<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT, OFFICIAL TEXT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSANT 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 Rule 14a-11(c) or Rule 14a-12
OGE ENERGY CORP.
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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)
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Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee Computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
- --------------------------------------------------------------------------------
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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OGE ENERGY CORP.
PROXY STATEMENT
AND
NOTICE OF ANNUAL MEETING
========================
MAY 15, 1997
OGE ENERGY CORP.
[LOGO]
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CONTENTS
Page
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Chairman's Letter 1 NOTICE OF ANNUAL MEETING
OF SHAREOWNERS
Notice of Annaul Meeting 2 AND PROXY STATEMENT
Proxy Statement 3 THURSDAY, MAY 15, 1997, AT 10:00 a.m.
Proposal No. 1 - Election of Directors 4 OKLAHOMA CITY MARRIOTT HOTEL
Information about Directors 4 3233 NORTHWEST EXPRESSWAY
and Nominees OKLAHOMA CITY, OKLAHOMA
Information Concerning the 7
Board of Directors
Executive Officers' Remuneration 8
Report of Compensation 8
Committee on Executive
Compensation
Summary Compensation 11
Table
Pension Plan Table 12
Change of Control Arrangements 13
Company Stock Performance 14
Security Ownership 14
Section 16(a) Beneficial 15
Ownership Reporting Compliance
Relationship with Independent 15
Public Accountants
Shareowner Proposals 15
Map 16
i
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OGE ENERGY CORP.
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March 28, 1997
DEAR SHAREOWNER:
You are cordially invited to attend the annual meeting of OGE Energy Corp.
at 10:00 a.m. on Thursday, May 15, 1997, at the Oklahoma City Marriott Hotel,
3233 Northwest Expressway, Oklahoma City, Oklahoma.
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.
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.
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,
/s/ Steven E. Moore
Steven E. Moore
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING
OF SHAREOWNERS
========================--------------------------------------------------------
The Annual Meeting of Shareowners of OGE Energy Corp. will be held on
Thursday, May 15, 1997, at 10:00 a.m. at the Oklahoma City Marriott Hotel, 3233
Northwest Expressway, 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 16 will assist you in locating the Oklahoma City Marriott Hotel.
The Board of Directors has fixed the close of business on March 18, 1997,
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.
/s/ Irma B. Elliott
Irma B. Elliott
Vice President and Secretary
Dated: March 28, 1997
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IMPORTANT - YOUR PROXY CARD IS ENCLOSED IN THIS ENVELOPE
To assure your representation at the meeting, please sign, date and return
the proxy promptly in the enclosed envelope. No postage is required for mailing
in the United States. If your shares are held in the name of a broker, trust,
bank or other nominee and you plan to attend the meeting and vote your shares in
person, you should bring with you a proxy or letter from the broker, trustee,
bank or nominee confirming your beneficial ownership of the shares.
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2
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PROXY STATEMENT
March 28, 1997
OGE Energy Corp. (the "Company") became the parent holding company of
Oklahoma Gas and Electric Company ("OG&E") and its subsidiaries at the close of
business on December 31, 1996, pursuant to a corporate reorganization. As a
result, all outstanding shares of OG&E common stock (other than shares held by
holders who perfected their dissenters' rights) automatically became shares of
the Company's Common Stock.
The Annual Meeting of Shareowners of OGE Energy Corp. will be held at the
Oklahoma City Marriott Hotel, 3233 Northwest Expressway, Oklahoma City,
Oklahoma, on May 15, 1997, at 10:00 a.m. For the convenience of those
shareowners who may attend the meeting, a map is printed on page 16 that gives
directions to the Oklahoma City Marriott Hotel. At the meeting, it is intended
that the first item in the accompanying notice will be presented for action by
the owners of the Company's Common Stock. 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 and 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 or its subsidiaries.
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 $7,000 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, 1997, the Company had outstanding approximately 40,373,991
shares of Common Stock, par value $.01 per share. The Company does not have any
other outstanding class of stock.
The owners of the Common Stock are entitled to one vote on each matter
presented for a vote at the meeting.
The Company's 1996 Annual Report to its shareowners, including financial
statements for the year 1996, was sent on or about March 28, 1997, to all
shareowners of the Company of record on March 18, 1997.
3
<PAGE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
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The Board of Directors of the Company presently consists of nine members.
The directors are classified into three groups. One class of directors is
elected at each year's Annual Meeting for a three-year term and to continue in
office until their successors are elected and qualified. The following three
persons are the nominees of the Board to be elected for such three-year term at
the Annual Meeting to be held on May 15, 1997: Messrs. William E. Durrett, H. L.
Hembree, III and Steven E. Moore. Each of these individuals is currently a
director of the Company whose term as a director is scheduled to expire at the
Annual Meeting.
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 0.06% 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 present in person or
by proxy and entitled to vote. Plurality means that the individuals who receive
the largest number of votes are elected as directors up to the maximum number of
directors to be chosen at the meeting. 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.
Each director of the Company is also a director of OG&E and became a
director of the Company upon the effectiveness of the corporate reorganization
on December 31, 1996.
INFORMATION ABOUT DIRECTORS AND NOMINEES
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The following contains certain information as of March 1, 1997, concerning the
three nominees for directors, as well as the directors whose terms of office do
not expire at the Annual Meeting on May 15, 1997.
