<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
ONEOK, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
ONEOK, Inc.
Notice of Annual Meeting
and
Proxy Statement
- ---------------------------------------------------------
April 20, 2000
[LOGO OF ONEOK]
100 West Fifth Street Tulsa, Oklahoma 74103
<PAGE>
[LOGO of ONEOK]
March 10, 2000
Dear Shareholder:
You are cordially invited to attend the annual meeting of ONEOK, Inc. at
10:00 a.m. on Thursday, April 20, 2000, at ONEOK Plaza, 100 West Fifth Street,
Tulsa, Oklahoma 74103-4298.
We look forward to greeting personally as many of our shareholders as
possible at the meeting. The matters to be voted on at the meeting are stated
in the Notice of Annual Meeting of Shareholders and are described in the Proxy
Statement. A report on the operations of ONEOK, Inc. will be presented,
followed by a question-and-answer and discussion period.
We know that most of our shareholders are unable personally to attend the
Annual Meeting. Therefore, proxies are solicited so that each shareholder has
an opportunity to vote by proxy. You can authorize a proxy by signing, dating,
and returning the enclosed proxy card. Shareholders whose stock is registered
in their name may also authorize a proxy by telephone or over the Internet.
Instructions for using these convenient services are set forth with this Proxy
Statement and on the proxy card. I urge you to submit your proxy as soon as
possible so that you can be sure your shares will be voted.
Regardless of the number of shares you own, your vote is important. Thank
you for your continued interest in ONEOK, Inc.
Very truly yours,
/s/ Larry W. Brummett
Larry W. Brummett
Chairman of the Board and Chief Executive Officer
<PAGE>
Notice of Annual Meeting
of Shareholders
- -------------------------------------------------------------------------------
On Thursday, April 20, 2000, ONEOK, Inc. will hold its Annual Meeting of
Shareholders at the ONEOK Plaza, 100 West Fifth Street, Tulsa, Oklahoma 74103-
4298. The meeting will begin at 10:00 a.m.
Only shareholders who owned stock at the close of business on February
22, 2000, can vote at this meeting or any adjournments that may take place. At
the meeting we will consider:
(1) election of four directors (Class C) to serve for a three-year term;
(2) approval of the reservation of 1,400,000 shares of common stock for
issuance under the ONEOK, Inc. Employee Stock Purchase Plan;
(3) ratification of the appointment of our principal independent
auditors for the 2000 Fiscal Year; and
(4) other business properly presented at the meeting.
Your Board of Directors recommends that you vote in favor of the three
proposals outlined in this Proxy Statement.
ONEOK mailed a copy of its 1999 Annual Report to all shareholders in
December, 1999.
We hope that you like the new format of our Proxy Statement. We welcome
your comments.
By Order of the Board of Directors,
/s/ Deborah B. Barnes
Deborah B. Barnes
Vice President, Secretary, and Associate General
Counsel
March 10, 2000
<PAGE>
Voting Methods
The accompanying Proxy Statement describes important issues affecting ONEOK,
Inc. If you are a shareholder of record, you have the right to vote your shares
through the Internet, by telephone, or by mail. You may also revoke your proxy
any time before the Annual Meeting. Please help us save time and postage costs
by voting through the Internet or by telephone. Each method is generally
available 24 hours a day and will ensure that your vote is confirmed and posted
immediately. To vote:
1. Via the Internet
a. Go to the web site at "http://www.eproxyvote.com/oke", 24 hours a
day, 7 days a week.
b. Enter the control number that appears in the proxy card box, just
below the perforation. This process is designed to verify
shareholders through the use of the control number and allows you
to vote your shares and to confirm that your instructions have
been properly recorded.
c. Follow the simple instructions.
d. Internet voting is also available to shareholders who hold their
shares in the Direct Stock Purchase and Dividend Reinvestment Plan
of ONEOK, Inc. and the Thrift Plan for Employees of ONEOK, Inc.
and Subsidiaries.
e. If you vote via the Internet, you do not have to mail your proxy
card.
2. By telephone
a. On a touch-tone telephone, call toll-free 1-877-PRX-VOTE (1-877-
779-8683) 24 hours a day.
b. Enter the control number that appears in the proxy card box, just
below the perforation. This process is designed to verify
shareholders through the use of the control number and allows you
to vote your shares and to confirm that your instructions have
been properly recorded.
c. Follow the simple recorded instructions.
d. Telephone voting is also available to shareholders who hold their
shares in the Direct Stock Purchase and Dividend Reinvestment Plan
of ONEOK, Inc. and the Thrift Plan for Employees of ONEOK, Inc.
and Subsidiaries.
e. If you vote via the telephone, you do not have to mail your proxy
card.
3. By mail
a. Mark your selection on the proxy card.
b. Date and sign your name exactly as it appears on your proxy card.
c. Mail the proxy card in the enclosed postage-paid envelope.
If your shares are held in the name of a bank, broker or other holder of
record, you will receive instructions from the holder of record that you must
follow in order for your shares to be voted.
Your vote is important. Thank you for voting.
<PAGE>
Table of Contents
for the Proxy Statement
<TABLE>
<CAPTION>
Page
<S> <C>
Quorum and voting........................................................ 1
Questions and answers.................................................... 2-4
Proposals you may vote on................................................ 5-6
Nominees for the Board of Directors/Continuing Directors................. 7-9
Statement on corporate governance........................................ 10
Committee structure and membership roster................................ 10-11
Directors' compensation.................................................. 12
Directors' and officers' ownership of ONEOK, Inc. stock.................. 13-14
Executive compensation: Report of the Compensation Committee............. 15-18
Stock performance graph.................................................. 19-20
Executive compensation, pension plans & other arrangements
Summary compensation table............................................ 21-22
Option grant table....................................................... 23
Aggregated option/SAR exercises and Year-End values table................ 24
Pension plans............................................................ 25
ONEOK, Inc. Supplemental Executive Retirement Plan....................... 26
Change in control and termination agreements............................. 27
Section 16(a) beneficial ownership reporting compliance.................. 28
Other matters............................................................ 28
</TABLE>
-i-
<PAGE>
Proxy Statement
The approximate date of the mailing of this Proxy Statement and proxy card is
March 10, 2000. This solicitation of proxies is being made by ONEOK, Inc.
Quorum and voting
Record Date. The record date for the meeting is February 22, 2000. Only
shareholders of record at the close of business on that date are entitled to
notice of, and to vote at, the meeting.
Voting Stock. The only class of stock entitled to be voted at the meeting is
ONEOK's common stock. At the close of business on the record date, there were
29,193,000 shares of common stock outstanding and entitled to be voted at the
meeting, and the holders of those shares will be entitled to one vote per
share.
Quorum. A quorum is a majority of the outstanding shares. They may be present
at the meeting or represented by proxy. There must be a quorum for the meeting
to be held, and except for the election of directors, a proposal must receive a
majority of the shares present in person or by proxy to be adopted. Directors
are elected by a plurality of the shares voted. If you submit a properly
executed proxy card, even if you abstain from voting, you will be considered
part of the quorum. However, except for proposal #1, abstentions are counted in
the tally of votes against a proposal. Broker non-votes have no effect on the
vote.
Adjourned Meeting. If a quorum is not present at the scheduled time of the
meeting, the shareholders who are represented may adjourn the meeting until a
quorum is present. If the time and place of the adjourned meeting are announced
at the time the adjournment is taken, no other notice will be given. If the
adjournment is for more than thirty (30) days, or if a new record date is set
for the adjourned meeting, a notice will be given to each shareholder of record
entitled to vote at the meeting. An adjournment will have no effect on the
business that may be conducted at the meeting.
Tabulation of Votes. ONEOK's transfer agent will be responsible for tabulating
and certifying the votes.
Voting by Street Name Holders. If you are the beneficial owner of shares held
in "street name" by a broker, the broker, as the record holder of the shares,
is required to vote those shares in accordance with your instructions. If you
do not give instructions to the broker, the broker will nevertheless be
entitled to vote the shares with respect to "discretionary" items but will not
be permitted to vote the shares with respect to "non-discretionary" items, in
which case, the shares will be treated as "broker non-votes."
Abstentions and Broker Non-Votes. If you abstain from voting, your shares will
nevertheless be included in the number of shares represented for purposes of
determining whether a quorum is present. Because directors are elected by a
plurality of the votes, an abstention would have no effect on the outcome of
the vote on Proposal 1 -- Election of Directors, and thus, is not offered as a
voting option for that proposal.
If your shares are treated as broker non-votes, they will nevertheless be
included in the number of shares represented for purposes of determining
whether a quorum is present. Otherwise, however, those shares will be treated
as shares not entitled to be voted on the proposal. Consequently, a broker non-
vote with respect to Proposal 1--Election of Directors will have no effect on
the outcome of the vote on that proposal.
