ENTERGY CORP /DE/
10-Qs and 10-Ks
PROXIES
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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. )
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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| o | Definitive Additional Materials | |
| o | Soliciting Material Pursuant to §240.14a-12 |
Entergy Corporation
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|
Entergy Corporation 639 Loyola Avenue New Orleans, LA 70113 |
New Orleans,
Louisiana
March 24, 2011
To the Shareholders of ENTERGY CORPORATION:
NOTICE OF THE ANNUAL MEETING OF
SHAREHOLDERS
|
Date:
|
Friday, May 6, 2011 | |
|
Time:
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10:00 am | |
|
Place:
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The Woodlands Waterway Marriott Hotel & Convention
Center 1601 Lake Robbins Drive, The Woodlands, Texas 77380 |
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 2011.
3. An advisory vote on executive compensation.
4. An advisory vote on the frequency of advisory votes on
executive compensation.
5. Approval of the 2011 Entergy Corporation Equity
Ownership and Long Term Cash Incentive Plan.
6. 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 8, 2011 are entitled to receive notice of, to attend
and to vote at the meeting.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
SHAREHOLDERS MEETING TO BE HELD ON MAY 6, 2011
This Proxy Statement and our 2010 Annual Report to Shareholders
are available at:
http://www.entergy.com/investor_relations/2010_publications.aspx.
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 2011 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 Woodlands Waterway
Marriott Hotel & Convention Center, 1601 Lake
Robbins Drive, The Woodlands, Texas. We intend to mail this
Proxy Statement and a proxy card to shareholders starting on or
about March 24, 2011.
INFORMATION
ABOUT THE ANNUAL MEETING
Who is
entitled to vote at the Annual Meeting?
Holders of our common stock at the close of business on
March 8, 2011, the record date for the meeting, can vote
their shares at the Annual Meeting. On that date, we had
178,777,374 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
shareholders 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; | |
| • | directly in your name as a holder of the Company’s restricted stock; | |
| • | 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 these proxy materials
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
proxy materials. If your shares are held in one of the Savings
Plans, see “How do I vote shares held under the Savings
Plans?” 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 3, 2011 for
shares held in the Savings Plans and through 11:59 p.m.
Eastern Time on Thursday, May 5, 2011 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.
You will be able to confirm that the system has properly
recorded your votes. 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. If you hold your
shares in street name, please follow the Internet voting
instructions that accompany your proxy materials. You may vote
on 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 vote on 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 form as
indicated on such form.
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. |
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?
If you participate in one of the Company’s Savings Plans,
your proxy card includes the number of shares credited to your
account under that 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 3, 2011. 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 for purposes of determining a
quorum.
2
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 “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. | |
| • | Advisory Vote on Executive Compensation. The approval of the non-binding vote on executive compensation 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. | |
| • | Advisory Vote on the Frequency of Advisory Votes on Executive Compensation. The frequency of the advisory vote on executive compensation receiving the greatest number of votes (every one, two or three years) will be considered the frequency recommended by shareholders. | |
| • | Approval of 2011 Equity Ownership and Long Term Cash Incentive Plan. The approval of the 2011 Entergy Corporation Equity Ownership and Long Term Cash 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. |
Although the advisory votes on executive compensation and the
frequency of future advisory votes on executive compensation are
non-binding, as provided by law, our Board will review the
results of the votes and will take them into account in making a
determination concerning executive compensation and the
frequency of such advisory votes.
Who
counts the votes?
We have engaged Broadridge Financial Solutions, Inc. as our
independent agent to receive and tabulate shareholders votes.
Broadridge will separately tabulate “for” and
“against” votes, votes on the frequency of holding an
advisory vote on executive compensation, abstentions and broker
non-votes. Broadridge has also been retained to be our election
inspector to certify the results, determine the existence of a
quorum and the validity of proxies and ballots, and perform any
other acts required under the General Corporation Law of
Delaware.
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 other than Proposal 5 (the advisory vote on the
frequency with which the advisory vote on executive compensation
should be held).
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 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 considered, pursuant to New York Stock Exchange
(“NYSE”) rules, to be 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
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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 all other proposals will not be deemed routine items. Broker
non-votes will not have an impact on the outcome of any proposal
to be voted on at the Annual Meeting.
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., LLC, 470 West Avenue,
Stamford, Connecticut 06902 to help us distribute and solicit
proxies. We will pay Morrow $14,000, plus expenses, for these
services.
4
CORPORATE
GOVERNANCE
Board
of Directors
As of March 24, 2011, there were 13 members of the Board of
Directors:
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Maureen S. Bateman
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J. Wayne Leonard Chairman and Chief Executive Officer |
James R. Nichols | ||||
|
W. Frank Blount
|
Stuart L. Levenick | William A. Percy, II | ||||
|
Gary W. Edwards Presiding Director |
Blanche Lambert Lincoln | W. J. “Billy” Tauzin | ||||
|
Alexis M. Herman
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Stewart C. Myers | Steven V. Wilkinson | ||||
|
Donald C. Hintz
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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 13 times in 2010. 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 then
in office attended our 2010 Annual Meeting of Shareholders.
The nominees for election to the Board of Directors at the
Annual Meeting include all of our current directors with the
exception of Mr. Blount and Mr. Nichols, who are
retiring from our Board at the Annual Meeting. For additional
information concerning the background and qualifications of the
director nominees, see “Matters Requiring Shareholder
Action — Proposal 1 — Election of
Directors.”
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 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 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 |
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| (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. | |
| • | 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 information concerning each
of its non-employee members to determine compliance with the
independence standards established by the NYSE. The Board has
affirmatively determined that each of our non-employee directors
is independent within the meaning of the rules of the NYSE. In
making this determination, the Board considered
Mr. Percy’s service as the non-compensated,
non-executive chair of the Board of Directors of Hope Enterprise
Corporation, a non-profit community development financial
institution, that provides financial products and services in
Arkansas, Louisiana and Mississippi. In 2010, certain of our
subsidiary corporations contributed $2,500 to this entity and
one of our subsidiaries renewed a $1,500,000 loan to a
for-profit subsidiary of Hope Enterprise Corporation.
Mr. Percy is a director of the subsidiary, but is not an
officer or employee of Hope Enterprise Corporation or any of its
subsidiaries. The Board also considered the fact that
Mr. Tauzin recently became affiliated with the legislative
practice of Alston & Bird LLP, a law firm that has
previously been engaged by the Company and which may be engaged
by the Company in the future. Mr. Tauzin will be Special
Legislative Counsel to the firm in its legislative and public
policy practice. He will not practice law and will not provide
any services to the Company or any of its affiliates, nor will
any compensation Mr. Tauzin receives from
Alston & Bird be based in whole or in part on fees
received by Alston & Bird from the Company or its
affiliates. In 2010, the fees paid by the Company to
Alston & Bird represented less than 0.1% of
Alston & Bird’s total fee revenue.
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 60 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
Securities and Exchange Commission (“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 these heightened
standards. 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.
6
The members of the Audit Committee are: Steven V. Wilkinson
(Chair), Maureen S. Bateman, Stuart L. Levenick and 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 2010, the
Audit Committee met 12 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.
The Corporate Governance Committee consists of three 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), Gary W. Edwards and
William A. Percy, II.
During 2010, 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), Gary W. Edwards, Alexis M. Herman and Stewart C. Myers.
During 2010, the Personnel Committee met 8 times. In addition,
the Personnel Committee met jointly with the Finance Committee
once in 2010. The role of our Chief Executive Officer in
determining or recommending the amount or form of executive
compensation is discussed in “Compensation Discussion and
Analysis” on page 30 of this Proxy Statement.
The Personnel Committee Report is set forth on page 32 of
this Proxy Statement, immediately following the
“Compensation Discussion & Analysis” section.
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. |
7
The Finance Committee consists of six directors. The members of
the Finance Committee are: W. Frank Blount (Chair), Donald C.
Hintz, Stuart L. Levenick, Stewart C. Myers, James R. Nichols
and W. J. “Billy” Tauzin.
During 2010, the Finance Committee met 7 times. In addition, the
Finance Committee met jointly with the Personnel Committee once
during 2010.
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 five directors. The members of
the Nuclear Committee are: Donald C. Hintz (Chair), W. Frank
Blount, William A. Percy, II, W. J. “Billy”
Tauzin and Steven V. Wilkinson.
During 2010, 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), W. Frank
Blount, Gary W. Edwards and Donald C. Hintz.
During 2010, 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
include 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 7 times in 2010.
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 composed of
Mr. Leonard and 12 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
8
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.
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. |
As discussed above, the Board has six standing
committees — audit, corporate governance, executive,
finance, nuclear and personnel. Each of the committees, other
than the Executive Committee, consists solely of independent
directors with each of the six committees having a separate
chair.
We believe that having a combined Chairman/Chief Executive
Officer, 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.
9
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.
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
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 2010 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 at 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: (i) 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; and (ii) to hold 100 percent of any
restricted stock grants, net of taxes.
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.
Political Contributions. We are
committed to participating constructively in the political
process, as we believe participation is essential to our
Company’s long-term success. Our participation in the
political process includes contributions to political
organizations in a manner that is compliant with all applicable
laws and reporting requirements. We have established effective
governance processes including oversight by our governmental
affairs department and in 2010, our Board adopted a policy
governing political contributions made by our Company. We have
also committed to produce an annual report regarding our
political contributions to candidates for election to political
office, political parties, political committees and political
entities organized under Section 527 of the Internal
Revenue Code (the “Code”). The annual report will
disclose the dollar amounts of the portion of more than de
minimis annual dues or payments made by Entergy to trade
associations that are not deductible under
Section 162(e)(1) of the Code. The report will also include
information regarding Entergy’s sponsorship of the Entergy
Corporation Political Action Committee (“ENPAC”), its
purposes and governance mechanisms and that information about
ENPAC’s activities can be found on the Federal Elections
Commission website. Please see our website at
http://www.entergy.com/investor_relations/corprate_governance.aspx
for a copy of the annual report and more information about the
ways in which we participate in the political process.
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
10
subcommittee of the Board of Directors consisting entirely 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
approved by the Board of Directors (or an appropriate
committee), (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.
TRANSACTIONS
WITH RELATED PERSONS
Since December 31, 2009, 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
the Company’s 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:
Presiding Director
Entergy Corporation
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. |
11
Except as provided above, our 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 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 legal and regulatory requirements. The Corporate
Governance 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. Blanche Lambert
Lincoln was elected to the Board in January 2011, effective
March 2, 2011; we also increased the size of the Board to
13 members effective March 2, 2011. Recognizing that two
vacancies on the Board would be created by the retirements of
Messrs. Blount and Nichols, the Corporate Governance
Committee established a process to identify and evaluate
prospective director candidates. The Committee sought to
identify candidates with backgrounds and qualifications that
would add to the collective knowledge and expertise of the
Board, while also reflecting an appropriate diversity of
backgrounds and experiences. With respect to Ms. Lincoln,
the Committee also took into account her strong ties to the
State of Arkansas. Ms. Lincoln was considered by the
Committee at the initial suggestion of Wayne Leonard, our Chief
Executive Officer and with other Board support based on her
strong reputation in the Senate on a broad range of issues. Ms
Lincoln was interviewed and, at the conclusion of this process,
the Committee unanimously recommended that Ms. Lincoln 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 of the candidate, 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
12
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, as
amended (the “Exchange Act”) 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 2010 to our Chief Executive
Officer, our Chief Financial Officer, and our three other most
highly compensated executive officers (collectively, the
“Named Executive Officers”). We believe the executive
pay programs described herein and in the accompanying tables
have played a material role in our ability to drive strong
financial results and to attract and retain a highly experienced
and successful management team. 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.
Overview
of 2010 Performance and Compensation
2010 Performance and Significant
Achievements. Our businesses delivered strong
financial and operational performance in 2010, achieving record
operational earnings per share for the sixth year in a row and
record cash flow from operations. Our operational earnings per
share increased by 6.4% from 2009 and our consolidated cash flow
from operations increased by 33.9%. We believe our efforts in
2010 also have positioned the Company for future success, as
reflected in the following significant achievements and
recognitions:
| • | Achieved record operational earnings per share and operating cash flow; | |
| • | Increased dividend nearly 11%, while completing $750 million share repurchase program; | |
| • | Implemented major leadership reorganization; | |
| • | Settled successfully Entergy Texas and Entergy Arkansas rate cases; | |
| • | Completed successfully Entergy Arkansas, Entergy Gulf States and Entergy Louisiana storm cost securitizations; | |
| • | Modified successfully Entergy Mississippi’s formula rate plan and successfully settled Entergy Louisiana’s formula rate plan; | |
| • | Selected five proposals from 2009 Summer Long Term Request for Proposals (one subsequently withdrawn), with definitive agreements targeted for 2011; | |
| • | Obtained approval from the Federal Energy Regulatory Commission for acquisition of Acadia Unit 2 power plant; | |
| • | Achieved on-line record runs at 5 of 7 Entergy Wholesale Commodity Business nuclear plants; | |
| • | Improved key customer service metrics, including call center responsiveness, low levels of complaints and low levels of outage frequency; |
13
| • | Included on the Dow Jones Sustainability World Index for the ninth consecutive year, the only U.S. utility to be so honored; | |
| • | Received the 12th EEI Emergency Assistance Recovery Award, the only company to win emergency response awards every year since first presented in 1998; and | |
| • | Received multiple awards and recognition for community relations, corporate citizenship, climate protection and customer service. |
Despite these strong financial and operational results, our
total shareholder return in 2010 substantially lagged our peers,
placing us in the fourth quartile of the Philadelphia Utility
Index for 2010 and in the third quartile for the three year
period ending December 31, 2010. This is in contrast to our
total shareholder return measured over the past ten years, which
has been in the top quartile of the Philadelphia Utility Index.
2010 Compensation. Due in large part to
the effects on our business and market salaries of the recent
economic downturn, none of our Named Executive Officers received
a base salary merit increase in base salary for 2010. However,
the incentive compensation paid to our Named Executive Officers
for 2010 performance reflected both our strong financial and
operational performance in 2010 and our poor 2010 total
shareholder return in relation to our peers. The payouts under
our annual incentive plan properly rewarded our executive
officers for substantially exceeding financial performance
objectives in 2010 that were deemed to be important to the
Company and its stakeholders and position the Company for long
term success. Our Long-Term Performance Plan, on the other hand,
paid out at a substantially lower level than in prior years and
substantially below target as a result of our poor total
shareholder return in relation to our peers. These payouts
reflect the
pay-for-performance
philosophy that underlies our incentive compensation programs.
Annual Incentive Compensation Paid for 2010 Financial
Performance. Our annual incentive program is
tied to our financial performance through the Entergy
Achievement Multiplier (the performance metric used to determine
awards under the Annual Incentive Plan), which is determined
based on our success in achieving our operational earnings per
share and operating cash flow goals. We exceeded our operational
earnings per share goal of $6.80 in fiscal 2010 by $0.30 per
share, and we exceeded our operating cash flow goal of
$3.04 billion by $0.94 billion. This resulted in an
Entergy Achievement Multiplier of 172%, with our Chief Executive
Officer receiving an award equal to 206% of his base salary and
our other Named Executive Officers each receiving awards equal
to 120% of their base salaries. For additional information
regarding our Annual Incentive Compensation program see
“Short-Term Compensation — Non-Equity Incentive
Plans (Cash Bonus)” on page 19.
Long-Term Incentive Compensation Paid for
2008-2010
Financial Performance. Under our Long-Term
Performance Plan, we measure performance over a three year
period by assessing Entergy’s total shareholder return in
relation to the total shareholder return of the companies
included in the Philadelphia Utility Index, with payouts under
the plan tied directly to our performance in relation to the
other companies in the index over the three year performance
period. Relative total shareholder return is used as the measure
of performance under this plan because it encourages our
executives to deliver superior shareholder value in relation to
our peers. For the 2008 — 2010 performance cycle, our
total shareholder return in relation to the other companies in
the Philadelphia Utility Index resulted in a minimum payout of
10% of target for the performance units granted in 2008. For
additional information regarding our long-term compensation
program see “Long-Term Compensation — Performance
Unit Program” on page 22.
2010 Changes to Executive
Compensation. In 2010, with the assistance of
the Personnel Committee’s independent executive
compensation consultant, the Personnel Committee completed a
review of the Company’s overall approach to its executive
compensation programs, which it undertakes annually to ensure
that the Company’s programs continue to be in line with
best practices of other companies in our industry as well as
other Fortune 500 companies. As a result of that review,
the Personnel Committee approved a number of changes to our
executive compensation programs that are intended to enhance the
alignment of the Company’s executive compensation programs
with best practices at companies in the Philadelphia Utility
Index as well as other Fortune 500 companies in general.
These changes include:
| • | Elimination of “gross up” payments by the Company with respect to excise taxes due on the payment of severance benefits to our named executive officers in the case of a change in control. See “Benefits, |
14
| Perquisites, Agreements and Post-Termination Plans — Retention Agreements and Other Compensation Arrangements” beginning on page 28. |
| • | Reduction of the maximum payout under our Long-Term Incentive Plan from 250% to 200% of target beginning with the 2011-2013 performance cycle, combined with an increase in the minimum payout from 10% to 25% of target. | |
| • | Modification of the components of long-term compensation to increase the portion of long-term compensation that will be derived from performance units from 50% to 60% and decrease the portion that will be derived from restricted stock and stock options to 40%. | |
| • | Addition of awards of restricted stock to our executive officers, beginning in 2011, as a component of long-term compensation. | |
| • | Elimination of club dues as a perquisite for the members of the Office of Chief Executive and the elimination of gross-up payments on perquisites, except for relocation. | |
| • | Discontinuation of financial counseling as a perquisite for all executive officers with the value of this discontinued perquisite not being replaced in the executive’s compensation. | |
| • | Adoption of a “double trigger” (requiring both a change in control and an involuntary job loss or substantial diminution of duties) for the acceleration of awards under our 2007 Equity Ownership and Long-Term Cash Incentive Plan. | |
| • | Adoption of a “clawback” policy providing for the recoupment by the Company of incentive compensation under appropriate circumstances. See “Compensation Program Administration — Executive Compensation Governance” beginning on page 29. | |
| • | Adoption of a policy prohibiting hedging transactions in our common stock by any officer, director or employee. See “Compensation Program Administration — Executive Compensation Governance” beginning on page 29. |
In January 2011, our Board also adopted a policy that prohibits
the Company or its affiliates from engaging the independent
consultant that provides executive and director compensation
services to the Personnel and Corporate Governance Committees or
its affiliates to provide other services to the Company with an
aggregate value in excess of $120,000 in any fiscal year.
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, in order to focus our executives on the achievement of superior results. |
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 long-term performance unit programs is
designed to pay out only if we achieve pre-established
performance goals. If minimum established performance goals are
not achieved, no payouts are made under our incentive programs.
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 at risk because it is
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 at risk because it is performance-based compensation
and the remaining 35% is represented 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.
15
| • | 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. Historically, awards were granted in the form of stock
options with a three-year vesting schedule and performance units
with a three-year performance cycle. Beginning in 2011, awards
will be granted in the form of restricted stock, stock options
and performance units. Stock options and restricted stock
generally will be subject only to time-based vesting.
Performance units pay out only if we achieve specified
performance targets with the amount of payout contingent on the
level of performance achieved. These awards focus and reward
executive officers on building shareholder value.
| • | Our compensation programs should enable us to attract, retain and motivate executive talent by offering competitive compensation packages. |
It is in our shareholders’ best interests that we attract
and retain talented executives by offering compensation packages
that are competitive. 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 annually 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 similar to ours. 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 800 public and private companies in general industry and approximately 100 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 used as the primary data for purposes of determining target
compensation. For this purpose, the Committee reviews the
results of the survey 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 companies in the survey data. In 2010, 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, Company
performance and internal equity.
| • | Proxy Analysis: Although the survey data described above is the primary data 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 five 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 |
16
| 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 | |
| • | NextEra Energy | |
| • | Northeast Utilities | |
| • | PG&E Corporation | |
| • | Progress Energy, Inc. | |
| • | Public Service Enterprise Group, Inc. | |
| • | Southern Company | |
| • | Xcel Energy |
Elements
of Our Compensation Program
The major components of our executive compensation program are
presented below:
Our executive compensation package consists of a combination of
short-term and long-term compensation elements. For 2010,
short-term compensation includes base pay and annual cash bonus
awards and long-term compensation includes stock options and
performance units. All of our incentive plans are linked to the
Company’s financial and stock performance or its total
shareholder return in relation to its peers. Our executive
compensation program is approved by our Personnel Committee,
which consists entirely of independent board members.
Our executive compensation programs reflect a balanced
compensation approach to incentivizing and rewarding performance
by combining a market-based base salary with reasonable annual
and long-term incentive compensation programs. These incentive
compensation programs are designed to reward our executive
officers if they attain specified annual and long-term goals
while taking an appropriate level of risk, as further explained
in “Compensation Risk Assessment” on page 32.
17
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 based upon our Chief Executive Officer’s recommendations for the Named Executive Officers other than himself | |||
|
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 based upon our Chief Executive Officer’s recommendations for the Named Executive Officers other than himself | |||
| — | 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 based upon our Chief Executive Officer’s recommendations for the Named Executive Officers other than himself | |||
| 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 based upon our Chief Executive Officer’s recommendations for the Named Executive Officers other than himself | |||
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; (iv) internal pay equity; and
(v) variations in business unit performance.
18
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 officers is stable. Also,
base salary remains the most common form of payment throughout
all industries. Its use ensures a competitive compensation
package for our Named Executive Officers.
The Committee determines the base salaries of our Named
Executive Officers, including whether to grant annual merit
increases, based on the following factors:
| • | Company, business unit and individual performance during the prior year; | |
| • | Market data; | |
| • | Internal pay equity; | |
| • | The Committee’s assessment of other elements of compensation provided to the Named Executive Officer; and | |
| • | The Chief Executive Officer’s recommendation, for all Named Executive Officers other than himself. |
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 assists us in 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 2010, in light of the continued uncertainty in
economic conditions and the projected slow growth in executive
officer salaries in 2010, based on our review of general
industry surveys prepared by various human resource consulting
firms, the Personnel Committee decided not to increase base
salaries from the levels established in 2009 for the executive
officers who constitute the Office of the Chief Executive.
In June 2010, Mr. Savoff was promoted to Executive Vice
President and Chief Operating Officer. Mr. Savoff’s
base salary was increased from $549,000 to $590,000 to reflect
the increased responsibilities of his new position, including
oversight of nuclear operations, and comparative market data for
officers in similar positions.
The 2010 base salaries for our Named Executive Officers were:
|
Named Executive Officer
|
2010 Base Salary | |||
|
J. Wayne Leonard
|
$ | 1,291,500 | ||
|
Leo P. Denault
|
$ | 630,000 | ||
|
Mark T. Savoff
|
$ | 590,000 | ||
|
Richard J. Smith
|
$ | 645,000 | ||
|
Gary J. Taylor
|
$ | 570,000 | ||
Mr. Leonard’s salary is larger than our other Named
Executive Officers because of his leadership role in setting
company policy and strategic planning and reflects market
practice for salaries for chief executive officers.
| • | Non-Equity Incentive Plans (Cash Bonus) |
We include performance-based incentives in the Named Executive
Officers’ compensation packages because we believe
performance-based incentives encourage 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
19
commonly used by companies in a variety of industry sectors to
compensate their executive officers for achieving financial and
operational goals.
Our Named Executive Officers participate in a performance-based
cash bonus plan known as the Executive Annual Incentive Plan or
Annual Incentive Plan. Under the plan, we use a performance
metric known as the Entergy Achievement Multiplier to determine
the percentage of target annual plan awards that will be paid
each year to each Named Executive Officer. Each year the
Personnel Committee reviews the performance measures used to
determine the Entergy Achievement Multiplier. In December 2009,
the Personnel Committee decided to retain the performance
measures used in 2009. Accordingly, the 2010 performance
measures used to determine the Entergy Achievement Multiplier
were consolidated operational earnings per share and operating
cash flow, with each measure weighted equally. The Committee
selected these performance measures because:
| • | earnings per share and operating cash flow have both a correlative and causal relationship with shareholder value over time; | |
| • | 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 used by a number of other
companies, including the companies in the Philadelphia Utility
Index, as components of their incentive programs. For example,
approximately 72% of the industry peer group companies use
earnings per share as an incentive measure.
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.
If we do not achieve our minimum achievement levels, no payout
occurs under the Annual Incentive Plan. 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
2010, the average Entergy Achievement Multiplier was 148% of
target.
In December 2009, the Committee set the 2010 target award for
incentives to be paid in 2011 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 the Company’s 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, of the short-term performance goals established pursuant to the Annual Incentive Plan; | |
| • | The Committee’s assessment of other elements of compensation provided to the Named Executive Officer; and | |
| • | The Chief Executive Officer’s recommendation, for all Named Executive Officers other than himself. |
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, which, as measured by total shareholder return, has exceeded all |
20
| but one of the companies in the Philadelphia Utility Index over his twelve-year tenure as Chief Executive Officer. |
| • | 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. |
In December 2009, the Committee determined the Annual Incentive
Plan targets to be used for purposes of determining annual
bonuses for 2010. The Committee’s determination of the
target levels was made after full Board review of
management’s 2010 financial plan for the Company, upon
recommendation of the Finance Committee, and after the
Committee’s determination that the established targets
aligned with the Company’s anticipated 2010 financial
performance as reflected in the financial plan. The targets
established to measure management performance against as
reported results, excluding the impact of the activities
associated with the previously planned separation of our
non-utility nuclear business (the “Spin Transaction”)
were:
| Minimum | Target | Maximum | ||||||||||
|
Earnings Per Share ($)
|
6.12 | 6.80 | 7.48 | |||||||||
|
Operating Cash Flow ($ billion)
|
2.68 | 3.04 | 3.40 | |||||||||
In January 2011, after reviewing earnings per share and
operating cash flow results against the performance objectives
in the above table, the Committee determined that we had
exceeded the operational EPS target of $6.80 by $0.40 in fiscal
2010 and had exceeded the operating cash flow goal of
$3.04 billion by $0.94 billion. In accordance with the
terms of the Annual Incentive Plan, in January 2011, the
Personnel Committee certified the 2010 Entergy Achievement
Multiplier at 172% 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 if the pre-established underlying performance goals
established by the Personnel Committee are satisfied at the end
of the performance period, 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 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 2011, the Committee exercised its negative
discretion to eliminate the Management Effectiveness Factor with
respect to the 2010 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 2010 based on an Entergy
Achievement Multiplier of 172% as well as the incentive awards
for each Named Executive Officer:
|
Named Executive Officer
|
Target | Payout as Percentage of Base Salary | 2010 Annual Incentive Award | |||||||||
|
J. Wayne Leonard
|
120 | % | 206 | % | $ | 2,665,656 | ||||||
|
Leo P. Denault
|
70 | % | 120 | % | $ | 758,520 | ||||||
|
Mark T. Savoff
|
70 | % | 120 | % | $ | 710,360 | ||||||
|
Richard J. Smith
|
70 | % | 120 | % | $ | 776,580 | ||||||
|
Gary J. Taylor
|
70 | % | 120 | % | $ | 686,280 | ||||||
Nuclear
Retention Plan
Some of Entergy’s executive officers, including
Mr. Taylor, participate in a retention plan for officers
and other leaders with special expertise in the nuclear
industry. The Committee authorized this retention plan to
attract and
21
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. This type of retention
plan has become a common practice among companies that operate
nuclear power plants. Mr. Taylor’s 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 received or will receive a cash bonus equal to
30% 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 employees
who participate in the Plan.