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NOMINEES FOR ELECTION FOR TERM EXPIRING AT 2000 ANNUAL MEETING OF SHAREOWNERS
WILLIAM E. DURRETT, 66, 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 [Photo]
company wholly-owned by American Fidelity Corporation. He also
serves as a director of BOK Financial Corporation and INTEGRIS
Health. Mr. Durrett has been a director of the Company since
December 31, 1996, and of OG&E since March 1991, and is a member
of the audit and compensation committees of the Board.
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H. L. HEMBREE, III, 65, is Chairman of the Executive
Committee of Merchants National Bank, Fort Smith, Arkansas, a
subsidiary of Deposit Guaranty Corp., Jackson, Mississippi. Mr.
Hembree is approximately a 5% shareholder of Deposit Guaranty [PHOTO]
Corp. 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 the
Company since December 31, 1996, and of OG&E since 1985, and is a
member of the compensation committee of the Board.
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4
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STEVEN E. MOORE, 50, is Chairman, President and Chief
Executive Officer of the Company and of OG&E, having been
appointed to such positions with the Company effective December
31, 1996 and as President of OG&E in August 1995, and as Chief
Executive Officer and Chairman of OG&E in May 1996. Mr. Moore has [PHOTO]
been employed by OG&E for more that 22 years, having previously
served as Senior Vice President of Law and Public Affairs. Mr.
Moore has served on many industry-wide committees in the electric
utility industry. Mr. Moore has been a director of the Company
since 1996 and of OG&E since October 1995.
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DIRECTORS WHOSE TERMS EXPIRE AT 1999 ANNUAL MEETING OF SHAREOWNERS
HERBERT H. CHAMPLIN, 59, 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 the Company since
December 31, 1996 and of OG&E since 1982, and is chairman of the [PHOTO]
audit committee and a member of the nominating committee of the
Board. Mr. Champlin also was engaged separately during 1996 as a
part of his principal business occupation in the petroleum
industry and had interests in oil and gas wells. During 1996,
under terms of gas purchase contracts, OG&E paid $38,503 to him
and his family business interests. The terms of the contracts
were no less favorable to OG&E than the terms that would have
been obtained from other independent producers.
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MARTHA W. GRIFFIN, 62, owner of Martha Griffin White
Enterprises, is presently engaged in the management of her
personal investments, the operation of a ranch and various civic
activities. Prior to September 30, 1994, she served as Chairman
of the Board of Griffin Television, Inc., located in Oklahoma
City, Oklahoma, and Chairman of the Board of Griffin Food Company
(a subsidiary of Griffin Television, Inc.). Mrs. Griffin has been [PHOTO]
a director of the Company since December 31, 1996 and of OG&E
since 1987, and is chairman of the nominating committee and a
member of the audit committee of the Board. During 1996, Mrs.
Griffin was also a major stockholder of television station KWTV,
Channel 9, Oklahoma City, Oklahoma. During 1996, OG&E paid an
aggregate of approximately $158,300 to KWTV for showing
television commercials of OG&E. This television time was
purchased by contract with the station, and the rate paid was no
less favorable to OG&E than the rate that would have been paid to
similar stations in the Oklahoma City area.
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RONALD H. WHITE, M.D., 60, is a practicing cardiologist and
is President and Chief Executive Officer of Cardiology, Inc. in
Oklahoma City. He serves as a member of the Board of Directors of [PHOTO]
INTEGRIS 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 the Company since
December 31, 1996 and of OG&E since 1989, and is a member of the
nominating committee of the Board.
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5
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DIRECTORS WHOSE TERMS EXPIRE AT 1998 ANNUAL MEETING OF SHAREOWNERS
LUKE R. CORBETT, 50, is Chairman and Chief Executive Officer
of Kerr-McGee Corporation. He has been employed by Kerr-McGee
Corporation for more than 12 years, having served as President
and Chief Operating Officer from 1995 to 1997; Group Vice [PHOTO]
President from 1992 to 1995; and Senior Vice President from 1991
to 1992. Mr. Corbett also serves as a member of the Board of
Directors of Devon Energy Corporation. Mr. Corbett has been a
Director of the Company since December 31, 1996, and of OG&E
since December 1, 1996.
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ROBERT KELLEY, 51, is Chairman, President and Chief
Executive Officer of Noble Affiliates, Inc., an independent
energy company with exploration and production operations in the
United States and international operations primarily in Canada,
Tunisia and Equatorial Guinea. He also serves as President and
Chief Executive Officer of Samedan Oil Corporation and Chairman [PHOTO]
and Chief Executive Officer of Noble Gas Marketing Inc., both
wholly-owned subsidiaries of Noble Affiliates, Inc. Mr. Kelley
has been a director of the Company since December 31, 1996 and of
OG&E since January 17, 1996, and is a member of the audit
committee of the Board. Mr. Kelley also serves as a director of
Exchange National Bank and Trust Company of Ardmore, Oklahoma and
of AmQuest Financial Corporation.