Default Voting. If you properly authorize a proxy in paper form, electronically
via the Internet, or by telephone, but do not indicate any voting instructions,
your shares will be voted as follows:
. Proposal 1 -- Election of Directors -- FOR all nominees.
. Proposal 2 -- Approval of the reservation of additional shares for
issuance under the ONEOK, Inc. Employee Stock Purchase Plan -- FOR.
. Proposal 3 -- Ratify the appointment of our principal independent
auditors for the 2000 Fiscal Year -- FOR.
-1-
<PAGE>
Questions and answers
- --------------------------------------------------------------------------------
1. Q: Who can attend the Annual Meeting?
A: All shareholders on February 22, 2000, may attend. If your shares
are held by your broker, often referred to as "in street name",
just bring a copy of your brokerage account statement or a proxy
card which you can get from your broker.
- --------------------------------------------------------------------------------
2. Q: Who are the largest principal shareholders?
A: As of February 22, 2000, the record date, the following are known
to be the beneficial owners of more than five percent (5%) of any
class of ONEOK's voting securities:
Title of class and name & address of beneficial owner
<TABLE>
-----------------------------------------------------------------------
<CAPTION>
Common stock: Amount and Nature of Percentage of
Ownership Class
-----------------------------------------------------------------------
<S> <C> <C>
Bank of Oklahoma, N.A.
Trustee for the Thrift Plan for
Employees of ONEOK, Inc. and
Subsidiaries
P.O. Box 2300
Tulsa, OK 74192 3,528,487 12.09%
-----------------------------------------------------------------------
Western Resources, Inc./1
/ 818 Kansas Avenue
Topeka, KS 66612-1217 2,166,273 7.42%
-----------------------------------------------------------------------
Preferred stock (Series A):
-----------------------------------------------------------------------
Western Resources, Inc./1
/ 818 Kansas Avenue
Topeka, KS 66612-1217 19,946,448 100%
</TABLE>
/1/As of 02/22/00 Western Resources, Inc. and its affiliates owned
approximately 45% of the outstanding shares of the capital
stock of ONEOK. Holders of the outstanding convertible
preferred stock are not entitled to vote on any matters being
considered at this Annual Meeting.
- --------------------------------------------------------------------------------
3. Q: How do I vote?
A: You may vote by mail, via the Internet, by phone, or in person.
Following the Notice of Annual Meeting is a description of the
Voting Methods available this year. As outlined on Page 1, "Quorum
and Voting", if you return a signed card but do not provide voting
instructions, your shares will be voted for the three proposals.
- --------------------------------------------------------------------------------
4. Q: How do I revoke my vote?
A: You have the right to revoke your proxy at any time before the
meeting by:
(1) notifying ONEOK's Corporate Secretary in writing;
(2) authorizing a different proxy via the Internet;
(3) authorizing a different proxy by telephone;
(4) voting in person; OR
(5) returning a later-dated proxy card.
- --------------------------------------------------------------------------------
-2-
<PAGE>
- --------------------------------------------------------------------------------
5. Q: Is my vote confidential?
A: Proxy cards, ballots and voting tabulations that identify
individual shareholders are mailed and returned directly to First
Chicago Trust Company of New York, a Division of EquiServe, and
handled in a manner that protects your voting privacy. It is
ONEOK's policy to protect the confidentiality of shareholder votes
throughout the voting process. In this regard, the vote of any
shareholder will not be disclosed to ONEOK's Directors, officers or
employees, except:
. to meet legal requirements;
. or to assert or defend claims for or against ONEOK;
. or except in those limited circumstances where
(1) a proxy solicitation is contested;
(2) a shareholder writes comments on a proxy card; or
(3) a shareholder authorizes disclosure.
Both the tabulators and inspectors of election have been, and will
remain, independent of ONEOK. Nothing in this policy prohibits
shareholders from disclosing the nature of their votes to ONEOK's
Directors, officers or employees, or impairs voluntary
communication between ONEOK and its shareholders, nor does this
policy prevent ONEOK from ascertaining which shareholders have
voted or from making efforts to encourage shareholders to vote.
- --------------------------------------------------------------------------------
6. Q: How is ONEOK, Inc. common stock in the Thrift Plan voted?
A: Thrift Plan votes receive the same confidentiality as all other
shares voted. If you hold shares of ONEOK, Inc. common stock
through the Thrift Plan, you must instruct the ONEOK, Inc. trustee,
Bank of Oklahoma, N.A. how to vote your shares. If you do not
authorize a proxy by mail, electronically via the Internet, or by
telephone, or return it with an unclear voting designation, or with
no voting designation at all, then the trustee will vote the shares
in your account in proportion to the way the other Thrift Plan
participants voted their shares.
- --------------------------------------------------------------------------------
7. Q: How will voting on any other business be conducted?
A: Although we do not know of any business to be considered at the
2000 Annual Meeting other than the proposals described in this
Proxy Statement, if any other business is properly presented at the
Annual Meeting, your signed proxy card gives authority to Larry W.
Brummett, ONEOK's Chairman of the Board and Chief Executive
Officer, and David L. Kyle, ONEOK's President and Chief Operating
Officer, to vote on these matters at their discretion.
- --------------------------------------------------------------------------------
8. Q: What shares are included on the proxy card(s)?
A: The shares on your proxy card(s) represent ALL of your shares,
including those in ONEOK's Direct Stock Purchase and Dividend
Reinvestment Plan and shares held in custody for your account by
Bank of Oklahoma, N.A. as trustee for the Thrift Plan for Employees
of ONEOK, Inc. and Subsidiaries. If you do not authorize a proxy by
mail, electronically via the Internet, or by telephone, your
shares, except for those held in the Thrift Plan, will not be
voted. See Question #6 for an explanation of the voting procedures
for the Thrift Plan shares.
- --------------------------------------------------------------------------------
9. Q: What does it mean if I receive more than one proxy card?
A: If your shares are registered differently and are in more than one
account, you will receive more than one proxy card and Proxy
Statement. Sign and return all proxy cards to ensure that all your
shares are voted. We encourage you to have all accounts registered
in the same name and address whenever possible. Also, you can
request that only one Proxy Statement and one Annual Report be
mailed to the same address. You can accomplish this by contacting
our transfer agent, First Chicago Trust Company of New York, a
Division of EquiServe, at 1-888-764-5595.
- --------------------------------------------------------------------------------
-3-
<PAGE>
- --------------------------------------------------------------------------------
10. Q: When are the shareholder proposals for the next Annual Meeting due?
A: All shareholder proposals to be considered for inclusion in next
year's Proxy Statement must be submitted in writing to the Vice
President, Secretary, and Associate General Counsel of ONEOK, Inc.,
100 West Fifth Street, Tulsa, OK 74103-4298 by November 10, 2000.
ONEOK will determine whether or not to include such proposal in the
Proxy Statement according to applicable law. It is recommended that
proposals be sent by certified mail, return receipt requested.
- --------------------------------------------------------------------------------
11. Q: What out-of-pocket costs will ONEOK incur in soliciting proxies?
A: Morrow & Co., Inc. was hired to assist in the distribution of proxy
materials and solicitation of votes for $8,500.00, plus estimated
out-of-pocket expenses. We also reimburse brokerage houses and
other custodians, nominees, and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation
materials to shareholders. The cost of soliciting proxies will be
borne by ONEOK, Inc.
- --------------------------------------------------------------------------------
12. Q: Who is soliciting my proxy?
A: The Board of Directors of ONEOK, Inc. is sending you this Proxy
Statement in connection with its solicitation of proxies for use at
ONEOK's 2000 Annual Meeting of Shareholders. Certain directors,
officers and employees of ONEOK also may solicit proxies on our
behalf by mail, telephone, fax or in person.
- --------------------------------------------------------------------------------
-4-
<PAGE>
Proposals you may vote on
1. Election of Directors in Class C -- term ending 2003
There are 4 director nominees for election this year. The nominees for
directors in Class C are:
. Edwyna G. Anderson;
. William L. Ford;
. Bert H. Mackie; and
. Gary D. Parker.
Detailed information on each is provided on page 7. As of April 20, 2000,
the Board of Directors will be reduced to 12 members. The Board is
divided into three Classes (A, B, and C) which will then consist of 4
members each. Each Class is elected for a term of three years, with the
term of one class expiring at each annual meeting of shareholders. The
By-laws provide that a person cannot be elected or reelected to the Board
after the person's 70th birthday. As a result, one director in Class C,
Mr. Stanton L. Young, is not standing for reelection this year.
However, as part of the amendment to the By-laws adopting ONEOK's new
fiscal year end of 12-31, Section 9.03 of the By-laws states that any
Director who would have been eligible for reelection at the normal time
for the prior fiscal year shall remain eligible for this Annual Meeting.
Your Board unanimously recommends a vote FOR each of these directors.