Long-Term
Compensation
Our goal for our long-term incentive compensation is to focus
and reward our executive officers for building shareholder value
and to increase our executive officers’ ownership in our
common stock. In our long-term incentive programs, we have
historically used a mix of performance units and stock options.
Performance units reward the Named Executive Officers on the
basis of total shareholder return, which is a measure of stock
appreciation and dividend payments relative to the companies in
the Philadelphia Utility Index. Stock options provide a direct
incentive for increasing the price of our common stock. In
addition, we have occasionally awarded restricted stock units
for retention purposes or to offset forfeited compensation in
order to attract officers and managers from other companies.
Beginning in 2011, our long-term incentive program will include
awards of restricted stock, in addition to grants of performance
units and stock options. For 2010, the target value of long-term
incentive compensation granted to an executive was divided
equally between the value determined on the date of grant of the
performance units and stock options granted under the program.
Beginning in 2011, the target value of long-term incentive
compensation will be allocated 60% to performance units and 40%
to a combination of stock options and restricted stock, equally
divided in value, all based on their grant date values.
Each of the performance units and stock options granted to our
Named Executive Officers in 2010 were awarded under our 2007
Equity Ownership and Long Term Cash Incentive Plan, which we
refer to as the 2007 Equity Ownership Plan. Prior to shareholder
approval of the 2011 Equity Ownership and Long Term Cash
Incentive Plan, any grants of performance units, stock options
and restricted stock will be granted under the 2007 Equity
Ownership Plan. If and when we receive shareholder approval for
the 2011 Equity Ownership Plan, performance units, stock options
and awards of restricted stock will be made under the 2011
Equity Ownership Plan and no further grants will be made under
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.
Dividends accrued during the performance cycle are paid out only
to the extent that the performance measures are achieved and a
payout under the program for that cycle occurs. 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 the companies in the Philadelphia Utility
Index. The Personnel Committee chose relative 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. It also takes
into account dividends paid by the companies in this Index and
normalizes events that affect the industry as a whole. Minimum,
target and maximum performance levels are determined by
reference to the percentile ranking of Entergy’s total
shareholder return against the total shareholder return of the
companies in the Philadelphia Utility Index. At any given time,
a participant in the Performance Unit Program is participating
in three performance cycles. Currently, participants are
participating in the
2009-2011,
the
2010-2012
and the
2011-2013
cycles.
22
The
2010-2012
Performance Grant. 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.
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.
| Performance Level | Minimum | Target | Maximum | ||||||
|
Total Shareholder Return
|
25th percentile | 50th percentile | 75th percentile | ||||||
|
Payouts
|
10% of target | 100% of target | 250% of Target | ||||||
There is no payout for performance below the
25th percentile. Payouts between minimum and target and
target and maximum are calculated using straight line
interpolation.
The Personnel Committee sets payout opportunities for the
Performance Unit Program at the outset of 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; | |
| • | The desire to ensure, as described above, that a substantial portion of total compensation is performance-based; | |
| • | The relative importance of the long-term performance goals established pursuant to the Performance Unit Program; | |
| • | The Committee’s assessment of other elements of compensation provided to the Named Executive Officer; and | |
| • | For Named Executive Officers, other than the Chief Executive Officer, the recommendation of the Chief Executive Officer. |
Payout for the
2008-2010
Performance Cycle. For the
2008-2010
performance cycle, the target amounts established in January
2008 for the Chief Executive Officer were 16,500 performance
units and for the other Named Executive Officers, the target
amounts established were 3,900 performance units. Participants
could earn performance units based on relative total shareholder
return consistent with the range of payouts 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 2011, the Committee assessed the Company’s total
shareholder return for the
2008-2010
performance cycle and determined the actual number of
performance units to be paid to Performance Unit Program
participants for the
2008-2010
performance cycle. The Committee compared the Company’s
total shareholder return against the total shareholder return of
the companies that comprise the Philadelphia Utility Index.
Based on this comparison, the Committee concluded that the
Company’s performance for the
2008-2010
performance cycle, ranked at the bottom of the third quartile,
or approximately the 25th percentile. This resulted in a
payout at 10% of target, or 10% of the target number of units
awarded. Each performance unit was then automatically converted
into
23
cash at the rate of $70.83 per unit, the closing price of our
common stock on the last trading day of the performance cycle
(December 31, 2010), plus dividend equivalents accrued over
the three-year performance cycle. See the 2010 Stock Option
Exercises and Stock Vested table for the amount paid to each of
the Named Executive Officers for the
2008-2010
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 Officers based upon our Chief Executive Officer’s recommendations for the Named Executive Officers other than himself. |
For stock option awards, the Committee’s assessment of
individual performance of each Named Executive Officer done in
consultation with our Chief Executive Officer, which involves a
review of each officer’s performance, role and
responsibilities, strengths and developmental opportunities is
the most important factor in determining the number of options
awarded. The Committee also considers the significant
achievements of the Company for the prior year.
The following table sets forth the number of stock options
granted to each Named Executive Officer in 2010. The exercise
price for each option was $77.10, which was the closing price of
Entergy Corporation common stock on the date of grant.
|
Named Exeutive Officer
|
Stock Options | |||
|
J. Wayne Leonard
|
135,000 | |||
|
Leo P. Denault
|
50,000 | |||
|
Mark T. Savoff
|
30,000 | |||
|
Richard J. Smith
|
40,000 | |||
|
Gary J. Taylor
|
40,000 | |||
The option grants awarded to our named executive officers (other
than the Chief Executive Officer) ranged in number between
30,000 and 50,000 shares. In the case of our Chief
Executive Officer, who received 135,000 stock options in 2010,
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 eleven-year period
between Mr. Leonard’s appointment as Chief Executive
Officer of the Company in January 1999 and the January 29,
2010 grant date exceeded all of our industry peer group
companies as well as all other U.S. investor owned electric
utility companies.
For additional information regarding stock options awarded in
2010 to each of the Named Executive Officers, see the 2010
Grants of Plan-Based Awards table on page 35 of this Proxy
Statement.
Under our 2007 Equity Ownership Plan and our predecessor equity
plans, all stock options must have an exercise price equal to
the fair market value of Company common stock on the date of
grant. In addition, until an executive officer achieves the
multiple of salary ownership position of our common stock as
described on page 10 of this 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
24
exercise in the form of Company common stock. Our equity
ownership plans prohibit the repricing of “underwater”
stock options without shareholder approval.
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 Stock |
During 2010, the Personnel Committee approved a change in our
long-term incentive awards to include awards of restricted stock
to our executive officers beginning in 2011. The grant of
restricted stock awards will replace a portion of the stock
option awards historically granted to our executive officers. We
believe this change enhances retention, mitigates the burn rate
and assists in building ownership of our common stock.
Shares of restricted stock generally will vest over a three-year
period, have voting rights and accrue dividends during the
vesting period. Upon vesting, shares of Entergy common stock
will be distributed. Officers subject to our stock ownership
guidelines will be required to retain vested shares until he or
she satisfies the stock ownership guidelines.
We intend our restricted stock awards to:
| • | Align the interests of executive officers with the interests of shareholders by tying executive officers’ long-term financial interests to the long-term financial interests of shareholders; | |
| • | Act as a retention mechanism for our key executives officers; and | |
| • | Maintain a market competitive position for total compensation. |
Benefits,
Perquisites, Agreements and Post-Termination Plans
| • | Pension Plan, Pension Equalization Plan and System Executive Retirement Plan |
Our senior executive officers are eligible to participate in the
Pension Plan, Pension Equalization Plan and System Executive
Retirement Plan. The Committee believes that these plans 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 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.
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.
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
25
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 |
||||||||||||
|
and 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.
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, Chief Operating
Officer) 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 2010 Pension Benefits table on page 38 of this
Proxy Statement for additional information regarding the
operation of the plans described under this caption.
26
| • | 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
their Annual Incentive Plan award into either or both the
Company-sponsored Executive Deferred Compensation Plan and the
equity plan. In addition, they are eligible to defer up to 100%
of their base salary into the Executive Deferred Compensation
Plan.
We provide these benefits because the Committee believes it is
standard market practice to permit officers to defer the cash
portion of their compensation. 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.
All deferral amounts represent an unfunded liability of the
employer. Amounts deferred into the equity 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.
The Company does not “match” amounts that are deferred
by employees pursuant to the Executive Deferred Compensation
Plan or equity 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).
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 plan.
| • | 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).
27
| • | 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. The
Personnel Committee reviews all perquisites, including the use
of corporate aircraft, on an annual basis. As a result of its
2010 review, beginning in 2011, we will not provide personal
financial counseling, club dues for members of the Office of
Chief Executive or tax gross up payments on any perquisites,
except for relocation. Our Named Executive Officers did not
receive any additional compensation for the lost value of these
discontinued perquisites.
In 2010, we offered to our Named Executive Officers the
following personal benefits: corporate aircraft usage, personal
financial counseling, club dues, relocation and housing benefits
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. For additional information regarding
perquisites, see the “All Other Compensation” column
in the Summary Compensation Table on page 33 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 Named
Executive Officers (other than our Chief Executive Officer and
Chief Financial Officer) is entitled to receive “change in
control” payments and benefits if such officer’s
employment is involuntarily terminated. To allow incentive
payments under the Annual Incentive Plan to continue to be
considered performance-based under Section 162(m),
severance payments under the System Executive Continuity Plan
are based on a multiple of the sum of an executive
officer’s annual base salary plus his or her average Annual
Incentive Plan award at target for the two fiscal years
immediately preceding the fiscal year in which the termination
of employment occurs. Under no circumstances can this multiple
exceed 2.99 the sum of (a) annual 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. We have strived to ensure that
the benefits and payment levels under the System Executive
Continuity Plan are consistent with market practices.
Recognizing that market practices have changed, in December
2010, in connection with its review of our compensation
practices and policies, the Personnel Committee modified our
System Continuity Plan to eliminate tax gross up payments on any
severance benefits received under this plan.
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. As mentioned above, 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
28
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. Again to align with best
market practices, in December 2010, both Mr. Leonard’s
and Mr. Denault’s agreements were amended to eliminate
tax gross up payments on any severance benefits they may receive
under these agreements.
In December 2009, we entered into a retention agreement with
Richard J. Smith, President, Entergy Wholesale Commodity
Business, in order to retain his services should the Spin
Transaction not occur. On April 5, 2010, we announced that
we would not proceed with the Spin Transaction. Under this
agreement, Mr. Smith remains employed by an Entergy System
company at a management level and with a salary no less than
Mr. Smith’s salary as of December 18, 2009. In
addition, the agreement provides that Mr. Smith is 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 he
(i) remains continuously employed in such capacity for
24 months after April 5, 2010 (the date of the public
announcement that the Spin Transaction will not occur) or
(ii) remains continuously employed in such capacity for at
least six (6) months after April 5, 2010 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 if the Spin
Transaction did 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 three retention agreements described
above, see “2010 Potential Payments upon Termination or
Change in Control” on page 41 of this Proxy Statement.
Compensation
Program Administration
Executive
Compensation Governance
We periodically review our compensation philosophy and make
adjustments that are believed to be in the best interest of the
Company and our shareholders. Some of the actions taken include
the following:
1. Our Company’s ultimate objective is to deliver
long-term value to shareholders as well as our other
stakeholders such as customers and employees. We continually
review and adjust our pay programs so that the primary focus is
our long-term success. Executives understand that successful
long-term decision making will allow them to be paid their
target compensation. Short term decisions that impair our long
term value will reduce an executive’s compensation over the
long term. To further this objective, in 2011, we increased the
portion of long-term compensation that will be derived from
performance units from 50% to 60% and decreased the portion that
will be derived from other equity awards to 40%. We added
restricted stock awards to our long-term compensation program
because we believe the use of restricted stock enhances
retention, mitigates the burn rate and assists in building
ownership of our common stock.
2. Our Board of Directors adopted the Entergy Corporation
Policy Regarding Recoupment of Certain Compensation in December
2010. This policy covers executive officers of the Company who
are subject to Section 16 of the Exchange Act. Under the
policy, the Committee will require reimbursement of incentives
paid to these executive officers where:
| • | the payment was predicated upon the achievement of certain financial results with respect to the applicable performance period that were subsequently the subject of a material restatement other than a restatement due to changes in accounting policy or a material miscalculation of a performance award occurs whether or not the financial statements were restated; | |
| • | in the Board of Directors’ view, the elected officer engaged in fraud that caused or partially caused the need for the restatement or caused a material miscalculation of a performance award whether or not the financial statements were restated; and |
29
| • | a lower payment would have been made to the elected officer based upon the restated financial results or miscalculation. |
The amount the Committee requires to be reimbursed is equal to
the excess of the gross incentive payment made over the gross
payment that would have been made if the original payment had
been determined based on the restated financial results or
correct calculation. Further, following a material restatement
of our financial statements, we will seek to recover any
compensation received by our Chief Executive Officer and Chief
Financial Officer that is required to be reimbursed under
Section 304 of the Sarbanes-Oxley Act of 2002
3. The Committee has formalized the timing and process for
reviewing our executive compensation consultant services and
fees. Annually, the Committee reviews the relationship with its
compensation consultant including services provided, quality of
those services, and fees associated with services during the
fiscal year to ensure executive compensation consultant
independence is maintained. To ensure the independence of the
Committee’s compensation consultant, in January 2011, the
Board adopted a policy that any consultant (including its
affiliates) retained by the Board of Directors or any Committee
of the Board of Directors to provide advice or recommendations
on the amount or form of executive and director compensation
should not be retained by the Company or any of its affiliates
to provide other services in an aggregate amount that exceeds
$120,000 in any fiscal year.
4. In 2010, we also adopted an anti-hedging policy which
prohibits officers, directors and employees from entering into
hedging or monetization transactions involving our common stock.
Prohibited transactions include, without limitation, zero-cost
collars, forward sale contracts, purchase or sale of options,
puts, calls, straddles or equity swaps or other derivatives that
are directly linked to the Company’s stock or transactions
involving “short-sales” of the Company’s stock.
The Board adopted this policy to require officers, directors and
employees to continue to own Company stock with the full risks
and rewards of ownership, thereby ensuring continued alignment
of their objectives with the Company’s other shareholders
Reviewing
Our Executive Compensation Programs and Establishing
Compensation Levels
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 Committee works with our executive
management to ensure that our compensation policies and
practices are consistent with our values and support the
successful recruitment, development and retention of executive
talent so we can achieve our business objectives and optimize
our long-term financial returns. The Committee evaluates
executive pay each year to ensure that our compensation policies
and practices are consistent with our philosophy. 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. |
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). The Personnel Committee also relies on the
recommendations of our senior human resources executives with
respect to compensation decisions, policies and practices. Our
Chief Executive Officer’s role is limited to:
| • | providing the Committee with an assessment of the performance of each Named Executive Officer; and |
30
| • | recommending base salary, annual merit increases, stock option, restricted stock 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 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 2010,
Mr. Leonard attended 6 meetings of the Personnel Committee.
Role
of the Compensation Consultant
Our Personnel Committee has the sole authority from the Board of
Directors for the appointment, compensation and oversight of its
outside compensation consultant. Prior to the engagement of Pay
Governance LLC, the Committee’s current independent
compensation consultant, in October 2010, our Personnel
Committee retained Towers Watson 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 reported directly to the Personnel
Committee, which had the right to retain or dismiss the
consultant without the consent of the Company’s management.
In addition, the consent of the Personnel Committee was required
to be obtained before Towers Watson could 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 provided 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 subsequently
reviewed on an ongoing basis the fees and compensation received
by Towers Watson for non-executive compensation matters to
monitor its independence.
During the first nine months of 2010, the Committee retained the
consulting firm of Towers Watson as its consultant to assist the
Committee with its responsibilities related to the
Company’s compensation programs for its executives.
Specifically, the Committee directed Towers Watson to:
(i) regularly attend meetings of the Committee,
(ii) conduct studies of competitive compensation practices,
(iii) identify the Company’s survey and proxy peer
group, (iv) review base salary, annual incentives and
long-term incentive compensation opportunities relative to
competitive practices, and (v) develop conclusions and
recommendations related to the executive compensation plan of
the Company for consideration by the Committee. A senior
consultant from Towers Watson generally attended most Personnel
Committee meetings. In its role as advisor to the Committee,
Towers Watson presented annual reports to the committee on
executive and director compensation. In 2010, Entergy incurred
in the aggregate fees of $259,286 from Towers Watson for
determining or recommending the amount or form of executive and
director compensation and $946,326 for others services, $877,331
of which was related to the Spin Transaction.
Pay Governance was engaged by the Committee as its executive
compensation consultant for the remainder of 2010. Pay
Governance is not affiliated with Towers Watson. Pay Governance
reviewed our compensation practices and made recommendations to
the Personnel Committee regarding our 2011 executive
compensation program. Pay Governance did not provide any other
services to the Company.
Tax
and Accounting Considerations
Section 162(m) of the 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
31
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 it is in the best interest of
the Company that the Personnel Committee retains the flexibility
and discretion to make compensation awards regardless of their
financial accounting consequences.
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, 2010.
The Personnel Committee
Maureen S. Bateman, Chair
Gary W. Edwards
Alexis M. Herman
Stewart C. Myers
Gary W. Edwards
Alexis M. Herman
Stewart C. Myers
COMPENSATION
RISK ASSESSMENT
Entergy’s management, under the oversight of the Personnel
Committee, 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.
32
EXECUTIVE
COMPENSATION TABLES
2010
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, 2010, 2009 and 2008.
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 |
Non-qualified |
|||||||||||||||||||||||||||||||||||
|
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
|
2010 | $ | 1,291,500 | $ | — | $ | 2,411,076 | $ | 1,807,650 | $ | 2,665,656 | $ | — | $ | 104,185 | $ | 8,280,067 | |||||||||||||||||||
|
Chairman of the Board and
|
2009 | $ | 1,341,174 | $ | — | $ | 10,067,775 | $ | 1,492,500 | $ | 1,782,270 | $ | 499,800 | $ | 200,040 | $ | 15,383,559 | |||||||||||||||||||
|
Chief Executive Officer
|
2008 | $ | 1,273,523 | $ | — | $ | 2,380,290 | $ | 2,813,125 | $ | 2,169,720 | $ | 313,200 | $ | 759,739 | $ | 9,709,597 | |||||||||||||||||||
|
Leo P. Denault
|
2010 | $ | 630,000 | $ | — | $ | 573,036 | $ | 669,500 | $ | 758,520 | $ | 528,600 | $ | 52,276 | $ | 3,211,932 | |||||||||||||||||||
|
Executive Vice President and
|
2009 | $ | 654,231 | $ | — | $ | 418,512 | $ | 537,300 | $ | 507,150 | $ | 837,200 | $ | 60,688 | $ | 3,015,081 | |||||||||||||||||||
|
Chief Financial Officer
|
2008 | $ | 621,231 | $ | — | $ | 3,114,534 | $ | 803,750 | $ | 617,400 | $ | 250,500 | $ | 150,285 | $ | 5,557,700 | |||||||||||||||||||
|
Mark T. Savoff
|
2010 | $ | 571,077 | $ | — | $ | 573,036 | $ | 401,700 | $ | 710,360 | $ | 351,900 | $ | 64,757 | $ | 2,672,830 | |||||||||||||||||||
|
Executive Vice President
|
2009 | $ | 570,115 | $ | — | $ | 418,512 | $ | 358,200 | $ | 441,945 | $ | 359,700 | $ | 66,014 | $ | 2,214,486 | |||||||||||||||||||
|
And Chief Operating Officer
|
2008 | $ | 543,563 | $ | — | $ | 562,614 | $ | 434,025 | $ | 538,020 | $ | 201,200 | $ | 192,838 | $ | 2,472,260 | |||||||||||||||||||
|
Richard J. Smith
|
2010 | $ | 645,000 | $ | — | $ | 573,036 | $ | 535,600 | $ | 776,580 | $ | 607,000 | $ | 242,032 | $ | 3,379,248 | |||||||||||||||||||
|
President, Entergy
|
2009 | $ | 669,807 | $ | — | $ | 418,512 | $ | 417,900 | $ | 519,225 | $ | 755,900 | $ | 140,779 | $ | 2,922,123 | |||||||||||||||||||
|
Wholesale Commodity
|
2008 | $ | 638,394 | $ | — | $ | 562,614 | $ | 562,625 | $ | 632,100 | $ | 391,400 | $ | 220,708 | $ | 3,007,841 | |||||||||||||||||||
|
Business
|
||||||||||||||||||||||||||||||||||||
|
Gary J. Taylor
|
2010 | $ | 570,000 | $ | 171,000 | $ | 573,036 | $ | 535,600 | $ | 686,280 | $ | 438,800 | $ | 92,680 | $ | 3,067,396 | |||||||||||||||||||
|
Group President,
|
2009 | $ | 591,924 | $ | 105,000 | $ | 418,512 | $ | 358,200 | $ | 458,850 | $ | 706,600 | $ | 87,946 | $ | 2,727,032 | |||||||||||||||||||
|
Utility Operations
|
2008 | $ | 564,412 | $ | 105,000 | $ | 562,614 | $ | 562,625 | $ | 558,600 | $ | 360,600 | $ | 247,290 | $ | 2,961,141 | |||||||||||||||||||
| (1) | The amounts in column (c) represent the actual base salary paid to the Named Executive Officer. The Named Executive Officers are paid on a bi-weekly basis and during 2009 there was an extra pay period. | |
| (2) | The amounts in column (e) represent the aggregate grant date fair value of performance units granted under the Performance Unit Program of the 2007 Equity Ownership Plan calculated in accordance with FASB ASC Topic 718, without taking into account estimated forfeitures. The grant date fair value of performance units is based on the probable outcome of the applicable performance conditions, measured using a Monte Carlo simulation valuation model. The simulation model applies a risk-free interest rate and an expected volatility assumption. The risk-free rate is assumed to equal the yield on a three-year treasury bond on the grant date. Volatility is based on historical volatility for the 36-month period preceding the grant date. If the highest achievement level is attained, the maximum amounts that will be received with respect to these performance units are as follows: Mr. Leonard, $4,298,325; Mr. Denault, $1,021,575; Mr. Savoff, $1,021,575; Mr. Smith, $1,021,575; and Mr. Taylor, $1,021,575. Amounts shown in this column for 2008 and 2009 vary from amounts shown in prior years due to a change in the method used by the Company to value performance units. Amounts presented for those prior years have been recalculated using the valuation method currently used by the Company. | |
| (3) | The amounts in column (f) represent the aggregate grant date fair value of stock options granted under the 2007 Equity Ownership Plan calculated in accordance with FASB ASC Topic 718. 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, 2010. | |
| (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 |
33
| 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 of the increase is attributable to above-market or preferential earnings on non-qualified deferred compensation (see “2010 Non-qualified Deferred Compensation”). For 2010, the aggregate change in the actuarial present value of Mr. Leonard’s pension benefits was a decrease of $539,200. | ||
| (6) | The amounts set forth in column (i) for 2010 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
|
$ | 10,830 | $ | 10,403 | $ | 10,830 | $ | 10,830 | $ | 10,830 | ||||||||||
|
Life Insurance Premium
|
$ | 11,484 | $ | 4,002 | $ | 3,792 | $ | 3,070 | $ | 7,095 | ||||||||||
|
Tax Gross Up Payments
|
$ | 25,739 | $ | 10,453 | $ | 10,071 | $ | 130,221 | $ | 21,741 | ||||||||||
|
Perquisites and Other Compensation
|
$ | 56,132 | $ | 27,418 | $ | 40,064 | $ | 97,911 | $ | 53,014 | ||||||||||
|
Total
|
$ | 104,185 | $ | 52,276 | $ | 64,757 | $ | 242,032 | $ | 92,680 | ||||||||||
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 2010 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 | X | |||||||
|
Mark T. Savoff
|
X | X | X | |||||||
|
Richard J. Smith
|
X | 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 $30,381
for fiscal year 2010. 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. In addition, in accordance with
the Company’s relocation policies, the Company paid $71,944
in relocation and housing expenses for Mr. Smith in 2010.
This amount reflects payments to our relocation service provider
and temporary living expenses. None of the other perquisites
referenced above exceeded $25,000 for any of the other Named
Executive Officers.
Beginning in 2011, the Company will not provide personal
financial counseling, club dues for the members of the Office of
Chief Executive or tax gross up payments on any perquisites,
except for relocation. The Company did not replace the value of
these discontinued perquisites in the executive’s
compensation.
