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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Central Louisiana Electric Company, Inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[CENTRAL LOUISIANA ELECTRIC COMPANY, INC. LOGO]
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
MARCH 12, 1997
3
[CENTRAL LOUSIANA ELECTRIC COMPANY, INC. LOGO]
March 12, 1997
To the Shareholders of
Central Louisiana Electric Company, Inc.
The annual meeting of shareholders for 1997 will be held at the Pineville
High School Auditorium at 1511 Line Street, Pineville, Louisiana, on Friday,
April 25, 1997, at 9 a.m., Central time. A notice of annual meeting of
shareholders and proxy statement is enclosed herewith, together with a proxy
that may be used by shareholders who are unable to attend the meeting in person.
The principal items of business to be transacted at the annual meeting are:
(1) the election of directors; and (2) the appointment of independent auditors
of the Company for the year ending December 31, 1997.
The board of directors of the Company recommends election of the nominees
for directors and appointment of the independent auditors, in each case as named
or described in the accompanying proxy statement.
You are cordially invited to attend the meeting. Even if you now expect to
attend the meeting, you are requested to sign, date and return the accompanying
proxy in the enclosed addressed envelope that requires no postage if mailed in
the United States. If you attend the meeting, you may vote in person even though
you have mailed in your proxy. Your continued interest and cooperation are
greatly appreciated.
Sincerely,
/s/ GREGORY L. NESBITT
Gregory L. Nesbitt
President and Chief Executive Officer
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1997
To the Shareholders of
Central Louisiana Electric Company, Inc.
Notice is hereby given that the annual meeting of shareholders of Central
Louisiana Electric Company, Inc. (the "Company") will be held at the Pineville
High School Auditorium at 1511 Line Street, Pineville, Louisiana, on Friday,
April 25, 1997, at 9 a.m., Central time, for the following purposes:
(1) To elect directors;
(2) To consider and act upon a proposal to appoint the firm of Coopers &
Lybrand L.L.P., independent certified public accountants, as auditors
of the Company for the year ending December 31, 1997; and
(3) To transact such other business as may properly come before the meeting
or any adjournments thereof.
Holders of record of common stock and preferred stock of the Company at the
close of business on February 25, 1997 are entitled to notice of and to vote at
the annual meeting.
The bylaws of the Company require that the holders of shares of capital
stock representing a majority of the votes entitled to be cast be represented in
person or by proxy at the meeting in order to constitute a quorum for the
transaction of business. Therefore, it is important that your stock be
represented at the meeting.
Please date, sign and return the enclosed proxy in the accompanying
envelope.
By order of the board of directors.
/s/ MICHAEL P. PRUDHOMME
Michael P. Prudhomme
Secretary/Treasurer
March 12, 1997
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
P. O. Box 5000
Pineville, Louisiana 71361-5000
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
The accompanying proxy is solicited on behalf of the board of directors of
Central Louisiana Electric Company, Inc. (the "Company") to be voted at the
annual meeting of shareholders of the Company to be held at the time and place
and for the purposes set forth in the foregoing notice. In addition to the
original solicitation by mail, certain regular employees of the Company may
solicit proxies by telephone, facsimile or in person, and Morrow & Company, Inc.
("Morrow") has been retained on customary terms to assist in the solicitation of
proxies. The Company has engaged Morrow to assist in the solicitation of proxies
at a fee of approximately $11,000, plus expenses. Other than Morrow, no
specially engaged employees or solicitors will be retained to solicit proxies.
All expenses of such solicitation, including the cost of preparing and mailing
this proxy statement and the reimbursement of brokerage firms and other nominees
for their reasonable expenses in forwarding proxy material to beneficial owners
of the Company's capital stock, will be borne by the Company. This proxy
statement and the accompanying proxy are being mailed to shareholders beginning
on or about March 12, 1997.
All duly executed proxies will be voted in accordance with the instructions
thereon. If no instructions have been given in a proxy, the shares represented
thereby will be voted at the annual meeting of shareholders or any adjournments
thereof FOR Item 1 (election of the nominees for director), FOR Item 2
(appointment of Coopers & Lybrand L.L.P. as independent auditors of the Company
for 1997) and, in the discretion of the persons named in the proxy, on any other
business that may properly come before the meeting.
Shareholders who execute proxies retain the right to revoke them at any
time before they are voted. A shareholder who attends the meeting may vote in
person even though such shareholder has mailed in a proxy. A proxy may be
revoked by a proxy bearing a later date. The revocation of a proxy will not be
effective until written notice thereof has been given to the secretary of the
Company, unless the person granting such proxy votes in person.
VOTING OF SECURITIES
As of February 25, 1997, the record date for the determination of
shareholders entitled to vote at the meeting, the Company had outstanding
22,458,556 shares of common stock, par value $2.00 per share ("Common Stock"),
and 364,550 shares of preferred stock, par value $100 per share ("$100 Preferred
Stock"), which are the only classes of stock of the Company outstanding and
entitled to vote at the meeting. Each holder of shares of Common Stock or $100
Preferred Stock is entitled to one vote for each share held, except that at an
election of directors, each holder of shares of Common Stock is entitled to cast
as many votes as equal the number of such holder's shares multiplied by the
number of directors to be elected, and may cumulate all or any part of such
votes for one or more of the nominees.
Under Louisiana law and the Company's articles of incorporation and bylaws,
an abstention from voting on a matter by a shareholder present in person or
represented by proxy at the meeting is not a vote "cast" and is counted neither
"for" nor "against" the matter subject to the abstention. Broker non-votes on
matters are treated as shares as to which voting power has been withheld by the
beneficial holders of those shares and, therefore, as shares not entitled to
vote. Under Louisiana law and the Company's articles of incorporation and
bylaws, a quorum is determined based upon the number of outstanding shares of
capital stock of the Company entitled to vote on a matter, including shares
relating to abstentions.
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ELECTION OF DIRECTORS
The Company's bylaws provide for the division of the board of directors
into three classes, Class I, Class II and Class III, with each class consisting,
as nearly as possible, of one-third of the number of directors constituting the
whole board. The term of each directorship is three years, and the terms of the
three classes are staggered in a manner so that only one class is elected by the
shareholders annually. Those persons who served as directors of the Company
during the past year are named in the Company's 1996 Summary Annual Report.
Three Class III directors are to be elected this year to serve as members of the
board of directors until the annual meeting of shareholders in 2000, or until
their successors are elected and qualified. The persons named in the
accompanying proxy may act with discretionary authority (i) with respect to
cumulative voting of shares of Common Stock and (ii) upon the unavailability of
a nominee for election, although management is unaware of any circumstances
likely to render any of the nominees unavailable for election. Unless a
shareholder specifies otherwise, the persons named in the accompanying proxy
intend to vote in favor of the nominees listed below. The affirmative vote of a
plurality of the total votes cast is required for the election of directors. All
of the nominees currently serve as directors of the Company. Directors who are
members of Classes I and II, who are continuing as directors at this time and
whose terms of office expire in 1998 and 1999, respectively, are named on page 3
below.
