ENTERGY CORP /DE/
10-Qs and 10-Ks
PROXIES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES
EXCHANGE ACT OF 1934 (Amendment
No. )
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Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to §240.14a-12
ENTERGY CORPORATION
(Name of Registrant as Specified In
Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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|
Entergy Corporation 639 Loyola Avenue New Orleans, LA 70113 |
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
New Orleans,
Louisiana
March 17, 2010
To the Shareholders of ENTERGY CORPORATION:
|
Date:
|
Friday, May 7, 2010 | |
|
Time:
|
10:00 am | |
|
Place:
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Hilton Jackson 1001 East County Line Road Jackson, Mississippi 39211 |
MATTERS TO BE VOTED ON:
1. Election of the director nominees identified in the
proxy statement that accompanies this notice.
2. Ratification of selection of Deloitte & Touche
LLP as independent registered public accountants for 2010
3. Approval of the Amended and Restated Entergy Corporation
Executive Annual Incentive Plan
4. Transact such other business as may properly come before
the meeting.
All shareholders are cordially invited to attend the meeting in
person. Whether or not you plan to attend the meeting, we urge
you to vote your shares via the toll-free number or over the
Internet, as described in the enclosed materials. If you receive
a copy of the proxy card by mail, you may sign, date and mail
the proxy card in the envelope provided.
Only shareholders of record as of the close of business on
March 9, 2010 are entitled to receive notice of, to attend
and to vote at the meeting.
Notice of Electronic Availability of Proxy Statement and
Annual Report. As permitted by Securities and
Exchange Commission rules, Entergy is making this proxy
statement and its annual report available to its shareholders
electronically via the Internet. On March 17, 2010, we
mailed to our shareholders a Notice containing instructions on
how to access this proxy statement and our annual report and
vote online. If you received a Notice by mail, you will not
receive a printed copy of the proxy materials in the mail.
Instead, the Notice instructs you on how to access and review
all of the important information contained in the proxy
statement and annual report. The Notice also instructs you on
how you may submit your proxy over the Internet or by telephone.
If you received a Notice by mail and would like to receive a
printed copy of our proxy materials, you should follow the
instructions for requesting such materials contained in the
Notice.
Robert D. Sloan
Executive Vice President, General Counsel & Secretary
TABLE OF
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PROXY
STATEMENT
We are providing these proxy materials to you in connection with
the solicitation of proxies by the Board of Directors of Entergy
Corporation for our 2010 Annual Meeting of Shareholders and for
any adjournment or postponement of the meeting (“Annual
Meeting”). In this proxy statement, we refer to Entergy
Corporation as “Entergy,” “the Company,”
“we,” “our” or “us.”
We are holding the Annual Meeting at the Hilton Jackson, 1001
East County Line Road, Jackson, Mississippi 39211, at
10:00 a.m. We intend to mail a Notice containing
instructions on how to access this proxy statement and our
annual report online starting on or about March 17, 2010.
INFORMATION
ABOUT THE ANNUAL MEETING
What is
included in these materials?
These materials include:
| • | Our Proxy Statement for the Annual Meeting; and | |
| • | Our 2010 Annual Report to Stockholders, which includes our audited consolidated financial statements. |
If you request a printed version of these materials, the
materials will also include the proxy card for the Annual
Meeting.
Why did I
receive a notice in the mail regarding the Internet availability
of proxy materials this year instead of a full set of proxy
materials?
Pursuant to rules adopted by the Securities and Exchange
Commission (“SEC”), we have elected this year to
provide access to our proxy materials over the Internet.
Accordingly, we are sending a Notice of Internet Availability of
Proxy Materials (the “Notice”) to our shareholders of
record and beneficial owners. All shareholders will have the
ability to access the proxy materials on the website referred to
in the notice or request to receive a printed set of the proxy
materials. Instructions on how to access the proxy materials
over the Internet or to request a printed copy may be found in
the Notice. In addition, shareholders may request to receive
proxy materials in printed form by mail or electronically by
email on an ongoing basis.
How can I
get electronic access to the proxy materials?
The Notice will provide you with instructions regarding how to:
| • | View our proxy materials for the Annual Meeting on the Internet; and | |
| • | Instruct us to send future proxy materials to you electronically by email. |
If you choose to receive future proxy materials by email, you
will receive an email next year with instructions containing a
link to those materials and a link to the proxy voting site.
Your election to receive proxy materials by email will remain in
effect until you terminate it.
Who is
entitled to vote at the Annual Meeting?
Holders of our common stock at the close of business on
March 9, 2010 can vote their shares at the Annual Meeting.
On that date, we had 189,223,615 common shares outstanding and
entitled to vote. Each common share is entitled to one vote on
each matter properly brought before the meeting.
Do I need
a ticket to attend the Annual Meeting?
No. If you are a shareholder of record, you need only present a
form of personal identification to be admitted to the meeting.
If your shares are held beneficially in the name of a bank,
broker or other holder of record, you will receive instructions
from the holder of record. You must follow the instructions of
the holder of record in order for
your shares to be voted. Telephone and Internet voting also will
be offered to stockholders owning shares through certain banks
and brokers. If your shares are not registered in your own name
and you plan to vote your shares in person at the Annual
Meeting, you should contact your broker or agent to obtain a
legal proxy or broker’s proxy card and bring it to the
Annual Meeting in order to vote. If your shares are held in an
employee savings plan, you must present your employee
identification badge.
What is
the difference between owning shares as a shareholder of record
and as a beneficial owner?
You may own common shares in one of the following ways:
| • | directly in your name as the shareholder of record; | |
| • | indirectly through a broker, bank or other holder of record in “street name;” or | |
| • | indirectly in one of the Company’s qualified employee savings plans (“Savings Plans”). |
If your shares are registered directly in your name, you are the
holder of record of these shares and you have the right to give
your proxy directly to us, to give your voting instructions by
telephone or by the Internet, or to vote in person at the
meeting. If you hold your shares in street name, your broker,
bank or other holder of record is sending the Notice to you. As
a holder in street name, you have the right to direct your
broker, bank or other holder of record how to vote by filling
out a voting instruction form that accompanies your Notice. If
your shares are held in one of the Savings Plans, see “How
do I vote shares held under the Savings Plan?” below.
How do I
vote?
Your vote is important. We encourage you to
vote promptly. Internet and telephone voting is available
through 11:59 p.m. Eastern Time on Tuesday, May 4,
2010 for shares held in Savings Plans and through
11:59 p.m. Eastern Time on Thursday, May 6, 2010 for
all other shares. You may vote in one of the following ways:
By Telephone. If you are located in the
United States or Canada, you can vote your shares by calling
1-800-690-6903
and following the instructions on the proxy card. You may vote
by telephone 24 hours a day. If you vote by telephone, you
do not need to return your proxy card.
By Internet. You can also vote your
shares over the Internet at www.proxyvote.com. You may vote by
the Internet 24 hours a day. As with telephone voting, you
will be able to confirm that the system has properly recorded
your votes. If you hold your shares in street name, please
follow the Internet voting instructions that accompany your
proxy materials. If you vote by the Internet, you do not need to
return your proxy card or your voting instruction form.
By Mail. If you received your proxy
materials by mail, you can vote by marking, dating, and signing
your proxy card and returning it by mail in the enclosed
postage-paid envelope. If you hold your shares in street name,
please complete and mail the voting instruction card.
At the Annual Meeting. If you hold your
shares in street name, you must obtain a proxy, executed in your
favor, from the holder of record if you wish to vote these
shares at the meeting.
All shares that have been properly voted and not revoked will be
voted at the meeting. If you sign and return your proxy card
without any voting instructions, your shares will be voted as
the Board of Directors recommends.
What if I
change my mind after I vote my shares?
If you are a shareholder of record, you can revoke your proxy
before it is exercised by:
| • | written notice to the Secretary of the Company; | |
| • | timely delivery of a valid, later-dated proxy or a later-dated vote by telephone or on the Internet; or | |
| • | voting by ballot at the Annual Meeting. |
2
If you hold your shares in street name, you may submit new
voting instructions by contacting your bank, broker or other
holder of record. You may also vote in person at the Annual
Meeting if you obtain a legal proxy as described in the answer
to the previous question.
All shares that have been properly voted and not revoked will be
voted at the Annual Meeting.
How do I
vote shares held under the Savings Plans?
Participants in the Company’s Savings Plans will receive a
full set of the proxy materials, including the proxy card, in
the mail. Your proxy card will include the number of shares
credited to your account under the plan as of the record date.
To allow sufficient time for the trustee to vote, the trustee
must receive your voting instructions by 11:59 p.m. Eastern
Time, on May 4, 2010. If the trustee does not receive your
instructions by that date, the trustee will vote your shares in
the same proportion of votes that the trustee receives from the
other participants who did vote, except as may be otherwise
required by law.
Is my
vote confidential?
We maintain the confidentiality of the votes of individual
shareholders. We do not disclose these votes to any member of
management, unless we must disclose them for legal reasons.
However, if a shareholder writes a comment on the proxy card, we
will forward the comment to management. In reviewing the
comment, management may learn how the shareholder voted. In
addition, the Inspectors of Election and selected employees of
our independent tabulating agent may have access to individual
votes in the normal course of counting and verifying the vote.
What are
the voting requirements to elect directors and approve each of
the proposals discussed in this Proxy Statement?
Quorum. We will have a quorum and will
be able to conduct the business of the Annual Meeting if the
holders of a majority of the votes that shareholders are
entitled to cast are present at the meeting, either in person or
by proxy. Abstentions and “broker non-votes” (see
below) are counted as present and entitled to vote for purposes
of determining a quorum.
Votes Required for Proposals. To elect
directors and adopt the other proposals, the following
proportion of votes is required:
| • | Directors. In the election of directors, each director will be elected by the vote of the majority of votes cast with respect to that director nominee. A majority of votes cast means that the number of votes cast “FOR” a nominee’s election must exceed the number of votes cast “AGAINST” such nominee’s election. A director who fails to receive a majority FOR vote will be required to tender his or her resignation to the Board of Directors for consideration. For additional information, see the “Corporate Governance — Corporate Governance Principles and Practices — Majority Voting in Director Elections.” | |
| • | Independent Registered Public Accountants. To ratify the selection of our independent registered public accountants, we must receive the affirmative vote of a majority of the shares entitled to vote on the matter and present in person at the Annual Meeting or represented by proxy. | |
| • | Approval of Amended and Restated Executive Annual Incentive Plan. The approval of the Amended and Restated Entergy Corporation Executive Annual Incentive Plan requires the affirmative vote of a majority of the shares entitled to vote on the matter and present in person at the Annual Meeting or represented by proxy. |
A vote to ABSTAIN will, pursuant to the Company’s bylaws,
not have any effect with respect to the election of directors.
It will, however, have the effect of a vote AGAINST the other
proposals.
Could
other matters be decided at the Annual Meeting?
As of the date of this Proxy Statement, we did not know of any
matters to be raised at the Annual Meeting other than those
referred to in this Proxy Statement. If other matters are
properly presented at the Annual Meeting for
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consideration, the Proxy Committee appointed by the Board of
Directors (the persons named in your proxy card if you are a
shareholder of record) will have the discretion to vote on those
matters for you.
What
happens if I do not submit voting instructions to my
broker?
If a proposal is routine (see below), a broker or other entity
holding shares for an owner in street name may vote for the
proposal without receiving voting instructions from the owner.
If a proposal is not routine, the broker or other entity may
vote on the proposal only if the owner has provided voting
instructions. A broker non-vote occurs when the broker or other
entity is unable to vote on a proposal because the proposal is
not routine and the owner does not provide any instructions. For
purposes of our Annual Meeting, we understand that the proposal
relating to the ratification of the selection of our independent
registered public accountants will be treated as a routine item,
but the proposals to elect directors and to approve the Amended
and Restated Executive Annual Incentive Plan will not be deemed
routine items.
Who will
pay for the cost of the proxy solicitation?
We will pay the expenses of soliciting proxies. Our directors,
officers or employees may solicit proxies for us in person, or
by telephone, facsimile or electronic transmission. We have
hired Morrow & Co. to help us distribute and solicit
proxies. We will pay Morrow $13,000, plus expenses for these
services.
4
CORPORATE
GOVERNANCE
Board
of Directors
As of March 17, 2010, there were 12 members of the Board of
Directors:
|
Maureen S. Bateman
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Donald C. Hintz | James R. Nichols | ||||
|
W. Frank Blount
|
J. Wayne Leonard Chairman and Chief Executive Officer |
William A. Percy, II | ||||
|
Gary W. Edwards Presiding Director |
Stuart L. Levenick | W. J. “Billy” Tauzin | ||||
|
Alexis M. Herman
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Stewart C. Myers | Steven V. Wilkinson | ||||
The Board provides oversight with respect to our overall
performance, strategic direction and key corporate policies. It
approves major initiatives, advises on key financial and
business objectives, and monitors progress with respect to these
matters. Members of the Board are kept informed of our business
by various reports and documents provided to them on a regular
basis, including operating and financial reports made at Board
and Committee meetings by the Chairman and Chief Executive
Officer and other officers. The Board has six standing
committees: Audit, Corporate Governance, Personnel, Finance,
Nuclear and Executive. The charters of the Audit, Personnel and
Corporate Governance Committees are available on the
Company’s Investor Relations website at
http://www.entergy.com/investor_relations/corporate_governance.aspx
and in print to any shareholder who requests them from the
Secretary of the Company.
The Board met 15 times in 2009. Each incumbent member of the
Board attended at least 75% of the total number of meetings of
the Board and the committees on which he or she served. We
encourage, but do not require, our Board members to attend
annual meetings of shareholders. All of our Board members,
except one, attended our 2009 Annual Meeting of Shareholders.
Director
Independence
A director is considered independent if the Board affirmatively
determines that he or she has no material relationship with the
Company and otherwise satisfies the independence requirements of
the New York Stock Exchange (“NYSE”). A director is
“independent” under the NYSE listing standards if the
Board affirmatively determines that the director has no material
relationship with us directly or as a partner, shareholder or
officer of an organization that has a relationship with us.
According to the independence standards established under the
NYSE listing standards, a director is not independent if:
| • | The director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer of the Company. | |
| • | The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from us, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). | |
| • | The director or an immediate family member is a current partner of a firm that is our internal or external auditor, the director is a current employee of such a firm, the director has an immediate family member who is a current employee of such a firm and personally works on the firm’s audit, assurance or tax compliance (but not tax planning) practice, or the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such firm and personally worked on our audit within that time. | |
| • | The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of our present executive officers at the same time serves or served on that company’s compensation committee. |
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| • | The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of such other company’s consolidated gross revenues. |
The Board of Directors has reviewed each of its non-employee
members to determine compliance with the independence standards
established under the NYSE listing standards and has
affirmatively determined that each of our non-employee directors
is independent within the meaning of the rules of the NYSE.
Board
Committees
Audit Committee. The Board has
established an audit committee for the purpose of overseeing our
accounting and financial reporting processes and the audits of
our financial statements. In addition, the Audit Committee
assists the Board in fulfilling its oversight responsibilities
with respect to, among other things:
| • | our compliance with legal and regulatory requirements, including our disclosure controls and procedures; | |
| • | the independent registered public accounting firm’s qualifications and independence; and | |
| • | the performance of our internal audit function and independent registered public accounting firm. |
The Board has adopted an Audit Committee Charter, a copy of
which is available at
http://www.entergy.com/investor_relations/corporate_governance.aspx
and in print to any shareholder who requests it from the
Secretary of the Company. For information about the Audit
Committee’s policy regarding independent auditor service,
see “Entergy Audit Committee Guidelines for Pre-Approval of
Independent Auditor Services” on page 57 of this Proxy
Statement.
The Audit Committee consists of four directors, each of whom the
Board has determined has no material relationship with us and is
otherwise independent under the rules of the NYSE. In addition,
all Audit Committee members must meet the heightened standards
for independence for audit committee members imposed by the SEC
and the NYSE. Under those heightened standards, a director may
not serve on the Audit Committee if the director (i) has
received any consulting, advisory, or other compensatory fees
from us (other than in his or her capacity as a director) or
(ii) is our affiliate or the affiliate of any of our
subsidiaries.
Each member of our Audit Committee satisfies this heightened
standard. No director may serve as a member of the Audit
Committee if that director serves on the audit committees of
more than two other public companies unless the Board determines
that such simultaneous service would not impair the ability of
that director to effectively serve on the Audit Committee. All
Audit Committee members must be financially literate, and at
least one member must have accounting or related financial
management expertise.
The members of the Audit Committee are:
| Steven V. Wilkinson (Chair) | Stuart L. Levenick | |
| Maureen S. Bateman | James R. Nichols |
The Board has determined that Mr. Wilkinson, the Chair of
the Audit Committee, is an audit committee financial expert, as
such term is defined by the rules of the SEC. During 2009, the
Audit Committee met 14 times.
Corporate Governance Committee. The
Board has established the Corporate Governance Committee, which
is responsible for, among other things:
| • | developing policies and practices relating to corporate governance and reviewing compliance with the Company’s Corporate Governance Guidelines; | |
| • | recommending the director nominees for approval by the Board and the shareholders; and | |
| • | establishing and implementing self-evaluation procedures for the Board and its committees. |
The Board has adopted a Corporate Governance Committee Charter,
a copy of which is available at
http://www.entergy.com/investor_relations/corporate_governance.aspx
and in print to any shareholder who requests it from the
Secretary of the Company.
6
The Corporate Governance Committee consists of four directors,
each of whom the Board has determined has no material
relationship with us and is otherwise independent under the
rules of the NYSE. The members of the Corporate Governance
Committee are:
| Alexis M. Herman (Chair) | William A. Percy, II | |
| Gary W. Edwards | W. J. “Billy” Tauzin |
During 2009, the Corporate Governance Committee met 8 times.
Personnel Committee. The Board has
established a Personnel Committee which is responsible for,
among other things:
| • | developing and implementing compensation policies and programs for our executive officers, including any employment agreement with an executive officer; | |
| • | evaluating the performance of our Chairman and Chief Executive Officer; and | |
| • | reporting, at least annually, to the Board on succession planning, including succession planning for the Chief Executive Officer. |
The Board has adopted a Personnel Committee Charter; a copy of
which is available at
http://www.entergy.com/investor_relations/corporate_governance.aspx
and in print to any shareholder who requests it from the
Secretary of the Company.
The Personnel Committee consists of four directors, each of whom
the Board has determined has no material relationship with us
and is otherwise independent under the rules of the NYSE. The
members of the Personnel Committee are:
| Maureen S. Bateman (Chair) | Alexis M. Herman | |
| Gary W. Edwards | W.J. “Billy” Tauzin |
During 2009, the Personnel Committee met 7 times. In addition,
the Personnel Committee met jointly with the Finance Committee
once in 2009. The role of our CEO in determining or recommending
the amount or form of executive compensation is discussed in
“Compensation, Discussion and Analysis” on
page 27 of this proxy statement.
The Personnel Committee Report is set forth on page 29 of
this proxy statement, immediately following the
“Compensation, Discussion & Analysis”
section.
The Personnel Committee has adopted a policy delegating its
equity grant authority and a policy on retention of independent
compensation consultants. Each of these policies is discussed in
the “Compensation Discussion & Analysis”
section of this proxy statement.
Finance Committee. The Board has
established the Finance Committee, which is responsible for,
among other things:
| • | reviewing and making recommendations to the Board regarding our financial policies, strategies, and decisions; | |
| • | reviewing our investing activities; and | |
| • | reviewing and making recommendations to the Board with respect to significant investments. |
The Finance Committee consists of five directors. The members of
the Finance Committee are:
| W. Frank Blount (Chair) | Stewart C. Myers | |
| Donald C. Hintz | James R. Nichols | |
| Stuart L. Levenick |
During 2009, the Finance Committee met 5 times. In addition, the
Finance Committee met jointly with the Personnel Committee once
during 2009.
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Nuclear Committee. The Board has
established the Nuclear Committee, which is responsible for,
among other things:
| • | providing non-management oversight and review of all the Company’s nuclear generating plants; | |
| • | focusing on safety, operating performance, operating costs, staffing and training; and | |
| • | consulting with management concerning internal and external nuclear-related issues. |
The Nuclear Committee consists of four directors. The members of
the Nuclear Committee are:
| Donald C. Hintz (Chair) | William A. Percy, II | |
| W. Frank Blount | Steven V. Wilkinson |
During 2009, the Nuclear Committee met 7 times.
Executive Committee. The Board has
established the Executive Committee, which is authorized to act
for the Board on matters other than those matters specifically
reserved by Delaware law to the entire Board. The members of the
Executive Committee are:
| J. Wayne Leonard (Chair) | Gary W. Edwards | |
| W. Frank Blount | Donald C. Hintz |
During 2009, the Executive Committee did not meet.
Corporate
Governance Principles and Practices
Corporate Charters and Ethics
Policies. Our Corporate Governance
Guidelines, certificate of incorporation, bylaws and Board
committee charters form the framework of our corporate
governance. In addition, we have adopted a Code of Business
Conduct and Ethics for the members of our Board of Directors, a
Code of Business Conduct and Ethics for our employees and a Code
of Entegrity, which sets forth the ethical responsibilities of
our employees, officers and representatives.
Our Corporate Governance Guidelines, the charters of our Audit,
Personnel and Corporate Governance Committees, and our ethics
guidelines, including any amendments, are available at
http://www.entergy.com/investor_relations/corporate_governance.aspx
and in print to any shareholder who requests it from the
Secretary of the Company.
Board Independence. Our Corporate
Governance Guidelines state that the Board of Directors should
be comprised of a substantial majority of non-employee directors
and a majority of independent directors. Under our Corporate
Governance Guidelines, no director qualifies as independent
unless the Board of Directors affirmatively determines that the
director has no material relationship with the Company (directly
or as a partner, shareholder or officer of an organization that
has a relationship with the Company). In addition, the Board of
Directors applies the independence tests specified in the rules
of the NYSE. For additional information, see “Corporate
Governance — Director Independence.”
Executive Meetings of the Board of
Directors. The non-employee directors meet in
executive session (separate from management) at least four times
a year. In addition, if non-employee directors include directors
who are not independent, the independent directors meet in
executive session at least once a year. The non-employee
directors met in executive session 6 times in 2009.
Board
Leadership Structure and Risk Oversight
Our company is led by J. Wayne Leonard, who has served as chief
executive officer and chairman of the Board since August 2006.
Our board is comprised of Mr. Leonard and 11 independent
directors. Our corporate governance guidelines require that when
the roles of Chairman of the Board and the Chief Executive
Officer are combined, the Board of Directors appoints from among
its independent members a Presiding Director. The Presiding
Director is recommended by the Corporate Governance Committee
and appointed by a majority of the independent members of the
Board of Directors. The Presiding Director, subject to his or
her annual election to the Board of Directors, serves for a term
of three years. The Company’s Presiding Director currently
is Gary W. Edwards.
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Under our Corporate Governance Guidelines, the Presiding
Director has the following responsibilities:
| • | Presides at executive sessions of independent directors and all meetings of the Board at which the Chairman of the Board and Chief Executive Officer is not present; | |
| • | Serves as liaison with Chairman of the Board and Chief Executive Officer when requested by the independent directors; | |
| • | Reviews and advises on Board meeting agendas (and consults with the Chairman of the Board and Chief Executive Officer on the preparation of agendas); | |
| • | May call meetings of the independent directors; | |
| • | Provides feedback from the Board to the Chairman of the Board and the Chief Executive Officer following each executive session of independent directors and, together with the Chair of the Personnel Committee, provides the Chairman of the Board and Chief Executive Officer with an annual performance review; and | |
| • | Such additional responsibilities as the Board of Directors may assign, and the Presiding Director may accept. |
The Board has six standing committees — audit,
corporate governance, executive, finance, nuclear and personnel.
Each of the committees is comprised solely of independent
directors with each of the six committees having a separate
chair.
We believe that having a combined chairman/CEO, independent
chairs for each of our board committees and an independent
presiding director provides the right form of leadership for our
company. This leadership structure is commonly utilized by other
public companies and we believe that it has been an effective
structure for us because it facilitates swift and effective
decision making and helps to assure that the Company speaks with
one voice, while at the same time encouraging open and
constructive dialogue among Board members.
We believe that the Board of Directors provides effective
oversight of the risks we face and our risk assessment and risk
management processes. In accordance with NYSE requirements, our
Audit Committee has the primary responsibility for overseeing
risk management. To assist the Audit Committee in discharging
its oversight responsibility, management provides the committee
with regular reports on environmental compliance, corporate
compliance, significant legal matters, the Company’s
insurance programs, and market and credit risk. Our standing
Board committees also regularly consider risks arising within
their respective functional areas of responsibility, with broad
operational risks reviewed by the full Board. Thus, under their
respective committee charters, the Finance Committee evaluates
risks associated with strategic decisions and major
transactions; the Audit Committee reviews risks relating to the
financial reporting process and the Company’s internal
controls; the Corporate Governance Committee considers risks
relating to the Company’s corporate governance and
legislative and regulatory policy; the Personnel Committee
considers risks relating to compensation, safety, employee
matters and succession planning; and the Nuclear Committee
considers risks relating to safety and other matters unique to
our nuclear fleet. Each of these committees receives regular
reports from management which assist it in its oversight of risk
in its respective area of responsibility.
Board Evaluation Process. The Board
conducts a self-evaluation process at least annually to
determine whether it and its committees are functioning
effectively.
Mandatory Resignation upon Change in Professional
Circumstances. Under our Corporate Governance
Guidelines, non-employee directors should submit their
resignations when either their employment or the major
responsibilities they held when they joined the Board changes.
Based on the recommendation of the Corporate Governance
Committee, the Board reviews the appropriateness of the
director’s nomination for re-election to the Board under
these circumstances.
Mandatory Director Retirement and Term
Limits. Under our Corporate Governance
Guidelines, a person may not be nominated for election or
re-election to the Board if he or she has reached the age of 72
on or before January 1 of the year in which such person would be
elected or re-elected, unless specifically recommended to serve
beyond the age of 72 by the Corporate Governance Committee and
approved by the Board of Directors. The Company does not have
term limits for its directors. Instead, our Board addresses the
suitability for continued service as a director upon the
expiration of each director’s term.
9
Succession Planning for the Chief Executive
Officer. The Personnel Committee reports on
at least an annual basis to the Board on succession planning.
Our succession planning is intended to include appropriate
contingencies for the unexpected retirement or incapacity of the
Chief Executive Officer.
Director Orientation and Continuing
Education. The Corporate Governance Committee
specifies the desired components of new director orientation and
makes periodic recommendations concerning the continuing
education of all Board members.
Director Stock Ownership
Guidelines. The Board of Directors believes
that the alignment of directors’ interests with those of
shareholders is strengthened when Board members are also
shareholders. The Board of Directors therefore requires that all
non-employee directors, within three years of being first
elected, own shares or units of Entergy common stock having a
market value of at least four times their annual cash retainer.
A review of non-employee director stock ownership was conducted
at the December 2009 Corporate Governance Committee meeting. The
Committee determined that all of our non-employee directors
satisfied these guidelines, as all non-employee directors who
had been members of the Board for a least three years held the
requisite number of shares or units.
Executive Officer Stock Retention
Policy. The Personnel Committee has adopted
stock retention guidelines applicable to the Company’s
executive officers. Our guidelines require an executive officer
to achieve and maintain a level of stock ownership equal to a
specified multiple of his or her salary. Until an executive
officer achieves the required level of stock ownership, the
executive officer is required upon the exercise of any stock
option granted on or after January 1, 2003, to retain at
least 75 percent of the after tax net profit in Entergy
common stock.