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BILL SWISHER, 66, is Chairman of the Board and Chief
Executive Officer of CMI Corporation, a manufacturer of road
construction equipment that is located in Oklahoma City, [PHOTO]
Oklahoma. Mr. Swisher has been a director of the Company since
December 31, 1996 and of OG&E since 1979, and is chairman of the
compensation committee and a member of the audit committee of the
Board.
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6
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INFORMATION CONCERNING THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
Each member of the Board of Directors of the Company is also a Director of
OG&E. The Board of Directors of the Company met on three occasions during 1996
and the Board of Directors of OG&E met on seven occasions during 1996. Each
director attended at least 92% of the total number of meetings of the Boards of
Directors and the committees of the Boards 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. The
Directors who are members of the various committees of the Company serve in the
same capacity for purposes of the OG&E Board. There were no committee meetings
of the Company during 1996 and the following describes the actions of the
committees of the OG&E Board during 1996. Members of the compensation committee
are Bill Swisher, chairman, and Messrs. Durrett and Hembree. During 1996, the
committee met on three occasions to review and make recommendations to OG&E's
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 OG&E.
Members of the audit committee are Herbert H. Champlin, chairman, Mrs.
Griffin and Messrs. Corbett, Durrett, Kelley, and Swisher. During 1996, the
committee met on three 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 financial operations.
Members of the nominating committee are Martha W. Griffin, chairman, Mr.
Champlin and Dr. White. During 1996, the committee met on three 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. Directors of the Company were not compensated for
serving in such capacity during 1996. Compensation of non-officer directors of
OG&E during 1996 consisted of an annual retainer fee of $27,500, of which $2,000
was payable monthly in cash (the same amount that has been paid monthly since
August 1994) and $3,500 was deposited in the director's Stock Account under the
Directors' Deferred Compensation Plan and converted to 85.106 common stock units
based on the closing price of OG&E's Common Stock on November 29, 1996. In
addition, all non-officer directors received $1,000 for each Board meeting and
$1,000 for each committee meeting attended. The Company assumed the Directors'
Deferred Compensation Plan of OG&E as part of the corporate reorganization and
the Board of Directors of the Company has currently set the compensation of
non-officer directors at the same levels paid to directors of OG&E during 1996.
Under the Directors' Deferred Compensation Plan, non-officer directors also may
defer payment of all or part of their attendance fees and the cash portion of
their annual retainer fee, 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.
Amounts credited to the Dollar Account accrue interest approximately equal
to the commercial paper rate for established companies. 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 amounts would purchase
based on the fair market value of the Company's Common Stock on the date the
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.
7
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When an individual ceases to be a director of the Company, all amounts credited
under the Plan are paid in cash in a lump sum or installments, 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 addition, 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 deferred portion of the attendance fees and the cash portion of the annual
retainer fee applied to purchase life insurance for the director.
In addition, for those directors who have retired from the Board of Directors
after 10 years or more of service, OG&E has historically continued to pay their
annual retainer until their death.
EXECUTIVE OFFICERS' REMUNERATION
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The Company's executive compensation program is administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"). OG&E is the
principal subsidiary of the Company. Since the Company did not conduct any business
operations prior to becoming the parent holding company of OG&E effective December
31, 1996, the executive officers of the Company (who also are executive officers of
OG&E) were compensated solely by OG&E during 1996 and the Company's Compensation
Committee did not meet during 1996. As noted above, the members of the Compensation
Committee and Board of Directors of OG&E serve in the same capacity for the Company.
Set forth below is the Committee's report on compensation paid to executive officers
by OG&E during 1996.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
GENERAL. The primary goals of the Committee in setting executive compensation in
1996 were: (i) to provide a total compensation package that would enable OG&E to
attract and retain key executives and (ii) to align the executives' interests with
those of shareowners and with performance by OG&E and its subsidiaries.
Compensation of OG&E's executive officers in 1996 was comprised primarily of
salary, awards under OG&E's Annual Incentive Compensation Plan, awards under OG&E's
Restricted Stock Plan, and benefits under OG&E's Employees' Retirement Savings Plan
and pension plan. Virtually all employees, including executive officers, are eligible
to participate in the Retirement Savings Plan and pension plan. Both the Retirement
Savings 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.(1) In addition, a Supplemental Executive Retirement Plan (the "SERP"), which
was adopted in 1993, offers attractive pension benefits to lateral hires. The only
participant in the SERP to date has been James G. Harlow, Jr., the former Chief
Executive Officer of OG&E. The SERP is not expected to benefit present executive
officers generally who remain employed by the Company or OG&E until age 65. In
reviewing the benefits under the SERP, Retirement Savings Plan, pension plan and
related restoration plans, the Committee sought in 1996 to provide participants with
benefits generally commensurate with those offered by other utilities of comparable
size. The restoration plans for the Retirement Savings Plan and pension plan contain
provisions requiring their immediate funding in the event of certain mergers,
consolidations or tender offers involving the Company.
The target level of total compensation of OG&E's executives in 1996 was set
generally at approximately the average of the compensation paid to similar executives
within the approximately 120 electric utilities included in the Edison Electric
Institute Survey (the "Survey Group")(2). In recent years, the Committee has
significantly altered the structure of the executive compensation system and the
composition of the individual compensation packages, shifting from a compensation
system based in large part on individual performance and continued employment to a
compensation system that places a significant portion of compensation at risk
dependent on the performance of OG&E and its subsidiaries.
