SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c)
or Sec. 240.14a-12
OKLAHOMA GAS AND ELECTRIC COMPANY
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
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or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
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and state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
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the offsetting fee was paid previously. Identify the previous
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Oklahoma Gas
And Electric Company
Proxy Statement
and
Notice of
Annual Meeting
May 19, 1994
Contents Page
Chairman's Letter 1
Notice of Annual Meeting 2
Proxy Statement 3
Proposal No. 1 - Election of Directors 4
Information about Directors and Nominees 4
Information concerning the
Board of Directors 7
Executive Officers' Remuneration 8
Report of Compensation Committee on
Executive Compensation 8
Compensation Committee Interlocks
and Insider Participation 10
Summary Compensation Table 10
Pension Plan Table 11
Company Stock Performance 12
Security Ownership 12
Relationship with Independent Public
Accountants 13
Shareowner Proposals 13
Map 13
Notice of Annual Meeting
of Shareowners
and Proxy Statement
Thursday, May 19, 1994, at 10:00 a.m.
Metro Tech Business
Conference Center
1900 Springlake Drive
Oklahoma City, Oklahoma
i
Oklahoma Gas and Electric Company
March 28, 1994
Dear Shareowner:
You are cordially invited to attend the annual meeting of
Oklahoma Gas and Electric Company at 10:00 a.m. on Thursday, May
19, 1994, at Metro Tech Business Conference Center, 1900
Springlake Drive, Oklahoma City, Oklahoma.
Those arriving before the meeting will have the opportunity
to visit informally with the management of your Company. In
addition to the business portion of the meeting, there will be
reports on the Company's current operations and outlook.
Even though you may own only a few shares, your proxy is
important in making up the total number of shares necessary to
hold the meeting. Whether or not you plan to attend the meeting,
please fill out, sign, and return your proxy card in the envelope
provided as soon as possible. Your cooperation will be
appreciated.
Your continued interest in the Company is most encouraging
and, on behalf of the Board of Directors and employees of the
Company, I want to express our gratitude for your confidence and
support.
Very truly yours,
JAMES G. HARLOW, JR.
Chairman of the Board
and President
1
Notice of Annual Meeting
of Shareowners
The Annual Meeting of Shareowners of Oklahoma Gas and
Electric Company will be held on Thursday, May 19, 1994, at
10:00 a.m. at Metro Tech Business Conference Center, 1900
Springlake Drive, Oklahoma City, Oklahoma, for the following
purposes:
(1) To elect three directors to serve for a three-year term; and
(2) To transact such other business as may properly come before
the meeting.
The map on page 13 will assist you in locating Metro Tech.
The Board of Directors has fixed the close of business on
March 21, 1994, as the record date for the determination of
shareowners entitled to notice of and to vote at this meeting or
any adjournment of the meeting. A list of such shareowners will
be available, as required by law, at the principal offices of the
Company at 101 N. Robinson, Oklahoma City, Oklahoma 73102-3405.
Irma B. Elliott
Dated: March 28, 1994 Secretary
IMPORTANT-YOUR PROXY CARD IS ENCLOSED IN THIS ENVELOPE
Shareowners are requested to fill in, sign, date, and return
the proxy promptly in the enclosed envelope. No postage is
required for mailing in the United States. Your cooperation will
be greatly appreciated.
2
Proxy Statement
March 28, 1994
The Annual Meeting of Shareowners of Oklahoma Gas and
Electric Company will be held at Metro Tech Business Conference
Center, 1900 Springlake Drive, Oklahoma City, Oklahoma, on May
19, 1994, at 10:00 a.m. For the convenience of those shareowners
who may attend the meeting, a map is printed on page 13 that
gives directions to Metro Tech. At the meeting, it is intended
that the owners of the Company's Common Stock and 4% Cumulative
Preferred Stock elect three persons to the Company's Board of
Directors for a three-year term and until their respective
successors shall be elected and shall qualify. The Board of
Directors does not now know of any other matters to be presented
at the meeting, but, if any other matters are properly presented
to the meeting for action, the persons named in the accompanying
proxy will vote upon them in accordance with their best judgment.
The Board of Directors solicits your proxy for use at this
meeting. You may revoke your proxy at any time before it is
exercised by giving written notice of its revocation to the
Secretary of the Company or filing with her another proxy as
provided by law. All proxies properly executed by shareowners and
received by the Company prior to the meeting will be voted in
accordance with the directions made on the proxy and, if no
directions are made, the proxy will be voted in favor of
election of the Board's nominees for directors.
The cost of soliciting proxies will be borne by the Company.
In addition to the use of the mails, proxies may be solicited
personally or by telephone or telegram by officers and regular
employees of the Company. Morrow & Co. Inc., New York, New York,
will assist in solicitation of proxies and the Company will pay
Morrow & Co. Inc. for its proxy solicitation services
approximately $6,000 plus expenses. The Company does not expect
to pay any additional compensation for the solicitation of
proxies; however, brokers and other custodians, nominees, or
fiduciaries may be reimbursed for their expenses in forwarding
proxy material to principals and obtaining their proxies.
On March 1, 1994, the Company had outstanding approximately
40,346,477 shares of Common Stock, par value $2.50 per share;
423,663 shares of 4% Cumulative Preferred Stock, par value $20
per share; and the following shares of Cumulative Preferred
Stock, par value $100 per share: 50,000 shares of the 4.20%
series, 75,000 shares of the 4.24% series, 65,000 shares of the
4.44% series, 75,000 shares of the 4.80% series and 150,000
shares of the 5.34% series.