34
2010
Grants of Plan-Based Awards
The following table summarizes award grants during 2010 to the
Named Executive Officers.
|
All Other |
||||||||||||||||||||||||||||||||||||||||||||
|
All Other |
Option |
|||||||||||||||||||||||||||||||||||||||||||
|
Stock |
Awards: |
Grant |
||||||||||||||||||||||||||||||||||||||||||
|
Awards: |
Number of |
Exercise |
Date Fair |
|||||||||||||||||||||||||||||||||||||||||
|
Estimated Future |
Estimated Future |
Number |
Securities |
or Base |
Value of |
|||||||||||||||||||||||||||||||||||||||
|
Payouts Under Non-Equity |
Payouts under Equity |
of Shares |
Underlying |
Price of |
Stock and |
|||||||||||||||||||||||||||||||||||||||
| Incentive Plan Awards(1) | Incentive Plan Awards(2) |
of Stock |
Options |
Option |
Option |
|||||||||||||||||||||||||||||||||||||||
|
Grant |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
or Units |
(#) |
Awards |
Awards |
||||||||||||||||||||||||||||||||||
|
Name |
Date |
($) |
($) |
($) |
(#) |
(#) |
(#) |
(#) |
(3) |
($/Sh) |
(4) |
|||||||||||||||||||||||||||||||||
|
(a)
|
(b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
|
J. Wayne Leonard
|
1/28/10 | — | $ | 1,549,800 | $ | 3,099,600 | ||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 2,230 | 22,300 | 55,750 | $ | 2,411,076 | |||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 135,000 | $ | 77.10 | $ | 1,807,650 | |||||||||||||||||||||||||||||||||||||||
|
Leo P. Denault
|
1/28/10 | — | $ | 441,000 | $ | 882,000 | ||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 530 | 5,300 | 13,250 | $ | 573,036 | |||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 50,000 | $ | 77.10 | $ | 669,500 | |||||||||||||||||||||||||||||||||||||||
|
Mark T. Savoff
|
1/28/10 | — | $ | 413,000 | $ | 826,000 | ||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 530 | 5,300 | 13,250 | $ | 573,036 | |||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 30,000 | $ | 77.10 | $ | 401,700 | |||||||||||||||||||||||||||||||||||||||
|
Richard J. Smith
|
1/28/10 | — | $ | 451,500 | $ | 903,000 | ||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 530 | 5,300 | 13,250 | $ | 573,036 | |||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 40,000 | $ | 77.10 | $ | 535,600 | |||||||||||||||||||||||||||||||||||||||
|
Gary J. Taylor
|
1/28/10 | — | $ | 399,000 | $ | 798,000 | ||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 530 | 5,300 | 13,250 | $ | 573,036 | |||||||||||||||||||||||||||||||||||||||
| 1/28/10 | 40,000 | $ | 77.10 | $ | 535,600 | |||||||||||||||||||||||||||||||||||||||
| (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 Program. 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, 2012.) | |
| (3) | 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. | |
| (4) | The amounts included in this column are valued based on the aggregate grant date fair value of the award calculated in accordance with FASB ASC Topic 718, and in the case of the performance units, are based on the probable outcome of the applicable performance conditions. See Notes 2 and 3 to the Summary Compensation Table for a discussion of the relevant assumptions used in calculating the grant date fair value. |
35
2010
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 December 31, 2010.
| 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
|
— | 135,000 | (1) | $ | 77.10 | 1/28/2020 | ||||||||||||||||||||||||||||||
| 41,666 | 83,334 | (2) | $ | 77.53 | 1/29/2019 | |||||||||||||||||||||||||||||||
| 116,666 | 58,334 | (3) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 255,000 | — | $ | 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 | ||||||||||||||||||||||||||||||||
| 2,230 | (4) | $ | 157,951 | |||||||||||||||||||||||||||||||||
| 2,250 | (5) | $ | 159,368 | |||||||||||||||||||||||||||||||||
| 100,000 | (6) | $ | 7,083,000 | |||||||||||||||||||||||||||||||||
|
Leo P. Denault
|
— | 50,000 | (1) | $ | 77.10 | 1/28/2020 | ||||||||||||||||||||||||||||||
| 15,000 | 30,000 | (2) | $ | 77.53 | 1/29/2019 | |||||||||||||||||||||||||||||||
| 33,333 | 16,667 | (3) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 60,000 | — | $ | 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 | ||||||||||||||||||||||||||||||||
| 9,800 | — | $ | 44.45 | 1/30/2013 | ||||||||||||||||||||||||||||||||
| 19,656 | — | $ | 41.69 | 2/11/2012 | ||||||||||||||||||||||||||||||||
| 530 | (4) | $ | 37,540 | |||||||||||||||||||||||||||||||||
| 480 | (5) | $ | 33,998 | |||||||||||||||||||||||||||||||||
| 24,000 | (7) | $ | 1,699,920 | |||||||||||||||||||||||||||||||||
|
Mark T. Savoff
|
— | 30,000 | (1) | $ | 77.10 | 1/28/2020 | ||||||||||||||||||||||||||||||
| 10,000 | 20,000 | (2) | $ | 77.53 | 1/29/2019 | |||||||||||||||||||||||||||||||
| 18,000 | 9,000 | (3) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 35,000 | — | $ | 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 | ||||||||||||||||||||||||||||||||
| 530 | (4) | $ | 37,540 | |||||||||||||||||||||||||||||||||
| 480 | (5) | $ | 33,998 | |||||||||||||||||||||||||||||||||
|
Richard J. Smith
|
— | 40,000 | (1) | $ | 77.10 | 1/28/2020 | ||||||||||||||||||||||||||||||
| 11,666 | 23,334 | (2) | $ | 77.53 | 1/29/2019 | |||||||||||||||||||||||||||||||
| 23,333 | 11,667 | (3) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 60,000 | — | $ | 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 | ||||||||||||||||||||||||||||||||
| 50,000 | — | $ | 44.45 | 1/30/2013 | ||||||||||||||||||||||||||||||||
| 70,000 | — | $ | 41.69 | 2/11/2012 | ||||||||||||||||||||||||||||||||
| 530 | (4) | $ | 37,540 | |||||||||||||||||||||||||||||||||
| 480 | (5) | $ | 33,998 | |||||||||||||||||||||||||||||||||
36
| 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 | (#) | ($) | Date | (#) | ($) | (#) | ($) | |||||||||||||||||||||||||||
|
Gary J. Taylor
|
— | 40,000 | (1) | $ | 77.10 | 1/28/2020 | ||||||||||||||||||||||||||||||
| 10,000 | 20,000 | (2) | $ | 77.53 | 1/29/2019 | |||||||||||||||||||||||||||||||
| 23,333 | 11,667 | (3) | $ | 108.20 | 1/24/2018 | |||||||||||||||||||||||||||||||
| 60,000 | — | $ | 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 | ||||||||||||||||||||||||||||||||
| 530 | (4) | $ | 37,540 | |||||||||||||||||||||||||||||||||
| 480 | (5) | $ | 33,998 | |||||||||||||||||||||||||||||||||
| (1) | Consists of options that vested or will vest as follows: 1/3 of the options granted vest on each of 1/28/2011, 1/28/2012 and 1/28/2013. | |
| (2) | Consists of options that vested or will vest as follows: 1/2 of the remaining unexercisable options vest on each of 1/29/2011 and 1/29/2012. | |
| (3) | The remaining unexercisable options vested on 1/24/2011. | |
| (4) | Consists of performance units that will vest on December 31, 2012 only if, and to the extent that, we attain achievement level 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, 2011 only if, and to the extent that, the Company attains achievement level 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 vest on December 3, 2012. | |
| (7) | Consists of restricted units granted under the 2007 Equity Ownership Plan. 8,000 units vested on January 25, 2011 and an additional 8.000 units will vest on each of January 25, 2012 and 2013. |
37
2010
Option Exercises and Stock Vested
The following table provides information concerning each
exercise of stock options and each vesting of stock during 2010
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 | $ | 13,922,296 | 1,650 | $ | 132,116 | ||||||||||
|
Leo P. Denault
|
13,154 | $ | 418,646 | 390 | $ | 31,227 | ||||||||||
|
Mark T. Savoff
|
— | — | 390 | $ | 31,227 | |||||||||||
|
Richard J. Smith
|
47,068 | $ | 1,869,543 | 390 | $ | 31,227 | ||||||||||
|
Gary J. Taylor
|
— | — | 390 | $ | 31,227 | |||||||||||
| (1) | Represents the vesting of performance units for the 2008-2010 performance period (payable solely in cash based on the closing stock price of the Company on the last date of the performance period) under the Performance Unit Program. |
2010
Pension Benefits
The following table shows the present value as of
December 31, 2010 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, 2010. 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 | 2010 | |||||||||||
|
J. Wayne Leonard(1)
|
Non-qualified supplemental retirement benefit | 12.68 | $ | 23,709,800 | $— | ||||||||||
| Qualified defined benefit plan | 12.68 | $ | 360,800 | $— | |||||||||||
|
Leo P. Denault(2)
|
Non-qualified System Executive Retirement Plan | 26.83 | $ | 3,717,200 | $— | ||||||||||
| Qualified defined benefit plan | 11.83 | $ | 206,600 | $— | |||||||||||
|
Mark T. Savoff
|
Non-qualified System Executive Retirement Plan | 7.06 | $ | 1,387,900 | $— | ||||||||||
| Qualified defined benefit plan | 7.06 | $ | 149,000 | $— | |||||||||||
|
Richard J. Smith(3)
|
Non-qualified Pension Equalization Plan | 34.30 | $ | 4,241,200 | $— | ||||||||||
| Qualified defined benefit plan | 11.34 | $ | 308,800 | $— | |||||||||||
|
Gary J. Taylor(4)
|
Non-qualified System Executive Retirement Plan | 20.80 | $ | 3,799,700 | $— | ||||||||||
| Qualified defined benefit plan | 10.80 | $ | 266,900 | $— | |||||||||||
| (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 $1,483,800. |
38
| (3) | Mr. Smith entered into an agreement granting 22.92 additional years of service under the non-qualified Pension Equalization Plan providing an additional $1,031,400 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 $1,269,700 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 final 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, Mr. Smith and
Mr. Taylor 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
39
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 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 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, 2010.
2010
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. As of December 31, 2009 none of the Named
Executive Officers had a deferred compensation balance remaining
in the Equity Ownership Plan. For additional information, see
“Benefits, Perquisites, Agreements and Post-Termination
Plans -Executive Deferred Compensation” in Compensation
Discussion and Analysis.
Additionally, as of December 31, 2010, Mr. Leonard and
Mr. Savoff have deferred account balances under a frozen
Defined Contribution Restoration Plan. These amounts are deemed
invested, as chosen by the participant, in certain of the T.
Rowe Price Investment funds also available to participants under
the qualified Savings 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
40
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 prescribed by law as
well as the plan, participating Named Executive Officers with
deferrals under the Executive Deferred Compensation Plan
and/or the
equity plans 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.
Executive
Deferred Compensation Plan
|
Aggregate |
||||||||||||||||||||
|
Executive |
Registrant |
Aggregate |
Aggregate |
Balance at |
||||||||||||||||
|
Contributions in |
Contributions in |
Earnings in |
Withdrawals/ |
December 31, |
||||||||||||||||
|
Name |
2010 |
2010 |
2010(1) |
Distributions |
2010 |
|||||||||||||||
|
(a)
|
(b) | (c) | (d) | (e) | (f) | |||||||||||||||
|
J. Wayne Leonard
|
$ | — | $ | — | $ | 106 | $ | (204,006 | ) | $ | — | |||||||||
|
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. |
Defined
Contribution Restoration Plan
|
Aggregate |
||||||||||||||||||||
|
Executive |
Registrant |
Aggregate |
Aggregate |
Balance at |
||||||||||||||||
|
Contributions in |
Contributions in |
Earnings in |
Withdrawals/ |
December 31, |
||||||||||||||||
|
Name |
2010 |
2010 |
2010(1) |
Distributions |
2010 |
|||||||||||||||
|
(a)
|
(b) | (c) | (d) | (e) | (f) | |||||||||||||||
|
J. Wayne Leonard
|
$ | — | $ | — | $ | (22,567 | ) | $ | — | $ | 210,098 | |||||||||
|
Leo P. Denault
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Mark T. Savoff
|
$ | — | $ | — | $ | (1,912 | ) | $ | — | $ | 17,796 | |||||||||
|
Richard J. Smith
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
Gary J. Taylor
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
| (1) | Amounts in this column are not included in the Summary Compensation Table. |
2010
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 following 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,
41
2010, the last business day of our last fiscal year. For
purposes of these tables, we assumed that our stock price was
$70.83, 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
Entergy’s 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, 2010:
|
Termination |
Termination |
|||||||||||||||||||||||||||||||
|
for Good |
Related to a |
|||||||||||||||||||||||||||||||
|
Benefits and Payments |
Voluntary |
Reason or |
Change in |
Change in |
||||||||||||||||||||||||||||
|
Upon Termination(1)
|
Resignation | For Cause | Not for Cause | Retirement(8) | Disability | Death | Control(9) | Control | ||||||||||||||||||||||||
|
Annual Incentive Payment(2)
|
— | — | — | — | — | — | — | $ | 3,099,600 | |||||||||||||||||||||||
|
Severance Payment(3)
|
— | — | — | — | — | — | — | $ | 8,495,487 | |||||||||||||||||||||||
|
Performance Units:(4)
|
||||||||||||||||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | $ | 1,062,450 | $ | 1,062,450 | $ | 1,062,450 | — | $ | 2,029,280 | ||||||||||||||||||||
|
2010-2012
Performance Unit Program
|
— | — | — | $ | 526,503 | $ | 526,503 | $ | 526,503 | — | $ | 2,029,280 | ||||||||||||||||||||
|
Unvested Stock Options(5)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Unvested Restricted Units(6)
|
— | — | $ | 7,083,000 | — | $ | 7,083,000 | $ | 7,083,000 | — | $ | 7,083,000 | ||||||||||||||||||||
|
Medical and Dental Benefits(7)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
280G Tax
Gross-up(10)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (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 benefits upon the occurrence of a change in control without termination of employment. For additional information regarding these vested benefits and awards, see “2010 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 severance payment equal to the product of Mr. Leonard’s average maximum annual bonus opportunity under the Annual Incentive Plan for the Company’s two calendar years immediately preceding the calendar year in which his termination occurs. 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 the sum of his (a) base salary plus (b) average Annual Incentive Plan award at target for the two calendar years immediately preceding the calendar year in which the termination occurs. | |
| (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 cause, disability or death, Mr. Leonard would have forfeited his performance units for all open performance periods and would have been entitled to receive a single sum severance payment pursuant to his retention agreement that would not be based on any outstanding performance periods. The payment would have been calculated using the average annual number of performance units he would have been entitled to receive under the Performance Unit Program with respect to the two most recent performance periods preceding the calendar year in which his termination occurs, assuming all performance goals were achieved at target. For purposes of the table, the value of Mr. Leonard’s severance payment was calculated by taking an average of the target performance units from the 2006-2008 Performance Unit Program (33,500 units) and the 2007-2009 Performance Unit Program (23,800 units). This average number of units (28,650 units) multiplied by the closing price of Entergy common stock on December 31, 2010 ($70.83) would equal a severance payment of $2,029,280 for the forfeited performance unit programs. |
42
| With respect to death, disability or retirement 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. | ||
| 2009 - 2011 Plan — 22,500 performance units at target, assuming a stock price of $70.83 | ||
| 2010 - 2012 Plan — 22,300 performance units at target, assuming a stock price of $70.83 | ||
| (5) | In the event of retirement, death, 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, 2010, and the exercise price of each option share. As of December 31, 2010, the exercise price for all of Mr. Leonard’s unvested options exceeded the closing stock price and accordingly, no amounts are reported in the table with respect to the accelerated vesting of Mr. Leonard’s stock options. | |
| (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) | Upon retirement Mr. Leonard would be eligible for retiree medical and dental benefits, the same as all other retirees. Pursuant to his retention agreement, in the event of a termination related to a change in control, Mr. Leonard would not be eligible to receive additional subsidized COBRA benefits. | |
| (8) | As of December 31, 2010, 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) | The 2007 Equity Ownership Plan was amended in December 2010 so that awards granted after December 30, 2010 require an involuntary termination in order to accelerate vesting or trigger severance payments upon a change in control. | |
| (10) | In December of 2010, Mr. Leonard voluntarily agreed to amend his retention agreement to eliminate excise tax gross up payments. |
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 the 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; | |
| • | the failure to pay any portion of his compensation within seven days of its due date; | |
| • | the 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; |
43
| • | the failure to continue to provide benefits substantially similar to those that he currently enjoys under any of the pension, savings, life insurance, medical, health and accident or disability plans, or the taking of any other action which materially reduces any of those benefits or deprives him of any material fringe benefits that he currently enjoys; | |
| • | the failure to provide him with the number of paid vacation days to which he is entitled in accordance with the 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 the
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, 2010:
|
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 | Control(9) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | $ | 3,202,290 | — | — | — | — | $ | 3,202,290 | ||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | $ | 371,858 | — | $ | 371,858 | $ | 371,858 | — | $ | 371,858 | ||||||||||||||||||||
|
2010-2012
Performance Unit Program
|
— | — | $ | 371,858 | — | $ | 371,858 | $ | 371,858 | — | $ | 371,858 | ||||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Unvested Restricted Units(5)
|
— | — | $ | 1,699,920 | — | $ | 1,699,920 | $ | 1,699,920 | — | $ | 1,699,920 | ||||||||||||||||||||
|
COBRA Benefits(6)
|
— | — | $ | 13,962 | — | — | — | — | — | |||||||||||||||||||||||
|
Medical and Dental Benefits(7)
|
— | — | — | — | — | — | — | $ | 13,962 | |||||||||||||||||||||||
|
280G Tax
Gross-up(10)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (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 “2010 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, 2010, 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 (not due to death or disability) by Mr. Denault for good reason or by the Company not for cause (regardless of whether there is a change in control), 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 annual base salary plus the greater of his annual incentive award under the Annual Incentive Plan for the calendar year |
44
| immediately preceding the calendar year in which Mr. Denault’s termination date occurs or (ii) Mr. Denault’s Annual Incentive Plan target award for the calendar year in which the effective date of the Agreement occurred (i.e., 2006). For purposes of this table, we have calculated the award using a base salary of $630,000 and target award of 70%. | ||
| (3) | In the event of a termination due to death or disability, by Mr. Denault for good reason, or by the Company not for cause (in all cases, regardless of whether there is a change in control), Mr. Denault would have forfeited his performance units for all open performance periods and would have been entitled to receive a single-sum severance payment pursuant to his retention agreement that would not be based on any outstanding performance periods. The payment would be calculated using the average annual number of performance units he would have been entitled to receive under the Performance Unit Program with respect to the two most recent performance periods preceding the calendar year in which his termination occurs, assuming all performance goals were achieved at target. For purposes of the table, the value of Mr. Denault’s severance payment was calculated by taking an average of the target performance units from the 2006-2008 Performance Unit Program (6,000 units) and the 2007-2009 Performance Unit Program (4,500 units). This average number of units (5,250 units) multiplied by the closing price of Entergy stock on December 31, 2010 ($70.83) would equal a severance payment of $371,858 for the forfeited performance programs. | |
| (4) | In the event of his death, disability, termination by Mr. Denault for good reason or by the Company not for cause (regardless of whether there is 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. 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, 2010, and the exercise price of each option share. As of December 31, 2010, the exercise price for all of Mr. Denault’s unvested options exceeded the closing stock price and accordingly, no amounts are reported in the table with respect to the accelerated vesting of Mr. Denault’s stock options. | |
| (5) | Mr. Denault’s 24,000 restricted units vest 1/3 on January 25, 2011, 1/3 on January 25, 2012 and 1/3 on January 25, 2013, provided he remains a full-time Entergy System company employee through each such vesting date. Pursuant to his restricted unit agreement, any unvested restricted units will vest immediately in the event of a change in control, Mr. Denault’s death or disability, or termination of employment by Mr. Denault for good reason or by the Company not for cause (regardless of whether there is a change in control). | |
| (6) | Pursuant to his retention agreement, in the event of a termination by Mr. Denault for good reason or by the Company not for cause, Mr. Denault would be eligible to receive Company-subsidized COBRA benefits for 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 Company-subsidized medical and dental benefits for 18 months. | |
| (8) | As of December 31, 2010, Mr. Denault is not eligible for retirement. | |
| (9) | The 2007 Equity Ownership Plan was amended in December 2010 so that awards granted after December 30, 2010 require an involuntary termination in order to accelerate vesting or trigger severance payments upon a change in control. | |
| (10) | In December of 2010, Mr. Denault voluntarily agreed to amend his retention agreement to eliminate excise tax gross up payments. |
Under the terms of Mr. Denault’s retention agreement,
Entergy 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 the Personnel Committee; | |
| • | willfully engaging in conduct that is demonstrably and materially injurious to Entergy; |
45
| • | 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 Entergy’s reputation; | |
| • | material violation of any agreement that he has entered into with Entergy; or | |
| • | unauthorized disclosure of Entergy’s 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 the corporate headquarters; | |
| • | the 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); | |
| • | the 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; | |
| • | the failure to pay any portion of his compensation within seven days of its due date; | |
| • | the 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; | |
| • | the failure to continue to provide benefits substantially similar to those that he currently enjoys under any of the pension, savings, life insurance, medical, health and accident or disability plans, or Entergy taking of any other action which materially reduces any of those benefits or deprives him of any material fringe benefits that he currently enjoys; | |
| • | the failure to provide him with the number of paid vacation days to which he is entitled in accordance with the normal vacation policy; or | |
| • | any purported termination of his employment not taken in accordance with his retention agreement |
46
Mark T.
Savoff
Executive Vice President and Chief Operating Officer
Executive Vice President and Chief Operating Officer
The following table shows certain payments and benefits,
excluding vested or earned awards and benefits, which our
Executive Vice 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, 2010:
|
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 | Control(7) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | — | — | — | — | — | $ | 2,998,970 | |||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | — | $ | 226,656 | $ | 226,656 | $ | 339,984 | $ | 339,984 | ||||||||||||||||||||
|
2010-2012
Performance Unit Program
|
— | — | — | — | $ | 125,133 | $ | 125,133 | $ | 375,399 | $ | 375,399 | ||||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Medical and Dental Benefits(5)
|
— | — | — | — | — | — | — | $ | 23,730 | |||||||||||||||||||||||
|
280G Tax
Gross-up(8)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (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 have been entitled to receive his vested pension benefits and would have been eligible for early retirement benefits. For a description of these benefits, see “2010 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 2.99 times the sum of his base salary plus annual incentive, calculated using the average annual target opportunity under the Annual Incentive Plan for the two calendar years immediately preceding the calendar year in which the participant’s date of termination occurs. For purposes of this table, we have assumed a 70% target opportunity and a base salary of $590,000. | |
| (3) | In the event of a termination related to a change in control, Mr. Savoff would have been entitled to receive pursuant to the 2007 Equity Ownership 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, the value of Mr. Savoff’s awards were calculated as follows: |
2009 - 2011 Plan — 4,800 performance units at
target, assuming a stock price of $70.83
2010 - 2012 Plan — 5,300 performance units at
target, assuming a stock price of $70.83
| 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 death, disability or 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, 2010, and the exercise price of each option share. As of December 31, 2010, the exercise price for all of Mr. Savoff’s unvested options exceeded the closing stock price and accordingly, no amounts are reported in the table with respect to the accelerated vesting of Mr. Savoff’s stock options. | |
| (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 Company-subsidized COBRA benefits for 18 months. |
47
| (6) | As of December 31, 2010, Mr. Savoff is retirement eligible and would retire rather than voluntarily resign. Given this scenario, the compensation and benefits available to Mr. Savoff under retirement are substantially the same as available with a voluntary resignation. | |
| (7) | Under the 2007 Equity Ownership Plan, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control of the Company and 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 | |
| • | Severance benefits in place of performance units become payable as described in footnote 3 above. |
The 2007 Equity Ownership Plan was amended in December 2010 so
that awards granted after December 30, 2010 require an
involuntary termination in order to accelerate vesting or
trigger severance payments.
| (8) | In December 2010, the System Executive Continuity Plan was amended to eliminate excise tax gross up payments. |
Richard
J. Smith
President, Entergy Wholesale Commodity Business
President, Entergy Wholesale Commodity Business
The following table shows certain payments and benefits,
excluding vested or earned awards and benefits, which the
President, Entergy Wholesale Commodity Business would have been
entitled to receive as a result of a termination of his
employment under various scenarios as of December 31, 2010:
|
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 | Control(7) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | — | — | — | — | — | $ | 3,278,535 | |||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | $ | 226,656 | $ | 226,656 | $ | 226,656 | $ | 339,984 | $ | 339,984 | |||||||||||||||||||
|
2010-2012
Performance Unit Program
|
— | — | — | $ | 125,133 | $ | 125,133 | $ | 125,133 | $ | 375,399 | $ | 375,399 | |||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Medical and Dental Benefits(5)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
280G Tax
Gross-up(8)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Retention Agreement(9)
|
— | — | — | $ | 967,500 | — | — | — | — | |||||||||||||||||||||||
| (1) | In addition to the payments and benefits in the table, Mr. Smith 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 “2010 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 forfeit his 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 using the average annual target opportunity derived under the Annual Incentive Plan for the two calendar years immediately preceding the calendar year in which the participant’s termination occurs. For purposes of this table, we have assumed a 70% target opportunity and 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 2007 Equity Ownership 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 |
48
| units were achieved at target level. For purposes of the table, the value of Mr. Smith’s awards were calculated as follows: |
2009 - 2011 Plan — 4,800 performance units at
target, assuming a stock price of $70.83
2010 - 2012 Plan — 5,300 performance units at
target, assuming a stock price of $70.83
| With respect to death, disability or retirement 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 retirement, death, disability or a change in control, all of Mr. Smith’s unvested stock options would immediately vest. In addition, he would be entitled to exercise any unexercised 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, 2010, and the exercise price of each option share. As of December 31, 2010, the exercise price for all of Mr. Smith’s unvested options exceeded the closing stock price and accordingly, no amounts are reported in the table with respect to the accelerated vesting of Mr. Smith’s stock options. | |
| (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 not be eligible to receive additional subsidized medical and dental benefits. | |
| (6) | As of December 31, 2010, 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, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control of the Company and 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 | |
| • | Severance benefits in place of performance units become payable as described in footnote 3 above. |
The 2007 Equity Ownership Plan was amended in December 2010 so
that awards granted after December 30, 2010 require an
involuntary termination in order to accelerate vesting or
trigger severance payment upon a change in control.
| (8) | In December 2010, the System Executive Continuity Plan was amended to eliminate excise tax gross up payments. | |
| (9) | In December 2009, the Company entered into an agreement with Mr. Smith. The agreement provides that Mr. Smith is entitled to receive a lump sum cash payment equal to 1.5 times his base salary as of the date of separation form Entergy if either he (i) remains continuously employed at a management level for 24 months after the date of the 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 such date and thereafter retires with the consent of our Chief Executive Officer prior to reaching such 24 months of service. We publicly announced that we no longer intended to pursue the Spin Transaction on April 5, 2010. If he retired on December 31, 2010 with permission from Entergy’s Chief Executive Officer, he would have been eligible to receive 1.5 times his base salary. See “Compensation Discussion and Analysis” for a complete description of Mr. Smith’s agreement. |
49
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, 2010:
|
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 | Control(7) | Control | ||||||||||||||||||||||||
|
Severance Payment(2)
|
— | — | — | — | — | — | — | $ | 2,897,310 | |||||||||||||||||||||||
|
Performance Units:(3)
|
||||||||||||||||||||||||||||||||
|
2009-2011
Performance Unit Program
|
— | — | — | $ | 226,656 | $ | 226,656 | $ | 226,656 | $ | 339,984 | $ | 339,984 | |||||||||||||||||||
|
2010-2012
Performance Unit Program
|
— | — | — | $ | 125,133 | $ | 125,133 | $ | 125,133 | $ | 375,399 | $ | 375,399 | |||||||||||||||||||
|
Unvested Stock Options(4)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
Medical and Dental Benefits(5)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
|
280G Tax
Gross-up(8)
|
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| (1) | In addition to the payments and benefits in the table, Mr. Taylor 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 “2010 Pension Benefits.” In the event of a termination related to a change in control, pursuant to the terms of the System Executive Retirement Plan, Mr. Taylor would be eligible for subsidized early retirement even if he does not have company permission to separate from employment. 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 2.99 times the sum of his base salary plus annual incentive, calculated using the average annual target opportunity derived under the Annual Incentive Plan for the two calendar years immediately preceding the calendar year in which the participant’s termination occurs. For purposes of this table, we have assumed a 70% target opportunity and 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 2007 Equity Ownership 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, the value of Mr. Taylor’s awards were calculated as follows: |
2009 - 2011 Plan — 4,800 performance units at
target, assuming a stock price of $70.83
2010 - 2012 Plan — 5,300 performance units at
target, assuming a stock price of $70.83
With respect to death, disability or retirement 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 retirement, death, disability or 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, 2010, and the exercise price of each option share. As of December 31, 2010, the exercise price for all of Mr. Taylor’s unvested options exceeded the closing stock price and accordingly, no amounts are reported in the table with respect to the accelerated vesting of Mr. Taylor’s stock options. |
50
| (5) | Upon retirement, Mr. Taylor would be eligible for retiree medical and dental benefits, the same as all other retirees. Pursuant to the System Executive Continuity Plan, in the event of a termination related to a change in control, Mr. Taylor would not be eligible to receive Company subsidized COBRA benefits. | |
| (6) | As of December 31, 2010, Mr. Taylor is retirement eligible and would retire rather than voluntarily resign. Given that scenario, the compensation and benefits available to Mr. Taylor under retirement are substantially the same as available with a voluntary. | |
| (7) | Under the 2007 Equity Ownership Plan, plan participants are entitled to receive an acceleration of certain benefits based solely upon a change in control of the Company and 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 | |
| • | Severance benefits in place of performance units become payable as described in footnote 3 above. |
| The 2007 Equity Ownership Plan was amended in December 2010 so that awards granted after December 30, 2010 require an involuntary termination in order to accelerate vesting or trigger severance payments. | ||
| (8) | In December 2010, the System Executive Continuity Plan was amended to eliminate excise tax gross up payments. |
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 30% 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. |
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. |
51
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; | |
| • | 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 and the executive is involuntarily terminated without
cause or terminates employment for good reason. In 2010, we
eliminated tax gross up payments for any severance benefits paid
under the System Executive Continuity Plan.
