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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-12579
OGE ENERGY CORP.
EMPLOYEES' STOCK OWNERSHIP AND RETIREMENT SAVINGS PLAN
(FULL TITLE OF THE PLAN)
OGE ENERGY CORP.
321 North Harvey
P.O. Box 321
Oklahoma City, Oklahoma 73101-0321
(NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS
OF ITS PRINCIPAL EXECUTIVE OFFICE)
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SIGNATURES
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The undersigned consist of the members of the Committee having the
responsibility for the administration of the OGE Energy Corp. Employees' Stock
Ownership and Retirement Savings Plan. Pursuant to the requirements of the
Securities Exchange Act of 1934, the Plan has duly caused this Annual Report on
Form 11-K to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oklahoma City and State of Oklahoma on the 23rd day
of June 2000.
OGE ENERGY CORP.
EMPLOYEES' STOCK OWNERSHIP AND RETIREMENT SAVINGS PLAN
By /s/ Irma B. Elliott
--------------------------------
Irma B. Elliott
Chairman
By /s/ Donald R. Rowlett
--------------------------------
Donald R. Rowlett
Member
By /s/ Dale P. Hennessy
--------------------------------
Dale P. Hennessy
Member
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the OGE Energy Corp.
Financial Programs Committee:
We have audited the accompanying statements of net assets available for benefits
of the OGE Energy Corp. Employees' Stock Ownership and Retirement Savings Plan
(the "Plan") as of December 31, 1999 and 1998, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1999. These financial statements and the schedule referred to below are the
responsibility of the Financial Programs Committee. Our responsibility is to
express an opinion on these financial statements and schedule based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of assets held for
investment purposes as of December 31, 1999, is presented for purposes of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
As explained in the notes thereto, information certified by the trustee and
presented in the schedule of assets held for investment purposes does not
disclose the historical cost of certain investments. Disclosure of this
information is required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974.
/s/ Arthur Andersen LLP
Oklahoma City, Oklahoma,
May 26, 2000
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<TABLE>
<CAPTION>
OGE ENERGY CORP. EMPLOYEES' STOCK OWNERSHIP AND RETIREMENT SAVINGS PLAN
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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DECEMBER 31, 1999 AND 1998
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1999 1998
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<S> <C> <C>
INVESTMENTS (AT MARKET VALUE):
Investments in common stock $ 120,318,332 $ 166,995,026
Investments in mutual funds 122,986,742 95,649,533
Investments in common collective trust 23,041,255 18,651,096
Participant loans 10,498,039 10,076,506
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Total investments 276,844,368 291,372,161
DIVIDENDS RECEIVABLE 2,089,332 1,900,410
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Net assets available for benefits $ 278,933,700 $ 293,272,571
============== ==============
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
OGE ENERGY CORP. EMPLOYEES' STOCK OWNERSHIP AND RETIREMENT SAVINGS PLAN
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STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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FOR THE YEAR ENDED DECEMBER 31, 1999
------------------------------------
<S> <C>
ADDITIONS:
Investment income:
Dividends $ 17,431,619
Interest on loans 890,536
Unrealized appreciation (depreciation)
in market value of investments:
Common stocks (54,621,242)
Mutual funds 7,559,752
Contributions:
Participants 10,525,967
Company 4,271,549
Transfer from the Coral Energy Services, L.L.C. Thrift Plan
(Note 1) 12,843,848
Realized loss on sale or distribution
of investments:
Common stocks (4,000,361)
Mutual funds 1,681,816
----------------
Total additions (3,416,516)
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DEDUCTIONS:
Distributions to participants (10,859,539)
Administrative expenses (62,816)
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Total deductions (10,922,355)
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NET DECREASE IN NET ASSETS AVAILABLE FOR
BENEFITS (14,338,871)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 293,272,571
----------------
End of year $ 278,933,700
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The accompanying notes are an integral part of this financial statement.