Majority Voting in Director
Elections. Our Bylaws require each director
to be elected by a majority of the votes cast with respect to
such director in uncontested elections (the number of shares
voted “for” a director must exceed the number of votes
cast “against” that director). In a contested election
(a situation in which the number of nominees exceeds the number
of directors to be elected), the standard for election of
directors will be a plurality of the shares represented in
person or by proxy at any such meeting and entitled to vote on
the election of directors.
Review
of Transactions with Related Persons.
Our Board of Directors has adopted written policies and
procedures for the review, approval or ratification of any
transaction involving an amount in excess of $120,000 in which
any director or executive officer of the Company, any nominee
for director, or any immediate family member of the foregoing
has or will have a material interest as contemplated by
Item 404(a) of
Regulation S-K
(“Related Party Transactions”). Under these policies
and procedures, the Corporate Governance Committee, or a
subcommittee of the Board of Directors comprised of independent
directors, reviews the transaction and either approves or
rejects the transaction after taking into account the following
factors:
| • | Whether the proposed transaction is on terms that are at least as favorable to the Company as those achievable with an unaffiliated third party; | |
| • | Size of the transaction and amount of consideration; | |
| • | Nature of the interest; | |
| • | Whether the transaction involves a conflict of interest; | |
| • | Whether the transaction involves services available from unaffiliated third parties; and | |
| • | Any other factors that the Corporate Governance Committee or subcommittee deems relevant. |
The policy does not apply to (a) compensation and Related
Party Transactions involving a director or an executive officer
solely resulting from that person’s service as a director
or employment with the Company so long as the compensation is
reported in the Company’s filings with the SEC,
(b) transactions involving the rendering of services as a
public utility at rates or charges fixed in conformity with law
or governmental authority or (c) any other categories of
transactions currently or in the future excluded from the
reporting requirements of Item 404(a) of
Regulation S-K.
10
TRANSACTIONS
WITH RELATED PERSONS
Since December 31, 2008, neither the Company nor any of its
affiliates has participated in any Related Party Transaction.
COMMUNICATION
WITH THE BOARD OF DIRECTORS
We believe that communication between the Board of Directors and
its shareholders and other interested parties is an important
part of the corporate governance process. The independent
members of the Board of Directors of the Company have adopted
the following communication policy:
Shareholders and other interested parties may communicate with
the Board or individual directors, including non-management
directors, by writing to them in care of the Presiding Director
at the address set forth below:
c/o Presiding
Director Entergy Corporation
639 Loyola Avenue
P.O. Box 61000
New Orleans, LA 70161
E-mail: etrbod@entergy.com
639 Loyola Avenue
P.O. Box 61000
New Orleans, LA 70161
E-mail: etrbod@entergy.com
The following types of communications will not be forwarded to
the directors:
| • | Spam | |
| • | Junk mail and mass mailings; | |
| • | Service complaints; | |
| • | Service inquiries; | |
| • | New service suggestions; | |
| • | Resumes and other forms of job inquiries; | |
| • | Surveys; | |
| • | Business solicitations and advertisements; or | |
| • | Requests for donations and sponsorships. |
Except as provided above, the Corporate Secretary forwards
communications sent in accordance with the above instructions to
the Board or to any individual director(s) to whom the
communication is directed unless the communication is
threatening, illegal or similarly inappropriate. The Corporate
Secretary periodically advises the Presiding Director of
significant communications received from shareholders and other
interested parties.
NOMINATION
OF DIRECTORS
The Corporate Governance Committee has not established any
specific, minimum qualifications that must be met by director
candidates or identified any specific qualities or skills that
it believes our directors must possess. The Committee’s
policy regarding consideration of potential director nominees
acknowledges that choosing a Board member involves a number of
objective and subjective assessments, many of which are
difficult to quantify or categorize. The Committee seeks to
nominate candidates with superior credentials, sound business
judgment, and the highest ethical character. The Committee also
will take into account the candidate’s relevant experience
with businesses or other organizations of comparable size to the
Company and seeks to identify candidates whose experience will
add to the collective experience of the Board. The Committee
believes the Board should reflect a diversity of backgrounds and
experiences in various areas, including age, gender, race,
geography and specialized experience, and candidates are
assessed to determine the extent to which they would contribute
to that diversity. The Committee also seeks to confirm that
candidates are not disqualified from serving on the Board under
applicable legal or regulatory requirements and evaluates
candidates’ independence, as that term is defined under
applicable
11
legal and regulatory requirements. The Committee annually
evaluates the effectiveness of its policy and procedures for the
evaluation of director candidates.
The Corporate Governance Committee does not have any single
method for identifying director candidates but will consider
candidates suggested by a wide range of sources. Stewart C.
Myers was elected to the Board in 2009 to fill an existing
vacancy. To fill this vacancy, the Corporate Governance
Committee established a process to identify and evaluate
director candidates suggested by members of the Board.
Mr. Myers was considered by the Committee at the suggestion
of Wayne Leonard, our Chief Executive Officer. The Committee
reviewed Mr. Myers’ background and experience and
interviewed Mr. Myers and, at the conclusion of this
process, the Committee recommended that Mr. Myers be
elected to the Board.
The Corporate Governance Committee will consider director
candidates recommended by our shareholders. Shareholders wishing
to recommend a candidate to the Corporate Governance Committee
should do so by submitting the recommendation in writing to our
Secretary at 639 Loyola Avenue, P.O. Box 61000, New
Orleans, LA 70161, and they will be forwarded to the Corporate
Governance Committee members for their consideration.
Any recommendation should include:
| • | the number of shares of the Company held by the shareholder; | |
| • | the name and address of the candidate; | |
| • | a brief biographical description, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements set forth above; and | |
| • | the candidate’s signed consent to serve as a director if elected and to be named in the Proxy Statement. |
Once the Corporate Governance Committee receives the
recommendation, it may request additional information from the
candidate about the candidate’s independence,
qualifications and other information that would assist the
Corporate Governance Committee in evaluating the candidate, as
well as certain information that must be disclosed about the
candidate in our Proxy Statement, if nominated. The Corporate
Governance Committee will apply the same standards in
considering director candidates recommended by shareholders as
it applies to other candidates.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our directors and executive officers, and any persons
owning more than ten percent of Entergy’s common stock, to
file with the SEC and NYSE initial reports of beneficial
ownership and certain changes in that beneficial ownership, with
respect to the equity securities of Entergy. We prepare and file
these reports on behalf of our directors and executive officers.
Based solely on a review of these forms filed with the SEC and
written representations from the reporting persons that no
Form 5 was required, the Company believes all reports were
timely filed.
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
In this section, we discuss and analyze the salaries and other
compensation elements paid in 2009 to our Chief Executive
Officer, our Chief Financial Officer, and our three other most
highly compensated executive officers (collectively, the
“Named Executive Officers”). Compensation data for
each Named Executive Officer appear in the summary compensation
and other tables appearing immediately after this section. This
discussion and analysis of Named Executive Officers compensation
policies and practices is also generally applicable to our
broader group of executive officers as discussed in this section.
12
Executive
Summary
We have designed the compensation program for our Named
Executive Officers to attract, retain, motivate and reward
executives who can contribute to our long-term success and
thereby build value for our shareholders.
Our executive compensation package is comprised of a combination
of short-term and long-term compensation elements. Short-term
compensation includes base pay and annual cash bonus awards.
Long-term compensation includes stock options and performance
units.
Our executive compensation program is approved by our Personnel
Committee, which is comprised entirely of independent board
members.
The following table summarizes the principal factors that we
take into account in deciding the amount of each compensation
element we pay or award to our executives:
|
Key Compensation Components |
||||
|
(where reported in summary |
||||
|
compensation table)
|
Factors
|
|||
| Base Salary | — | Company, business unit and individual performance | ||
|
(salary, column c)
|
— | Market data | ||
| — | Internal pay equity | |||
| — | The Committee’s assessment of other elements of compensation | |||
|
Non-Equity Incentive Plan Compensation (Cash Bonus) |
— | Compensation practices at our peer group companies and the general market for companies our size | ||
|
(non-equity plan compensation, column g)
|
— | Desire to ensure that a substantial portion of total compensation is performance-based | ||
| — | The Committee’s assessment of other elements of compensation | |||
| — | Company and individual performance | |||
|
Performance Units (stock awards, column e) |
— | Compensation practices at our peer group companies and in broader group of utility companies | ||
| — | Target long-term compensation values in the market for similar jobs | |||
| — | The desire to ensure that a substantial portion of total compensation is performance-based | |||
| — | The Committee’s assessment of other elements of compensation | |||
| Stock Options | — | Individual performance | ||
|
(options, column f)
|
— | Prevailing market practice | ||
| — | Targeted long-term value created by the use of stock options | |||
| — | Potential dilutive effect of stock option grants | |||
| — | The Committee’s assessment of other elements of compensation | |||
We make compensation decisions for each executive officer after
taking into account all elements of the officer’s
compensation. In making compensation decisions, we apply the
same compensation policies to all of our executive officers;
however, the application of these policies results in different
compensation amounts to individual executive officers because
of: (i) differences in roles and responsibilities;
(ii) differences in market-based compensation levels for
specific officer positions; (iii) our assessment of
individual performance; and (iv) variations in business
unit performance.
13
Objectives
of our Executive Compensation Program
| • | The greatest part of the compensation of our Named Executive Officers should be in the form of “at risk” performance-based compensation. |
We have designed our compensation programs to ensure that a
significant percentage of the total compensation of our Named
Executive Officers is contingent on achievement of performance
goals that drive total shareholder return and result in
increases in our common stock price. For example, each of our
annual cash incentive and our long-term performance unit
programs is designed to pay out if we achieve pre-established
performance goals. Assuming achievement of these performance
goals at target level, approximately 80% of the annual target
total compensation (excluding non-qualified supplemental
retirement income) of our Chief Executive Officer is represented
by performance-based compensation and the remaining 20% is
represented by base salary. For the other Named Executive
Officers, assuming achievement of performance goals at the
target levels, approximately 65% of their annual target total
compensation (excluding non-qualified supplemental retirement
income) is represented by performance-based compensation and the
remaining 35% by base salary. Our Chief Executive Officer’s
total compensation is at greater risk than our other Named
Executive Officers, reflecting market practice and acknowledging
the leadership role of the Chief Executive Officer in setting
company policy and strategies.
| • | A substantial portion of our Named Executive Officers’ compensation should be delivered in the form of equity awards. |
To align the economic interests of our Named Executive Officers
with our shareholders, we believe that a substantial portion of
their total compensation should be in the form of equity-based
awards. Awards are typically granted in the form of stock
options with a three-year vesting schedule and performance units
with a three-year performance cycle. Stock options are generally
subject only to time-based vesting. Performance units pay out
only if we achieve specified performance targets. The amount of
payout depends on the level of performance achieved.
| • | Our compensation programs should enable us to attract, retain and motivate executive talent by offering compensation packages that are competitive but fair. |
It is in our shareholders’ best interests that we attract
and retain talented executives by offering compensation packages
that are competitive but fair. Our Personnel Committee has
sought to develop compensation programs that deliver total
target compensation in aggregate at approximately the
50th
percentile of the market.
Our
Starting Point
To develop a competitive compensation program, the Personnel
Committee on an annual basis reviews base salary and other
compensation data from two sources:
| • | Survey Data: The Committee uses published and private compensation survey data to develop marketplace compensation levels for our executive officers. The data, which is compiled by the Committee’s independent compensation consultant, compares the current compensation levels received by each of our executive officers against the compensation levels received by executives holding similar positions at companies with corporate revenues consistent with our revenues. For non-industry specific positions such as a chief financial officer, the Committee reviews general industry data. For management positions that are industry-specific such as Group President, Utility Operations, the Committee reviews data from energy services companies. The survey data reviewed by the Committee covers approximately 300 public and private companies in general industry and approximately 70 public and private companies in the energy services sector. In evaluating compensation levels against the survey data, the Committee considers only the aggregated survey data. The identity of the companies comprising the survey data is not disclosed to, or considered by, the Committee in its decision-making process and, thus, is not considered material by the Committee. |
The Committee uses the survey data to develop compensation
programs that deliver total target compensation at approximately
the 50th percentile of the surveyed companies. This survey data
is the primary source used for targeting compensation. For this
purpose, the Committee reviews the results of the survey
14
data (organized in tabular format) comparing each Named
Executive Officer’s compensation relative to the 25th, 50th
(or median) and 75th percentile of the surveyed companies. The
Committee considers its objectives to have been met if our Chief
Executive Officer and the executive officers who constitute what
we refer to as our Office of the Chief Executive, considered as
a group (9 officers, including all of the Named Executive
Officers) have a target compensation package that falls within
the range of 90 — 110 percent of the
50th percentile
of the surveyed companies in the survey data. In 2009, the
target compensation of all Named Executive Officers fell within
this range. Actual compensation received by an individual
officer may be above or below the 50th percentile based on an
individual officer’s skills, performance and
responsibilities.
| • | Proxy Analysis: Although the survey data described above is the primary data source used in determining compensation, the Committee reviews data derived from proxy statements as an additional point of analysis. The proxy data is used to compare the compensation levels of our Named Executive Officers against the compensation levels of the corresponding top 5 highest paid executive officers from 18 of the companies included in the Philadelphia Utility Index. This analysis is used by the Committee to evaluate the reasonableness of the Company’s compensation program. The proxy market data compare our executive officers to other proxy officers based on pay rank without regard to roles and responsibilities. These companies are: |
| • | AES Corporation | |
| • | Ameren Corporation | |
| • | American Electric Power Co. Inc. | |
| • | CenterPoint Energy Inc. | |
| • | Consolidated Edison Inc. | |
| • | Dominion Resources Inc. | |
| • | DTE Energy Company | |
| • | Duke Energy Corporation | |
| • | Edison International |
| • | Exelon Corporation | |
| • | FirstEnergy Corporation | |
| • | FPL Group Inc. | |
| • | Northeast Utilities | |
| • | PG&E Corporation | |
| • | Progress Energy, Inc. | |
| • | Public Service Enterprise Group, Inc. | |
| • | Southern Company | |
| • | XCEL Energy |
Elements
of the Compensation Program
The major components of our executive compensation program are
presented below:
Short-Term
Compensation
| • | Base Salary |
Base Salary. The Personnel Committee analyzes
pay data and determines the base salaries for all of our Named
Executive Officers. Base salary is a component of our Named
Executive Officers’ compensation package because the
Committee believes it is appropriate that some portion of the
compensation that is provided to these
15
officers be provided in a form that is a fixed cash amount.
Also, base salary remains the most common form of payment
throughout all industries. Its use ensures a competitive
compensation package to our Named Executive Officers.
The Committee determines whether to award Named Executive
Officers annual merit increases in base salary based on the
following factors:
| • | Company, business unit and individual performance during the prior year; | |
| • | Market data; | |
| • | Internal pay equity; and | |
| • | The Committee’s assessment of other elements of compensation provided to the Named Executive Officer. |
The corporate and business unit goals and objectives vary by
individual officers and include, among other things, corporate
and business unit financial performance, capital expenditures,
cost containment, safety, reliability, customer service,
business development and regulatory matters.
Our use of “internal pay equity” in setting merit
increases is limited to determining whether a change in an
executive officer’s role and responsibilities relative to
other executive officers requires an adjustment in the
officer’s salary. The Committee has not established any
predetermined formula against which the base salary of one Named
Executive Officer is measured against another officer or
employee.
In January 2009, in light of economic conditions and the
projected slow growth in executive officer salaries in 2009
based on our review of general industry surveys prepared by
various human resource consulting firms, the Personnel Committee
decided not to increase the 2009 base salaries of the executive
officers who constitute the Office of the Chief Executive. The
2009 base salaries for our Named Executive Officers were:
|
Named Executive Officer
|
2009 Base Salary | |||
|
J. Wayne Leonard
|
$ | 1,291,500 | ||
|
Leo P. Denault
|
$ | 630,000 | ||
|
Mark T. Savoff
|
$ | 549,000 | ||
|
Richard J. Smith
|
$ | 645,000 | ||
|
Gary J. Taylor
|
$ | 570,000 | ||
| • | Non-Equity Incentive Plans (Cash Bonus) |
We include performance-based incentives in the Named Executive
Officers’ compensation packages because it encourages our
Named Executive Officers to pursue objectives consistent with
the overall goals and strategic direction that the Board has set
for our Company. Annual incentive plans are commonly used by
companies in a variety of industry sectors to compensate their
executive officers.
Our Named Executive Officers participate in a performance-based
cash bonus plan known as the Executive Annual Incentive Plan or
Annual Incentive Plan. The plan operates on a calendar year
basis. We use a performance metric known as the Entergy
Achievement Multiplier to determine the payouts for each
particular calendar year. The Entergy Achievement Multiplier is
used to determine the percentage of target annual plan awards
that will be paid each year to each Named Executive Officer. In
December 2008, the Personnel Committee selected the performance
measures for the Entergy Achievement Multiplier to be based in
equal part on earnings per share and operating cash flow for
2009 awards. The Committee selected these performance measures
because:
| • | earnings per share and operating cash flow have both a correlative and causal relationship to shareholder value performance; | |
| • | earnings per share and operating cash flow targets are aligned with externally-communicated goals; and | |
| • | earnings per share and operating cash flow results are readily available in earning releases and SEC filings. |
In addition, these measures are commonly used by other
companies, including the industry peer group companies, as
components of their incentive programs. For example,
approximately 56 percent of the industry peer
16
group companies use earnings per share as an incentive measure
and 22 percent use some type of cash flow measure. The
Personnel Committee evaluates and sets the performance measures
used for the Annual Incentive Plan on an annual basis.
The Committee sets minimum and maximum achievement levels under
the Annual Incentive Plan. Payouts for performance between
minimum and target achievement levels and between target and
maximum levels are calculated using straight line interpolation.
In general, the Committee seeks to establish target achievement
levels such that the relative difficulty of achieving the target
level is consistent from year to year. Over the five years
ending with 2009, the average Entergy Achievement Multiplier was
128% of target.
In December 2008, the Committee set the 2009 target award for
incentives to be paid in 2010 under the Annual Incentive Plan
for our Chief Executive Officer at 120% of his base salary and
the target awards for each other Named Executive Officer at 70%
of their respective base salaries. In setting these target
awards, the Personnel Committee considered several factors,
including:
| • | Analysis provided by the Committee’s independent compensation consultant as to compensation practices at the industry peer group companies and the general market for companies our size; | |
| • | Competitiveness of the Company’s compensation plans and their ability to attract and retain top executive talent; | |
| • | The individual performance of each Named Executive Officer; | |
| • | Target bonus levels in the market for comparable positions; | |
| • | The desire to ensure that a substantial portion of total compensation is performance-based; | |
| • | The relative importance, in any given year, of the short-term performance goals established pursuant to the Annual Incentive Plan; and | |
| • | The Committee’s assessment of other elements of compensation provided to the Named Executive Officer. |
The Committee established a higher target percentage for
Mr. Leonard compared to the other Named Executive Officers
to reflect the following factors:
| • | Mr. Leonard’s leadership and contributions to the Company’s success as measured by, among other things, the overall performance of the Company. | |
| • | Market practices that compensate chief executive officers at greater potential compensation levels with more “pay at risk” than other named executive officers. | |
| • | The Personnel Committee’s assessment of Mr. Leonard’s strong performance based on the Board’s annual performance evaluation, in which the Board reviews and assesses Mr. Leonard’s performance based on: leadership, strategic planning, financial results, succession planning, communications with all of our stakeholders, external relations with the communities and industries in which we operate and his relationship with the Board. |
The Committee based its decision on the target award of the
Named Executive Officers (other than the Chief Executive
Officer) on the recommendation of the Chief Executive Officer,
including his assessment of each officer’s performance. For
additional information regarding the role of the Chief Executive
Officer in compensation decisions, see “Compensation
Program Administration— Role of Chief Executive
Officer.”
In January 2009, the Committee determined the Entergy
Achievement Multiplier targets to be used for purposes of
determining annual bonuses for 2009. The targets established to
measure management performance against as reported results,
excluding the impact of activities associated with the planned
separation of our non-utility nuclear business (the “Spin
Transaction”), were:
| Minimum | Target | Maximum | ||||||||||
|
Earnings Per Share ($)
|
6.30 | 7.00 | 7.70 | |||||||||
|
Operating Cash Flow ($ billion)
|
2.52 | 2.88 | 3.24 | |||||||||
17
After reviewing earnings per share and operating cash flow
results against the performance objectives in the above table
and, in accordance with the terms of the Annual Incentive Plan,
adjusting for non-recurring charges for impairments to the
nuclear decommissioning trust, in January 2010, the Personnel
Committee certified the 2009 Entergy Achievement Multiplier at
115% of target.
Under the terms of the Management Effectiveness Program, the
Entergy Achievement Multiplier is automatically increased by
25 percent for the members of the Office of the Chief
Executive, subject to the Personnel Committee’s discretion
to adjust the automatic multiplier downward or eliminate it
altogether. In accordance with Section 162(m) of the
Internal Revenue Code, the multiplier, which we refer to as the
Management Effectiveness Factor, is intended to provide the
Committee, through the exercise of negative discretion, a
mechanism to take into consideration specific achievement
factors relating to the overall performance of the Company. In
January 2010, the Committee exercised its negative discretion to
eliminate the Management Effectiveness Factor with respect to
the 2009 incentive awards reflecting the Personnel
Committee’s determination that the Entergy Achievement
Multiplier, in and of itself without the Management
Effectiveness Factor, was consistent with the performance levels
achieved by the Company’s management.
The following table shows the Annual Incentive Plan payments as
a percentage of base salary for 2009 based on an Entergy
Achievement Multiplier of 115% as well as the incentive awards
for each Named Executive Officer:
|
Named Executive Officer
|
Target | Percentage Base Salary | 2009 Annual Incentive Award | |||||||||
|
J. Wayne Leonard
|
120 | % | 138 | % | $ | 1,782,270 | ||||||
|
Leo P. Denault
|
70 | % | 81 | % | $ | 507,150 | ||||||
|
Mark T. Savoff
|
70 | % | 81 | % | $ | 441,945 | ||||||
|
Richard J. Smith
|
70 | % | 81 | % | $ | 519,225 | ||||||
|
Gary J. Taylor
|
70 | % | 81 | % | $ | 458,850 | ||||||
Nuclear
Retention Plan
Some of Entergy’s executive officers, including
Mr. Taylor, participate in a special retention plan for
officers and other leaders with special expertise in the nuclear
industry. The Committee authorized the Plan to attract and
retain management talent in the nuclear power field, a field
that requires unique technical and other expertise that is in
great demand in the utility industry. For individuals who
commenced participation prior to January 1, 2007, such as
Mr. Taylor, the Plan provides for bonuses to be paid over a
four-year employment period. For example, an employee who
commenced participation on January 1, 2005, subject to his
or her continued employment with a participating company, and in
accordance with the terms and conditions of the Plan, was
eligible to receive three cash bonus payments (January 2007,
2008 and 2009) with each payment equal to an amount from
15% to 25% of the employee’s base salary as of
January 1, 2005. In the case of Mr. Taylor, the cash
bonus was fixed at 25% of his base salary and Mr. Taylor
received in January 2009 (for calendar year 2008) a cash
bonus equal to 25% of his January 1, 2005 base salary.
Effective January 1, 2009 and consistent with the terms of
the Plan, Mr. Taylor’s participation in the Plan was
renewed to reinforce the value we place on him as a member of
our senior management team, to recognize his superior experience
in the nuclear industry and to keep his pay competitive.
Mr. Taylor’s continued participation in the Plan
covers a three-year period that began on January 1, 2009.
In January 2010, 2011 and 2012, in accordance with the terms and
conditions of the Plan, Mr. Taylor will receive a cash
bonus equal to 30 percent of his base salary as of
January 1, 2009. Mr. Taylor’s participation in
the Plan (with respect to the period covered and percentage of
base salary paid) is consistent with the level of participation
of other senior executive officers who participate in the Plan.
Long-Term
Compensation
Our long-term incentive programs are intended to reward the
Named Executive Officers for achievement of shareholder value
creation over the long-term. In our long-term incentive
programs, we primarily use a mix of performance units and stock
options in order to accomplish different objectives. Performance
units reward the Named Executive Officers on the basis of total
shareholder return, which is a measure of stock appreciation and
18
dividend payments relative to the industry peer group companies.
Stock options provide a direct incentive for increasing the
price of our common stock. In addition, we occasionally award
restricted units for retention purposes or to offset forfeited
compensation in order to attract officers and managers from
other companies.
Each of the performance units, stock options and restricted
units granted to our Named Executive Officers in 2009 were
awarded under our 2007 Equity Ownership and Long Term Cash
Incentive Plan, which we refer to as the 2007 Equity Ownership
Plan.
| • | Performance Unit Program |
We issue performance unit awards to our Named Executive Officers
under our Performance Unit Program. Each Performance Unit equals
the cash value of one share of our common stock at the end of
the three-year performance cycle. Each unit also earns the cash
equivalent of the dividends paid during the performance cycle.
The Performance Unit Program is structured to reward Named
Executive Officers only if performance goals set by the
Personnel Committee are met. The Personnel Committee has no
discretion to make awards if minimum performance goals are not
achieved. The Performance Unit Program provides a minimum,
target and maximum achievement level. We measure performance by
assessing Entergy’s total shareholder return relative to
the total shareholder return of industry peer group companies.
The Personnel Committee chose total shareholder return as a
measure of performance because it assesses the Company’s
creation of shareholder value relative to other electric
utilities over the performance cycle. Minimum, target and
maximum performance levels are determined by reference to the
quartile ranking of Entergy’s total shareholder return
against the total shareholder return of industry peer group
companies.
For the
2010-2012
performance cycle, the Personnel Committee identified the
Philadelphia Utility Index as the industry peer group for total
shareholder return performance because the companies represented
in this index more closely approximate us in terms of size and
scale. The companies included in the Philadelphia Utility Index
are provided on page 15.
Subject to achievement of the Performance Unit Program
performance levels, the Personnel Committee established the
following target amounts for the 2010 — 2012
performance cycle: 22,300 performance units for our Chief
Executive Officer and 5,300 performance units for each of the
other Named Executive Officers. The range of payouts under the
program is shown below.
| Quartiles: | 4 | 3 | 2 | 1 | ||||||||
|
Performance Levels: |
Zero | Minimum | Target | Maximum | ||||||||
|
Total Shareholder Return Ranges: |
Below 25th percentile |
25th to
50th percentiles |
50th to
75th percentiles |
75th
percentile and above |
||||||||
| Payouts: | No Payout |
Interpolate between Minimum and Target (10% to 100% of Target) |
Interpolate between Target and Maximum (100% to 250% of Target) |
Maximum Payout (250% of Target) |
||||||||
The Personnel Committee sets payout opportunities for the
Performance Unit Program each performance cycle. In determining
payout opportunities, the Committee considers several factors,
including:
| • | The advice of the Committee’s independent compensation consultant regarding compensation practices at the industry peer group companies; | |
| • | Competitiveness of the Company’s compensation plans and their ability to attract and retain top executive talent; | |
| • | Target long-term compensation values in the market for similar jobs; |
19
| • | The desire to ensure, as described above, that a substantial portion of total compensation is performance-based; | |
| • | The relative importance, in any given year, of the long-term performance goals established pursuant to the Performance Unit Program; and | |
| • | The Committee’s assessment of other elements of compensation provided to the Named Executive Officer. |
For the
2007-2009
performance cycle, the target amounts established in January
2007 for the Chief Executive Officer were 23,800 performance
units and for the other Named Executive Officers, the target
amounts established were 4,500 performance units. Participants
could earn performance units consistent with the range of
payouts as described above for the
2010-2012
performance cycle. The Committee established a higher target
amount for Mr. Leonard compared to the other Named
Executive Officers based on the following factors:
| • | Mr. Leonard’s leadership and contributions to the Company’s success as measured by, among other things, the overall performance of the Company. | |
| • | Market practices that compensate chief executive officers at greater potential compensation levels with more “pay at risk” than other named executive officers. |
In January 2010, the Committee assessed the Company’s total
shareholder return for the
2007-2009
performance period and determined the actual number of
performance units to be paid to Performance Unit Program
participants for the
2007-2009
performance cycle. Performance was measured in a manner similar
to that described above for the
2010-2012
cycle, on the basis of relative total shareholder return.