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,” except that all options may
no longer be exercisable.
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, shares of restricted stock 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
52
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 the Entergy System company
employer.
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 for those retiring with a minimum
12 months of participation are pro-rated based on the
actual full months of participation, 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,” including:
| • | all unvested stock options will vest immediately; | |
| • | vested stock options will expire ten years from the grant date; and | |
| • | restricted units may be subject to specific death benefits depending on the restricted unit agreement (as noted, where applicable, in the tables above). |
53
Equity
Compensation Plan Information
The following table summarizes the equity compensation plan
information as of December 31, 2010. Information is
included for equity compensation plans approved by the
stockholders and equity compensation plans not approved by the
stockholders. Information regarding the 2011 Entergy Corporation
Equity Ownership and Long Term Cash Incentive Plan, which
shareholders are being asked to approve pursuant to
Proposal 5 in this Proxy Statement, is not included in this
table
|
Number of Securities |
||||||||||||
|
Weighted |
Remaining Available for |
|||||||||||
|
Number of Securities to |
Average |
Future Issuance (Excluding |
||||||||||
|
be Issued Upon Exercise |
Exercise |
Securities Reflected in |
||||||||||
|
of Outstanding Options |
Price |
Column (a)) |
||||||||||
|
Plan
|
(a) | (b) | (c) | |||||||||
|
Equity compensation plans approved by security holders(1)
|
9,911,940 | $ | 76.56 | 2,258,812 | ||||||||
|
Equity compensation plans not approved by security holders(2)
|
1,313,785 | $ | 41.40 | — | ||||||||
|
Total
|
11,225,725 | $ | 72.45 | 2,258,812 | ||||||||
| (1) | Includes the Equity Ownership Plan, which was approved by the shareholders on May 15, 1998 and the 2007 Equity Ownership Plan which was approved by Entergy shareholders on May 12, 2006. 7,000,000 shares of Entergy common stock can be issued from the 2007 Plan, with no more than 2,000,000 shares available for non-option grants. The Equity Ownership Plan and the 2007 Plan (the “Plans”) are administered by the Personnel Committee of the Board of Directors (other than with respect to awards granted to non-employee directors, which awards are administered by the entire Board of Directors). Eligibility under the Plans is limited to the non-employee directors and to the officers and employees of an Entergy System employer and any corporation 80% or more of whose stock (based on voting power) or value is owned, directly or indirectly, by the Company. The Plans provide for the issuance of stock options, restricted shares, equity awards (units whose value is related to the value of shares of the common stock but do not represent actual shares of common stock), performance awards (performance shares or units valued by reference to shares of common stock or performance units valued by reference to financial measures or property other than common stock) and other stock-based awards. | |
| (2) | Entergy has a Board-approved stock-based compensation plan. However, effective May 9, 2003, the Board has directed that no further awards be issued under that plan. |
54
2010
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)
(different location from Board and other committee meetings) |
$2,000 | |
|
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. |
Presiding Director and Chair Cash
Retainers. In 2010, the Presiding Director
received an annual cash retainer of $20,000. The chairs of the
Audit Committee and Nuclear Committee each received an annual
cash retainer fee of $15,000 and the chairs of each of the
Personnel Committee, Corporate Governance Committee and Finance
Committee received an annual cash retainer of $10,000.
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. Payouts under the Service Recognition Plan occur over
a five-year period in equal installments. 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 $1,500 for participation in
director education programs, director orientation or business
sessions, inspection trips or conferences not held on the same
day as a Board meeting.
The Company also reimburses non-employee directors for their
expenses in attending Board and committee meetings, director
education programs and other Board-related activities. The
Company also purchases director and officer liability insurance,
life insurance, accidental death and disability insurance and
aircraft accident insurance for its non-employee directors. In
addition, each non-employee director may receive an annual
physical at the Company’s expense.
55
2010 Director
Compensation Table
The table below provides information regarding non-employee
director compensation for the fiscal year ended
December 31, 2010:
|
Fees |
||||||||||||||||||||||||||||
|
Earned |
||||||||||||||||||||||||||||
|
or Paid |
All Other |
|||||||||||||||||||||||||||
|
in Cash |
Stock Awards |
Option |
Compensation |
|||||||||||||||||||||||||
|
($) |
($) |
Awards |
($) |
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
|
$ | 87,831 | $ | 45,162 | $ | 60,056 | — | $ | 38,602 | $ | 171,595 | $ | 231,651 | |||||||||||||||
|
W. Frank Blount
|
$ | 84,331 | $ | 45,162 | $ | 60,056 | — | $ | 63,892 | $ | 193,385 | $ | 253,441 | |||||||||||||||
|
Gary W. Edwards
|
$ | 83,831 | $ | 45,162 | $ | 60,056 | — | $ | 16,448 | $ | 145,441 | $ | 205,497 | |||||||||||||||
|
Alexis M. Herman
|
$ | 72,581 | $ | 45,162 | $ | 60,056 | — | $ | 18,719 | $ | 136,462 | $ | 196,518 | |||||||||||||||
|
Donald C. Hintz
|
$ | 95,831 | $ | 45,162 | $ | 60,056 | — | $ | 28,979 | $ | 169,972 | $ | 230,028 | |||||||||||||||
|
Stuart L. Levenick
|
$ | 66,581 | $ | 45,162 | $ | 60,056 | — | $ | 13,791 | $ | 125,534 | $ | 185,590 | |||||||||||||||
|
Stewart C. Myers
|
$ | 69,331 | $ | 45,162 | $ | 43,766 | — | $ | 10,798 | $ | 125,291 | $ | 169,057 | |||||||||||||||
|
James R. Nichols
|
$ | 70,581 | $ | 45,162 | $ | 60,056 | — | $ | 68,047 | $ | 183,790 | $ | 243,846 | |||||||||||||||
|
William A. Percy, II
|
$ | 81,581 | $ | 45,162 | $ | 60,056 | — | $ | 27,325 | $ | 154,068 | $ | 214,124 | |||||||||||||||
|
W.J. “Billy” Tauzin
|
$ | 69,331 | $ | 45,162 | $ | 60,056 | — | $ | 9,450 | $ | 123,943 | $ | 183,999 | |||||||||||||||
|
Steven V. Wilkinson
|
$ | 97,831 | $ | 45,162 | $ | 60,056 | — | $ | 18,325 | $ | 161,318 | $ | 221,374 | |||||||||||||||
| (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 33. | |
| (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 for the 150 shares of common stock granted on a quarterly basis to each non-employee director during 2010. 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, 2010. | |
| (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 2010, the outstanding phantom units issued under the Service Recognition Program for Outside Directors held by each of our directors were: Ms. Bateman 8,000; Mr. Blount 18,400; Mr. Edwards 3,831; Ms. Herman 5,600; Mr. Hintz 4,800; Mr. Levenick 3,831; Mr. Myers 583; Mr. Nichols 19,426; Mr. Percy 8,254; Mr. Tauzin 3,693; and Mr. Wilkinson 5,227. As of December 31, 2010, Mr. Hintz had 260,000 unexercised options outstanding. |
56
| (6) | The amounts in column (g) include dividends accrued under the Service Recognition Program and 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; and (c) Company paid premiums for $25,000 life insurance and $25,000 accidental death and disability insurance. |
PERSONNEL
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each member of the Personnel Committee is an independent
director. During the last completed fiscal year, 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 compensation 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.
COMMON
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 24, 2011, 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 | ||||||
|
T. Rowe Price Associates, Inc.(1)
100 E. Pratt Street Baltimore, Maryland 21202 |
9,564,661 | 5.2 | % | |||||
| (1) | Based on a Schedule 13G filed with the SEC on February 10, 2010, T. Rowe Price Associates, Inc. has indicated that it has sole voting power over 2,656,164 shares of Entergy common stock and sole power to dispose or to direct the disposition of 9,543,811 shares of Entergy common stock. |
57
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, 2010
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
|
3,700 | — | 8,000 | |||||||||
|
W. Frank Blount
|
12,834 | — | 18,400 | |||||||||
|
Leo P. Denault
|
10,884 | 311,799 | — | |||||||||
|
Gary W. Edwards
|
900 | — | 6,231 | |||||||||
|
Alexis Herman
|
4,500 | — | 5,600 | |||||||||
|
Donald C. Hintz
|
8,091 | 260,000 | 6,000 | |||||||||
|
J. Wayne Leonard
|
360,710 | 1,679,133 | 2,966 | |||||||||
|
Stuart L. Levenick
|
3,200 | — | 3,831 | |||||||||
|
Blanche L. Lincoln
|
— | — | — | |||||||||
|
Stewart C. Myers
|
738 | — | 583 | |||||||||
|
James R. Nichols(3)
|
8,889 | — | 19,426 | |||||||||
|
William A. Percy, II
|
2,650 | — | 12,154 | |||||||||
|
Mark T. Savoff
|
1,010 | 173,800 | 251 | |||||||||
|
Richard J. Smith
|
42,272 | 405,266 | — | |||||||||
|
W. J. Tauzin
|
3,100 | — | 3,693 | |||||||||
|
Gary J. Taylor
|
1,454 | 314,833 | — | |||||||||
|
Steven V. Wilkinson
|
4,255 | — | 5,227 | |||||||||
|
All directors and executive officers as a group (23 persons)
|
489,778 | 3,619,048 | 92,362 | |||||||||
| (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 6,059 shares that are owned by a charitable foundation that Mr. Nichols controls. |
58
AUDIT
COMMITTEE REPORT
The Audit Committee is comprised of four independent directors.
All members meet the independence criteria as defined by the New
York Stock Exchange. During 2010, the Audit Committee complied
with its written Charter, as adopted by the Board of Directors.
The Charter, which was most recently revised in May 2010, 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 12 meetings during 2010. 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 annual 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). The Audit Committee
received the written disclosures and the letter from the
independent registered public accounting firm pursuant to
applicable requirements of the Public Company Accounting
Oversight Board regarding the independent registered public
accounting firm communication 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 |
59
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 and its subsidiaries for the
years ended December 31, 2010 and 2009 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:
| 2010 | 2009 | |||||||
|
Audit Fees
|
$ | 8,376,900 | $ | 9,175,534 | ||||
|
Audit-Related Fees(a)
|
$ | 1,235,000 | $ | 892,150 | ||||
|
Total audit and audit-related fees
|
$ | 9,611,900 | $ | 10,067,684 | ||||
|
Tax Fees(b)
|
$ | 43,812 | — | |||||
|
All Other Fees
|
— | — | ||||||
|
Total Fees(c)
|
$ | 9,655,712 | $ | 10,067,684 | ||||
| (a) | Includes fees for employee benefit plan audits, consultation on financial accounting and reporting, and other attestation services. | |
| (b) | Includes fees for tax advisory services. | |
| (c) | 100% of fees paid in 2010 and 2009 were pre-approved by the Audit Committee. |
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.
60
MATTERS
REQUIRING SHAREHOLDER ACTION
PROPOSAL 1 —
Election of Directors
At our Annual Meeting, 11 people will be elected as members
of the Board of Directors; in each case, to serve until the next
annual meeting and until his or her successor is duly elected
and qualified or until his or her earlier death, resignation or
removal. The Corporate Governance Committee of the Board of
Directors has nominated the 11 people listed below for
election at the Annual Meeting. Each nominee is currently
serving as a director of the Company. The number of directors
constituting our Board is currently set at 13, but the Board has
reduced the number of directors to 12 effective upon the Annual
Meeting which will leave one vacancy on the Board immediately
following the Annual Meeting. The Corporate Governance Committee
is currently conducting a search for a candidate to fill the
vacancy. Proxies cannot be voted for a greater number of
directors than the 11 nominees as identified in this Proxy
Statement.
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 card but do not give instructions with
respect to voting for directors, your shares will be voted for
the 11 persons recommended by the Board of Directors.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR THE ELECTION OF EACH NOMINEE.
2011
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, 2010, period served as a director, position
(if any) with the Company, business experience, directorships of
other publicly-owned corporations (if any) and other
professional affiliations.
|
MAUREEN SCANNELL BATEMAN Age
67 Director Since 2000 New York, New York • Managing Director, Rose Hill Consultants, June 2010-present • Former Of Counsel, Butzel Long (legal services), 2007 to June 2010 • 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 • Fellow of the American Bar Association • Trustee-Fellow of Fordham University • Treasurer and a Director of Fordham Law Alumni Trustees |
61
|
GARY W.
EDWARDS Age 69 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) (2002-2010) • Member of Advisory Board of Theatre Under the Stars, Houston, Texas • Former Director of Sunoco Logistics Partners LP |
|
|
ALEXIS M. HERMAN Age
63 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 • 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 George Meany National Labor College, Bush-Clinton Haiti Fund, National Urban League and National Epilepsy Foundation • Former Director of Presidential Life Insurance Company |
|
|
DONALD C.
HINTZ Age
67 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 |
62
|
J. WAYNE LEONARD Age
60 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 • Former Trustee of United Way of Greater New Orleans |
|
|
STUART L. LEVENICK Age
57 Director Since
2005 Peoria, Illinois • Group President and Executive Office Member of Caterpillar Inc., a manufacturer of construction and mining equipment, 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 • Executive Director of U.S. Chamber of Commerce, Washington, D.C. • Executive Director of Association of Equipment Manufacturers, Washington, D.C. |
|
|
BLANCHE LAMBERT LINCOLN Age
50 Director Since 2011 Arlington, Virginia • Former United States Senator for the State of Arkansas (1999-2011) • Former United States Representative for the State of Arkansas (1993-1997) • Former Chair, U.S. Senate Committee on Agriculture, Nutrition and Forestry • Former Member, U.S. Senate Committee on Finance, Committee on Energy and Natural Resources, and Special Committee on Aging |
63
|
STEWART C. MYERS Age
70 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 |
|
|
WILLIAM A.
PERCY, II Age
71 Director Since
2000 Greenville, Mississippi • Chairman and Chief Executive Officer of Greenville Compress Company (commercial warehouse and real estate) • Chairman of Hope Enterprise Corporation (a non-profit economic development corporation) • Former Partner of Trail Lake Enterprises (cotton farm and gin) |
|
|
W. J. “BILLY”
TAUZIN Age
67 Director
Since 2005 Washington, DC • Manager, Tauzin Strategic Networks, a consulting firm, since July 2010 • Former President and Chief Executive Officer, Pharmaceutical Research and Manufacturers of America (PhRMA) (trade association) (2005-2010) • Former United States Representative for the State of Louisiana (1980-2005) • Former Chairman, U.S. House Committee on Energy and Commerce • Former Chairman, U.S. House Subcommittee on Coast Guard and Maritime Transportation • Former Member, Louisiana House of Representatives (1972-1980) • Director of LHC Group, Inc. • Trustee of Keck Graduate Institute • Director of Research America |
64
|
STEVEN V. WILKINSON Age
69 Director Since
2003 Watersmeet, Michigan • Retired Audit Partner, Arthur Andersen LLP (international public accounting firm) • Director of Cabot Microelectronics Corporation • Director of Blackburn College |
The Board includes a diverse group of leaders in their
respective fields. Many of the current directors have leadership
experience at major domestic and international companies and
experience on other companies’ boards, which provide an
understanding of different business processes, challenges, and
strategies. Others have experience in government relations. All
have personal traits such as candor, integrity, commitment, and
collegiality that are essential to an effective board of
directors. The Corporate Governance Committee believes that each
of the foregoing nominees enhances 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); 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, Ms. Lincoln, a former
U.S. Senator and U.S. Representative, and
Mr. Tauzin, a former U.S. Representative and former
President and Chief Executive Officer 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; and Mr. Wilkinson, a former audit
partner with a major international auditing firm, contributes
his knowledge of accounting and auditing. The non-employee
director nominees collectively also satisfy the Committee’s
goal of geographical diversity, with the 11 nominees residing in
nine states and the District of Columbia, including nominees
with strong ties to the states of Arkansas (Ms. Lincoln),
Louisiana (Mr. Tauzin), Texas (Mr. Edwards) and
Mississippi (Mr. Percy). 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.
| PROPOSAL 2 — | Ratification of selection of Deloitte & Touche LLP as Independent Registered Public Accountants for 2011 |
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 2011.
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 the matter and present in person or
represented 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.
65
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.
| PROPOSAL 3 — | Advisory Vote on Executive Compensation |
Background
of the Proposal
The Company asks that you approve, on an advisory basis, the
compensation paid to our Named Executive Officers as disclosed
in this Proxy Statement under the headings “Compensation
Discussion and Analysis” and “Executive Compensation
Tables.” The Company is requesting this advisory vote as
required by Section 14A of the Exchange Act. Your vote will
not be binding on the Board of Directors. However, the Board of
Directors and the Personnel Committee will review the voting
results and take them into consideration when making future
decisions regarding executive compensation.
Executive
Compensation
As discussed in the Compensation Discussion and Analysis section
of this Proxy Statement, our compensation principles and
underlying programs are designed to attract, motivate and retain
key executives who are crucial to our long-term success. The
compensation paid to our named executive officers reflects our
commitment to pay for performance. A significant percentage of
our Named Executive Officers’ compensation is made in the
form of long-term incentive awards that incentivize management
to achieve results to the mutual benefit of shareholders and
management. Moreover, a significant portion of our named
executive officers’ cash compensation is paid in the form
of annual performance bonuses which are paid based on the
achievement of pre-defined performance measures. In addition,
the Company recognizes that a strong governance framework is
essential to an effective executive compensation program. This
framework and executive compensation philosophy are established
by an independent Personnel Committee that is advised by an
independent executive compensation consultant.
The following items reflect our commitment to pay for
performance and to maintaining a strong executive compensation
governance framework:
| • | Variable compensation is heavily weighted toward long-term incentives to align compensation with sustained shareholder returns; in fiscal 2010, 100% of long-term incentive awards for named executive officers were performance-based, consisting of performance units and stock options. | |
| • | Incentive plans that are based upon targets that are approved by the Personnel Committee at the beginning of the applicable performance period, and which have minimum thresholds and maximum payment caps. | |
| • | An annual risk assessment conducted by the Company’s management and reviewed and approved by our Personnel Committee to evaluate whether incentive programs drive behaviors that are demonstrably within the risk management parameters the Committee deems prudent. | |
| • | “Double-triggers” for Named Executive Officers for severance benefits and equity acceleration in the event of a change in control with equity grants effective January 1, 2011 and beyond. | |
| • | Elimination of excise tax gross-up payments for Named Executive Officers upon the payment of severance benefits in the event of a change in control. | |
| • | Adoption in 2010 of a recoupment policy to claw back compensation under appropriate circumstances that is applicable to all incentive compensation paid to our Section 16 officers. | |
| • | Adoption in 2010 of a policy that prohibits hedging and other speculative transactions in our common stock by our directors and employees. | |
| • | Reduction of the maximum payout under our Long-Term Incentive Plan from 250% to 200% of target beginning with the 2011-2013 performance cycle, combined with an increase in the minimum payout from 10% to 25% of target, to better align with market practice. |
66
| • | Modification of the components of long-term compensation to increase the portion of long-term compensation that will be derived from performance units from 50% to 60% and decrease the portion that will be derived from restricted stock and stock options to 40%. | |
| • | Addition of awards of restricted stock to our executive officers, beginning in 2011, as a component of long-term compensation. | |
| • | Elimination of club dues as a perquisite for the members of the Office of Chief Executive and elimination of financial counseling as a perquisite for all executive officers, combined with the elimination of gross-up payments on all perquisites, except relocation. |
The Compensation Discussion and Analysis discussion beginning on
page 13 includes additional details about our executive
compensation programs. We believe the information provided above
and within the Compensation Discussion and Analysis section of
this Proxy Statement demonstrates that our executive
compensation programs have been designed appropriately and work
effectively to align management’s interests with the
interests of shareholders. Accordingly, the Board of Directors
requests that you approve our executive compensation programs
and philosophy by approving the following advisory resolution:
RESOLVED that the shareholders of Entergy Corporation approve,
on an advisory basis, the compensation of its Named Executive
Officers, as disclosed in the Company’s Proxy Statement for
the 2011 Annual Meeting of Shareholders, pursuant to the
compensation disclosure rules of the Securities and Exchange
Commission, including the Compensation Discussion and Analysis,
the compensation tables, and any related information found in
the Proxy Statement of Entergy Corporation.
The
Board of Directors unanimously recommends that the shareholders
vote FOR the advisory resolution approving the
Company’s executive compensation.
PROPOSAL 4 —
Advisory Vote on the Frequency of Advisory Votes on Executive
Compensation
Background
of the Proposal
In addition to the foregoing advisory vote on executive
compensation, we are asking that you cast a non-binding advisory
vote on whether we should request a similar advisory vote on
executive compensation every year, every two years, or every
three years. We are requesting this vote as required by
Section 14A of the Exchange Act, which requires that we ask
our shareholders to cast an advisory vote on the frequency with
which we will seek an advisory vote on executive compensation at
least once every six years.
Frequency
Vote on Say on Pay
As discussed above, the Board of Directors believes that our
current executive compensation programs directly link executive
compensation to our financial performance and align the
interests of our executive officers with those of our
shareholders. The Board believes that giving our shareholders
the right to cast an advisory vote every year on their approval
of the compensation arrangements of our named executive officers
is a good corporate governance practice and is in the best
interests of our shareholders, by allowing our shareholders to
provide us with their input on our executive compensation
philosophy, policies and practices as disclosed in our Proxy
Statement every year.
Although the Board recommends that shareholders vote in favor of
an annual advisory vote on executive compensation, our
shareholders will be able to specify one of four choices for the
frequency of the vote on the Say on Pay proposal as follows:
(i) one year, (ii) two years, (iii) three years
or (iv) abstain. Shareholders are not voting to approve or
disapprove of the Board’s recommendation of an annual vote.
The option of one year, two years or three years that receives
the highest number of votes cast by our shareholders will deemed
to be the frequency for the advisory vote on executive
compensation that has been approved by our shareholders.
However, because this vote is advisory and will not be binding
on the Board or the Company, the Board may decide that it is in
the best interests of our shareholders and the Company to hold
an advisory vote on executive compensation more or less
frequently than the option approved by our shareholders.
67
The
Board of Directors recommends the selection of one year as your
preference for the frequency with which shareholders will be
provided an advisory vote on executive
compensation.
| PROPOSAL 5 — | Approval of the 2011 Equity Ownership and Long Term Cash Incentive Plan of Entergy Corporation and Subsidiaries |
On January 28, 2011, the Personnel Committee and our Board
of Directors unanimously approved and adopted, subject to the
approval of our shareholders at the Annual Meeting, the 2011
Equity Ownership and Long Term Cash Incentive Plan of Entergy
Corporation and Subsidiaries (the “Plan”). The Plan
will continue to afford the Personnel Committee the ability to
design compensatory awards that are responsive to our needs, and
include authorization for a variety of awards designed to
advance our interests and long-term success by encouraging stock
ownership among our directors, officers and other employees.
We have historically granted equity awards under various plans,
including most recently under the 2007 Equity Ownership and
Long-Term Cash Incentive Plan (the “Existing Plan”).
