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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-12833
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
(Full Title of the Plan)
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TEXAS UTILITIES COMPANY
(formerly known as TUC Holding Company)
Energy Plaza, 1601 Bryan Street, Dallas, Texas 75201-3411
(214) 812-4600
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS Page
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The following financial statements are furnished for the Plan:
Statements of Financial Condition at June 30, 1997 and 1996................................3
Statements of Income and Changes in Plan Equity for the
years ended June 30, 1997 and 1996 .....................................................4
Notes to Financial Statements..............................................................5
Schedules I, II and III have been omitted
because the required information is shown in the financial statements, notes
or the information is not applicable to this Plan.
INDEPENDENT AUDITORS' REPORT.......................................................................7
PLAN ADMINISTRATOR'S SIGNATURE.....................................................................8
EXHIBIT
The following exhibit is filed herewith:
Independent Auditors' Consent..............................................................9
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DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30,
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ASSETS AND PLAN EQUITY 1997 1996
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Investment in Securities of Participating Employers --
Common stock of Texas Utilities Company,
At fair value as determined by quoted market prices
(Historical cost: 1997-- $779,569; 1996-- $ 368,351) (Note 2) .. $704,652 $456,371
Dividends receivable ............................................... 10,742 5,338
Cash and cash equivalents .......................................... 426 1
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Total Assets and Plan Equity ............................ $715,820 $461,710
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</TABLE>
See accompanying Notes to Financial Statements.
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DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
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<CAPTION>
For The Year Ended June 30,
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1997 1996
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Additions (deductions):
Net investment income:
Dividends on common stock of Texas Utilities Company ......... $ 41,604 $ 24,328
Interest ..................................................... 424 454
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Net investment income ..................................... 42,028 24,782
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Realized gain on investments (Note 2) ............................ -- 1,818
Unrealized appreciation (depreciation) of investments (Note 2) ... (162,918) 88,020
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Contributions and deposits (Note 3):
Participating directors' compensation deferrals ........... 187,500 181,250
Company matching .......................................... 187,500 181,250
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Total contributions and deposits ..................... 375,000 362,500
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Total additions ................................... 254,110 477,120
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Withdrawals, lapses and forfeitures:
Distributions to plan sponsor ............................. -- 472
Reversions ................................................ -- 14,938
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Total withdrawals, lapses and reversions ............. -- 15,410
Net additions ............................................. 254,110 461,710
Plan Equity, Beginning of Year ..................................... 461,710 --
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Plan Equity, End of Year ........................................... $ 715,820 $ 461,710
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</TABLE>
See accompanying Notes to Financial Statements.
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DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
NOTES TO FINANCIAL STATEMENTS
1. Plan Description-- The Deferred Compensation Plan for Outside Directors
of Texas Utilities Company (Plan) was approved and authorized by the
Board of Directors of Texas Utilities Company (Company) on May 19,
1995, effective July 1, 1995. Members of the Board of Directors of the
Company who are not current or former officers or employees of the
Company or any of its subsidiaries (Outside Directors) are eligible to
participate in the Plan. The Plan allows Outside Directors of the
Company to defer a percentage of their compensation, which is defined
as the annual Board retainer. The Company will make a matching award
equal to 100% of such deferred compensation. The maturity period,
elected by the participants, is not fewer than 3 years and not more
than 10 years. In the event a participant's service is terminated
because of death or disability, all amounts in the participant's
account shall mature upon such termination. If the participant
terminates service prior to the end of a Plan Year, the deferred
amount, the Company match and the dividend equivalent credits will be
recomputed as of the termination date. In the event a participant's
termination results from reasons other than death or disability all
amounts credited to an account, except as provided in the event of a
participant's termination prior to the end of a Plan Year, shall mature
at the end of the applicable maturity period.
The number of participants at June 30, 1997 was 9.
2. Plan Investments -- The cost, market value and unrealized appreciation
(depreciation) of investments at June 30, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Unrealized
Number of Historical Market Appreciation
Shares Cost Value (Depreciation)
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<S> <C> <C> <C> <C>
Common stock of Texas Utilities Company--June 30, 1997 20,462(1) $779,569 $704,652 $(162,918)
Common stock of Texas Utilities Company--June 30, 1996 10,675(2) $368,351 $456,371 $ 88,020
</TABLE>
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(1) Represents 0.0091% of the outstanding shares of common stock of
Texas Utilities Company (224,649,557 at June 30, 1997).
(2) Represents 0.0048% of the outstanding shares of common stock of
Texas Utilities Company (224,602,557 at June 30, 1996).
