963 and 2,371,887 shares, respectively. Putnam
Investments, Inc. has shared voting power as to 1,351,387 shares.
PROPOSAL 1 ELECTION OF DIRECTORS
GENERAL INFORMATION ABOUT NOMINEES
All nominees are currently members of the Board. 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, 2001.
MAUREEN S. BATEMAN Age 58 Director Since 2000
Boston, Massachusetts
- Executive Vice President and General Counsel of State Street
Corporation (administrative and financial services for
institutional investors)
- Vice Chairman of the Board of Trustees of Fordham University
- Director of Boston Public Library Foundation; the Boston Bar
Foundation; YMCA of Boston; and Catholic Schools Foundation
of Boston
W. FRANK BLOUNT Age 63 Director Since 1987
Atlanta, Georgia
- Chairman & CEO of JI Ventures, Inc. (high-tech venture
capital fund)
- Former Chairman & CEO of Cypress Communications, Inc. (in-
building integrated communications supplier)
- Former CEO and Director of Telstra Communications Corporation
(Australian- telecommunications company)
- Former Group President of AT&T
- Director of First Union National Bank of Georgia; Caterpillar,
Inc.; Alcatel Ltd.; Adtran, Inc.; Hanson PLC; and Global Light
Communications, Inc.
VADM. GEORGE W. DAVIS Age 68 Director Since 1998
USN (Ret.)
Columbia, South Carolina
- 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
- Former Director of The University of Chicago's Board of
Governors for Argonne National Laboratories
- Former Chairman of the Board for the National Nuclear
Accrediting Board for the Institute of Nuclear Power
Operations
SIMON D. deBREE Age 64 Director Since 2001
The Netherlands
- Retired Director and CEO of DSM (chemicals, polymers, life
science products)
- Chairman of the Supervisory Boards of Stork N.V., Koninklijke
Boskalis Westminster N.V. and Parenco B.V.
- Commissioner of the Foundation de la Maison de la Chimie
- Former President of the Association of Petrochemicals
Producers in Europe and the European Chemical Industry
Council
- Former Vice President of the Association of Plastics
Manufacturers in Europe
- Former Board Member of the Dutch-German Chamber of Commerce
- Former Member of the Advisory Council of the Dutch and
Japanese Trade Federation
CLAIBORNE P. DEMING Age 47 Director Since 2002
El Dorado, Arkansas
- President and CEO of Murphy Oil Corporation (oil and gas)
- Director of Murphy Oil Company, Ltd.
- Member, Arkansas State Board of Education
DR. NORMAN C. FRANCIS Age 70 Director Since 1994
New Orleans, Louisiana
- President of Xavier University of Louisiana
- Director of The Equitable Life Assurance Society of the United
States; Liberty Bank & Trust
- Member of the Advisory Board of The Times Picayune Publishing
Co.
- Chairman of the Board for the Southern Education Foundation
- Former Chairman of the Board of Trustees, Educational Testing
Service
- Chairman of the Advisory Board for the Local Initiative
Support Corporation
J. WAYNE LEONARD Age 51 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 1998-1999
- Chief Operating Officer, Entergy Arkansas, Inc.; Entergy Gulf
States, Inc.; Entergy Louisiana, Inc.; Entergy Mississippi,
Inc.; and Entergy New Orleans; Inc.; March-December, 1998
- President, Cinergy Capital & Trading, 1998
- President, Energy Commodities Business Unit of Cinergy, 1998
- Group Vice President and Chief Financial Officer of Cinergy,
1994-1997
ROBERT v.d. LUFT Age 66 Director Since 1992
Chadds Ford, Pennsylvania
- Chairman of the Board, Entergy
- Chairman of the Board of EKLP, L.L.C.
- Member, Management Committee, EntergyShaw, L.L.C.
- 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
- Director of Stonebridge Bank
- Director of U.S. Chamber of Commerce
KATHLEEN A. MURPHY Age 51 Director Since 2000
Stamford, Connecticut
- Former Senior Vice President and Chief Financial Officer of
Connell Limited Partnership (diversified manufacturing
company)
- Trustee of Emmanuel College, Boston, Massachusetts
DR. PAUL W. MURRILL Age 67 Director Since 1993
Baton Rouge, Louisiana
- Professional Engineer
- Former 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.; Tidewater, Inc.; Howell
Corporation; Baton Rouge Water Company; and MicroProbe Inc.
- Chairman of Trustees, Burden Foundation
JAMES R. NICHOLS Age 63 Director Since 1986
Boston, Massachusetts
- Partner, Nichols & Pratt (family trustees), Attorney and
Chartered Financial Analyst
- Partner, Nichols & Pratt Advisors (registered investment
adviser)
- Life Trustee of the Boston Museum of Science
WILLIAM A. PERCY, II Age 62 Director Since 2000
Greenville, Mississippi
- President and Chief Executive Officer of Greenville Compress
Company (commercial warehouse and real estate)
- Chairman of Staple Cotton (regional cotton marketing co-op)
and Enterprise Corporation of the Delta (a non-profit
economic development corporation)
- Director of ChemFirst Inc. and Mississippi Chemical
Corporation
DENNIS H. REILLEY Age 48 Director Since 1999
Danbury, Connecticut
- Chairman, President and Chief Executive Officer of PRAXAIR,
Inc. (industrial gases)
- Director of Marathon Oil Corporation
- Former Chairman of American Chemical Council
- Former Executive Vice President & Chief Operating Officer of
Dupont (industrial products, fibers, petroleum, chemicals,
and specialty business products)
- Former 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 66 Director Since 1983
Houma, Louisiana
- Chairman of the Board of T. Baker Smith & Son, Inc.
(consultants - civil engineering and land surveying).
During 2001, T. Baker Smith & Son, Inc. performed
land-surveying services for Entergy companies and was
paid approximately $105,229. Mr. Smith's children own
100% of the voting stock of T. Baker Smith & Son, Inc.
- Member of Mississippi River Commission
- Member of Louisiana Board of Regents (Colleges and
Universities)
BISMARK A. STEINHAGEN Age 67 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 2001, the Board of Directors met twelve 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.
In 2001, all who are 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 six standing
committees.