The first step in the process of switching to a more incentive-based system for
executive officers occurred in 1992 with awards of Restricted Stock 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 imple-
- ----------
(1) Effective December 31, 1996, the Annual Incentive Compensation Plan, Employees'
Retirement Savings Plan (and related supplemental restoration plan) and
Restricted Stock Plan were assumed by the Company and the pension plan (and
related supplemental restoration plan) were amended to permit participation by
employees of the Company.
(2) 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 14. 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.
</TABLE>
8
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mented the Annual Incentive Compensation Plan. The implementation of the Annual
Incentive Compensation Plan was a result of a study by Towers Perrin, at the
Committee's request, of the Survey Group that indicated that although the total
compensation of OG&E's executive officers was commensurate with the total
compensation of similar officers within the Survey Group, OG&E's executive
officers received a greater proportion of their compensation in salary and a
lesser proportion in incentive-based awards. Accordingly, in an effort to bring
OG&E's compensation system more in line with the Survey Group, the salaries of
senior executives generally were frozen during 1993 and 1994 at 1992 levels, and
executives received increased incentive-based awards. This process continued in
1995 and 1996 for several executive officers (including Mr. Harlow, the Chief
Executive Officer) as their 1995 and 1996 salaries remained frozen at 1992
levels. As a result of this process, the potential total cash compensation of
OG&E's executives, as well as the makeup of that compensation, became generally
consistent with the average 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. This new law is not expected to impact the Company or OG&E with respect to
executive compensation paid in 1997. The Committee continues to review 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.
BASE SALARY. The base salaries for OG&E's executive officers in 1996 were
designed to be competitive with the Survey Group and generally approximated the
salary at the 50th percentile of the range for comparable executives employed by
companies in the Survey Group. Actual base salaries were determined based on
individual performance and experience. The salaries of executive officers
generally are determined in January of each year with an effective date of March
1, and are subject to adjustment during a year when an individual's duties and
responsibilities are changed. For this reason, the salary of Mr. Moore was
increased on August 1, 1995, upon his appointment as President and Chief
Operating Officer of OG&E and on May 16, 1996, upon his appointment as President
and Chief Executive Officer following the resignation of Mr. Harlow as Chief
Executive Officer due to illness.
ANNUAL INCENTIVE COMPENSATION PLAN. The Annual Incentive Compensation Plan
was adopted in late 1992. The plan is designed to provide key management
personnel with annual incentive awards, the payment of which is tied to the
achievement of specified OG&E objectives relating to profitability. Awards with
respect to 1996 performance were made under the Plan to 11 employees, including
all executive officers, and specified corporate and individual performance goals
were established in January 1996. Payouts of the awards are in cash and are
dependent primarily on the achievement of such specified performance goals. In
1996, the corporate 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 corporate goals, to receive from 0% to 150% of
such targeted amounts. For 1996, the targeted amounts ranged from 20% to 30% of
base salary and approximated the 50th percentile of the level of such awards
granted to comparable executives employed by companies in the Survey Group.
The percentage of the targeted amount that an officer ultimately receives
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. In no event, however, will any payouts be made
unless the specified minimum corporate performance goals are satisfied. For
1996, the Company's earnings per share ($3.25) exceeded the target levels and
the operating and maintenance expenses were less than the target levels.
Corporate performance in 1996 and performance by individuals of their
pre-established personal goals resulted in payouts ranging from 141% to 151% of
their target amounts and from 24% to 45% of base salary earned in 1996.
RESTRICTED STOCK AWARDS. Another significant component of executive
compensation in 1996 was awards under OG&E'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 of three or four years during which the share is subject to
forfeiture if the recipient of the share ceases to render substantial services
to the Company or a subsidiary 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.
Awards under the Restricted Stock Plan were made at the end of 1996 and
were based, as required by the Plan, on the individual's performance during
1996. 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
9
<PAGE>
incentives provided to executives in the Survey Group and the amount of the 1996
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. For 1996, awards of Restricted Stock ranged
from 4% to 30% of an executive's base salary. As in prior years, each share of
Restricted Stock awarded in 1996 is subject to forfeiture during a Restricted
Period. Moreover, as in prior years, the shares awarded in 1996 to nine key
officers contained a significant additional condition. Such officers generally
will be entitled at the end of the Restricted Period of three years 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 90 electric and combination utility
companies (including utility holding companies) shown in the Merrill Lynch &
Co., Inc. Data Sheet-Electric and Combination Utility Companies (the "Merrill
Lynch Index") with the officer receiving fewer shares and possibly no shares
depending on the Company's performance relative to the performance of the
companies in the Merrill Lynch Index. The Committee's rationale for this
additional condition was to continue to reward past service and to align the
officer's interests with those of shareowners and, at the same time, to tie the
Restricted Stock awards directly to long-term corporate performance. The amount
of shares awarded in 1996 that an officer will ultimately receive will not be
determined until the end of 1999. Prior awards of Restricted Stock were not
considered by the Committee in making awards in 1996.