For purposes of determining the Company’s relative
performance for the
2007-2009
performance cycle, the Committee used the Philadelphia Utility
Index as our peer group. Based on market data and the
recommendation of management, the Committee compared the
Company’s total shareholder return against the total
shareholder return of the companies that comprised the
Philadelphia Utility Index.
Based on a comparison of the Company’s performance relative
to the Philadelphia Utility Index as described above, the
Committee concluded that the Company’s performance, for the
2007-2009
performance cycle, ranked in the third quartile. This resulted
in a payment of 57% of target. Each performance unit was then
automatically converted into cash at the rate of $81.84 per
unit, the closing price of our common stock on the last trading
day of the performance cycle (December 31, 2009), plus
dividend equivalents accrued over the three-year performance
cycle. See the 2009 Stock Option Exercises and Stock Vested
table for the amount paid to each of the Named Executive
Officers for the
2007-2009
performance cycle.
| • | Stock Options |
The Personnel Committee considers several factors in determining
the amount of stock options it will grant under our 2007 Equity
Ownership Plan to our Named Executive Officers, including:
| • | Individual performance; | |
| • | Prevailing market practice in stock option grants; | |
| • | The targeted long-term value created by the use of stock options; | |
| • | The number of participants eligible for stock options, and the resulting “burn rate” (i.e., the number of stock options authorized divided by the total number of shares outstanding) to assess the potential dilutive effect; and | |
| • | The Committee’s assessment of other elements of compensation provided to the Named Executive Officer. |
For stock option awards, the Committee’s assessment of
individual performance of each Named Executive Officer done in
consultation with our Chief Executive Officer is the most
important factor in determining the number of options awarded.
20
The following table sets forth the number of stock options
granted to each Named Executive Officer in 2009. The exercise
price for each option was $77.53, which was the closing fair
market value of Entergy Corporation common stock on the date of
grant.
|
Named Executive Officer
|
Stock Options | |||
|
J. Wayne Leonard
|
125,000 | |||
|
Leo P. Denault
|
45,000 | |||
|
Mark T. Savoff
|
30,000 | |||
|
Richard J. Smith
|
35,000 | |||
|
Gary J. Taylor
|
30,000 | |||
The option grants awarded to our named executive officers (other
than the Chief Executive Officer) ranged in number between
30,000 and 45,000 shares. In the case of our Chief
Executive Officer, who received 125,000 stock options in 2009,
the Committee took special note of Mr. Leonard’s
performance as the Company’s Chief Executive Officer. Among
other things, the Committee noted that the total shareholder
return of the Company measured over the ten-year period between
Mr. Leonard’s appointment as CEO of the Company in
January 1999 and the January 29, 2009 grant date exceeded
all of our industry peer group companies as well as all other
U.S. utility companies.
For additional information regarding stock options awarded in
2009 to each of the Named Executive Officers, see the 2009
Grants of Plan-Based Awards table on page 32 of this Proxy
Statement.
Under our 2007 Equity Ownership Plan and our predecessor equity
plans, all options must have an exercise price equal to the
closing fair market value of Company common stock on the date of
grant. In addition, until an executive officer achieves the
multiple ownership position of our common stock as described on
page 10 of the proxy statement, the executive officer
(including a Named Executive Officer), upon exercising any stock
option granted on or after January 1, 2003, must retain at
least 75% of the after-tax net profit from such stock option
exercise in the form of Company common stock.
We have not adopted a formal policy regarding the granting of
options at times when the Company is in possession of material
non-public information. However, we generally grant options to
Named Executive Officers only during the month of January in
connection with our annual executive compensation decisions. On
occasion, we may grant options to newly hired employees or
existing employees for retention or other limited purposes.
| • | Restricted Units |
Restricted units granted under our 2007 Equity Ownership Plan
represent phantom shares of Company common stock (i.e.,
non-stock interests that have an economic value equivalent to a
share of our common stock). We occasionally grant restricted
units for retention purposes, to offset forfeited compensation
from a previous employer or for other limited purposes. If all
conditions of the grant are satisfied, restrictions on the
restricted units lift at the end of the restricted period, and a
cash equivalent value of the restricted units is paid. The
settlement price is equal to the number of restricted units
multiplied by the closing price of Company common stock on the
date restrictions lift. Restricted units are not entitled to
dividends or voting rights. Restricted units are generally
time-based awards for which restrictions lift, subject to
continued employment, generally over a two- to five-year period.
In December 2009, the Committee granted Mr. Leonard, our
Chief Executive Officer, 100,000 restricted units. The Committee
granted Mr. Leonard these restricted units in recognition
of the importance of his continued exemplary leadership as
Chairman and Chief Executive Officer and to encourage the
retention of his leadership in light of the numerous strategic
challenges facing the Company, including the challenges
associated with the completion of the Spin Transaction. The
Committee also took into account the competitive market for
chief executive officers. In determining the size of the grant,
the Committee consulted its independent consultant to confirm
that the grant was consistent with market practices. The
Committee also noted, based on the advice of its independent
consultant, that such grants are a commonly used market
technique for retention purposes.
The restricted units will vest in two equal installments of
50,000 units each on December 3, 2011 and
December 3, 2012. On each vesting date, we will pay to
Mr. Leonard, subject to payment of withholding taxes, a
21
cash amount equal to the closing price of a share of our common
stock on that date. Under certain conditions, including a
termination of employment without cause, death or disability,
Mr. Leonard’s restricted stock units may vest on an
earlier date.
No other Named Executive Officers received restricted units
during 2009.
| • | 2009 Significant Achievements |
In assessing individual and management performance with respect
to the overall compensation of each of our Named Executive
Officers, the Committee noted the following significant
achievements during 2009:
| • | Achieved the safest year in Entergy’s history; | |
| • | Achieved the highest generation ever from our entire nuclear fleet; | |
| • | Reported the highest earnings in our history; | |
| • | Named to “2010 All-America Executive Team” according to rankings compiled by the prestigious Institutional Investors magazine; our Chief Executive Officer and Chief Financial Officer ranked as the top CEO and CFOs in the power industry; Entergy was also ranked as the top electric utility in the country and among the top nine companies in the nation, making it one of the “Most Honored Companies;” | |
| • | Successfully completed Entergy New Orleans storm cost audits for Hurricanes Katrina, Rita, Gustav and Ike and reached agreement with the Louisiana Public Service Commission staff on recoverable Hurricane Gustav and Ike storm costs; | |
| • | Issued securitized debt for Entergy Texas 2008 storm costs; | |
| • | Implemented storm reserve accounting at Entergy Arkansas; | |
| • | Settled rate actions at Entergy Mississippi (annual formula rate plan), Entergy Texas (rate case) and renewed Entergy Gulf States Louisiana and Entergy Louisiana formula rate plans for three years; | |
| • | Completed the Board approved and previously announced $1.5 billion and $0.5 billion stock buyback programs; | |
| • | Named for the eighth consecutive year to the Dow Jones Sustainability World Index, an index that tracks the performance of companies that lead their field in terms of corporate sustainability on a global basis; | |
| • | Recognized for corporate governance practices where in 2009, we received a 100 percent rating for corporate governance in the RiskMetrics Group’s (formerly Institutional Shareholder Services) utility rankings; and | |
| • | Received multiple awards and recognition, including 11th EEI Emergency Assistance Recovery Award and Platts Global Energy Awards recognizing Entergy New Orleans gas rebuild project as the Global Infrastructure Project of the Year. |
Benefits,
Perquisites, Agreements and Post-Termination Plans
| • | Pension Plan, Pension Equalization Plan and System Executive Retirement Plan |
The Named Executive Officers participate in a Company-sponsored
pension plan that covers a broad group of employees. This
pension plan is a funded, tax-qualified, noncontributory defined
benefit pension plan. Benefits under the pension plan are based
upon an employee’s years of service with the Company and
the employee’s average monthly rate of “Eligible
Earnings” (which generally includes the employee’s
salary and eligible incentive awards, other than incentive
awards paid under the Annual Incentive Plan) for the highest
consecutive 60 months during the 120 months preceding
termination of employment. Benefits under the tax-qualified plan
are payable monthly after separation from the Company. The
amount of annual earnings that may be considered in calculating
benefits under the tax-qualified pension plan is limited by
federal law.
22
Benefits under the tax-qualified pension plan in which the Named
Executive Officers participate are calculated as an annuity
equal to 1.5% of a participant’s Eligible Earnings
multiplied by years of service. Years of service under the
pension plan formula cannot exceed 40. Contributions to the
pension plan are made entirely by the Company and are paid into
a trust fund from which the benefits of participants will be
paid.
The Company sponsors a Pension Equalization Plan, which is
available to a select group of management and highly compensated
employees, including the Named Executive Officers (other than
our Chief Executive Officer). The Pension Equalization Plan is a
non-qualified unfunded supplemental retirement plan that
provides for the payment to participants from Entergy’s
general assets a single lump sum cash distribution upon
separation from service generally equal to the actuarial present
value of the difference between the amount that would have been
payable as an annuity under the tax-qualified pension plan, but
for Internal Revenue Code limitations on pension benefits and
earnings that may be considered in calculating tax-qualified
pension benefits, and the amount actually payable as an annuity
under the tax-qualified pension plan. The Pension Equalization
Plan also takes into account as “Eligible Earnings”
any incentive awards paid under the Annual Incentive Plan.
The Company also sponsors a System Executive Retirement Plan,
which is available to the Company’s approximately 60
officers, including the Named Executive Officers (other than our
Chief Executive Officer). Participation in the System Executive
Retirement Plan requires individual approval by the plan
administrator. An employee participating in both the System
Executive Retirement Plan and the Pension Equalization Plan is
eligible to receive only the greater of the two single-sum
benefits computed in accordance with the terms and conditions of
each plan.
Like the Pension Equalization Plan, the System Executive
Retirement Plan is designed to provide for the payment to
participants from Entergy’s general assets of a single-sum
cash distribution upon separation from service. The single-sum
benefit is generally equal to the actuarial present value of a
specified percentage of the participant’s “Final
Average Monthly Compensation” (which is generally
1/36th of the sum of the participant’s annual rate of
base salary and Annual Incentive Plan award for the 3 highest
years during the last 10 years preceding termination of
employment), after first being reduced by the value of the
participant’s tax-qualified Pension Plan benefit and
typically any prior employer pension benefit available to the
participant.
While the System Executive Retirement Plan has a replacement
ratio schedule from one year of service to the maximum of
30 years of service, the table below offers a sample ratio
at 20 and 30 years of service.
|
Executives at |
||||||||||||
|
Management Level 3 |
||||||||||||
|
& Above — Includes |
||||||||||||
|
the remaining 4 |
||||||||||||
|
Executives at |
Named Executive |
Executives at |
||||||||||
|
Years of Service
|
Management Level 1 | Officers | Management Level 4 | |||||||||
|
20 Years
|
55.0 | % | 50.0 | % | 45.0 | % | ||||||
|
30 years
|
65.0 | % | 60.0 | % | 55.0 | % | ||||||
Mr. Leonard’s retention agreement (as further
discussed below) provides that, in lieu of his participation in
the Pension Equalization Plan and the System Executive
Retirement Plan, upon the termination of his employment (unless
such termination is for Cause, as defined in the agreement), he
will be entitled to receive a benefit equal to 60% of his Final
Average Compensation (as described in the description of the
System Executive Retirement Plan above) calculated as a single
life annuity and payable as an actuarial equivalent lump sum.
This benefit will be reduced by other benefits to which he is
entitled from any Company-sponsored pension plan or prior
employer pension plans. The terms of Mr. Leonard’s
Supplemental Retirement Benefit were negotiated at the time of
his employment with the Company and were designed to, among
other things, offset the loss of benefits resulting from
Mr. Leonard’s resignation from his prior employer. At
the time that the Company recruited Mr. Leonard, he had
accumulated twenty-five years of seniority with his prior
employer and had served as an executive officer for that
employer for over ten years and in an officer-level capacity for
over fifteen years.
The Committee believes that the Pension Plan, Pension
Equalization Plan and System Executive Retirement Plan are an
important part of our Named Executive Officers’
compensation program. These plans are important in the
recruitment of top talent in the competitive market, as these
types of supplemental plans are typically found in companies of
similar size to the Company. These plans serve a critically
important role in the retention of our senior
23
executives, as benefits from these plans generally increase for
each year that these executives remain employed by us. The plans
thereby encourage our most senior executives to remain employed
by us and continue their work on behalf of our shareholders.
We have agreed to provide service credit to all of our Named
Executive Officers (other than Mr. Leonard and
Mr. Savoff, our Executive Vice President, Operations) under
either the Pension Equalization Plan or the System Executive
Retirement Plan. We typically offer these service credit
benefits as one element of the total compensation package
offered to new mid-level or senior executives that we recruit
from other companies. By offering these executives
“credited service,” we are able to compete more
effectively to hire these employees by mitigating the potential
loss of their pension benefits resulting from accepting
employment with our Company.
See the 2009 Pension Benefits table on page 35 of this
Proxy Statement for additional information regarding the
operation of the plans described under this caption.
| • | Savings Plan |
The Named Executive Officers are eligible to participate in a
Company-sponsored Savings Plan that covers a broad group of
employees. This is a tax-qualified retirement savings plan,
wherein total combined before-tax and after-tax contributions
may not exceed 30 percent of a participant’s base
salary up to certain contribution limits defined by law. In
addition, under the Savings Plan, the participant’s
employer matches an amount equal to seventy cents for each
dollar contributed by participating employees, including the
Named Executive Officers, on the first six percent of their
Earnings (as defined in the Savings Plan) for that pay period.
We maintain the Savings Plan for our employees, including our
Named Executive Officers, because we wish to encourage our
employees to save some percentage of their cash compensation for
their eventual retirement. The Savings Plan permits employees to
make such savings in a manner that is relatively tax efficient.
This type of savings plan is also a critical element in
attracting and retaining talent in a competitive market.
| • | Executive Deferred Compensation |
The Named Executive Officers are eligible to defer up to 100% of
the following into the Company-sponsored Executive Deferred
Compensation Plan:
| • | Base Salary | |
| • | Annual Incentive Plan Bonus | |
| • | Performance Unit Program Awards |
The Named Executive Officers also are eligible to defer up to
100% of the following payments into our 2007 Equity Ownership
Plan:
| • | Annual Incentive Plan Bonus | |
| • | Performance Unit Program Awards |
Amounts deferred under the Executive Deferred Compensation Plan
and 2007 Equity Ownership Plan are subject to limitations
prescribed by law and the respective plan.
Additionally, Mr. Leonard and Mr. Savoff currently
have deferred account balances under a frozen Defined
Contribution Restoration Plan. These amounts are deemed invested
in the options available under this Defined Contribution
Restoration Plan. The Defined Contribution Restoration Plan,
until it was frozen in 2005, credited eligible employees’
deferral accounts with employer contributions to the extent
contributions under the qualified savings plan in which the
employee participated were subject to limitation imposed by the
Internal Revenue Code.
All deferral amounts represent an unfunded liability of the
employer. Amounts deferred into the 2007 Equity Ownership Plan
are deemed invested in phantom shares of our common stock.
Amounts deferred under the Executive Deferred Compensation Plan
are deemed invested in one or more of the available investment
options (generally mutual funds) offered under the Savings Plan.
Within the Executive Deferred Compensation Plan, the Named
Executive Officer may move funds from one deemed investment
option to another.
24
The Company does not “match” amounts that are deferred
by employees pursuant to the Executive Deferred Compensation
Plan or 2007 Equity Ownership Plan. With the exception of
allowing for the deferral of federal and state taxes, the
Company provides no additional benefit to the Named Executive
Officer for deferring any of the above payments. Any increase in
value of the deferred amounts results solely from the increase
in value of the investment options selected (phantom Company
stock or mutual funds available under the Savings Plan).
Deferred amounts are credited with earnings or losses based on
the rate of return of deemed investment options or Company
common stock, as selected by the participants.
We provide this benefit because the Committee believes it is
standard market practice to permit officers to defer the cash
portion of their compensation. The Executive Deferred
Compensation Plan and 2007 Equity Ownership Plan permit them to
do this while also receiving gains or losses on deemed
investments, as described above. We believe that providing this
benefit is important as a retention and recruitment tool as
many, if not all, of the companies with which we compete for
executive talent provide a similar arrangement to their senior
employees.
| • | Health & Welfare Benefits |
The Named Executive Officers are eligible to participate in
various health and welfare benefits available to a broad group
of employees. These benefits include medical, dental and vision
coverage, life and accidental death & dismemberment
insurance and long-term disability insurance. Eligibility,
coverage levels, potential employee contributions and other plan
design features are the same for the Named Executive Officers as
for the broad employee population.
| • | Executive Long-Term Disability Program |
All of our executive officers, including the Named Executive
Officers, are eligible to participate in our Executive Long-Term
Disability program. Individuals who elect to participate in this
plan and become disabled under the terms of the plan are
eligible for 65 percent of the difference between their
base salary and $275,000 (i.e. the base salary that produces the
maximum $15,000 monthly payment disability payment under
our general long-term disability plan).
| • | Perquisites |
We provide our Named Executive Officers with certain perquisites
and other personal benefits as part of providing a competitive
executive compensation program and for employee retention.
However, perquisites are not a material part of our compensation
program. In 2009, we offered to our Named Executive Officers
limited benefits such as the following: corporate aircraft
usage, personal financial counseling, club dues and annual
mandatory physical exams. For security and business convenience
reasons, we permit the Chief Executive Officer to use our
corporate aircraft at Company expense for personal use. Our
other Named Executive Officers may use corporate aircraft for
personal travel subject to the approval of our Chief Executive
Officer. The Personnel Committee reviews all perquisites,
including the use of corporate aircraft, on an annual basis. For
additional information regarding perquisites, see the “All
Other Compensation” column in the Summary Compensation
table on page 30 of this Proxy Statement.
| • | Retention Agreements and other Compensation Arrangements |
The Committee believes that retention and transitional
compensation arrangements are an important part of overall
compensation. The Committee believes that these arrangements
help to secure the continued employment and dedication of our
Named Executive Officers, notwithstanding any concern that they
might have at the time of a change in control regarding their
own continued employment. In addition, the Committee believes
that these arrangements are important as recruitment and
retention devices, as all or nearly all of the companies with
which we compete for executive talent have similar arrangements
in place for their senior employees.
To achieve these objectives, we have established a System
Executive Continuity Plan under which each of our other Named
Executive Officers is entitled to receive “change in
control” payments and benefits if such officer’s
employment is involuntarily terminated for similar qualifying
events or circumstances. Based on the market data provided by
its independent compensation consultant, the Committee believes
the benefits and payment levels
25
under the System Executive Continuity Plan are consistent with
market practices. Severance payments under the System Executive
Continuity Plan are based on the sum of an executive
officer’s base salary plus awards granted under the Annual
Incentive Plan. Revenue Ruling
2008-13
provides that compensation will not be treated as
performance-based under Section 162(m) if it is payable
regardless of actual performance in the event of termination by
a company without “cause,” by the executive with
“good reason” or an executive’s retirement.
Effective January 1, 2010, we amended the System Executive
Continuity Plan to allow incentive payments under the Annual
Incentive Plan to continue to be considered performance-based
under Section 162(m). With this amendment, severance
payments will be calculated based on the sum of (a) base
salary plus (b) the higher of: (i) the annual
incentive award actually awarded to the executive office under
the Annual Incentive Plan for the fiscal year immediately
preceding the fiscal year in which the termination of employment
occurs or (ii) the average Annual Incentive Plan award for
the two fiscal years immediately preceding the fiscal year in
which the termination of employment occurs.
In certain cases, the Committee may approve the execution of a
retention agreement with an individual executive officer. These
decisions are made on a case by case basis to reflect specific
retention needs or other factors, including market practice. If
a retention agreement is entered into with an individual
officer, the Committee considers the economic value associated
with that agreement in making overall compensation decisions for
that officer. The Company has voluntarily adopted a policy that
any severance arrangements providing benefits in excess of 2.99
times an officer’s annual base salary and annual incentive
award must be approved by the Company’s shareholders.
At present, we have entered into retention agreements with our
Chief Executive Officer and Chief Financial Officer. In general,
these retention agreements provide for “change in
control” payments and other benefits in lieu of those
provided under our System Executive Continuity Plan. The
retention agreements entered into with Mr. Leonard and
Denault reflect, among other things, the competition for chief
executive officer and chief financial officer talent in the
marketplace and the Committee’s assessment of the critical
role of these officers in executing the Company’s long-term
financial and other strategic objectives. Effective
January 1, 2010, we made amendments similar to those made
to the System Executive Continuity Plan to
Mr. Denault’s and Mr. Leonard’s retention
agreements to allow incentive payments under the Annual
Incentive Plan to continue to be considered performance based
under Section 162(m). Based on the market data provided by
its independent compensation consultant, the Committee believes
the benefits and payment levels under these retention agreements
are consistent with market practices.
On December 18, 2009, we entered into a retention agreement
with Richard J. Smith, our President and Chief Operating
Officer. This agreement provides for Mr. Smith’s
continued employment and the payment of certain compensation to
Mr. Smith in the event the planned Spin Transaction does
not occur. The agreement provides that in such event,
Mr. Smith will continue to be employed by an Entergy System
Company at a management level and with a salary no less than
Mr. Smith’s current management level and salary and
that his duties will include, among other things, coordinating
the orderly unwinding of the preparations for the contemplated
Spin Transaction. In addition, the agreement provides that
Mr. Smith will be entitled to receive a lump sum cash
payment equal to 1.5 times his base salary as of the date of
separation from Entergy if either (i) he remains
continuously employed in such capacity for 24 months after
any public announcement that the Spin Transaction will not occur
or (ii) he remains continuously employed in such capacity
for at least six (6) months after any such public
announcement and thereafter retires with the consent of our
Chief Executive Officer prior to reaching such 24 months of
service. We entered into this agreement with Mr. Smith in
light of Mr. Smith’s leadership role in the
preparations for the Spin Transaction and the critical role that
Mr. Smith would have in dismantling these preparations
should the Spin Transaction not occur. In determining the type
and size of the amount of payment under this agreement, we
consulted with our independent compensation consultant to
confirm that the economic value of this arrangement was
consistent with market practices.
For additional information regarding the System Executive
Continuity Plan and the two retention agreements described
above, see “2009 Potential Payments upon Termination or
Change in Control” on page 39 of this Proxy Statement.
26
Compensation
Program Administration
Role
of Personnel Committee
The Personnel Committee has overall responsibility for approving
the compensation program for our Named Executive Officers and
makes all final compensation decisions regarding our Named
Executive Officers. The Personnel Committee is responsible for,
among its other duties, the following actions related to our
Named Executive Officers:
| • | developing and implementing compensation policies and programs for our executive officers, including any employment agreement with an executive officer; | |
| • | evaluating the performance of our Chairman and Chief Executive Officer; and | |
| • | reporting, at least annually, to the Board on succession planning, including succession planning for the Chief Executive Officer. |
The Personnel Committee has authorized, in limited
circumstances, the delegation of its authority to grant stock
options under Company plans to the Chairman and Chief Executive
Officer of the Company and to the Senior Vice President of Human
Resources and Administration subject to the following conditions:
| • | No grant may exceed an aggregate value of $1 million per grantee; | |
| • | All awards must be issued in accordance with the terms of Company plans, including the requirement that all options be issued for an exercise price not less than the fair market value of the stock on date the option is granted; | |
| • | No awards may be granted to any employee subject to Section 16 of the Securities Exchange Act of 1934; and | |
| • | The Personnel Committee must be advised on at least a quarterly basis of the grants made under the exercise of this delegated authority. |
Role
of Chief Executive Officer
The Personnel Committee solicits recommendations from
Mr. Leonard, our Chief Executive Officer, with respect to
compensation decisions for individual Named Executive Officers
(other than himself). Our Chief Executive Officer’s role is
limited to:
| • | providing the Committee with an assessment of the performance of each Named Executive Officer; and | |
| • | recommending base salary, annual merit increases, stock option and annual cash incentive plan compensation amounts for these officers. |
In addition, the Committee may request that the Chief Executive
Officer provide management feedback and recommendations on
changes in the design of compensation programs, such as special
retention plans or changes in structure of bonus programs.
Mr. Leonard does not play any role with respect to any
matter affecting his own compensation nor does he have any role
determining or recommending the amount, or form of, director
compensation.
Mr. Leonard may attend committee meetings of the Personnel
Committee only at the invitation of the chair of the Personnel
Committee and cannot call a meeting of the Committee. However,
he is not in attendance at any meeting when the Committee
determines and approves the compensation to be paid to the Named
Executive Officers. Since he is not a member of the Committee,
he has no vote on matters submitted to the Committee. During
2009, Mr. Leonard attended five meetings of the Personnel
Committee.
In 2009, the Committee’s compensation consultant met at the
request of the Personnel Committee with the Chief Executive
Officer to review market trends in executive and management
compensation and to discuss the Company’s overall
compensation philosophy, such as the optimum balance between
base and incentive compensation. In addition, the Committee
requested that its independent compensation consultant interview
the Chief
27
Executive Officer to obtain management feedback on the impact of
compensation programs on employees and information regarding the
roles and responsibilities of the Named Executive Officers.
Role
of the Compensation Consultant
In discharging its duties, our Personnel Committee has retained
Towers Watson, formerly Towers Perrin, as its independent
compensation consultant to assist it in, among other things,
evaluating different compensation programs and developing market
data to assess our compensation programs. Under the terms of its
engagement, Towers Watson reports directly to the Personnel
Committee, which has the right to retain or dismiss the
consultant without the consent of the Company’s management.
In addition, the consent of the Personnel Committee must be
obtained before Towers Watson can accept any material
engagements recommended by the Company’s management.
In considering the appointment of Towers Watson, the Personnel
Committee took into account that Towers Watson provides from
time to time general consulting services to the Company’s
management with respect to non-executive compensation matters.
In this connection, the Committee reviewed the fees and
compensation received by Towers Watson for these services over a
historical period. After considering the nature and scope of
these engagements and the fee arrangements involved, the
Personnel Committee determined that the engagements did not
create a conflict of interest. The Committee reviews on an
ongoing basis the fees and compensation received by Towers
Watson for non-executive compensation matters on an annual basis
to monitor its independence. In 2009, Entergy incurred in the
aggregate fees of $234,668 from Towers Watson for determining or
recommending the amount or form of executive and director
compensation and $1,363,128 for other services, $1,141,054 of
which was for services related to the Spin Transaction.