Audit Committee. 10 meetings in 2001
Present Members: Dennis H. Reilley (Chairman)
George W. Davis
Maureen S. Bateman
Kathleen A. Murphy
Bismark A. Steinhagen
Claiborne P. Deming (elected March 8, 2002)
Functions: Discusses the audit results with management, the
Company's own internal auditors and with its
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 2001
Present Members: Paul W. Murrill (Chairman)
Robert v.d. Luft
James R. Nichols
Wm. Clifford Smith
Dennis H. Reilley
Kathleen A. Murphy
Function: Reviews all financial, budgeting and banking
policies.
Makes recommendations to the Board concerning
financial transactions and the sale of securities.
Personnel Committee. 6 meetings in 2001
Present Members: Norman C. Francis (Chairman)
William A. Percy, II
George W. Davis
W. Frank Blount
Simon D. deBree
James R. Nichols
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. 7 meetings in 2001
Present Members: George W. Davis (Chairman)
Bismark A. Steinhagen
Robert v.d. Luft
Wm. Clifford Smith
William A. Percy, II
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.
Director Affairs/
Public Affairs
Committee. 2 meetings in 2001 (Note: On May 11, 2001, the
Director Affairs Committee and the Public Affairs
Committee were consolidated into a single
committee.)
Present Members: William A. Percy, II (Chairman)
W. Frank Blount
Maureen S. Bateman
Kathleen A. Murphy
Simon D. deBree
Norman C. Francis
Claiborne P. Deming (elected March 8, 2002)
Functions: Advises and counsels management and the Board
regarding governmental, regulatory and public
relations matters and on all matters concerning
Directors, including committee memberships,
compensation and performance.
Makes recommendations to the Board regarding
public policy issues and equal opportunity in all
corporate relationships.
Searches for and screens new nominees for
positions on the Board.
Considers qualified candidates for director
nominated by stockholders; provided, however,
that written notice of any stockholder
nominations must be received by the Secretary of
the Corporation not less than 60 days nor more
than 85 days prior to the anniversary date of the
immediately preceding year's annual meeting.
Executive Committee. 5 meetings during 2001
Present Members: Robert v.d. Luft (Chairman)
J. Wayne Leonard
Paul W. Murrill
Norman C. Francis
George W. Davis
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 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. If a director attends a meeting
of a committee on which that director does not serve as a member, he
or she receives one-half of the fee of an attending member. 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 $5,000
annually. Directors receive only one-half the fees set forth above
for telephone attendance at Board or committee meetings. All non-
employee directors receive on a quarterly basis 150 shares of Common
Stock and one-half the value of the 150 shares in cash. In 2001, Mr.
Luft was paid $200,000 plus 47,000 stock options (granted at market
price) to serve as Chairman of the Board. The non-employee Directors
have the opportunity to receive annually an executive physical
examination either from their local physician or at the Mayo Clinic's
Jacksonville, Florida location. The Corporation will pay the cost of
the physical examination, and, if at Mayo, travel and living expenses.
Non-employee Directors are reimbursed for all normal travel and
expenses associated with attending Board and committee meetings as
well as inspection trips and conferences associated with their Board
duties.
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. 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 an amount
in cash equal to the value of their accumulated "phantom" shares.
Payments are made in at least five but no more than 15 annual
payments. Each "phantom" share is assigned a value on its payment
date equal to the value of a share of Common Stock on that date.
Dividends are earned on each "phantom" share from the date of original
crediting.
RETIREMENT FOR DIRECTORS. Before Entergy Gulf States, Inc. became a
subsidiary of Entergy, 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 this deferred compensation is an unsecured
obligation of the Corporation, which 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
January 1, 2000, Dr. Murrill began to receive his deferred
compensation plus interest in equal installments annually for 15
years. Beginning on the January 1 after Mr. Steinhagen turns 70, he
will receive his deferred compensation plus interest in equal
installments annually for 10 years.
PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dr. Francis and Messrs. Blount, Percy, Nichols, deBree and Adm. Davis
served during 2001 as members of the Personnel Committee of the Board.
None of these directors was, during 2001, an officer or employee of
Entergy or any of its subsidiaries.
SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
The following table shows how much Common Stock each current director,
nominee and executive officer named in the "Summary Compensation Table"
on page 19 beneficially owned as of December 31, 2001, 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.
Entergy Corporation Common Entergy
Stock Corporation
Stock
Equivalent
Units (d)
Amount and Nature
of Beneficial
Ownership
Sole Voting Other
and Beneficial
Investment Ownership
Name Power (a)
Maureen S. Bateman 900 - 800
W. Frank Blount 7,434 - 8,000
VADM. George W. Davis 2,100 - 2,400
Simon D. deBree 140 - -
Claiborne P. Deming (c) - -
Norman C. Francis 3,100 - 5,600
Frank F. Gallaher 8,091 54,667 47,041
Donald C. Hintz 3,715 414,499 26,861
Jerry D. Jackson 23,447 138,333 25,721
J. Wayne Leonard 13,065 585,600 -
Robert v.d. Luft 22,672 214,166 7,200
Kathleen A. Murphy 1,900 (b) - 800
Dr. Paul W. Murrill 2,722 - 8,000
James R. Nichols 9,757 - 8,000
William A. Percy, II 1,150 - 800
Dennis H. Reilley 600 - 1,600
Wm. Clifford Smith 10,400 - 8,000
Bismark A. Steinhagen 10,247 - 8,000
C. John Wilder 9,234 140,199 53,693
All directors, nominees,
and executive officers 153,136 1,776,548 265,462
(a) Includes stock options that are exercisable within 60 days of
December 31, 2001.
(b) Includes 1,000 shares in which Ms. Murphy has joint ownership.
(c) Mr. Deming was elected to the Board on January 25, 2002 and now
owns 50 shares.
(d) Represents the balances of stock equivalent units each executive
holds under the Executive Annual Incentive Plan Deferral Program and
the Defined Contribution Restoration Plan. These units will be paid
out in a combination of Entergy Corporation Common Stock and cash
based on the value of Entergy Corporation Common Stock on the date of
payout. The deferral period is determined by the individual and is at
least two years from the award of the bonus up until retirement for
the Executive Annual Incentive Plan and at retirement for the Defined
Contribution Restoration Plan. For Directors of Entergy Corporation
the units are part of the Service Award for Directors. All non-
employee directors are credited with 800 units for each year of
service on the Board up to a maximum of 10 years.
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 2001, all directors' and officers' reports
were timely filed.
AUDIT COMMITTEE REPORT
The Entergy Corporation Board of Directors' Audit Committee is
comprised of five directors who are not officers of the Company. All
members meet the criteria for independence as defined by the New York
Stock Exchange. During 2001, the Audit Committee complied with its
written charter, as adopted by the Board of Directors. The charter
was published in the 2000 Proxy Statement.