2. Approval of the reservation of 1,400,000 shares of common stock reserved
for issuance under the ONEOK, Inc. Employee Stock Purchase Plan
The Board of Directors adopted the ONEOK, Inc. Employee Stock Purchase
Plan ("Plan") in August of 1995 and the shareholders approved the Plan in
January of 1996. The Plan allows eligible employees of ONEOK and its
subsidiaries to purchase common stock at a discount from the market value
of the shares. Benefits or amounts to be allocated to participants under
the Plan are not determinable. The Board adopted the Plan because the
Directors believe:
. that it is desirable to offer employees an inducement to acquire an
ownership interest in ONEOK on a tax-favored basis; and
. stock ownership gives employees an interest parallel to the interests
of ONEOK's shareholders.
As of August 31, 1999, there were 40,053 shares remaining available for
issuance under the Plan. The Board believes that the number of shares
reserved for issuance under the Plan should be increased to 1,400,000
shares so that sufficient shares continue to be available under the Plan
to reward and motivate existing employees, and to attract new employees
in the future. The increase in shares reserved under the Plan considers
the rapid growth that we have experienced and the future growth and
expansion of ONEOK that is anticipated.
The Plan is intended to qualify as an "employee stock purchase plan"
within the meaning of Section 423 of the Internal Revenue Code of 1986,
and participants gain favorable tax treatment under Sections 421 and 423
of this Code.
See Exhibit A for a summary of the material features of the Plan as
amended and restated, subject to and qualified by, reference to the
actual text of the amended and restated Plan, which is attached to
Exhibit A.
Your Board unanimously recommends a vote FOR the reservation of additional
shares for issuance under the ONEOK, Inc. Employee Stock Purchase Plan.
-5-
<PAGE>
3. Ratify the appointment of KPMG LLP as principal independent auditors
The Audit Committee has recommended, and the Board has approved, the
appointment of KPMG LLP as our principal independent auditors for the
2000 Fiscal Year subject to shareholder ratification. KPMG has
unrestricted access to the Audit Committee to discuss audit findings and
other financial matters. Representatives of KPMG will attend the Annual
Meeting to answer appropriate questions. They also may make a statement.
Audit services provided by KPMG during the 1999 Fiscal Year included an
audit of ONEOK's consolidated financial statements, audits of the
financial statements of certain ONEOK affiliates, and audits of employee
benefit plan financial statements. In addition, KPMG provided various
non-audit services to ONEOK during the 1999 Fiscal Year.
Your Board unanimously recommends a vote FOR the approval of KPMG's appointment
as independent auditors for 2000.
Abstentions or votes withheld on all proposals will be treated as present at
the meeting for purposes of determining a quorum, but will not be counted as
votes cast on proposal #1. Abstentions on proposals #2 and #3 will be counted
against the proposal.
-6-
<PAGE>
Nominees for the Board of Directors
Class C -- Term ending 2003
Edwyna G. Anderson Director since 1995
Age 70
Mrs. Anderson served as General Counsel of Duquesne Light
Company from September 1988 until retirement in October 1994.
She also served as Special Counsel to the President of
Duquesne Light Company from October 1994 until March 1995,
when she retired from that position.
William L. Ford Director since 1981
Age 57
Mr. Ford has served as President of Shawnee Milling Company
since 1979. He serves on the boards of numerous civic and
business organizations and not-for-profit associations.
Bert H. Mackie Director since 1989
Age 57
Mr. Mackie has been with Security National Bank since 1962,
and is currently President and a director. Mr. Mackie serves
on the Board of Governors of the United States Postal Service.
Gary D. Parker Director since 1991
Age 54
Mr. Parker, a certified public accountant, is also the
majority shareholder of Moffitt, Parker & Company, Inc., and
has been President of the firm since 1982. He is a director of
First National Bank and Trust Company of Muskogee, Oklahoma.
-7-
<PAGE>
Continuing Directors
Class A -- Term ending 2001
Larry W. Brummett Director since 1994
Age 49
Mr. Brummett has been employed by ONEOK for more than 25
years. He was employed by ONEOK's Oklahoma Natural Gas Company
division as an engineer trainee in June 1974 and, after
receiving a number of promotions within the division, was
elected Vice President of Tulsa District September 1, 1986,
and Executive Vice President in May 1990. He was elected
Executive Vice President of ONEOK Inc. January 21, 1993. He
was elected President and Chief Executive Officer February 17,
1994, and was elected to the additional position of Chairman
of the Board effective June 1, 1994. Mr. Brummett is a
director of the American Gas Association; Southern Gas
Association; and the Oklahoma City Branch of the Federal
Reserve Bank. He is also an officer or director of numerous
civic and business organizations and not-for-profit
associations.
Douglas T. Lake Director since 1998
Age 49
Mr. Lake, Executive Vice President and Chief Strategic Officer
of Western Resources, Inc., became a director of ONEOK, Inc.
in October 1998. He joined Western Resources, Inc. in
September 1998. Mr. Lake was with Bear Stearns & Co., Inc.
from 1995 through 1998, where he last served as Senior
Managing Director of the Investment Banking Department. He was
with Dillon Read & Co., Inc. from 1991 through 1995. Mr. Lake
is currently Chairman of the Board of Directors of Protection
One, Inc., and is a director of Guardian International, Inc.
Douglas Ann Newsom, Ph.D. Director since 1982
Age 66
Dr. Newsom has been a Professor within the Department of
Journalism at Texas Christian University, Fort Worth, Texas,
since 1969, and taught as an adjunct professor during 1968. In
addition to her teaching position, Dr. Newsom is a textbook
author and public relations counselor. Ms. Newsom has been a
member of the Advisory Council of GRI for fifteen years.
J. D. Scott Director since 1979
Age 68
Mr. Scott served as President, Chief Executive Officer and
Chairman of the Board of ONEOK Inc. from January 1987 until he
retired in 1994.
-8-
<PAGE>
Continuing Directors
Class B -- Term ending 2002
William M. Bell Director since 1981
Age 64
Mr. Bell is currently President and a director of Bank One,
Oklahoma, N.A. He has been involved in all facets of
commercial banking, retail banking, real estate finance, and
fiduciary services. Mr. Bell served as president and chairman
of Liberty Mortgage Company (predecessor to Bank One), which
he started in 1966. In 1987, he was elected chairman of The
Liberty National Bank and Trust Company of Oklahoma City and,
in 1988, became its president and chief executive officer. He
serves on the boards of numerous civic and business
organizations and not-for-profit associations.
Douglas R. Cummings Director since 1989
Age 70
Mr. Cummings has been President of Cummings Oil Company since
1972. He is an officer or director of numerous civic and
business organizations and not-for-profit associations.
Howard R. Fricke Director since 1997
Age 64
Mr. Fricke is Chairman of the Board and Chief Executive
Officer of Security Benefit Group of Companies. He joined the
Security Benefit Group of Companies in 1988, having previously
served as Chairman and Chief Executive Officer of the Anchor
National Company in Phoenix, Arizona. He is currently a
director of Payless ShoeSource, Inc., Stormont-Vail Regional
Medical Center, and Menninger. He is currently Chairman of the
Life Office Management Association and a past director of the
American Council of Life Insurers and the Kansas Insurance
Education Foundation.
David L. Kyle Director since 1995
Age 47
Mr. Kyle is the President and Chief Operating Officer of
ONEOK, Inc. He was employed by Oklahoma Natural Gas Company, a
division of ONEOK Inc., in 1974 as an engineer trainee. He
served in a number of positions prior to being elected Vice
President of Gas Supply September 1, 1986, and Executive Vice
President May 17, 1990. He was elected President of Oklahoma
Natural Gas on September 1, 1994. He was elected President of
ONEOK Inc. effective September 1, 1997.
-9-
<PAGE>
Statement on corporate governance
The Corporate Governance Guidelines of the Board of Directors of ONEOK, Inc.
are intended to embody the principles by which the Board operates, and are not
intended to be a code of regulations, but rather a statement of intention. The
Guidelines were adopted by the Board in March of 1999. Key areas of the
Guidelines and principal functions of the Board are:
. Review succession planning and CEO performance evaluation;
. Review compensation and stock ownership; and
. Review the structure and operations of the Board.
The Board of Directors believes that corporate governance is a continuing
process and these Guidelines are reviewed periodically and may change from time
to time as conditions warrant.
Committee structure and membership roster
As of August 31, 1999
Committee structure: The Board has established the following standing
committees: Charters have been adopted by these Committees as indicated.
. The Audit Committee examines accounting processes and reporting systems,
assesses the adequacy of internal controls and risk management, reviews and
approves ONEOK's financial disclosures, and evaluates the performance and
recommends the appointment of independent auditors. The Audit Committee has
adopted, and operates under, a charter.
. The Executive Committee acts on behalf of the Board during intervals
between meetings of the Board and reports to the Board at its next regular
meeting on any actions taken. This committee has the power to act on major
matters where it deems action appropriate, providing a degree of flexibility
and ability to respond to time-sensitive business and legal matters without
calling a special Board meeting. It is ONEOK's practice to seek ratification by
the Board for the actions taken by the Executive Committee.