The Existing Plan has awards authorized but not granted at the
date of this Proxy Statement. If approved by our shareholders,
the Plan will become effective and no further awards will be
made under the Existing Plan.
Why You
Should Vote in Favor of the Plan
We believe our future success depends on our ability to attract,
motivate and retain high quality employees and directors and
that approval of the Plan is critical to achieving this success.
We would be at a severe competitive disadvantage if we could not
use equity-based awards to recruit and compensate our employees
and directors.
The use of equity as part of our compensation program is also
important to our continued success because it fosters a
pay-for-performance
culture, which is an important element of our overall
compensation philosophy. We believe that equity compensation
motivates employees to create shareholder value because the
value employees realize from equity compensation is based on our
stock performance. Because equity compensation awards under the
Plan will be subject to vesting
and/or
performance criteria, the Plan also aligns the goals and
objectives of our employees with the interests of our
shareholders and promotes a focus on long-term value creation.
We also believe we have demonstrated our commitment to sound
equity compensation practices. We recognize that equity
compensation awards dilute shareholder equity and, therefore, we
have carefully managed our equity incentive compensation to
assure that the cost of equity compensation to our shareholders
is reasonable in relation to the important benefits gained.
Plan
Highlights
The Plan authorizes the Personnel Committee to provide
equity-based compensation in the form of stock options, stock
appreciation rights (“SARs”), restricted stock,
restricted stock units (“RSUs”), performance shares,
performance units, and other awards for the purpose of providing
our directors, officers and other employees incentives and
rewards for superior performance. Some of the key features of
the Plan that reflect our commitment to effective management of
incentive compensation are set forth below and are described
more fully under the heading “Summary of the Plan” and
in the Plan, a copy of which is set forth as Annex A to
this Proxy Statement.
Administration. The Plan will be
administered by the Personnel Committee, which consists entirely
of independent, non-employee directors.
Plan Limits. Total awards under the
Plan are limited to 5,500,000 shares. Shares covered by
awards that are not earned, which are settled in cash or which
are forfeited or terminated for any reason, and options which
expire unexercised, shall again be available for subsequent
awards under the Plan.
No Liberal Recycling Provisions. As
described above, the Plan generally provides that shares that
are not earned, which are settled in cash or are terminated or
forfeited or that relate to options that are not exercised, may
be added back to the total number of shares available under the
Plan. The Plan, however, provides that the following shares will
not be added back to the aggregate plan limit: (1) shares
tendered in payment of the option exercise price;
(2) shares withheld by us to satisfy our tax withholding
obligations; (3) shares that are repurchased by us with
stock
68
option proceeds and (4) stock-settled SARs (i.e., the full
amount of the award is charged against available shares, even if
only a net number of shares is delivered).
Minimum Vesting Periods. The Plan
generally provides that all awards that vest on the basis of
continued employment or service or other time-based criteria
will have a vesting period of at least three years and all
awards that vest on the attainment of performance goals or other
performance-based criteria will have a vesting period of at
least 12 months; provided that up to 5% of the stock
authorized under the Plan may be used for Full Value Share
Awards not subject to these minimum vesting conditions.
No Repricing. We have never repriced
underwater stock options or SARs, and repricing of options and
SARs is prohibited without shareholder approval under the Plan.
Change in Control Definition. The Plan
includes a definition of “change in control.” In
general, a change of control will be deemed to have occurred if:
| • | a person or group buys or otherwise acquires 30% or more of our common stock; | |
| • | individuals who constitute our Board of Directors as of the effective date of the Plan cease for any reason to constitute at least a majority of our Board of Directors, unless their replacements are approved as described in the Plan; | |
| • | we consummate a reorganization, merger, consolidation or significant sale of assets resulting in a substantial change in our ownership or directors; or | |
| • | our shareholders approve our complete liquidation or dissolution or we complete the sale of all or substantially all of our assets. |
Other Features.
| • | The Plan also provides that no stock options or SARs will be granted with an exercise or base price less than the fair market value of our common stock on the date of grant. | |
| • | The Plan is designed to allow awards made under the Plan to qualify as performance-based compensation under Section 162(m) of the Code. | |
| • | All awards under the Plan are subject to the “clawback” policy adopted by our Board in 2010. | |
| • | The Plan imposes “double-trigger” vesting for equity awards following a change in control. |
In addition to providing for these key features in the Plan, our
historical grants under our equity plans illustrate our
commitment to appropriately managing equity compensation. From
January 2008 to January 2011, we have awarded stock options and
restricted stock averaging .6% of shares outstanding on an
annual basis.
If the Plan is approved, our full dilution level on
March 8, 2011 will be 3.1%. This level of full dilution
assumes all 5,500,000 shares will actually be issued under
the Plan. Management and our Board of Directors are cognizant of
dilution levels and strive to maintain dilution at an
appropriate level.
From January 1, 2011 to March 8, 2011, 30,132 stock
options, with an average exercise price of $88.86, expired
without being exercised. Thus, as of March 8, 2011:
| • | There are a total of 178,777,374 of our common shares outstanding; | |
| • | There are 11,288,487 stock options outstanding, with an average exercise price of $73.30 and average remaining term of 5.2 years; | |
| • | There are a total of 166,800 full value awards outstanding, all of which are restricted shares; and | |
| • | There are 1,019,960 common shares remaining available under our Existing Plan. If the Plan is approved by our shareholders, the Plan will become effective and no further awards will be made under the Existing Plan. |
69
SUMMARY
OF THE PLAN
The following summary of the material provisions of the Plan is
not intended to be exhaustive and is qualified in its entirety
by the terms of the Plan, a copy of which is set forth as
Annex A to this Proxy Statement.
Term
If approved by the shareholders, the Plan will be effective as
of the date of shareholder approval. No awards shall be granted
under the Plan later than 10 years from the effective date.
Administration
Unless the Board provides otherwise, the Personnel Committee
shall administer the Plan in accordance with its terms and shall
have all powers, authority and discretion necessary or proper
for such purpose, including the sole and exclusive power and
discretion to:
| • | grant awards to participants under the Plan, to select the participants to receive awards, to determine the type, size, terms and conditions of the awards to be made to each participant selected, to determine the time when awards to participants will be granted, and to prescribe the form of the agreements embodying awards made under the Plan; | |
| • | determine all questions arising in the administration of the Plan including, but not limited to, the power and discretion to determine eligibility and participation of any individual; | |
| • | make factual determinations, construe and interpret the Plan, including the intent of the Plan and any ambiguous, disputed or doubtful provisions of the Plan; and | |
| • | adopt such rules and regulations as it shall deem desirable or necessary for the administration of the Plan. |
Notwithstanding the foregoing, the Plan shall be administered by
the entire Board of Directors with respect to any award granted
to a non-employee director.
Eligibility
Eligibility under the Plan is limited to the Company’s
non-employee directors and to officers and employees of Entergy
and any corporation 80% or more of whose stock (based on voting
power) or value is owned, directly or indirectly, by Entergy
(approximately 300 individuals). The Committee, in its sole
discretion, will determine which individuals are eligible to
participate in the Plan, provided that the Board will make all
determinations with respect to any award granted to a
non-employee director.
Securities
Subject to the Plan
The number of shares of Company common stock that may be issued
under the Plan may not exceed, in the aggregate,
5,500,000 shares of which no more than
2,000,000 shares shall be issued pursuant to the exercise
of Incentive Stock Options.
As described below, the Plan also contains limits on the number
of shares that may be issued pursuant to various types of awards
under the Plan. Any award, or portion thereof, which is settled
in cash, shall not be applied against the maximum number of
shares that can be issued under the Plan. Shares covered by
awards under the Plan which are not earned, or which are
forfeited or terminated for any reason, and options which expire
unexercised or which are exchanged for other awards under the
Plan, shall again be available for subsequent awards under the
Plan. The Plan, however, provides that the following shares will
not be added back to the aggregate plan limit: (1) shares
tendered in payment of the option exercise price;
(2) shares withheld by us to satisfy our tax withholding
obligations; (3) shares that are repurchased by us with
stock option proceeds and (4) stock-settled SARs (i.e., the
full amount of the award is charged against available shares,
even if only a net number of shares is delivered).
Notwithstanding any other provision of the Plan, the Committee
shall make or provide for such adjustments to the Plan, to the
number and class of shares available thereunder or to any
outstanding Awards, Award limits set forth in the Plan, and in
the exercise, strike, or purchase price per share under any
outstanding Award, as it shall deem
70
appropriate to prevent dilution or enlargement of rights,
including adjustments in the event of any change in the common
stock, whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split,
split-up,
split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of Entergy, or in the
event of payment of a dividend or distribution to the
shareholders of Entergy in a form other than common stock
(excepting normal cash dividends) that has a material effect on
the common stock.
Limits on
Awards to Participants
The total number of shares of common stock any single
participant may receive in any calendar year pursuant to an
award of options or SARs granted under the Plan shall not exceed
1,500,000.
The total number of restricted share and restricted share unit
awards that any individual may receive in any calendar year
under the Plan is 500,000.
The value of performance units payable to a single participant
who is described as a “covered employee” under the
Code may not exceed 0.5% of the Company’s operating cash
flow during any applicable performance period.
Stock
Options
The Plan authorizes awards of stock options and SARs. Subject to
the limits of the Plan, the Committee may grant options for such
number of shares and having such terms as the Committee
designates.
Options shall vest and be exercisable in the time-frame
determined by the Committee, which shall be set forth in the
Award agreement. No option shall be exercisable after ten years
from the date such option is granted.
The option price determined by the Committee shall not be less
than the fair market value on the date the option is granted.
Once determined by the Committee, no price of any option shall
be decreased, other than pursuant to customary adjustment
provisions, unless that change is authorized by the
Company’s shareholders.
Under the Plan, to the extent permitted under applicable law and
the relevant option award agreement, the exercise price of an
option shall be paid in full at the time of exercise at the
election of the participant (i) in cash, (ii) in
shares of common stock, (iii) in any combination of the
foregoing, (iv) through the withholding of shares of common
stock that would otherwise be issuable in connection with the
exercise of the option, (v) through the delivery of
irrevocable instructions to a broker to deliver promptly to the
Company an amount equal to the aggregate exercise price of the
option or (vi) any other legal form of payment that the
Committee may deem appropriate. The Committee may limit the
extent to which shares of common stock may be used in exercising
Options.
Under no circumstances will any option be exercisable after it
has terminated or expired.
Stock
Appreciation Rights (SARs)
An SAR entitles the holder, upon exercise of the SAR, to receive
payment of an amount determined by multiplying (i) the
excess of the fair market value of a share of common stock on
the date of exercise of the SAR over the strike price
established for such SAR on its grant date, by (ii) the
number of shares as to which such SAR will have been exercised.
Payment of the amount determined under the forgoing formula may
be made, in the discretion of the Committee, in cash, in shares
of unrestricted common stock (valued at their fair market value
on the date of exercise), or a combination thereof. SARs may be
granted in tandem with all or any portion of a related Option or
may be granted independently of any Option. The strike price for
each SAR shall be established in the discretion of the
Committee; provided, however, that (i) the strike price per
share subject to a SAR granted in connection with an Option
shall be the exercise price per share under the related Option
and (ii) the strike price per share subject to a
freestanding SAR shall be not less than the fair market value of
a share of common stock on the grant date of the SAR. No SAR may
be exercised after ten years from the date such SAR is granted.
Restricted
Stock Awards
Subject to the limits of the Plan, the Committee may grant
restricted shares for such number and having such terms as the
Committee designates. The Committee shall determine the nature
and extent of the restrictions on
71
grants of restricted shares, the duration of such restrictions,
and any circumstances under which restricted shares will be
forfeited. Holders of restricted shares shall be entitled to any
voting rights relative to the restricted shares. Dividends paid
with respect to the restricted shares shall be subject to the
same restrictions on transfer and risks of forfeiture as
applicable to the underlying restricted shares as well as any
other transfer, forfeiture provisions or reinvestment
requirements (including, without limitation, the reinvestment of
such dividends in the form of common stock or equity awards) as
the Committee may, in its discretion, determine.
Equity
Awards
Subject to the limits of the Plan, the Committee may grant an
award of a unit whose value is related to the value of shares of
the Company’s common stock but does not represent actual
shares of common stock (“Equity Awards”). Equity
Awards shall be allocated to a participant’s Equity Award
account subject to such restriction, terms and conditions as the
Committee, in its discretion, may determine.
All Equity Awards granted to a participant shall mature and be
distributed at such time as earned, vested and no longer subject
to a timely and binding deferral election. All Equity Awards
will be paid out in the form specified in the related award
agreement. Dividend equivalents may be awarded in connection
which may be paid currently or on a deferred basis. Dividend
equivalents shall be subject to all conditions and restrictions
of the underlying Awards to which they relate, including
restrictions on transfer and risks of forfeiture as applicable
to the underlying Award and any other provisions or reinvestment
requirements.
In the discretion of the Committee, the Committee may award a
participant Equity Awards in the form of RSUs, which shall be
subject to such terms, restrictions on transfer and such
forfeiture conditions as the Committee deems appropriate.
Performance
Awards
The Committee may award Performance Awards represented by units
denominated on the date of grant either in shares of common
stock (Performance Shares) or in specified dollar amounts
(Performance Units). At the time of making grants of Performance
Awards, the Committee shall establish such terms and conditions
as it shall determine applicable to such Awards. Recipients of
Performance Awards are not required to provide consideration
other than the rendering of service. At the time a Performance
Award is granted, the Committee shall determine, in its sole
discretion, one or more performance periods and performance
goals to be achieved during the applicable performance periods,
as well as such other restrictions and conditions as the
Committee deems appropriate. In the case of Performance Units,
the Committee shall also determine a target unit value or a
range of unit values for each Award. Except to the extent
inconsistent with the requirements for Awards intended to
qualify as performance-based compensation for purposes of Code
Section 162(m), the Committee may adjust performance goals
to reflect an event either not directly related to the
operations of Entergy or not within the reasonable control of
Entergy’s management, or a change in accounting standards
required by U.S. generally accepted accounting principles.
The performance goals to be used in connection with determining
whether to grant Performance Awards under the Plan will be based
upon or may relate to one or any combination of business
criteria, such as performance, efficiency, or profitability,
measured by specified levels of growth, in one or more of the
following, as the Committee may determine: earnings measures
(including, for example, basic earnings per share, diluted
earnings per share, net income, pre-tax income, operating
income, earnings before interest, taxes, depreciation and
amortization or any combination thereof, and net operating
profits after taxes); stock price, shareholder return measures
(including, for example, total shareholder return, economic
value added, cumulative shareholder value added, return on
equity, return on capital employed, return on invested capital,
return on assets, dividend payout ratio and cash flow, such as
operating cash flows, free cash flow, discounted cash flow
return on investment and cash flow in excess of cost of capital
or any combination thereof); market share, sales, costs, fuel
cost per million BTU, costs per kilowatt hour, retained
earnings, budget achievement, revenue measures (including, for
example, revenue and direct margin); valuation measures
(including, for example, stock price increase, price to book
value ratio, and price to earnings ratio); capital and risk
measures (including, for example, debt to equity ratio, debt
ratio, equity ratio, dividend payout as percentage of net income
and diversification of business opportunities); productivity,
return on sales, completion of acquisitions, cash available to
parent, economic value added (EVA), expense control
72
(including, for example, operations & maintenance
expense, total expenditures, expense ratios, and expense
reduction); expense spending, capital/kwh, capital spending,
gross margin, net margin, market capitalization, market value,
profit margin, customer measures (including, for example,
customer satisfaction, customer growth, service cost, service
levels, responsiveness, bad debt collections or losses, and
reliability, such as outage frequency, outage duration, and
frequency of momentary outages); employee satisfaction; project
measures (including, for example, completion of key milestones);
production measures (including, for example, generating capacity
factor, performance against the INPO index, generating
equivalent availability, heat rates and production cost). 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 Award and payment of any Award under the Plan with
respect to a relevant Performance Period shall be contingent
upon the attainment of the applicable Performance Goals.
Approval of the Plan will also constitute approval, for purposes
of Section 162(m) of the Code, of the business criteria
that may be used in connection with the performance goals and
the other material terms contained in the Plan that are to be
used in connection with Performance Awards thereunder and that
are intended to qualify as “performance-based”
compensation for purposes of Section 162(m).
Other
Stock-Based Awards
The Committee may make other stock-based awards (“Other
Awards”) as it deems appropriate. The terms and conditions
of any Other Award shall be set forth in the applicable Award
agreement or otherwise by the Committee. The circumstances
(including any applicable performance goals) under which, and
the number, if any, of shares of common stock or the amount of
cash that shall then become payable to the holder of the Other
Award shall be set forth in the applicable agreement or
otherwise.
Transferability
Generally, no award under the Plan shall be transferable other
than by will or the laws of descent and distribution.
Amendment
The Committee can amend the Plan in whole or in part at any
time, including the adoption of amendments deemed necessary or
desirable to qualify the awards under the laws of various states
and under rules and regulations promulgated by the SEC with
respect to officers and directors who are subject to the
provisions of Section 16 of the Exchange Act, to comply
with any applicable provisions of the Code, including Code
Section 162(m), or to correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any
award granted under the Plan, without the approval of
Company’s shareholders.
However, the Committee cannot take any action without the
approval of Company’s shareholders that would cause the
Plan to no longer comply with any regulatory requirements,
materially increase benefits accruing to participants,
materially increase the number of securities that may be issued
under the Plan, or materially modify the requirements for
participation in the Plan. In addition, if exemption from Code
Section 162(m) deduction limits is to be continued, any
such amendment shall be made with Board and shareholder
approval, if necessary to comply with the requirements for the
qualified performance-based compensation exception under Code
Section 162(m).
Change in
Control
If within 24 months following the effective date of a
Change in Control (as defined in the Plan), a participant’s
System employment is terminated by an Entergy System company
without Cause or by Participant with Good Reason (such that the
Participant is no longer employed by any Entergy System
company), the following shall apply:
(a) with respect to Restricted Shares or other Awards
subject to restrictions and issued under the Plan and
outstanding as of the effective date of the Change in Control,
all restrictions imposed on such Awards shall lapse effective as
of the date the grantee’s employment is terminated;
73
(b) if during a performance period(s) applicable to a
Performance Award granted under the Plan, and except to the
extent otherwise paid in accordance with the terms of an
individual agreement, a grantee shall forfeit the Performance
Award and instead shall be entitled to receive a single-sum
severance payment calculated using the average annual number of
performance shares or performance units, as applicable, the
grantee would have been entitled to receive under the Plan with
respect to the two most recent Performance Periods that precede
and do not include the grantee’s date of termination of
system company employment. Such severance payment shall be
determined by dividing by two the sum of the grantee’s
annual target pay out levels (i.e., as if target performance
under the Award was obtained) with respect to such two most
recent Performance Periods; and
(c) any Options outstanding as of the effective date of the
Change in Control that are not vested shall become fully vested
and exercisable as of the date grantee’s employment is
terminated, and any such vested and exercisable Options may be
exercised within the remaining term of the Option award.
Notwithstanding the foregoing, Incentive Stock Options shall be
subject to the limitations under Section 422 of the Code
including, without limitation, the applicable time limitations.
Federal
Income Tax Effects
The federal income tax consequences applicable to the Company
and grantees in connection with awards under the Plan are
complex and depend, in large part, on the surrounding facts and
circumstances. Under current federal income tax laws, a
participant will generally recognize income, and the Company
will be entitled to a deduction, with respect to grants of
performance awards, options, restricted stock, Equity Awards,
performance awards, and other stock-based awards as follows:
| • | Payments in Respect of Performance Awards. Any cash and/or the fair market value of any common stock received as payments in respect of performance awards under the Plan will constitute ordinary income to the officer or employee in the year in which paid, and the Company will be entitled to a deduction in the same amount. | |
| • | Incentive Stock Options. The grant of an Incentive Stock Option will not result in any immediate tax consequences to the Company or the optionee. An optionee will not realize taxable income, and the Company will not be entitled to any deduction, upon the timely exercise of an Incentive Stock Option, but the excess of the fair market value of the common stock acquired over the exercise price will be an item of tax preference for purposes of the alternative minimum tax. If the optionee does not dispose of the common stock acquired within one year after its receipt (or within two years after the date the option was granted), the gain or loss realized on the subsequent disposition of the common stock will be treated as long-term capital gain or loss and the Company will not be entitled to any deduction. If the optionee disposes of the common stock acquired less than one year after its receipt (or within two years after the option was granted), the optionee will realize ordinary income in an amount equal to the lesser of (i) the excess of the fair market value of the common stock acquired on the date of exercise over the exercise price, or (ii) if the disposition is a taxable sale or exchange, the amount of any gain realized. Upon such a disqualifying disposition, the Company will be entitled to a deduction in the same amount and at the same time as the optionee realizes such ordinary income. Any amount realized by the optionee in excess of the fair market value of the common stock on the date of exercise will be taxed to the optionee as capital gain. | |
| • | Nonqualified Stock Options. The grant of a Nonqualified Stock Option will not result in any immediate tax consequences to the Company or the optionee. Upon the exercise of a Nonqualified Stock Option, the optionee will generally realize ordinary income equal to the excess of the fair market value of the common stock acquired over the exercise price. The Company will be entitled to a deduction at the same time as, and in an amount equal to, the income realized by the optionee. | |
| • | Restricted Stock. A grantee generally will not realize taxable income upon an award of restricted stock. However, a grantee who receives restricted stock, either as a grant or in payment of a performance award, will realize as ordinary income at the time of the lapse of the restrictions an amount equal to the fair market value of the common stock at the time of such lapse. Alternatively, and if permitted by the Committee, a grantee may elect to realize ordinary income on the date of receipt of the restricted common stock. At the |
74
| time the grantee realizes ordinary income, the Company will be entitled to deduct the same amount as the ordinary income realized by the grantee. |
| • | Internal Revenue Code Section 162(m). Under Section 162(m) of the Internal Revenue Code, the allowable federal income tax deduction by the Company for compensation paid to certain of its executive officers is limited to $1 million per year per officer. “Qualified performance-based compensation” is generally excluded from this deduction limit. Payments or grants (excluding grants of restricted stock that vest solely upon the passage of time or pure equity grants or stock bonuses) under the Plan are intended to qualify as performance-based compensation under Section 162(m) and the applicable regulations, which require the Plan to be approved by shareholders. | |
| • | Code Section 409A. To the extent that any award under the Plan is or may be considered to involve a nonqualified deferred compensation plan or deferral subject to Code Section 409A, the terms and administration of such award shall comply with the provisions of such section and final regulations issued thereunder. |
Director
Grants
The Plan authorizes awards to non-employee directors. The
Company currently expects that any future awards issued under
the Plan to non-employee directors will be made on terms
generally consistent with past practice in amounts determined by
a fixed formula to be established by the Board of Directors.
The
Board of Directors unanimously recommends that the shareholders
vote FOR the proposal to approve the 2011 Entergy
Corporation Equity Ownership and Long Term Cash Incentive Plan.
Proxies solicited by the Board of Directors will be voted
“FOR” this proposal unless a contrary vote is
specified.
75
OTHER
INFORMATION
Shareholder
Proposals for 2012 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 23, 2011. Also, under our Bylaws, 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 7, 2012 and not earlier than
February 10, 2012.
Annual
Report on
Form 10-K
A copy of our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010, as filed with
the SEC, 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 SEC’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 24, 2011
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ANNEX A
2011
EQUITY OWNERSHIP AND LONG TERM CASH INCENTIVE PLAN
OF ENTERGY CORPORATION AND SUBSIDIARIES
OF ENTERGY CORPORATION AND SUBSIDIARIES
ARTICLE I
PURPOSE,
ESTABLISHMENT AND TERM OF PLAN
1.1 Purpose. The purpose of
this 2011 Equity Ownership and Long Term Cash Incentive Plan of
Entergy Corporation and Subsidiaries (the “Plan”) is
to promote the interests of Entergy Corporation
(“Entergy”) and its shareholders by strengthening
Entergy’s ability to (i) attract, motivate and retain
executive personnel and other select employees and directors of
outstanding ability upon whose judgment, initiative and efforts
the financial success and growth of the business of Entergy
largely depend; (ii) provide additional incentive, by means
of performance-related incentives, for key personnel and
directors to achieve longer-range performance goals; and
(iii) align further the interests of Entergy’s
management with the shareholders by enabling such individuals to
participate in the long-term growth and financial success of
Entergy.
1.2 Effective Date and
Duration. This Plan shall be effective as of
the Effective Date, as set forth in Section 2.11, and shall
govern Awards granted on or after the Effective Date. The Plan
shall remain in effect until the earlier of (a) its
termination by action of the Committee or the Board or
(b) the date on which all of the shares of Common Stock
available for issuance or reissuance under the Plan have been
issued or reissued, as the case may be, and all restrictions on
such shares under the terms of the Plan and the agreements
evidencing Awards granted under the Plan have lapsed. Provided,
however, that Awards shall be granted, if at all, within ten
(10) years following the Effective Date, and Incentive
Stock Options, if any, shall be granted not later than ten
(10) years following the date of Board approval of the Plan.
ARTICLE II
DEFINITIONS
The following words and phrases shall have the respective
meanings under the Plan as set forth below, unless the context
clearly requires a different meaning:
2.1 “Award” shall mean the
beneficial interest in or right to any Option, SAR, Restricted
Share, Equity Award, Performance Award or Other Stock-Based
Award granted from time to time under the Plan by the Committee,
subject to such restrictions, terms and conditions as the
Committee may determine.
2.2 “Board” shall mean the Board of
Directors of Entergy.
2.3 “Cause” shall mean:
(a) the willful and continuing failure by Participant to
substantially perform Participant’s duties (other than such
failure resulting from the Participant’s incapacity due to
physical or mental illness or any such actual or anticipated
failure after the issuance of a Notice of Termination for Good
Reason by the Participant) that has not been cured within thirty
(30) days after a written demand for substantial
performance is delivered to the Participant by the board of
directors of the Employer, which demand specifically identifies
the manner in which the board believes that the Participant has
not substantially performed the Participant’s
duties; or
(b) the willful engaging by the Participant in conduct
which is demonstrably and materially injurious to any System
Company, monetarily or otherwise; or
(c) conviction of, or entrance of a plea of guilty or
nolo contendere to, a felony or other crime which has or
may have a material adverse affect on Participant’s ability
to carry out Participant’s duties or upon the reputation of
any System Company; or
(d) a material violation by Participant of any agreement
Participant has with a System Company; or
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(e) unauthorized disclosure by Participant of the
confidences of any System Company.