Mr. Ernest L. Williamson, who has served as a director since 1989, will
retire from the board of directors effective at the annual meeting of
shareholders since he has reached the retirement age for outside directors
specified in the Company's bylaws. Neither the shareholders nor the board of
directors have nominated anyone to fill the vacancy created by Mr. Williamson's
retirement. Prior to the annual meeting of shareholders, the board of directors
will take action pursuant to the bylaws to decrease the number of directors from
ten to nine effective with Mr. Williamson's retirement.
DIRECTORS
The following sets forth information concerning the three nominees for
election as directors at the annual meeting of shareholders and the continuing
directors, including the business experience of each during the past five years.
NOMINEES FOR ELECTION UNTIL 2000 ANNUAL MEETING
CLASS III DIRECTORS
J. PATRICK GARRETT has been president and chief executive officer of
Windsor Food Company Ltd., a privately held company engaged in the food
processing business, since July 1995. Prior to that time, he had been engaged in
the practice of law for more than five years as a member of the law firm of
Baker & Botts, L.L.P. Mr. Garrett (age 53) has served as a director of the
Company since 1981 and is a member of the compensation committee of the board of
directors.
F. BEN JAMES, JR. has been president of James Investments, Inc., a company
primarily engaged in real estate development and international marketing, for
more than five years. Mr. James (age 61) has been a director of the Company
since 1986 and is chairman of the audit committee of the board of directors. He
is also a director of First Commerce Corporation.
A. DELOACH MARTIN, JR. has been chairman of Central Engineering & Supply
Company, a company engaged in the wholesale distribution of refrigeration and
mill supplies, for more than five years. Mr. Martin (age 67) became a director
of the Company in 1978 and is chairman of the executive committee and a member
of the audit committee of the board of directors.
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CONTINUING DIRECTORS
CLASS I DIRECTORS
(TERMS OF OFFICE EXPIRE IN 1998)
SHERIAN G. CADORIA has served as president of Cadoria Speaker and
Consultancy Service since January 1992. She retired in 1990 as Brigadier General
of the United States Army after a 29-year military career. Ms. Cadoria (age 57)
has been a director of the Company since 1993 and is a member of the
compensation committee of the board of directors.
HUGH J. KELLY is a retired president and chief executive officer of Ocean
Drilling & Exploration Company, a company which has offshore drilling operations
and explores for and produces oil and gas. Before his retirement in 1989, he had
served as chief executive officer since 1977 and as president and director since
1974. He is now an oil and gas consultant. Mr. Kelly (age 71) has been a
director of the Company since 1992 and is a member of the audit committee of the
board of directors. He is also a director of Tidewater Inc., Hibernia
Corporation, Hibernia National Bank, Chieftain International, Inc. and Gulf
Island Fabrication, Inc.
GREGORY L. NESBITT has served as chief executive officer of the Company
since 1993 and has served as president since 1992; he had served as chief
operating officer from 1991 to 1993 and as executive vice president from 1988 to
1991. Mr. Nesbitt (age 59) has been a director of the Company since 1988 and is
a member of the executive committee of the board of directors. He joined the
Company in 1980 and served as senior vice president of the Company's electric
power supply group until January 1988.
CLASS II DIRECTORS
(TERMS OF OFFICE EXPIRE IN 1999)
ROBERT T. RATCLIFF has been chairman, president and chief executive officer
of Ratcliff Construction Company, Inc., a company primarily engaged in the
design and construction of industrial, commercial and governmental facilities,
since 1975. Mr. Ratcliff (age 54) has been a director of the Company since 1993
and is a member of the audit committee of the board of directors. He is also a
director of Hibernia Corporation and Hibernia National Bank.
EDWARD M. SIMMONS is chairman of the board and chief executive officer of
McIlhenny Company (makers of Tabasco brand products). Prior to being named
chairman of the board in June 1996, Mr. Simmons had served as president and
chief executive officer of McIlhenny Company for more than five years. Mr.
Simmons (age 68) has been a director of the Company since 1992 and he previously
served on the Company's board of directors during the period 1971-1981. He is
chairman of the compensation committee and a member of the executive committee
of the board of directors and also serves as a director of First Commerce
Corporation, First National Bank of Commerce, Pan American Life Insurance
Company and Piccadilly Cafeterias, Inc.
WILLIAM H. WALKER, JR. is president and a director of Howard, Weil,
Labouisse, Friedrichs Inc., an investment banking firm, and has served in such
positions for more than five years. Mr. Walker (age 51) has been a director of
the Company since September 1996.
ORGANIZATION AND COMPENSATION OF THE BOARD OF DIRECTORS
The board of directors has an executive committee, an audit committee (the
"Audit Committee") and a compensation committee (the "Compensation Committee").
The members of such committees are identified under "-- Directors" above. The
board of directors has no standing nominating committee.
The Audit Committee recommends to the board of directors the appointment of
the independent auditors of the Company, reviews the scope of audits, reviews
and recommends to the board of directors financial reporting and accounting
practices, reviews the scope and results of the Company's procedures for
internal auditing and the adequacy of the system of internal accounting controls
of the Company, and
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has responsibility with respect to audit matters generally. During 1996, the
Audit Committee held two meetings.
The Compensation Committee approves, or in some cases recommends to the
board of directors, remuneration arrangements and compensation plans involving
the Company's directors, officers and employees, and administers the granting of
restricted stock and other awards to eligible employees under the Company's
long-term incentive compensation plan and annual incentive compensation program
described below. The Compensation Committee held two meetings in 1996.
The board of directors held four regular meetings and two special meetings
during 1996. At intervals between formal meetings, members of the board are
provided with information regarding the operations of the Company and are
consulted informally from time to time with respect to pending business. During
1996, all directors attended at least 75% of the total number of meetings of the
board of directors and of the committees of the board of directors on which such
directors served.
The director who is a regularly employed officer of the Company receives no
fees for serving as a director of the Company. Each other director who is not
the chairman of a board committee receives an annual fee of $12,000 for serving
as a director. Each director who is the chairman of a board committee receives
an additional annual fee of $3,000. Each director receives $800 for each day he
or she attends one or more meetings of the board of directors or its committees.
The Company also reimburses directors for travel and related expenses incurred
in attending meetings of the board of directors or such committees. The Company
has in effect a deferred compensation plan for directors under which a director
may elect to defer all or part of his or her compensation as a director. The
Company has a retirement plan for its non-employee directors under which
directors with five years of service receive at age 65 or upon later retirement
an annual payment equal to the annual board fee in effect at the time of
retirement. Benefits are payable for life or a period equal to the number of
years of service as a director, whichever is shorter. The Company also provides
its non-employee directors $200,000 of life insurance and permanent total
disability coverage under the Company's group accidental death and dismemberment
plan, which covers all active, full-time employees.
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SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth the number of shares of Common Stock and
$100 Preferred Stock beneficially owned as of February 1, 1997 by each director
and nominee, each of the executive officers named in the Summary Compensation
Table below and all directors and executive officers as a group.