Tax
and Accounting Considerations
Section 162(m) of the Internal Revenue Code limits the tax
deductibility by a publicly held corporation of compensation in
excess of $1 million paid to the Chief Executive Officer or
any of its other Named Executive Officers (other than the Chief
Financial Officer), unless that compensation is
“performance-based compensation” within the meaning of
Section 162(m). The Personnel Committee considers
deductibility under Section 162(m) as it structures the
compensation packages that are provided to its Named Executive
Officers. However, the Personnel Committee and the Board believe
that it is in the best interest of the Company that the
Personnel Committee retains the flexibility and discretion to
make compensation awards, whether or not deductible. This
flexibility is necessary to foster achievement of performance
goals established by the Personnel Committee as well as other
corporate goals that the Committee deems important to the
Company’s success, such as encouraging employee retention
and rewarding achievement.
Likewise, the Personnel Committee considers financial accounting
consequences as it structures the compensation packages that are
provided to the Named Executive Officers. However, the Personnel
Committee and the Board believe that it is in the best interest
of Entergy that the Personnel Committee retains the flexibility
and discretion to make compensation awards regardless of their
financial accounting consequences.
28
PERSONNEL
COMMITTEE REPORT
The Personnel Committee of the Company has reviewed and
discussed the Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and, based on such review and discussions, the
Personnel Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy
Statement and incorporated by reference in the Company’s
Annual Report on
Form 10-K
for the year ended December 31, 2009.
The Personnel Committee
Maureen S. Bateman, Chair
Gary W. Edwards
Alexis M. Herman
W. J. “Billy” Tauzin
Gary W. Edwards
Alexis M. Herman
W. J. “Billy” Tauzin
COMPENSATION
RISK ASSESSMENT
Entergy’s management has conducted an assessment of the
risks associated with our compensation practices and policies
and has determined that risks arising from such compensation
policies and practices are not reasonably likely to have a
material adverse effect on Entergy. This determination has taken
into account, among other things, the following design elements
of our compensation programs and policies and practices: the mix
of cash and equity payouts at various compensation levels; the
mix of performance time horizons used by our plans; the use of
financial performance metrics that are readily monitored and
reviewed; incorporation of both operational and financial goals
and individual performance; avoidance of uncapped awards;
multiple levels of review and approval of awards; and our
internal risk review and assessment processes.
29
EXECUTIVE
COMPENSATION TABLES
2009
Summary Compensation Table
The following table summarizes the total compensation paid or
earned by each of the Named Executive Officers for the fiscal
years ended December 31, 2009, 2008 and 2007.
The Company has not entered into any employment agreements with
any of the Named Executive Officers other than the retention
agreements described in “Potential Payments upon
Termination or Change in Control.” For additional
information regarding the material terms of the awards reported
in the following tables, including a general description of the
formula or criteria to be applied in determining the amounts
payable, see “Compensation Discussion and Analysis.”
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
|
Change in |
||||||||||||||||||||||||||||||||||||
|
Pension |
||||||||||||||||||||||||||||||||||||
|
Value and |
||||||||||||||||||||||||||||||||||||
|
Non-Equity |
Nonqualified |
|||||||||||||||||||||||||||||||||||
|
Incentive |
Deferred |
All |
||||||||||||||||||||||||||||||||||
|
Stock |
Option |
Plan |
Compensation |
Other |
||||||||||||||||||||||||||||||||
|
Name and |
Salary |
Awards |
Awards |
Compensation |
Earnings |
Compensation |
||||||||||||||||||||||||||||||
|
Principal Position
|
Year | (1) | Bonus | (2) | (3) | (4) | (5) | (6) | Total | |||||||||||||||||||||||||||
|
J. Wayne Leonard
|
2009 | $ | 1,341,174 | $ | — | $ | 9,850,425 | $ | 1,492,500 | $ | 1,782,270 | $ | 499,800 | $ | 200,040 | $ | 15,166,209 | |||||||||||||||||||
|
Chairman of the Board and
|
2008 | $ | 1,273,523 | $ | — | $ | 1,785,300 | $ | 2,813,125 | $ | 2,169,720 | $ | 313,200 | $ | 759,739 | $ | 9,114,607 | |||||||||||||||||||
|
Chief Executive Officer
|
2007 | $ | 1,216,443 | $ | — | $ | 2,185,316 | $ | 4,009,875 | $ | 1,815,480 | $ | 4,879,200 | $ | 613,661 | $ | 14,719,975 | |||||||||||||||||||
|
Leo P. Denault
|
2009 | $ | 654,231 | $ | — | $ | 372,144 | $ | 537,300 | $ | 507,150 | $ | 837,200 | $ | 60,688 | $ | 2,968,713 | |||||||||||||||||||
|
Executive Vice President
|
2008 | $ | 621,231 | $ | — | $ | 2,973,900 | $ | 803,750 | $ | 617,400 | $ | 250,500 | $ | 150,285 | $ | 5,417,066 | |||||||||||||||||||
|
and Chief Financial Officer
|
2007 | $ | 584,422 | $ | — | $ | 413,190 | $ | 943,500 | $ | 516,600 | $ | 535,000 | $ | 128,933 | $ | 3,121,645 | |||||||||||||||||||
|
Mark T. Savoff
|
2009 | $ | 570,115 | $ | — | $ | 372,144 | $ | 358,200 | $ | 441,945 | $ | 359,700 | $ | 66,014 | $ | 2,168,118 | |||||||||||||||||||
|
Executive Vice President,
|
2008 | $ | 543,563 | $ | — | $ | 421,980 | $ | 434,025 | $ | 538,020 | $ | 201,200 | $ | 192,838 | $ | 2,331,626 | |||||||||||||||||||
|
Operations
|
2007 | $ | 524,516 | $ | — | $ | 413,190 | $ | 550,375 | $ | 456,674 | $ | 254,300 | $ | 141,706 | $ | 2,340,761 | |||||||||||||||||||
|
Richard J. Smith
|
2009 | $ | 669,807 | $ | — | $ | 372,144 | $ | 417,900 | $ | 519,225 | $ | 755,900 | $ | 140,779 | $ | 2,875,755 | |||||||||||||||||||
|
President and
|
2008 | $ | 638,394 | $ | — | $ | 421,980 | $ | 562,625 | $ | 632,100 | $ | 391,400 | $ | 220,708 | $ | 2,867,207 | |||||||||||||||||||
|
Chief Operating Officer
|
2007 | $ | 599,612 | $ | — | $ | 413,190 | $ | 943,500 | $ | 535,886 | $ | 743,700 | $ | 153,733 | $ | 3,389,621 | |||||||||||||||||||
|
Gary J. Taylor
|
2009 | $ | 591,924 | $ | 105,000 | $ | 372,144 | $ | 358,200 | $ | 458,850 | $ | 706,600 | $ | 87,946 | $ | 2,680,664 | |||||||||||||||||||
|
Group President,
|
2008 | $ | 564,412 | $ | 105,000 | $ | 421,980 | $ | 562,625 | $ | 558,600 | $ | 360,600 | $ | 247,290 | $ | 2,820,507 | |||||||||||||||||||
|
Utility Operations
|
2007 | $ | 542,576 | $ | 105,000 | $ | 413,190 | $ | 943,500 | $ | 474,230 | $ | 723,800 | $ | 184,089 | $ | 3,386,385 | |||||||||||||||||||
| (1) | The amounts in column (c) represent the actual base salary paid to the Named Executive Officer. Changes in base salary were effective in April of the years shown and the base salary disclosed above is a combination of the two rates in effect during the year. The Named Executive Officers are paid on a bi-weekly basis and there was an extra pay period during calendar year 2009. | |
| (2) | The amounts in column (e) represent the aggregate grant date fair value of performance units granted under the 2009 — 2011 Performance Unit Program of the Equity Ownership Plan calculated in accordance with accounting standards. For Mr. Leonard, it also includes the grant date fair value of restricted units granted to him in December 2009 calculated in accordance with accounting standards. The amounts included in column (e) for the 2009 — 2011 Plan are calculated based on the probable satisfaction of the performance conditions. If the highest level of performance is achieved, the maximum amounts that will be received under the plan are as follows: Mr. Leonard, $4,361,063; Mr. Denault, $930,360; Mr. Savoff, $930,360; Mr. Smith, $930,360; and Mr. Taylor, $930,360. For a discussion of the relevant assumptions used in valuing these awards, see Note 12 to the Financial Statements in our Form 10-K for the year ended December 31, 2009. | |
| (3) | The amounts in column (f) represent the aggregate grant date fair value of stock options granted under the Equity Ownership Plan calculated in accordance with accounting standards. For a discussion of the relevant assumptions used in valuing these awards, see Note 12 to the Financial Statements in our Form 10-K for the year ended December 31, 2009. | |
| (4) | The amounts in column (g) represent cash payments made under the Annual Incentive Plan. | |
| (5) | The amounts in column (h) include the annual actuarial increase in the present value of the Named Executive Officer’s benefits under all pension plans established by the Company using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements and includes amounts which the Named Executive Officers may not currently be entitled to receive because such amounts are not vested. None |
30
| of the increase is attributable to above-market or preferential earnings on non-qualified deferred compensation (see “2009 Nonqualified Deferred Compensation”). | ||
| (6) | The amounts set forth in column (i) for 2009 include (a) matching contributions by the Company under the Savings Plan to each of the Named Executive Officers; (b) life insurance premiums; (c) tax gross up payments relating to perquisites; (d) dividends paid on stock awards and (e) perquisites and other compensation. The amounts are listed in the following table: |
|
J. Wayne |
Leo P. |
Mark T. |
Richard J. |
Gary J. |
||||||||||||||||
| Leonard | Denault | Savoff | Smith | Taylor | ||||||||||||||||
|
Company Contribution — Savings Plan
|
$ | 9,750 | $ | 9,750 | $ | 9,750 | $ | 9,750 | $ | 9,750 | ||||||||||
|
Life Insurance Premium
|
$ | 7,482 | $ | 3,944 | $ | 2,892 | $ | 3,070 | $ | 7,482 | ||||||||||
|
Tax Gross Up Payments
|
$ | 15,871 | $ | 9,212 | $ | 10,332 | $ | 49,656 | $ | 20,940 | ||||||||||
|
Dividends Paid on Stock Awards
|
$ | 116,376 | $ | 22,015 | $ | 22,015 | $ | 22,015 | $ | 22,015 | ||||||||||
|
Perquisites and Other Compensation
|
$ | 50,561 | $ | 15,767 | $ | 21,025 | $ | 56,288 | $ | 27,759 | ||||||||||
|
Total
|
$ | 200,040 | $ | 60,688 | $ | 66,014 | $ | 140,779 | $ | 87,946 | ||||||||||
Perquisites
and Other Compensation
The amounts set forth in column (i) also include
perquisites and other personal benefits that we provide to our
Named Executive Officers as part of providing a competitive
executive compensation program and for employee retention. The
following perquisites and other compensation were provided by us
in 2009 to the Named Executive Officers:
|
Personal Use of |
||||||||||
|
Named Executive |
Financial |
Corporate |
Executive |
|||||||
|
Officer
|
Counseling | Club Dues | Aircraft | Relocation | Physicals | |||||
|
J. Wayne Leonard
|
x | x | x | |||||||
|
Leo P. Denault
|
x | x | ||||||||
|
Mark T. Savoff
|
x | x | ||||||||
|
Richard J. Smith
|
x | x | x | |||||||
|
Gary J. Taylor
|
x | x | x | x | x |
For security and business reasons, we permit our Chief Executive
Officer to use our corporate aircraft for personal use at
Company expense. Our other Named Executive Officers may use the
corporate aircraft for personal travel subject to the approval
of our Chief Executive Officer. The aggregate incremental
aircraft usage cost associated with Mr. Leonard’s
personal use of the corporate aircraft, including the costs
associated with travel to outside board meetings, was $26,869
for fiscal year 2009. These amounts are reflected in column
(i) and the total above. The incremental cost to the
Company for use of the corporate aircraft is based on the
variable operational costs of each flight, including fuel,
maintenance, flight crew travel expense, catering,
communications and fees, including flight planning, ground
handling and landing permits.
None of the other individual perquisites items exceeded $25,000
for any of the Named Executive Officers.
31
2009
Grants of Plan-Based Awards
The following table summarizes award grants during 2009 to the
Named Executive Officers.
|
All Other |
All Other |
|||||||||||||||||||||||||||||||||||||||||||
|
Stock |
Option |
|||||||||||||||||||||||||||||||||||||||||||
|
Awards: |
Awards: |
Grant |
||||||||||||||||||||||||||||||||||||||||||
|
Number |
Number of |
Exercise |
Date Fair |
|||||||||||||||||||||||||||||||||||||||||
|
Estimated Future |
Estimated Future |
of Shares |
Securities |
or Base |
Value of |
|||||||||||||||||||||||||||||||||||||||
|
Payouts Under Non-Equity |
Payouts under Equity |
of Stock |
Underlying |
Price of |
Stock and |
|||||||||||||||||||||||||||||||||||||||
| Incentive Plan Awards(1) | Incentive Plan Awards(2) |
or Units |
Options |
Option |
Option |
|||||||||||||||||||||||||||||||||||||||
|
Grant |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
(#) |
(#) |
Awards |
Awards |
||||||||||||||||||||||||||||||||||
|
Name |
Date |
($) |
($) |
($) |
(#) |
(#) |
(#) |
(3) |
(4) |
($/Sh) |
(5) |
|||||||||||||||||||||||||||||||||
|
(a)
|
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
|
J. Wayne Leonard
|
1/29/09 | — | $ | 1,549,800 | $ | 3,099,600 | ||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 2,250 | 22,500 | 56,250 | $ | 4,361,063 | |||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 125,000 | $ | 77.53 | $ | 1,492,500 | |||||||||||||||||||||||||||||||||||||||
| 12/3/09 | 100,000 | $ | 8,106,000 | |||||||||||||||||||||||||||||||||||||||||
|
Leo P. Denault
|
1/29/09 | — | $ | 441,000 | $ | 882,000 | ||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 480 | 4,800 | 12,000 | $ | 930,360 | |||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 45,000 | $ | 77.53 | $ | 537,300 | |||||||||||||||||||||||||||||||||||||||
|
Mark T. Savoff
|
1/29/09 | — | $ | 384,300 | $ | 768,600 | ||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 480 | 4,800 | 12,000 | $ | 930,360 | |||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 30,000 | $ | 77.53 | $ | 358,200 | |||||||||||||||||||||||||||||||||||||||
|
Richard J. Smith
|
1/29/09 | — | $ | 451,500 | $ | 903,000 | ||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 480 | 4,800 | 12,000 | $ | 930,360 | |||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 35,000 | $ | 77.53 | $ | 417,900 | |||||||||||||||||||||||||||||||||||||||
|
Gary J. Taylor
|
1/29/09 | — | $ | 399,000 | $ | 798,000 | ||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 480 | 4,800 | 12,000 | $ | 930,360 | |||||||||||||||||||||||||||||||||||||||
| 1/29/09 | 30,000 | $ | 77.53 | $ | 358,200 | |||||||||||||||||||||||||||||||||||||||
| (1) | The amounts in columns (c), (d) and (e) represent minimum, target and maximum payment levels under the Annual Incentive Plan. The actual amounts awarded are reported in column (g) of the Summary Compensation Table. | |
| (2) | The amounts in columns (f), (g) and (h) represent the minimum, target and maximum payment levels under the Performance Unit Plan. Performance under the program is measured by the Company’s total shareholder return relative to the total shareholder returns of the companies included in the Philadelphia Utility Index. If the Company’s total shareholder return is not at least 25% of that for the Philadelphia Utility Index, there is no payout. Subject to achievement of performance targets, each unit will be converted into the cash equivalent of one share of the Company’s common stock on the last day of the performance period (December 31, 2011.) | |
| (3) | In December 2009, the Personnel Committee granted 100,000 restricted units to Mr. Leonard. The restricted units vest in two equal installments of 50,000 units each on December 3, 2011 and December 3, 2012. The restricted units were granted under the 2007 Equity Ownership Plan. | |
| (4) | The amounts in column (j) represent options to purchase shares of the Company’s common stock. The options vest one-third on each of the first through third anniversaries of the grant date. The options have a ten-year term from the date of grant. The options were granted under the 2007 Equity Ownership Plan. | |
| (5) | The amounts included in this column are valued based on the aggregate grant date fair value of the award calculated in accordance with accounting standards. The amounts included for grants under the Performance Unit Plan are calculated assuming the highest level of performance is achieved. See Note 12 to the Financial Statements in our Form 10-K for the year ended December 31, 2009 for a discussion of the relevant assumptions used in calculating the grant date fair value. |
32
2009
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes unexercised options, stock that
has not vested and equity incentive plan awards for each Named
Executive Officer outstanding as of the end of 2009.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
|
Equity |
||||||||||||||||||||||||||||||||||||
|
Incentive |
||||||||||||||||||||||||||||||||||||
|
Equity |
Plan |
|||||||||||||||||||||||||||||||||||
|
Equity |
Incentive |
Awards: |
||||||||||||||||||||||||||||||||||
|
Incentive |
Plan |
Market or |
||||||||||||||||||||||||||||||||||
|
Plan |
Awards: |
Payout |
||||||||||||||||||||||||||||||||||
|
Awards: |
Number of |
Value of |
||||||||||||||||||||||||||||||||||
|
Number |
Number |
Number |
Number |
Market |
Unearned |
Unearned |
||||||||||||||||||||||||||||||
|
of |
of |
of |
of Shares |
Value of |
Shares, |
Shares, |
||||||||||||||||||||||||||||||
|
Securities |
Securities |
Securities |
or Units |
Shares or |
Units or |
Units or |
||||||||||||||||||||||||||||||
|
Underlying |
Underlying |
Underlying |
of Stock |
Units of |
Other |
Other |
||||||||||||||||||||||||||||||
|
Unexercised |
Unexercised |
Unexercised |
Option |
That Have |
Stock |
Rights |
Rights |
|||||||||||||||||||||||||||||
|
Options |
Options |
Unearned |
Exercise |
Option |
Not |
That Have |
That Have |
That Have |
||||||||||||||||||||||||||||
|
(#) |
(#) |
Options |
Price |
Expiration |
Vested |
Not Vested |
Not Vested |
Not Vested |
||||||||||||||||||||||||||||
|
Name
|
Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
|
J. Wayne Leonard
|
— | 125,000 | (1) | $ | 77.53 | 1/29/2019 | ||||||||||||||||||||||||||||||
| 58,333 | 116,667 | (2) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 170,000 | 85,000 | (3) | $ | 91.82 | 1/25/2017 | |||||||||||||||||||||||||||||||
| 210,000 | — | $ | 68.89 | 1/26/2016 | ||||||||||||||||||||||||||||||||
| 165,200 | — | $ | 69.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
| 220,000 | — | $ | 58.60 | 3/02/2014 | ||||||||||||||||||||||||||||||||
| 195,000 | — | $ | 44.45 | 1/30/2013 | ||||||||||||||||||||||||||||||||
| 330,600 | — | $ | 41.69 | 2/11/2012 | ||||||||||||||||||||||||||||||||
| 330,600 | — | $ | 37.00 | 1/25/2011 | ||||||||||||||||||||||||||||||||
| 2,250 | (4) | $ | 184,140 | |||||||||||||||||||||||||||||||||
| 16,500 | (5) | $ | 1,350,360 | |||||||||||||||||||||||||||||||||
| 100,000 | (6) | $ | 8,184,000 | |||||||||||||||||||||||||||||||||
|
Leo P. Denault
|
— | 45,000 | (1) | $ | 77.53 | 1/29/2019 | ||||||||||||||||||||||||||||||
| 16,666 | 33,334 | (2) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 40,000 | 20,000 | (3) | $ | 91.82 | 1/25/2017 | |||||||||||||||||||||||||||||||
| 50,000 | — | $ | 68.89 | 1/26/2016 | ||||||||||||||||||||||||||||||||
| 35,000 | — | $ | 69.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
| 40,000 | — | $ | 58.60 | 3/02/2014 | ||||||||||||||||||||||||||||||||
| 676 | — | $ | 52.40 | 2/11/2012 | ||||||||||||||||||||||||||||||||
| 7,720 | — | $ | 52.40 | 1/25/2011 | ||||||||||||||||||||||||||||||||
| 9,800 | — | $ | 44.45 | 1/30/2013 | ||||||||||||||||||||||||||||||||
| 19,656 | — | $ | 41.69 | 2/11/2012 | ||||||||||||||||||||||||||||||||
| 5,434 | — | $ | 37.00 | 1/25/2011 | ||||||||||||||||||||||||||||||||
| 480 | (4) | $ | 39,283 | |||||||||||||||||||||||||||||||||
| 3,900 | (5) | $ | 319,176 | |||||||||||||||||||||||||||||||||
| 24,000 | (7) | $ | 1,964,160 | |||||||||||||||||||||||||||||||||
|
Mark T. Savoff
|
— | 30,000 | (1) | $ | 77.53 | 1/29/2019 | ||||||||||||||||||||||||||||||
| 9,000 | 18,000 | (2) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 23,333 | 11,667 | (3) | $ | 91.82 | 1/25/2017 | |||||||||||||||||||||||||||||||
| 30,000 | — | $ | 68.89 | 1/26/2016 | ||||||||||||||||||||||||||||||||
| 20,000 | — | $ | 69.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
| 31,800 | — | $ | 58.60 | 3/02/2014 | ||||||||||||||||||||||||||||||||
| 480 | (4) | $ | 39,283 | |||||||||||||||||||||||||||||||||
| 3,900 | (5) | $ | 319,176 | |||||||||||||||||||||||||||||||||
33
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||||||||
|
Equity |
||||||||||||||||||||||||||||||||||||
|
Incentive |
||||||||||||||||||||||||||||||||||||
|
Equity |
Plan |
|||||||||||||||||||||||||||||||||||
|
Equity |
Incentive |
Awards: |
||||||||||||||||||||||||||||||||||
|
Incentive |
Plan |
Market or |
||||||||||||||||||||||||||||||||||
|
Plan |
Awards: |
Payout |
||||||||||||||||||||||||||||||||||
|
Awards: |
Number of |
Value of |
||||||||||||||||||||||||||||||||||
|
Number |
Number |
Number |
Number |
Market |
Unearned |
Unearned |
||||||||||||||||||||||||||||||
|
of |
of |
of |
of Shares |
Value of |
Shares, |
Shares, |
||||||||||||||||||||||||||||||
|
Securities |
Securities |
Securities |
or Units |
Shares or |
Units or |
Units or |
||||||||||||||||||||||||||||||
|
Underlying |
Underlying |
Underlying |
of Stock |
Units of |
Other |
Other |
||||||||||||||||||||||||||||||
|
Unexercised |
Unexercised |
Unexercised |
Option |
That Have |
Stock |
Rights |
Rights |
|||||||||||||||||||||||||||||
|
Options |
Options |
Unearned |
Exercise |
Option |
Not |
That Have |
That Have |
That Have |
||||||||||||||||||||||||||||
|
(#) |
(#) |
Options |
Price |
Expiration |
Vested |
Not Vested |
Not Vested |
Not Vested |
||||||||||||||||||||||||||||
|
Name
|
Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
|
Richard J. Smith
|
— | 35,000 | (1) | $ | 77.53 | 1/29/2019 | ||||||||||||||||||||||||||||||
| 11,666 | 23,334 | (2) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 40,000 | 20,000 | (3) | $ | 91.82 | 1/25/2017 | |||||||||||||||||||||||||||||||
| 50,000 | — | $ | 68.89 | 1/26/2016 | ||||||||||||||||||||||||||||||||
| 40,000 | — | $ | 69.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
| 63,600 | — | $ | 58.60 | 3/02/2014 | ||||||||||||||||||||||||||||||||
| 7,640 | — | $ | 51.50 | 1/25/2011 | ||||||||||||||||||||||||||||||||
| 50,000 | — | $ | 44.45 | 1/30/2013 | ||||||||||||||||||||||||||||||||
| 70,000 | — | $ | 41.69 | 2/11/2012 | ||||||||||||||||||||||||||||||||
| 39,428 | — | $ | 37.00 | 1/25/2011 | ||||||||||||||||||||||||||||||||
| 480 | (4) | $ | 39,283 | |||||||||||||||||||||||||||||||||
| 3,900 | (5) | $ | 319,176 | |||||||||||||||||||||||||||||||||
|
Gary J. Taylor
|
— | 30,000 | (1) | $ | 77.53 | 1/29/2019 | ||||||||||||||||||||||||||||||
| 11,666 | 23,334 | (2) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 40,000 | 20,000 | (3) | $ | 91.82 | 1/25/2017 | |||||||||||||||||||||||||||||||
| 50,000 | — | $ | 68.89 | 1/26/2016 | ||||||||||||||||||||||||||||||||
| 35,000 | — | $ | 69.47 | 1/27/2015 | ||||||||||||||||||||||||||||||||
| 40,000 | — | $ | 58.60 | 3/02/2014 | ||||||||||||||||||||||||||||||||
| 26,900 | — | $ | 44.45 | 1/30/2013 | ||||||||||||||||||||||||||||||||
| 34,600 | — | $ | 41.69 | 2/11/2012 | ||||||||||||||||||||||||||||||||
| 480 | (4) | $ | 39,283 | |||||||||||||||||||||||||||||||||
| 3,900 | (5) | $ | 319,176 | |||||||||||||||||||||||||||||||||
| (1) | Consists of options that will vest as follows: 1/3 of the options granted vest on each of 1/29/2010, 1/29/2011 and 1/29/2012. | |
| (2) | Consists of options that vested or will vest as follows: 1/2 of the unexercisable options vest on each of 1/24/2010 and 1/24/2011. | |
| (3) | The remaining unexercisable options will vest on 1/25/2010. | |
| (4) | Consists of performance units that will vest on December 31, 2011 only if, and to the extent that, we satisfy performance conditions as described under “Long-Term Compensation — Performance Unit Program” in Compensation Discussion and Analysis. | |
| (5) | Consists of performance units that will vest on December 31, 2010 only if, and to the extent that, the Company satisfies performance conditions as described under “Long-Term Compensation — Performance Unit Program” in Compensation Discussion and Analysis. | |
| (6) | Consists of restricted units granted under the 2007 Equity Ownership Plan 50,000 of which will vest on December 3, 2011 and the remaining 50,000 will visit on December 3, 2012. | |
| (7) | Consists of restricted units granted under the Equity Ownership Plan. 8,000 units will vest on each of January 25, 2011, 2012 and 2013. |
34
2009
Option Exercises and Stock Vested
The following table provides information concerning each
exercise of stock options and each vesting of stock during 2009
for the Named Executive Officers.
| Options Awards | Stock Awards | |||||||||||||||
| (a) | (b) | (c) | (d) | (e) | ||||||||||||
|
Number of |
Number of |
|||||||||||||||
|
Shares |
Value |
Shares |
Value |
|||||||||||||
|
Acquired |
Realized |
Acquired |
Realized |
|||||||||||||
|
on Exercise |
on Exercise |
on Vesting |
on Vesting |
|||||||||||||
|
Name
|
(#) | ($) | (#)(1) | ($) | ||||||||||||
|
J. Wayne Leonard
|
330,600 | $ | 18,723,928 | 64,988 | (2) | $ | 5,275,618 | |||||||||
|
Leo P. Denault
|
12,404 | $ | 322,969 | 2,834 | $ | 231,935 | ||||||||||
|
Mark T. Savoff
|
— | — | 2,834 | $ | 231,935 | |||||||||||
|
Richard J. Smith
|
40,137 | $ | 1,091,955 | 2,834 | $ | 231,935 | ||||||||||
|
Gary J. Taylor
|
26,667 | $ | 1,154,009 | 2,834 | $ | 231,935 | ||||||||||
| (1) | Represents the vesting of performance units for the 2007-2009 performance period (payable solely in cash based on the closing stock price of the Company on the date of vesting) under the Performance Unit Program. | |
| (2) | Amount includes the August 3, 2009 cash settlement of 50,000 restricted units granted under the 2007 Equity Ownership Plan. |
2009
Pension Benefits
The following table shows the present value as of
December 31, 2009 of accumulated benefits payable to each
of the Named Executive Officers, including the number of years
of service credited to each Named Executive Officer, under our
retirement plans determined using interest rate and mortality
rate assumptions set forth in Note 11 to the Financial
Statements in the
Form 10-K
for the year ended December 31, 2009. Additional
information regarding these retirement plans is set forth in
Compensation Discussion and Analysis under the heading
“Benefits, Perquisites, Agreements and Post-Termination
Plans — Pension Plan, Pension Equalization Plan and
System Executive Retirement Plan” and following this table.