For purposes of clauses (a) and (b) of this
definition, no act, or failure to act, on the Participant’s
part shall be deemed “willful” unless done, or omitted
to be done, by the Participant not in good faith and without
reasonable belief that the Participant’s act, or failure to
act, was in the best interest of the Employer.
2.4 “Change in Control” shall mean:
(a) the purchase or other acquisition by any person, entity
or group of persons, acting in concert within the meaning of
Sections 13(d) or 14(d) of the Securities Exchange Act of
1934 (“Act”), or any comparable successor provisions,
of beneficial ownership (within the meaning of
Rule 13d-3
promulgated under the Act) of thirty percent (30%) or more of
either the shares of common stock outstanding immediately
following such acquisition or the combined voting power of
Entergy Corporation’s voting securities entitled to vote
generally and outstanding immediately following such
acquisition, other than any such purchase or acquisition in
connection with a Non-CIC Merger (defined in subsection (b)
below);
(b) the consummation of a merger or consolidation of
Entergy Corporation, or any direct or indirect subsidiary of
Entergy Corporation with any other corporation, other than a
Non-CIC Merger, which shall mean a merger or consolidation
immediately following which the individuals who comprise the
Board immediately prior thereto constitute at least a majority
of the Board, or the board of directors of the entity surviving
such merger or consolidation, or the board of directors of any
parent thereof (unless the failure of such individuals to
comprise at least such a majority is unrelated to such merger or
consolidation);
(c) the stockholders of Entergy Corporation approve a plan
of complete liquidation or dissolution of Entergy Corporation or
there is consummated an agreement for the sale or disposition by
Entergy Corporation of all or substantially all of Entergy
Corporation’s assets; or
(d) any change in the composition of the Board such that
individuals who on the Effective Date constitute the Board and
any new director (other than a director whose initial assumption
of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of Entergy Corporation)
whose appointment or election by the Board or nomination for
election by Entergy Corporation’s stockholders was approved
or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors on such
Effective Date or whose appointment, election or nomination for
election was previously so approved or recommended, cease for
any reason to constitute at least a majority thereof.
Provided, however, that no Change in Control shall be deemed to
occur solely by virtue of (i) the insolvency or bankruptcy
of Entergy Corporation; or (ii) the transfer of assets of
Entergy Corporation to an affiliate of Entergy Corporation,
provided such affiliate assumes the obligations under the Plan
and agrees to continue uninterrupted the rights of the
Participants under the Plan; or (iii) the consummation of
any transaction or series of integrated transactions immediately
following which the record holders of the common stock of
Entergy Corporation immediately prior to such transaction or
series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or
substantially all of the assets of Entergy Corporation
immediately following such transaction or series of transactions.
2.5 “Change in Control Period” shall
mean the period commencing on the date of a Potential Change in
Control and ending on the earlier of: (a) twenty-four
(24) calendar months following the date of a Change in
Control event, or (b) the date on which the Change in
Control event contemplated by the Potential Change in Control is
terminated.
2.6 “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 regulation under
such section.
2.7 “Committee” shall mean the duly
designated Personnel Committee of the Board, or such other
committee of the Board as the Board may designate to administer
this Plan. With respect to Awards granted to Outside Directors,
the term “Committee” shall mean the Board. If no
committee of the Board has been appointed to administer the
Plan, the Board shall exercise all of the powers of the
Committee granted herein, and, in any event,
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the Board may in its discretion exercise any or all of such
powers in accordance with the same terms, conditions and
limitations applicable to the Committee, unless otherwise
specified in this Plan document.
2.8 “Common Stock” shall mean the
common stock, par value of $0.01 per share, of Entergy.
2.9 “Covered Participant” shall mean
a Participant who is a “covered employee” as defined
in Code Section 162(m)(3), or who the Committee believes
will be such a covered employee for a Plan Year.
2.10 “Dividend Equivalent” shall
mean a credit, made at the discretion of the Committee or as
otherwise provided by the Plan, and entitling the Participant to
receive cash, shares of Common Stock, or other property equal in
value to the cash or Common Stock dividend paid on one share of
Common Stock for each share of Common Stock represented by an
Award held by such Participant.
2.11 “Effective Date” shall mean
May 6, 2011, or such other date as the Plan shall be
approved by the shareholders of Entergy.
2.12 “Employer” shall mean with
respect to a given Participant and a given Award, the System
Company by which such Participant is employed at the time such
Award is granted under this Plan, unless otherwise determined by
the Committee.
2.13 “Entergy” shall mean Entergy
Corporation, a Delaware corporation, or any successor thereto.
2.14 “Equity Award” shall mean an
Award of a unit whose value is related to the value of shares of
Common Stock but does not represent actual shares of Common
Stock at the time such an Award is granted, such as a Restricted
Share Unit, as described in Article VIII of the Plan.
2.15 “Equity Award Account” shall
mean the record of Equity Awards granted to a Participant under
the Plan solely for accounting purposes, and shall not require a
segregation of any Entergy System assets.
2.16 “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended from time to time,
and interpretive rulings and regulations.
2.17 “Fair Market Value” shall mean:
(a) with respect to Common Stock, the closing transaction
price of a share of Common Stock, as reported on the New York
Stock Exchange on the date as of which such value is being
determined, or on the following trading date if that date is not
a trading date, except in the case of an Award for which a
Performance Period is established, in which case the preceding
trading date shall be used if the last day of the Performance
Period is not on a trading date. The Committee may designate a
different time or method of determining the Fair Market Value,
if appropriate, because of changes in the hours and methods of
trading on the New York Stock Exchange. If the Common Stock
ceases to be listed on the New York Stock Exchange, the
Committee shall designate an alternative exchange, stock market
or method of determining the Fair Market Value of the Common
Stock.
(b) with respect to any property (including securities)
other than Common Stock, the fair market value of such property
as the Committee, in its discretion, may determine to be the
Fair Market Value of such property. The Committee may vary its
method of determination of the Fair Market Value of such other
property, as provided in this Subsection 2.17(b), for different
purposes under the Plan.
2.18 “Full Value Share Award”
shall mean a Restricted Share or a Performance Award, Equity
Award or Other Stock-Based Award that represents a full share of
Common Stock and that is settled or paid in shares of Common
Stock. A Full Value Share Award shall not include SARs or
Options.
2.19 “Good Reason” shall mean the
occurrence, without the Participant’s express written
consent, of any of the following events:
(a) the substantial reduction or alteration in the nature
or status of the Participant’s duties or responsibilities
from those in effect on the date immediately preceding the first
day of the Change in Control Period, other than an insubstantial
and inadvertent act that is remedied by the System Company
employer promptly
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after receipt of notice thereof given by the Participant and
other than any such alteration primarily attributable to the
fact that Entergy may no longer be a public company;
(b) a reduction of five percent (5%) or more in
Participant’s base salary as in effect immediately prior to
commencement of a Change in Control Period, which shall be
calculated exclusive of any bonuses, overtime, or other special
payments, but including the amount, if any, the Participant
elects to defer under: (1) a cash or deferred arrangement
qualified under Code Section 401(k); (2) a cafeteria
plan under Code Section 125; (3) the Executive
Deferred Compensation Plan of Entergy Corporation and
Subsidiaries, or any successor or replacement plan; and
(4) any other nonqualified or statutory deferred
compensation plan, agreement, or arrangement in which the
Participant may hereafter participate or be a party;
(c) requiring Participant to be based at a location outside
of the continental United States and other than his primary work
location as it existed on the date immediately preceding the
first day of the Change in Control Period, except for required
travel on business of any System Company to an extent
substantially consistent with the Participant’s present
business obligations;
(d) failure by System Company employer to continue in
effect any compensation plan in which Participant participates
immediately prior to the commencement of the Change in Control
Period and that is material to Participant’s total
compensation, including this Plan, incentive compensation, bonus
and other plans or any substitute plans adopted prior to the
Change in Control Period, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by System Company
employer to continue Participant’s participation therein
(or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount and
timing of payment of benefits provided and the level of the
Participant’s participation relative to other participants,
as existed immediately prior to the Change in Control Period;
(e) any material reduction in the benefits provided to the
Participant under any of the System Company’s pension,
savings, life insurance, medical, health and accident, or
disability plans in which Participant was participating
immediately prior to the Change in Control Period, the taking of
any other action by System Company employer which would directly
or indirectly materially reduce any of such benefits or deprive
Participant of any material fringe benefit enjoyed by
Participant immediately prior to commencement of the Change in
Control Period, or a material reduction in the number of paid
vacation days to which Participant is entitled on the basis of
years of service with the System in accordance with the System
Company’s normal vacation policy in effect immediately
prior to the Change in Control Period; or
(f) any purported termination of Participant’s
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 2.24
hereof; for purposes of this Plan, no such purported termination
shall be effective in depriving Participant of the right to
terminate employment for Good Reason.
Participant’s right to terminate his employment for Good
Reason shall not be affected by Participant’s incapacity
due to physical or mental illness. Participant’s continued
employment for up to 180 days following the date
Participant knew or should have known of the event giving rise
to the claim of Good Reason shall not constitute consent to, or
a waiver of rights with respect to, any act or failure to act
constituting Good Reason. For purposes of this Plan a
Participant’s employment shall be deemed terminated by the
Employer with Good Reason only if the Participant has incurred a
“separation from service” within the meaning of Code
Section 409A.
2.20 “Grant Date” shall mean the
date specified by the Committee on which a grant of an Award
shall become effective, which date shall not be earlier than the
date on which the Committee acts with respect to such grant.
2.21 “Incentive Stock Option” means
an Option that is intended to be, is designated in the Award
grant and agreement as, and qualifies as an incentive stock
option within the meaning of Section 422(b) of the Code.
2.22 “Key Employee” shall mean one
of the following: (a) a System officer having annual
compensation greater than $140,000 (adjusted for inflation
pursuant to Code Section 416(i) and limited to the top 50
System officers), (b) a five percent owner of Entergy, or
(c) a one percent owner of Entergy having annual System
Company
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compensation of more than $150,000, subject to such other
determinations made by the Committee, in its sole discretion, in
a manner consistent with the regulations issued under Code
Section 409A.
2.23 “Nonstatutory Stock Option”
means an Option not intended to be an incentive stock option
within the meaning of Section 422(b) of the Code.
2.24 “Notice of Termination” shall
mean a notice that shall indicate the specific termination
provision in this Plan relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Participant’s employment
under the provision so indicated. Further, a Notice of
Termination for Cause addressed to a System Management
Participant is required to include a copy of a resolution duly
adopted by the Board (after reasonable notice to the System
Management Participant and an opportunity for the System
Management Participant, together with his or her counsel, to be
heard before the Board) finding that, in the good faith opinion
of the Board, the System Management Participant was guilty of
conduct set forth in the definition of Cause herein, and
specifying the particulars thereof in detail.
2.25 “Operating Cash Flow” shall
mean the amount of operating cash flow for any given Performance
Period, as determined by the Committee based on Entergy
Corporation’s financial statements and in accordance with
generally accepted accounting principles.
2.26 “Options” shall mean Incentive
Stock Options or Nonstatutory Stock Options, or both, as
described in Article VI of the Plan.
2.27 “Option Price” shall mean, with
respect to each share of Common Stock subject to an Option, the
price fixed by the Committee at which the share may be purchased
pursuant to the exercise of the Option.
2.28 “Other Stock-Based Award” shall
mean an Award other than an Option, SAR, Restricted Share, or
Equity Award, granted from time to time under the Plan by the
Committee subject to such restrictions, terms and conditions as
the Committee may determine and denominated or payable in,
valued in whole or in part by reference to, or otherwise based
on or related to, shares of Common Stock.
2.29 “Outside Director” shall mean a
member of the Board who is not an officer or employee of a
System Company.
2.30 “Participant” shall mean a
person who is selected for an Award under this Plan, in
accordance with Article V.
2.31 “Performance Award” shall mean
an Award awarded subject to attainment of Performance Goals
during the applicable Performance Period, as more fully
described in Article IX.
2.32 “Performance Goals” shall mean
the goals for a Performance Period as established by the
Committee and against which performance will be measured.
2.33 “Performance Period” shall mean
the period designated by the Committee during which Performance
Goals must be attained.
2.34 “Plan” shall mean this 2011
Equity Ownership and Long Term Cash Incentive Plan of Entergy
Corporation and Subsidiaries, as amended from time to time.
2.35 “Potential Change in Control”
shall be deemed to have occurred if the event set forth in any
one of the following paragraphs shall have occurred:
| • | Entergy or any affiliate or subsidiary company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; | |
| • | the Board adopts a resolution to the effect that, for purposes of this Plan, a Potential Change in Control has occurred; | |
| • | any System Company or any person or entity with the wherewithal to effectuate such action, publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; or |
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| • | any person or entity becomes the beneficial owner (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended from time to time), either directly or indirectly, of securities of Entergy Corporation representing 20% or more of either the then outstanding shares of common stock of Entergy Corporation or the combined voting power of Entergy Corporation’s then outstanding securities (not including in the calculation of the securities beneficially owned by such person or entity any securities acquired directly from Entergy Corporation or its affiliates). |
2.36 “Restricted Period” shall mean
the period designated by the Committee during which Restricted
Shares or Restricted Share Units shall be subject to a
substantial risk of forfeiture and may not be sold, exchanged,
assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of, except as otherwise provided in the
Plan and as the Committee may determine.
2.37 “Restricted Shares” shall mean
shares of Common Stock that are awarded subject to restrictions
on the holder’s right to sell, transfer, pledge or assign
such shares and with such other restrictions as the Committee
may determine, all as described in Article VII of the Plan.
2.38 “Restricted Share Units” shall
mean Equity Awards that are subject to such restrictions on
transfer and such forfeiture conditions as the Committee deems
appropriate, all as described in Article VIII of the Plan.
2.39 “Retirement” shall mean the
earlier of the attainment of (a) age 65 or
(b) age 55 with at least 10 years of vesting
service, as determined in accordance with the terms of the
Entergy Corporation sponsored qualified defined benefit pension
plan in which the Participant participates.
2.40 “SAR” or “Stock
Appreciation Right” shall mean an Award representing,
for each share of Common Stock subject to such SAR, a right
granted to a Participant pursuant to Article VI of the Plan
to receive payment in any combination of shares of Common Stock
or cash of an amount equal to the excess, if any, of the Fair
Market Value of a share of Common Stock on the date of exercise
over the strike price established by the Committee in its sole
discretion on the Grant Date of the Award and which shall be no
less than the Fair Market Value of a share of Common Stock on
the Grant Date.
2.41 “Specified Employee” shall mean
a Participant who is a Key Employee at a time when the Employer
or a member of any controlled group of corporations that
includes the Employer is publicly traded on an established
securities market whether inside or outside the United States.
Whether a Participant is a Specified Employee shall be
determined under rules established by the Committee in
accordance with regulations under Code Section 409A. All
determinations by the Committee with regard to whether a
Participant is a Specified Employee shall be final and binding
on the Participant for purposes of the Plan.
2.42 “System” shall mean Entergy and
all System Companies and, except in determining whether a Change
in Control has occurred, shall include any successor thereto.
2.43 “System Company” shall mean
Entergy and any corporation 80% or more of whose stock (based on
voting power) or value is owned, directly or indirectly, by
Entergy and any partnership or trade or business which is 80% or
more controlled, directly or indirectly, by Entergy, and, except
in determining whether a Change in Control has occurred, shall
include any successor thereto.
2.44 “System Management Level” shall
mean, for purposes of determining a System Management
Participant, one of the following management levels reflected in
the human resources records of the System: (a) System
Management Level 1; (b) System Management
Level 2; (c) System Management Level 3; and
(d) System Management Level 4.
2.45 “System Management Participant”
shall mean a Participant who is currently, or was immediately
prior to the commencement of a Change in Control Period, at one
of the System Management Levels set forth in Section 2.44.
2.46 “Ten Percent Owner” means a
Participant who, at the time an Option is granted to the
Participant, owns Common Stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock
of Entergy within the meaning of Section 422(b)(6) of the
Code.
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2.47 “Total Disability” and
“Totally Disabled” shall have such meaning as
defined under the Entergy Corporation sponsored group insurance
plan covering total disability, and determinations of Total
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 Totally
Disabled. However, in the absence of such insurance plan or in
the event the individual is an Outside Director, the Committee
shall make such determination. If a Specified Employee separates
from service due to Total Disability, the provisions of
Section 12.14(b) shall apply.
ARTICLE III
SHARES SUBJECT
TO PLAN AND ALLOWED ADJUSTMENTS
3.1 Maximum Number of
Shares Issuable. The stock to be issued,
transferred or sold under the Plan shall be Common Stock.
Subject to adjustment as provided in Section 3.2, the
maximum aggregate of five million five hundred thousand
(5,500,000) shares of Common Stock shall be available for
delivery pursuant to Awards of Options, SARs, Restricted Shares,
Equity Awards or Other Stock-Based Awards granted from time to
time under the Plan, of which no more than two million
(2,000,000) shares of Common Stock in the aggregate may be
issued in connection with the exercise of Incentive Stock
Options. Any Award, or portion thereof, which is settled in cash
shall not be applied against the maximum allocation of shares.
Shares of Common Stock delivered under this Plan shall be
authorized but unissued shares or open market shares of Entergy.
Shares of Common Stock covered by Awards which are not earned,
or which are forfeited or terminated for any reason, and Options
which expire unexercised, shall again be available for
subsequent Awards under the Plan. Notwithstanding the terms of
the immediately preceding sentence to the contrary, Common Stock
related to the following recycled Awards shall not again be
available for Awards under the Plan: (a) Common Stock
tendered to the Plan in connection with the payment of an
Option, (b) Common Stock related to that portion of an
Award utilized for the payment of withholding taxes,
(c) Common Stock repurchased by Entergy using Option
proceeds; and (d) Awards of SARs that may be settled in
Common Stock (to the extent only actual shares of Common Stock
delivered to Participants are otherwise counted against the
maximum allocation of shares).
3.2 Adjustments Upon Changes in Capital
Structure. Notwithstanding any other
provision of the Plan, the Committee shall make or provide for
such adjustments to the Plan, to the number and class of shares
available thereunder or to any outstanding Awards, Award limits
set forth in the Plan, and in the exercise, strike, or purchase
price per share under any outstanding Award, as it shall deem
appropriate to prevent dilution or enlargement of rights,
including adjustments in the event of any change in the Common
Stock, whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split,
split-up,
split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of Entergy, or in the
event of payment of a dividend or distribution to the
shareholders of Entergy in a form other than Common Stock
(excepting normal cash dividends) that has a material effect on
the Common Stock. Any fractional share resulting from an
adjustment pursuant to this Section shall be rounded down to the
nearest whole number. The Committee in its sole discretion may
also make such adjustments in the terms of any Award to reflect,
or related to, such changes in the capital structure of Entergy
or distributions as it deems appropriate, including modification
of Performance Goals and Performance Periods. The adjustments
determined by the Committee pursuant to this Section 3.2
shall be final, binding and conclusive.
3.3 Limitations on Option and SAR
Repricing. Except in connection with a
corporate transaction involving Entergy (including, without
limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger,
consolidation,
split-up,
spin-off, combination, or exchange of shares, such as described
in Section 3.2), without prior shareholder approval the
terms of outstanding Awards may not be amended to reduce the
exercise price of outstanding Options or SARs or cancel
outstanding Options or SARs in exchange for cash, other awards
or for Options or SARs with an exercise price that is less than
the exercise price of the original Options or SARs. This
paragraph shall not be construed to apply to “issuing or
assuming a stock option in a transaction to which section 424(a)
applies,” within the meaning of Section 424 of the
Code.
3.4 Other Limitations on Award
Modifications. The approval of Entergy’s
shareholders shall be necessary to accelerate, lapse or waive
restrictions except in the case of death, Total Disability,
Retirement or terminations with Cause or for Good Reason
following a Change in Control event.
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ARTICLE IV
ADMINISTRATION
4.1 Administration of
Plan. The Committee shall operate and
administer the Plan and shall have the authority to exercise the
powers and discretion conferred on it by the Plan, including the
right to delegate any function to a specified person or persons.
The Committee shall have membership composition which enables
(i) Awards to Section 16 Persons to qualify as
exempt from liability under Section 16(b) of the Exchange
Act and (ii) Awards to Covered Participants to qualify as
performance-based compensation as provided under Code Section
162(m).
4.2 Powers of the
Committee. The Committee shall administer the
Plan in accordance with its terms and shall have all powers,
authority, and discretion necessary or proper for such purpose.
By way of illustration, the Committee shall have the following
powers:
The Committee shall have the sole and exclusive power and
discretion to grant Awards to Participants under the Plan, to
select the Participants to receive Awards, to determine the
type, size, terms and conditions of the Awards to be made to
each Participant selected, to determine the time when Awards to
Participants will be granted, and to prescribe the form of the
agreements embodying Awards made under the Plan.
The Committee shall determine all questions arising in the
administration of the Plan including, but not limited to, the
power and discretion to determine eligibility and participation
of any individual.
The Committee shall make factual determinations, construe and
interpret the Plan, including the intent of the Plan and any
ambiguous, disputed or doubtful provisions of the Plan.
The Committee may adopt such rules and regulations as it shall
deem desirable or necessary for the administration of the Plan.
Notwithstanding the foregoing, the Plan shall be administered by
the Board with respect to any Award granted to an Outside
Director.
4.3 Committee Actions. All
findings, decisions, or determinations of any type made by the
Committee pursuant to the Plan, including factual
determinations, any interpretation or construction of the Plan,
and the specific conditions and provisions of the Awards granted
under the Plan, shall be final and conclusive and shall be
binding upon all persons including, without limitation, each
Participant, beneficiary, legal representative, and any other
interested parties. To the maximum extent permitted by
applicable law, each member of the Committee and the Board shall
be indemnified and held harmless by Entergy against and from
(i) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection
with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under
the Plan or any Award agreement, and (ii) any and all
amounts paid by him or her in settlement thereof, with
Entergy’s approval, or paid by him or her in satisfaction
of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall give Entergy an
opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or
her own behalf. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which
such persons may be entitled under Entergy’s Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that Entergy may have to indemnify
them or hold them harmless.
4.4 Delegation of
Duties. With the exception of the authority
to grant Awards to persons subject to Sections 16(a) and
16(b) of the Exchange Act, to persons who are Covered
Participants, or to make other determinations regarding such
persons, the Committee may delegate to one or more of its
members or to one or more agents, to the extent permitted by
law, such administrative duties as it may deem advisable, and
the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with
respect to any responsibility the Committee or such person may
have under the Plan.
4.5 Reliance on Reports. The
Committee may employ attorneys, consultants, accountants or
other persons, and the Committee, Entergy and its officers and
directors shall be entitled to rely upon the advice, opinions or
evaluations of any such persons.
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4.6 Non-Uniform
Determinations. The Board’s and the
Committee’s respective determinations under the Plan,
including without limitation, determinations as to the key
employees or Outside Directors to receive Awards, the terms and
provisions of such Awards and the agreement(s) evidencing the
same, need not be uniform and may be made by it selectively
among the key employees or outside directors who receive or are
eligible to receive Awards under the Plan, whether or not such
key employees or Outside Directors are similarly situated.
ARTICLE V
ELIGIBILITY,
PARTICIPATION AND AWARD LIMITS
5.1 Eligibility. Those
individuals eligible for Awards under the Plan are
(a) Outside Directors and (b) those select employees
of a System Company determined to have significant
responsibility for the continued growth, development and
financial success of the System Companies.
5.2 Participation. Subject
to the provisions of the Plan, and with the exception of grants
to Outside Directors as determined by the Board, the Committee
shall from time to time select from such eligible persons those
to whom Awards shall be granted and determine the amount of such
Award, and such individuals shall become Participants.
5.3 Minimum Vesting. Except
as otherwise specifically provided in Article XIII, any
Awards that vest on the basis of the Participant’s
continued employment or service or other time-based criteria
shall provide for a vesting period of at least three
(3) years, and any Awards that vest upon the attainment of
Performance Goals or other performance-based criteria shall
provide for a vesting period of at least twelve (12) months
(such vesting periods, in the discretion of the Committee, may
occur in full at the end of such period or may occur in
specified installments over such period); provided, however,
that the Committee may, in its discretion, provide that a
Participant will remain eligible to receive all or a portion of
an Award upon death, Total Disability, Retirement, or an Outside
Director’s separation from the Board, but such Participant
shall otherwise remain subject to the same vesting and payment
provisions as all other Participants. Notwithstanding the
immediately preceding sentence, five percent (5%) of the shares
of Common Stock authorized under this Plan shall not be subject
to the minimum vesting requirements set forth in this
Section 5.3; provided those shares are delivered for Full
Value Share Awards.
5.4 Participant Total Award
Limits. Subject to adjustment as provided in
Section 3.2, the following limitations shall apply to the
grant of any Award:
(a) Options and SARs. No Participant shall be
granted in any calendar year one or more Options or SARs (but
only to the extent such SAR is not granted in tandem with an
Option) that in the aggregate may become excercisable with
respect to more than 1,500,000 shares of Common Stock
reserved for issuance under the Plan.
(b) Restricted Shares and Restricted Share
Units. No Participant shall be granted in any calendar year
one or more Restricted Share Awards or Restricted Share Unit
Awards, subject to applicable vesting and performance
requirements, with respect to more than 500,000 shares of
Common Stock reserved for issuance under the Plan.
(c) Performance Awards. The value of Performance
Awards payable to a single Covered Participant shall not exceed
0.5% of Operating Cash Flow during any applicable Performance
Period.
ARTICLE VI
STOCK
OPTIONS AND
STOCK
APPRECIATION RIGHTS (SARs)
6.1 General
Provisions. Options and SARs shall be subject
to such terms and conditions, exercisable at such time or times,
and evidenced by such form of Award agreement between the
Participant and the Employer, as the Committee shall determine;
provided, however, that such determinations are not inconsistent
with the other provisions of the Plan, including those set forth
in Article V and in this Article.
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6.2 Grant of Option. Options
may be in the form of either an Incentive Stock Option or
Nonstatutory Stock Option; provided, however, that only
Participants who are System Company employees shall be eligible
for Awards of Incentive Stock Options. An Incentive Stock Option
granted to a prospective employee upon the condition that such
person become an employee of a System Company shall be deemed
granted effective on the date such person commences service with
a System Company, with an exercise price determined as of such
date.