The owners of the 4 % Cumulative Preferred Stock and Common
Stock are entitled to one vote on each matter presented for a
vote at the meeting for each $2.50 of par value (eight votes per
share as to the 4% Cumulative Preferred Stock, $20 par value, and
one vote per share as to the Common Stock, $2.50 par value) of
stock held by such owners of record at the close of business on
March 21, 1994. Owners of other Cumulative Preferred Stock of the
Company are not entitled to vote.
The Company's 1993 Annual Report to its shareowners,
including financial statements for the year 1993, was sent on or
about March 28, 1994, to all shareowners of the Company of record
on March 21, 1994. Financial statements of the Company also are
on file with the Securities and Exchange Commission and at the
offices of the New York and Pacific Stock Exchanges.
3
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors consists of nine members with terms
expiring on different Annual Meeting dates. Approximately one-
third of the members of the Board of Directors are nominated each
year to serve as directors for a term of three years. Directors
are elected at the Annual Meeting for the terms specified and
continue in office until their successors are elected and
qualified.
At the Annual Meeting to be held on May 19, 1994, three
persons are to be elected to the Board of Directors for a term
expiring at the Annual Meeting in 1997. The following three
persons are the nominees of the Board to be elected for such
three-year term: Messrs. William E. Durrett, H.L. Hembree, III
and John F. Snodgrass. Each of these individuals is currently a
director of the Company whose term as a director is scheduled to
expire at the Annual Meeting. Each director serves according to
the Company's retirement policy for directors. Accordingly, under
the Company's current policy, it is expected that Mr. Snodgrass
will retire from the Board following his 70th birthday in
September 1995, at which time the Board may elect a new director
to serve the balance of Mr. Snodgrass' term.
The enclosed proxy, unless otherwise specified, will be
voted in favor of the election as directors of the previously
listed three nominees. The Board of Directors does not know of
any nominee who will be unable to serve, but if any of them
should be unable to serve, the proxy holder may vote for a
substitute nominee. No nominee or director owns more than 0.1 %
of any class of voting securities of the Company.
For the nominees described herein to be elected as
directors, they must receive a plurality of the votes of shares
of Common Stock and 4% Preferred present in person or by proxy
and entitled to vote. Consequently, any shares not voted (whether
by withholding authority, broker non-vote, or otherwise) have no
impact on the election of Directors, except to the extent the
failure to vote for an individual results in the individual
receiving fewer votes than another individual.
INFORMATION ABOUT DIRECTORS AND NOMINEES
The following contains certain information as of March 1,
1994, concerning the three nominees for directors, as well as the
directors whose terms of office do not expire at the Annual
Meeting on May 19, 1994.
Nominees For Election For Term Expiring at 1997 Annual Meeting of
Shareowners
WILLIAM E. DURRETT, 63, is Chairman of the Board, President
and Chief Executive Officer of American Fidelity Corporation, an
insurance holding company, and numerous other subsidiaries of
American Fidelity Corporation. He serves as Chairman of the Board
and director of American Fidelity Assurance Company, an insurance
company wholly-owned by American Fidelity Corporation. He also
serves as a director of BOK Financial Corporation and Oklahoma
Healthcare Corporation. Mr. Durrett has been a director of
Oklahoma Gas and Electric Company since March 1991, and is
a member of the audit and compensation committees of the Board.
He beneficially owns, directly or indirectly, 553 shares of
Common Stock of the Company. This does not include 2,600 shares
of Common Stock and 200 shares of 4.80% Cumulative Preferred
Stock of the Company held by a subsidiary of American Fidelity
Corporation, for which Mr. Durrett disclaims beneficial
ownership. See "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION" for a description of transactions in 1993 between
the Company and American Fidelity Assurance Company.
H. L. HEMBREE, III, 62, is Chairman of the Executive
Committee of Merchants National Bank, Fort Smith, Arkansas. Prior
to 1989, he was Chairman and Chief Executive Officer of Arkansas
Best Corporation, a diversified holding company located in Fort
Smith, Arkansas. He has been a director of Oklahoma Gas and
Electric Company since 1985, and is a member of the compensation
committee of the Board. He beneficially owns, directly or
indirectly, 9,077 shares of Common Stock of the Company. This
does not include Mr. Hembree's economic interest in 2,446 shares
of Common Stock of the Company under the Directors' Deferred
Compensation Plan. See "INFORMATION CONCERNING THE BOARD OF
DIRECTORS."
4
JOHN F. SNODGRASS, 68, is President Emeritus and Trustee of
The Samuel Roberts Noble Foundation, Inc. (a not-for-profit
charitable organization) in Ardmore, Oklahoma. He serves as a
director of Noble Affiliates Inc., Noble Drilling Corporation,
Investors Trust Company and Exchange National Bank and Trust
Company, Ardmore, Oklahoma and Centaur Pharmaceuticals, Inc.,
Sunnyvale, California. Mr. Snodgrass has been a director of
Oklahoma Gas and Electric Company since 1985, and is a member
of the compensation and the nominating committees of the Board.
He beneficially owns, directly or indirectly, 3,600 shares of
Common Stock, 34 shares of 4% Cumulative Preferred Stock and 25
shares of 4.24% Cumulative Preferred Stock of the Company.