CEO COMPENSATION. Mr. Moore became President and Chief Executive Officer
following Mr. Harlow's resignation as Chief Executive Officer due to illness on
May 16, 1996, and assumed the additional role of Chairman upon Mr. Harlow's
death. Prior to that time, Mr. Moore served as President and Chief Operating
Officer. The 1996 compensation for Mr. Moore consisted of the same components as
the compensation for other executive officers. Mr. Moore's 1996 salary was
increased from $270,000 to $280,000, effective March 1, 1996, and his 1996
targeted award under the Annual Incentive Plan was initially set at 25% of his
base salary so that his total potential cash compensation and the components of
such compensation would approximate the average cash compensation for chief
operating officers of the companies in the Survey Group. Following his
apppointment as Chief Executive Officer on May 16, 1996, Mr. Moore's salary and
target incentive award for the balance of 1996 were increased to $375,000 and
30%, respectively, which the Compensation Committee believed were appropriate
levels based on his prior experience. As a result of 1996 performance as
described above, he received a payout of $146,072 under the Annual Incentive
Plan, representing 151% of his composite targeted award, of which 131% was
attributable to corporate performance and 20% was attributable to his individual
performance. Mr. Moore's Restricted Stock award was based on his performance in
1996 and a comparison of his award to the long-term compensation of other chief
executive officers in the Survey Group. Consideration also was given to Mr.
Moore's prior experience with OG&E, his demonstrated leadership skills and his
positive reputation within the community and utility industry. Based on these
factors, the Committee determined to grant Mr. Moore a Restricted Stock award
having an approximate value at the date of its grant of 43% of his composite
base salary for 1996. As was the case with respect to awards of Restricted Stock
to other key officers, Mr. Moore's ultimate receipt of the shares awarded to him
will be dependent upon the Company's achievement of specified return on equity
targets during 1997, 1998 and 1999.
Prior to May 16, 1996, Mr. Harlow served as Chairman and Chief Executive
Officer. Initially, his salary for 1996 remained frozen at the 1992 level
($500,000) and his targeted award under the Annual Incentive Plan remained at
30% (i.e., $150,000) so that his total potential cash compensation and the
components of such compensation would appproximate the average cash compensation
for chief executive officers of the companies in the Survey Group. On May 16,
1996, Mr. Harlow resigned due to illness as Chief Executive Officer and
continued as Chairman at a reduced annual salary of $350,000 prior to his death
on June 1, 1996. In accordance with the terms of the Annual Incentive Plan, Mr.
Harlow received a prorated payout of $90,699 under the Plan based on the period
of time he was employed by OG&E during 1996, of which 131% was attributable to
corporate performance and 20% was attributable to individual performance. At the
time Mr. Harlow resigned as Chief Executive Officer, he entered into an
employment and consulting agreement with OG&E, the terms of which are summarized
in the footnotes to the Compensation Table on page 12.
CONCLUSION. The Committee believes that the Company's current executive
compensation system serves the interests of the Company and its shareowners
effectively. The Committee takes very seriously its responsibilities with
respect to the Company's executive compensation system. To this end, the
Committee will continue to monitor and revise the compensation policies as
necessary to ensure that the Company's compensation system continues to meet the
needs of the Company and its shareowners.
Compensation Committee
Bill Swisher, Chairman
Hugh L. Hembree, III, member
William E. Durrett, member
10
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
Since the Company did not conduct any business operations during 1996, the current executive officers of the
Company were not compensated by the Company during 1996. The following table provides information regarding
compensation to OG&E's Chief Executive Officers and four other most highly compensated executive officers for the
past three years. To the extent the table shows zeros for other annual compensation, stock options, stock
appreciation rights or payouts under long-term incentive plans for a particular year, no amounts were required to
be reported 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.
Long Term Compensation
--------------------------------
Annual Compensation Awards Payouts
------------------------------ ----------------------- -------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Principal Salary Bonus(1) Compensation Awards(2) Options/ Payouts Compensation(3)
Position Year ($) ($) ($) ($) SAR(#) ($) ($)
- ------------------ ---- ------ -------- ------------- ---------- ---------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
S.E. Moore, (4) Chairman, 1996 337,708 146,072 0 101,291 0 0 28,489
President and 1995 212,000 58,591 0 52,974 0 0 17,726
Chief Executive Officer 1994 162,917 41,920 0 32,579 0 0 15,334
P.J. Ryan (5) 1996 295,000 83,190 0 0 0 0 26,405
Vice Chairman 1995 295,000 63,130 0 58,968 0 0 25,804
1994 295,000 92,925 0 73,739 0 0 27,982
A.M. Strecker 1996 206,667 62,816 0 51,653 0 0 19,242
Senior Vice President 1995 200,000 46,800 0 39,974 0 0 19,059
Finance and Administration 1994 197,083 51,090 0 39,384 0 0 19,557
J.T. Coffman 1996 134,167 39,420 0 26,814 0 0 14,913
Vice President Power Supply 1995 127,500 31,720 0 25,475 0 0 6,039
1994 112,249 12,075 0 22,158 0 0 12,387
J.R. Hatfield (6) 1996 132,083 40,166 0 26,402 0 0 9,089
Treasurer 1995 127,500 29,835 0 25,475 0 0 2,350
1994 47,813 13,919 0 9,534 0 0 5,730
J.G. Harlow, Jr. (7) 1996 200,737 90,699 0 0 0 0 37,800
Chairman and 1995 500,000 183,000 0 149,972 0 0 52,145
Chief Executive Officer 1994 500,000 131,000 0 149,976 0 0 52,934
</TABLE>
- -----------------
<TABLE>
<CAPTION>
<S> <C>
(1) As explained on page 9, amounts in this column reflect payouts under OG&E's Annual Incentive Compensation Plan.