(a) If the Award agreement evidencing an Option does not
contain a specific designation that it is an Incentive Stock
Option, it shall be an Award of Nonstatutory Stock Options.
(b) To the extent the Committee elects to grant Incentive
Stock Options under the Plan, such Incentive Stock Options shall
be subject to the limitations under Section 422 of the Code
including, without limitation, the applicable time limitations.
(c) The aggregate fair market value (determined in each
instance on the Grant Date of an Incentive Stock Option) of the
Common Stock with respect to which an Incentive Stock Option is
first exercisable by any Participant in any calendar year shall
not exceed $100,000 or any other limit prescribed in the Code
for the Participant. To the extent such fair market value
exceeds $100,000, such Option shall be treated, for federal
income tax purposes, as a Nonstatutory Stock Option. For
purposes of this Section, Options designated as Incentive Stock
Options shall be taken into account in the order in which they
were granted, and the Fair Market Value of Common Stock shall be
determined as of the time the Option with respect to such Common
Stock is granted. If the Code is amended to provide for a
limitation different from that set forth in this Section, such
different limitation shall be deemed incorporated herein
effective as of the date and with respect to such Options as
required or permitted by such amendment to the Code. If an
Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation
set forth in this Section, the Participant may designate which
portion of such Option the Participant is exercising. In the
absence of such designation, the Participant shall be deemed to
have exercised the Incentive Stock Option portion of the Option
first. Upon exercise, shares issued pursuant to each such
portion shall be separately identified.
6.3 Option Price.
(a) The Option Price determined by the Committee shall not
be less than the Fair Market Value on the date the Option is
granted. In addition, no Option shall be exchanged for cash,
except as the Committee may determine to be necessary or
desirable in connection with a corporate transaction approved by
the Board.
(b) No Incentive Stock Option granted to a Ten Percent
Owner shall have an exercise price per share less than one
hundred ten percent (110%) of the Fair Market Value of a share
of Common Stock on the effective date of the grant of the
Option. Notwithstanding the foregoing, an Option (whether an
Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than the minimum exercise
price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner
qualifying under the provisions of Section 424(a) of the
Code.
6.4 Term of Options. Subject
to Section 5.3, the Committee, in its sole discretion,
shall prescribe the time or times at which, or the conditions
upon which, an Option or portion thereof shall become vested and
exercisable, which shall be set forth in the Award agreement;
provided, however, that (a) no Option shall be exercisable
after the expiration of ten (10) years after the Grant Date
of such Option, and (b) no Incentive Stock Option granted
to a Ten Percent Owner shall be exercisable after the expiration
of five (5) years after the Grant Date of such Option.
6.5 Exercise of
Options. Subject to the terms and conditions
as specified in an Award agreement and to all applicable legal
requirements, an Option may be exercised during the term thereof
and the specified number of shares with respect to such Option
exercise shall be issued, following receipt by Entergy of
(a) notice of the exercise of an Option (in accordance with
procedures that the Committee shall have specified in the Award
agreement or otherwise) delivered to Entergy’s Secretary or
his or her designee, (b) payment, as provided in the Plan,
of the Option Price, and (c) satisfaction of the full
amount of any and all applicable income tax and employment tax
amounts required to be withheld in connection with such
exercise. The Committee may also permit Participants, either on
a selective or aggregate basis, simultaneously to exercise
Options and sell the shares of Common Stock thereby acquired
pursuant to a brokerage or similar arrangement, approved in
advance by the Committee, and use the proceeds from such sale as
payment of the purchase price of such shares.
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6.6 Payment. To the extent
permitted under applicable law and the relevant Option Award
agreement, the exercise price of an Option shall be paid to
Entergy in full at the time of exercise at the election of the
Participant (a) in cash, (b) in shares of Common Stock
having a Fair Market Value on the exercise date equal to the
aggregate exercise price of the Option and satisfying such other
requirements as may be imposed by the Committee, (c) partly
in cash and partly in such shares of Common Stock,
(d) through the withholding of shares of Common Stock
(which would otherwise be delivered to the Participant) with an
aggregate Fair Market Value on the exercise date equal to the
aggregate exercise price of the Option, (e) through the
delivery of irrevocable instructions to a broker to deliver
promptly to Entergy an amount equal to the aggregate exercise
price of the Option, or (f) any other legal form of payment
that the Committee may deem appropriate. The Committee may limit
the extent to which shares of Common Stock may be used in
exercising Options. The Committee reserves, at any and all
times, the right, in its sole and absolute discretion, to
establish, decline to approve or terminate any program or
procedures for the exercise of Options by means of a cashless
exercise, including with respect to one or more Participants
specified by Entergy notwithstanding that such program or
procedures may be available to other Participants.
6.7 Shareholder
Rights. Prior to Option exercise, a
Participant shall have no rights to dividends or other rights of
a shareholder with respect to shares of Common Stock subject to
such Option. A Participant shall have rights to future dividends
and other rights of a shareholder with respect to such shares of
Common Stock only after the Participant has given written notice
to the Committee or its delegate of exercise of the Option and
satisfied all other conditions to exercise such Option as
imposed by the Committee pursuant to the Plan.
6.8 Termination of
Service. Unless a Participant’s Award
agreement provides otherwise:
| • | subject to the Change in Control immediate vesting provisions set forth in Article XIII, an Option or SAR shall terminate, shall be forfeited and may no longer be exercised 90 days after the Participant ceases to be a System Company employee for any reason other than termination for Cause, Total Disability, death or Retirement; | |
| • | all Options and SARs shall terminate, shall be forfeited and may no longer be exercised upon a System Company employee Participant’s termination for Cause; | |
| • | if a System Company employee’s employment is terminated by reason of Total Disability or Retirement, or an Outside Director separates from the Board, all Options and SARs held by the Participant will immediately vest and may be exercised within the remaining term of the Option or SAR Award; and | |
| • | if the Participant dies while in the employ of a System Company or while serving as an Outside Director, the Options and SARs held by such Participant will immediately vest and, within the remaining term of each Option and SAR award, be exercised by the legal representative of the Participant’s estate, or if it has been distributed as part of the estate, by the person or persons to whom the Participant’s rights under the Option and SAR shall pass by will or by the applicable laws of descent and distribution. |
In no event may an Option or SAR be exercised to any extent by
anyone after the expiration or termination of such Option or
SAR. In addition, Incentive Stock Options shall be subject to
the limitations under Section 422 of the Code including,
without limitation, the applicable time limitations.
6.9 Stock Appreciation
Rights. SARs shall be evidenced by Award
Agreements specifying the number of shares of Common Stock
subject to the Award, in such form as the Committee shall from
time to time establish.
(a) Grant and Terms of
SARs. SARs may be granted in tandem with all
or any portion of a related Option or may be granted
independently of any Option. The strike price for each SAR shall
be established in the discretion of the Committee; provided,
however, that (i) the strike price per share subject to a
SAR granted in connection with an Option shall be the exercise
price per share under the related Option and (ii) the
strike price per share subject to a freestanding SAR shall be
not less than the Fair Market Value of a share of Common Stock
on the Grant Date of the SAR. A SAR granted in connection with
an Option will expire no later than the related Option expires
and shall be exercisable only at the time and to the extent the
related Option is exercisable, subject to such provisions as the
Committee may specify where the SAR is granted with respect to
less than the full number of shares of Common Stock subject to
the related Option. Subject to the provisions of
Section 6.9, a SAR granted without relation to an Option
shall be exercisable at such time or times, or upon such event
or events, and subject to such terms, conditions,
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performance criteria and restrictions as shall be determined by
the Committee and set forth in the Award agreement evidencing
such SAR; provided, however, that no such SAR shall be
exercisable after the expiration of ten (10) years after
the Grant Date of such SAR.
(b) Payment of SARs. A SAR
shall entitle the holder, upon exercise of the SAR, to receive
payment of an amount determined by multiplying (i) the
excess of the Fair Market Value of a share of Common Stock on
the date of exercise of the SAR over the strike price
established for such SAR on its Grant Date, by (ii) the
number of shares as to which such SAR will have been exercised.
Payment of the amount determined under the forgoing formula may
be made, in the discretion of the Committee, in cash or shares
of unrestricted Common Stock (valued at their Fair Market Value
on the date of exercise), or a combination thereof.
ARTICLE VII
RESTRICTED
SHARE AWARDS
7.1 Grant of Restricted
Shares. The Committee may award Restricted
Shares to such key employees and Outside Directors whom the
Committee determines to be eligible pursuant to the terms of
Article V. An Award of Restricted Shares may be subject to
restrictions on transfer and forfeiture provisions, all as the
Committee may determine. Such Restricted Shares shall be awarded
based on such other terms and conditions as the Committee shall
from time to time determine subject to the provisions of the
Plan; provided, however, the Participant shall be entitled to
any voting rights relative to such Restricted Shares during the
Restricted Period. If either the grant of a Restricted Share
Award or the lapsing of the Restriction Period is to be
contingent upon the attainment of one or more Performance Goals,
the Committee shall follow procedures substantially equivalent
to those set forth with respect to Performance Awards,
including, but not limited to, those procedures related to the
setting and certification of Performance Goals, and the
requirement that the Performance Goal(s) be based on one or more
of the business criteria referenced in Section 9.3.
7.2 Award of Restricted
Shares. At the time an Award of Restricted
Shares is made, the Committee shall establish the Restricted
Period applicable to such Award. Each Award of Restricted Shares
may have a different Restricted Period.
7.3 Restricted
Period. Subject to Section 5.3, the
Restricted Period may be based on the continued employment of
the Participant with a System Company for a specified time
period or periods or on the attainment of specified business
goals or measures established by the Committee in its sole
discretion, including, without limitation, Performance Goals as
described in Article 9.
7.4 Shareholder
Rights. Unless otherwise set forth in the
Award agreement relating to a Restricted Share Award, and
subject to the terms and conditions of a Restricted Share Award,
the holder of such Award shall have all rights as an Entergy
shareholder, including, but not limited to, voting rights, the
right to receive dividends and the right to participate in any
capital adjustment applicable to all holders of Common Stock.
Notwithstanding the preceding sentence, any and all cash and
stock dividends paid with respect to the Restricted Shares shall
be subject to the same restrictions on transfer and risks of
forfeiture as applicable to the underlying Restricted Shares and
shall also be subject to any other provisions or reinvestment
requirements (including, without limitation, the reinvestment of
dividends in the form of Common Stock
and/or
Equity Awards) as the Committee may, in its discretion,
determine. The Participant shall have the same rights and
privileges, and be subject to the same restrictions, with
respect to any additional shares received pursuant to
Section 3.2.
7.5 Forfeiture. Upon the
forfeiture of any Restricted Shares (including any additional
Restricted Shares which may result from the reinvestment of cash
and stock dividends in accordance with such rules as the
Committee may establish), such forfeited shares shall be
surrendered.
7.6 Share Issuance. During
the Restricted Period, the Restricted Shares shall be held by a
custodian in book entry form with restrictions on such shares
duly noted or, alternatively, a certificate or certificates
representing a Restricted Share Award shall be registered in the
holder’s name and may bear a legend, in addition to any
legend which may be required, indicating that the ownership of
the shares of Common Stock represented by such certificate is
subject to the restrictions, terms and conditions of this Plan
and the agreement relating to the Restricted Share
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Award. All such certificates shall be deposited with Entergy,
together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a
guarantee of signature if deemed necessary or appropriate, which
would permit transfer to Entergy of all or a portion of the
shares of Common Stock subject to the Restricted Share Award in
the event such Award is forfeited in whole or in part.
7.7 Expiration of Restricted
Period. Subject to the Change in Control
immediate vesting provisions set forth in Article XIII,
upon the expiration or termination of the Restricted Period and
the satisfaction of any other conditions prescribed by the
Committee, the restrictions applicable to the Restricted Shares
shall lapse and a stock certificate for the number of Restricted
Shares (including any dividends reinvested in Common Stock) with
respect to which the restrictions have lapsed shall be
delivered, free of all such restrictions, except any that may be
imposed by law, to the Participant or the Participant’s
beneficiary or estate, as the case may be. Also at such time,
any dividends on the Restricted Shares that were reinvested in
Equity Awards shall be payable in cash to the Participant or the
Participant’s beneficiary or estate, as the case may be.
7.8 Section 83(b)
Election. The Committee may provide in an
Award agreement that the Award of Restricted Shares is
conditioned upon the Participant refraining from making an
election with respect to the Award under Section 83(b) of
the Code. Irrespective of whether an Award is so conditioned, if
a Participant makes an election pursuant to Section 83(b)
of the Code with respect to an Award of Restricted Shares, the
Participant shall be required to promptly provide a copy of such
election to Entergy or the Committee, as the Award agreement may
specify.
ARTICLE VIII
EQUITY AWARDS
8.1 Issuance of Equity
Awards. An Equity Award, including, but not
limited to, Restricted Share Units, may be granted to key
employees and Outside Directors determined to be eligible
pursuant to the terms of Article V. Subject to the
remaining provisions of this Article VIII, Equity Awards
shall be allocated to a Participant’s Equity Award Account
at such time or times, in such amounts, and subject to such
restrictions, terms and conditions as the Committee, in its
discretion, may determine.
8.2 Funding. In the case of
Equity Awards granted under the Plan, no shares of Common Stock
shall be issued at the time the Award is made, and Entergy, the
Employer and Plan, or any one of them, shall not be required to
set aside a fund for the payment of any such Award.
8.3 Maturity of Equity
Awards. Subject to Section 5.3, all
Equity Awards granted to a Participant shall become vested and
payable at the time or times or under such circumstances as the
Committee shall from time to time determine and specify in the
Award agreement.
8.4 Payment of Equity
Awards. A Participant who has an Equity Award
allocated to his Equity Award Account shall be entitled to
receive a distribution from the Employer with respect to each
then mature Equity Award allocated to his Equity Award Account
at such time as any such Equity Award has been earned and vested
and is no longer subject to a timely and binding deferral
election as may be specified in the Agreement. Equity Awards
shall be paid out in the form set forth in the Award agreement,
as the Committee may determine.
8.5 Dividend
Equivalents. Dividend Equivalents may be
awarded in connection with an Award (other than an Option or
SAR) and may be paid currently or on a deferred basis. The
Committee may provide at the Date of Grant or thereafter that
the Dividend Equivalent shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional
shares of Common Stock or such other investment vehicles as the
Committee may specify; provided, however, that Dividend
Equivalents shall be subject to all conditions and restrictions
of the underlying Awards to which they relate, including
restrictions on transfer and risks of forfeiture as applicable
to the underlying Award and any other provisions or reinvestment
requirements.
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ARTICLE IX
PERFORMANCE
AWARDS
9.1 Performance Awards. The
Committee may award Performance Awards represented by units
denominated on the Date of Grant either in shares of Common
Stock (Performance Shares) or in specified dollar amounts
(Performance Units). At the time of making grants of Performance
Awards, the Committee shall establish such terms and conditions
as it shall determine applicable to such Awards. Recipients of
Performance Awards are not required to provide consideration
other than the rendering of service. At the time a Performance
Award is granted, the Committee shall determine, in its sole
discretion, one or more performance periods and performance
goals to be achieved during the applicable performance periods,
as well as such other restrictions and conditions as the
Committee deems appropriate. In the case of Performance Units,
the Committee shall also determine a target unit value or a
range of unit values for each Award.
9.2 Performance Goals. The
Committee may determine that an Award shall be subject to the
satisfaction of such performance goals as established by the
Committee. As determined by the Committee, achievement of the
Performance Goals may be measured (a) individually,
alternatively or in any combination, (b) with respect to
Entergy, a subsidiary, division, business unit, product line,
product, or any combination of the foregoing, or (c) on an
absolute basis, or relative to a target, to a designated
comparison group, to results in other periods, to an index, or
to other external measures. The Performance Goals established by
the Committee
and/or the
results for any Performance Period shall be adjusted by the
Committee in the event of a Section 3.2 adjustment.
Further, except to the extent inconsistent with the requirements
for Awards intended to qualify as performance-based compensation
for purposes of Code Section 162(m), Performance Goals may
be adjusted by the Committee to reflect an event either not
directly related to the operations of Entergy or not within the
reasonable control of Entergy’s management, or a change in
accounting standards required by U.S. generally accepted
accounting principles.
9.3 Performance-Based
Compensation. For an Award that is subject to
Performance Goals, including one that is intended to qualify as
“performance-based compensation” under Code
Section 162(m), the applicable Performance Goals will be
based upon or may relate to one or any combination of business
criteria, such as performance, efficiency, or profitability,
measured by specified levels or of growth, in one or more of the
following, as the Committee may determine: earnings measures
(including, for example, basic earnings per share, diluted
earnings per share, net income, pre-tax income, operating
income, earnings before interest, taxes, depreciation and
amortization or any combination thereof, and net operating
profits after taxes); stock price, shareholder return measures
(including, for example, total shareholder return, economic
value added, cumulative shareholder value added, return on
equity, return on capital employed, return on invested capital,
return on assets, dividend payout ratio and cash flow, such as
operating cash flows, free cash flow, discounted cash flow
return on investment and cash flow in excess of cost of capital
or any combination thereof); market share, sales, costs, fuel
cost per million BTU, costs per kilowatt hour, retained
earnings, budget achievement, revenue measures (including, for
example, revenue and direct margin); valuation measures
(including, for example, stock price increase, price to book
value ratio, and price to earnings ratio); capital and risk
measures (including, for example, debt to equity ratio, debt
ratio, equity ratio, dividend payout as percentage of net income
and diversification of business opportunities); productivity,
return on sales, completion of acquisitions, cash available to
parent, economic value added (EVA), expense control (including,
for example, operations & maintenance expense, total
expenditures, expense ratios, and expense reduction); expense
spending, capital/kwh, capital spending, gross margin, net
margin, market capitalization, market value, profit margin,
customer measures (including, for example, customer
satisfaction, customer growth, service cost, service levels,
responsiveness, bad debt collections or losses, and reliability,
such as outage frequency, outage duration, and frequency of
momentary outages); employee satisfaction; project measures
(including, for example, completion of key milestones);
production measures (including, for example, generating capacity
factor, performance against the INPO index, generating
equivalent availability, heat rates and production cost). The
Performance Goals may be stated in terms of absolute levels or
relative to another company or companies or to an index or
indices. Other than by adjustments to the Performance Goals
and/or
performance results in accordance with Section 9.2, the
Committee may not waive the achievement of the applicable
Performance Goals except in the case of the death or Total
Disability of the grantee or following a Change in Control. The
Award and payment of any Award under this Plan with respect to a
relevant Performance Period shall be contingent upon the
attainment of the applicable Performance Goals. The Committee
shall certify in writing prior to payment of any such Award that
such
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applicable Performance Goals relating to the Award are
satisfied. Approved minutes of the Committee may be used for
purposes of meeting the certification requirements of Code
Section 162(m). All Awards to Covered Participants under this
Plan shall be further subject to such other conditions,
restrictions, and requirements as the Committee may determine to
be necessary or appropriate.
9.4 Maturity of Performance
Awards. Subject to Section 5.3, all
Performance Awards granted to a Participant shall become vested
and payable at the time or times or under such circumstances as
the Committee shall from time to time determine and specify in
the Award agreement.
9.5 Payment of Performance
Awards. Performance Awards may be paid out in
cash, Common Stock, other property or a combination thereof. Any
and all dividends or Dividend Equivalents payable with respect
to Performance Awards shall be subject to the same restrictions,
contingencies and risks of forfeiture as applicable to the
underlying Performance Awards and shall also be subject to any
other provisions or reinvestment requirements (including,
without limitation, the reinvestment of dividends and dividend
equivalents in the form of Common Stock
and/or
Equity Awards) as the Committee, in its discretion, may
determine.
ARTICLE X
OTHER
STOCK-BASED AWARDS
10.1 Terms of Award. Subject
to the limits described in this Plan, and in addition to the
Awards set forth in preceding Articles, the Committee, in its
sole discretion, may carry out the purpose of this Plan by
awarding Other Stock-Based Awards as it determines to be in the
best interests of the Company and subject to such other terms
and conditions as it deems necessary and appropriate. The terms
and conditions of any Other Stock-Based Award shall be set forth
in the applicable Award agreement or otherwise by the Committee,
including the circumstances (and any applicable Performance
Goals) under which and the amount of cash
and/or
shares of Common Stock, if any, that shall then become payable
to the holder of the Award.
ARTICLE XI
TERMINATION
OR AMENDMENT OF THE PLAN
11.1 Termination or
Amendment. The Committee shall have the
right, authority and power to alter, amend, modify, suspend,
revoke or terminate the Plan in whole or in part at any time,
including the adoption of amendments deemed necessary or
desirable to qualify the Awards under the laws of various states
and under rules and regulations promulgated by the Securities
and Exchange Commission with respect to officers and directors
who are subject to the provisions of Section 16 of the
Exchange Act, to comply with any applicable provisions of the
Code, including Code Section 162(m), or to correct any
defect or supply any omission or reconcile any inconsistency in
the Plan or in any Award granted under the Plan, without the
approval of Entergy’s shareholders; provided, however, that
the approval of Entergy’s shareholders shall be necessary
to amend or modify the Plan if such amendment or modification
would (a) cause the Plan to no longer comply with
regulatory requirements; (b) materially increase the
benefits accruing to participants under the Plan;
(c) materially increase the shares of Common Stock reserved
for issuance under the Plan; or (d) materially modify the
requirements for participation in the Plan. In addition, if
exemption from Code Section 162(m) deduction limits is to
be continued, any such amendment shall be made with shareholder
approval if necessary to comply with the requirements for the
qualified performance-based compensation exception under Code
Section 162(m).
11.2 Amendment or Termination Affecting
Outstanding Awards. Except as provided in
Section 14.2 of the Plan, no amendment or termination or
modification of the Plan shall in any manner adversely affect
any Award previously granted without the consent of the
Participant; provided, however, that in connection with a Change
in Control, the Committee may amend, modify, or terminate the
Plan in a manner that does adversely affect Awards previously
granted upon a finding by the Committee that the amendment or
modification is in the best interest of holders of outstanding
Awards affected by the amendment or modification; for purposes
of this provision, acceleration of payment of an Award without
reduction in the amount of the Award shall not be considered as
adversely affecting an Award.
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ARTICLE XII
GENERAL
PROVISIONS
12.1 Fractional Shares. The
Employer shall not be required to deliver any fractional share
of Common Stock but may pay, in lieu thereof, the Fair Market
Value of such fractional share to the Participant or the
Participant’s beneficiary or estate, as the case may be.
For purposes of this Section 12.1, the Fair Market Value
shall be determined as of the following dates: (i) the date
on which restrictions lapse for Restricted Shares or Restricted
Share Units, (ii) the end of the Performance Period for
Performance Units, (iii) the maturity date for Equity
Awards other than Restricted Share Units or Performance Units,
or (iv) in any case, such other dates as the Committee may
determine.
12.2 Tax
Withholdings. Subject to such terms and
conditions as may be established by the Committee, the
Participant shall pay to Entergy any amount necessary to satisfy
applicable federal, state or local tax withholding requirements
attributable to an Award of Options, SARs, Restricted Shares,
Performance Units, Equity Awards, or Other Stock-Based Awards
under this Plan promptly upon notification of the amounts due.
The Committee may permit the withholding amount required to be
paid by the Participant to be satisfied by cash, or shares of
Common Stock that otherwise would be distributed to the
Participant upon exercise of an Award, or a combination of both.
Such amount withheld shall not exceed the minimum statutory
withholding requirements applicable to the Participant. Shares
related to that portion of an Award used for the payment of
withholding taxes shall not again be available for Awards under
the Plan.
12.3 Legal and Other
Requirements. The obligation to sell and
deliver Common Stock under the Plan shall be subject to all
applicable laws, regulations, rules and approvals, including,
but not by way of limitation, the effectiveness of a
registration statement under the Securities Act of 1933 if
deemed necessary or appropriate by Entergy. Certificates for
shares of Common Stock issued hereunder may be legended as the
Committee shall deem appropriate. Entergy and the Committee
reserve the right to restrict, in whole or in part, the delivery
of Common Stock or other securities pursuant to any Award prior
to the satisfaction of all legal requirements relating to the
issuance of such Common Stock or other securities, to their
registration, qualification or listing or to an exemption from
registration, qualification or listing. Under no circumstances
shall Entergy be required to net-cash settle any Award because
sufficient registered and authorized shares of Common Stock are
not available.
12.4 Award Agreements. All
Awards shall be documented in a written or electronic agreement
in a form approved by the Committee, which shall include the
terms and conditions of the Award.
12.5 Beneficiaries. The
Participant may designate one or more beneficiaries who shall be
entitled to exercise the Participant’s rights hereunder
following the death of the Participant. Such designation shall
be made on a form supplied by the Committee. In the absence of a
valid beneficiary designation, the Participant’s rights
hereunder shall pass pursuant to the Participant’s will or
by the applicable laws of descent and distribution.
12.6 Non-Transferability. Awards
granted under this Plan, and any rights and privileges
pertaining thereto, may not be transferred, assigned, pledged or
hypothecated in any manner other than by will or by the laws of
descent and distribution, or pursuant to a qualified domestic
relations order (“QDRO”) as defined in the Code.
Awards may be exercised or settled during the lifetime of the
Participant only by the Participant (or the Participant’s
alternate payee pursuant to a QDRO) or by the Participant’s
or alternate payee’s guardian or legal representative. Any
attempted assignment, transfer, pledge, hypothecation or other
disposition of an Award, or levy of attachment or similar
process upon the Award not specifically permitted herein shall
be null and void and without effect.
12.7 Effect on Other
Plans. Awards may be granted singly, in
combination or in tandem (except where prohibited by applicable
law) and may be made in combination or tandem with, or as
alternatives to, awards or grants under any other employee plan
maintained by a System Company; provided that the adoption of
the Plan shall have no effect on awards made or to be made
pursuant to other stock plans covering the employees of any
System Company or successors thereto. Awards under the Plan
shall not constitute earnings for purposes of any pension plan
covering employees of any System Company except as otherwise
expressly provided in any such pension plan.