Directors Whose Terms Expire at 1996 Annual Meeting of
Shareowners
HERBERT H. CHAMPLIN, 56, is President of Champlin
Exploration, Inc., an independent oil producer, and President of
Enid Data Systems, computer marketers, both located in Enid,
Oklahoma. Mr. Champlin has been a director of Oklahoma Gas and
Electric Company since 1982, and is chairman of the audit
committee and a member of the nominating committee of the Board.
He beneficially owns, directly or indirectly, 2,550 shares of
Common Stock of the Company. This does not include Mr. Champlin's
economic interest in 2,210 shares of Common Stock of the Company
under the Directors' Deferred Compensation Plan. See "INFORMATION
CONCERNING THE BOARD OF DIRECTORS." Mr.Champlin also was engaged
separately during 1993 as a part of his principal business
occupation in the petroleum industry and had interests in oil and
gas wells. During 1993, under terms of gas purchase contracts,
the Company paid $323,152 to him and his family business
interests. The terms of the contracts were no less favorable to
the Company than the terms that would have been obtained from
other independent producers.
MARTHA W. GRIFFIN, 59, is Chairman of the Board of Griffin
Television, Inc., located in Oklahoma City, Oklahoma, and also
serves as Chairman of the Board of Griffin Food Company (a
subsidiary of Griffin Television, Inc.). She serves as a member
of the Board of Directors of the Oklahoma Chamber of Commerce and
Industry and the Oklahoma Heritage Association. Mrs. Griffin has
been a director of Oklahoma Gas and Electric Company since 1987,
and is a member of the audit and nominating committees of the
Board. She beneficially owns, directly or indirectly, 2,330
shares of Common Stock of the Company. Mrs. Griffin is also a
major stockholder of television station KWTV, Channel 9, Oklahoma
City, Oklahoma. During 1993, the Company paid an aggregate of
approximately $261,724 to KWTV for showing television commercials
of the Company. This television time was purchased by contract
with the station, and the rate paid was no less favorable to the
Company than the rate that would have been paid to similar
stations in the Oklahoma City area.
5
RONALD H. WHITE, M.D., 57, is a practicing cardiologist and
is President of Cardiology, Inc. in Oklahoma City. He serves as a
member of the Board of Directors of Baptist Medical Center of
Oklahoma City, and was a member of the Board of Regents of the
University of Oklahoma for 14 years. Dr. White has been a
director of Oklahoma Gas and Electric Company since 1989, and is
a member of the audit committee of the Board. He beneficially
owns, directly or indirectly, 400 shares of Common Stock of the
Company.
Directors Whose Terms Expire at 1995 Annual Meeting of
Shareowners
JAMES G. HARLOW, JR., 59, is Chairman of the Board,
President and Chief Executive Officer of the Company, named to
the position of President in 1973, named Chief Executive Officer
in 1976, and named Chairman in 1982. He serves as a member of the
Board of Directors of Fleming Companies, Inc., Massachusetts
Mutual Life Insurance Company and Associated Electric & Gas
Insurance Services Limited. Mr. Harlow has been a director of
Oklahoma Gas and Electric Company since 1970. He beneficially
owns, directly or indirectly, 42,741 shares of Common Stock of
the Company.
BILL SWISHER, 63, is Chairman of the Board and Chief
Executive Officer of CMI Corporation, a manufacturer of road
construction equipment that is located in Oklahoma City,
Oklahoma. Mr. Swisher has been a director of Oklahoma Gas and
Electric Company since 1979, and is chairman of the compensation
committee and a member of the audit committee of the Board. He
beneficially owns, directly or indirectly, 4,390 shares of Common
Stock of the Company. This does not include Mr. Swisher's
economic interest in 2,940 shares of Common Stock of the Company
under the Directors' Deferred Compensation Plan. See "INFORMATION
CONCERNING THE BOARD OF DIRECTORS."
JOHN A. TAYLOR, 68, is President and majority stockholder of
Hiawatha Exploration Company, which is an oil and gas producing
company engaged in various oil and gas exploration ventures. From
1976 until 1990, Hiawatha was General Partner for Prominex
Gesellschaft MBH of West Germany. He is also President of
ComQuest Exploration Company, a high-technology oil and gas
exploration organization established in 1986. Both companies are
headquartered in Oklahoma City, Oklahoma. Mr. Taylor also has
served as an outside director of GTS Corp., Houston, since 1989.
At the request of the Board of Directors of GTS Corp., due to the
continuing financial problems of GTS Corp., Mr. Taylor served as
President of GTS Corp. from March 1992 to June 1993, for which he
received no compensation other than the reimbursement of his
expenses. In May 1992, GTS Corp. filed a voluntary petition in
bankruptcy. Mr. Taylor has been a director of Oklahoma Gas and
Electric Company since 1977, and is chairman of the nominating
committee and a member of the audit committee of the Board. He
beneficially owns, directly or indirectly, 2,394 shares of Common
Stock of the Company.
The information set forth above on share ownership is based
on information furnished to the Company by the directors and all
shares listed are beneficially owned by the individuals or by
members of their immediate family unless otherwise indicated.
6
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors of the Company met on 11 occasions
during 1993. Each director attended at least 92% of the total
number of meetings of the Board of Directors and the committees
of the Board on which he or she served.