In addition, this section includes information regarding early
retirement options under the plans.
|
Number |
Present |
||||||||||||||
|
of Years |
Value of |
Payments |
|||||||||||||
|
Credited |
Accumulated |
During |
|||||||||||||
|
Name
|
Plan Name
|
Service | Benefit | 2009 | |||||||||||
|
J. Wayne Leonard(1)
|
Non-qualified supplemental retirement benefit | 11.68 | $ | 24,323,900 | $— | ||||||||||
| Qualified defined benefit plan | 11.68 | $ | 285,900 | $— | |||||||||||
|
Leo P. Denault(2)
|
Non-qualified System Executive Retirement Plan | 25.83 | $ | 3,239,300 | $— | ||||||||||
| Qualified defined benefit plan | 10.83 | $ | 155,900 | $— | |||||||||||
|
Mark T. Savoff
|
Non-qualified System Executive Retirement Plan | 6.06 | $ | 1,077,800 | $— | ||||||||||
| Qualified defined benefit plan | 6.06 | $ | 107,200 | $— | |||||||||||
|
Richard J. Smith(3)
|
Non-qualified Pension Equalization Plan | 33.25 | $ | 3,701,700 | $— | ||||||||||
| Qualified defined benefit plan | 10.33 | $ | 241,300 | $— | |||||||||||
|
Gary J. Taylor(4)
|
Non-qualified System Executive Retirement Plan | 19.80 | $ | 3,422,000 | $— | ||||||||||
| Qualified defined benefit plan | 9.75 | $ | 205,800 | $— | |||||||||||
| (1) | Pursuant to his retention agreement, Mr. Leonard is entitled to a non-qualified supplemental retirement benefit in lieu of participation in the Company’s non-qualified supplemental retirement plans such as the System Executive Retirement Plan or the Pension Equalization Plan. Mr. Leonard may separate from employment without a reduction in his non-qualified supplemental retirement benefit. | |
| (2) | During 2006, Mr. Denault entered into an agreement granting an additional 15 years of service under the non-qualified System Executive Retirement Plan if he continues to work for an Entergy System company employer until age 55. The additional 15 years increases the present value of his benefit by $1,431,700. |
35
| (3) | Mr. Smith entered into an agreement granting 22.92 additional years of service under the non-qualified Pension Equalization Plan providing an additional $999,300 above the present value of accumulated benefit he would receive under the non-qualified System Executive Retirement Plan. | |
| (4) | Mr. Taylor entered into an agreement granting an additional 10 years of service under the System Executive Retirement Plan resulting in a $1,623,300 increase in the present value of his benefit. |
Qualified
Retirement Benefits
The qualified retirement plan is a funded defined benefit
pension plan that provides benefits to most of the
non-bargaining unit employees of Entergy System companies. All
Named Executive Officers are participants in this plan. The
pension plan provides a monthly benefit payable for the
participant’s lifetime beginning at age 65 and equal
to 1.5% of the participant’s five-year average monthly
eligible earnings times such participant’s years of
service. Participants are 100% vested in their benefit upon
completing 5 years of vesting service.
Normal retirement under the plan is age 65. Employees who
terminate employment prior to age 55 may receive a reduced
deferred vested retirement benefit payable as early as
age 55 that is actuarially equivalent to the normal
retirement benefit (i.e., reduced by 7% per year for the first
5 years preceding age 65, and reduced by 6% for each
additional year thereafter). Employees who are at least
age 55 with 10 years of vesting service upon
termination are entitled to a subsidized early retirement
benefit beginning as early as age 55. The subsidized early
retirement benefit is equal to the normal retirement benefit
reduced by 2% per year for each year that early retirement
precedes age 65. Mr. Leonard and Mr. Smith are
eligible for subsidized early retirement benefits.
Non-qualified
Retirement Benefits
The Named Executive Officers are eligible to participate in
certain non-qualified retirement benefit plans that provide
retirement income, including the Pension Equalization Plan and
the System Executive Retirement Plan. Each of these plans is an
unfunded non-qualified defined benefit pension plan that
provides benefits to key management employees. In these plans,
as described below and in Compensation, Discussion and Analysis,
an executive is typically enrolled in one or more plans but only
paid the amount due under the plan (or combination of plans)
that provides the highest benefit. In general, upon disability,
participants in the Pension Equalization Plan and the System
Executive Retirement Plan remain eligible for continued service
credits until recovery or retirement. Generally, spouses of
participants who die before commencement of benefits may be
eligible for a portion of the participant’s accrued benefit.
All of the Named Executive Officers (other than
Mr. Leonard) participate in both the Pension Equalization
Plan and System Executive Retirement Plan.
The
Pension Equalization Plan
All of the Named Executive Officers (with the exception of
Mr. Leonard) are participants in the Pension Equalization
Plan. The benefit provisions are substantially the same as the
qualified retirement plan but provide two additional benefits:
(a) “restorative benefits” intended to offset
limitations on certain earnings that may be considered in
connection with the qualified retirement plan and
(b) supplemental credited service (if granted to an
individual participant). The benefits under this plan are offset
by benefits payable from the qualified retirement plan and may
be offset by prior employer benefits. Participants receive their
Pension Equalization Plan benefit in the form of a single sum
cash distribution. The Pension Equalization Plan benefit
attributable to supplemental credited service is not vested
until age 65. Subject to the approval of the Entergy System
company employer (which approval is deemed given following a
change in control), an employee who terminates employment prior
to age 65 may be vested in his or her benefit, with payment
of the lump sum benefit generally at separation from service
unless delayed six months under Internal Revenue Code
Section 409A. Benefits payable prior to age 65 are
subject to the same reductions as qualified plan benefits.
The
System Executive Retirement Plan
All Named Executive Officers (except Mr. Leonard) are
participants in the System Executive Retirement Plan. The System
Executive Retirement Plan provides for a single sum payment at
age 65, as further described in
36
Compensation Discussion and Analysis. The System Executive
Retirement Plan benefit is not vested until age 65. Subject
to the approval of the Entergy System company employer, an
employee who terminates his or her employment prior to
age 65 may be vested in the System Executive Retirement
Plan benefit, with payment of the lump sum benefit generally at
separation from service unless delayed six months under Internal
Revenue Code Section 409A. Benefits payable prior to
age 65 are subject to the same reductions as qualified plan
benefits. Further, in the event of a change in control,
participants whose employment is terminated without
“Cause” or for “Good Reason,” as defined in
the Plan are also eligible for a subsidized lump sum benefit
payment, even if they do not currently meet the age or service
requirements for early retirement under that plan or have
company permission to separate from employment. Such lump sum
benefit is payable generally at separation from service unless
delayed 6 months under Internal Revenue Code
Section 409A.
Mr. Leonard’s
Non-qualified Supplemental Retirement Benefit
Mr. Leonard’s retention agreement provides that if his
employment with the Company is terminated for any reason other
than for cause (as defined below under “Potential Payments
Upon Termination or Change in Control”), he will be
entitled to a non-qualified supplemental retirement benefit in
lieu of participation in the Company’s non-qualified
supplemental retirement plans such as the System Executive
Retirement Plan or the Pension Equalization Plan.
Mr. Leonard’s non-qualified supplemental retirement
benefit is calculated as a single life annuity equal to 60% of
his final three-year average compensation (as described in the
description of the System Executive Retirement Plan included in
the Compensation Discussion and Analysis), reduced to account
for benefits payable to Mr. Leonard under the
Company’s and a former employer’s qualified pension
plans. The benefit is payable in a single lump sum. Because
Mr. Leonard has already attained the age of 55, he is
currently entitled under his retention agreement to his
non-qualified supplemental retirement benefit if he were to
leave Entergy System company employment other than as the result
of a termination for cause.
Additional
Information
For a description of the material terms and conditions of
payments and benefits available under the retirement plans,
including each plan’s normal retirement payment and
benefit, benefit formula and eligibility standards, specific
elements of compensation included in applying the payment and
benefit formula, and our policies with regard to granting extra
years of credited service, see “Compensation Discussion and
Analysis — Benefits, Perquisites, Agreements and
Post-Termination Plans — Pension Plan, Pension
Equalization Plan, and System Executive Retirement Plan.”
For a discussion of the relevant assumptions used in valuing
these liabilities, see Note 11 to the Financial Statements
in our
Form 10-K
for the year ended December 31, 2009.
2009
Non-qualified Deferred Compensation
The following tables provide information regarding the Executive
Deferred Compensation Plan, the Amended and Restated 1998 Equity
Ownership Plan of Entergy Corporation and Subsidiaries (the 1998
Equity Ownership Plan) and the 2007 Equity Ownership Plan, which
allow for the deferral of compensation for the Named Executive
Officers. For additional information, see “Benefits,
Perquisites, Agreements and Post-Termination Plans —
Executive Deferred Compensation” in Compensation Discussion
and Analysis.
Additionally, some of the Named Executive Officers have deferred
account balances under a frozen Defined Contribution Restoration
Plan. These amounts are deemed invested in the options available
under this Defined Contribution Restoration Plan. The Defined
Contribution Restoration Plan, until it was frozen in 2005,
credited eligible employees’ deferral accounts with
employer contributions to the extent contributions under the
qualified savings plan in which the employee participated were
subject to limitations imposed by the Internal Revenue Code.
All deferrals are credited to the applicable Entergy system
company employer’s non-funded liability account. Depending
on the plan under which deferral is made, the Named Executive
Officers may elect investment in either phantom Company common
stock or one or more of several investment options under the
Savings Plan. Within limitations of the program, participating
Named Executive Officers may move funds from one deemed
investment option to another. The participating Named Executive
Officers do not have the ability to withdraw funds from the
deemed investment accounts except within the terms provided in
their deferral elections. Within the limitations
37
prescribed by law as well as the program, participating Named
Executive Officers have the option to make a successive deferral
of these funds. Assuming a Named Executive Officer does not
elect a successive deferral, the Entergy System company employer
of the participant is obligated to pay the amount credited to
the participant’s account at the earlier of deferral
receipt date or separation of service. These payments are paid
out of the general assets of the employer and are payable in a
lump sum.
FICA and Medicare taxes are paid on all deferred amounts prior
to their deferral. Applicable federal and state taxes are paid
at the time the deferred amounts are paid to the participant.
Employees are not eligible for a “match” of amounts
that are deferred by them pursuant to the deferred compensation
programs. With the exception of allowing for the deferral of
federal and state taxes, the Company provides no additional
benefit to the Named Executive Officers in connection with
amounts deferred under the Executive Deferred Compensation Plan.
The deemed investment options available to participating Named
Executive Officers are limited to certain deemed investment
options available to all non-officer employees under the Savings
Plan. Deferred amounts are deemed credited with earnings or
losses based on the rate of return of deemed investment options
(under the Executive Deferred Compensation Plan) or Entergy
Corporation common stock (under the 1998 Equity Ownership Plan
or the 2007 Equity Ownership Plan). In 2006, the Personnel
Committee approved a number of recommendations to simplify the
deferral programs and reduce the number of options available to
the Named Executive Officers.
Executive
Deferred Compensation Plan
|
Aggregate |
||||||||||||||||||||
|
Executive |
Registrant |
Aggregate |
Aggregate |
Balance at |
||||||||||||||||
|
Contributions in |
Contributions in |
Earnings in |
Withdrawals/ |
December 31, |
||||||||||||||||
|
Name |
2009 |
2009 |
2009(1) |
Distributions |
2009(2) |
|||||||||||||||
|
(a)
|
(b) | (c) | (d) | (e) | (f) | |||||||||||||||
|
J. Wayne Leonard
|
$ | — | $ | — | $ | 8,272 | $ | (175,235 | ) | $ | 203,900 | |||||||||
|
Leo P. Denault
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Mark T. Savoff
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Richard J. Smith
|
$ | — | $ | — | $ | 5,581 | $ | (843,075 | ) | $ | — | |||||||||
|
Gary J. Taylor
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| (1) | Amounts in this column are not included in the Summary Compensation Table. | |
| (2) | For Mr. Leonard, approximately $183,000 of the amount reported in this column has previously been reported in the Summary Compensation Table. |
Equity
Ownership Plan
|
Aggregate |
||||||||||||||||||||
|
Executive |
Registrant |
Aggregate |
Aggregate |
Balance at |
||||||||||||||||
|
Contributions in |
Contributions in |
Earnings in |
Withdrawals/ |
December 31, |
||||||||||||||||
|
Name |
2009 |
2009 |
2009(1) |
Distributions |
2009 |
|||||||||||||||
|
(a)
|
(b) | (c) | (d) | (e) | (f) | |||||||||||||||
|
J. Wayne Leonard
|
$ | — | $ | — | $ | 89,463 | $ | (9,337,269 | ) | $ | — | |||||||||
|
Leo P. Denault
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Mark T. Savoff
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Richard J. Smith
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Gary J. Taylor
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| (1) | Amounts in this column are not included in the Summary Compensation Table. |
38
Defined
Contribution Restoration Plan
|
Aggregate |
||||||||||||||||||||
|
Executive |
Registrant |
Aggregate |
Aggregate |
Balance at |
||||||||||||||||
|
Contributions in |
Contributions in |
Earnings in |
Withdrawals/ |
December 31, |
||||||||||||||||
|
Name |
2009 |
2009 |
2009(1) |
Distributions |
2009 |
|||||||||||||||
|
(a)
|
(b) | (c) | (d) | (e) | (f) | |||||||||||||||
|
J. Wayne Leonard
|
$ | — | $ | — | $ | 5,520 | $ | — | $ | 232,665 | ||||||||||
|
Leo P. Denault
|
$ | — | $ | — | $ | 606 | $ | (63,276 | ) | $ | — | |||||||||
|
Mark T. Savoff
|
$ | — | $ | — | $ | 467 | $ | — | $ | 19,708 | ||||||||||
|
Richard J. Smith
|
$ | — | $ | — | $ | 1,458 | $ | (152,193 | ) | $ | — | |||||||||
|
Gary J. Taylor
|
$ | — | $ | — | $ | 521 | $ | (46,738 | ) | $ | — | |||||||||
| (1) | Amounts in this column are not included in the Summary Compensation Table. |
2009
Potential Payments upon Termination or Change in
Control
The Company has plans and other arrangements that provide
compensation to the Named Executive Officers if the
officer’s employment is terminated under specified
conditions, including a change in control of the Company. In
addition, we have entered into individual retention agreements
with Mr. Leonard, Mr. Denault and Mr. Smith.
The tables below reflect the amount of compensation each of our
Named Executive Officers would have received if his employment
with the Company had been terminated under various scenarios as
of December 31, 2009, the last business day of our last
fiscal year. For purposes of these tables, we assumed that our
stock price was $81.84, the closing market price on that date.
J. Wayne
Leonard
Chairman and Chief Executive Officer
Chairman and Chief Executive Officer
The following table shows certain payments and benefits,
excluding vested or earned awards and benefits, which our
Chairman and Chief Executive Officer would have been entitled to
receive as a result of a termination of his employment under
various scenarios as of December 31, 2009:
|
Termination |
Termination |
|||||||||||||||||||||||||||||||
|
for Good |
Related to a |
|||||||||||||||||||||||||||||||
|
Benefits and Payments |
Voluntary |
For |
Reason or |
Change in |
Change in |
|||||||||||||||||||||||||||
|
Upon Termination(1)
|
Resignation | Cause | Not for Cause | Retirement(8) | Disability | Death(9) | Control(10) | Control | ||||||||||||||||||||||||
|
Annual Incentive Payment(2)
|
— | — | — | — | — | — | — | $ | 3,099,600 | |||||||||||||||||||||||
|
Severance Payment(3)
|
— | — | — | — | — | — | — | $ | 8,495,487 | |||||||||||||||||||||||
|
Performance Units:(4)
|
||||||||||||||||||||||||||||||||
|
2008-2010
Performance Unit Program
|
— | — | — | $ | 900,240 | $ | 900,240 | $ | 900,240 | $ | 1,350,360 | $ | 1,350,360 | |||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | $ | 613,800 | $ | 613,800 | $ | 613,800 | $ | 1,841,400 | $ | 1,841,400 | |||||||||||||||||||
|
Unvested Stock Options(5)
|
— | — | — | $ | 538,750 | $ | 538,750 | $ | 538,750 | (9) | $ | 538,750 | $ | 538,750 | ||||||||||||||||||
|
Unvested Restricted Units(6)
|
— | — | $ | 8,184,000 | — | $ | 8,184,000 | $ | 8,184,000 | — | $ | 8,184,000 | ||||||||||||||||||||
|
Medical and Dental Benefits(7)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
280G Tax
Gross-up
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | In addition to the payments and benefits in the table, Mr. Leonard would have been eligible to retire and entitled to receive his vested pension benefits. However, a termination “for cause” would have resulted in forfeiture of Mr. Leonard’s supplemental retirement benefit. Mr. Leonard is not entitled to additional pension |
39
| benefits in the event of a change in control. For additional information regarding these vested benefits and awards, see “2009 Pension Benefits.” | ||
| (2) | In the event of a termination related to a change in control, Mr. Leonard would have been entitled under his retention agreement to receive a lump sum payment of his cash annual incentive bonus under the Annual Incentive Plan calculated at maximum annual bonus opportunity. For purposes of this table, we have calculated the award at 200% of target opportunity and assumed a base salary of $1,291,500. | |
| (3) | In the event of a termination related to a change in control, Mr. Leonard would have been entitled to receive pursuant to his retention agreement a lump sum severance payment equal to the sum of 2.99 times his base salary plus target annual incentive (calculated at 120% of his base salary). | |
| (4) | In the event of a termination related to a change in control, including a termination by Mr. Leonard for good reason, by the Company other than for cause, disability or death, Mr. Leonard would have been entitled to receive under the terms of his retention agreement a lump sum payment relating to his performance units. The payment is calculated as if all performance goals relating to the performance unit were achieved at target level. For purposes of the table, we have calculated the value of Mr. Leonard’s awards as follows: |
2008 - 2010 Plan — 16,500 performance units at
target, assuming a stock price of $81.84
2009 - 2011 Plan — 22,500 performance units at
target, assuming a stock price of $81.84
For scenarios other than a termination related to a change in
control, the award is not enhanced or accelerated by the
termination event. With respect to death or disability, the
award is pro-rated based on the number of months of
participation in each Performance Unit Program performance
cycle. The amount of the award is based on actual performance
achieved, with a stock price set as of the end of the
performance period, and payable in the form of a lump sum after
the completion of the performance period.
| (5) | In the event of retirement, disability or a termination related to a change in control, all of Mr. Leonard’s unvested stock options would immediately vest. In addition, Mr. Leonard would be entitled to exercise any outstanding options during a ten-year term extending from the grant date of the options. For purposes of this table, we assumed that Mr. Leonard exercised his options immediately upon vesting and received proceeds equal to the difference between the closing price of common stock on December 31, 2009, and the exercise price of each option share. | |
| (6) | Mr. Leonard’s 100,000 restricted units vest in two installments on December 3, 2011 and December 3, 2012. Pursuant to his restricted unit agreement, any unvested restricted units will vest immediately in the event of a termination related to a change in control, in the event of the termination of his employment by Mr. Leonard for good reason, by the Company other than for cause, or by reason of his death or disability. | |
| (7) | Pursuant to Mr. Leonard’s retention agreement, in the event of a termination related to a change in control, Mr. Leonard is not eligible to receive additional medical and dental benefits. Upon retirement Mr. Leonard would be eligible for retiree medical and dental benefits similar to those provided to Company retirees. | |
| (8) | As of December 31, 2009, Mr. Leonard is retirement eligible and would retire rather than voluntarily resign. Given this scenario, the compensation and benefits available to Mr. Leonard under retirement are substantially the same as available with a voluntary resignation. | |
| (9) | Under the 2007 Equity Ownership Plan (applicable to grants of equity awards made after January 1, 2007), in the event of a plan participant’s death, all unvested stock options would become immediately exercisable. | |
| (10) | Under the 2007 Equity Ownership Plan, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control in the Company without regard to whether their employment is terminated as a result of a change in control. The accelerated benefits in the event of a change in control are as follows: |
| • | All unvested stock options would become immediately exercisable; and | |
| • | All performance units become vested (based on the assumption that all performance goals were achieved at target). |
40
Under the terms of Mr. Leonard’s retention agreement,
we may terminate his employment for cause upon
Mr. Leonard’s:
| • | willful and continued failure to substantially perform his duties (other than because of physical or mental illness or after he has given notice of termination for good reason) that remains uncured for 30 days after receiving a written notice from our Board; or | |
| • | willfully engaging in conduct that is demonstrably and materially injurious to us and which results in a conviction of or entrance of a plea of guilty or nolo contendere (essentially a form of plea in which the accused refuses to contest the charges) to a felony. |
In the event of a change in control, Mr. Leonard may
terminate his employment for good reason upon:
| • | the substantial reduction or alteration in the nature or status of his duties or responsibilities; | |
| • | a reduction in his annual base salary; | |
| • | the relocation of his principal place of employment to a location more than 20 miles from his current place of employment; | |
| • | our failure to pay any portion of his compensation within seven days of its due date; | |
| • | our failure to continue in effect any compensation plan in which he participates and which is material to his total compensation, unless other equitable arrangements are made; | |
| • | our failure to continue to provide benefits substantially similar to those that he currently enjoys under any of our pension, savings, life insurance, medical, health and accident or disability plans, or our taking of any other action which materially reduces any of those benefits or deprives him of any material fringe benefits that he currently enjoys; | |
| • | our failure to provide him with the number of paid vacation days to which he is entitled in accordance with our normal vacation policy; or | |
| • | any purported termination of his employment not taken in accordance with his retention agreement. |
Leo P.
Denault
Executive Vice President and Chief Financial Officer
Executive Vice President and Chief Financial Officer
The following table shows certain payments and benefits,
excluding vested or earned awards and benefits, which our
Executive Vice President and Chief Financial Officer would have
been entitled to receive as a result of a termination of his
employment under various scenarios as of December 31, 2009:
|
Termination |
Termination |
|||||||||||||||||||||||||||||||
|
for Good |
Related to a |
|||||||||||||||||||||||||||||||
|
Benefits and Payments |
Voluntary |
For |
Reason or |
Change in |
Change in |
|||||||||||||||||||||||||||
|
Upon Termination(1)
|
Resignation | Cause | Not for Cause | Retirement(8) | Disability | Death(9) | Control(10) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | $ | 3,202,290 | — | — | — | — | $ | 3,202,290 | ||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2008-2010
Performance Unit Program
|
— | — | $ | 319,176 | — | $ | 319,176 | $ | 319,176 | $ | 319,176 | $ | 319,176 | |||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | $ | 392,832 | — | $ | 392,832 | $ | 392,832 | $ | 392,832 | $ | 392,832 | |||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | $ | 193,950 | — | $ | 193,950 | $ | 193,950 | (9) | $ | 193,950 | $ | 193,950 | ||||||||||||||||||
|
Unvested Restricted Units(5)
|
— | — | $ | 1,995,120 | — | $ | 1,995,120 | $ | 1,995,120 | $ | 1,995,120 | $ | 1,995,120 | |||||||||||||||||||
|
COBRA Benefits(6)
|
— | — | $ | 13,962 | — | — | — | — | — | |||||||||||||||||||||||
|
Medical and Dental Benefits(7)
|
— | — | — | — | — | — | — | $ | 13,962 | |||||||||||||||||||||||
|
280G Tax
Gross-up
|
— | — | — | — | — | — | — | $ | 3,457,221 | |||||||||||||||||||||||
41
| (1) | In addition to the payments and benefits in the table, Mr. Denault also would have been entitled to receive his vested pension benefits. If Mr. Denault’s employment were terminated under certain conditions relating to a change in control, he would also be eligible for early retirement benefits. For a description of these benefits, see “2009 Pension Benefits.” In addition, Mr. Denault is subject to the following provisions: |
| • | Retention Agreement. Mr. Denault’s retention agreement provides that, unless his employment is terminated for cause, he will be granted an additional 15 years of service under the System Executive Retirement Plan if he continues to work for an Entergy System company employer until age 55. Because Mr. Denault had not reached age 55 as of December 31, 2009, he is only entitled to this supplemental credited service and System Executive Retirement Plan supplemental benefits in the event of his death or disability. | |
| • | System Executive Retirement Plan. If Mr. Denault’s employment were terminated for cause, he would forfeit his benefit under the System Executive Retirement Plan. In the event of a termination related to a change in control, pursuant to the terms of the System Executive Retirement Plan, Mr. Denault would be eligible for subsidized retirement (but not the additional 15 years of service) upon his separation of service even if he does not then meet the age or service requirements for early retirement under the System Executive Retirement Plan or have company permission to separate from employment. |
| (2) | In the event of a termination related to a change in control or a termination by Mr. Denault for good reason or by the Company not for cause, Mr. Denault would be entitled to receive pursuant to his retention agreement a lump sum severance payment equal to 2.99 times the sum of his base salary plus annual incentive, calculated at target opportunity. For purposes of this table, we have calculated the award at a 70% target opportunity and assumed a base salary of $630,000. | |
| (3) | In the event of a termination related to a change in control, a termination by Mr. Denault for good reason or a termination by the Company other than for cause, disability or death, Mr. Denault would have been entitled to receive under the terms of his retention agreement a lump sum payment relating to his performance units. The payment is calculated as if all performance goals relating to the performance units were achieved at target level. For purposes of the table, we have calculated the value of Mr. Denault’s awards as follows: |
2008 - 2010 Plan — 3,900 performance units at
target, assuming a stock price of $81.84
2009 - 2012 Plan — 4,800 performance units at
target, assuming a stock price of $81.84
| (4) | In the event of disability or a termination related to a change in control, all of Mr. Denault’s unvested stock options would immediately vest. In addition, he would be entitled to exercise any unexercised options during a ten-year term extending from the grant date of the options. Further, pursuant to Mr. Denault’s retention agreement, in the event of a termination for good reason or other than for cause, all of Mr. Denault’s unvested stock options granted under the 2007 Equity Ownership Plan (applicable to grants of equity awards made after January 1, 2007) would immediately vest. For purposes of this table, we assumed that Mr. Denault exercised his options immediately upon vesting and received proceeds equal to the difference between the closing price of common stock on December 31, 2009, and the exercise price of each option share. | |
| (5) | Mr. Denault’s 24,000 restricted units vest 1/3 in 2011, 1/3 in 2012 and 1/3 in 2013. Pursuant to his restricted unit agreement, any unvested restricted units will vest immediately in the event of change in control, termination related to a change in control, a termination by Mr. Denault for good reason or a termination by the Company other than for cause, disability or death. | |
| (6) | Pursuant to his retention agreement, in the event of a termination by the Company other than cause or by Mr. Denault for good reason, Mr. Denault would be eligible to receive company-subsidized COBRA benefits for a period of 18 months. | |
| (7) | Pursuant to the System Executive Continuity Plan, in the event of a termination related to a change in control, Mr. Denault would be eligible to receive subsidized medical and dental benefits for a period up to 18 months. | |
| (8) | As of December 31, 2009, compensation and benefits available to Mr. Denault under this scenario are substantially the same as available under a voluntary resignation. |
42
| (9) | Under the 2007 Equity Ownership Plan, in the event of a plan participant’s death, all unvested stock options would become immediately exercisable | |
| (10) | Under the 2007 Equity Ownership Plan, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control in the Company without regard to whether their employment is terminated as a result of a change in control. The accelerated benefits in the event of a change in control are as follows: |
| • | All unvested stock options would become immediately exercisable; and | |
| • | All performance units become vested (based on the assumption that all performance goals were achieved at target) |
Under the terms of Mr. Denault’s retention agreement,
we may terminate his employment for cause upon
Mr. Denault’s:
| • | continuing failure to substantially perform his duties (other than because of physical or mental illness or after he has given notice of termination for good reason) that remains uncured for 30 days after receiving a written notice from our Personnel Committee; | |
| • | willfully engaging in conduct that is demonstrably and materially injurious to us; | |
| • | conviction of or entrance of a plea of guilty or nolo contendere to a felony or other crime that has or may have a material adverse effect on his ability to carry out his duties or upon our reputation; | |
| • | material violation of any agreement that he has entered into with us; or | |
| • | unauthorized disclosure of our confidential information. |
Mr. Denault may terminate his employment for good reason
upon:
| • | the substantial reduction in the nature or status of his duties or responsibilities; | |
| • | a reduction of 5% or more in his base salary as in effect on the date of the retention agreement; | |
| • | the relocation of his principal place of employment to a location other than our corporate headquarters; | |
| • | our failure to continue to allow him to participate in programs or plans providing opportunities for equity awards, stock options, restricted stock, stock appreciation rights, incentive compensation, bonus and other plans on a basis not materially less favorable than enjoyed at the time of the retention agreement (other than changes similarly affecting all senior executives); | |
| • | our failure to continue to allow him to participate in programs or plans with opportunities for benefits not materially less favorable than those enjoyed by him under any of our pension, savings, life insurance, medical, health and accident, disability or vacation plans at the time of the retention agreement (other than changes similarly affecting all senior executives); or | |
| • | any purported termination of his employment not taken in accordance with his retention agreement. |
Mr. Denault may terminate his employment for good reason in
the event of a change in control upon:
| • | the substantial reduction or alteration in the nature or status of his duties or responsibilities; | |
| • | a reduction in his annual base salary; | |
| • | the relocation of his principal place of employment to a location more than 20 miles from his current place of employment; | |
| • | our failure to pay any portion of his compensation within seven days of its due date; | |
| • | our failure to continue in effect any compensation plan in which he participates and which is material to his total compensation, unless other equitable arrangements are made; | |
| • | our failure to continue to provide benefits substantially similar to those that he currently enjoys under any of our pension, savings, life insurance, medical, health and accident or disability plans, or our taking of any |
43
| other action which materially reduces any of those benefits or deprives him of any material fringe benefits that he currently enjoys; |
| • | our failure to provide him with the number of paid vacation days to which he is entitled in accordance with our normal vacation policy; or | |
| • | any purported termination of his employment not taken in accordance with his retention agreement |
Mark T.