</TABLE>
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OGE ENERGY CORP. EMPLOYEES' STOCK OWNERSHIP AND RETIREMENT SAVINGS PLAN
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NOTES TO FINANCIAL STATEMENTS
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DECEMBER 31, 1999 AND 1998
--------------------------
1. DESCRIPTION OF PLAN AND SIGNIFICANT ACCOUNTING POLICIES:
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The OGE Energy Corp. Employees' Stock Ownership and Retirement Savings Plan (the
"Plan"), originally the Oklahoma Gas and Electric Company Employees' Thrift
Plan, was adopted in 1981 and became effective January 1, 1982. The Plan is a
defined contribution trusteed plan. Fidelity Management Trust Company
("Fidelity") serves as the Trustee of the Plan and is responsible for the
safekeeping and investment of all contributions made to the Trust.
By OGE Energy Corp.'s Board action taken July 15, 1998, the Oklahoma Gas and
Electric Company Employees' Stock Ownership Plan (the "ESOP") was merged into
the OGE Energy Corp. Employees' Retirement Savings Plan effective October 1,
1998. The name of the surviving plan was changed to the OGE Energy Corp.
Employees' Stock Ownership and Retirement Savings Plan. The ESOP has been frozen
since 1986. Therefore, no contributions have been made to the ESOP and no new
participants have entered the ESOP. All participants of the ESOP are fully
vested in the amounts allocated to their accounts. The merged Plan implements a
Dividend Pass-Through Program in which dividends allocable to shares of OGE
Energy Corp. (the "Company") stock allocable to assets of the ESOP are paid in
cash to participants by the Trustee.
Effective July 1, 1999, Enogex, Inc., a subsidiary of the Company, purchased
substantially all of the assets of Tejas Transok Holding, L.L.C. and its
subsidiaries ("Transok"). As a result of this acquisition, a trustee-to-trustee
transfer of certain assets from the Coral Energy Services, L.L.C. Thrift Plan to
the Plan took place, with respect to certain former employees of Transok. The
total amount transferred from this plan was $12,843,848. In addition, the Plan
was amended, effective July 1, 1999, to provide special eligibility, vesting and
in-service withdrawal rules for former employees of Transok and its affiliates.
Participation in the Plan is voluntary. Each regular full-time employee shall be
eligible to participate in the Plan. All other employees are eligible to become
participants in the Plan after completing one year of service as defined in the
Plan. Participants may contribute any whole percentage between 2% and 15% of
their compensation. The first 6% of contributions are called "Regular
Contributions," and any contributions over 6% of compensation are called
"Supplementary Contributions." Participants may designate, at their discretion,
all or any portion of their Regular and Supplementary Contributions to the Plan
as a salary reduction contribution under Section 401(k) of the Internal Revenue
Code. Under Section 401(k) of the Internal Revenue Code, the portion of the
participant's base salary that is contributed as a "Tax-Deferred Contribution"
will not be subject to Federal income tax until such portion is withdrawn or
distributed from the Plan. Participant contributions to the Plan are made
monthly.
Participants can direct that all of their contributions be invested in multiples
of 1% in any one or all of the following twelve investment funds, each with a
specific investment portfolio goal:
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OGE Energy Corp. Common Stock Fund - consists primarily of shares of the
Company's common stock contributed by the Company or purchased by the
Trustee and shares of the Fidelity U.S. Government Fund, which is used
to hold the cash used to fund purchases and distributions. All shares
of the Fidelity U.S. Government Fund held by the Plan and the
dividends receivable are included in the Company's Common Stock Fund.
Fidelity Asset Manager - consists of approximately 50% stocks, 40% bonds
and 10% short-term instruments.
Fidelity Asset Manager: Growth - consists of approximately 70% stocks, 25%
bonds and 5% short-term instruments.
Fidelity Asset Manager: Income - consists of approximately 20% stocks, 50%
bonds and 30% short-term instruments.
Fidelity Managed Income Portfolio - consists of short-term and long-term
investment contracts.