The Committee held ten meetings during 2001. The meetings were
designed to facilitate and encourage private communication between the
Committee and management, the internal auditors and the Company's
independent public accountants. In August 2001, the Audit Committee
selected Deloitte & Touche to succeed PricewaterhouseCoopers as the
Company's independent auditors; the Board of Directors ratified the
selection in October 2001.
During these meetings, the Committee reviewed and discussed the
audited financial statements with management and Deloitte & Touche.
The Audit Committee believes that management maintains an effective
system of internal controls which results in fairly presented
financial statements. Based on these discussions, the Audit Committee
recommended to the Board of Directors that the audited financial
statements be included in Entergy's Annual Report on Form 10-K.
The discussions with Deloitte & Touche also included the matters
required by Statement on Auditing Standards No. 61 and No. 90. The
Audit Committee received from Deloitte & Touche written disclosures
and the letter regarding its independence as required by Independence
Standards Board Standard No. 1. This information was discussed with
Deloitte & Touche. The Audit Committee also has considered whether
the provision of the non-audit services described below by Deloitte &
Touche is compatible with maintaining their independence and has
concluded that it is. Deloitte & Touche provides no internal audit
services for the Corporation.
The Audit Committee of the Board of Directors of Entergy Corporation
Dennis H. Reilley, Chairperson Kathleen A. Murphy
Maureen S. Bateman Bismark A. Steinhagen
George W. Davis
March 8, 2002
INDEPENDENT ACCOUNTANTS
On the recommendation of the Audit Committee, the Executive Committee
(acting between board meetings) has appointed Deloitte & Touche as
independent accountants for the Corporation, effective August 13,
2001. The Corporation's former independent accountants,
PricewaterhouseCoopers, were dismissed effective August 13, 2001. The
reports issued by PricewaterhouseCoopers on Entergy's financial
statements for either of the two most recent fiscal years did not
contain any adverse opinion or a disclaimer of opinion, or any
qualification or modification as to uncertainty, audit scope or
accounting principles. During Entergy's two most recent fiscal years
and through August 13, 2001, there were no disagreements with
PricewaterhouseCoopers on a matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedure, which, if not resolved to the satisfaction of
PricewaterhouseCoopers, would have caused PricewaterhouseCoopers to
make reference to the subject matter of the disagreement in connection
with its reports.
The Corporation initially reported the change in accountants on Form
8-K on August 13, 2001. The Form 8-K contained a letter from
PricewaterhouseCoopers to the Securities and Exchange Commission
stating that it agreed with the statements concerning their firm made
therein.
A representative of Deloitte & Touche will be present at the meeting
and will be available to respond to appropriate questions by
stockholders and will be given an opportunity to make a statement if
the representative desires to do so.
Aggregate fees billed to Entergy Corporation and its subsidiaries for
the year ended December 31, 2001 by Deloitte & Touche LLP, the member
firms of Deloitte Touche Tohmatsu, and their respective affiliates
(collectively, "Deloitte & Touche"), which includes Deloitte
Consulting:
Audit Fees $1,808,000
==========
Financial Information Systems Design and $0
Implementation Fees ==========
All Other Fees:
Merger-related Consultation $1,327,436 (1)
Support for Regulatory Proceedings 309,878
Audit and Accounting-related 181,320
Tax Compliance 55,785
Tax Consultation 23,758
Other 50,723
----------
Total $1,948,900 (2)
==========
(1) These fees were for services provided by Deloitte Consulting
prior to the appointment of Deloitte & Touche as the Company's
independent accountants. Deloitte & Touche has recently announced
its intent to separate Deloitte Consulting from the firm.
(2) Includes fees of $1,757,392 for services in progress prior to the
appointment of Deloitte & Touche as the Company's independent
accountants.
REPORT OF PERSONNEL COMMITTEE ON EXECUTIVE COMPENSATION
The Personnel Committee of the Entergy Corporation Board of Directors
(Committee) reviews and makes recommendations to the Board regarding
all aspects of executive compensation including the adoption of, or
amendments to, the various compensation, incentives and benefit
plans/programs maintained for officers and other key management
employees of the Corporation.
The Corporation's executive compensation programs provide competitive
rewards designed to attract, retain and motivate key management
employees who are critical to the Corporation's success. For 2001,
the Committee assessed the competitiveness of its compensation
programs to a peer group of similar-sized energy services companies as
well as a larger group of companies participating in the Towers Perrin
Competitive Compensation Survey (based on revenue).
For 2001, the comparator groups were used for all components of
Entergy's compensation including base salary and incentives (both
annual and long-term). An executive's base salary was targeted at the
median of base salary within the comparator groups. Incentive plans
provided opportunities for executives to earn compensation at the 75th
percentile at target for the comparator groups, based upon performance
targets approved by the Board. The total executive compensation
package consisted of the following four major components:
1. Base Salary
Base salary was reviewed in conjunction with both of the comparator
groups. As a result of this review, the Board of Directors granted to
Mr. Leonard an increase, during 2001, as reflected in the "Summary
Compensation Table" on page 19.
2. Benefits and Perquisites
Executives were eligible to participate in Entergy's pension plan(s),
in addition to the Company's standard medical, dental, life insurance
and long-term disability coverage. Additionally, Executives were
provided financial planning perquisites during 2001.
3. Annual Incentive Compensation
Each executive's annual incentive compensation is based on the
attainment of key strategic goals and objectives which may include
improvement in earnings per share, operating cash flows, control of
operation and maintenance costs, customer satisfaction, etc. For his
performance in the year 2001, Mr. Leonard received an annual incentive
award of $1,281,000.
4. Long-Term Incentive Compensation
The Personnel Committee approved a three-year, performance-based, Long-
Term Incentive Plan which spans the period of 2001 through 2003.
Under the Long-Term Incentive Plan, the corporation is required to
achieve pre-set levels of performance measured against a selected
group of other companies in the area of total return to shareholders.
Stock option grants are considered on an annual cycle (i.e., in
January of each year) and are based upon each executive's performance,
as reviewed by the Committee. Mr. Leonard received a grant of 330,600
stock options in January 2001, based on his 2000 performance. The
award was funded under the 1998 Equity Ownership Plan.
- Total Compensation
As reported in the "Summary Compensation Table," during 2001, Mr.