. The Executive Compensation Committee reviews ONEOK's executive
compensation programs to ensure the attraction, retention and appropriate
reward of executive officers, to motivate their performance in the achievement
of ONEOK's business objectives, and to align the interests of executive
officers with the long-term interests of ONEOK's shareholders. This Committee
reviews and makes recommendations to the Board on employee and director
compensation, personnel policies, programs, and plans. The Executive
Compensation Committee has adopted, and operates under, a charter.
. The Nominating and Corporate Governance Committee ensures an appropriate
structure for management succession and development, and an effective process
for director selection and tenure by making recommendations on the Board's
organization and practices and by aiding in identifying and recruiting director
candidates. The Committee also establishes and reviews issues of corporate
governance. The Committee considers nominees recommended by shareholders for
service on the Board of Directors. Recommendations should be sent to the
Corporate Secretary at the address shown on the front of this Proxy Statement.
The Nominating and Corporate Governance Committee has adopted, and operates
under, a charter.
-10-
<PAGE>
Committee membership roster as of August 31, 1999:
<TABLE>
<CAPTION>
Executive Nominating and
Name Audit Compensation Corporate Governance Executive
- -------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C>
E. G. Anderson M M M
- -------------------------------------------------------------------------------------------
W. M. Bell M M M
- -------------------------------------------------------------------------------------------
L. W. Brummett C
- -------------------------------------------------------------------------------------------
D. R. Cummings M M
- -------------------------------------------------------------------------------------------
W. L. Ford C M
- -------------------------------------------------------------------------------------------
H. R. Fricke M M
- -------------------------------------------------------------------------------------------
D. L. Kyle M M
- -------------------------------------------------------------------------------------------
D. T. Lake M M
- -------------------------------------------------------------------------------------------
B. H. Mackie M M C
- -------------------------------------------------------------------------------------------
D. A. Newsom M M
- -------------------------------------------------------------------------------------------
G. D. Parker C M
- -------------------------------------------------------------------------------------------
J. D. Scott M M
- -------------------------------------------------------------------------------------------
S. L. Young M M
- -------------------------------------------------------------------------------------------
Number of
committee 2 4 2 0
meetings in Fiscal
Year 1999
</TABLE>
C = Chairperson
M = Member
-11-
<PAGE>
Directors' compensation
ONEOK annually benchmarks directors' compensation and strives to pay at the
median for companies of comparable size in its industry.
During Fiscal 1999, twelve meetings were held by the Board of Directors. All
directors, except Mr. Fricke, attended at least seventy-five (75%) of the
meetings of the Board of Directors and committees on which such directors
served. The total amount of directors' fees paid in Fiscal 1999 was
$519,468.75. Executive officers are not paid for their services as directors.
In Fiscal 1999, $192,234.75 of the total amount paid for directors' fees was
deferred under the Deferred Compensation Plan for Non-Employee Directors. All
non-employee directors are eligible to participate in this Plan. In January
each year the non-employee directors may elect to have all, or a portion of,
the annual retainer fee and meeting fees payable by ONEOK deferred. Deferred
amounts are treated either as phantom stock or as a cash deferral.
Phantom stock deferrals will be treated as though the deferred amount is
invested in ONEOK common stock at the Fair Market Value on the date the
retainer and/or fees are earned. Phantom stock earns the equivalent of
dividends, reinvested at the Fair Market Value on the payment date of each
common stock dividend declared. Phantom stock accounts are representative of
shares of common stock which can be issued to a non-employee Director under the
ONEOK, Inc. Long-Term Incentive Plan, but are deferred until settlement in
shares of common stock at an elected deferral date. See page 13 for phantom
stock ownership.
Cash deferrals will be credited with interest at the Investment Return Rate
determined by the Executive Compensation Committee annually.
Also in 1999, ONEOK's shareholders approved modifications to the ONEOK, Inc.
Long-Term Incentive Plan to provide for the payment of non-employee directors'
compensation in the form of stock awards. As a part of their annual retainer,
each director received 200 shares of common stock, which they could elect to
defer.
The following table summarizes the compensation of ONEOK's directors:
Director's compensation table
<TABLE>
<CAPTION>
Type of compensation Cash Stock based
- ----------------------------------------------------------------------
<S> <C> <C>
Annual Retainer $22,500 200
- ----------------------------------------------------------------------
Annual Retainer for Committee Chair $ 3,500
- ----------------------------------------------------------------------
Board or Committee Attendance Fee (per meeting) $ 1,000
</TABLE>
-12-
<PAGE>
Directors' & officers'
ownership of ONEOK, Inc. stock
The following table shows how much ONEOK, Inc. common stock each Named
Executive Officer and director owned as of December 31, 1999. No director or
executive officer beneficially owns more than 1% of the common stock, and
directors and executive officers as a group beneficially own approximately
2.18% of the common stock.
Directors' & officers' stock ownership
<TABLE>
<CAPTION>
Total of shares of
Shares of Directors' common stock
common deferred beneficially owned plus
stock compensation Directors' deferred
Name and Address of beneficially plan phantom compensation plan
Beneficial Owner/1/ owned/2/ stock/3/ phantom stock
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Edwyna G. Anderson 385 208 593
William M. Bell/4/ 2,839 1,489 4,328
Larry W. Brummett/5/ 110,100 -- 110,100
Douglas R. Cummings 2,200 948 3,148
Eugene N. Dubay/5/ 26,553 -- 26,553
William L. Ford/6/ 4,145 2,434 6,579
Howard R. Fricke -- 2,137 2,137
John A. Gaberino,
Jr./5/,/7/ 15,335 -- 15,335
J. M. Graves/8/ 3,354 -- 3,354
S. J. Jatras/8/ 3,300 -- 3,300
James C. Kneale/5/,/9/ 32,684 -- 32,684
David L. Kyle/5/ 84,531 -- 84,531
Douglas T. Lake 6,459 229 6,688
Bert H. Mackie 2,195 948 3,143
Jerry D. Neal/5/,/10/ 8,491 -- 8,491
Douglas Ann Newsom/11/ 2,000 -- 2,000
Gary D. Parker/12/ 4,682 436 5,118
J.D. Scott/5/ 126,776 -- 126,776
Stanton L. Young 62,500 -- 62,500
- ----------------------------------------------------------------------------
All directors and
executive officers as a
group including those
named above 636,407 8,829 645,236
</TABLE>
-13-
<PAGE>
Notes to stock ownership table:
/1/ All of ONEOK's directors and named executive officers may be contacted at
ONEOK, Inc. 100 West Fifth Street, Tulsa, OK 74103-4298.
/2/ This column includes ONEOK, Inc. stock held by directors and officers, or
by members of their families for which the directors and officers have sole
or shared voting or investment power, shares of common stock they hold in
the ONEOK, Inc. Direct Stock Purchase and Dividend Reinvestment Plan, and
ONEOK, Inc. securities directors and officers have the right to acquire
within 60 days of December 31, 1999.
/3/ Phantom stock has a value equal to shares of common stock, but phantom
stock has no voting rights or other shareholder rights. See Director's
Compensation on page 12 for further information concerning the Deferred
Compensation Plan for Non-Employee Directors. Phantom stock suffers all the
risks, and enjoys all the rewards, of changes in the price of common stock.
/4/ Includes 702 shares held in the Bell Family 1982 Revocable Trust.
/5/ The amounts shown include shares of ONEOK, Inc. common stock:
. Which the following persons have the right to acquire as a result of
the exercise of stock options within 60 days after December 31, 1999
under the ONEOK, Inc. Long-Term Incentive Plan;
. In the custody of the Trustee for the Thrift Plan for Employees of
ONEOK, Inc. and Subsidiaries as of December 31, 1999; and
. Shares of restricted stock which were granted under the ONEOK, Inc.
Long-Term Incentive Plan as of October 21, 1999. These shares are
restricted and vest in full after a three-year period. The named
individuals have voting rights for these shares and these shares earn
dividends:
<TABLE>
<CAPTION>
Exercisable Held by the
Executive Officer/Director within 60 Days Thrift Plan Restricted Stock
<S> <C> <C> <C>
Larry W. Brummett 51,979 18,917 13,338
Eugene N. Dubay 13,000 5,401 4,042
John A. Gaberino, Jr. 1,775 9,410 4,042
James C. Kneale 11,590 12,751 2,021
David L. Kyle 36,051 27,927 9,498
Jerry D. Neal 10,900 0 0
J. D. Scott 0 77,721 0
All directors and executive
officers as a group (including
those named above): 168,695 229,309 44,054
</TABLE>
/6/ Includes 1,149 shares owned by the 1979 Leslie A. Ford Trust, of which
William L. Ford is a trustee. Mr. Ford disclaims beneficial ownership of
these shares.