AMOUNT AND
NATURE OF
AMOUNT AND NATURE OF BENEFICIAL BENEFICIAL
OWNERSHIP OF COMMON STOCK(1) OWNERSHIP OF
---------------------------------------- $100 PREFERRED
OPTIONS STOCK(2)
EXERCISABLE -------------------
WITHIN PERCENT PERCENT
DIRECT 60 DAYS OTHER OF CLASS INDIRECT OF CLASS
------- ----------- ----- -------- -------- --------
DIRECTORS
- -----------
Sherian G. Cadoria....................... 150 * *
J. Patrick Garrett....................... 4,744 * *
F. Ben James, Jr......................... 2,400 * *
Hugh J. Kelly............................ 2,000 * *
A. DeLoach Martin, Jr.................... 19,200 * *
Gregory L. Nesbitt(3).................... 45,631 2,000 * 283 *
Robert T. Ratcliff....................... 1,000 * *
Edward M. Simmons........................ 1,283 * *
William H. Walker, Jr.................... 0 * *
Ernest L. Williamson..................... 1,000 * *
NAMED OFFICERS
- ------------------
Robert L. Duncan......................... 29,269 2,600 * 327 *
David M. Eppler.......................... 16,810 2,800 7 * 334 *
Catherine C. Powell...................... 3,371 * 181 *
Michael P. Prudhomme..................... 5,380 6,000 * 207 *
All directors and executive officers as a
group (16 persons, including those
listed above).......................... 138,853 18,400 7 .70% 1,704 *
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(1) In accordance with Securities and Exchange Commission regulations, shares
are deemed to be "beneficially owned" by a person if such person directly or
indirectly has or shares the power to vote or to dispose of the shares,
regardless of whether such person has any economic interest in the shares.
In addition, a person is deemed to own beneficially any shares of which such
person has the right to acquire beneficial ownership within 60 days, as in
the case of the stock options which are set forth under the "Options
Exercisable Within 60 Days" column. Shares of Common Stock listed under the
"Direct" column are those as to which each named individual has sole voting
or dispositive power, including shares held under the Company's 401(k)
Savings and Investment Plan (1,311 shares for Mr. Nesbitt, 144 shares for
Mr. Eppler, 29 shares for Ms. Powell, 43 shares for Mr. Prudhomme and 268
shares for other executive officers included in the amount shown for all
directors and executive officers as a group) and shares granted as
restricted stock awards under the Company's long-term incentive compensation
plan described below (10,726 shares for Mr. Nesbitt, 3,718 shares for Mr.
Eppler, 3,367 shares for Mr. Duncan, 2,576 shares for Ms. Powell, 1,760
shares for Mr. Prudhomme and 1,835 shares for other executive officers
included in the amount shown for all directors and executive officers as a
group). Shares listed under the "Other" column are those as to which the
named individual shares voting and dispositive power with another person.
(2) The shares of $100 Preferred Stock beneficially owned by the individuals
indicated in the table are shares held for the respective accounts of
executive officers under the ESOP Component of the Company's 401(k) Savings
and Investment Plan.
(3) Mr. Nesbitt is also the president and chief executive officer of the
Company.
* Less than 1% of class.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended ("Section
16(a)"), requires the Company's executive officers and directors, and persons
who beneficially own more than 10% of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission and the New York
Stock Exchange initial reports of ownership and reports of changes in ownership
of the Company's equity securities. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no year-end reports on Form 5 were required, during the
fiscal year ended December 31, 1996, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater-than-10%
shareholders were satisfied.
EXECUTIVE COMPENSATION
GENERAL
The Summary Compensation Table sets forth individual compensation
information with respect to the chief executive officer and the four other most
highly paid executive officers of the Company for services rendered in all
capacities to the Company during the fiscal years ended December 31, 1996,
December 31, 1995 and December 31, 1994. The table discloses the annual salary,
bonuses and other compensation awards and payouts to the named executive
officers.
SUMMARY COMPENSATION TABLE
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LONG-TERM
COMPENSATION
ANNUAL COMPENSATION PAYOUTS
------------------------------------ ------------
(a) (b) (c) (d) (e) (f) (g)
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OTHER ALL
ANNUAL OTHER
COMPEN- LTIP COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) SATION(2)(3) PAYOUTS(4) SATION(5)
- --------------------------- ---- -------- -------- ------------ ---------- ---------
Gregory L. Nesbitt.......... 1996 $271,081 $130,600 $11,954 $144,187 $6,000
President and Chief 1995 269,796 94,800 10,546 146,135 6,000
Executive Officer 1994 242,431 66,000 17,530 54,476 6,000
David M. Eppler............. 1996 $140,808 $62,800 $ 4,302 $ 58,526 $6,483
Executive Vice President 1995 140,807 49,956 4,446 72,970 6,442
1994 140,031 25,300 7,012 27,343 6,098
Robert L. Duncan............ 1996 $131,004 $53,100 $ 3,909 $ 51,626 $6,939
Vice President -- Customer 1995 128,945 42,268 4,080 69,182 6,898
Operations 1994 124,200 31,900 6,584 30,036 6,843
Catherine C. Powell......... 1996 $102,000 $44,400 $ 2,872 $ 33,523 $5,683
Vice President -- Employee 1995 96,024 32,528 1,666 0 4,715
& Corporate Services 1994 85,126 15,400 2,182 0 3,405
Michael P. Prudhomme........ 1996 $102,672 $30,300 $ 2,171 $ 27,505 $6,038
Secretary -- Treasurer 1995 107,970 17,600 2,606 48,258 5,576
1994 99,451 9,000 3,326 26,509 5,244
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(1) The "Bonus" column includes cash awards that are payable or have been paid
to executive officers pursuant to an annual incentive compensation program
under which participants may receive incentive compensation in addition to
base compensation determined by the performance of the Company and the
individual participants, and merit lump-sum payments received by certain
named officers.
(2) For 1994, 1995 and 1996, the "Other Annual Compensation" column includes
long-term incentive plan compensation which represents dividends paid on
restricted stock awards. Dividends on restricted stock are paid quarterly
and at the same rate as dividends on the Common Stock. As
(Footnotes continued on following page)
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permitted by the rules on executive officer compensation disclosure,
restricted stock awards granted under the Company's long-term incentive
compensation plan, which are subject to performance-based vesting
requirements, are reported under the "Long-Term Incentive Plan -- Awards in
1996" table below. The number and value of the aggregate restricted stock
holdings at December 31, 1996, a portion of which is included in the "LTIP
Payouts" column, for each of the named executive officers were as follows:
Gregory L. Nesbitt, 7,813 shares with a value of $215,834; David M. Eppler,
2,812 shares with a value of $77,681; Robert L. Duncan, 2,555 shares with a
value of $70,582; Catherine C. Powell, 1,877 shares with a value of $51,852;
and Michael P. Prudhomme, 1,419 shares with a value of $39,200.
(3) For 1994, the "Other Annual Compensation" column includes the amount paid to
the named executive officers as reimbursement for payment of taxes incurred
relating to future benefits accrued in 1994 pursuant to the Company's
Supplemental Executive Retirement Plan.
(4) For 1994, 1995 and 1996, the "LTIP Payouts" column includes the value of
restricted stock and opportunity shares under the Company's long-term
incentive compensation plan vested in 1995 relating to the performance
period January 1, 1992 to December 31, 1994, in 1996 relating to the
performance period January 1, 1993 to December 31, 1995, and in 1997
relating to the performance period January 1, 1994 to December 31, 1996,
respectively, and related tax gross-up amounts.