Leonard's participation in each of Entergy's compensation components
was as follows:
- Base Salary 16%
- Bonus 30%
- Long-Term Incentive Compensation
- Performance Shares (LTIP) 0%
- Stock Options* 54%
- All Other Compensation 0%
* Please note that this number includes the 330,600 stock options
granted for 2001. A Black Scholes model price of $9.15 is assumed
for the stock options.
- Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code generally disallows an
income 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 that 1)
compensation over $1 million must be performance-based and 2)
incentive plans must be approved by shareholders.
All of Entergy's incentive plans are intended to meet the requirements
of the Internal Revenue Code for deductibility. As a result, we do
not believe that any executive officers earned compensation in excess
of $1 million in 2001 that was not tax deductible. Although the
Company intends generally to comply with requirements of Code Section
162(m) when consistent with the Company's objectives, executives may
be paid compensation that is not deductible under Code Section 162(m).
Personnel Committee Members:
Dr. Norman C. Francis, Chairman
Mr. William A. Percy, II
Vice Adm. George W. Davis, USN (Ret.)
Mr. James R. Nichols
Mr. W. Frank Blount
Mr. Simon D. DeBree
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,
1996 1997 1998 1999 2000 2001
Entergy $100 116 127 110 188 179
S&P 500 (2) $100 133 171 208 189 166
S&P EUI (2) $100 126 145 117 179 164
(1) Assumes $100 invested at the closing price on December 31, 1996,
in Entergy 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.
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 Position Year Salary Bonus Compensation Awards Options Payouts Compensation(b)
J. Wayne Leonard 2001 $897,500 $1,684,800 $3,709 $7,400,000(c)(d) 330,600 shares $ 0 $ 0
Chief Executive Officer 2000 836,538 1,190,000 11,646 (c) 330,600 2,410,413 0
1999 771,938 840,000 2,570 (c) 255,000 0 0
Frank F. Gallaher 2001 $432,828 $524,828 $161,787 (c) 60,000 shares $ 0 $16,574
Senior Vice President 2000 416,390 504,642 127,484 (c) 34,500 328,084 13,910
1999 401,161 303,855 38,496 (c) 39,500 0 13,545
Donald C. Hintz 2001 $599,423 $779,000 $198,321 (c) 160,000 shares $ 0 $21,605
President 2000 570,096 743,000 104,399 (c) 175,000 1,181,837 26,516
1999 535,713 495,000 76,188 (c) 272,000 0 22,156
Jerry D. Jackson 2001 $475,345 $576,382 $19,646 (c) 80,000 shares $ 0 $17,378
Executive Vice President 2000 458,223 554,214 58,758 (c) 58,500 1,181,575 15,162
1999 442,809 403,554 39,670 (c) 94,000 0 15,497
C. John Wilder 2001 $493,128 $600,000 $158,059 (c) 87,700 shares $ 0 $16,284
Executive Vice President and 2000 468,392 619,370 148,540 (c) 87,700 953,006 13,919
Chief Financial Officer 1999 445,191 406,693 119,878 (c) 52,500 0 20,035
(a) Amounts include the value of restricted shares that vested in
2000 (see note (c) below) under Entergy's Equity Ownership Plan.
(b) Includes the following:
(1) 2001 benefit accruals under the Defined Contribution Restoration
Plan as follows: Mr. Gallaher $8,578; Mr. Hintz $14,415; Mr. Jackson
$11,272; and Mr. Wilder $8,367.
(2) 2001 employer contributions to the System Savings Plan as
follows: Mr. Gallaher $7,996; Mr. Hintz $6,681; Mr. Jackson $6,106;
and Mr. Wilder $7,917.
(3) 2001 reimbursements for moving expenses as follows: Mr. Hintz
$509.
(c) Restricted unit (equivalent to shares of Entergy Corporation
common stock) awards in 2001 are reported under the "Long-Term
Incentive Plan Awards" table, and reference is made to that table for
information on the aggregate number of restricted units awarded during
2001 and the vesting schedule for such units. At December 31, 2001,
the number and value of the aggregate restricted unit holdings were as
follows: Mr. Gallaher 24,500 units, $958,195; Mr. Hintz 57,000 units,
$2,229,270; Mr. Jackson 25,400 units, $993,394; Mr. Leonard 246,000
units, $9,621,060; and Mr. Wilder 25,400 units, $993,394. Accumulated
dividends are paid on restricted units when vested. The value of
restricted unit holdings as of December 31, 2001 are determined by
multiplying the total number of units awarded by the closing market
price of Entergy Corporation common stock on the New York Stock
Exchange Composite Transactions on December 31, 2001 ($39.11 per
share). No restrictions were lifted in 2001. The value of stock for
which restrictions were lifted in 2000, and the applicable portion of
accumulated cash dividends, are reported in the LTIP payouts column in
the above table.
(d) In addition to the restricted units granted under the Equity
Ownership Plan, in January 2001 Mr. Leonard was granted 200,000
restricted units. 50,000 of the restricted stock units will vest on
each of December 31, 2001, December 31, 2002, December 31, 2003 and
December 31, 2004, based on continued service with Entergy
Corporation. Accumulated dividends will not be paid on Mr. Leonard's
restricted units when vested. The value that Mr. Leonard may realize
is dependent upon both the number of units that vest and the future
market price of Entergy common stock.
Option Grants to the Executive Officers in 2001
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(b)
Name Granted (a) 2001 share) Date 5% 10%
J. Wayne Leonard 330,600 3.8% $37.00 1/25/11 $7,692,765 $19,494,977
Frank F. Gallaher 60,000 0.7% 37.00 1/25/11 1,396,146 3,538,108
Donald C. Hintz 160,000 1.9% 37.00 1/25/11 3,723,056 9,434,955
Jerry D. Jackson 80,000 0.9% 37.00 1/25/11 1,861,528 4,717,478
C. John Wilder 87,700 1.0% 37.00 1/25/11 2,040,700 5,171,535
(a) Options were granted on January 25, 2001, 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 25, 2001. These
options will vest in equal increments, annually, over a three-year
period beginning in 2002.
(b) 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 2001 and December 31, 2001 Option Values
Number of Securities Value of Unexercised
Shares Underlying Unexercised Options In-the-Money Options
Acquired Value as of December 31, 2001 as of December 31, 2001 (b)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
(a)
J. Wayne Leonard - $ - 280,200 636,000 $3,334,647 $5,027,873
Frank F. Gallaher 38,833 604,807 10,000 96,167 81,726 617,905
Donald C. Hintz 2,500 22,916 238,833 420,667 2,778,663 3,477,946
Jerry D. Jackson - - 60,833 150,334 633,897 1,084,501
C. John Wilder - - 64,233 163,667 791,982 1,287,469
(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,
2001, and the option exercise price.