(2) Amounts in this column reflect the market value of the shares of Restricted Stock awarded under the 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 1996, 1995 and 1994 was as follows: (i) Mr. Moore, 2,463 shares, 1,308 shares and
991 shares, respectively; (ii) Mr. Ryan, zero shares, 1,456 shares and 2,243 shares, respectively; (iii) Mr.
Strecker, 1,256 shares, 987 shares and 1,198 shares, respectively; (iv) Mr. Coffman, 652 shares, 629 shares
and 674 shares, respectively; (v) Mr. Hatfield, 642 shares, 629 shares, and 290 shares, respectively; and (vi)
Mr. Harlow, zero shares, 3,703 shares and 4,562 shares. In the absence of death, disability or normal
retirement, the shares awarded to these individuals in 1996, 1995 and 1994 are subject to forfeiture for three
years with the amount the recipient ultimately receives dependent on Company performance. The total number of
shares and market value of Restricted Stock held by each of the named individuals as of December 31, 1996,
were as follows: Mr. Moore, 5,650 shares, $235,888; Mr. Ryan, 5,747 shares, $239,937; Mr. Strecker, 4,524
shares, $188,877; Mr. Coffman, 2,067 shares, $86,297; Mr. Hatfield, 1,561 shares, $65,172; and Mr. Harlow,
none. Dividends are paid to these individuals on the shares of Restricted Stock owned by them.
(3) Amounts in this column for 1996 reflect: (i) for Mr. Moore, $15,197 (Retirement Savings Plan and Retirement
Savings Restoration Plan) and $13,292 (insurance premiums); (ii) for Mr. Ryan, $13,275 (Retirement Savings
Plan and Retirement Savings Restoration Plan) and $13,130 (insurance premiums); (iii) for Mr. Strecker, $9,300
(Retirement Savings Plan and Retirement Savings Restoration Plan) and $9,942 (insurance premiums); (iv) for
Mr. Coffman, $6,037 (Retirement Savings Plan and Retirement Savings Restoration Plan) and $8,876 (insurance
premiums); (v) for Mr. Hatfield, $3,963 (Retirement Savings Plan and Retirement Savings Restoration Plan) and
$5,126 (insurance premiums); and (vi) for Mr. Harlow, $9,033 (Retirement Savings Plan and Retirement Savings
Restoration Plan), $3,767 (insurance premiums), and $25,000 (consulting fees). 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.
(4) Mr. Moore was appointed President in August 1995, Chief Executive Officer in May 1996, and Chairman in June
1996.
(5) Mr. Ryan resigned as Vice Chairman, effective January 3, 1997. Prior to his retirement, Mr. Ryan entered into
an agreement with OG&E,
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
whereby he is to render consulting services to OG&E in 1997 and 1998 and is to be paid $6,500 per month for
such services plus a lump sum payment of $25,000. Under such agreement, Mr. Ryan also will receive the same
benefits provided for executive officers who accepted OG&E's early retirement offer in June 1994. These
benefits include (i) $500 per month until the earlier of Mr. Ryan's death or his attainment of age 62; (ii)
continued coverage for Mr. Ryan and his spouse under OG&E's medical plans; (iii) an enhanced pension benefit
computed as if Mr. Ryan had three additional years of service with OG&E and was five years older at the date
of his retirement (the approximate cost to the Company of providing this benefit to Mr. Ryan was $248,369).
OG&E also agreed to reimburse Mr. Ryan for the costs of accounting services in connection with his personal,
financial and tax planning during 1997 and for his 1997 tax returns.
(6) Mr. Hatfield was not employed by OG&E or its subsidiaries prior to August 18, 1994.
(7) Mr. Harlow served as Chairman and Chief Executive Officer of OG&E until May 16, 1996 at which time he resigned
as Chief Executive Officer due to illness. Following his resignation and in accordance with an employment and
consulting agreement with OG&E, Mr. Harlow received $13,287 for acting as Chairman and $25,000 in consulting
fees prior to his death. Also, as part of such agreement, Mr. Harlow received a country club membership
(approximate cost $30,000) and continued coverage (or coverage comparable to that provided) under OG&E's
medical plans for Mr. Harlow and his spouse.
</TABLE>
<TABLE>
<CAPTION>
PENSION PLAN TABLE
===================================================================================================================
<S> <C>
The Company and OG&E maintain 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 prior to 1993 has
consisted solely of salaries and for 1993, 1994, 1995 and 1996 consists of salary and bonus) 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, bonuses 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 and OG&E fund 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
Retirement Plan and Retirement Restoration Plan to persons in the remuneration classification specified.