Savoff
Executive Vice President, Operations
Executive Vice President, Operations
The following table shows certain payments and benefits,
excluding vested or earned awards and benefits, which our
Executive Vice President, Operations would have been entitled to
receive as a result of a termination of his employment under
various scenarios as of December 31, 2009:
|
Termination |
Termination |
|||||||||||||||||||||||||||||||
|
for Good |
Related to a |
|||||||||||||||||||||||||||||||
|
Benefits and Payments |
Voluntary |
For |
Reason or Not |
Change in |
Change in |
|||||||||||||||||||||||||||
|
Upon Termination(1)
|
Resignation | Cause | for Cause | Retirement(6) | Disability | Death(7) | Control(8) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | — | — | — | — | — | $ | 2,799,900 | |||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2008-2010
Performance Unit Program
|
— | — | — | — | $ | 212,784 | $ | 212,784 | $ | 319,176 | $ | 319,176 | ||||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | — | $ | 130,944 | $ | 130,944 | $ | 392,832 | $ | 392,832 | ||||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | — | — | $ | 129,300 | $ | 129,300 | (7) | $ | 129,300 | $ | 129,300 | |||||||||||||||||||
|
Medical and Dental Benefits(5)
|
— | — | — | — | — | — | — | $ | 23,730 | |||||||||||||||||||||||
|
280G Tax
Gross-up
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | In addition to the payments and benefits in the table, if Mr. Savoff’s employment were terminated under certain conditions relating to a change in control, Mr. Savoff would also have been entitled to receive his vested pension benefits and he would also be eligible for early retirement benefits. For a description of these benefits, see “2009 Pension Benefits.” If Mr. Savoff’s employment were terminated for cause, he would forfeit his benefit under the System Executive Retirement Plan. | |
| (2) | In the event of a termination related to a change in control, Mr. Savoff would be entitled to receive pursuant to the System Executive Continuity Plan a lump sum severance payment equal to three times the sum of his base salary plus annual incentive, calculated at target opportunity. For purposes of this table, we have calculated the award at a 70% target opportunity and assumed a base salary of $549,000. | |
| (3) | In the event of a termination related to a change in control, Mr. Savoff would have been entitled to receive pursuant to the System Executive Continuity Plan a lump sum payment relating to his performance units under the Performance Unit Program. The payment is calculated as if all performance goals relating to the performance units were achieved at target level. For purposes of the table, we have calculated the value of Mr. Savoff’s awards as follows: |
2008 - 2010 Plan — 3,900 performance units at
target, assuming a stock price of $81.84
2009 - 2012 Plan — 4,800 performance units at
target, assuming a stock price of $81.84
With respect to death or disability, the award is pro-rated
based on the number of months of participation in each
Performance Unit Program performance cycle. The amount of the
award is based on actual performance achieved, with a stock
price set as of the end of the performance period, and payable
in the form of a lump sum after the completion of the
performance period.
| (4) | In the event of disability or a termination related to a change in control, all of Mr. Savoff’s unvested stock options would immediately vest. In addition, he would be entitled to exercise any unexercised options during a ten-year term extending from the grant date of the options. For purposes of this table, we assumed that Mr. Savoff exercised his options immediately upon vesting and received proceeds equal to the difference between the closing price of common stock on December 31, 2009, and the exercise price of each option share. |
44
| (5) | Pursuant to the System Executive Continuity Plan, in the event of a termination related to a change in control, Mr. Savoff would be eligible to receive subsidized medical and dental benefits for a period up to 18 months. | |
| (6) | As of December 31, 2009, compensation and benefits available to Mr. Savoff under this scenario are substantially the same as available under a voluntary resignation. | |
| (7) | Under the 2007 Equity Ownership Plan (applicable to grants of equity awards made after January 1, 2007), in the event of a plan participant’s death, all unvested stock options would become immediately exercisable. | |
| (8) | Under the 2007 Equity Ownership Plan, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control in the Company without regard to whether their employment is terminated as a result of a change in control. The accelerated benefits in the event of a change in control are as follows: |
| • | All unvested stock options would become immediately exercisable; and | |
| • | All performance units become vested (based on the assumption that all performance goals were achieved at target) |
Richard
J. Smith
President and Chief Operating Officer
President and Chief Operating Officer
The following table shows certain payments and benefits,
excluding vested or earned awards and benefits, which our
President and Chief Operating Officer would have been entitled
to receive as a result of a termination of his employment under
various scenarios as of December 31, 2009:
|
Termination |
Termination |
|||||||||||||||||||||||||||||||
|
for Good |
Related to a |
|||||||||||||||||||||||||||||||
|
Benefits and Payments |
Voluntary |
For |
Reason or |
Change in |
Change in |
|||||||||||||||||||||||||||
|
Upon Termination(1)
|
Resignation | Cause | Not for Cause | Retirement(6) | Disability | Death(7) | Control(8) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | — | — | — | — | — | $ | 3,278,535 | |||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2008-2010
Performance Unit Program
|
— | — | — | $ | 212,784 | $ | 212,784 | $ | 212,784 | $ | 319,176 | $ | 319,176 | |||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | $ | 130,944 | $ | 130,944 | $ | 130,944 | $ | 392,832 | $ | 392,832 | |||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | — | $ | 150,850 | $ | 150,850 | $ | 150,850 | (7) | $ | 150,850 | $ | 150,850 | ||||||||||||||||||
|
Medical and Dental Benefits(5)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
280G Tax
Gross-up
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | In addition to the payments and benefits in the table, Mr. Smith also would have been eligible to retire and entitled to receive his vested pension benefits. For a description of the pension benefits available to Named Executive Officers, see “2009 Pension Benefits.” In the event of a termination related to a change in control, pursuant to the terms of the Pension Equalization Plan, Mr. Smith would be eligible for subsidized early retirement even if he does not have company permission to separate from employment. If Mr. Smith’s employment were terminated for cause, he would not receive a credited service benefit under the Pension Equalization Plan. | |
| (2) | In the event of a termination related to a change in control, Mr. Smith would be entitled to receive pursuant to the System Executive Continuity Plan a lump sum severance payment equal to 2.99 times the sum of his base salary plus annual incentive, calculated at target opportunity. For purposes of this table, we have calculated the award at a 70% target opportunity and assumed a base salary of $645,000. | |
| (3) | In the event of a termination related to a change in control, Mr. Smith would have been entitled to receive pursuant to the System Executive Continuity Plan a lump sum payment relating to his performance units. The |
45
| payment is calculated as if all performance goals relating to the performance units were achieved at target level . For purposes of the table, we have calculated the value of Mr. Smith’s awards as follows: |
2008 - 2010 Plan — 3,900 performance units at
target, assuming a stock price of $81.84
2009 - 2012 Plan — 4,800 performance units at
target, assuming a stock price of $81.84
With respect to death or disability, the award is pro-rated
based on the number of months of participation in each
Performance Unit Program performance cycle. The amount of the
award is based on actual performance achieved, with a stock
price set as of the end of the performance period, and payable
in the form of a lump sum after the completion of the
performance period.
| (4) | In the event of disability or a termination related to a change in control, all of Mr. Smith’s unvested stock options would immediately vest. In addition, he would be entitled to exercise his stock options for the remainder of the ten-year term extending from the grant date of the options. For purposes of this table, we assumed that Mr. Smith exercised his options immediately upon vesting and received proceeds equal to the difference between the closing price of common stock on December 31, 2009, and the exercise price of each option share. | |
| (5) | Upon retirement, Mr. Smith would be eligible for retiree medical and dental benefits. Pursuant to the System Executive Continuity Plan, in the event of a termination related to a change in control, Mr. Smith would be eligible to receive additional medical and dental benefits similar to those provided to Company retirees. | |
| (6) | As of December 31, 2009, Mr. Smith is retirement eligible and would retire rather than voluntarily resign. Given that scenario, the compensation and benefits available to Mr. Smith under retirement are substantially the same as available with a voluntary resignation. | |
| (7) | Under the 2007 Equity Ownership Plan (applicable to grants of equity awards made after January 1, 2007), in the event of a plan participant’s death, all unvested stock options would become immediately exercisable. | |
| (8) | Under the 2007 Equity Ownership Plan, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control in the Company without regard to whether their employment is terminated as a result of a change in control. The accelerated benefits in the event of a change in control are as follows: |
| • | All unvested stock options would become immediately exercisable; and | |
| • | All performance units become vested (based on the assumption that all performance goals were achieved at target) |
The information in this table does not reflect the agreement we
entered into with Mr. Smith in December 2009. In order to
receive any payments contemplated by the agreement, the planned
Spin Transaction must not occur and (i) Mr. Smith must
remain employed for 24 months after a public announcement
that the Spin Transaction will not occur or (ii) he must
remain continuously employed in such capacity for at least six
(6) months after any such public announcement and
thereafter retire with the consent of our Chief Executive
Officer. Neither event occurred between the date of this
agreement and December 31, 2009. If these events occur,
Mr. Smith will be entitled to receive a lump sum cash
payment equal to 1.5 times his base salary as of the date of
separation from Entergy. See “Compensation Discussion and
Analysis” for a complete description of
Mr. Smith’s agreement.
46
Gary J.
Taylor
Group President, Utility Operations
Group President, Utility Operations
The following table shows certain payments and benefits,
excluding vested or earned awards and benefits, which our Group
President, Utility Operations would have been entitled to
receive as a result of a termination of his employment under
various scenarios as of December 31, 2009:
|
Termination |
Termination |
|||||||||||||||||||||||||||||||
|
for Good |
Related to a |
|||||||||||||||||||||||||||||||
|
Benefits and Payments |
Voluntary |
For |
Reason or |
Change in |
Change in |
|||||||||||||||||||||||||||
|
Upon Termination(1)
|
Resignation | Cause | Not for Cause | Retirement(6) | Disability | Death(7) | Control(8) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | — | — | — | — | — | $ | 2,907,000 | |||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2008-2010
Performance Unit Program
|
— | — | — | — | $ | 212,784 | $ | 212,784 | $ | 319,176 | $ | 319,176 | ||||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | — | $ | 130,944 | $ | 130,944 | $ | 392,832 | $ | 392,832 | ||||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | — | — | $ | 129,300 | $ | 129,300 | (7) | $ | 129,300 | $ | 129,300 | |||||||||||||||||||
|
Medical and Dental Benefits(5)
|
— | — | — | — | — | — | — | $ | 17,659 | |||||||||||||||||||||||
|
280G Tax
Gross-up
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | In addition to the payments and benefits in the table, if Mr. Taylor’s employment were terminated under certain conditions relating to a change in control, Mr. Taylor would also have been entitled to receive his vested pension benefits and he would also be eligible for early retirement benefits. For a description of the pension benefits available to Named Executive Officers, see “2009 Pension Benefits.” If Mr. Taylor’s employment were terminated for cause, he would not receive a benefit under the System Executive Retirement Plan. | |
| (2) | In the event of a termination related to a change in control, Mr. Taylor would be entitled to receive pursuant to the System Executive Continuity Plan a lump sum severance payment equal to three times the sum of his base salary plus annual incentive, calculated at target opportunity. For purposes of this table, we have calculated the award at a 70% target opportunity and assumed a base salary of $570,000. | |
| (3) | In the event of a termination related to a change in control, Mr. Taylor would have been entitled to receive pursuant to the System Executive Continuity Plan a lump sum payment relating to his performance units. The payment is calculated as if all performance goals relating to the performance units were achieved at target level for the entire performance period. For purposes of the table, we have calculated the value of Mr. Taylor’s awards as follows: |
2008 - 2010 Plan — 3,900 performance units at
target, assuming a stock price of $81.84
2009 - 2012 Plan — 4,800 performance units at
target, assuming a stock price of $81.84
With respect to death or disability, the award is pro-rated
based on the number of months of participation in each
Performance Unit Program performance cycle. The amount of the
award is based on actual performance achieved, with a stock
price set as of the end of the performance period, and payable
in the form of a lump sum after the completion of the
performance period.
| (4) | In the event of disability or a termination related to a change in control, all of Mr. Taylor’s unvested stock options would immediately vest. In addition, he would be entitled to exercise his stock options for a ten-year term extending from the grant date of the options. For purposes of this table, we assumed that Mr. Taylor exercised his options immediately upon vesting and received proceeds equal to the difference between the closing price of common stock on December 31, 2009, and the exercise price of each option share. | |
| (5) | Pursuant to the System Executive Continuity Plan, in the event of a termination related to a change in control, Mr. Taylor would be eligible to receive subsidized medical and dental benefits for a period up to 18 months. | |
| (6) | As of December 31, 2009, compensation and benefits available to Mr. Taylor under this scenario are substantially the same as available under a voluntary resignation. | |
| (7) | Under the 2007 Equity Ownership Plan (applicable to grants of equity awards made after January 1, 2007), in the event of a plan participant’s death, all unvested stock options would become immediately exercisable. |
47
| (8) | Under the 2007 Equity Ownership Plan, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control in the Company without regard to whether their employment is terminated as a result of a change in control. The accelerated benefits in the event of a change in control are as follows: |
| • | All unvested stock options would become immediately exercisable; and | |
| • | All performance units become vested (based on the assumption that all performance goals were achieved at target) |
In the following sections, we provide additional information
regarding certain of the scenarios described in the tables above:
Termination
Related to a Change in Control
Under our System Executive Continuity Plan, our Named Executive
Officers will be entitled to the benefits described in the
tables above in the event of a termination related to a change
in control if their employment is terminated other than for
cause or if they terminate their employment for good reason, in
each case within a period commencing 90 days prior to and
ending 24 months following a change in control.
A change in control includes the following events:
| • | The purchase of 25% or more of either our common stock or the combined voting power of our voting securities, the merger or consolidation of the Company (unless our board members constitute at least a majority of the board members of the surviving entity); | |
| • | the merger or consolidation of the Company (unless our board members constitute at least a majority of the board members of the surviving entity; | |
| • | the liquidation, dissolution or sale of all or substantially all of our assets; or | |
| • | a change in the composition of our board such that, during any two-year period, the individuals serving at the beginning of the period no longer constitute a majority of our board at the end of the period. |
The proposed separation of our non-utility nuclear business in a
tax-free spin-off to our shareholders does not constitute a
“Change in control” for purposes of the System
Executive Continuity Plan.
We may terminate a Named Executive Officer’s employment for
cause under the System Executive Continuity Plan if he:
| • | fails to substantially perform his duties for a period of 30 days after receiving notice from our board; | |
| • | engages in conduct that is injurious to us or any of our subsidiaries; | |
| • | is convicted or pleads guilty to a felony or other crime that materially and adversely affects his ability to perform his duties or our reputation; | |
| • | violates any agreement with us or any of our subsidiaries; or | |
| • | discloses any of our confidential information without authorization. |
A Named Executive Officer may terminate his employment with us
for good reason under the System Executive Continuity Plan if,
without his consent:
| • | the nature or status of his duties and responsibilities is substantially altered or reduced compared to the period prior to the change in control; | |
| • | his salary is reduced by 5% or more; | |
| • | he is required to be based outside of the continental United States at somewhere other than his primary work location prior to the change in control; | |
| • | any of his compensation plans are discontinued without an equitable replacement; |
48
| • | his benefits or number of vacation days are substantially reduced; or | |
| • | his employment is purported to be terminated other than in accordance with the System Executive Continuity Plan. |
In addition to participation in the System Executive Continuity
Plan, upon the completion of a transaction resulting in a change
in control of the Company, benefits already accrued under our
System Executive Retirement Plan, Pension Equalization Plan and
Supplemental Retirement Plan, if any, will become fully vested
if the executive is involuntarily terminated without cause or
terminates employment for good reason. Any awards granted under
the Equity Ownership Plan will become fully vested upon a Change
in control without regard to whether the executive is
involuntarily terminated without cause or terminates employment
for good reason.
Under certain circumstances, the payments and benefits received
by a Named Executive Officer pursuant to the System Executive
Continuity Plan may be forfeited and, in certain cases, subject
to repayment. Benefits are no longer payable under the System
Executive Continuity Plan, and unvested performance units under
the Performance Unit Program are subject to forfeiture, if the
executive:
| • | accepts employment with us or any of our subsidiaries; | |
| • | elects to receive the benefits of another severance or separation program; | |
| • | removes, copies or fails to return any property belonging to us or any of our subsidiaries; | |
| • | discloses non-public data or information concerning us or any of our subsidiaries; or | |
| • | violates his non-competition provision, which generally runs for two years but extends to three years if permissible under applicable law. |
Furthermore, if the executive discloses non-public data or
information concerning us or any of our subsidiaries or violates
his non-competition provision, he will be required to repay any
benefits previously received under the System Executive
Continuity Plan.
Termination
for Cause
If a Named Executive Officer’s employment is terminated for
“cause” (as defined in the System Executive Continuity
Plan and described above under “Termination Related to a
Change in Control”), he is generally entitled to the same
compensation and separation benefits described below under
“Voluntary Resignation.”
Voluntary
Resignation
If a Named Executive Officer voluntarily resigns from his
Entergy System company employer, he is entitled to all accrued
benefits and compensation as of the separation date, including
qualified pension benefits (if any) and other post-employment
benefits on terms consistent with those generally available to
our other salaried employees. In the case of voluntary
resignation, the officer would forfeit all unvested stock
options and restricted units as well as any perquisites to which
he or she is entitled as an officer. In addition, the officer
would forfeit, except as described below, his or her right to
receive incentive payments under the Performance Unit Program or
the Annual Incentive Plan. If the officer resigns after the
completion of an Annual Incentive Plan or Performance Unit
Program performance period, he could receive a payout under the
Performance Unit Program based on the outcome of the performance
cycle and could, at the Company’s discretion, receive an
annual incentive payment under the Annual Incentive Plan. Any
vested stock options held by the officer as of the separation
date will expire the earlier of ten years from date of grant or
90 days from the last day of active employment.
Retirement
Under our retirement plans, a Named Executive Officer’s
eligibility for retirement benefits is based on a combination of
age and years of service. Normal retirement is defined as
age 65. Early retirement is defined under the qualified
retirement plan as minimum age 55 with 10 years of
service and in the case of the System Executive Retirement Plan
and the supplemental credited service under the Pension
Equalization Plan, the consent of Entergy System company
employer.
49
Upon a Named Executive Officer’s retirement, he is
generally entitled to all accrued benefits and compensation as
of the separation date, including qualified pension benefits and
other post-employment benefits consistent with those generally
available to salaried employees. The annual incentive payment
under the Annual Incentive Plan is pro-rated based on the actual
number of days employed during the performance year in which the
retirement date occurs. Similarly, payments under the
Performance Unit Program are pro-rated based on the actual
number of days employed, in each outstanding performance cycle,
in which the retirement date occurs. In each case, payments are
delivered at the conclusion of each annual or performance cycle,
consistent with the timing of payments to active participants in
the Annual Incentive Plan and the Performance Unit Program,
respectively.
Unvested stock options issued under our Equity Ownership Plan
vest on the retirement date and expire ten years from the grant
date of the options. Any restricted units held (other than those
issued under the Performance Unit Program) by the executive upon
his or her retirement are forfeited, and perquisites (other than
short-term financial counseling services) are not available
following the separation date.
Disability
If a Named Executive Officer’s employment is terminated due
to disability, he generally is entitled to the same compensation
and separation benefits described above under
“Retirement,” except that restricted units may be
subject to specific disability benefits (as noted, where
applicable, in the tables above).
Death
If a Named Executive Officer dies while actively employed by an
Entergy System company employer, he generally is entitled to the
same compensation and separation benefits described above under
“Retirement,” except that:
| • | all unvested stock options granted prior to January 1, 2007 are forfeited; | |
| • | vested stock options will expire the earlier of ten years from the grant date or three years following the executive’s death; and | |
| • | restricted units may be subject to specific death benefits (as noted, where applicable, in the tables above). |
2009
NON-EMPLOYEE DIRECTOR COMPENSATION
The Company uses a combination of cash and stock-based incentive
compensation to attract and retain qualified candidates to serve
on the Board. In setting director compensation, the Company
considers the significant amount of time that directors expend
in fulfilling their duties to the Company as well as the
skill-level required by the Company of members of the Board.
Cash
Compensation Paid to Board Members
Quarterly Cash Retainer. Each
non-employee director receives a quarterly cash retainer equal
to the value of 75 shares of our common stock.
Meeting Attendance Fees. In addition to
receiving a quarterly cash retainer, each non-employee director
receives a fee for attending Board and Committee Meetings:
|
Meeting
|
Fee
|
|
|
Board Meetings
|
$1,500 | |
|
Committee Meetings(1)
|
||
|
(in conjunction with Board meetings)
|
$1,000 | |
|
Committee Meetings(1)
|
$2,000 | |
|
(different location from Board and other committee meetings)
|
||
|
Telephone Meetings
|
One-half of applicable fees |
| (1) | 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 applicable fees of an attending member. |
50
Presiding Director and Chair Cash
Retainers. In 2009, the Presiding Director
received an annual cash retainer of $15,000. The chairs of the
Audit Committee and Nuclear Committee each received an annual
cash retainer fee of $10,000 and the chairs of each of the
Personnel Committee, Corporate Governance Committee and Finance
Committee received an annual cash retainer of $5,000. In January
2010, in light of the additional time commitment required of the
Board Committee Chairs and the Presiding Director and general
industry pay practices for similar positions, the Board approved
an increase in the annual cash retainer paid to the Chairs of
each of the Board Committees and the Presiding Director. The
Chairs of the Audit and Nuclear Committees will receive annual
cash retainer fees of $15,000, the Chairs of the Corporate
Governance, Finance and Personnel Committees will receive annual
cash retainer fees of $10,000 and the Presiding Director will
receive annual cash retainer fee of $20,000.
Equity-Based
Compensation
All non-employee directors receive two types of equity-based
compensation grants: common stock and phantom units (which are
the economic equivalent of one share of our common stock).
Common Stock. Each non-employee
director receives a quarterly grant of 150 shares of common
stock. Directors may defer receipt of these shares subject to
certain conditions as phantom units of Entergy common stock. The
deferred shares are paid in cash in an amount equal to the
market value of our common stock at the time of distribution.
Deferred shares accrue dividend equivalents until distribution.
Phantom Units. Under the Service
Recognition Program for Outside Directors, non-employee
directors are credited with 800 phantom units representing
shares of common stock for each year of service on the Board.
After five years, the director’s rights in the phantom
units vest and he or she becomes entitled to receive, upon the
conclusion of his or her service on the Board, the cash
equivalent for each vested unit of one share of Common Stock on
the date of the director’s retirement or separation from
the Board. Phantom units accumulate dividend equivalents. In the
event of a change in control (as defined in the plan) and the
termination of the director’s service, the phantom units
vest and become immediately payable.
Other
Benefits
Non-employee directors receive $1,500 for participation in
director education programs, director orientation or business
sessions, inspection trips or conferences not held on the same
day as a Board meeting.
The Company also reimburses non-employee directors for their
expenses in attending Board and committee meetings, director
education programs and other Board-related activities. The
Company also purchases director and officer liability insurance,
life insurance, accidental death and disability insurance and
aircraft accident insurance for its non-employee directors. In
addition, each non-employee director may receive at the
Company’s expense an annual physical.