Long-Term Incentive Plan Awards in 2001
The following table summarizes the awards of restricted units
(equivalent to shares of Entergy Corporation common stock) granted
under the Equity Ownership Plan in 2001 to the Named Executive
Officers.
Estimated Future Payouts Under
Non-Stock Price-Based Plans (a) (b)
Number of Performance Period Until
Name Units Maturation or Payout Threshold Target Maximum
J. Wayne Leonard 48,000 1/1/01-12/31/03 16,000 32,000 48,000
Frank F. Gallaher 12,700 1/1/01-12/31/03 4,300 8,500 12,700
Donald C. Hintz 28,500 1/1/01-12/31/03 9,500 19,000 28,500
Jerry D. Jackson 12,700 1/1/01-12/31/03 4,300 8,500 12,700
C. John Wilder 12,700 1/1/01-12/31/03 4,300 8,500 12,700
(a) Restricted units awarded will vest at the end of a three-year
period, subject to the attainment of approved performance goals for
Entergy. Restrictions are lifted based upon the achievement of the
cumulative result of these goals for the performance period. The
value any Named Executive Officer may realize is dependent upon both
the number of units that vest and the future market price of Entergy
Corporation 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 number of units indicated in the respective
column. Achievement of a level between these three specified levels
would result in the award of a number of units 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, 2001, were for Mr. Gallaher (32), for Mr.
Jackson (22) and for Mr. Leonard (3). Because they entered into
supplemental retirement agreements, the credited years of service
under this plan were for Mr. Hintz (30) and for Mr. Wilder (18).
The following table shows the annual retirement benefits that would be
paid at normal retirement (age 65 or later) and includes covered
compensation for the executive officers included in the salary column
of the summary compensation table on page 19.
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 the benefits that 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 (as defined in the plans).
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 (SERP). 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
(except for Mr. Leonard). 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 in 1998 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 is 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 Named Executive Officers under
this plan are as follows: Mr. Gallaher (32), Mr. Hintz (30), Mr.
Jackson (28) and Mr. Wilder (3).
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 years immediately preceding 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. Upon
completion of a transaction resulting in a change-in-control of
Entergy (a "Merger"), benefits already accrued under Entergy's System
Executive Retirement Plan, Post-Retirement Plan, Supplemental
Retirement Plan and Pension Equalization Plan will become fully vested
if the participant is involuntarily terminated without "cause" or
terminates employment for "good reason" (as such terms are defined in
such plans).
EXECUTIVE RETENTION AGREEMENTS
Retention Agreement with Mr. Leonard - The retention agreement with
Mr. Leonard provides that upon a termination of employment while a
Merger is pending (a) by Entergy without "cause" or by Mr. Leonard
for "good reason", as such terms are defined in the agreement, other
than a termination of employment described in the next paragraph, or
(b) by reason of Mr. Leonard's death or disability:
- Entergy will pay to him a lump sum cash severance payment equal
to three times (in limited circumstances, five times) the sum of Mr.
Leonard's base salary and target annual incentive award;
- Entergy will pay to him a pro rata annual incentive award, based
on an assumed maximum annual achievement of applicable performance
goals;
- his supplemental retirement benefit will fully vest, will be
determined as if he had remained employed with Entergy until the
attainment of age 55, and will commence upon his attainment of age 55;
- he will be entitled to immediate payment of performance awards,
based upon an assumed target achievement of applicable performance
goals;
- all of his stock options will become fully vested and will remain
outstanding for their full ten-year term; and
- Entergy will pay to him a "gross-up" payment in respect of any
excise taxes he might incur.
If Mr. Leonard's employment is terminated by Entergy for "cause"
at any time, or by Mr. Leonard without "good reason" and without
Entergy's permission prior to his attainment of age 55, Mr. Leonard
will forfeit his supplemental retirement benefit. If Mr. Leonard's
employment is terminated by Mr. Leonard without "good reason" with
Entergy's permission prior to his attainment of age 55, Mr. Leonard
will be entitled to a supplemental retirement benefit, reduced by
6.5% for each year that the termination date precedes his attainment
of age 55, payable commencing upon Mr. Leonard's attainment of age
62. If Mr. Leonard's employment is terminated by Mr. Leonard without
"good reason" following his attainment of age 55, Mr. Leonard will be
entitled to his full supplemental retirement benefit. The amounts
payable under the agreement will be funded in a rabbi trust.
Retention Agreement with Mr. Gallaher - The retention agreement with
Mr. Gallaher provides that upon termination of employment while a
Merger is pending and for two years after completion of a Merger (a)
by Mr. Gallaher for "good reason" or by Entergy without "cause", as
such terms are defined in the agreement or (b) by reason of Mr.
Gallaher's death or disability:
- Entergy will pay to him a lump sum cash severance payment equal
to four times the sum of his base salary and maximum annual incentive
award;
- Entergy will pay to him a pro rata annual incentive award, based
on an assumed maximum achievement of applicable performance goals;
- he will be entitled to immediate payment of performance awards,
based upon an assumed maximum achievement of applicable performance
goals;
- all of his stock options will become fully vested and will remain
outstanding for their full ten-year term;
- he may elect to receive either a lump sum supplemental retirement
benefit equal to $3.8 million or the benefit he would have earned
under the terms of the SERP applicable to individuals who became
participants on or after March 25, 1998; and
- Entergy will pay to him a "gross-up" payment in respect of any
excise taxes he might incur.
Retention agreement with Mr. Hintz - The retention agreement with Mr.