Committees. The committees of the Company's Board of Directors
include a compensation committee, an audit committee and a
nominating committee. Members of the compensation committee are
Bill Swisher, chairman, and Messrs. Durrett, Hembree and
Snodgrass. During 1993, the committee met on two occasions to
review and make recommendations to the Board of Directors with
respect to compensation of principal officers, salary policy for
the period, benefit programs for employees, compensation for
outside directors for service on the Board and the Board
committees, and future objectives and goals of the Company.
Members of the audit committee are Herbert H. Champlin,
chairman, Mrs. Griffin and Messrs. Durrett, Swisher, Taylor and
Dr. White. During 1993, the committee met on two occasions to
review and make recommendations to the Board of Directors with
respect to internal audit procedures, engagement of independent
public accountants, their review with the independent
accountants of the results of the auditing engagement,
and matters having a material effect upon the Company's
financial operations.
Members of the nominating committee are John A. Taylor,
chairman, Messrs. Champlin and Snodgrass and Mrs. Griffin. During
1993, the committee met on two occasions to review and make
recommendations to the Board of Directors with respect to
nominees for election as directors. Similarly, recommendations
were made concerning membership of the audit, compensation and
nominating committees and rotation of committee assignments among
directors. It is expected that the nominating committee will
consider nominees recommended by shareowners in accordance with
the Company's By-laws. The Company's By-laws provide that
a shareowner intending to nominate director candidates
for election at an Annual Meeting of Shareowners must
deliver written notice thereof to the Secretary of the
Company not later than 90 days in advance of the meeting. The
notice must set forth certain information concerning such
shareowner and the nominee(s), including each nominee's name and
address, a representation that the shareowner is entitled to vote
at such meeting and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the
notice, a description of all arrangements or understandings
between the shareowner and each nominee and any other person
pursuant to which the nomination or nominations are to be made by
the shareowner, such other information as would be required to be
included in a proxy statement soliciting proxies for the election
of the nominee(s) of such shareowner and the consent of each
nominee to serve as a director of the Company if so elected. The
chairman of the Annual Meeting may refuse to acknowledge the
nomination of any person not made in compliance with the
foregoing procedure.
Director Compensation. Compensation of non-officer directors of
the Company consists of a retainer fee of $1,500 per month; in
addition, all non-officer directors receive $ 1,000 for each
Board meeting attended, and $1,000 for each committee meeting
attended. Non-officer directors may defer payment of all or part
of their retainer and attendance fees under the Directors'
Deferred Compensation Plan, which deferred amounts are, at the
election of the director, credited to a Dollar Account or a Stock
Account or a combination of both, on the date the deferred
amounts otherwise would have been paid.
Deferred amounts credited to the Dollar Account accrue
interest approximately equal to the commercial paper rate for
established companies. Deferred amounts credited to the Stock
Account are converted into common stock units equal in number to
the number of shares of the Company's Common Stock which the
deferred amounts would purchase based on the fair market value of
the Company's Common Stock on the date the deferred amounts would
otherwise be paid. The Stock Account is credited on each dividend
payment date for the Company's Common Stock with additional
common stock units by dividing the aggregate cash dividend which
would have been paid if existing common stock units were actual
shares of the Company's Common Stock by the fair market value of
the Company's Common Stock as of the dividend payment date.
All deferred amounts are paid in cash, with the value of
common stock units based on the fair market value of the
Company's Common Stock at the time of payment, in one payment or
in installments when the individual ceases to be a director of
the Company. In addition, deferred amounts that are credited to
the Stock Account are automatically transferred to a Dollar
Account upon the occurrence of certain mergers and related
transactions in which the Company is not the survivor. As an
alternative to the foregoing investment options, the Plan permits
a non-officer director to have all or any portion of the deferred
retainer and attendance fees applied to purchase life insurance
for the director. At March 1, 1994, three directors were
participating in the Deferred Compensation Plan.
7
EXECUTIVE OFFICERS' REMUNERATION
The Company's executive compensation program is administered
by the Compensation Committee of the Board of Directors of the
Company (the "Committee"). Set forth below is the Committee's
report on compensation paid to executive officers during 1993.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
General. The primary goals of the Committee in setting
executive compensation in 1993 were: (i) to provide a total
compensation package that enables the Company to attract and
retain key executives and (ii) to align the executives' interests
with those of shareowners and with Company performance.
The 1993 compensation of the Company's executive officers
was comprised primarily of salary, awards under the Company's
Restricted Stock Plan, awards under the new Annual Incentive
Compensation Plan and benefits under the Company's Employees'
Thrift Plan and pension plan. Virtually all employees, including
executive officers, are eligible to participate in the Thrift
Plan and the pension plan. Both the Thrift Plan and pension plan
have a supplemental restoration plan, that enables executive
officers to receive the same benefits that they would have
received in the absence of limitations imposed by the federal tax
laws on contributions or payouts. In reviewing the benefits under
the Thrift Plan, pension plan and related restoration plans, the
Committee's goal is to ensure that participants receive benefits
commensurate with what similar companies typically offer. The
restoration plans for the Thrift Plan and pension plan contain
provisions requiring their immediate funding in the event of
certain mergers, consolidations or tender offers involving the
Company. In 1993, the Committee recommended, and the Board of
Directors, adopted a Supplemental Executive Retirement Plan (the
"SERP"), which is designed to enable the Company to offer
attractive pension benefits to lateral hires. The SERP is not
expected to benefit present executive officers generally, due to
their existing years of service with the Company.