Fidelity Contrafund - consists of common stocks from domestic and foreign
companies that the Fund's manager believes are undervalued or show
potential for growth.
Fidelity Growth & Income Portfolio - consists of foreign and domestic
stocks with a focus on those that pay current dividents and show
potential earnings growth.
Fidelity Blue Chip Growth Fund - consists of common stocks of well known,
established growth companies, both foreign and domestic.
PIMCOTotal Return Administrative - consists mainly of bonds, including
U.S. Government, corporate, mortgage and foreign.
PBHG Growth - consists of common stocks of small and medium sized U.S.
companies.
Templeton Foreign I - consists mainly of stocks and debt securities of
companies and governments of developed or developing countries outside
the United States.
Invesco Total Return - consists 30% of stocks, 30% of fixed and variable
income securities, and the remaining 40% is allocated between stocks
and bonds based on business, economic and market conditions.
The accompanying financial statements have been prepared on the accrual basis of
accounting. Investments are carried at market value determined from quoted
market prices when available or at contract value for investments contracts (See
Note 4). Realized gains/losses on sales or dispositions and
appreciation/depreciation of plan assets included in the statements of changes
in net assets available for benefits are based on the change in market value of
the assets at the beginning of the plan year or at the time of purchase during
the year.
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The Company contributes to the Plan on a monthly basis on behalf of each
participant an amount equal to 50% of the participant's Regular Contribution for
participants with less than 20 years of Plan participation, as defined in the
Plan, and an amount equal to 75% of the participant's Regular Contribution for
participants with 20 or more years of participation in the Plan. No Company
contributions are made with respect to the participant's Supplementary
Contribution. The Company's contribution can be made either in cash or in shares
of the Company's common stock. If the Company contributes cash, such cash is
used to purchase common stock of the Company.
Participants' Regular and Supplementary Contributions are fully vested and
non-forfeitable. Participants gradually vest in their allocated share of Company
contributions over a seven-year period. After three years of service with the
Company, participants become 30% vested in their Company contribution account,
vest an additional 10% upon the completion of the following year, and 20% for
each subsequent year of participation in the Plan. In addition, participants
fully vest when they are eligible for retirement under the Company Employees'
Retirement Plan or in the event of death, permanent disability or attainment of
age 65.
Forfeitures of the Company's contributions resulting from termination of the
participant's interest in the Plan are used to reduce the Company's
contributions. During 1999, there were no material forfeitures that were used to
reduce employer contributions. At December 31, 1999 and 1998, there were no
material forfeited and unallocated assets. Forfeitures will be reinstated if the
participant is re-employed by the Company and returns to the Plan within five
years.
The Plan is a qualified plan under provisions of Section 401(a) of the Internal
Revenue Code and is exempt from Federal income taxes under provisions of Section
501(a) of the Internal Revenue Code. The Plan has been amended since receiving
the determination letter, dated March 1, 2000. However, the Company is of the
opinion that the Plan is currently designed and being operated in compliance
with the applicable requirements of the Internal Revenue Code. Therefore, the
Company believes the Plan is qualified and continues to be tax-exempt.
Participants on whose behalf Company contributions are made are not taxed on the
amounts contributed by the Company or on any income earned thereon until the
receipt of a distribution, pursuant to the terms of the Plan. The taxation of
income earned on Plan assets attributable to participants' contributions to the
Plan is also deferred until distribution is made. The amount of income taxes
applicable to the participants or their beneficiaries upon distribution is
prescribed by the Internal Revenue Code and is dependent upon the method of
distribution.
The Plan is administered by a committee appointed by the Board of Directors of
the Company (the "Financial Programs Committee"). Certain expenses of
administering the Plan are expected to be paid by the participants.
Participants' accounts are charged five dollars annually for administrative
expenses. In addition, participants exercising the loan option are charged
thirty-five dollars for loan setup and fifteen dollars annually for maintenance.
All other administrative expenses are paid by the Company.