7 Includes 108 shares held by Mrs. John A. Gaberino, Jr. Mr. Gaberino
disclaims beneficial ownership of these shares.
/8/ Messrs. J. M. Graves and S. J. Jatras retired from ONEOK's Board of
Directors effective 01-21-99. Mr. Jatras died in January, 2000.
/9/ Includes 3,475 shares held by Mrs. James C. Kneale. Mr. Kneale disclaims
beneficial ownership of these shares. Mr. Kneale also holds 640 shares in
trust for his daughter.
/10/Mr. Neal retired from ONEOK effective 05/31/99.
/11/Includes 1,000 shares held by Ms. Newsom's spouse. Ms. Newsom disclaims
beneficial ownership of these shares.
/12/Includes 470 shares held by Mrs. Gary D. Parker. In addition, Mr. Parker
holds 1,400 shares in trust as the Trustee of the Phillip Wilkinson
Irrevocable Trust under agreement dated 07/13/95.
-14-
<PAGE>
Executive compensation:
Report of the Compensation Committee
The Committee's Responsibilities: The Executive Compensation Committee of the
Board ("the Committee") has responsibility for reviewing, and recommending to
the full Board of Directors, the Company's executive compensation programs to
ensure:
. the attraction, retention and appropriate reward of executive officers;
. to motivate their performance in the achievement of the Company's business
objectives; and
. to align the interests of executive officers with the long-term interests of
the Company's shareholders.
The Committee is composed entirely of outside directors. The purpose of this
report is to summarize the philosophical principles, specific program
objectives, and other factors considered by the Committee in reaching its
recommendations regarding the executive compensation of the Named Executive
Officers.
Compensation Philosophy: The Company's executive compensation program is based
on the belief that the interests of executives should be closely aligned with
those of the shareholders. The Committee has adopted a framework of principles
for the management compensation program which:
. attracts the best talent to ONEOK;
. encourages executives to manage from the perspective of owners with an
equity stake in the Company;
. motivates individuals to perform at their highest levels;
. encourages strong financial and operational performance of the Company and
creates shareholder value by maintaining a portion of executives' total
compensation at risk;
. rewards outstanding achievement; and
. retains the leadership and skills necessary for building long-term
shareholder value.
Compensation Methodology: ONEOK strives to provide a comprehensive executive
compensation program that is competitive and performance-based in order to
attract and retain superior executive talent. Annually, the Committee reviews
market data for two components of executive compensation: (1) annual cash
compensation, and (2) long-term incentive compensation. To assist in
benchmarking the competitiveness of its compensation programs, ONEOK
participates in executive compensation surveys and utilizes independent
compensation consultants. Because the Committee believes that the Company's
direct competition for executive talent is broader than the companies that are
included in the Standard & Poor's Natural Gas 500 Index previously used, as
well as the new S&P Utilities Index which is currently used in the Performance
Graph on page 19, the surveys utilized include the American Gas Association
Executive Compensation Survey, the KPMG Oil and Gas Industry Compensation
Survey, the Effective Compensation Oil and Gas Industry Compensation Survey,
and the Watson Wyatt Worldwide Top Management Compensation Survey.
Components of Compensation:
. Annual cash compensation: Annual cash compensation for the Named Executive
Officers, as well as all executive officers, consists of two components,
base salary and a variable, at-risk incentive under the Key Employee Annual
Incentive Plan (the "AI Plan").
Annual base salary is designed to compensate executives for their level of
responsibility, experience, sustained individual performance, and
contribution to the Company. The Committee recommends to the Board all
salary increases for executive officers. The goal is to compensate
executives within the 90th percentile of the average salaries paid for
similar positions by ONEOK's peers as identified through published surveys,
company documents, and other sources.
Annual incentive awards are issued under the AI Plan and are provided in
order to focus attention on achievement of the goals set for the Company
and each of its operating units. The AI Plan is designed to allow the
Company's officers and other key employees the opportunity to earn
compensation that is above average
-15-
<PAGE>
when compared to ONEOK's peers if ONEOK achieves outstanding results
compared to those peers and to targeted objectives. The Committee
administers the AI Plan in accordance with stated purposes and recommends
to the full Board of Directors, based on recommendations of the CEO, all
awards under the AI Plan.
Annual incentive awards are based on achievement of certain corporate
goals, as outlined in the table below, unit criteria, when applicable, and
individual performance criteria.
<TABLE>
<CAPTION>
Criteria Weight
-----------------------------
<S> <C>
Earnings per share 35%
-----------------------------
Shareholder appreciation 35%
-----------------------------
Return on invested capital 30%
</TABLE>
Individual performance criteria includes:
. problem analysis; . planning and organizational
. directing; ability;
. utilization of human, capital, . decision-making;
and material resources; . time management;
. initiation of, and response to, change; . communications and team
relations;
The Bonus column of the Summary Compensation Table on page 21 contains the
annual incentives earned for Fiscal 1999 for each of the Named Executive
Officers.
. personal actions.
. Long-term Incentive Compensation: On August 20, 1998, the Committee
recommended to the full Board that it amend and restate the Key Employee
Stock Plan. The amendments included changing the name to the ONEOK, Inc.
Long-Term Incentive Plan (the "LTI Plan"), increasing the number of shares
subject to the LTI Plan, modifying the definition of certain terms governing
the granting of stock incentives, and providing for payment of non-employee
director compensation in the form of stock awards. The LTI Plan was approved
by the shareholders on January 21, 1999, and will remain in effect until all
shares authorized to be issued as stock incentives have been granted or
until the Board terminates the LTI Plan.
The purpose of the LTI Plan is to provide incentives to enable the Company
to attract, retain, and reward key employees and to give such employees an
interest parallel to the interests of the Company's shareholders. The LTI
Plan is administered by the Committee, and the Committee reviews and
recommends to the full Board of Directors, after recommendation of the CEO,
all long-term incentive awards. The Committee is authorized to make all
decisions and interpretations required to administer and execute the LTI
Plan. Participation in the LTI Plan is limited to key employees of ONEOK,
Inc. who are in a position to contribute significantly to the growth and
profitability of the Company, its divisions, and subsidiaries.
The LTI Plan authorizes the Committee to grant stock incentives to
participating key employees in a variety of forms including: (1) Incentive
Stock Options, (2) Non-Statutory Stock Options, (3) Restricted Stock
Awards, and (4) Performance Awards. In 1995, 1996, 1997, 1998, and during
the four-month period of transition to the Company's new fiscal year end of
December 31st ("transition period"), these awards were granted as non-
statutory stock options. Also, during the transition period, grants of
restricted stock were awarded. In determining the number of stock options
awarded, the Committee reviewed a survey detailing the 50th percentile of
grant values of long-term incentives in the utility sector, and it also
considered the participant's past performance. The table below details the
grants which have been made from the LTI Plan and the balance remaining
available for grant on December 31, 1999:
-16-
<PAGE>
<TABLE>
<CAPTION>
Date # of # of Shares First exercisable Date Expiration date
Employees
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11/16/95 57 107,400 11/16/96 11/16/05
-----------------------------------------------------------------------------
10/10/96 63 100,700 10/10/97 10/10/06
-----------------------------------------------------------------------------
10/16/97 82 199,000 10/16/98 10/16/07
-----------------------------------------------------------------------------
01/16/98 37 45,200 01/16/99 01/16/08
-----------------------------------------------------------------------------
10/15/98 143 284,100 10/15/99 10/15/08
-----------------------------------------------------------------------------
10/21/99
Stock options 142 308,700 10/21/00 10/21/09
-----------------------------------------------------------------------------
10/21/99
Restricted
stock 44 66,300 10/21/02 10/21/09
-----------------------------------------------------------------------------
Total remaining available for grant as of 12/31/99: 1,359,682
</TABLE>
Non-statutory stock options and restricted stock grants have an exercise
price equal to the fair market value of common stock on the date of grant.
The options granted in 1995, 1996, 1997, and in January of 1998 are
exercisable beginning one year from the date of grant. In 1998 the
Committee modified the Non-Statutory Stock Option Agreement to allow stock
options granted under that Agreement to become exercisable beginning one
year after the date of grant in four equal annual installments. The
restricted stock grants awarded during the transition period are restricted
for a period of 3 years.
Stock Options may include a restoration feature, by which options are
granted to replace shares that are surrendered by participants as full or
partial payment to the Company of the purchase price of shares being
acquired through the exercise of the stock option or shares that are
surrendered to satisfy the tax obligations incident to the exercise of an
option. Each restored option shall have an option price equal to the fair
market value of the common stock on the date of grant of the restored
option and shall expire on the stated expiration date of the original
option.
The LTI Plan does not allow for the repricing of stock options.