51
2009 Director
Compensation Table
The table below provides information regarding non-employee
director compensation for the fiscal year ended
December 31, 2009:
|
Fees |
||||||||||||||||||||||||||||
|
Earned |
||||||||||||||||||||||||||||
|
or Paid |
All Other |
|||||||||||||||||||||||||||
|
in Cash |
Stock Awards |
Option |
Compensation |
|||||||||||||||||||||||||
|
($) |
($) |
Awards |
($) |
Total |
||||||||||||||||||||||||
|
Name (1) |
(2) |
(5) |
($) |
(6) |
($) |
|||||||||||||||||||||||
|
(a)
|
(b) | (c) | (d) | (g) | (h) | |||||||||||||||||||||||
|
|
|
Excluding |
With |
|||||||||||||||||||||||||
|
Stock |
Retirement |
Retirement |
Retirement |
|||||||||||||||||||||||||
| Grants(3) | Accruals(4) | Accruals | Accruals | |||||||||||||||||||||||||
|
Maureen S. Bateman
|
$ | 85,225 | $ | 44,949 | $ | 59,696 | — | $ | 57,326 | $ | 187,500 | $ | 247,196 | |||||||||||||||
|
W. Frank Blount
|
$ | 80,975 | $ | 44,949 | $ | 59,696 | — | $ | 59,347 | $ | 185,271 | $ | 244,967 | |||||||||||||||
|
Simon D. deBree
|
$ | 41,651 | $ | 21,302 | $ | 59,696 | — | $ | 536,441 | $ | 599,613 | $ | 659,309 | |||||||||||||||
|
Gary W. Edwards
|
$ | 76,725 | $ | 44,949 | $ | 59,696 | — | $ | 15,124 | $ | 136,798 | $ | 196,494 | |||||||||||||||
|
Alexis M. Herman
|
$ | 71,725 | $ | 44,949 | $ | 59,696 | — | $ | 13,469 | $ | 130,143 | $ | 189,839 | |||||||||||||||
|
Donald C. Hintz
|
$ | 91,725 | $ | 44,949 | $ | 59,696 | — | $ | 20,727 | $ | 157,401 | $ | 217,097 | |||||||||||||||
|
Stuart L. Levenick
|
$ | 61,475 | $ | 44,949 | $ | 59,696 | — | $ | 8,231 | $ | 114,655 | $ | 174,351 | |||||||||||||||
|
Stewart C. Myers
|
$ | 17,427 | $ | 10,854 | $ | — | — | $ | 180 | $ | 28,461 | $ | 28,461 | |||||||||||||||
|
James R. Nichols
|
$ | 72,475 | $ | 44,949 | $ | 59,696 | — | $ | 62,434 | $ | 179,858 | $ | 239,554 | |||||||||||||||
|
William A. Percy, II
|
$ | 83,225 | $ | 44,949 | $ | 59,696 | — | $ | 28,003 | $ | 156,177 | $ | 215,873 | |||||||||||||||
|
W.J. “Billy” Tauzin
|
$ | 67,725 | $ | 44,949 | $ | 59,696 | — | $ | 6,819 | $ | 119,493 | $ | 179,189 | |||||||||||||||
|
Steven V. Wilkinson
|
$ | 99,475 | $ | 44,949 | $ | 59,696 | — | $ | 15,455 | $ | 159,879 | $ | 219,575 | |||||||||||||||
| (1) | J. Wayne Leonard, the Company’s Chairman and Chief Executive Officer, is not included in this table as he is an employee of the Company and thus receives no compensation for his service as a director. The compensation received by Mr. Leonard as an employee of the Company is shown in the Summary Compensation table on page 30. | |
| (2) | The amounts reported in column (b) consist of all fees earned or paid in cash for services as a director, including retainer fees, Presiding Director and Chair fees, and meeting fees, all of which are described under “Cash Compensation” above. | |
| (3) | The amounts in this column represent the aggregate grant date fair value in accordance with accounting standards of the 150 shares of Common Stock granted on a quarterly basis to each non-employee director during 2009. For a discussion of the relevant assumptions used in valuing these awards, see Note 12 to the Financial Statements in our Form 10-K for the year ended December 31, 2009. | |
| (4) | The amounts in this column represent the aggregate grant date fair value in accordance with accounting standards of retirement accruals for phantom units granted to each director. Under the Service Recognition Program for Outside Directors, each non-employee director is credited with 800 phantom units representing shares of Common Stock for each year of service on the Board. After five years, the director’s rights in the phantom units vest and the director becomes entitled to receive, upon the conclusion of service on the Board, the cash equivalent of one share of Common Stock for each vested unit on the date of the director’s retirement or separation. | |
| (5) | As of the end of 2009, the outstanding phantom units issued under the Service Recognition Program for Outside Directors held by each of our directors were: Ms. Bateman 7,200; Mr. Blount 17,600; Mr. deBree 640; Mr. Edwards 3,031; Ms. Herman 4,800; Mr. Hintz 4,000; Mr. Levenick 3,031; Mr. Myers 0; Mr. Nichols 18,626; Mr. Percy 7,454; Mr. Tauzin 2,893; and Mr. Wilkinson 4,427. As of December 31, 2009, Mr. Hintz had 260,000 unexercised options outstanding. |
52
| (6) | The amounts in column (g) include the following perquisites: (a) Company paid physical exams, related expenses and associated tax gross up payments; (b) personal air travel and associated tax gross-up payments; (c) Company paid premiums for $25,000 life insurance and $25,000 accidental death and disability insurance; and (d) dividends accrued under the Service Recognition Program for Outside Directors. Included in column (g) for Mr. deBree is his distribution from the Service Recognition Program for Outside Directors. Mr. deBree retired from our Board in May 2009. |
PERSONNEL
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each member of the Personnel Committee is an independent
director. None of the Personnel Committee members has served as
an officer of the Company, and none of the Company’s
executive officers has served as a member of a personnel
committee or board of directors of any other entity, which has
an executive officer serving as a member of the Company’s
Board of Directors.
53
COMMON
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 17, 2010, our records and other information
available from external sources indicated that the following
shareholders were the beneficial owners of more than five
percent of our common stock. The information below is as
reported in their filings with the SEC. We are not aware of any
other beneficial owner of more than five percent of our common
stock:
|
Amount and Nature |
||||||||
|
Name and Address of |
of Beneficial |
|||||||
|
Beneficial Owner
|
Ownership | Percent of Class | ||||||
|
BlackRock Inc.(1)
|
10,997,361 | 5.8 | % | |||||
|
40 East 52nd Street
New York, NY 10022 |
||||||||
| Capital World Investors(2) | 15,013,784 | 7.9 | % | |||||
|
333 South Hope Street
Los Angeles, CA 90071 |
||||||||
|
FMR LLC(3)
|
9,597,126 | 5.1 | % | |||||
|
82 Devonshire Street
Boston, MA 02109 |
||||||||
| (1) | Based on a Schedule 13G filed with the SEC on January 29, 2010, BlackRock, Inc. has indicted that it has sole voting power over 10,997,361 shares and sole power to dispose or to direct the disposition of 10,997,361 shares. | |
| (2) | Based on a Schedule 13G filed with the SEC on February 12, 2010, Capital World Investors has indicted that it has sole voting power over 450,000 shares and sole power to dispose or to direct the disposition of 15,013,784 shares | |
| (3) | Based on a Schedule 13G filed with the SEC on February 16, 2010, FMR LLC has indicted that it has sole voting power over 833,331 shares and sole power to dispose or to direct the disposition of 9,597,126. |
54
COMMON
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial ownership of our
common stock and stock-based units as of December 31, 2009
for all directors and Named Executive Officers. Unless otherwise
noted, each person had sole voting and investment power over the
number of shares of common stock and stock-based units set forth
across from his or her name.
|
Options Exercisable |
||||||||||||
|
Name
|
Shares(1) | Within 60 Days | Stock Units(2) | |||||||||
|
Entergy Corporation
|
||||||||||||
|
Maureen S. Bateman
|
6,700 | — | 7,200 | |||||||||
|
W. Frank Blount
|
12,234 | — | 17,600 | |||||||||
|
Leo P. Denault
|
7,543 | 276,619 | — | |||||||||
|
Gary W. Edwards
|
800 | — | 4,831 | |||||||||
|
Alexis Herman
|
3,900 | — | 4,800 | |||||||||
|
Donald C. Hintz
|
7,755 | 260,000 | 5,200 | |||||||||
|
J. Wayne Leonard
|
257,875 | 1,864,733 | 2,842 | |||||||||
|
Stuart L. Levenick
|
2,600 | — | 3,031 | |||||||||
|
Stewart C. Myers
|
138 | — | — | |||||||||
|
James R. Nichols(3)
|
9,894 | — | 18,626 | |||||||||
|
William A. Percy, II
|
2,650 | — | 10,754 | |||||||||
|
Mark T. Savoff
|
831 | 144,800 | 240 | |||||||||
|
Richard J. Smith
|
29,381 | 415,668 | — | |||||||||
|
W. J. Tauzin
|
2,500 | — | 2,893 | |||||||||
|
Gary J. Taylor
|
1,394 | 279,833 | — | |||||||||
|
Steven V. Wilkinson
|
3,655 | — | 4,427 | |||||||||
|
All directors and executive officers as a group (21 persons)
|
354,139 | 3,831,922 | 82,444 | |||||||||
| (1) | The number of shares of Entergy Corporation common stock owned by each individual and by all directors and executive officers as a group does not exceed one percent of the outstanding Entergy Corporation common stock. | |
| (2) | Represents the balances of phantom units each executive holds under the defined contribution restoration plan and the deferral provisions of the Equity Ownership Plan. These units will be paid out in either Entergy Common Stock or cash equivalent to the value of one share of Entergy Common Stock per unit on the date of payout, including accrued dividends. The deferral period is determined by the individual and is at least two years from the award of the bonus. For our directors, the phantom units are issued under the Service Recognition Program for Outside Directors. All non-employee directors are credited with units for each year of service on the Board. In addition, Messrs. Edwards, Hintz and Percy are deferring receipt of their quarterly stock grants. The deferred shares will be settled in cash in an amount equal to the market value of our common stock at the end of the deferral period. | |
| (3) | Excludes 4,059 shares that are owned by a charitable foundation that Mr. Nichols controls. |
55
AUDIT
COMMITTEE REPORT
The Audit Committee is comprised of four independent directors.
All members meet the independence criteria as defined by the
NYSE. During 2009, the Audit Committee complied with its written
Charter, as adopted by the Board of Directors. The Charter,
which was most recently revised in May 2009, is available on
Entergy’s website.
The Audit Committee is responsible for overseeing Entergy’s
accounting and financial reporting processes and audits of
Entergy’s financial statements. As set forth in its
charter, the Audit Committee acts only in an oversight capacity
and relies on the work and assurances of management, which has
primary responsibility for Entergy’s financial statements
and reports, Entergy’s internal auditors, as well
Entergy’s independent registered public accounting firm,
Deloitte & Touche LLP (Deloitte & Touche)
which is responsible for expressing an opinion on the conformity
of Entergy’s audited financial statements to generally
accepted accounting principles.
The Committee held 14 meetings during 2009. The meetings were
designed to facilitate and encourage private communication
between the Committee and management, the internal auditors, and
Deloitte & Touche. During these meetings, the
Committee reviewed and discussed the audited financial
statements and the unaudited interim financial statements with
management and Deloitte & Touche. The Committee also
received and discussed written communications from both
management and Deloitte & Touche regarding internal
controls over financial reporting as required by the Public
Company Accounting Oversight Board’s Auditing Standard
No. 5, “An Audit of Internal Control over Financial
Reporting that is Integrated with an Audit of Financial
Statements,” and applicable SEC rules.
The discussions with Deloitte & Touche also included
the matters required by the standards of the Public Company
Accounting Oversight Board (United States), Statements on
Auditing Standards (SAS) No. 61, “Communication with
Audit Committees,” as modified or supplemented. The Audit
Committee received the written disclosures and the letter from
the independent accountants required by applicable requirements
of the Public Company Accounting Oversight Board regarding the
independent accountant’s communications with the Audit
Committee concerning independence and has discussed with
Deloitte & Touche its independence.
Deloitte & Touche provides no internal audit services
for Entergy and the Audit Committee has concluded that non-audit
services provided by Deloitte & Touche are compatible
with maintaining its independence.
Based on the above-referenced reviews and 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 Audit Committee of the Entergy Corporation Board of
Directors:
|
Steven V. Wilkinson, Chair Maureen S. Bateman |
Stuart L. Levenick James R. Nichols |
56
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
A representative of Deloitte & Touche LLP will be
present at the meeting and will be available to respond to
appropriate questions by shareholders 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 years ended December 31, 2009 and 2008
by Deloitte & Touche LLP, the member firms of Deloitte
Touche Tohmatsu, and their respective affiliates (collectively,
“Deloitte & Touche”), which includes
Deloitte Consulting were as follows:
| 2009 | 2008 | |||||||
|
Audit Fees
|
$ | 9,175,534 | $ | 10,587,151 | ||||
|
Audit-Related Fees(a)
|
$ | 892,150 | $ | 778,689 | ||||
|
Total audit and audit-related fees
|
$ | 10,067,684 | $ | 11,365,840 | ||||
|
Tax Fees(b)
|
— | — | ||||||
|
All Other Fees
|
— | — | ||||||
|
Total Fees(c)
|
$ | 10,067,684 | $ | 11,365,840 | ||||
| (a) | Includes fees for employee benefit plan audits, consultation on financial accounting and reporting, and other attestation services. | |
| (b) | Includes fees for tax return review and tax compliance assistance. | |
| (c) | 100% of fees paid in 2009 and 2008 were pre-approved by the Entergy Corporation Audit Committee. |
Entergy
Audit Committee Guidelines for Pre-Approval of Independent
Auditor Services
The Audit Committee has adopted the following guidelines
regarding the engagement of Entergy’s independent auditor
to perform services for Entergy:
1. The independent auditor will provide the Audit
Committee, for approval, an annual engagement letter outlining
the scope of services proposed to be performed during the fiscal
year, including audit services and other permissible non-audit
services (e.g. audit related services, tax services, and all
other services).
2. For other permissible services not included in the
engagement letter, Entergy management will submit a description
of the proposed service, including a budget estimate, to the
Audit Committee for pre-approval. Management and the independent
auditor must agree that the requested service is consistent with
the SEC’s rules on auditor independence prior to submission
to the Audit Committee. The Audit Committee, at its discretion,
will pre-approve permissible services and has established the
following additional guidelines for permissible non-audit
services provided by the independent auditor:
| • | Aggregate non-audit service fees are targeted at fifty percent or less of the approved audit service fee. | |
| • | All other services should only be provided by the independent auditor if it is the only qualified provider of that service or if the Audit Committee specifically requests the service. |
3. The Audit Committee will be informed quarterly as to the
status of pre-approved services actually provided by the
independent auditor.
4. To ensure prompt handling of unexpected matters, the
Audit Committee delegates to the Audit Committee Chair or its
designee the authority to approve permissible services and fees.
The Audit Committee Chair or designee will report action taken
to the Audit Committee at the next scheduled Audit Committee
meeting.
5. The Vice President and General Auditor will be
responsible for tracking all independent auditor fees and will
report quarterly to the Audit Committee.
57
MATTERS
REQUIRING SHAREHOLDER ACTION
| ITEM 1 — | Election of Directors |
At our Annual Meeting, 12 people will be elected as members
of the Board of Directors, each for a one-year term, and until
their respective successors are duly elected and qualified or
until their earlier resignation or removal. The Corporate
Governance Committee of the Board of Directors has nominated the
12 people listed below for election at the Annual Meeting.
Each nominee is currently serving as a director of the Company.
Each director is elected annually to serve until the next annual
meeting or until his or her successor is elected. There are no
family relationships among our executive officers and directors.
All of the nominees have indicated that they will be available
to serve as directors. In the event that any nominee should
become unavailable, however, the proxy holders will vote for a
nominee or nominees designated by the Board, unless the Board
chooses to reduce the number of directors serving on the Board.
If you sign your proxy or voting instruction card but do not
give instructions with respect to voting for directors, your
shares will be voted for the twelve persons recommended by the
Board of Directors.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE
ELECTION OF EACH NOMINEE.
2010
NOMINEES FOR THE BOARD OF DIRECTORS
The following pages contain information concerning each of the
nominees for director, including each nominee’s age as of
December 31, 2009, period served as a director, position
(if any) with the Company, business experience and directorships
of other publicly-owned corporations (if any).
|
MAUREEN SCANNELL BATEMAN Age
66 Director Since 2000 New York, New York • Of Counsel, Butzel Long (legal services), 2007 to present • Former General Counsel, Manhattanville College, December 2007-January 2010 • Former Partner, Holland & Knight LLP (legal services), 2004-2007 • Former Executive Vice President and General Counsel of State Street Corporation (banking and financial services for institutional investors) • Former Managing Director and General Counsel of United States Trust Company of New York (banking trust and investment advisory services) • Director of Evercore Trust Company • Vice President — General of the American Irish Historical Society • Trustee of the Gregorian University Foundation • Director of Boston Bar Foundation • Member of the Board of Overseers of the Boston Symphony Orchestra • Fellow of the American Bar Association • Trustee-Fellow of Fordham University • Treasurer and a Director of Fordham Law Alumni Trustees |
58
|
W. FRANK
BLOUNT Age
71 Director Since
1987 Atlanta, Georgia • Chairman & Chief Executive Officer of JI Ventures, Inc. (high-tech venture capital fund) since 2000 • Former Chairman & Chief Executive Officer of Cypress Communications, Inc. (in-building integrated communications supplier) • Former Chief Executive Officer and Director of Telstra Communications Corporation (Australian telecommunications company) • Former Group President of AT&T Inc. • Director of Caterpillar, Inc., Alcatel-Lucent S.A., KBR, Inc. • Member of Advisory Board of China Telecom Corporation Limited • Board of Trustees of Georgia State University • Former Director of Adtran, Inc. and Hanson PLC |
|
|
GARY W.
EDWARDS Age
68 Director
Since 2005 Houston, Texas • Presiding Director of the Board of Directors of Entergy Corporation (since October 2006) • Former Senior Executive Vice President of Conoco Inc. (1999-2001); Former Executive Vice President of Conoco Inc. (1991-1999); Former Senior Vice President of DuPont (1991-1999) • Director of Sunoco, Inc. • Director of The Methodist Hospital, Houston, Texas • Director Emeritus of Yellowstone Park Foundation • Trustee of Kansas State University Foundation • Former Member of Advisory Board of Compass Partners, LLP, New York (investment banking firm) (2002-2009) • Member of Advisory Board of Theatre Under the Stars, Houston, Texas • Former Director of Sunoco Logistics Partners LP |
|
|
ALEXIS M. HERMAN Age
62 Director
Since 2003 McLean, Virginia • Chair and Chief Executive Officer of New Ventures, LLC (corporate consultants) since 2001 • Director of The Coca-Cola Company, Cummins, Inc. and MGM Mirage • Chair, Diversity Advisory Board of Toyota Motor Sales, U.S.A., Inc. • Former Secretary of Labor of the United States of America • Former White House Assistant to the President of the United States of America • Director of Xavier University of Louisiana, George Meany National Labor College, Bush-Clinton Katrina Fund, National Urban League and National Epilepsy Foundation • Former Director of Presidential Life Insurance Company |
59
|
DONALD C.
HINTZ Age
66 Director
Since 2004 Punta Gorda, Florida • Former President, Entergy Corporation and Entergy Services, Inc.; former President and Chief Executive Officer of Entergy Operations, Inc.; and former President and Chief Operating Officer of System Energy Resources, Inc. (retirement commenced in 2004) • Member of the U.S. Department of Energy’s Nuclear Energy Advisory Committee • Former President and Vice President of the American Nuclear Society • Director of Ontario Power Generation Inc. • Former Director of Electric Power Research Institute Board • Member of International Technical Advisory Board of Nuclear Electric Insurance Limited • Chair of the Nuclear Electric Insurance Limited International Technical Advisory Committee |
|
|
J. WAYNE LEONARD Age
59 Director
Since 1999 New Orleans, Louisiana • Chairman of the Board of Directors of Entergy Corporation since August 2006 • Chief Executive Officer of Entergy Corporation and Entergy Services, Inc. since 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 • Former President, Cinergy Capital & Trading, Inc. • Former President, Energy Commodities Business Unit of Cinergy Corp. • Former Group Vice President and Chief Financial Officer of Cinergy Corp. • Director of Tidewater, Inc. • Director of Edison Electric Institute • Trustee of United Way of Greater New Orleans |
|
|
STUART L. LEVENICK Age
56 Director Since
2005 Peoria, Illinois • Group President and Executive Office Member of Caterpillar Inc. since 2004 • Director of W. W. Grainger, Inc., (distributes facility maintenance products) • Director of Advisory Board, Commerce Bank, Peoria, Illinois • Director of Heart of Illinois United Way, Peoria Illinois • Director of U.S. Chamber of Commerce, Washington, D.C. • Director of Association of Equipment Manufacturers, Washington, D.C. |
60
|
STEWART C. MYERS Age
69 Director
Since 2009 Cambridge, Massachusetts • Robert C. Merton (1970) Professor of Financial Economics at the Massachusetts Institute of Technology Sloan School of Management • Principal and Director of The Brattle Group (economic consulting firm) since 1991 • Co-Author, Principles of Corporate Finance • Past President, American Finance Association • Research Associate, National Bureau of Economic Research |
|
|
JAMES R.
NICHOLS Age
71 Director
Since 1986 Boston, Massachusetts • Partner, Nichols & Pratt, LLP (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
70 Director Since
2000 Greenville, Mississippi • Chairman and Chief Executive Officer of Greenville Compress Company (commercial warehouse and real estate) • Chairman of Enterprise Corporation of the Delta (a non-profit economic development corporation) • Former Partner of Trail Lake Enterprises (cotton farm and gin) |
61
|
W. J. “BILLY”
TAUZIN Age
66 Director
Since 2005 Washington, DC • President and CEO, Pharmaceutical Research and Manufacturers of America (PhRMA) (trade association) • Former United States Congressman for the State of Louisiana (1980-2005) • Director of LHC Group, Inc. • Trustee of Keck Graduate Institute • Director of Research America |
|
|
STEVEN V. WILKINSON Age
68 Director Since
2003 Watersmeet, Michigan • Retired Audit Partner, Arthur Andersen LLP (international public accounting firm) • Director of Cabot Microelectronics Corporation • Director of Blackburn College |
In selecting nominees for director, the Corporate Governance
Committee seeks nominees who satisfy the criteria for Board
membership described on page 11 and who collectively
reflect a broad diversity of backgrounds and experiences in
fields relevant to Board service. The Corporate Governance
Committee believes that each of the foregoing nominees
contributes to this diversity, enhancing the collective
knowledge and capabilities of the Board and is well qualified to
serve as a director of Entergy. For example, our non-employee
director nominees possess deep senior executive management
experience across a wide range of industries, including
financial services (Ms. Bateman); communications
(Mr. Blount); chemicals and oil and gas (Mr. Edwards);
nuclear energy (Mr. Hintz); heavy equipment manufacturing
(Mr. Levenick); and commercial real estate
(Mr. Percy). Mr. Hintz also contributes his extensive
knowledge of the Company gained as its former President;
Ms. Bateman contributes her skills as an accomplished
corporate attorney; Ms. Herman, a former United States
Secretary of Labor, and Mr. Tauzin, a former Congressman
and the President and CEO of a major trade association,
contribute their knowledge and experience in governmental and
legislative affairs; Mr. Myers, a distinguished corporate
finance professor and leader in the development of modern
finance theory, contributes his knowledge of corporate finance;
Mr. Nichols contributes his experience as an attorney and
investment adviser; and Mr. Wilkinson, a former audit
partner with a major international auditing firm, contributes
his knowledge of accounting and auditing. The nominees
collectively also satisfy the Committee’s goal of
geographical diversity, with the 12 nominees residing in
10 states and the District of Columbia. The Committee based
the selection of each of its nominees on, among other things,
its evaluation of the foregoing experience, qualifications,
attributes and skills and its view that each nominee possesses
the requisite judgment and integrity to serve with distinction
on the Board of Directors.
62
| ITEM 2 — | Ratification of Selection of Deloitte & Touche LLP as Independent Registered Public Accountants for 2010 |
The Audit Committee annually reviews the qualifications,
performance and independence of the Company’s independent
auditors in accordance with regulatory requirements and
guidelines and evaluates whether to change the Company’s
independent auditors.
Based on this review, the Audit Committee has appointed
Deloitte & Touche LLP as independent auditors to
conduct the Company’s annual audit for 2010.
Deloitte & Touche LLP has served as the Company’s
independent auditors since 2001. Although shareholder approval
is not required for the appointment of Deloitte &
Touche LLP, the Board and the Audit Committee have determined
that it would be desirable as a good corporate governance
practice to request the shareholders to ratify the selection of
Deloitte & Touche LLP as our independent auditors.
Ratification requires the affirmative vote of a majority of the
shares entitled to vote on, and voted for or against, the
matter, represented in person or by proxy at the Annual Meeting.
If the shareholders do not ratify the appointment, the Audit
Committee may reconsider the appointment. Even if the
appointment is ratified, the Audit Committee, in its discretion,
may select different independent auditors if it subsequently
determines that such a change would be in the best interest of
the Company and its shareholders.
Representatives of Deloitte & Touche LLP will be
present at the Annual Meeting and will have an opportunity to
make a statement if they wish. They will be available to respond
to questions from shareholders at the meeting.
The
Board of Directors and the Audit Committee recommend that the
shareholders vote FOR the ratification of the appointment
of Deloitte & Touche LLP.
| ITEM 3 — | Approval of the Amended and Restated Entergy Corporation Executive Annual Incentive Plan |
The Personnel Committee has approved and recommends that the
shareholders vote for the approval of the Amended and Restated
Entergy Corporation Executive Annual Incentive Plan (the
“EAIP”). A copy of the EAIP is attached hereto as
Annex A. The Board of Directors believes “at
risk” compensation is a significant factor in motivating
executive performance to increase stockholder value. The EAIP is
designed to link pay and performance by providing Entergy’s
officers with the opportunity to receive an annual cash award
based on the achievement of pre-established performance goals.
Under Section 162(m), named executive officers’ (other
than the Chief Financial Officer) compensation over
$1 million is generally not deductible for United States
income tax purposes. However, performance-based compensation is
exempt from the deduction limit if certain requirements are met.
The EAIP is structured to allow that to the extent that
applicable requirements are satisfied, amounts paid under the
EAIP will qualify as performance-based compensation deductible
for federal income tax purposes under Section 162(m) and
the applicable regulations. Among other requirements,
Section 162(m) requires shareholder approval of incentive
plans and their performance measures. We are submitting the EAIP
for such shareholder approval to allow awards paid under the
EAIP to be deductible under Section 162(m).
At the Annual Meeting, the shareholders will vote on the
approval of the EAIP. The EAIP affords flexibility in the form
and payment of awards to meet changing business needs. The
Board’s approval and recommendation of the EAIP follows a
review and evaluation of the amendments to the existing
Executive Annual Incentive Plan. A summary of the EAIP follows.
The
Board of Directors recommends that the shareholders vote FOR the
proposal to approve the Amended and Restated Entergy Corporation
Executive Annual Incentive Plan. Proxies solicited by the Board
of Directors will be voted “FOR” this proposal unless
a contrary vote is specified.
63
SUMMARY
OF THE EXECUTIVE ANNUAL INCENTIVE PLAN
Term
If approved by the shareholders, the EAIP, as amended, will be
effective for grants and elections made after January 1,
2010, and will continue until terminated by the Board.
Purpose
The EAIP links pay and performance by providing Entergy’s
officers with an opportunity to receive an annual cash award
based upon the achievement of pre-established performance goals.
The performance goals are chosen by the Personnel Committee from
the list included in the EAIP and are intended to align the
interests of plan participants with those of Entergy and its
shareholders.
Administration
The EAIP will be administered by the Personnel Committee.
Subject to the terms of the EAIP, the Personnel Committee will
have the authority to determine the size, terms and conditions
of awards under the EAIP, to construe and interpret the EAIP, to
amend the terms and conditions of any outstanding award to the
extent such terms and conditions are within the sole discretion
of the Personnel Committee as provided in the EAIP, and to make
all other determinations which may be necessary or advisable for
administration of the EAIP.
Eligibility
All employees of Entergy or its 80% owned subsidiaries as of the
last fiscal quarter of the performance period at the approximate
equivalent of a corporate Vice President or higher employment
level, are eligible to participate in the EAIP for that
performance period. Currently, there are 70 individuals eligible
to participate in the EAIP.