The Company intends to continue the Plan indefinitely, but reserves the right to
alter, amend, modify, revoke or terminate the Plan at any time upon the
direction of the Company's Board of Directors. If the Plan is terminated for any
reason, the interests of all participants will be fully vested, and the
Financial Programs Committee will direct that the participants' account balances
be distributed as soon as practical. The Company has no continuing liability
under the Plan after the final disposition of the assets of the Plan.
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Adoption of New Accounting Pronouncement
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The American Institute of Certified Public Accountants ("AICPA") issued
Statement of Position ("SOP") 99-3, "Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters," which
eliminates the requirement of a defined contribution plan to disclose
participant directed investment programs. The SOP was adopted for the 1999
financial statements and as such, the 1998 financial statements have been
reclassified to eliminate the participant directed fund investment program
disclosures.
2. LOANS TO PARTICIPANTS:
----------------------
The maximum amount which a participant may borrow is the lesser of $50,000 or
50% of the participant's allocated vested share of the Plan assets. The loans
are secured by a portion of the amounts remaining in the participant's account.
The Plan allows participants on leave of absence to obtain loans from their
account. All loans granted must be repaid pursuant to a written repayment
schedule not to exceed five years and evidenced by a written promissory note
signed by the borrower. Borrowed amounts do not share in the earnings and losses
of the investment funds. Rather, when the loan is repaid, the interest on the
loan is credited to the participant's account in the Plan.
The interest rate is equal to the "prime rate," as published in the WALL STREET
JOURNAL on the first business day of the month, plus 1%. The range for interest
rates was 7% to 10% during 1999.
If a participant should terminate from the Plan, any outstanding loan balance is
converted to a distribution.
<TABLE>
<CAPTION>
<S> <C>
Loan activity for 1999 was as follows:
Balance at beginning of year $ 10,076,506
New loans 4,376,107
Repayment of Principal (4,672,944)
Transfer from Transok 718,370
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Balance at end of year $ 10,498,039
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Interest applicable to these loans during 1999 was $890,536.
</TABLE>
3. AMOUNTS DUE TO PARTICIPANTS:
----------------------------
As of December 31, 1999, participants whose accounts represented $53,511
(4,507.26 shares) have withdrawn from participation in the earnings and
operations of the Plan and were distributed these amounts subsequent to the end
of the period. As of December 31, 1998, there were no participants that had
terminated and requested a distribution and had not received payment of the
distribution.
4. INVESTMENTS:
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Investments of Company common stock in the OGE Energy Corp. Common Stock Fund at
December 31, 1999 and 1998, of $120,318,332 and $166,995,026, respectively, are
carried at market value ($19.00 per share and $29.00 per share at December 31,
1999 and 1998, respectively) and are comprised of 6,332,543.79 and 5,758,449.17
shares, respectively.
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At December 31, 1999, the participant directed amount included in the Plan
totaled $227,314,788. Information about the net assets and the significant
components of the changes in net assets relating to the non-participant directed
investments is as follows:
<TABLE>
<CAPTION>
December 31,
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1999 1998
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<S> <C> <C>
Net Assets:
Common stock $ 51,618,912 $ 76,974,975
============== ==============
Year Ended
December 31, 1999
-----------------
Changes in Net Assets:
Contributions $ 3,288,195
Dividends 2,945,812
Net depreciation on investments (28,246,586)
Loan activity, net 210,870
Distributions to participants (2,683,991)
Transfers to participant directed
investments (870,363)
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Total decrease in net assets $ (25,356,063)
==============
</TABLE>
The following presents investments that represent 5 percent or more of the
Plan's net assets:
<TABLE>
<CAPTION>
December 31,
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1999 1998
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<S> <C> <C>
OGE Energy Corp. Common Stock $ 51,618,912* $ 76,974,975*
OGE Energy Corp. Common Stock 68,699,420 90,020,051
Fidelity Asset Manager: Growth 24,577,326 23,581,807
Fidelity Managed Income Portfolio 23,041,255 18,651,096
Fidelity Contrafund 24,134,150 17,583,373
Fidelity Growth & Income Portfolio 23,808,949 18,857,882
Fidelity Blue Chip Growth Fund 28,285,401 18,401,268
* Nonparticipant-directed
</TABLE>
The Fidelity Managed Income Portfolio investment option is a common collective
trust that invests in various investment contracts. This investment option is
fully benefit-responsive and is, therefore, recorded at contract value in the
accompanying statements of net assets available for benefits. Contract value
represents the principal balance of the fund, plus accrued interest at the
stated contract rate, less payments received and contract charges by the fund
manager. The crediting interest rate is based on the average rates of the
underlying investment contracts. The average yield of this fund for the years
ended September 30, 1999 and 1998, the Portfolio's fiscal year-end, was 5.52%
and 5.81%, respectively. The
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crediting interest rate of this fund at September 30, 1999 and 1998, was 5.51%
and 5.89%, respectively. The fair value of the fund approximates contract value
at December 31, 1999.