In 1993, the Committee made a significant change in its
method for compensating executive officers. This change was to
shift from a compensation system that was based in large part on
individual performance and continued employment to one in which a
significant portion of compensation is at risk dependent on
Company performance. The Committee's decision to make this change
was based primarily on a study by Towers Perrin, conducted at the
Committee's request, of the compensation of the Company's
executives as compared to the compensation paid to similar
executives at the approximately 120 electric utilities included
in the Edison Electric Institute Survey (the "Survey Group")/1.
The study showed that, while the total compensation of the
Company's executive officers was commensurate with the Survey
Group, the Survey Group generally had a much larger percentage of
total compensation that was at risk based on corporate
performance.
The first step in the process of switching to a more
incentive-based system for executive officers occurred in 1992
with the awards of Restricted Stock, the payouts of which, as
explained below, were tied not only to continued employment but
also to the achievement of specified performance targets over a
three-year period. The remaining step occurred in 1993 when the
Committee froze the salaries of senior executives and implemented
the Annual Incentive Plan. With the implementation of the Annual
Incentive Plan, salaries of senior executives were frozen at 1992
levels so that their potential total cash compensation would be
consistent with the average cash compensation paid to similar
executives by corporations in the Survey Group.
In 1993, a new Federal tax law was passed which limits the
deductibility of executive compensation in excess of $1,000,000
unless certain exceptions are met. Under transition rules adopted
by the Internal Revenue Service, this new law is not expected to
impact the Company with respect to executive compensation paid in
1994. The Committee is reviewing the new law and associated
regulations, as well as the structure of its salary and various
compensation programs, and its present intent is to take
appropriate steps to ensure the continued deductibility of its
executive compensation.
Annual Incentive Plan. The Annual Incentive Plan was adopted
in late 1992. Through annual awards, the Plan is designed to
provide incentives to key management personnel to achieve Company
objectives tied directly to profitability. In 1993, awards were
made under the Plan to 10 employees, including all executive
officers. Payouts of the awards are in cash and are dependent
primarily on the achievement of specified performance goals set
by the Committee immediately after the beginning of the
performance year. In 1993, these goals were based 50% on earnings
per share as compared to earnings goals set by the Committee and
50% on operating and maintenance expense per kilowatt-hour, as
compared to approximately 25 electric utilities. The amount of
the award for each executive officer was expressed as a
percentage of base salary (the "targeted amount"), with the
officer having the ability, depending upon achievement of the
Company goals, to receive from 0% to 150% of such targeted
amount.
/1 While similar, the utilities in the Survey Group are not the
same utilities in the Dow Jones Electric Utilities Index utilized
in the Stock Performance Graph on page 12. The Survey Group was
selected by Towers Perrin and, in the judgment of the Committee,
is an appropriate peer group to use for compensation purposes.
8
The percentage of the targeted amount that an officer is to
receive based on Company performance is subject to being
increased or decreased by up to 20 % at the discretion of the
Committee, depending on the individual's achievement of
pre-established personal goals approved by the Committee. The
mere achievement by an officer of his or her personal goals is
not intended to increase or decrease the officer's award. Rather,
it is only when the officer exceeds or fails to achieve his or
her personal goals that the award is to be increased or
decreased. For 1993, despite the achievement of a level of
performance by the Company to permit the payout of awards under
the Plan, the Committee, with the approval of the Board, declined
to authorize the payout of any 1993 awards. The Committee's
primary reason was that, since the Company had decided to not
increase for 1994 the pay schedules for its salaried and
non-salaried employees pending the outcome of the Oklahoma
Corporation Commission's rate refund and reduction case against
the Company, it would be inappropriate to authorize payments to
the executives pursuant to the Plan based on 1993 performance.
The Committee will reconsider the possible payout of the 1993
awards when directed to do so by the Board and, at such time, may
authorize payment to participants based on the Company's and
individual's performance in 1993 or may cancel or reduce such
payments.
Restricted Stock Awards. The other significant component of
executive compensation in 1993 was awards under the Company's
Restricted Stock Plan. The Plan empowers the Committee to make
contingent awards of Common Stock ("Restricted Stock") to key
employees. Each share of Restricted Stock is subject to a
Restricted Period during which the share is subject to forfeiture
if the recipient of the share ceases to render substantial
services to the Company for any reason (other than death,
disability or normal retirement) and during which the share may
not be transferred. The Committee has the power in the event of
certain mergers, consolidations or tender offers involving the
Company to lapse all restrictions on shares of Restricted Stock.
The 1993 awards under the Restricted Stock Plan were made at
the end of 1993 and were based, as required by the Plan, on the
individual's performance during 1993. In evaluating an
individual's performance,the Committee considered individual job
performance, experience and individual characteristics such as
leadership and dedication, with no particular weight given to one
factor over another. The Committee also considered the long-term
incentives provided to executives in the Survey Group and the
amount of the 1993 awards made for each executive officer
generally represented the long-term incentives awarded to similar
executives by corporations in approximately the 50th percentile
of the Survey Group. Like prior years, each share of Restricted
Stock awarded in 1993 is subject to forfeiture during a
Restricted Period as described above. However, the Committee
imposed a significant additional condition on the shares awarded
to certain key officers in 1992 and in 1993. Such officers
generally will be entitled at the end of the Restricted Period to
keep the full amount of the shares awarded to them only if the
Company during such period meets or exceeds a specific return on
equity target as compared to the return on average equity for the
approximately ninety electric and combination utility companies
shown in the Merrill Lynch & Co. Inc. Utility Data Sheet, with
the officer receiving fewer shares and possibly no shares if such
target is not achieved. The Committee's rationale for this
additional condition was to continue to reward past service and
to align the officers' interests with those of shareowners and,
at the same time, to tie the Restricted Stock awards directly to
long-term performance by the Company. The amount of awarded
shares granted in 1993 that an officer will ultimately receive
will not be determined until the end of 1996. Prior awards of
Restricted Stock were not considered by the Committee in making
awards in 1993.