Amendment
to Existing Executive Incentive Plan
The Executive Incentive Plan was amended to make the plan
compliant with IRS Code Section 409A.
Awards
Under the EAIP
Not later than 90 days after the beginning of each
performance period, the Personnel Committee will select one or
more performance measures, establish written performance goals
with respect to each selected performance measure and determine
the award opportunities for that performance period.
The performance measures may be based on any combination of
corporate, division
and/or
individual goals. For each performance measure, the Personnel
Committee will establish performance goals which will be used to
determine award opportunities. For example, the Personnel
Committee may establish various levels of Company pretax income
as performance goals and link each such performance goal to an
award opportunity. The performance measures, performance goals
and award opportunities may vary among officers and from year to
year. The Personnel Committee may establish minimum levels of
performance goal achievement below which grants will not be made.
As soon as practicable after the end of the performance period,
the Personnel Committee will assess performance to determine
what payments, if any, will be made under the EAIP for each of
the Company’s officers.
The EAIP provides that the total amount payable for one
performance period to named executive officers in the Summary
Compensation Table for the applicable period shall not exceed 1%
of Entergy’s operating cash flow for the performance period
and the amount payable to any one named officer under the EAIP
for a performance period shall not exceed 0.5% of Entergy’s
operating cash flow for the performance period.
The EAIP provides that the performance measures that may serve
as determinants of an officer’s award opportunities may be
based on one or any combination of the following business
criteria as EBITDA (earnings before interest, taxes,
depreciation and amortization), EBIT (earnings before interests
and taxes), net income, earnings per share, operating cash flow,
cash flow, return on equity, sales, budget achievement,
productivity, price of
64
Entergy Corporation stock, market share, total return to
shareholder, return on capital, net cash flow, cash available to
parent, net operating profit after taxes (NOPAT), economic value
added (EVA), expense spending, O&M expense, expense,
O&M or capital/kwh, capital spending, gross margin, net
margin, market capitalization, market value, debt ratio, equity
ratio, return on assets, profit margin, customer growth,
customer satisfaction, safety or Entergy continuous improvement
(ECI). The Performance Goals may be stated in terms of absolute
levels or relative to another company or companies or to an
index or indices. The Performance Goals established by the
Personnel Committee
and/or the
results for any Performance Period may be adjusted by the
Personnel Committee to reflect capital changes and may exclude
unusual or nonrecurring events, including extraordinary items,
changes in accounting principles, discontinued operations,
acquisitions, divestitures and material restructuring charges.
As provided in the EAIP, the Personnel Committee has negative
discretion to reduce or eliminate any or all final grants that
would otherwise be paid. However, the Personnel Committee may
not exercise discretion to increase the amount otherwise payable
to an officer.
In the event that changes are made to IRS Code
Section 162(m) or the regulations thereunder to permit
greater flexibility with respect to any award opportunities
under the EAIP, the Personnel Committee may exercise such
greater flexibility consistent with the terms of the EAIP
without regard to the restrictive provisions of the EAIP.
Payment
of Awards
Amounts due under the EAIP are payable as soon as practicable
after the payment is approved by the Personnel Committee but no
later than March 15th following the end calendar year for which
the award was made. Subject to the terms of the Company’s
Executive Deferred Compensation Plan and the 2007 Equity
Ownership Plan, an officer eligible to participate in the
Executive Deferred Compensation Plan and the 2007 Equity
Ownership Plan may defer the receipt of some or all of the
officer’s payment under the EAIP.
If during a performance period the officer ceases to be a
regular, full time employee of the Company for a reason other
than death, total disability or retirement, the officer’s
eligibility under the EAIP shall terminate and no amounts will
be paid to that officer under the EAIP. In the event a
participating officer (who was an officer as of the first day of
a performance period) terminates employment due to death, total
disability or retirement, that officer shall be entitled to a
portion of his or her potential payment, as determined by
Administrative Guidelines.
Amendments
The Personnel Committee may modify, amend, suspend or terminate
the EAIP at any time.
Other
Matters
As discussed above, amounts that may be paid under the EAIP for
fiscal 2010 and future years are dependent on the attainment of
performance goals established by the Personnel Committee, as
well as the Personnel Committee’s authority, subject to the
terms of the EAIP, to reduce or eliminate such grants.
Accordingly, the amounts, if any, that may be paid under the
EAIP in the future cannot presently be determined. If the
shareholders do not approve the EAIP, the Personnel Committee
will review the Company’s executive compensation program in
light of such vote and the principles described in the
Compensation Discussion and Analysis.
65
OTHER
INFORMATION
Shareholder
Proposals for 2011 Meeting
For a shareholder proposal to be included in the proxy statement
for our next annual meeting, the proposal must be received by
the Company at its principal offices no later than
November 17, 2010. Also, under our By-laws, shareholders
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 9, 2011 and not earlier than
February 12, 2011.
Annual
Report on
Form 10-K
A copy of our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009, as filed with
the Securities and Exchange Commission, will be sent to any
shareholder without charge upon written request addressed to:
Entergy Corporation
Investor Relations
P. O. Box 61000
New Orleans, Louisiana 70161
You may also obtain our Annual Report on
Form 10-K
over the Internet at the Securities and Exchange
Commission’s web site, www.sec.gov.
By order of the Board of Directors,
J. Wayne Leonard
Chairman of the Board and Chief Executive Officer
Dated: March 17, 2010
66
ANNEX A
EXECUTIVE
ANNUAL INCENTIVE PLAN
OF ENTERGY CORPORATION AND SUBSIDIARIES
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2010)
OF ENTERGY CORPORATION AND SUBSIDIARIES
(AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2010)
Entergy Corporation, a Delaware corporation, hereby amends and
restates its Executive Annual Incentive Plan, effective
January 1, 2010 (the “Plan”), as applicable to
Performance Periods beginning on or after such date. The Plan
permits annual cash awards to System Management
Level Employees, based on the achievement of
pre-established Performance Goals. The Plan shall remain in
effect until terminated as herein provided.
ARTICLE I.
PLAN PURPOSES
The purposes of the Plan are to (a) provide incentives to
achieve annual goals that are within System, Business Unit
and/or
individual control and are considered key to the Company’s
success; (b) reward performance with pay that varies in
relation to the extent to which the pre-established performance
goals are achieved; and (c) allow that amounts paid under
the Plan to Covered Participants are “qualified performance
based compensation” within the meaning of Code
Section 162(m).
ARTICLE II.
DEFINITIONS
The terms defined in this Article II shall, for all
purposes of this Plan, have the meanings herein specified,
unless the context expressly, or by necessary implication,
requires otherwise:
2.01 “Award” shall mean the actual
dollar amount paid to a Participant pursuant to the Plan.
2.02 “Award Opportunity” shall mean
the various levels of incentive award pay out opportunities that
a Participant may earn under the Plan, as established by the
Committee.
2.03 “Base Salary” shall mean, as to
any specific Performance Period, the actual base salary paid by
a System Company employer to a Participant as an Employee during
such Performance Period. Base Salary (a) shall not be
reduced by the amount, if any, of any voluntary salary
reductions or any salary reduction contributions made to any
salary reduction plan, defined contribution plan or other
deferred compensation plans of a System Company or pursuant to
any deferred compensation arrangements; and (b) shall be
calculated exclusive of any payments under this Plan or other
incentive plans, programs or arrangements, bonus payments,
overtime, severance payments, or other special awards.
2.04 “Board” shall mean the Board of
Directors of the Company.
2.05 “Business Unit” shall mean a
division or department of a System Company, or any combination
of System Companies, divisions or departments thereof.
2.06 “Code” shall mean the Internal
Revenue Code of 1986, as amended. Reference in the Plan to any
section of the Code shall be deemed to include any amendment or
successor provisions to such section and any regulations under
such section.
2.07 “Committee” shall mean the
Personnel Committee of the Board comprised solely of two or more
outside Directors of the Board who are non-employee directors
under
Rule 16b-3
promulgated under the Exchange Act and successor rules, and with
respect to a Covered Participant, outside directors under Code
Section 162(m).
2.08 “Company” shall mean Entergy
Corporation and any successor.
A-1
2.09 “Covered Participant” shall
mean a Participant who is a “covered employee” as
defined in Code Section 162(m), or who the Committee
believes will be such a “covered employee” for a
Performance Period.
2.10 “Director” shall mean a member
of the Board who is not an Employee.
2.11 “Disability” shall have the
meaning as defined under the Entergy Corporation sponsored group
insurance plan covering disability, and determination of
Disability shall be made by the insurance company providing such
coverage on the date on which the Participant, whether or not
eligible for benefits under such insurance plan becomes
Disabled. However, in the absence of such insurance plan, the
Committee shall make such determination.
2.12 “Employee” shall mean a
full-time, salaried employee of a System Company. The term
“Employee” shall not include a person retained as an
independent contractor, leased employee, consultant or a person
otherwise designated by the Company at the time of hire as not
eligible to participate in the Plan, even if such person is
determined to be an “employee” by any governmental or
judicial authority.
2.13 “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended from time to time
and interpretive rules and regulations.
2.14 “Operating Cash Flow” shall
mean the amount of operating cash flow for any given Performance
Period, as determined by the Committee based on the
Company’s audited financial statements and in accordance
with generally accepted accounting principles.
2.15 “Participant” shall mean a
System Management Level Employee of a System Company
approved for participation by the Committee.
2.16 “Performance Goals” shall mean
the goals established by the Committee, against which a
Participant’s performance shall be measured to determine if
an Award is payable under the Plan.
2.17 “Performance Period” shall mean
the Plan Year, or such other period as may be established by the
Committee, during which time the performance of Participants
shall be measured.
2.18 “Plan” shall mean this
Executive Annual Incentive Plan, as amended and restated, or if
hereafter amended or supplemented, as so amended or supplemented.
2.19 “Plan Year” shall mean the
calendar year.
2.20 “Retirement” shall mean
retirement directly from the service of a System Company in
accordance with the terms of the Entergy Corporation sponsored
qualified defined benefit pension plan in which the Participant
participates and where the Participant immediately thereafter
commences retirement income benefits under such plan.
2.21 “Rule 16b-3”
shall mean
Rule 16b-3
promulgated by the SEC under the Exchange Act, or any successor
rule or regulation.
2.22 “SEC” shall mean the Securities
and Exchange Commission or any successor thereto.
2.23 “System” shall mean the Company
and all System Companies and any successors thereto.
2.24 “System Company” shall mean
(a) the Company, (b) any corporation 80% or more of
whose stock (based on voting power) or value is owned directly
or indirectly by the Company; and (c) any partnership or
trade or business which is eighty percent (80%) or more
controlled, directly or indirectly, by Company and any successor
thereto.
2.25 “System Management Level” shall
mean the applicable management level set forth below:
a. System Management Level 1 (Chief Executive Officer);
b. System Management Level 2 (Presidents and Executive
Vice Presidents within the System);
c. System Management Level 3 (Senior Vice Presidents
within the System); and
d. System Management Level 4 (Vice Presidents within
the System).
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2.26 “Target Award Level” shall mean
the target Award Opportunity, as established by the Committee,
intended to reward performance at the targeted level.
ARTICLE III.
CONSTRUCTION
3.01 Gender and Number. The
masculine pronoun whenever used in the Plan shall include the
feminine. Similarly, the feminine pronoun whenever used in the
Plan shall include the masculine as the context or facts may
require. Whenever any words are used herein in the singular,
they shall be construed as if they were also used in the plural
in all cases where the context so applies.
3.02 Captions. The captions
to the articles and sections of this Plan are for convenience
only and shall not control or affect the meaning or construction
of any of its provisions.
3.03 Severability. In the
event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been
included.
3.04 Controlling Law. The
Plan and all related documents shall be governed by and
construed in accordance with the laws of the State of Delaware,
without regard to the conflict of law principles of any state.
Any persons or corporations who now are or shall subsequently
become parties to the Plan shall be deemed to consent to this
provision.
3.05 No Right to
Employment. This Plan does not confer nor
shall be construed as creating an express or implied contract of
employment between any Participant and any System Company or
other party. Nothing in the Plan shall interfere with or limit
in any way the right of any System Company employer to terminate
any Employee’s System employment at any time, nor confer
upon any Employee any right to continue in the employ of any
System Company employer.
ARTICLE IV.
ELIGIBILITY
AND PARTICIPATION
4.01 Eligibility. In order
to be eligible to participate in the Plan for a Performance
Period, an individual must be (a) an Employee;
(b) employed by a System Company before the commencement of
the last quarter of the Performance Period or employed by a
System Company for a minimum of 3 months during such
Performance Period; (c) physically worked at least one
business day during such Performance Period; and
(d) employed at a System Management Level on the last day
of the Performance Period, except in the event of certain status
changes including, but not limited to, death, Disability and
Retirement during such Performance Period (which shall be
addressed by administrative guidelines implemented by
Company’s Senior Vice-President, Human
Resources & Administration).
4.02 No Right to
Participation. No Employee shall have a right
to participate in the Plan, regardless of prior participation in
the Plan.
4.03 Participants. Prior to,
or within the first 90 days of, the commencement of each
Performance Period, the Committee shall approve Participants
from those Employees meeting the eligibility requirements of the
Plan, considering such factors as the degree to which the
Employee is responsible for establishing the strategic direction
of the Company
and/or
Business Units, executing tactical action plans, or achievement
of bottom line results.
4.04 Status Change During Performance
Period. No Awards shall be payable to an
individual who, prior to the end of the Performance Period,
separates from employment for reasons other than death,
Retirement or Disability. In the event, during a Performance
Period, of a Participant’s promotion to a System Management
Level, promotion or demotion among System Management Levels,
death, Disability or Retirement, eligibility for Awards shall be
determined pursuant to administrative guidelines implemented
pursuant to this Plan by the Company’s Senior
Vice-President, Human Resources & Administration and
the Participant’s Award (if any) will be paid: (a) if
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the Performance Goals are satisfied in accordance with the terms
of the Plan; and (b) at the same time that Awards are paid
to Participants who do not have such a separation from
employment or change in status.
ARTICLE V.
DETERMINATION
OF AWARDS
5.01 Timing of Performance
Goals. For each Performance Period, the
Committee shall establish, in writing, System, Business Unit
and/or
individual ranges of attainment of Performance Goals for the
Performance Period: provided, however, that with respect to
Covered Participants, such Performance Goals for the Performance
Period shall be established no later than 90 days after the
commencement of each Performance Period (provided the outcome of
the Performance Goals are substantially uncertain at the time
established) or such later date as may be permitted under Code
Section 162(m).
5.02 Performance Goals. The
following provisions shall apply to the establishment of
Performance Goals for any Performance Period:
a. Each Performance Goal range shall include a level of
performance at which one hundred percent (100%) of the Target
Award Level may be earned.
b. Each range shall include levels of performance above and
below the one hundred percent (100%) performance level at which
a greater or lesser percent of the Target Award Level may be
earned.
c. Subject to Section 5.05 herein, the Committee may
establish Performance Goals based on one or any combination of
the following business criteria: EBITDA (earnings before
interest, taxes, depreciation and amortization), EBIT (earnings
before interests and taxes), net income, earnings per share,
operating cash flow, cash flow, return on equity, sales, budget
achievement, productivity, price of Entergy Corporation stock,
market share, total return to shareholder, return on capital,
net cash flow, cash available to parent, net operating profit
after taxes (NOPAT), economic value added (EVA), expense
spending, O&M expense, expense, O&M or capital/kwh,
capital spending, gross margin, net margin, market
capitalization, market value, debt ratio, equity ratio, return
on assets, profit margin, customer growth, customer
satisfaction, safety or Entergy continuous improvement (ECI).
The Performance Goals may be stated in terms of absolute levels
or relative to another company or companies or to an index or
indices. The Performance Goals established by the Committee
and/or the
results for any Performance Period may be adjusted by the
Committee to reflect capital changes and may exclude unusual or
nonrecurring events, including extraordinary items, changes in
accounting principles, discontinued operations, acquisitions,
divestitures and material restructuring charges.
d. All Awards to Covered Participants under this Plan shall
be further subject to such other conditions, restrictions, and
requirements as the Committee may deem necessary to comply with
the Code Section 162(m).
5.03 Award
Opportunities. For each Performance Period,
the Committee shall establish in writing Award Opportunities
that correspond to various levels of achievement of the
pre-established Performance Goals, such that the level of
achievement of the pre-established Performance Goals at the end
of the Performance Period shall determine the Awards; provided,
however, that with respect to Covered Participants, such Award
Opportunities shall be established no later than 90 days
after the commencement of each Performance Period (provided the
outcome of the Performance Goals to which the Award
Opportunities relate are substantially uncertain at the time
established). The established Award Opportunities may vary in
relation to the System Management Level of each Participant or
among Participants at the same System Management Level. Except
as provided in Section 5.05, Award Opportunities for
Participants shall be established as a function of each
Participant’s Base Salary. The Committee may establish
minimum levels of Performance Goal achievement, below which no
Participant shall receive an Award.
5.04 No Mid-Year Changes in Award
Opportunities. Except as provided in 5.05
herein, each Participant’s Award shall be based exclusively
on the Award Opportunities established by the Committee pursuant
to Section 5.03.
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5.05 Potential
Modifications. In the event that changes are
made to Code Section 162(m) or the regulations thereunder
(or their interpretation) to permit greater flexibility with
respect to any Award Opportunities under the Plan, the Committee
may exercise such greater flexibility consistent with the terms
of the Plan and, to the extent of such changes, without regard
to otherwise applicable restrictive provisions of the Plan.
5.06. Determination of
Awards. Following the completion of each
Performance Period, if the Performance Goals established by the
Committee for that Performance Period were met, the Committee
shall certify in writing prior to payment of Awards that the
Performance Goals for such Performance Period were satisfied.
Awards under this Plan to a Covered Participant with respect to
a relevant Performance Period shall be contingent upon the
attainment of the Performance Goals that are applicable to such
Covered Participant, as certified by the Committee. Approved
minutes of the Committee may be used for this purpose.
5.07 Computation of
Awards. Awards shall be computed and paid
based on the attainment of the pre-established Performance
Goals. With respect to a Performance Period, funding for Awards
to Covered Participants shall not exceed 1% of Operating Cash
Flow during such Performance Period. In addition, with respect
to a Performance Period, no more than .5% of Operating Cash Flow
during such Performance Period shall be allocated to a single
Covered Participant. Amounts in excess of the limits set forth
in this Section 5.07 shall be disallowed and shall not be
carried over for payment to Covered Participants in a subsequent
Performance Period.
5.08 Award Adjustments. The
Committee shall have the discretion to reduce or eliminate the
amount of a Participant’s Award otherwise payable under the
Plan. The Committee shall have no discretion to increase any
Award to a Covered Participant.
ARTICLE VI.
PAYMENT OF
AWARDS
6.01 Timing and Form of
Payment. No Participant shall be vested in
Awards, nor Awards made, prior to the end of the applicable
Performance Period and approval of the Award by the Committee.
Unless a deferral election is made by a Participant pursuant to
Section 6.02, to the extent a Participant has a
“legally binding right” (within the meaning of Code
Section 409A) to his Award, such Award shall be paid in cash as
soon as practicable after, and no later than March 15th
following the end of the calendar year in which the Award is no
longer subject to a “substantial risk of forfeiture”
(within the meaning of Code Section 409A).
6.02 Voluntary Deferral of
Awards. A Participant may defer receipt of
some or all payments otherwise due under the Plan pursuant to
the terms of any deferred compensation plan sponsored by the
Company or by any System Company under which such deferral is
permitted provided such deferral election and the deferred
compensation plan under which such deferral election is made,
are both in compliance with the requirements of Code
Section 409A and the regulations thereunder.
ARTICLE VII.
ADMINISTRATION
7.01 Committee
Authority. The Plan shall be administered by
the Committee, which, in addition to the other powers set forth
herein, shall have the full power, subject to, and within the
limits of the Plan, to:
a. make all determinations and interpretations and approve
all rules as may be necessary or advisable for the
administration of the Plan, including, but not limited to, those
necessary to resolve any ambiguities with respect to any of the
terms and provisions of the Plan;
b. exercise all powers and perform such acts in connection
with the Plan as are deemed necessary or appropriate to promote
the best interests of the System;
c. determine the size and types of Award Opportunities and
Awards;
d. determine the terms and conditions of Award
Opportunities in a manner consistent with the Plan;
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e. construe and interpret the Plan and any agreement or
instrument entered into under the Plan;
f. establish, amend or waive rules and regulations for the
Plans administration; and
g. subject to the provisions of Article V, amend the
terms and conditions of any outstanding Award Opportunity to the
extent such terms and conditions are within the sole discretion
of the Committee as provided in the Plan.
7.02 Authorized Agents. The
Committee may authorize one or more of its members or any
officer of the Company, to execute and deliver documents on
behalf of the Committee, including administrative guidelines for
this Plan.
7.03 Binding Decisions. All
determinations and decisions of the Committee as to any disputed
question arising under the Plan, including questions of
construction and interpretation, shall be final, binding and
conclusive upon all parties.
7.04 Effect of Code
Section 409A. To the extent that any
Award under this Plan is or may be considered to involve a
nonqualified deferred compensation plan or deferral subject to
Section 409A of the Code, the terms and administration of
such Award shall comply with the provisions of such Section and
Treasury Regulations issued thereunder, and, to the extent
necessary, shall be modified, replaced or terminated in the
discretion of the Committee. Notwithstanding any provision of
the Plan to the contrary, in the event that the Committee
determines that any Award may be or become subject to Code
Section 409A, the Company may adopt such amendments to the
Plan or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or
take any other actions, that the Committee determines are
necessary or appropriate to (i) exclude or exempt the Plan
from the application of Code Section 409A
and/or
preserve the intended tax treatment of the benefits provided
with respect toe the Award, or (ii) comply with the
requirements of Code Section 409A.
ARTICLE VIII.
AMENDMENT
AND TERMINATION
8.01 The Committee may amend, suspend, or terminate
the Plan or any portion thereof at any time; provided, if
exemption from Code Section 162(m) deduction limits is to
be continued, such amendment is made with shareholder approval
if shareholder approval is necessary to comply with any tax,
regulatory or exchange requirement, including for these
purposes, the requirements for the performance-based
compensation exception under Code Section 162 (m).
ARTICLE IX.
MISCELLANEOUS
9.01 Nontransferability. No
right or interest of any Participant in the Plan shall be
assignable or transferable, or subject to any lien, directly, by
operation of law or otherwise, including, but not limited to,
execution, levy, garnishment, attachment, pledge and bankruptcy.
In the event of a Participant’s death, any payment to which
the Participant may be entitled shall be made to the
Participant’s estate.
9.02. Tax Withholding. A
System Company shall have the right to deduct from all payments
under the Plan any foreign, federal, state or local income or
other taxes required by law to be withheld with respect to such
payments. Before payment of any Award may be deferred under
Article VI, a System Company may require that the
Participant pay or agree to withholding for any foreign,
federal, state or local income or other taxes which may be
imposed on any amount deferred.
9.03 Non-uniform
Determinations. The Committee’s
determinations under the Plan (including without limitation,
determinations of the persons to receive Awards, the form,
amount, and timing of such payments, the terms and provisions of
such payments, and the agreement evidencing same) need not be
uniform and may be made selectively among persons who receive,
or are eligible to receive Awards under the Plan, whether or not
such persons are similarly situated.
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9.04 Interaction with Other
Plans. Payments under the Plan shall not
constitute earnings for the purposes of any other plans, unless
so specified in such plan.
9.05 No Funding. A System
Company shall have no obligation to reserve or otherwise fund in
advance any amounts that are, or may in the future become,
payable under this Plan. Any funds, which a System Company
acting in its sole discretion determines to reserve for future
payments under this Plan, may be commingled with other funds of
the System Company and need not in any way be segregated from
other assets or funds held by the System Company.
9.06 Successors. All
obligations of a System Company under the Plan shall be binding
upon and inure to the benefit of any successor of such System
Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business
and/or
assets of the System Company.
9.07 Other Plans. Nothing
contained in this Plan shall prevent the Committee or the Board
from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required;
and such arrangements may be either generally applicable or
applicable only in specific cases.
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| ENTERGY CORPORATION 639 LOYOLA AVENUE NEW ORLEANS, LA 70113 VOTE BY INTERNET — www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE — 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: M21013-P93041 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY ENTERGY CORPORATION The Board of Directors recommends you vote FOR the following proposals: 1. Election of Directors 1a. M. S. Bateman 1b. W. F. Blount 1c. G. W. Edwards 1d. A. M. Herman 1e. D. C. Hintz 1f. J. W. Leonard 1g. S. L. Levenick 1h. S. C. Myers 1i. J. R. Nichols 1j. W. A. Percy, II 1k. W. J. Tauzin 1l. S. V. Wilkinson For Against Abstain 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2. Ratification of Selection of Deloitte & Touche LLP as independent registered public accountants for 2010. 3. Approval of the Amended and Restated Entergy Corporation Executive Annual Incentive Plan. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. For Against Abstain 0 0 0 0 0 0 Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. Date Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) |
| Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement are available at www.proxyvote.com. M21014-P93041 ENTERGY CORPORATION THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE 2010 ANNUAL MEETING OF SHAREHOLDERS, MAY 7, 2010 The undersigned hereby appoints J. Wayne Leonard, Gary W. Edwards and Alexis M. Herman, jointly and severally, as attorneys and proxies, each with the power to appoint his or her substitute, and hereby authorizes them to represent and to vote on behalf of the undersigned all of the shares of Common Stock of Entergy Corporation that the undersigned is entitled in any capacity to vote if personally present at the 2010 Annual Meeting of Shareholders to be held on May 7, 2010, and at any adjournments or postponements thereof, in accordance with the instructions set forth on the reverse and with the same effect as though the undersigned were present in person and voting their shares. The proxies are authorized in their discretion to vote for the election of a person to the Board of Directors if any nominee named herein becomes unable to serve or for good cause will not serve, upon all matters incident to the conduct of the meeting, and upon such other business as may properly come before the meeting. |
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETINGINFORMATION ABOUT THE ANNUAL MEETINGCORPORATE GOVERNANCEBoard of DirectorsDirector IndependenceBoard CommitteesCorporate Governance Principles and PracticesTRANSACTIONS WITH RELATED PERSONSCOMMUNICATION WITH THE BOARD OF DIRECTORSNOMINATION OF DIRECTORSSECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCECOMPENSATION DISCUSSION AND ANALYSISPERSONNEL COMMITTEE REPORTCOMPENSATION RISK ASSESSMENTEXECUTIVE COMPENSATION TABLES2009 Summary Compensation2009 Grants of Plan-Based Awards2009 Outstanding Equity Awards at Fiscal Year-End2009 Option Exercises and Stock Vested2009 Pension Benefits2009 Non-qualified Deferred Compensation2009 Potential Payments Upon Termination or Change in Control2009 NON-EMPLOYEE DIRECTOR COMPENSATIONPERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONCOMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERSCOMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERSAUDIT COMMITTEE REPORTINDEPENDENT REGISTERED PUBLIC ACCOUNTANTSMATTERS REQUIRING SHAREHOLDER ACTIONItem 1 Election of DirectorsItem 2 Ratification of Selection of Deloitte & Touche LLP as Independent Registered Public Accountants for 2010Item 3 Approval of the Amended and Restated Entergy Corporation Executive Annual Incentive PlanOTHER INFORMATIONShareholder Proposals for 2011 MeetingAnnual Report on Form 10-K