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Average Years of Service at Retirement
Compensation --------------------------------------------------------------------------------
5 Highest Years 10 15 20 25 30 35 40 45
===============================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 13,411 $ 20,117 $ 26,822 $ 33,528 $ 40,234 $ 46,939 $ 53,645 $ 60,350
125,000 17,161 25,742 34,322 42,903 51,484 60,064 68,645 77,225
150,000 20,911 31,367 41,822 52,278 62,734 73,189 83,645 94,100
175,000 24,661 36,992 49,322 61,653 73,984 86,314 98,645 110,975
200,000 28,411 42,617 56,822 71,028 85,234 99,439 113,645 127,850
225,000 32,161 48,242 64,322 80,403 96,484 112,564 128,645 144,725
250,000 35,911 53,867 71,822 89,778 107,734 125,689 143,645 161,600
300,000 43,411 65,117 86,822 108,528 130,234 151,939 173,645 195,350
350,000 50,911 76,367 101,822 127,278 152,734 178,189 203,645 229,100
400,000 58,411 87,617 116,822 146,028 175,234 204,439 233,645 262,850
450,000 65,911 98,867 131,822 164,778 197,734 230,689 263,645 296,600
500,000 73,411 110,117 146,822 183,528 220,234 256,939 293,645 330,350
550,000 80,911 121,367 161,822 202,278 242,734 283,189 323,645 364,100
600,000 88,411 132,617 176,822 221,028 265,234 309,439 353,645 397,850
650,000 95,911 143,867 191,822 239,778 287,734 335,689 383,645 431,600
700,000 103,411 155,117 206,822 258,528 310,234 361,939 413,645 465,350
750,000 110,911 166,367 221,822 277,278 332,734 388,189 443,645 499,100
- -----------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
As of December 31, 1996, the credited years of service for the individuals
listed in the remuneration table on page 11 are as follows: S. E. Moore - 22
years; P. J. Ryan - 35 years; A. M. Strecker - 25 years; J. T. Coffman - 26
years; and J. R. Hatfield - 2 years. At the time of his retirement, Mr. Harlow
had 35 credited years of service.
In 1993, OG&E 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 OG&E's Retirement and Restoration
Plans described above and by amounts received under pension plans from other
employers. For a participant in the SERP who retires before age 65, the 65%
benefit is reduced, with the reduction being 1% per year for ages 62 through 64,
an additional 2% per year for ages 60 through 61, an additional 4% per year for
ages 58 through 59 and an additional 6% per year for ages 55 through 57, so that
a participant retiring at age 55 would receive 32% of his average cash
compensation during his final 36 months, reduced by the deductions set forth
above. With the exception of Mr. Harlow, who retired at age 62, none of the
individuals listed in the remuneration table on page 11 has received or 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.
CHANGE OF CONTROL ARRANGEMENTS
- --------------------------------------------------------------------------------
On November 20, 1996, the Company and OG&E entered into employment
agreements with each officer of OG&E. Pursuant to such agreements, each such
officer is to remain an employee for a three-year period following a change of
control of the Company (the "Employment Period"). During the Employment Period,
the officer is entitled to (i) an annual base salary in an amount at least equal
to his or her base salary prior to the change of control, (ii) an annual bonus
in an amount at least equal to his or her highest bonus in the three years prior
to the change of control, and (iii) continued participation in the incentive,
savings, retirement and welfare benefit plans. The officer also is entitled to
payment of expenses and provision of fringe benefits to the extent paid or
provided to (a) such officer prior to the change of control or (b) other peer
executives of the Company.
If, during the Employment Period, the officer's employment is terminated by
the employer for reasons other than cause or disability or by such officer due
to a change in employment responsibilities, the officer shall be entitled to the
following payments: (i) all accrued and unpaid compensation and (ii) a severance
payment equal to 2.99 times the sum of such officer's (a) annual base salary and
(b) highest recent annual bonus. The officer shall also be entitled to continued
welfare benefits for three years and outplacement services. If the payment of
the foregoing benefits, when taken together with any other payments to the
officer, would result in the imposition of the excise tax on excess parachute
payments under Section 4999 of the Internal Revenue Code of 1986, as amended,
then the severance benefits will be reduced if such reduction results in a
greater after-tax payment to the officer. The officer is entitled to receive
such amounts in a lump-sum payment within 30 days of termination. A change of
control encompasses certain mergers and acquisitions, changes in Board
membership and acquisition of securities of the Company.
13
<PAGE>
COMPANY STOCK PERFORMANCE
- --------------------------------------------------------------------------------
The following graph shows a five-year comparison of cumulative total
returns for OG&E'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 OG&E's Common Stock and each index was 100 at December 31, 1991,
and that all dividends were reinvested.