The investment in the Company's common stock (stated in terms of
performance units for each participant) is stated at market value based
upon the last reported sale price on recognized exchanges on the last
business day of the Plan Year. The cost basis of plan investments is
determined on an average cost basis. All costs and expenses of the Plan
and its administration, except expenses incurred in the acquisition or
disposition of investments, are paid by the Plan sponsor.
Net plan investments value at June 30, 1997 and 1996 were $34.4375 and
$42.75 per unit, respectively.
3. Plan Contributions -- Contributions by the Company and participants'
compensation deferrals for the year ended June 30, 1997 and 1996 were
as follows:
<TABLE>
<CAPTION>
Participating
Directors' Contributions Total
Company Compensation Deferrals by Company Contributions
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<S> <C> <C> <C>
Texas Utilities Company
June 30, 1997 ............................ $187,500 $187,500 $375,000
June 30, 1996 ............................ $181,250 $181,250 $362,500
</TABLE>
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DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
TEXAS UTILITIES COMPANY
NOTES TO FINANCIAL STATEMENTS
4. Distributions Payable -- During the year ended June 1996, one
participant retired from service as an Outside Director. The value of
the participant's 1,223.38 and 1,157.56 performance units at June 30,
1997 and 1996, respectively, and of the dividend equivalent credits
earned thereon will be determined on June 30, 1998, the end of the
maturity period, and distributed to the participant.
5. Federal Income Taxes -- The Plan does not, and is not intended to, meet
the requirements of a tax-qualified plan under Section 401(a) of the
Internal Revenue Code (Code). Therefore, the trust which the Company
has established under the Plan in order to provide Plan benefits is not
exempt from federal income taxes under Section 501 (a) of the Code.
Based on the Code and the regulations thereunder as currently in
effect:
(a) A participant's elective deferrals under the Plan, matching
awards, incentive awards, and any dividends, interest or other
income thereon will not be subject to federal income tax until
the year such amounts are paid or otherwise made available to
the participant.
(b) Elective deferrals under the Plan are not deductible by the
participant on his or her federal income tax return, since
elective deferrals are not includable in participant's income.
(c) Amounts distributed under the Plan will be taxable as ordinary
income to the participant in the year of such distribution.
6. Plan Administration Fees -- All administrative fees are paid by the
Company, the Plan sponsor.
7. Amendment or Termination -- The Company's Board of Directors may amend,
terminate, or suspend the Plan at any time. An amendment or
modification of the Plan may affect active participants as well as
future participants, but no amendment or modification of the Plan for
any reason may diminish any participant's account as of the effective
date thereof. Upon termination of the Plan, the deferred amount,
matching award, and dividend equivalent credits will be recomputed as
of the date of termination.
8. Subsequent Event-- On August 5, 1997, pursuant to the Amended and
Restated Agreement and Plan of Merger dated as of April 13, 1996 among
the Company, ENSERCH Corporation, a Texas corporation (ENSERCH) and TUC
Holding Company, a Texas corporation (TUCHC): (i) subsidiary TUCHC was
merged into Texas Utilities Company and ENSERCH (the Merger), (ii) the
Company and ENSERCH became wholly-owned subsidiaries of TUCHC, (iii)
TUCHC changed its name to Texas Utilities Company, (iv) the Company
changed its name to Texas Energy Industries, Inc., (v) all of the
Company's common stock held under the Plan was automatically converted
into shares of TUCHC on a one-for-one basis and (vi) TUCHC assumed
sponsorship of the Plan. Management has not determined whether the
Merger will have any additional effects on the Plan.
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INDEPENDENT AUDITORS' REPORT
Organization and Compensation Committee,
Deferred Compensation
Plan for Outside Directors of Texas Utilities Company:
We have audited the statements of financial condition of the Deferred
Compensation Plan for Outside Directors of Texas Utilities Company as of June
30, 1997 and 1996 and the related statements of income and changes in plan
equity for the fiscal years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 financial condition of the Plan at June 30, 1997 and
1996 and the related plan income and changes in plan equity for the fiscal
years then ended, in conformity with generally accepted accounting principles.
/s/Deloitte & Touche LLP
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Dallas, Texas
September 5, 1997
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Organization and Compensation Committee has duly caused this annual report to
be signed on its behalf by the undersigned thereunto duly authorized.
DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS
OF TEXAS UTILITIES COMPANY
By /s/ Peter B. Tinkham
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Plan Administrator
Organization and Compensation Committee
September 19, 1997
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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23.1 - Independent Auditors' Consent
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
Texas Utilities Company:
We consent to the incorporation by reference in Registration Statement No.
333-32833 on Form S-8 of our report dated September 5, 1997, appearing in this
Annual Report on Form 11-K of the Deferred Compensation Plan for Outside
Directors of Texas Utilities Company for the year ended June 30, 1997.
/s/ Deloitte & Touche LLP
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Dallas, Texas
September 19, 1997
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