(5) For 1994, 1995 and 1996, respectively, the "All Other Compensation" column
includes: (i) amounts contributed or accrued by the Company under the
Company's 401(k) Savings and Investment Plan on behalf of the named
executive officers as follows: Gregory L. Nesbitt, $6,000, $6,000 and
$6,000; David M. Eppler, $5,999, $6,000 and $6,000; Robert L. Duncan,
$6,000, $6,000 and $6,000; Catherine C. Powell, $3,405, $4,594 and $5,488;
and Michael P. Prudhomme, $4,436, $4,679 and $5,099; and (ii) term life
insurance premiums paid for the benefit of the named executive officers as
follows: Gregory L. Nesbitt, $0, $0 and $0; David M. Eppler, $99, $442 and
$483; Robert L. Duncan, $843, $898 and $939; Catherine C. Powell, $0, $121
and $195; and Michael P. Prudhomme, $808, $897 and $939.
STOCK OPTION PLANS
The Company currently maintains two plans pursuant to which options to
purchase shares of Common Stock are outstanding or available for future grants.
The Company's 1981 Incentive Stock Option Plan (the "Stock Option Plan"),
covering an aggregate of 800,000 shares of Common Stock, expired in 1991 and no
future grants can be made under this plan. As of February 1, 1997, options
covering 18,400 shares remained to be exercised pursuant to grants made under
the Stock Option Plan. The Company has in effect a long-term incentive
compensation plan pursuant to which certain officers and key employees may
receive stock options or stock appreciation rights. This plan is discussed in
greater detail under the section "Long-Term Incentive Plan" below. No stock
options were granted under the long-term incentive compensation plan in 1996.
Although the long-term incentive compensation plan permits grants of stock
appreciation rights, no such rights had been granted under the plan as of
December 31, 1996.
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The following table sets forth, for each of the persons listed in the
Summary Compensation Table, certain information concerning stock options
exercised during 1996. The table also discloses information concerning
unexercised stock options held at December 31, 1996.
AGGREGATE OPTION EXERCISES IN 1996 AND 1996 YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- ----------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT MONEY OPTIONS AT
SHARES DECEMBER 31, 1996(#) DECEMBER 31, 1996
ACQUIRED ON VALUE --------------------------- ------------------------------
NAME EXERCISE(#) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE
---- ----------- ----------- ----------- ------------- -------------- -------------
Gregory L. Nesbitt..... 1,000 $10,595 2,000 0 $21,690 $0
David M. Eppler........ 2,800 28,266 2,800 0 30,366 0
Robert L. Duncan....... 3,000 30,847 2,600 0 28,197 0
Catherine C. Powell.... 0 0 0 0 0 0
Michael P. Prudhomme... 0 0 6,000 0 65,070 0
- ---------------
(1) Based on the closing price of the Common Stock on the New York Stock
Exchange Composite Tape on the exercise date and at year-end, as the case
may be, minus the exercise price.
LONG-TERM INCENTIVE PLAN
The Company has in effect a long-term incentive compensation plan (the
"Long-Term Plan"), pursuant to which certain officers and key employees may
receive stock incentives and/or cash incentives based on the value of the Common
Stock. Five types of awards may be granted under the Long-Term Plan: (i) stock
awards consisting of restricted stock and "opportunity shares" which may be
awarded in connection with restricted stock awards; (ii) restricted unit awards
consisting of Common Stock equivalent units and "opportunity units" which may be
awarded in connection with restricted unit awards; (iii) nonstatutory stock
options or incentive stock options; (iv) stock appreciation rights attached to
stock options; and (v) stock appreciation rights not attached to stock options.
An aggregate of 800,000 shares of Common Stock, or cash equivalents of Common
Stock, may be issued pursuant to the Long-Term Plan (such number being subject
to antidilution adjustments under certain circumstances). Plan participants,
awards to participants, performance measurement periods and performance goals
are determined by the Compensation Committee. Upon a change of control of the
Company or merger or similar transaction involving the Company, all restrictions
imposed on awards under the Long-Term Plan will lapse, all unvested rights will
vest and all stock options and similar rights granted under the plan will become
fully exercisable, subject to certain limitations imposed by the Long-Term Plan.
The following table sets forth, for each of the persons listed in the
Summary Compensation Table, information as to long-term incentive plan awards
granted under the Long-Term Plan during 1996.
LONG-TERM INCENTIVE PLAN -- AWARDS IN 1996
- --------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
- -------------------------------------------------------------------------------------------------------
ESTIMATED FUTURE PAYOUTS
PERFORMANCE OR ------------------------------------------
OTHER PERIOD UNTIL NUMBER OF NUMBER OF NUMBER OF
NUMBER OF MATURATION OR THRESHOLD TARGET MAXIMUM
NAME SHARES(#)(1) PAYOUT SHARES(#)(2) SHARES(#)(2) SHARES(#)(3)
---- ------------ ------------------ ------------ ------------ ------------
Gregory L. Nesbitt...... 3,036 1/1/96-12/31/98 759 3,036 4,554
David M. Eppler......... 1,048 1/1/96-12/31/98 262 1,048 1,572
Robert L. Duncan........ 975 1/1/96-12/31/98 244 975 1,462
Catherine C. Powell..... 759 1/1/96-12/31/98 190 759 1,139
Michael P. Prudhomme.... 573 1/1/96-12/31/98 143 573 860
(Footnotes on following page)
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- ---------------
(1) The amounts under column (b) "Number of Shares" represent the target level
of performance-based restricted stock awards granted to the named executive
officers in 1996, as reflected in column (e) "Number of Target Shares." For
further information concerning these awards and the award of "opportunity
shares" granted in connection with the restricted stock, see the discussion
under footnotes 2 and 3 below.
(2) The amounts under columns (d) "Number of Threshold Shares" and (e) "Number
of Target Shares" represent performance-based restricted stock awards
granted to the named executive officers in 1996 that will vest under the
threshold and target levels established by the Compensation Committee. The
restricted stock awards vest based on total return to shareholders (Common
Stock price appreciation plus dividends paid during performance cycle) in
relation (by percentile) to a peer group of other utilities ("Total Return
to Shareholders"). The vesting (payout) schedule for the restricted stock
awards set forth under these two columns, based on the Company's Total
Return to Shareholders ranking, is as follows:
(a) No awards vest if the Company's ranking is below the 25th
percentile.
(b) Threshold performance provides 25% award payout at the 25th
percentile.
(c) Target performance provides 100% award payout from the 45th
percentile to the 55th percentile.
Performance awards above the threshold level and below the target level
will be prorated.
The recipient of a restricted stock award is the record owner of the number
of target shares awarded, which are issued in the name of the recipient but
held in escrow by the Company until delivery to or forfeiture by the
recipient. The recipient may vote the shares covered by the award and
receives dividends with respect thereto, but generally may not sell, pledge
or otherwise transfer such shares until the restriction period imposed by
the Compensation Committee comes to an end and the performance goals
established by the committee have been met. The recipient may, at the end
of the restriction period, forfeit all or a portion of the restricted
shares awarded depending on the performance level achieved. The restriction
period for restricted stock awarded during 1996 is three years from the
date of grant (January 1999). The restricted stock awards require an
additional three-year holding period following vesting before any shares
may be sold.