[GRAPH]
<TABLE>
<CAPTION>
Dow Jones Dow Jones
Measurement Period Equity Market Electric
(Fiscal Year Covered) OG&E Index Utilities Index
- --------------------- ---- ----- ---------------
<S> <C> <C> <C> <C>
12/31/91 100 100 100
12/31/92 83 109 107
12/31/93 97 119 119
12/30/94 94 120 105
12/29/95 132 166 138
12/31/96 137 206 139
</TABLE>
SECURITY OWNERSHIP
- --------------------------------------------------------------------------------
The following table shows the number of shares of the Company's Common
Stock beneficially owned on March 1, 1997, by each Director, by each of the
Executive Officers named in the compensation table on page 11, and by all
Executive Officers and Directors as a group:
<TABLE>
<CAPTION>
Number of Common Shares(1)
<S> <C>
Herbert H. Champlin 5,197
Luke R. Corbett 192
William E. Durrett 1,774
Martha W. Griffin 2,635
H. L. Hembree, III 15,592
Robert Kelley 1,707
Bill Swisher 12,106
Ronald H. White 1,474
S.E. Moore 23,657
P.J. Ryan 11,769
A.M. Strecker 21,993
J.T. Coffman 6,327
J.R. Hatfield 3,973
All Executive Officers and 139,501
Directors as a group
(18 persons)
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(1) Ownership by each other executive officer is less than 0.06% of the class,
by each other director is less than 0.04% of the class and, for all
executive officers and directors as a group, is less than 0.35% of the
class. Amounts shown include shares for which, in certain instances, an
individual has disclaimed beneficial interest. Amounts shown for executive
officers include 72,859 shares of Common Stock representing their interest
in shares held under the Company's Employees' Stock Ownership Plan,
Retirement Savings Plan and Restricted Stock Plan, for which in certain
instances they have voting power but not investment power.
(2) Amounts shown for Messrs. Champlin, Corbett, Durrett, Hembree, Kelley,
Swisher and White, and for Mrs. Griffin include, 4,368, 86, 305, 6,022,
707, 6,678, 474, and 305 common stock units, respectively, under the
Director's Deferred Compensation Plan.
</TABLE>
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.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Under federal securities laws, the Company's and OG&E's directors and
executive officers are required to report, within specified monthly and annual
due dates, their initial ownership in the Company's common and preferred stocks
and subsequent acquisitions, dispositions or other transfers of interest in such
securities. The Company is required to disclose whether it has knowledge that
any person required to file such a report may have failed to do so in a timely
manner. To the Company's knowledge, all of the Company's directors and officers
subject to such reporting obligations have satisfied their reporting obligations
in full.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
During 1996, Oklahoma Gas and Electric Company engaged Arthur Andersen LLP
as its independent public accountants. The Board of Directors has appointed
Arthur Andersen LLP as the independent public accountants for the Company and
OG&E for 1997. Representatives of Arthur Andersen LLP 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
1998 must be received by the Company on or before November 28, 1997, 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 1998 proxy statement.
15
<PAGE>
LOCATION OF OKLAHOMA CITY MARRIOTT HOTEL
- --------------------------------------------------------------------------------
[MAP]
16
<PAGE>
<TABLE>
<CAPTION>
OGE ENERGY CORP.
OGE ENERGY CORP. ANNUAL MEETING OF SHAREOWNERS
[LOGO] MAY 15, 1997
<S> <C>
P The undersigned hereby appoints Steven E. Moore, Herbert H. Champlin, 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
of the undersigned to represent and to vote all shares of stock of OGE Energy Corp. held of record by the
R undersigned on March 18, 1997, at the Company's Annual Meeting of Shareowners to be held on May 15, 1997 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 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.
X
----------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------
----------------
SEE REVERSE SIDE
----------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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.
<S> <C>
-------------------------------------------------------------
The Board recommends a vote FOR the election as directors
of the nominees named below.
-------------------------------------------------------------
1. Election of Directors:
NOMINEES:
X / /97 William E. Durrett; H.L. Hembree, III; Steven E. Moore
- ---------------------------------------------------------------
Signature of Shareowner Date / / FOR all nominees / / WITHHOLD AUTHORITY
(list exceptions below). to vote for all nominees.
X / /97
- ---------------------------------------------------------------
Signature of Shareowner Date
----------------------------------------------------------------
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE ABOVE.
----------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the meeting.
----------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
OGE ENERGY CORP.
ADMISSION TICKET
RETAIN FOR ADMITTANCE
Annual Meeting of
OGE ENERGY CORP. SHAREOWNERS
Thursday, May 15, 1997
10:00 a.m.
Oklahoma City Marriott Hotel*
3233 Northwest Expressway
Oklahoma City, Oklahoma
It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person. To make sure your shares are
represented, we urge you to complete and mail the proxy card above.
{MAP}
THIS TICKET MUST BE PRESENTED TO THE OGE REPRESENTATIVE AT THE MARRIOTT
HOTEL FOR ADMITTANCE TO THE ANNUAL MEETING.
*REGIONAL MAP ON REVERSE SIDE.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
OGE ENERGY CORP. ADMISSION TICKET
101 North Robinson RETAIN FOR ADMITTANCE
Oklahoma City, Oklahoma 73102-3405
EAST BOUND I-44: Exit I-44 East
to Highway '3' (Grand Boule-
vard), continuing in a northerly
direction approximately 1-1/2
miles, exit right onto Highway
'3A' East (Northwest Express-
way), proceed approximately {MAP}
1/4 mile, turn left on Indepen-
dence,turn right to Marriott
Hotel.
WEST BOUND I-44: Exit left I-44
West 'Exit 125C' to Highway
'3A'(Northwest Expressway),
turn right onto Highway '3A'
(Northwest Expressway),
continue in a northwesterly
direction approximately 2 miles,
turn right to Marriott Hotel.
</TABLE>