CEO Compensation. The 1993 compensation for Mr. Harlow, the
Chief Executive Officer of the Company, consisted of the same
components as the compensation for other executive officers. His
salary was frozen with the adoption of the Annual Incentive Plan,
so that his total potential cash compensation would approximate
the average cash compensation for chief executive officers of the
companies in the Survey Group. His targeted award under the
Annual Incentive Plan was 10% of his base salary (i.e. $50,000),
and, as stated above, the Committee has postponed the decision on
whether any payout of awards to participants in the Plan should
occur based on 1993 performance. At the present time, it is the
intent of the Committee to keep Mr. Harlow's salary at its
current level for 1994 and 1995, and to increase his targeted
awards from 10% of his salary to 20% of his salary for 1994 and
from 20% to 30% for 1995. With respect to Mr. Harlow's Restricted
Stock Award, the award was based on Mr. Harlow's performance in
1993. Additionally, the Committee compared the award to Mr.
Harlow to the long-term compensation of other chief executive
officers in the Survey Group. Consideration also was given to Mr.
Harlow's 17 years of experience as Chief Executive Officer of the
Company, his demonstrated leadership skills and his positive
reputation within the community and utility industry. Based on
these factors, the Committee determined to grant Mr. Harlow a
Restricted Stock award having an approximate value at the date of
its grant of 30% of his base salary. As was the case with respect
to awards of Restricted Stock to other key officers, Mr. Harlow's
ultimate receipt of the shares awarded to him will be dependent
upon the Company's achievement of specified return on equity
targets during 1994, 1995 and 1996.
Compensation Committee
Bill Swisher, Chairman Hugh L. Hembree, III, member
William E. Durrett, member John F. Snodgrass, member
9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Bill Swisher is the Chairman and William E. Durrett, H.L.
Hembree, III and John F. Snodgrass are the members of the
Compensation Committee. William E. Durrett, also serves as
Chairman of the Board and Chief Executive Officer of American
Fidelity Corporation and as Chairman of the Board of its
subsidiary American Fidelity Assurance Company. In 1993, the
Company paid American Fidelity Assurance Company $1,123,208
(which includes employee contributions) for a long-term
disability policy for its employees and $593,322 for services in
administering the Company's medical, health and similar benefit
plans. The terms of these transactions were no less favorable to
the Company than the terms that would have been obtained from
similar insurance companies. It is expected that similar
transactions will occur in the future.
SUMMARY COMPENSATION TABLE
The following table provides information regarding compensation to the Company's Chief Executive Officer and
four other most highly compensated executive officers for the past three years.
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
------------------------------------ ------------------------- ---------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Principal Bonus 1/ Compensation Awards 2/ Options/ Payouts Compensation 3/
Position Year Salary ($) ($) ($) ($) SAR (#) ($) ($)
- ------------------ ---- ---------- -------- ------------ ---------- ---------- ------- ---------------
J.G. Harlow, Jr. 1993 500,000 - 0 149,976 0 0 55,296
Chairman, President 1992 500,000 0 0 149,993 0 0 50,621
and Chief Executive 1991 475,000 0 0 94,988 0 0 -
Officer
P.J. Ryan 1993 295,000 - 0 73,728 0 0 30,409
Executive Vice 1992 295,000 0 0 73,718 0 0 29,006
President and Chief 1991 280,000 0 0 55,986 0 0 -
Operating Officer
B.G. Bunce 1993 195,000 - 0 38,988 0 0 24,543
Senior Vice President 1992 195,000 0 0 38,980 0 0 22,145
Accounting and 1991 185,000 0 0 36,963 0 0 -
Administration
A.M. Strecker 1993 195,000 - 0 38,988 0 0 20,216
Vice President and 1992 195,000 0 0 38,980 0 0 19,868
Treasurer 1991 185,000 0 0 36,963 0 0 -
S.E. Moore 1993 160,000 - 0 31,968 0 0 13,940
Vice President-Law 1992 160,000 0 0 31,987 0 0 13,318
and Public Affairs 1991 150,000 0 0 29,970 0 0 -
<FN>
1/ As explained on page 9, consideration of payment of bonuses based on 1993 performance has been deferred by the Compensation
Committee.
2/ Amounts in this column reflect the market value of the shares of Restricted Stock awarded under the Company's Restricted
Stock Plan, based on the closing price of the Company's Common Stock on the date the award was made. The number of shares
awarded in 1993, 1992 and 1991 was as follows: (i) Mr. Harlow, 4,166 shares, 4,633 shares and 2,282 shares, respectively;
(ii) Mr. Ryan, 2,048 shares, 2,277 shares and 1,345 shares, respectively; (iii) Mr. Bunce, 1,083 shares, 1,204 shares and
888 shares, respectively; (iv) Mr. Strecker, 1,083 shares, 1,204 shares, and 888 shares, respectively; and (v) Mr. Moore,
888 shares, 988 shares and 720 shares, respectively. In the absence of death, disability or normal retirement, the shares
awarded to these individuals in 1993 and 1992 are subject to forfeiture for three years with the amount the recipient
ultimately receives dependent on Company performance, while the shares awarded in 1991 vest as follows: 20% at the
end of each of the first three years following the year in which granted and 40% at the end of the fourth year
following the year in which granted. The total number of shares and market value of Restricted Stock held by each
of the named individuals as of December 31,1993, were as follows: Mr. Harlow, 11,078 shares, $409,886; Mr. Ryan,
5,668 shares, $209,716; Mr. Bunce, 3,176 shares, $117,512; Mr. Strecker, 3,176 shares, $117,512; and Mr. Moore,
2,601 shares, $96,237. Dividends are paid to these individuals on the shares of Restricted Stock owned by them.