Hintz provides that Mr. Hintz will be paid an initial retention
payment of approximately $2.8 million on the date on which a Merger
is completed and an additional retention payment of approximately
$2.3 million on the second anniversary of the completion of a Merger
if he remains employed on each of those dates. The agreement also
provides that upon termination of employment while a Merger is
pending and for two years after completion (a) by Mr. Hintz for "good
reason" or by Entergy without "cause", as such terms are defined in
the agreement or (b) by reason of Mr. Hintz's death or disability:
- Entergy will pay to him a lump sum cash severance payment equal
to $2.8 million if such termination occurs prior to completion of a
Merger or equal to $2.3 million if such termination occurs following
completion of a Merger;
- Entergy will pay to him a pro rata annual incentive award, based
on an assumed maximum achievement of applicable performance goals, if
such termination occurs following completion of a Merger;
- he will be entitled to immediate payment of performance awards
based upon an assumed target achievement of applicable performance
goals, if such termination occurs prior to completion of a Merger, or
based upon an assumed maximum achievement of applicable performance
goals, if such termination occurs following completion of a Merger;
- all of his stock options will become fully vested and will remain
outstanding for their full ten-year term;
- he will be entitled to receive a supplemental retirement benefit
that, when combined with Mr. Hintz's SERP benefit, equals the benefit
he would have earned under the terms of the SERP as in effect
immediately prior to March 25, 1998; and
- Entergy will pay to him a "gross-up" payment in respect of any
excise taxes he might incur.
Retention Agreement with Mr. Jackson - The retention agreement with
Mr. Jackson provides that upon retirement in accordance with the
agreement, Mr. Jackson: (a) will be entitled to a subsidized
retirement benefit equal to the applicable nonqualified retirement
benefit payable to Mr. Jackson without reduction for early retirement
("Subsidized Retirement Benefit"); and (b) may enter into a
consulting arrangement with Entergy through March 31, 2005, under
terms and conditions set forth in the agreement.
Pursuant to the agreement, should Mr. Jackson experience a
Qualifying Event (as defined in the agreement) after the Successor
Placement Date (as defined in the agreement) but before March 31,
2003, he shall not be entitled to benefits under the System Executive
Continuity Plan but shall instead be entitled to the following:
- a lump sum amount equal to any unpaid base salary that would
otherwise have been paid through March 31, 2003;
- the Subsidized Retirement Benefit; and
- all other benefits to which he may be entitled under the terms
and conditions of those Entergy plans and programs in which he
participates in accordance with the agreement.
Additionally, Mr. Jackson is entitled to certain benefits, as
described in the agreement, in the event of a change in control (as
defined in the System Executive Continuity Plan) after which Entergy
or its successor company fails to honor Mr. Jackson's consulting
arrangement.
Retention Agreement with Mr. Wilder - The retention agreement with
Mr. Wilder provides that if Mr. Wilder terminates his employment
without "good reason" and prior to a termination for "cause," as
those terms are defined in his agreement, Entergy will pay to him a
lump sum cash severance payment equal to three times the sum of his
base salary and target annual award and a "gross-up" payment in
respect of any excise taxes he might incur.
The agreement also provides that, as a substitute for the above
entitlement, upon termination of employment (a) by Mr. Wilder for
"good reason" or by Entergy without "cause", as such terms are
defined in the agreement, in each case prior to the termination of a
Merger or prior to the second anniversary of the completion of a
Merger, (b) by reason of Mr. Wilder's death or disability while a
Merger is pending and for two years after completion of a Merger or
(c) for any reason following the second anniversary of a Merger:
- Mr. Wilder will be entitled to a lump sum cash severance payment
equal to four times (in limited circumstances, three times) the sum of
the his base salary and maximum annual incentive award;
- Mr. Wilder will be entitled to a pro rata annual incentive award,
based on an assumed maximum achievement of applicable performance
goals;
- except in the case of a termination by reason of death or
disability, he will continue to be employed as a Special Project
Coordinator at an annual base salary of $200,000, and will continue to
participate in all of Entergy's benefit plans, until the earliest of
(a) his attainment of age 55 (at which time he will be deemed eligible
to retire under Entergy's plans then in effect), (b) his employment
with a company listed in the Fortune Global 500 Index or (c) his
employment with any company that has a conflict of interest policy
that would prohibit his continued employment with Entergy;
- Entergy will credit him with 15 additional years of service under
Entergy's supplemental retirement plan and he may elect to receive
either (a) approximately $1.9 million in a cash lump sum in full
settlement of all nonqualified retirement benefits or (b) the benefit
that he would have earned under the terms of the SERP applicable to
individuals who became participants on or after March 25, 1998 (which
amount he may elect to receive upon completion of a Merger);
- he will be entitled to immediate vesting of performance awards,
based upon an assumed maximum achievement of applicable performance
goals;
- all of his stock options will become fully vested and will remain
outstanding for their full ten-year term; and
- he will be entitled to a "gross-up" payment in respect of any
excise taxes he might incur.
If Mr. Wilder terminates employment without good reason and
other than on account of death or disability, on or after the
completion of a Merger and before the second anniversary of the
completion of a Merger:
- Mr. Wilder is entitled to a lump sum cash severance payment equal
to three times the sum of his base salary and target annual incentive
award;
- Mr. Wilder is entitled to a pro rata annual incentive award,
based on an assumed maximum achievement of applicable performance
goals;
- he will continue to be employed as a Special Project Coordinator
at an annual base salary of $200,000, and will continue to participate
in all of Entergy's benefit plans, until the earliest of (a) his
attainment of age 55 (at which time he will be deemed eligible to
retire under Entergy's plans then in effect), (b) his employment with
a company listed in the Fortune Global 500 Index or (c) his employment
with any company that has a conflict of interest policy that would
prohibit his continued employment with Entergy;
- Entergy will credit him with 15 additional years of service under
Entergy's supplemental retirement plan and he may elect either (a)
approximately $1.9 million in a cash lump sum in full settlement of
all nonqualified retirement benefits or (b) the benefit that he would
have earned under the terms of the SERP applicable to individuals who
became participants on or after March 25, 1998 (which amount he may
elect to receive upon completion of a Merger);
- he will be entitled to immediate vesting of performance awards,
based upon an assumed target achievement of applicable performance
goals;
- all of his stock options will become fully vested and will remain
outstanding for their full ten-year term; and
- he will be entitled to a "gross-up" payment in respect of any
excise taxes he might incur.
PROPOSAL 2 - STOCKHOLDER PROPOSAL CONCERNING CERTAIN WORDING ON
THE CORPORATION'S PROXY CARD
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 2002 Annual Meeting of Stockholders:
"Management and Directors are requested to change the format of
the Proxy Material in the two areas which are not fair to the
shareowners: Remove the word "EXCEPT" and re-apply the word
"AGAINST" in the Vote For Directors column. Remove the statement
(if applicable) placed in the lower section announcing that all
signed proxies but not voted as to choice will be voted at the
discretion of Management."