(3) The amounts under column (f) "Number of Maximum Shares" represent the number
of performance-based restricted stock awards that vest at the target level
set forth under column (e) "Number of Target Shares" plus the number of
performance-based "opportunity shares" granted to the named executive
officers in 1996 that will vest between the target and maximum levels
established by the Compensation Committee. The "opportunity shares" vest
based on Total Return to Shareholders and will be issued when the
restriction period on the associated restricted stock awards lapses. The
vesting (payout) schedule for the "opportunity shares" included in this
column, based on the Company's Total Return to Shareholders ranking, is as
follows:
(a) No awards of "opportunity shares" vest if the Company's ranking is
at or below the 55th percentile.
(b) Maximum performance provides 100% "opportunity share" award payout
(equal to 50% of number of target shares of restricted stock) at the
75th percentile.
Performance awards of "opportunity shares" above the target level and below
the maximum level will be prorated.
"Opportunity shares" awarded in connection with a restricted stock award
will not be issued until the lapse of restrictions on the related
restricted stock and do not entitle the recipient to the rights of a
shareholder with respect to the "opportunity shares" until the time of
issuance of the Common
(Footnotes continued on following page)
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Stock representing the "opportunity shares." Provisions of the "opportunity
share" awards require an additional three-year holding period following
vesting before any of the shares may be sold.
PENSION PLAN
The Company has in effect a pension plan and related trust (the "Pension
Plan"), covering substantially all employees of the Company, under which the
Company makes such contributions as are actuarially necessary to provide for the
retirement benefits established under the plan. Benefits are based on employees'
earnings, length of service, age at retirement, payment form elected,
application of statutory benefit limits, and certain other factors, and are
payable upon normal retirement at age 65, upon early retirement beginning at age
55 or after termination of employment under certain circumstances. Annual
benefits under the Pension Plan are limited to the maximum amount prescribed by
sections 415 and 401(a)(17) of the Internal Revenue Code of 1986, as amended
(the "Code"). For 1997, the annual compensation of each employee which is to be
taken into account under the Pension Plan cannot exceed $160,000, and the
maximum allowable pension benefit for the plan is limited to $125,000. Payments
to retired employees under the Pension Plan are not reduced for Social Security
benefits or other offsetting amounts.
In addition, effective July 1, 1992, the Company established a Supplemental
Executive Retirement Plan (the "SERP") for the benefit of certain participants
designated by the Compensation Committee. The SERP provides participants who
have completed ten years of service and terminated employment after reaching age
65 with a right to monthly payments for the life of the participant and
surviving spouse equal to 65% of final average compensation, reduced by the
Pension Plan benefit and benefits under other previous employer pension plans.
The SERP also provides adjusted benefits for early retirement on or after age 55
with ten years of service, for termination of service due to disability and for
beneficiaries in the event of the death of the participant. Benefits under the
SERP are payable out of the Company's general funds. The SERP participants in
1996 were the five individuals named in the Summary Compensation Table and one
other executive officer of the Company.
Under the Pension Plan, eligible remuneration for purposes of determining
the annual pension benefit payable to a participant upon retirement is based
upon the average of the five consecutive years (of the participant's last ten
years of employment) during which the participant received his or her highest
amount of remuneration from the Company. Under the SERP, eligible remuneration
is based on the sum of the highest annual salary paid during the five years
prior to termination of employment and the average of the three highest annual
incentive compensation program awards paid to the participant during the
preceding five years. The remuneration covered by the Pension Plan and the SERP
consists of salaries and bonuses paid to Pension Plan and SERP participants,
including the salaries and bonuses set forth in columns (c) and (d) of the
Summary Compensation Table. The estimated annual benefits payable upon
retirement at normal retirement age under the Pension Plan and the SERP for Mr.
Nesbitt, Mr. Eppler, Mr. Duncan, Ms. Powell and Mr. Prudhomme would be
approximately $239,339, $126,084, $114,013, $88,205 and $85,478, respectively.
These amounts are based on the assumption that these executive officers will
continue to work for the Company until age 65 and that their earnings in the
five years prior to such retirement will be the same, respectively, as their
earnings during the past five years.
LONG-TERM DISABILITY PLAN
The Company maintains a long-term disability plan that provides disability
benefits up to 60% of salary or a maximum of $7,500 per month for all active
full-time employees with two or more years of service. These benefits are
provided for the first 24 months out of the Company's general funds, and
thereafter pursuant to an insurance contract under which premiums are paid by
the Company.
SEVERANCE AGREEMENTS
The Company has severance agreements with Mr. Nesbitt, Mr. Eppler, Mr.
Duncan, Ms. Powell and Mr. Prudhomme and one other executive officer of the
Company. The agreement for each such officer
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15
provides generally for payment of a minimum annual salary equal to such
executive officer's current annual base salary, participation in all Company
benefit plans and programs applicable to the Company's executive officers and
reimbursement of employment-related expenses incurred while performing such
officer's duties. Under the severance agreements, the base salaries for 1997 for
Mr. Nesbitt, Mr. Eppler, Mr. Duncan, Ms. Powell and Mr. Prudhomme are $300,000,
$162,000, $144,100, $112,200 and $102,700, respectively. The severance
agreements had an initial term of three years ending on July 1, 1995, with
continuously renewing one-year extensions thereafter, unless either the Company
or the executive officer gives notice prior to such extension that such
officer's term of employment will not be extended.
The severance agreements include provisions governing reductions in salary
or duties, termination of employment and change in control. Generally, if the
executive's employment is terminated (i) by the Company for any reason other
than a material breach by the executive (as defined in the agreements) or (ii)
by the executive following a reduction in base salary (other than a reduction in
pay uniformly applicable to all officers) or a significant reduction in the
executive's authority, duties or responsibilities, the executive is entitled to
receive, as severance pay, an amount equal to his or her annual base salary at
the time of termination. The executive is also entitled to continued health plan
coverage for up to 18 months after such termination. The executive is also
entitled to require the Company to (i) purchase his or her principal residence
(if it is located within 60 miles of the Company's Pineville office) for an
amount equal to the greater of (x) the purchase price of the residence plus the
cost of capital improvements or (y) the fair market value of the residence, and
(ii) pay or reimburse the executive for relocation costs.
Generally, in the event a change in control occurs and within three years
after such change in control the executive's employment is terminated by the
Company for reasons other than a material breach by the executive (as defined in
the agreements) or the executive terminates his or her employment for good
reason (as defined in the agreements), the Company will pay the executive, in
lieu of any severance obligation otherwise payable under the severance
agreement, an amount equal to three times the executive's average compensation
paid during the five calendar years preceding the change in control. In the
event of a change in control, payments under the agreements for the individuals
named in the Summary Compensation Table, using compensation for the years 1992
through 1996, would be approximately as follows: Mr. Nesbitt, $706,157; Mr.
Eppler, $423,491; Mr. Duncan, $394,352; Ms. Powell, $239,324; and Mr. Prudhomme,
$309,404. However, the severance agreements limit the amount payable upon a
change in control to an amount that would not result in the disallowance of a
deduction to the Company under the "golden parachute" provisions of the Code or
the imposition of an excise tax on the employee under Section 4999 of the Code.