Chief Executive Officer Compensation: This Committee meets annually to review
the Board of Directors' evaluation of Mr. Brummett's performance. The Committee
uses this performance evaluation, the surveys previously mentioned, and the
C.A. Turner Utility Report on financial and stock performance in considering
Mr. Brummett's compensation. When reviewing the surveys and financial data, the
Committee factors in that Mr. Brummett also serves the Company as Chairman of
the Board. Categories in which Mr. Brummett's performance is evaluated include:
(1) leadership, (2) strategic planning, (3) financial issues, (4) management
and operations, (5) human resources, and (6) communications.
. Annual cash compensation: The Committee recommended, and the Board of
Directors approved, a base salary amount of $490,000. Because he was
paid at his previously approved salary for four months of Fiscal 1999,
the actual salary he received in Fiscal 1999 was $476,667.
Annual incentive compensation for Mr. Brummett is based on attainment
of annual performance goals for the Company, and on Mr. Brummett's
individual objectives and performance as reviewed by the Committee.
Based on these criteria, Mr. Brummett was awarded $181,700 representing
27% of his compensation that related to the Company's performance
during the fiscal year.
-17-
<PAGE>
. Long-term incentive compensation: On October 15, 1998, Mr. Brummett
received a non-statutory stock option grant of 31,200 shares of stock at
a purchase price of $35.2188 per share. On October 16, 1999, 7,800
shares of stock under this grant became exercisable, and the remaining
portion of the grant will vest equally over the next three years. During
the transition period, Mr. Brummett received a non-statutory stock
option grant of 35,100 shares of stock at a purchase price of $29.1563
per share. The first 8,775 shares of this grant will not become
exercisable until October 21, 2000. He was also granted a restricted
stock award of 13,200 shares on October 21, 1999.
Internal revenue service limitations on deductibility of executive
compensation: Federal law restricts the deductibility, for federal income tax
purposes, of certain executive compensation above a specified threshold. In
1999, no Corporate executives received compensation reaching the threshold. In
the Committee's judgment, the potential for non-deductibility of such
compensation is either nonexistent or not material. The Committee intends to
take into account these tax law provisions in structuring and administering the
Company's executive compensation in future years.
Compensation committee interlock and insider participation: There are none.
Respectfully submitted by the members of the Executive Compensation Committee
of the Board of Directors:
s/William L. Ford, Chair
s/Douglas R. Cummings, Vice Chair
s/Douglas T. Lake
s/Bert H. Mackie
s/Gary D. Parker s/Stanton L. Young
-18-
<PAGE>
Stock performance graph
Comparison of Five Year Cumulative Total Return
Among ONEOK, Inc., S&P 500 Index, S&P Utilities Index (New Peer Index), and S&P
Natural Gas 500 (Previous Peer Index)
[PERFORMANCE GRAPH]
12 Months Ended August 31
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
. ONEOK, Inc. 100.00 128.80 169.18 208.20 199.92 215.06
- ---------------------------------------------------------------------------
.S&P 500 Index 100.00 121.45 144.19 202.81 219.22 306.52
- ---------------------------------------------------------------------------
.S&P Utilities Index (New Peer
Index) 100.00 117.07 132.46 146.65 183.59 206.52
- ---------------------------------------------------------------------------
.S&P Natural Gas 500 (Previous
Peer Index) 100.00 113.32 153.45 185.49 179.65 285.30
</TABLE>
Notes to stock performance graph:
1 The Company believes that the S&P Utilities Index (New Peer Index) is more
representative of the industry than the S&P Natural Gas 500 Index
(Previous Peer Index) that was formerly selected. The New Peer Index is
comprised of the following: AES Corp.; Ameren Corp.; American Electric
Power; Carolina Power & Light; Central & South West Corp.; Cinergy Corp.;
CMS Energy Corp.; Coastal Corp.; Columbia Energy Group; Consolidated
Edison Inc.; Consolidated Natural Gas Co.; Constellation Energy Corp.;
Dominion Resources Inc; DTE Energy Co.; Duke Energy Corp.; Eastern
Enterprises; Edison International; Enron Corp.; Entergy Corp.; Firstenergy
Corp.; Florida Progress Corp.; FPL Group Inc.; GPU Inc.; New Century
Energies, Inc.; Niagara Mohawk Holdings Inc.; NICOR Inc.; Northern States
Power/MN; ONEOK, Inc.; Pacificorp; PECO Energy Co.; Peoples Energy Corp.;
PG&E Corp.; PP&L Resources Inc.; Public Service Entrp.; Reliant Energy
Inc.; Sempra Energy; Sonat Inc.; Southern Co.; Texas Utilities Co.; UNICOM
Corp.; and Williams Cos. Inc. The Previous Peer Index is the S&P Natural
Gas 500 Index comprised of: Coastal Corp.; Columbia Energy Group;
Consolidated Natural Gas Co.; Eastern Enterprises; ENRON Corp.; NICOR
Inc.; ONEOK, Inc.; Peoples Energy Corp.; Sempra Energy; Sonat Inc.; and
Williams Cos. Inc.
2 Assuming that the value of the investment in ONEOK common stock and each
index was $100 on August 31, 1994, and that all dividends were reinvested,
this graph compares ONEOK's cumulative total return (i.e., based on common
stock price and dividends), plotted on an annual basis, with the S&P 500
Stock Index, a performance indicator of the overall stock market, the S&P
Natural Gas 500 Index cumulative total return previously used, and the New
Peer Index, the S&P Utilities Index.
-19-
<PAGE>
3 The information provided in this Performance Graph and in the Executive
Compensation Report of the Compensation Committee on Pages 15-18 should
not be considered soliciting material. Also, it should not be considered
to be filed with the Securities and Exchange Commission or to be subject
to Regulations 14A or 14C, other than as provided in Item 402 of
Regulation S-K, or to the liabilities of Section 18 of the Securities
Exchange Act of 1934. Unless specific reference is made to such sections
in a filing, the information should not be incorporated by reference into
any such filing under the Securities Act of 1933 or the Securities Act of
1934. Also, the stock performance as shown on the Performance Graph should
not be interpreted as a prediction of future stock performance.
-20-
<PAGE>
Executive compensation, pension plans & other arrangements
Summary compensation table
<TABLE>
<CAPTION>
Long-term compensation
-------------------------------
Annual compensation Awards Payouts
Securities
Restricted underlying
Other annual stock options/ LTIP All other
Name and principal Salary/2/ Bonus compensation award(s)/3/ SARs/4 Payouts compensation/5/
position Year/1/ ($) ($) ($) ($) / # ($) ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
L. W. Brummett SY 1999 165,333 0 None 331,650 35,100 None 9,800
Chairman of the Board FY 1999 489,667 181,700 None None 31,200 None 20,325
and Chief Executive
Officer FY 1998 435,800 634,900 None None 44,179/6/ None 12,800
FY 1997 400,933 500,000 None None 10,000 None 9,400
D. L. Kyle SY 1999 118,667 0 None 236,175 17,800 None 7,000
President and FY 1999 354,669 114,500 None None 21,000 None 14,412
Chief Operating Officer FY 1998 317,472 400,000 None None 30,801/6/ None 12,800
FY 1997 297,600 375,000 None None 8,000 None 9,400
E. N. Dubay SY 1999 83,333 0 None 100,500 8,000 None 5,000
President - Kansas FY 1999 234,667 48,100 None None 12,000 None 12,910
Gas Service Company FY 1998 201,233 209,900 None None 10,000 None 10,000
FY 1997 166,850 250,000 None None 2,500 None 3,200
J. A. Gaberino, Jr. SY 1999 80,000 0 None 100,500 8,000 None 7,110
Senior Vice President FY 1999 235,000 38,500 None None 7,100 None 9,762
and General Counsel FY 1998 131,250 78,400 None None 0 None 0
FY 1997 0 0 None None 0 None 0
J. C. Kneale SY 1999 80,000 0 None 50,250 8,000 None 7,686
Vice President,
Treasurer, FY 1999 216,676 48,100 None None 6,500 None 12,300
and Chief Financial
Officer FY 1998 191,677 167,900 None None 9,965/6/ None 9,234
FY 1997 143,733 105,340 None None 4,429/6/ None 8,620
J. D. Neal SY 1999 0 0 None 0 0 None 0
Retired 05/31/99 FY 1999 128,917 20,700 None None 4,000 None 7,595
Vice President,
Treasurer, FY 1998 168,000 85,400 None None 5,900 None 9,600
and Chief Financial
Officer FY 1997 166,066 102,600 None None 2,500 None 9,400
</TABLE>
/1/The Company has changed its year end from August 31st to December 31st.
Periods shown as SY1999 refer to the four (4) months ending December 31,
1999. Periods using FY refer to fiscal years ended August 31st of the years
indicated. Compensation data is presented for Fiscal 1999, the four-month
transition period ended December 31, 1999, and the twelve-month fiscal
years ended August 31, 1998 and August 31, 1997.