3/ Amounts in this column for 1993 reflect: (i) for Mr. Harlow, $22,500 (Thrift Plan and Thrift Restoration Plan) and
$32,796 (insurance premiums); (ii) for Mr. Ryan, $13,275 (Thrift Plan and Thrift Restoration Plan) and $17,134
(insurance premiums); (iii) for Mr. Bunce, $8,775 (Thrift Plan) and $15,768 (insurance premiums); (iv) for
Mr. Strecker, $8,775 (Thrift Plan) and $11,441 (insurance premiums); and (v) for Mr. Moore, $4,800 (Thrift Plan)
and $9,140 (insurance premiums). A significant portion of the insurance premiums reported for each of these
individuals is for life insurance policies and such premiums are recovered by the Company from the proceeds of the
policies. Information for 1991 is omitted from this column as permitted by the SEC's rules.
To the extent the table shows zeros for bonuses, other annual compensation, stock options, stock appreciation rights or
payouts under long-term incentive plans for a particular year, these forms of compensation were not provided to executive
officers in such year or, in the case of other annual compensation, the amounts were below the threshold required for
disclosure under the SEC's rules.
10
PENSION PLAN TABLE
The Company maintains a qualified non-contributory Retirement
Plan covering all employees of the Company who have completed one
year's service. Subject to limitations imposed by the Employee
Retirement Income Security Act of 1974 ("ERISA"), benefits under
the Retirement Plan are based upon the five highest consecutive
years of cash compensation (which for the executives named in the
Summary Compensation Table has consisted to date solely of
salaries) during an employee's last ten years prior to retirement
and length of service. Social Security benefits are deducted in
determining benefits payable under the Plan. Remuneration covered
by the Plan includes salaries and overtime pay. Retirement
benefits are payable to participants upon normal retirement (at
or after age 65) or early retirement (at or after attaining age
55 and completing five or more years of service), to former
employees after reaching retirement age who have completed five
or more years of service before terminating their employment and
to participants after reaching retirement age upon total and
permanent disability. As indicated above, the benefits payable
under the Plan are subject to maximum limitations under ERISA.
Should benefits at the time of retirement exceed the then
permissible limits of ERISA, the Retirement Restoration Plan will
provide benefits through a lump-sum distribution actuarially
equivalent to the amounts that would have been payable annually
under the Retirement Plan but for the ERISA limits. The Company
funds the estimated benefits payable under the Retirement
Restoration Plan through contributions to a trust for the benefit
of those employees who will be entitled to receive payments under
the Retirement Restoration Plan.
The following table sets forth the estimated annual benefits payable
upon normal retirement under the Company's Retirement Plan and Retirement
Restoration Plan to persons in the remuneration classification specified.
Average Years of Service at Retirement
Compensation -----------------------------------------------
5 Highest Years 10 20 30 40 45
- ---------------------------------------------------------------------------
$100,000 $ 13,648 $ 27,295 $ 40,943 $ 54,590 $ 61,414
125,000 17,398 34,795 52,193 69,590 78,289
150,000 21,148 42,295 63,443 84,590 95,164
200,000 28,648 57,295 85,943 114,590 128,914
250,000 36,148 72,295 108,443 144,590 162,664
300,000 43,648 87,295 130,943 174,590 196,414
350,000 51,148 102,295 153,443 204,590 230,164
400,000 58,648 117,295 175,943 234,590 263,914
450,000 66,148 132,295 198,443 264,590 297,664
500,000 73,648 147,295 220,943 294,590 331,414
550,000 81,148 162,295 243,443 324,590 365,164
600,000 88,648 177,295 265,943 354,590 398,914
As of December 31,1993, the credited years of service for
individuals listed in the remuneration table on page 10 are as follows:
J. G. Harlow, Jr. - 32 years; P. J. Ryan - 32 years; B. G. Bunce - 44 years;
A. M. Strecker - 22 years; and S. E. Moore - 19 years.
In 1993, the Company adopted a Supplemental Executive Retirement
Plan (the "SERP"). The SERP is an unfunded supplemental plan that is not
subject to the benefits limit imposed by ERISA. The plan generally provides
for an annual retirement benefit at age 65 equal to 65 % of the participant's
average cash compensation during his or her final 36 months of employment,
reduced by Social Security benefits, by amounts payable under the Company's
Retirement and Restoration Plans described above and by amounts received
under pension plans from other employers. None of the individuals listed in
the remuneration table on page 10 is expected to receive benefits under the
SERP at normal retirement as the benefits payable to such individuals under
the Company's Retirement and Restoration Plans are expected to exceed the
benefits payable under the SERP.
11
COMPANY STOCK PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the Company's Common Stock, the Dow Jones Equity Market
Index and the Dow Jones Electric Utilities Index. The graph assumes
that the value of the investment in the Company's Common Stock and
each index was $100 at December 31, 1988, and that all dividends
were reinvested.