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12.8 No Entitlements. A
Participant’s rights, if any, in respect of or in
connection with any Award are derived solely from the
discretionary decision to permit the individual to participate
in the Plan and to benefit from a discretionary Award. By
accepting an Award under the Plan, a Participant expressly
acknowledges that there is no obligation on the part of Entergy,
the Committee, or any other entity or individual to continue the
Plan and/or
grant any additional Awards. Any Award granted hereunder is not
intended to be compensation of a continuing or recurring nature,
or part of a Participant’s normal or expected compensation,
and in no way represents any portion of a Participant’s
salary, compensation, or other remuneration for purposes of
pension benefits, severance, redundancy, resignation or any
other purpose.
12.9 No Right to Employment or
Service. Neither the Plan nor any Award
granted under the Plan shall be deemed to give any individual a
right to remain an employee, consultant or director of Entergy
or any System Company. Entergy and each System Company reserves
the right to terminate the services of any person at any time,
and for any reason, subject to applicable laws, Entergy’s
Certificate of Incorporation and Bylaws and a written employment
agreement (if any), and such terminated person shall be deemed
irrevocably to have waived any claim to damages or specific
performance for breach of contract or dismissal, compensation
for loss of office, tort or otherwise with respect to the Plan
or any outstanding Award that is forfeited
and/or
terminated by its terms or to any future Awards.
12.10 Recoupment Policy. All
Awards made under this Plan shall be subject to Entergy’s
Policy Regarding Recoupment of Certain Compensation, as adopted
by the Board at its meeting held on December 2, 2010;
provided, however, that if the Recoupment Policy is
amended from time to time, then any Awards under this Plan shall
be subject to the terms of such Recoupment Policy as in effect
on the grant date of such Award.
12.11 Notices. Every
direction, revocation or notice authorized or required by the
Plan shall be deemed delivered to Entergy on the date it is
personally delivered to the Secretary of Entergy at its
principal executive offices or three business days after it is
sent by registered or certified mail, postage prepaid, addressed
to the Secretary at such offices, and shall be deemed delivered
to a Participant on the date it is personally delivered to him
or three business days after it is sent by registered or
certificate mail, postage prepaid, addressed to him at the last
address shown for him on the records of Entergy and its
subsidiaries.
12.12 Applicable Law. All
questions pertaining to the validity, construction and
administration of the Plan and rights and benefits granted
hereunder shall be determined in conformity with the laws of the
State of Delaware, to the extent not preempted or controlled by
the laws of the United States and regulations thereunder.
12.13 Funding. The Plan
shall be totally unfunded. No Participant shall have any
interest in any fund or specific asset of any System Company by
reason of the Plan.
12.14 Timing and Form of Payment.
(a) Notwithstanding any Plan provision to the contrary, for
purposes of the limitations on nonqualified deferred
compensation under Code Section 409A, each payment under
this Plan shall be treated as a separate payment for purposes of
applying the Code Section 409A deferral election rules and
the exclusion from Code Section 409A for certain short-term
deferral amounts. To the extent Code Section 409A might
otherwise be applicable, payments under this Plan shall be
excludible from the requirements of Code Section 409A, to
the maximum possible extent, either as (i) short-term
deferral amounts (e.g., payable under the schedule prior
to March 15 of the calendar year following the calendar year of
substantial vesting), or (ii) under the exclusion for
involuntary separation pay provided in Treasury Regulations
Section 1.409A-1(b)(9)(iii).
(b) Notwithstanding any Plan provision to the contrary, for
purposes of the limitations on nonqualified deferred
compensation under Code Section 409A and only to the extent
Code Section 409A is applicable, if a Participant is a
Specified Employee at the time of his “separation from
service” within the meaning of Code Section 409A and
Awards become payable to the Participant under this Plan by
reason of such separation from service, then such Awards shall
not be paid to the Participant prior to the earlier of
(i) the expiration of the six (6)-month period measured
from the date of the Participant’s separation from service,
or (ii) the date of the Participant’s death. If
distribution is delayed pursuant to this Subsection 12.15(b),
the delayed distribution amount shall continue to be credited
with investment returns during the period of delay as if such
amount, at the election of the Participant, remained invested
under the Plan or under one or more of the deemed investment
funds (as designated from
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time-to-time
in advance by the Committee or its delegate) made available
under the Executive Deferred Compensation Plan of Entergy
Corporation and Subsidiaries (“EDCP”). Immediately
following the earlier of the Participant’s six-month delay
period or the Participant’s death, the full amount of the
Participant’s delayed distribution, including investment
returns deemed credited pursuant to this Subsection 12.15(b),
shall be distributed in a single payment to the Participant or
to his Beneficiary, as applicable. Any payments that are delayed
pursuant to this Subsection shall be paid by the Employer in the
seventh month after the date the Participant “separates
from service.”
ARTICLE XIII
CHANGE IN
CONTROL
13.1 Accelerated Vesting/Severance
Payment. Notwithstanding any Plan provision
to the contrary, but subject to any federal securities law
restrictions on sale and exercise, if within 24 months
following the effective date of a Change in Control, a
Participant’s System employment is terminated by the System
Companies without Cause or by Participant with Good Reason (such
that the Participant is no longer employed by any System
Company), the following shall apply:
(a) with respect to Restricted Shares or other Awards
subject to restrictions and issued under the Plan and
outstanding as of the effective date of the Change in Control,
all restrictions imposed hereunder shall lapse effective as of
the date Participant’s System employment is terminated;
(b) if during a Performance Period(s) applicable to a
Performance Award granted under the Plan, and except to the
extent otherwise paid in accordance with the terms of a
Participant’s individual agreement, if applicable, a
Participant shall forfeit the Performance Award and instead
shall be entitled to receive a single-sum payment calculated
using the average annual number of performance shares or
performance units, as applicable, the Participant would have
been entitled to receive under the Plan with respect to the two
most recent Performance Periods that precede and do not include
the Participant’s date of termination of System Company
employment. Such severance payment shall be determined by
dividing by two the sum of the Participant’s annual target
pay out levels (i.e., as if target performance under the
Award was obtained) with respect to such two most recent
Performance Periods; and
(c) any Options outstanding as of the effective date of the
Change in Control that are not vested shall become fully vested
and exercisable as of the date Participant’s System
employment is terminated, and any such vested and exercisable
Options may be exercised within the remaining term of the Option
Award. Notwithstanding the foregoing, Incentive Stock Options
shall be subject to the limitations under Section 422 of the
Code including, without limitation, the applicable time
limitations.
13.2 Source of
Payments. Within thirty (30) days
following the date of a Change in Control, or at such other time
as the System Company may determine in its complete discretion,
a System Company may make a single irrevocable lump sum
contribution to the Trust for Deferred Payments of Entergy
Corporation and Subsidiaries (“Trust”) pursuant to the
terms and conditions described in such Trust. To the extent such
a Trust is created, it shall be a “grantor” trust
under the Internal Revenue Code, and the establishment and
funding of such Trust is not intended to cause Participants to
realize current income on amounts contributed thereto, and the
Trust shall be so interpreted. Notwithstanding the foregoing,
any contributions to the Trust by a System Company during a
“restricted period” (within the meaning of Code
Section 409A(b)(3)(B) for the purposes of paying deferred
compensation to an applicable “covered employee”
(within the meaning of Code Section 409A(b)(3)(D)(i)) shall
not be added to the principal but shall be held by the trustee
to be returned to the System Company (together with any earnings
thereon) upon the System Company’s providing to the trustee
a written certification, signed by the actuarial consulting firm
which prepared the actuarial report filed with the most recent
Form 5500 annual report for Entergy’s tax-qualified
defined benefit plans, that the deposit was made during a
restricted period for the purposes of paying deferred
compensation to an applicable covered employee.
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ARTICLE XIV
DEFERRAL
ELECTIONS
14.1 Additional
Definitions. Additional definitions set forth
in other Sections of this Article XIV shall apply to all
provisions of this Article XIV unless otherwise indicated.
14.2 Code
Section 409A. The Committee shall
determine the manner and the extent to which System Management
Participants may defer the receipt of certain Awards granted to
them under this Plan. The terms and conditions of such deferral
opportunities shall be set forth in the Participant’s Award
Agreement. 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 Code Section 409A,
the terms and administration of such Award shall comply with the
provisions of such Section and final 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 or any Award Agreement
to the contrary, in the event that the Committee determines that
any Award may be or become subject to Code Section 409A,
Entergy may adopt such amendments to the Plan and the affected
Award Agreement (without Participant consent) 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 and any Award Agreement from
the application of Code Section 409A
and/or
preserve the intended tax treatment of the benefits provided
with respect to the Award, or (ii) comply with the
requirements of Code Section 409A.
14.3 Deferral under the Executive Deferred
Compensation Plan. Subject to the terms and
conditions of the EDCP, and in accordance with the terms of the
applicable Equity Award agreement, Equity Awards otherwise
payable to Participants under this Plan may be deferred under
the EDCP.
14.4 Deferral Elections.
(a) Subject to the Deferral Election requirements set forth
in this Article XIV and such other rules, regulations, and
procedures as established by the Committee (or its delegate)
from time to time, a System Management Participant may elect to
defer (an “Initial Deferral Election”) Restricted
Share Units, Performance Units or Incentive Compensation under
the Executive Annual Incentive Plan (“EAIP”) used to
purchase Equity Awards in accordance with Section 8.1
(“EAIP Equity Awards”) (collectively, “Deferrable
Benefits”). Each Initial Deferral Election shall be made in
such form as the Committee may require, but in any event shall
be made: (1) on or before thirty (30) days following
the grant date of the Restricted Share Units and shall be
effective only with respect to Restricted Share Units that vest
upon completion of at least twelve (12) months of service
after the date of the System Management Participant’s
Initial Deferral Election; (2) no later than twelve
(12) months before the end of the Performance Period for
which the Performance Units are earned, provided such
Performance Units are “performance-based compensation”
for purposes of Code Section 409A; and (3) prior to the
beginning of the calendar year with respect to which the
Incentive Compensation used to purchase EAIP Equity Awards is
earned. Any such Initial Deferral Election shall apply only to
the specified Award payable with respect to a single Performance
Period or service period, as applicable, and shall not have any
continuing deferral effect or application as to Awards payable
for any future Performance Periods or service periods. That is,
a separate Initial Deferral Election must be made with respect
to each Award payable for each Performance Period and each
service period, as applicable.
(b) Subject to the applicable Deferral Election
requirements set forth in this Article XIV and such other
rules, regulations and procedures as may be established by the
Committee from time to time, a System Management Participant may
elect, pursuant to a subsequent election as to specified Awards
previously deferred hereunder (a “Successive Deferral
Election”), to irrevocably delay the payment of such
specified Awards to a specified payment date; provided that
(1) such Successive Deferral Election shall not take effect
until at least twelve (12) months after the date on which
the Successive Deferral Election is made, (2) the payment
of the Awards with respect to which the Successive Deferral
Election is made shall be deferred for a period of not less than
five (5) years from the date such previously deferred
Awards would otherwise have been paid, and (3) such
Successive Deferral Election shall be made not less than twelve
(12) months before the date the payment is scheduled to be
paid. A Successive Deferral Election shall be in such form as
the Committee may require.
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(c) A System Management Participant shall lose his
eligibility to make Initial Deferral Elections
and/or
Successive Deferral Elections under the Plan on the earliest of
the following events: (1) termination of System employment;
(2) loss of System Management Participant status; or
(3) written revocation of System Management Participant
status (for purposes of this Article XIV) based on a
false or misleading statement or representation made by the
System Management Participant to the Committee in the exercise
of any and all rights, options or directions available to the
System Management Participant under the terms of the Plan. That
is, by way of illustration and without limiting the breadth of
the foregoing, if the System Management Participant makes a
willful and deliberate misrepresentation to the Committee as a
means for qualifying for, or obtaining, a Financial Hardship
Distribution under Section 14.10(b), such System Management
Participant shall be subject to immediate loss of continued
System Management Participant status under this
Article XIV, except to the extent of any undistributed
Awards previously deferred by him under the Plan. Further, any
willful or deliberate misrepresentation made by a System
Management Participant shall subject him to disciplinary
actions, including discharge, by the Employer, or the right of
the Committee to demand and recover from the System Management
Participant any amounts distributed to him based on any such
false or misleading statements or misrepresentations.
14.5 Deferred Amount; Deferral Receipt
Date. Each Deferral Election may defer
receipt of any Deferrable Benefit, which may be less than the
entire amount of such Deferrable Benefit (a “Deferred
Amount”). Each Deferred Amount may be expressed as a number
of units or a percentage of the total of such Deferrable Benefit
due the System Management Participant. Receipt of each Deferred
Amount may be deferred to such date or dates as the System
Management Participant shall specify in his Deferral Election
(each, a “Deferral Receipt Date”), provided that:
(a) a Deferral Receipt Date pursuant to an Initial Deferral
Election shall be not less than two (2) years following the
date on which the Deferred Amount would otherwise be paid to the
System Management Participant;
(b) a Deferral Receipt Date pursuant to a Successive
Deferral Election shall be not less than five (5) years
following the date on which the previously Deferred Amount would
otherwise be paid to the System Management Participant; and
(c) the Deferral Receipt Date shall in no event be later
than the date on which the System Management Participant
terminates employment.
14.6 Deferral Election
Procedure. Each Deferral Election shall be
effective upon its execution and delivery to the Committee (or
its delegate), provided such delivery is made in accordance with
the time or times specified in Section 14.4. Once made, a
Deferral Election may not be revoked or modified. With respect
to all System Management Participants, the Committee shall have
the sole and exclusive authority and discretion, subject to
compliance with Code Section 409A, to establish rules,
regulations and procedures for the execution and delivery of any
Deferral Election and may condition such elections in any manner
that the Committee deems necessary, appropriate, or desirable.
14.7 Forfeiture of Deferred
Amounts. Each Deferral Election (including
any Successive Deferral Election) shall remain subject to
limitations or forfeitures of benefits for (a) breach of
any of the conditions of receipt of any Award under the Plan and
(b) failure of System Management Participant to satisfy any
of the conditions necessary to receipt of any Deferrable Benefit.
14.8 Payment of Deferred Amounts.
(a) Commencing with the effective date of a System
Management Participant’s Deferral Election and until the
corresponding Deferral Receipt Date, the applicable Deferred
Amount shall be either: (i) accounted for as units
(including fractional units) of Common Stock, the number of such
units being based on the value of a share of Common Stock on the
effective date of such Deferral Election, or (ii) deferred
into such deemed investment options, if any, under the EDCP as
the Committee or its delegate deems appropriate. Units that are
the subject of such Deferral Election shall be credited with
Dividend Equivalents in an amount equal to all dividends paid
with respect to a share of Common Stock during the Deferral
Election period and, if applicable, any Successive Deferral
Election period(s). All Dividend Equivalents will be reinvested
in additional units as of the payment date of the dividend in
respect of which they are awarded. If the Participant has chosen
to keep the Deferred Amount in Units, as soon as
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reasonably practicable following the System Management
Participant’s Deferral Receipt Date with respect to a
Deferred Amount, the Employer shall pay to the System Management
Participant in cash an amount equal to (i) the Fair Market
Value of a share of Common Stock on the Deferral Receipt Date,
multiplied by the number of units then credited to the System
Management Participant’s account (including units awarded
in respect of reinvested Dividend Equivalents) with respect to
such Deferred Amount, less (ii) all applicable estimated
federal and state income and employment tax amounts required to
be withheld in connection with such payment.
(b) Notwithstanding any Plan provision to the contrary, if
a System Management Participant is a Specified Employee at the
time of his “separation from service” within the
meaning of Code Section 409A and benefits become payable to
the System Management Participant under this Plan by reason of
such separation from service, then such benefits shall not be
paid to the System Management Participant prior to the earlier
of (i) the expiration of the six (6)-month period measured
from the date of the System Management Participant’s
separation from service, or (ii) the date of the
Participant’s death. If distribution is delayed pursuant to
this Subsection 14.8(b), the delayed distribution amount shall
continue to be credited with investment returns during the
period of delay as if such amount, at the election of the System
Management Participant, remained invested under the Plan or
under one or more of the deemed investment funds (as designated
from
time-to-time
in advance by the Committee or its delegate) made available
under the EDCP. Immediately following the earlier of the
Participant’s six-month delay period or the
Participant’s death, the full amount of the
Participant’s delayed distribution amount, including
investment returns deemed credited pursuant to this Subsection
14.8(b), shall be distributed in a single-sum payment to the
Participant or to his Beneficiary, as applicable. Any payments
that are delayed pursuant to this Subsection shall be paid by
the Employer in the seventh month after the date the System
Management Participant “separates from service.”
14.9 Acceleration of Deferred Amounts.
(a) Acceleration on
Death. Notwithstanding an irrevocable
Deferral Election (including any Successive Deferral Election),
if a System Management Participant dies, all of System
Management Participant’s outstanding Deferral Receipt Dates
shall be accelerated, and the entirety of System Management
Participant’s Deferred Amounts (net of any amounts required
to be withheld for federal and state taxes) shall be paid in a
single-sum distribution to the System Management
Participant’s beneficiary as soon as reasonably practicable
following the death of the System Management Participant and in
any event no later than the end of the calendar year in which
the System Management Participant’s death occurs, or, if
later, the 15th day of the third month immediately
following the death of the System Management Participant.
(b) Hardship
Distributions. Notwithstanding any other
provision of this Plan to the contrary, at any time a System
Management Participant may apply to the Committee for a special
distribution of all or any part of his Deferred Amounts valued
as of the date of his application on account of an Unforeseeable
Emergency (a “Financial Hardship Distribution”). For
this purpose, “Unforeseeable Emergency” means, in each
case determined in accordance with Code Section 409A and
regulations thereunder, a severe financial hardship to the
System Management Participant resulting from an illness or
accident of the System Management Participant, the System
Management Participant’s spouse or the System Management
Participant’s dependent (as defined in Code
Section 152, without regard to Code Section 152(b)(1),
(b)(2) or (d)(1)(B)); loss of the System Management
Participant’s property due to casualty; or other similar or
extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the System Management
Participant. Financial Hardship distributions shall be subject
to the following conditions:
(i) Any such distribution shall not be for a greater amount
than the amount reasonably necessary to satisfy the
Unforeseeable Emergency (including applicable income taxes and
penalties reasonably expected to result from the withdrawal),
and shall be subject to approval by the Committee or its
delegate. The Committee or its delegate shall consider the
circumstances of each such case and the best interest of the
System Management Participant and his family and shall have the
right, in its or his sole discretion to allow such Financial
Hardship Distribution, or if applicable, to direct a
distribution of part of the amount requested or to refuse to
allow any distribution.
(ii) Upon determination that such a Financial Hardship
Distribution shall be granted, the System Management
Participant’s Employer shall make the appropriate
distribution to the System Management Participant from its
general assets in respect of the System Management
Participant’s Deferred Amounts and
A-21
the Committee shall accordingly reduce or adjust the Deferred
Amounts credited to the System Management Participant. In no
event shall the aggregate amount of the Financial Hardship
Distribution exceed the full value of the System Management
Participant’s Deferred Amounts. For purposes of this
Section, the value of the System Management Participant’s
Deferred Amounts shall be determined as of the date of the
System Management Participant’s application for the special
distribution.
(iii) The Committee or its delegate shall consider any
requests for payment under this provision on a uniform and
nondiscriminatory basis and in accordance with the standards of
interpretation described in Code Section 409A and the
regulations thereunder. The circumstances that will constitute
an Unforeseeable Emergency will depend upon the facts of each
case, but, in any case, no withdrawal may be made to the extent
that such hardship is or may be relieved: through reimbursement
or compensation by available insurance or otherwise, by
liquidation of the System Management Participant’s assets,
to the extent the liquidation of such assets would not itself
cause severe financial hardship, or by the additional
compensation that will be available to the System Management
Participant as a result of the suspension of System Management
Participant deferrals.
(iv) The withdrawal shall be paid in the form of a
single-sum cash payment five (5) days following the
approval of the withdrawal by the Committee or its delegate or
at such later time as permitted under Code Section 409A and
the regulations thereunder. In the event a System Management
Participant receives a Financial Hardship Distribution pursuant
to this Subsection 14.9(b), his current deferrals under the Plan
will automatically cease. The System Management Participant may
apply to the Committee to resume deferrals with respect to Plan
Years beginning on or after the January 1 following the date of
such cessation of deferrals, provided, that the Committee shall
approve such resumption only if the Committee determines that
the System Management Participant is no longer incurring the
Unforeseeable Emergency for which the Financial Hardship
Distribution was approved. Any application to resume Deferral
Elections must be made in accordance with the Deferral Election
procedures set forth in this Article XIV.
14.10 Unfunded Plan. In the
case of Deferred Amounts credited to a System Management
Participant under the Plan, no actual Common Stock or units in
the respective Investments Funds under the EDCP shall be
purchased at the time of the deferrals, and Entergy Corporation,
the Employer, and the Plan, or any one of them, shall not be
required to set aside a fund or assets for the payment of any
such Deferred Amounts. It is a condition of the Plan, and the
System Management Participant expressly agrees, that neither he
nor any other person or entity shall look to any other person or
entity other than the Employer for the payment of benefits under
the Plan. The System Management Participant or any other person
or entity having or claiming a right to payments hereunder shall
rely solely on the unsecured obligation of the Employer set
forth herein. Nothing in this Plan shall be construed to give
the System Management Participant or any such person or entity
any right, title, interest, or claim in or to any specific
asset, fund, reserve, account or property of any kind
whatsoever, owned by Entergy Corporation or the Employer or in
which Entergy Corporation or the Employer may have any right,
title or interest now or in the future. However, the System
Management Participant or any such person or entity shall have
the right to enforce his claim against the Employer in the same
manner as any other unsecured creditor of the Employer.
14.11 Employer Liability. At
its own discretion, a System Company employer may purchase such
insurance or annuity contracts or other types of investments as
it deems desirable in order to accumulate the necessary funds to
provide for future benefit payments under the Plan. However,
(a) a System Company employer shall be under no obligation
to fund the benefits provided under this Plan; (b) the
investment of System Company employer funds credited to a
special account established hereunder shall not be restricted in
any way; and (c) such funds may be available for any
purpose the System Company may choose. Nothing stated herein
shall prohibit a System Company employer from adopting or
establishing a trust or other means as a source for paying any
obligations created hereunder provided, however, any and all
rights that any such System Management Participants shall have
with respect to any such trust or other fund shall be governed
by the terms thereof. An Employer reserves the right, in its
sole discretion, to establish or participate in and maintain a
rabbi trust to hold assets that may be used to cover the
Employer’s costs of the Plan including, without limitation,
a rabbi trust that provides for the actual investment of
Deferred Amounts in the respective investments as available to
the Employer, on the same basis as the deemed investment
directions made by the System Management Participant.
A-22
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: |
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| M32708-P09995 | 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 that you vote FOR all of the nominees: | ||||||||||||||
| 1. | Election of Directors | For | Against | Abstain | ||||||||||
| 1a. | M.S. Bateman
|
¨ | ¨ | ¨ | ||||||||||
| 1b. | G. W. Edwards
|
¨ | ¨ | ¨ | ||||||||||
| 1c. | A. M. Herman
|
¨ | ¨ | ¨ | ||||||||||
| 1d. | D. C. Hintz
|
¨ | ¨ | ¨ | ||||||||||
| 1e. | J. W. Leonard
|
¨ | ¨ | ¨ | ||||||||||
| 1f. | S. L. Levenick
|
¨ | ¨ | ¨ | ||||||||||
| 1g. | B. L. Lincoln
|
¨ | ¨ | ¨ | ||||||||||
| 1h. | S. C. Myers
|
¨ | ¨ | ¨ | ||||||||||
| 1i. | W. A. Percy, II
|
¨ | ¨ | ¨ | ||||||||||
| 1j. | W. J. Tauzin
|
¨ | ¨ | ¨ | ||||||||||
| 1k. | S. V. Wilkinson
|
¨ | ¨ | ¨ | ||||||||||
| The Board recommends that you vote FOR the following proposals: | For | Against | Abstain | |||||||
| 2. | Ratification of selection of Deloitte &
Touche LLP as Independent
Registered Public Accountants for 2011.
|
¨ | ¨ | ¨ | ||||||
| 3. | Approval of Advisory Vote on
Executive Compensation.
|
¨ | ¨ | ¨ | ||||||
| The Board recommends that you vote for one year: | ||||||||||||
| 4. | Recommend Frequency on Advisory
Vote on Executive Compensation.
|
1 year ¨ | 2 years ¨ | 3 years ¨ | Abstain ¨ |
|||||||
| The Board recommends that you vote FOR the following proposal: | For | Against | Abstain | |||||||
| 5. | Approval of the 2011 Entergy
Corporation Equity Ownership and
Long Term Cash Incentive Plan.
|
¨ | ¨ | ¨ | ||||||
NOTE: Such other business as may properly
come before the meeting or any adjournment thereof.
come before the meeting or any adjournment thereof.
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.
|
|
|
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Signature [PLEASE SIGN WITHIN BOX]
|
Date | Signature (Joint Owners) | Date | |||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and our 2010 Annual Report to Shareholders are available
at http://www.entergy.com/investor_relations/2010_publications.aspx.
The Proxy Statement and our 2010 Annual Report to Shareholders are available
at http://www.entergy.com/investor_relations/2010_publications.aspx.
| M23709-P09995 | ||
ENTERGY CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS FOR THE 2011 ANNUAL MEETING OF
SHAREHOLDERS, MAY 6, 2011
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS FOR THE 2011 ANNUAL MEETING OF
SHAREHOLDERS, MAY 6, 2011
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 2011 Annual Meeting of
Shareholders to be held on May 6, 2011, 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.
Continued and to be signed on reverse side
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 TABLES2010 Summary Compensation Table2010 Grants of Plan-Based Awards2010 Outstanding Equity Awards at Fiscal Year-End2010 Option Exercises and Stock Vested2010 Pension Benefits2010 Non-qualified Deferred Compensation2010 Potential Payments Upon Termination or Change in ControlEquity Compensation Plan Information2010 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 ACTIONProposal 1 Election of DirectorsProposal 2 Ratification of selection of Deloitte & Touche LLP as Independent Registered Public Accountants for 2011Proposal 3 Advisory Vote on Executive CompensationProposal 4 Advisory Vote on the Frequency of Advisory Votes on Executive CompensationProposal 5 Approval of the 2011 Equity Ownership and Long Term Cash Incentive Plan of Entergy Corporation and SubsidiariesOTHER INFORMATIONShareholder Proposals for 2012 MeetingAnnual Report on Form 10-K