STATEMENT OF SECURITY HOLDER. Reasons: This entirely unfair voting
arrangement has benefited Management and Directors in their
determination to stay in office by whatever means. Note that this is
the only area in which an "AGAINST" choice is omitted, and has been so
for about 15 years with no successful objections. Claiming of votes
by Management is unfair, as a shareowner has the right to sign as
"Present" and not voting, showing receipt of material and only
preventing further solicitation of a vote. Since Management claims
the right to advise an "AGAINST" vote in matters presented by
shareowners, I likewise have the right to ask for a vote "AGAINST" all
Company select nominees for Director until directors stop the practice
of excessive extra remuneration for Management other than base pay and
some acceptable perks. Thank you.
BOARD OF DIRECTORS' RESPONSE: Your Board of Directors recommends that
the changes to the Company's proxy materials requested by Mr. Morse
not be adopted and that stockholders vote AGAINST the proposal.
The Board of Directors believes that the first part of the
stockholder's request, if adopted, would create a statement in the
Company's form of proxy card that would be unintelligible and would be
unnecessary. The proposal seeks stockholder approval of a request that
the Company "remove the word `EXCEPT' and re-apply the word `AGAINST'
in the Vote for Directors column," on the Company's form of proxy card
(while the stockholder refers to the "Proxy Material", it is the
Company's interpretation that since this statement appears only on the
form of proxy card, the reference should be to the form of proxy card
for this part of the stockholder's request). The Company's current
form of proxy card contains a selection box labeled "For All Except"
in the "Election of Directors" row and then provides a space in which
stockholders may list the nominees with respect to whom the security
holder chooses to withhold authority to vote. Removing the word
"except" and replacing it with the word "against" results in the
following wording above the selection box: "For All Against." The
Company could not, and assumes the stockholders in general could not,
reasonably determine the actions required by the inclusion of this
wording. The Company's proxy material, including the proxy card,
currently provides stockholders with the opportunity to vote for
directors or to have their shares withheld from voting for directors.
No changes are required to satisfy Delaware law (the laws under which
the Company is incorporated) or to provide stockholders adequate
choices.
With respect to the second part of the stockholder's request, the
Board of Directors believes that the removal of the statement
announcing that, in the absence of direction from the stockholder, all
proxies properly executed will be voted at the discretion of
Management, effectively disenfranchises stockholders. The signing of a
proxy shows unambiguous and unequivocal evidence of the stockholder's
intent to vote its shares despite the fact that no affirmative
indication is given as to the manner in which the proxy is to be
voted. Moreover, by signing the proxy and not indicating the manner of
the vote, the stockholder is evidencing a clear intent to have the
shares voted at the discretion of Management.
In summary, the first request of Mr. Morse would create an
unintelligible, meaningless and unnecessary statement in the proxy
card. The second request would effectively disenfranchise those
stockholders who wish to grant Management discretion to vote their
shares.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST
PROPOSAL 2.
PROPOSAL 3 - STOCKHOLDER PROPOSAL CONCERNING "POISON PILLS"
The Corporation has been advised that Mr. Emil Rossi, P.O. Box 249,
Boonville, CA 95415, a holder of 558 shares of the Corporation's
Common Stock, proposes to submit the following resolution to the 2002
Annual Meeting of Stockholders:
"Shareholders request that our Board of Directors seek
shareholder approval prior to adopting any poison pill and also
redeem or terminate any pill now in effect unless it has been
approved by a shareholder vote at the next shareholder meeting."
STATEMENT OF SECURITY HOLDER. Reasons: The poison pill is an
important issue for shareholder vote even if our company does not now
have a poison pill or plan to adopt a poison pill in the future.
Currently our board can adopt a poison pill and/or redeem a current
poison pill and adopt a new poison pill:
1) At any time
2) In a short period of time
3) Without shareholder approval
Negative Effects of Poison Pills on Shareholder Value
A study by the Securities and Exchange Commission found evidence
that the negative effect of poison pills to deter profitable
takeover bids outweigh benefits.
Source: Office of the Chief Economist, Securities and Exchange
Commission. The Effect of Poison Pills on the Wealth of Target
Shareholders, October 23, 1986.
Additional Support for this Proposal Topic
- Pills adversely affect shareholder value.
Power and Accountability
Neil Minow and Robert Monks
- The Council of Institutional Investors
www.cii.org/ciicentral/policies.htm & www.cii.org
recommends shareholder approval of all poison pills.
Institutional Investor Support for Shareholder Vote
Many institutional investors believe poison pills should be voted
on by shareholders. A poison pill can insulate management at the
expense of shareholders. A poison pill is such a powerful tool
that shareholders should be able to vote on whether it is
appropriate. We believe a shareholder vote on poison pills will
avoid an unbalanced concentration of power in our directors who
could focus on narrow interests at the expense of the vast
majority of shareholders.
Institutional Investor Support is High-Caliber Support
This proposal topic has significant institutional support.
Shareholder right to vote on poison pill resolutions achieved a
57% average yes-vote from shareholders at 26 major companies in
2000 (Percentage based on yes-no votes). Institutional investor
support is high-caliber support. Institutional investors have
the advantage of a specialized staff and resources, long-term
focus, fiduciary duty and independent perspective to thoroughly
study the issues involved in this proposal topic.
68% Vote at a Major Company
This proposal topic won 68% of the yes-no vote at the Burlington
Northern Santa Fe (BNI) 2001 annual meeting. The text of the BNI
proposal, which has further information on poison pills, is
available at The Corporate Library website under Proposals.
Shareholder Vote Precedent Set by Other Companies
In recent years, various companies have been willing to redeem
poison pills or at least allow shareholders to have a meaningful
vote on whether a poison pill should remain in force. We believe
that our company should do so as well.
In the interest of shareholder value vote yes:
SHAREHOLDER VOTE ON POISON PILLS
YES ON 3
BOARD OF DIRECTORS' RESPONSE: Your Board of Directors recommends that
Mr. Rossi's proposal not be adopted and that the shareholders vote
AGAINST the proposal.
The Board of Directors believes that the action requested in this
proposal is unnecessary and ill-advised. The Board of Directors has
not adopted a shareholder rights plan (sometimes called a "poison
pill"). Circumstances could arise in the future, however, where the
adoption of such a plan would be an important tool for protecting the
interests of the Corporation's stockholders in compliance with the
fiduciary duties of the Board of Directors. Requiring stockholder
approval for the adoption of a rights plan would impede the ability of
the Board of Directors to use such a plan for the benefit of
stockholders when circumstances warrant. The Board is comprised (with
one exception) entirely of outside directors. The Board is in the
best possible position to be free from self-interest in discharging
its fiduciary duty to determine whether a shareholder rights plan is
in the best interests of the shareholders.