(Performance graph shown here)
December 31,
|---------------------------------------------------------------------------|
| 1988 1989 1990 1991 1992 1993 |
|---------------------------------------------------------------------------|
|OG&E 100 128 137 165 137 161 |
|---------------------------------------------------------------------------|
|Dow Jones Equity Market Index 100 131 126 167 181 199 |
|---------------------------------------------------------------------------|
|Dow Jones Electric Utilities Index 100 131 133 173 185 206 |
|---------------------------------------------------------------------------|
SECURITY OWNERSHIP
Information regarding ownership of the Company's stock by each of
the Directors of the Company is set forth under "INFORMATION ABOUT
DIRECTORS AND NOMINEES." The following table shows the number of
shares of the Company's Common Stock and Preferred Stock
beneficially owned on March 1, 1994, by each of the named Executive
Officers and by all Executive Officers and Directors as a group:
Number of Number of
Common Shares 1/ Preferred Shares 1/
- ------------------------------------------------------------------
J.G. Harlow, Jr. 42,741 0
P.J. Ryan 27,322 0
B.G. Bunce 19,754 0
A.M. Strecker 16,336 0
S.E. Moore 14,049 0
All Executive Officers and
Directors as a group 185,687 87
(18 persons)
<FN>
1/ No more than 0.1 % of the class for each executive officer and
0.5 % of the class for all executive officers and directors as a
group. Amounts shown include shares for which, in certain instances,
an individual has disclaimed beneficial interest. Amounts shown for
executive officers include 121,852 shares of Common Stock
representing their interest in shares held under the Company's
Employees' Stock Ownership Plan, Thrift Plan and Restricted Stock
Plan, for which in certain instances they have voting power but not
investment power.
The foregoing information on share ownership is based on information
furnished to the Company by the individuals listed above and all
shares listed are beneficially owned by the individuals or by
members of their immediate family unless otherwise indicated.
12
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
During 1993, Oklahoma Gas and Electric Company engaged
Arthur Andersen & Co. as its independent public accountants. The
Board of Directors has appointed Arthur Andersen & Co. as the
independent public accountants for the Company for 1994.
Representatives of Arthur Andersen & Co. will be present at the
Annual Meeting of Shareowners and will have the opportunity to
make a statement if they so desire. Such representatives will be
available to respond to appropriate questions from shareowners at
the meeting.
SHAREOWNER PROPOSALS
Any shareowner proposal intended to be presented at the Annual
Meeting in 1995 must be received by the Company on or before
November 29, 1994, for inclusion in the Company's proxy statement
and form of proxy relating to that meeting. Proposals received by
that date, deemed to be proper for consideration at the Annual
Meeting and otherwise conforming to the rules of the Securities
and Exchange Commission, will be included in the 1995 proxy
statement.
LOCATION OF METRO TECH BUSINESS CONFERENCE CENTER
(Map shown here)
From I-35 north or southbound, exit at Northeast 36th
Street; proceed west on 36th to Martin Luther King Boulevard.
Turn north to Metro Tech Business Center.
From I-44 east or westbound, exit at Martin Luther King Boulevard;
proceed south on Martin Luther King Boulevard to Metro Tech Business Center.
13
APPENDIX
------------
The following graphic image information was omitted in electronic submission:
Description Page No.
------------------------ --------
1. Performance Graph 12
2. Map of Meeting Location 13
OKLAHOMA GAS AND ELECTRIC COMPANY
O G & E Annual Meeting of Shareowners
ELECTRIC SERVICE May 19,1994
P
The undersigned hereby appoints James G. Harlow, Jr., John A. Taylor, and Bill Swisher, and each of them
severally, with full power of substitution and with full power to act with or without the other, as the proxies
R of the undersigned to represent and to vote all shares of stock of Oklahoma Gas and Electric Company held of
record by the undersigned on March 21, 1994, at the Company's Annual Meeting of Shareowners to be held on
May 19, 1994, and at all adjournments thereof, on all matters coming before said meeting.
O
THIS PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, WILL BE VOTED AS DIRECTED. IF
X NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF THE
NOMINEES NAMED ON THE REVERSE SIDE OF THIS PROXY CARD.
Y
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. Unless you attend and vote in person, you MUST sign and return your proxy in order to
have your shares voted at the meeting.
_______________________________________________________________________________________________________________________________
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS BELOW. EACH JOINT OWNER SHOULD SIGN. ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR OTHERS SIGNING IN A REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL TITLES.
____________________________________________________________
|PROXY NUMBER| TOTAL COMMON SHARES INCLUD-| 4% CUMULATIVE |
| | ING REINVESTMENT PLAN AND | PREFERRED SHARES|
| | CUSTOMER STOCK PLAN | |
|____________|____________________________|__________________|
The Board recommends a vote FOR the election as directors
of the nominees named below.
1. Election of Directors.
X / / 94 NOMINEES:
__________________________________ __________ William E. Durrett; H. L. Hembree, III; John F. Snodgrass
Signature of Shareowner Date
X / / 94 [] FOR all nominees (list exceptions below).
__________________________________ __________
Signature of Shareowner Date
____________________________________________________________
Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name on the line above.
[] WITHHOLD AUTHORITY to vote for all nominees.
2. In their discretion, the proxies are authorized to
vote upon such other business as may properly come
before the meeting.