The severance agreements also generally require the executives not to
disclose confidential information relating to the Company and, for a period of
one year after termination, not to hire Company officers, employees or agents,
or solicit or divert any customer or supplier of the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (in this report, the "Committee") has prepared
its report of 1996 executive compensation. The Committee, composed entirely of
directors who are not current or former officers or employees of the Company, is
responsible for implementing, or making recommendations to the board of
directors with respect to, the Company's officer compensation programs. The
Committee has retained the services of executive compensation consultants to
provide professional assistance, data and advice regarding pay practices at the
Company. This report describes the basis on which such 1996 compensation
determinations or recommendations were made by the Committee with respect to the
Company's executive officers. This report, required by rules of the Securities
and Exchange Commission, provides specific information regarding compensation of
the Company's president and chief executive officer (the "Chief Executive
Officer") and general information regarding compensation of the Company's
executive officers as a group. The Chief Executive Officer and four other most
highly compensated executive officers are sometimes referred to as the "Named
Executives."
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Section 162(m) of the Code limits to $1,000,000 in a taxable year the
deduction publicly held companies may claim for compensation paid to an
executive officer, unless certain requirements are met. The Committee has
reviewed this provision and has determined that the Company is not affected by
Section 162(m) because no compensation paid to any officer currently approaches
or is expected to approach $1,000,000 in the near term. Accordingly, no change
to any of the compensation plans is contemplated at this time.
Compensation Philosophy and Overall Objective of Executive Compensation
Programs
The Company seeks to ensure that executive compensation is directly linked
to corporate performance and shareholder value, as well as comparable pay
practices in the industry. Each year, the Committee, in making compensation
decisions and recommendations, and the board of directors, in approving base
salaries, review the performance of the Company and compare such performance to
specified internal and external performance standards. The Committee has
developed the following compensation guidelines as the principles upon which
compensation decisions and recommendations are made:
- Provide variable compensation opportunities that are linked to the
financial performance of the Company and that align executive
compensation with the interests of shareholders.
- Provide incentives to increase corporate performance and shareholder
value relative to those of other electric utilities.
- Establish executive officer base pay levels somewhat below the
competitive market, while providing incentive awards (from the annual and
long-term plans) above the market, provided that performance objectives
are achieved.
- Provide a competitive total compensation package that is "at-risk" driven
and enables the Company to attract and retain key executives.
Compensation Program Components
The compensation program for executive officers is currently comprised of
base salary and two at-risk components: annual performance-related incentives
and performance-based awards of restricted stock and related "opportunity
shares" granted under the Long-Term Plan, as discussed above under "Long-Term
Incentive Plan." In addition, certain of the executive officers have stock
options outstanding that were granted under the Stock Option Plan, which expired
in 1991 and under which no future grants can be made. See "Stock Option Plans."
The compensation programs for the Company's executive officers are further
explained below.
- Base Salary -- Base pay levels recommended by the Committee are largely
determined through comparisons with those of other electric utilities of
similar size and complexity to the Company. These companies, as well as
other electric utilities, are included in the Edison Electric Institute
Index of approximately 100 investor-owned electric utilities (the "Edison
Electric Institute Index") graphed in the performance graph shown
elsewhere. Actual salaries are based on individual performance
contributions within a salary structure that is established through job
evaluation and market comparisons. While the actual relationship may vary
from year to year, it is the Company's policy to have base pay levels for
the Company's executive officers, including the Named Executives, to be
at or somewhat below the average of the competitive market. Including
1996 base salary increases, actual base pay levels for the Company's
executive officers, including the Named Executives, are consistent with
this policy. Increases in base salary for 1996 to continuing executive
officers were recommended by the Committee and approved by the board of
directors in January 1996. In January 1996, the base salary of one of the
executive officers, other than the Chief Executive Officer who received a
5% increase (see "-- 1996 Compensation for the President and Chief
Executive Officer -- Base Salary"), was increased 4%.
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The other executive officers, whose base salaries were already at the
average of the competitive market, received merit lump-sum payments in
1996 in lieu of increases in base salary. The merit lump-sum payments to
the Named Executives averaged approximately 6% of base salary and the
other executive officer received a merit lump-sum payment equal to 2% of
base salary. The merit lump-sum payments for 1996 to the executive
officers were recommended by the Committee and approved by the board of
directors in January 1996 and were paid in February 1996 in order to
recognize the individual performance and team contribution of each of
these executive officers.
- Annual Incentive Compensation -- The Company's executive officers are
eligible to participate in an annual incentive compensation program with
awards generally based on earnings per share goals and the Company's
actual return on equity in relation to that of the Edison Electric
Institute Index, a peer group of approximately 100 electric utilities.
Earnings per share and return on equity goals are generally of equal
weight. Based on actual results, awards from 0% to 150% of target
incentive levels may be made. For 1996, the earnings per share target
was $2.10. The Company's return on equity target was the 50th to 59th
percentile of the Edison Electric Institute Index. The Company's return
on equity performance for the twelve months ended September 30, 1996 was
in the 75th to 99th percentile of the Edison Electric Institute Index,
and its primary earnings per share in 1996 were $2.23. Based on the
earnings per share and return on equity financial performance, the
Committee approved actual awards for 1996 at 150% of target annual bonus
levels. The objective of the annual incentive compensation program is to
deliver competitive levels of at-risk compensation (i.e., award levels
compared to the Company's competitive peer group for comparable
performance) for the attainment of short-term financial objectives that
the Committee believes are primary determinants of shareholder value
over time, and to reinforce behaviors that contribute to consistent
growth of the enterprise. The Committee bases target annual bonus levels
on average competitive bonus levels among other electric utility
companies of similar size and complexity. These companies are included
in the Edison Electric Institute Index. Targeted awards for executive
officers of the Company under this program range from 15% to 32% of base
salary. Awards are paid in the first quarter of the year following the
year for which the award is earned. The amounts of actual awards are
further subject to the discretion of the Committee, within established
program guidelines (i.e., the ability of the Committee to make
adjustments to reflect extraordinary items of income or expense).
- Long-Term Incentive Compensation Plan -- The Committee supports increased
stock ownership by key executives of the Company and favors awards to key
executives of stock and/or cash based on the Company's stock price
appreciation and other measures of performance. The basis for such
position is the Committee's belief that the Company benefits by providing
those persons who have substantial responsibility for the management and
growth of the Company with additional incentives by increasing their
proprietary interest in the success of the Company or by awarding those
persons for increases in the Company's stock price or the achievement of
other long-term performance goals for the Company. Thus, under the
Long-Term Plan, executive officers may be eligible to receive
performance-based grants of restricted stock, related "opportunity
shares," restricted unit grant awards, related "opportunity units," stock
options and stock appreciation rights, giving them the right to receive
or purchase shares of Common Stock under specified circumstances, or to
receive cash awards based on the Company's stock price appreciation or
the achievement of pre-established long-term performance goals. The
Committee believes that such programs are also important as a means of
retaining senior management over the long term. The number of shares of
stock and other awards granted to executive officers under the Long-Term
Plan is based on competitive practices (i.e., compensation practices of
other utilities that constitute the Edison Electric Institute Index).
