8-KLeadership ChangesMaterial Agreements

ENTERGY CORP /DE/ 8-K Report, Agreement Terminated (Aug 1, 2007)

Filed August 1, 2007For Securities:ETR

Summary

Entergy Corp. (ETR) filed an 8-K on August 1, 2007, reporting a material change to an executive compensation agreement. Effective July 26, 2007, the company and Richard Smith, President and Chief Operating Officer, mutually agreed to rescind his previous retention agreement. This rescission reinstates Mr. Smith into one of Entergy's System Executive Continuity Plans (SECPs). These plans provide specific benefits to executive officers in the event of termination without cause or resignation for good reason during a change in control period. This move aligns Mr. Smith's change-in-control benefits with those of other senior executives. Notably, Mr. Smith has voluntarily capped his potential cash payout under the SECPs at 2.99 times his compensation, a level that was in place before March 2004 when the cap was implemented. This voluntary limitation is lower than the standard SECP benefit he would otherwise be entitled to. Investors should note that this change modifies the executive's existing change-in-control protections.

Key Highlights

  • 1Rescission of Richard Smith's retention agreement, President and COO.
  • 2Mr. Smith reinstated into one of Entergy's System Executive Continuity Plans (SECPs).
  • 3SECPs provide benefits upon termination without cause or resignation for good reason during a change in control period.
  • 4Aligns Mr. Smith's change-in-control benefits with other executive officers.
  • 5Mr. Smith voluntarily capped his cash payment under SECPs at 2.99, lower than his entitlement.
  • 6The change is effective July 26, 2007.

Frequently Asked Questions

The main event is the rescission of a retention agreement for Richard Smith, President and Chief Operating Officer, and his subsequent reinstatement into Entergy's System Executive Continuity Plans (SECPs).

The agreement was mutually rescinded to align Mr. Smith's change-in-control benefits with those of other executive officers by having him participate in the standard SECPs.

The SECPs provide certain benefits to executive officers if their employment is terminated other than for 'cause' or if they resign for 'good reason' within a specified 'change in control period' (90 days before to 24 months after a change in control).

Yes, Mr. Smith voluntarily elected to limit his potential cash payment under the SECPs to a 2.99 cap, which is lower than the full benefit he would otherwise be entitled to under the plans. This cap was in effect prior to March 2004.