Contrary to the proponent's suggestion, the ability to adopt a
shareholder rights plan does not give a board of directors absolute
veto power over any business combination. Rather, in upholding the
legal validity of shareholder rights plans, the Delaware Supreme Court
has made it clear that a board is required to act in accordance with
its fiduciary duties in adopting and maintaining a rights plan. As a
result, rights plans should neither prevent unsolicited proposals from
being made nor prevent companies from being acquired at prices that
are fair and adequate.
In recommending a vote against the proposal, the Board of Directors
has not determined that a rights plan should be adopted by the
Corporation. Any such determination would be made only after careful
deliberation, in light of all circumstances then prevailing and in the
exercise of the Board's fiduciary duties.
The recommendation against the proposal is based on the Board's belief
that it would not be wise to limit the flexibility of the Board of
Directors to act in the best interests of Entergy stockholders if
circumstances arise in the future that would warrant the adoption of a
rights plan.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST
PROPOSAL 3.
STOCKHOLDER PROPOSALS FOR 2003 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 November 27, 2002. 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 11, 2003 and not earlier than
February 14, 2003.
By order of the Board of Directors,
/s/ Robert v.d. Luft
Robert v.d. Luft
Chairman of the Board.
Dated: March 27, 2002
ENTERGY CORPORATION
Proxy Solicited by the Board of Directors for the
Annual Meeting of Stockholders--May 10, 2002
I hereby appoint J. Wayne Leonard, Robert v.d. Luft and Wm. Clifford Smith
jointly and severally, as Proxies, each with the power to appoint his
substitute, and hereby authorize them to represent and to vote, as designated on
the reverse side, all shares of Common Stock of Entergy Corporation held of
record by me on March 12, 2002, at the Annual Meeting of Stockholders to be held
in the Grand Ballroom of The Peabody Little Rock Hotel, 3 Statehouse Plaza,
Little Rock, Arkansas 72201, on Friday, May 10, 2002, at 10:00 a.m., Central
Daylight Time, and any adjournment or adjournments thereof, with all powers that
I would possess if personally present.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting, and any adjournment or adjournments
thereof.
Receipt of the notice of meeting, the proxy statement and the Annual Report of
Entergy Corporation for 2001 is acknowledged.
(Continued, and to be marked, dated and signed, on the other side)
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
You can now access your Entergy Corporation account online.
Access your Entergy Corporation stockholder account online via Investor
ServiceDirectSM(ISD).
Mellon Investor Services LLC, agent for Entergy Corporation, now makes it easy
and convenient to get current information on your shareholder account. After a
simple and secure process of establishing a Personal Identification Number
(PIN), you are ready to log in and access your account to:
- View account status - View payment history for dividends
- View certificate history - Make address changes
- View book-entry information - Obtain a duplicate 1099 tax form
- Establish/change your PIN
Visit us on the web at http://www.melloninvestor.com
and follow the instructions shown on this page.
Step 1: FIRST TIME USERS- Step 2: Log in for Step 3: Account Status
Establish a PIN Account Access Screen
You must first establish a You are now ready to You are now ready to
Personal Identification log in. To access access your account
Number (PIN) online by your account please information. Click on
following the directions enter your: the appropriate button to
provided in the upper right view or initiate
portion of the web screen as - SSN transactions.
follows. You will also need - PIN
your Social Security Number - Then click on the - Certificate History
(SSN) available to establish Submit button - Book-Entry
a PIN. Information
If you have more than - Issue Certificate
Investor ServiceDirectSM is one account, you will - Payment History
currently only available for now be asked to select - Address Change
domestic individual and the appropriate - Duplicate 1099
joint accounts. account.
SSN
PIN
- Then click on the
Establish Pin button
Please be sure to remember
your PIN, or maintain it in
a secure place for future
reference.
For Technical Assistance Call 1-877-978-7778 between
9am-7pm Monday-Friday Eastern Time
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1
AND A VOTE AGAINST PROPOSALS 2 AND 3. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSAL 1 AND AGAINST PROPOSALS 2 AND 3.
Please
mark X
your
vote as
indicated
in this
example.
FOR WITHHOLD FOR ALL
EXCEPT
1) Election of Directors
01 M.S. Bateman 09 K.A. Murphy
02 W.F. Blount 10 P.W. Murrill
03 G.W. Davis 11 J.R. Nichols
04 S.D. deBree 12 W.A. Percy, II
05 C.P Deming 13 D.H. Reilley
06 N.C. Francis 14 W.C. Smith
07 J.W. Leonard 15 B.A. Steinhagen
08 R.v.d. Luft
_____________________________________
Except Nominee(s) written above
FOR AGAINST ABSTAIN
2) Stockholder proposal concerning
certain wording on the
Corporation's proxy card.
3) Stockholder proposal concerning
"poison pills".
Please disregard if you have previously provided your consent
decision.
By checking the box to the right, I consent to future delivery of
annual reports, proxy statements, prospectuses and other materials
and shareholder communications electronically via the Internet at a
web page which well be disclosed to me. I understand that the
Company may no longer distribute printed materials to me for any
future shareholder meeting until such consent is revoked. I
understand that I may revoke my consent at any time by contacting the
company's transfer agent, Mellon Investor Services LLC, Ridgefield
Park, NJ and that costs normally associated with electronic delivery,
such as usage and telephone charges as well as any costs I may incur
in printing documents, will be my responsibility.
Signature___________________ Signature___________________ Date_____________
If acting as Attorney, Executor, Trustee or in other representative
capacity, please sign name and title
-------------------------------------------------------------------------------
FOLD AND DETACH HERE
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
Internet Telephone Mail
http://www.proxyvoting.c 1-800-435-6710
om/ETR
Use any touch-tone Mark, sign and
Use the Internet to O telephone to vote OR date your proxy
vote your proxy. Have R your proxy. Have card and return it
your proxy card in your proxy card in in the
hand when you access hand when you call. enclosed postage-
the web site. You You will be prompted paid envelope.
will be prompted to to enter your
enter your control control number,
number, located in the located in the box
box below, to create below, and then
and submit an follow the
electronic ballot. directions given.
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
You can view the Annual Report and Proxy Statement on the
Internet at: http://investor.entergy.com/investor/financial/index.shtm