Grants of restricted stock and awards of related "opportunity shares"
under the Long-Term Plan were made to all executive officers in 1996.
Awards to executive officers are based on a competitive compensation
analysis (i.e., compensation practices of other utilities that
constitute the Edison Electric Institute Index). Awards actually earned
are based on the Company's performance during a three-year performance
cycle compared to the other electric utilities in the
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Edison Electric Institute Index over the same period. For the fourth
three-year performance cycle which ended December 31, 1996, the Company's
total return to shareholders placed it at the 73rd percentile compared to
the Edison Electric Institute Index, thus meeting the objectives, as
specified in the Long-Term Plan, for such performance cycle. Provisions of
the restricted stock and "opportunity share" grants require an additional
three-year holding period following vesting before any shares may be sold.
No other types of awards under the Long-Term Plan were made to executive
officers in 1996.
Other Executive Compensation Plans
The Company also provides executive officers with certain executive
benefits, such as a supplemental retirement plan and severance agreements. The
Committee considers each of these programs to be reasonably competitive and
appropriate for executive officers of the Company.
1996 Compensation for the President and Chief Executive Officer
The Committee believes that the role of the Chief Executive Officer is
particularly important in reaching corporate goals and accomplishing
organizational objectives. As such, for fiscal year 1996, the Committee made the
following recommendations or determinations regarding the compensation for Mr.
Nesbitt:
- Base Salary -- Mr. Nesbitt is president and chief executive officer of
the Company. His base salary was increased in January 1996 from $260,000
to $272,000, an increase of approximately 5%. The amount of this increase
was based on the continued performance of Mr. Nesbitt as evaluated by the
Committee. Even with this adjustment, his base pay is significantly below
peers in the industry.
- Annual Incentive -- Mr. Nesbitt was eligible to participate in 1996 in
the Company's annual incentive compensation program discussed in this
report above (see "-- Annual Incentive Compensation"). The Chief
Executive Officer's 1996 target award was 32% of his base salary. His
actual award for 1996 was 150% of target, or 48%.
- Long-Term Incentive -- Awards were made to Mr. Nesbitt under the
Long-Term Plan during 1996. The number of shares of stock and other
awards granted to the Chief Executive Officer under the Long-Term Plan
are based on competitive practices within the industry. Administration is
consistent with the provisions of the plan as described above in
"Long-Term Incentive Plan." For the three-year performance cycle ended
December 31, 1996, the Chief Executive Officer's award was 147.5% of
target, or 2,912 shares.
Summary
The Committee believes that base pay levels and increases and
performance-based awards are reasonable and competitive with the compensation
programs provided to officers and other executives by electric utilities of
similar size and complexity to the Company. The Committee believes further that
the degree of performance sensitivity in the annual incentive program continues
to be reasonable, yielding awards that are directly linked to the annual
financial and operational results of the Company. The Long-Term Plan continues
to provide, in the view of the Committee, financial opportunities to
participants and retention features for the Company that are consistent with the
relative returns that are generated on behalf of the Company's shareholders.
The Compensation Committee
Edward M. Simmons, Chairman
Sherian G. Cadoria, Brig. General
(retired)
J. Patrick Garrett
Ernest L. Williamson
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PERFORMANCE GRAPH
The following performance graph compares the performance of the Common
Stock to the S&P 500 Index and to the Edison Electric Institute Index (which
includes the Company) for the Company's last five fiscal years. The graph
assumes that the value of the investment in the Common Stock and each index was
$100 at December 31, 1991 and that all dividends were reinvested.
Measurement Period CLECO S&P 500 Index EEI Index(1)
(Fiscal Year Covered)
1991 $100 $100 $100
1992 $104 $108 $108
1993 $113 $118 $120
1994 $113 $120 $106
1995 $139 $165 $139
1996 $151 $203 $140
(1) The Edison Electric Institute Index is comprised of: Allegheny Power System,
Inc.; American Electric Power Company, Inc.; Atlantic Energy, Inc.;
Baltimore Gas & Electric Company; Bangor Hydro-Electric Company; Black Hills
Corporation; Boston Edison Company; Carolina Power & Light Company;
Centerior Energy Corporation; Central & South West Corporation; Central
Hudson Gas & Electric Corporation; Central Louisiana Electric Company, Inc.;
Central Maine Power Company; Central Vermont Public Service Corporation;
Cilcorp Inc.; CINergy Corp.; Cipsco Inc.; CMS Energy Corp.; Commonwealth
Energy System; Consolidated Edison Company of New York, Inc.; Delmarva Power
& Light Co.; Dominion Resources, Inc.; DPL Inc.; DQE Inc.; DTE Energy Co.;
Duke Power Company; Eastern Utilities Associates; Edison International
(formerly SCEcorp); Empire District Electric Company; Enova Corp.; Entergy
Corporation; ESELCO Inc.; Florida Progress Corporation; FPL Group, Inc.;
General Public Utilities Corporation; Green Mountain Power Corporation;
Hawaiian Electric Industries, Inc.; Houston Industries Incorporated; Idaho
Power Company; IES Industries, Inc.; Illinova Corp.; Interstate Power Co.;
IPALCO Enterprises Inc.; Kansas City Power & Light Company; KU Energy Corp.;
LG&E Energy Corp.; Long Island Lighting Company; Madison Gas & Electric Co.;
Maine Public Service Company; MidAmerican Energy Co.; Minnesota Power &
Light Co.; Montana Power Co.; Nevada Power Company; New England Electric
System; New York State Electric & Gas Corporation; Niagara Mohawk Power
Corp.; NIPSCO Industries, Inc.; Northeast Utilities; Northern States Power
Co.; Northwestern Public Service Co.; Ohio Edison Company; Oklahoma Gas &
Electric Company; Orange & Rockland Utilities, Inc.; Otter Tail Power
Company; Pacific Gas & Electric Co.; Pacificorp; Peco Energy Co.; Pinnacle
West Capital Corp.; Portland General Corporation; Potomac Electric Power
Corporation; PP&L Resources Inc.; Public Service Co. of Colorado; Public
Service Company of New Mexico; Public Service Enterprise Group Incorporated;
Puget Sound Power & Light Company; Rochester Gas & Electric Corporation;
SCANA Corp.; Sierra Pacific Resources; SIGECORP (holding company of Southern
Indiana Gas & Electric Co.); Southern Company; Southern Indiana Gas &
Electric Co.; Southwestern Public Service Company; St. Joseph Light & Power
Co.; TECO Energy, Inc.; Texas Utilities Company; TNP Enterprises, Inc.;
Tucson Electric Power Company; Unicom Corp.; Union Electric Co.; United
Illuminating Company; Unitil Corp.; Upper Peninsula Energy Corp.; Utilicorp
United Inc.; Washington Water Power Co.; Western Resources, Inc.; Wisconsin
Energy Corporation; WPL Holdings Inc.; and WPS Resources Corp.
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APPOINTMENT OF AUDITORS
The firm of Coopers & Lybrand L.L.P., independent certified public
accountants, has served as auditors for the Company continuously since 1952. The
board of directors, upon recommendation of the Audit Committee, proposes to
continue such firm's services as auditors for the Company for the year ending
December 31, 1997. Neither such firm nor any of its associates has any
relationship with the Company except in their capacity as auditors. The persons
named in the accompanying proxy will vote in accordance with the choice
specified thereon, or, if no choice is properly indicated, in favor of the
appointment of Coopers & Lybrand L.L.P. as auditors of the Company.