/2/This column includes $13,000 in fees received in Fiscal 1999 and $2,000
received from 9-1-99 to 12-31-99 by Mr. Brummett and Mr. Kyle for serving
on the Board of Directors of Magnum Hunter Resources, Inc. ONEOK Resources
Company is a 30% owner of Magnum Hunter Resources, Inc.
/3/Restricted stock was granted under the ONEOK, Inc. Long-Term Incentive Plan
on October 21, 1999. These values represent the number of shares granted
times the closing price ($25.125) of unrestricted stock as of 12/31/99. The
awards were as follows:
<TABLE>
<S> <C> <C>
L. W. Brummett 13,200 shares
D. L. Kyle 9,400 shares
E. N. Dubay 4,000 shares
J. A. Gaberino, Jr. 4,000 shares
J. C. Kneale 2,000 shares
J. D. Neal 0 shares
</TABLE>
/4/No Stock Appreciation Rights ("SARs") were granted in Fiscal 1999 or during
the four-month transition period ended 12/31/99 to any of the named
executive officers.
/5/The table below shows the components of this column for Fiscal 1999 and the
four-month transition period (SY 1999):
<TABLE>
<CAPTION>
ONEOK match to ONEOK, Inc. Employee
ONEOK match to Thrift Plan Non-Qualified Deferred Compensation Plan
---------------------------------------------------------------------
FY 1999 SY 1999 FY 1999 SY 1999
<S> <C> <C> <C> <C>
L. W. Brummett $ 10,325.00 0 $ 10,000.00 $ 9,800
D. L. Kyle 10,012.00 0 4,400.00 7,000
E. N. Dubay 12,910.00 0 0.00 5,000
J. A. Gaberino, Jr. 9,762.00 0 0.00 7,110
J. C. Kneale 12,300.00 0 0.00 7,686
J. D. Neal 7,595.00 0 0.00 0
</TABLE>
-21-
<PAGE>
/6/A portion of the securities underlying these grants are restored or
"reloaded" options. The stock option agreements provide that an additional
option may be granted if, and when, the optionee exercises all or part of
the option using common stock to pay the purchase price of the option or to
satisfy tax obligations incident to the exercise of the option. The
restored option will be exercisable for the number of shares tendered to
pay the option price or to satisfy any tax obligation, and will be
exercisable at any time after the expiration of a period of six (6) months
following the date of grant (or at any other time as determined by ONEOK)
and will expire on the expiration date of the original grant. The number of
restored options included in these grants are as follows:
<TABLE>
<S> <C> <C>
L. W. Brummett 11,662 shares at an exercise price of $35.75 Expires 11-16-05
7,517 shares at an exercise price of $35.75 Expires 10-10-06
D. L. Kyle 5,919 shares at an exercise price of $35.75 Expires 11-16-05
1,369 shares at an exercise price of $35.75 Expires 11-16-05
6,013 shares at an exercise price of $35.75 Expires 10-10-06
J. C. Kneale 1,974 shares at an exercise price of $34.03 Expires 10-10-06
1,391 shares at an exercise price of $42.53 Expires 11-16-05
1,929 shares at an exercise price of $30.69 Expires 11-16-05
</TABLE>
-22-
<PAGE>
Option grant table
The following table represents additional information concerning the option
awards shown in the Summary compensation table for Fiscal Year 1999 and for the
four-month transition period ending 12/31/99. These options to purchase common
stock were granted to the Named Executive Officers under the ONEOK, Inc. Long-
Term Incentive Plan.
Option grants in Fiscal Year 1999 and during the 4-month period ending
12/31/99/1/
<TABLE>
<CAPTION>
Potential realizable value
at assumed annual rates of
stock price appreciation
Individual grants for option term/3/
- ------------------------------------------------------------------------------------------------------------
Percent of
Securities total options
underlying granted to Exercise
options employees or base
granted/2/ in fiscal year & price Expiration
Name Date Number transition period ($/share) date 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
L. W. Brummett 10-15-98 FY 31,200 10.98% $35.2188 10-15-08 $ 691,046 $ 1,751,247
10-21-99 SY 35,100 11.34% $29.1563 10-21-09 $ 643,602 $ 1,631,014
D. L. Kyle 10-15-98 FY 21,000 7.39% $35.2188 10-15-08 $ 465,127 $ 1,178,724
10-21-99 SY 17,800 5.75% $29.1563 10-21-09 $ 326,385 $ 827,124
E. N. Dubay 10-15-98 FY 12,000 4.22% $35.2188 10-15-08 $ 265,787 $ 673,556
10-21-99 SY 8,000 2.58% $29.1563 10-21-09 $ 146,690 $ 371,741
J. A. Gaberino, Jr. 10-15-98 FY 7,100 2.50% $35.2188 10-15-08 $ 157,257 $ 398,521
10-21-99 SY 8,000 2.58% $29.1563 10-21-09 $ 146,690 $ 371,741
J. C. Kneale 10-15-98 FY 6,500 2.29% $35.2188 10-15-08 $ 143,968 $ 364,843
10-21-99 SY 8,000 2.58% $29.1563 10-21-09 $ 146,690 $ 371,741
J. D. Neal 10-15-98 FY 4,000 1.41% $35.2188 10-15-08 $ 88,596 $ 224,519
10-21-99 SY 0 0.00% $ 0 $ 0
</TABLE>
Notes to option grant table:
/1/No Stock Appreciation Rights ("SARs") were granted in Fiscal 1999 or during
the four-month transition period ended 12/31/99.
/2/Each option was awarded with an exercise price equal to the fair market
value of a share of ONEOK, Inc. common stock on the date of the grant and
will become exercisable in four equal installments commencing one year from
the grant date.
/3/These amounts represent assumed rates of appreciation only and are not
intended to forecast future appreciation of the common stock price. Actual
gains, if any, on stock option exercises depend on the future performance
of the common stock and overall market conditions. There can be no
assurances that the potential values reflected in this table will be
achieved.
-23-
<PAGE>
Aggregated option/SAR exercises and Year-End values
The following table shows information for the Named Executive Officers,
concerning:
. exercises of stock options and SARs/1/ during Fiscal 1999 and during the
four-month transition period ended 12/31/99; and
. the amount and values of unexercised stock options and SARs as of
December 31, 1999.
Aggregated options/SAR exercises in 1999 and Year-End option/SAR values
<TABLE>
<CAPTION>
Value of unexercised in-
the-
Number of securities money options at fiscal
underlying unexercised year end & at
options at fiscal year end & transition period end
at transition period end (#) ($)/2/
Shares
acquired
on Value
exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($)
<S> <C> <C> <C> <C> <C> <C>
L. W. Brummett 0 FY 0 FY 44,179 FY 31,200 FY $0.00 FY $0.00 FY
0 SY 0 SY 51,979 SY 58,500 SY $0.00 SY $0.00 SY
D. L. Kyle 0 FY 0 FY 30,801 FY 21,000 FY $0.00 FY $0.00 FY
0 SY 0 SY 36,051 SY 33,550 SY $0.00 SY $0.00 SY
E. N. Dubay 0 FY 0 FY 10,000 FY 12,000 FY $0.00 FY $0.00 FY
0 SY 0 SY 13,000 SY 17,000 SY $0.00 SY $0.00 SY
J. A. Gaberino, Jr. 0 FY 0 FY 0 FY 7,100 FY $0.00 FY $0.00 FY
0 SY 0 SY 1,775 SY 13,325 SY $0.00 SY $0.00 SY
J. C. Kneale 0 FY 0 FY 9,965 FY 6,500 FY $0.00 FY $0.00 FY
0 SY 0 SY 11,590 SY 12,875 SY $0.00 SY $0.00 SY
J. D. Neal 0 FY 0 FY 10,900 FY 0 FY $27,650 FY $0.00 FY
0 SY 0 SY 10,900 SY 0 SY $3,510 SY $0.00 SY
</TABLE>
/1/No Stock Appreciation Rights ("SARs") were granted in Fiscal 1999 or during
the four-month transition period ended 12/31/99.
/2/Based on per share price for ONEOK, Inc. common stock at fiscal year end
(FY) of $30.8125 per share and $25.0938 for the four-month transition
period ended 12/31/99 (SY). The price reflects the average of the high and
low trading price on the New York Stock Exchange on August 31, 1999 and on
December 31, 1999
-24-
<PAGE>
Pension plans
This table shows the estimated annual retirement benefits payable to a covered
participant based upon the final average pay formulas of the Retirement Plan
for Employees of ONEOK, Inc. and Subsidiaries/1/. The estimates assume that
benefits are received in the form of a single life annuity.