5. HISTORICAL COST INFORMATION:
----------------------------
Disclosure of historical cost information with regard to certain plan
investments is required to be presented in the schedule of assets held for
investment purposes (Schedule I) in accordance with the Department of Labor
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. Due to the record-keeping system maintained by the
trustee, certain historical cost information cannot be provided.
6. SUBSEQUENT EVENTS:
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Effective February 1, 2000, the Plan adopted an amendment stating that for
participants whose employment or reemployment commencement dates occurs on or
after February 1, 2000, the Company shall contribute 100% of the Regular
Contributions deposited during such month by such participant, provided that the
amount of employee contributions (that the Company will match) shall not exceed
6% of the Participant's compensation.
The Plan adopted an amendment, effective July 1, 2000, which will add the
INVESCO Dynamics Fund and Spartan Total Market Index Fund. Additionally, the
definition of "compensation" (as it is used to determine eligible employee
contributions) will be expanded to include overtime payments, pay in lieu of
overtime for exempt personnel and special lump-sum recognition awards. Finally,
the maximum employee contribution percentage will be increased from 15% to 19%
of compensation.
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<CAPTION>
Schedule I
OGE ENERGY CORP.
EMPLOYEES' STOCK OWNERSHIP AND RETIREMENT SAVINGS PLAN
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SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
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AS OF DECEMBER 31, 1999
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(a)* (b) Issuer (c) Description of Investment (d) Cost (e) Market Value
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<S> <C> <C> <C> <C>
* OGE Energy Corp. Common stock, $0.01 par value (f) $ 51,618,912**
* OGE Energy Corp. Common stock, $0.01 par value 68,699,420
* Fidelity Mgmt. Trust Co. Asset Manager, mutual fund 12,096,855
* Fidelity Mgmt. Trust Co. Asset Manager: Growth, mutual fund 24,577,326
* Fidelity Mgmt. Trust Co. Asset Manager: Income, mutual fund 3,062,388
* Fidelity Mgmt. Trust Co. Managed Income Portfolio, common
collective trust 23,041,255
* Fidelity Mgmt. Trust Co. Contrafund, mutual fund 24,134,150
* Fidelity Mgmt. Trust Co. Growth and Income Portfolio, mutual fund 23,808,949
* Fidelity Mgmt. Trust Co. Blue Chip Growth Fund, mutual fund 28,285,401
PIMCO Total Return Administrative, mutual fund 804,921
PBHG Growth, mutual fund 3,644,214
Templeton Foreign I, mutual fund 1,699,358
Invesco Total Return, mutual fund 873,180
Plan participants Participant Loans, interest rates from
7% to 10% $10,498,039 10,498,039
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Total investments $ 276,844,368
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* Party in interest
** Non participant - directed investment
(f) Historical cost information could not be obtained from the Plan's Trustee
</TABLE>
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<CAPTION>
EXHIBIT INDEX
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Exhibit No. Description
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<S> <C>
1.01 Consent of Independent Public Accountants
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