A representative of Coopers & Lybrand L.L.P. is expected to attend the
annual meeting. If present, the representative will have an opportunity to make
a statement during the meeting if he or she so desires and will respond to
appropriate questions raised during the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the knowledge of the Company based on a
review of the information and as of the dates indicated, certain information
with respect to each person who is the beneficial owner of more than 5% of the
outstanding shares of any class of the Company's voting securities.
SHARES OF COMMON STOCK SHARES OF $100 PREFERRED
BENEFICIALLY OWNED STOCK BENEFICIALLY OWNED
------------------------ ------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
BENEFICIAL PERCENTAGE BENEFICIAL PERCENTAGE
NAME AND ADDRESS OWNERSHIP OF CLASS OWNERSHIP OF CLASS
---------------- ---------- ---------- ---------- ----------
College Retirement Equities Fund
730 Third Avenue
New York, NY 10017........................ 1,134,364(1) 5.1%
State Street Bank and Trust Company,
Trustee of the ESOP Component of the
Company's 401(k) Savings and Investment
Plan
225 Franklin Street
Boston, MA 02110.......................... 292,507(2) 80.2%
- ---------------
(1) As of December 31, 1996, based on a Schedule 13G filed with the Securities
and Exchange Commission. The reporting entity states that it has sole voting
and dispositive power with respect to 1,134,364 shares of Common Stock and
shared voting and dispositive power with respect to no shares of Common
Stock.
(2) As of December 31, 1996, based upon a Schedule 13G filed with the Securities
and Exchange Commission. The reporting entity states that it has shared
dispositive power with respect to 292,507 shares and shared voting power
with respect to 292,507 shares. Such 292,507 shares are held by State Street
Bank and Trust Company as trustee (the "ESOP Trustee") of the ESOP component
(the "ESOP") of the Company's 401(k) Savings and Investment Plan (the
"Savings Plan"). Such 292,507 shares are convertible under certain
circumstances pursuant to the Company's Restated Articles of Incorporation
and the governing instruments of the ESOP and the Savings Plan into
1,404,034 shares of Common Stock, subject to antidilution adjustment, or
approximately 6.3% of the Common Stock outstanding as of December 31, 1996.
Participants in the Savings Plan have voting rights with respect to shares
of $100 Preferred Stock (or Common Stock into which such stock has been
converted) allocated to their accounts. The ESOP Trustee is required to vote
unallocated shares in the same proportion as allocated shares as to which it
has received voting instructions from participants. Participants in the
Savings Plan have, in the event of a tender or exchange offer,
(Footnotes continued on following page)
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investment discretion with respect to shares of $100 Preferred Stock (or
Common Stock into which such stock has been converted) allocated to their
accounts. In such an event, the ESOP Trustee is required to tender
unallocated shares in the same proportion that it tenders allocated shares
as to which it has received investment instructions, but has no power to
tender allocated shares as to which it has received no investment
instructions. The reporting entity also states that it, as trustee of
various collective investor funds for employee benefit plans and other
index accounts and various personal trust accounts, has sole voting power
with respect to 96,442 shares of Common Stock, shared voting power with
respect to 2,931 shares of Common Stock, sole dispositive power with
respect to 98,308 shares of Common Stock and shared dispositive power with
respect to 3,965 shares of Common Stock.
ANNUAL REPORT
The Company's 1996 Summary Annual Report, together with the enclosed 1996
Annual Report to Shareholders, which contains the Company's consolidated
financial statements for the year ended December 31, 1996, accompany the proxy
material being mailed to all shareholders. The Summary Annual Report and the
Annual Report to Shareholders are not a part of the proxy solicitation material.
PROPOSALS BY SHAREHOLDERS
Proposals of shareholders intended to be presented at the Company's annual
meeting of shareholders to be held in 1998, and otherwise eligible, must be
received by the Company (at the address indicated on the first page of this
proxy statement) no later than November 12, 1997 (subject to certain provisions
of the Company's bylaws which require that certain proposals be submitted 180
days before such meeting) to be included in the Company's proxy material and
form of proxy relating to such meeting.
OTHER MATTERS
Management does not intend to bring any other matters before the meeting
and has not been informed that any other matters are to be presented to the
meeting by others. If other matters properly come before the meeting or any
adjournments thereof, the persons named in the accompanying proxy and acting
thereunder intend to vote in accordance with their best judgment.
ALL SHARES THAT A SHAREHOLDER OWNS, NO MATTER HOW FEW, SHOULD BE
REPRESENTED AT THE ANNUAL MEETING OF SHAREHOLDERS. THE ACCOMPANYING PROXY SHOULD
THEREFORE BE COMPLETED, SIGNED, DATED AND RETURNED AS SOON AS POSSIBLE.
By order of the board of directors.
/s/ GREGORY L. NESBITT
Gregory L. Nesbitt
President and Chief Executive
Officer
March 12, 1997
17
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
Proxy Solicited on Behalf of the Board of Directors of the Company
for the Annual Meeting on April 25, 1997
P The undersigned hereby constitutes and appoints Gregory L. Nesbitt, David
M. Eppler and Michael P. Prudhomme, and each of them (the "Proxy
R Committee"), his or her true and lawful agents and proxies, with full
power of substitution in each, to represent the undersigned at the
O annual meeting of shareholders of Central Louisiana Electric Company,
Inc., to be held at the Pineville High School Auditorium, 1511 Line
X Street, Pineville, Louisiana, on Friday, April 25, 1997, and at any
adjournments thereof, on all matters coming before said meeting. Receipt
Y of the notice of the meeting and the proxy statement, both dated
March 12, 1997, is acknowledged. The following items of business will
be considered at the aforesaid annual meeting:
1.Election of three Class III Directors. Nominees:
J. Patrick Garrett, F. Ben James, Jr. and A. DeLoach Martin, Jr., whose
terms of office expire in 2000.
2. Proposal to approve appointment of Coopers & Lybrand L.L.P. as auditors.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE) BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY COMMITTEE
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD. ACTION TAKEN
PURSUANT TO THIS PROXY CARD WILL BE EFFECTIVE AS TO ALL THE SHARES (WHETHER
COMMON OR PREFERRED, AND, IF PREFERRED, OF ANY CLASS OR SERIES) THAT YOU OWN.
23
Please mark your
|x| votes as in this 1628
example.
This proxy when executed will be voted in the manner directed herein. If no
direction is made, this proxy will be voted "FOR" Items 1 and 2.
- ------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR all proposals.
- ------------------------------------------------------------------------------
1. Election of FOR WITHHELD
Directors. | | | |
(see reverse)
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------
2. Proposal to approve FOR AGAINST ABSTAIN
appointment of | | | | | |
Coopers & Lybrand L.L.P.
as auditors.
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, trustee or guardian, please give
full title as such.
- ---------------------------------------------
- ---------------------------------------------
SIGNATURE(S) DATE
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EXHIBIT INDEX
Exhibit 99 -- 1996 Annual Report to Shareholders