<TABLE>
<CAPTION>
Estimated annual benefits under final-average earnings
/2/ /3/ /4/ /5/
---------------------------------------------------------------
15 Years 20 Years 25 Years 30 Years 35 Years
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $44,396 $53,725 $63,055 $72,385 $81,715
--------------------------------------------------------------------------
$150,000 $53,771 $65,132 $76,493 $87,854 $99,215
--------------------------------------------------------------------------
$175,000 $63,146 $76,538 $89,930 $103,322 $116,715
--------------------------------------------------------------------------
$200,000 $72,521 $87,944 $103,368 $118,791 $134,215
--------------------------------------------------------------------------
$225,000 $81,896 $99,350 $116,805 $134,260 $151,715
--------------------------------------------------------------------------
$250,000 $91,271 $110,757 $130,243 $149,729 $169,215
--------------------------------------------------------------------------
$300,000 $110,021 $133,569 $157,118 $180,666 $204,215
--------------------------------------------------------------------------
$400,000 $147,521 $179,194 $210,868 $242,541 $274,215
--------------------------------------------------------------------------
$450,000 $166,271 $202,007 $237,743 $273,479 $309,215
--------------------------------------------------------------------------
$500,000 $185,021 $224,819 $264,618 $304,416 $344,215
</TABLE>
Notes to the pension benefits table:
/1 /The Retirement Plan for Employees of ONEOK, Inc. and Subsidiaries is a
tax-qualified, defined-benefit pension plan under both the Internal Revenue
Code of 1986, as amended, and the Employee Retirement Income Security Act
of 1974, as amended. Benefits become vested and non-forfeitable after
completion of five years of continuous employment. A vested participant
receives the retirement benefit at retirement age under the Retirement
Plan, unless separating earlier from service, in which case the retirement
benefit is actuarially reduced for early commencement. Benefits are
calculated at retirement date based on credited service, limited to a
maximum of 35 years, and final average earnings. Credited years of service
under these plans for the Named Executive Officers as of December 31, 1999
are as follows: L. W. Brummett, 25 years and 6 months; D. L. Kyle, 25 years
and 6 months; E. N. Dubay, 3 years and 8 months; J. A. Gaberino, Jr.,
1 year and 11 months; J. C. Kneale, 18 years and 8 months; and J. D. Neal
(retired 05/31/99) 35 years.
/2/ For purposes of the above table, the annual Social Security Covered
Compensation benefit ($33,060) was used in the excess benefit calculation.
/3/ Under the Internal Revenue Code, the annual compensation of each employee
to be taken into account under the Retirement Plan cannot exceed $150,000,
adjusted for increases in the cost of living, for plan years beginning
after December 31, 1993. The maximum amount for 1999, as adjusted, is
$160,000.
/4/ Amounts are estimates only and would be subject to adjustment based on
rules and regulations applicable to the method of distribution and survivor
benefit options selected by the retiree. Retirement benefits would be
actuarially reduced for retirement prior to age 65.
/5/ The compensation covered by the Retirement Plan benefit formula is the
basic salary paid to an employee within the employee's final average
earnings. The final average earnings means the employee's highest earnings
during any sixty consecutive months during the last 120 months of
employment. For any employee named or shown in the Summary compensation
table who retires with vested benefits under the Plan, the compensation
shown as "salary" in the Summary compensation table could be considered
covered compensation in determining benefits, except that the Plan benefit
formula takes into account only a fixed percentage of final average
earnings which is uniformly applied to all employees. The amount of covered
compensation that may be considered in calculating retirement benefits is
also subject to limitations in the Internal Revenue Code of 1986, as
amended, applicable to the Plan.
-25-
<PAGE>
ONEOK, Inc. Supplemental Executive
Retirement Plan
The following table sets forth the estimated benefits payable upon retirement
at age 65 to a covered participant under the Supplemental Executive Retirement
Plan ("SERP"). The estimates assume that a covered participant is fully vested.
The amounts shown would be reduced for commencement prior to age 60. SERP
benefits are offset by benefits payable under the Retirement Plan.
<TABLE>
<CAPTION>
Estimated annual benefits at indicated age of retirement
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
50 and under 55 60 65 and over
- -----------------------------------------------------------------------------------------
$125,000 $62,500 $70,000 $73,563 $77,125
- -----------------------------------------------------------------------------------------
$150,000 $75,000 $84,000 $88,275 $92,550
- -----------------------------------------------------------------------------------------
$175,000 $87,500 $98,000 $102,988 $107,975
- -----------------------------------------------------------------------------------------
$200,000 $100,000 $112,000 $117,700 $123,400
- -----------------------------------------------------------------------------------------
$225,000 $112,500 $126,000 $132,413 $138,825
- -----------------------------------------------------------------------------------------
$250,000 $125,000 $140,000 $147,125 $154,250
- -----------------------------------------------------------------------------------------
$300,000 $150,000 $168,000 $176,550 $185,100
- -----------------------------------------------------------------------------------------
$400,000 $200,000 $224,000 $235,400 $246,800
- -----------------------------------------------------------------------------------------
$450,000 $225,000 $252,000 $264,825 $277,650
- -----------------------------------------------------------------------------------------
$500,000 $250,000 $280,000 $294,250 $308,500
</TABLE>
The SERP covers certain elected or appointed officers of ONEOK, and certain
other highly compensated employees in the management of ONEOK. Participants are
selected by the CEO, or in the case of the CEO by the Board of Directors.
Benefits payable to participating employees under the SERP are based upon a
specified percentage (reduced for early retirement) of the highest 36
consecutive month's compensation of the employee's last 60 months of service.
. SERP benefits less the benefit payable under the Retirement Plan;
. Pension benefits from the Retirement Plan.
The SERP will, in any case, pay a benefit equal to the benefit which would be
payable to the participant under the Retirement Plan if the limitations imposed
by the Internal Revenue Code Sections 401(a)(17) and 415(b) were not
applicable, less the benefit payable under the Retirement Plan with such
limitations. Benefits under the SERP are paid coincidentally with the payment
of benefits under the Retirement Plan or as the administrative committee may
determine.
ONEOK has begun funding this benefit in a Rabbi Trust.
The Board of Directors may amend or terminate the SERP at any time; however,
benefits to current participants may not be reduced.
-26-
<PAGE>
Change in control and termination agreements
During 1999, ONEOK, Inc. entered into new termination agreements with each of
its named executive officers. These agreements replaced former termination
agreements between ONEOK and its named executive officers. Each of the new
termination agreements has a three-year term, but will be extended
automatically in one-year increments unless ONEOK provides notice to the
officer that it does not wish to extend the term at least 90 days before the
January 1 preceding the initial termination date of the agreement.
Under the termination agreements, severance payments and benefits are payable
if there is a change in control of ONEOK and the officer's employment is
terminated without "just cause" or for "good reason" at any time during the
three years after the change in control, or for Messrs. Brummett and Kyle, for
any reason by the executive within twelve (12) months of the change in control.
In general, these severance benefits include:
. a lump sum payment equal to three times the officers' current annual
compensation, plus a prorated portion of the officers' short-term incentive
compensation;
. accelerated vesting of retirement and other benefits under ONEOK's SERP;
. continuation of welfare benefits for thirty-six (36) months;
. for Messrs. Brummett and Kyle, gross up payments to cover any excise taxes
due if any portion of their severance payments constitute excess parachute
payments; and
. for each of the other named executive officers, severance payments will be
reduced if the net after-tax benefit to such named executive officer
exceeds the net after-tax benefit if such reduction were not made. ONEOK
will make gross up payments to such officers only if the severance
payments, as reduced, are later deemed to constitute excess parachute
payments.
Calculated using base salary and bonus levels during 1999, and assuming a
December 31, 1999, change in control and termination date, payments under the
termination agreements (excluding any gross up payments) with ONEOK's named
executive officers would have been: L. W. Brummett, $4,393,815; D. L. Kyle,
$2,896,957; E. N. Dubay, $1,643,370; J. A. Gaberino, Jr., $1,562,463; J. C.
Kneale, $1,725,435; and J. D. Neal (retired 05/31/99) $0.
Under each agreement a change in control will occur if:
. in connection with a merger, tender offer, sale of assets or other business
combination, or a contested election, the individuals who were directors
immediately before the transaction no longer constitute a majority of the
board of directors of ONEOK or any successor company; or
. any person or entity acquires beneficial ownership of 15% or more of
ONEOK's outstanding voting securities, except as provided below:
A change in control will not result if WAI, Inc. or Western Resources, Inc.
acquires 15% or more of ONEOK's outstanding voting securities under their
Shareholder Agreement with ONEOK, but this exception expires upon (1)
termination of the Shareholder Agreement or (2) upon the successful
consummation of a "buyout tender offer," as defined in the Shareholder
Agreement.
Other change in control arrangements:
Under ONEOK, Inc.'s Long Term Incentive Plan, non-qualified stock options
granted to the named executive officers will become fully vested upon a change
in control, and shares of restricted stock will become fully vested and non-
restricted.
-27-
<PAGE>
Section 16(a) beneficial ownership reporting compliance
ONEOK believes that during Fiscal 1999 all Securities and Exchange Commission
filings of its officers, directors and ten percent shareholders complied with
the requirements of Section 16 of the Securities Exchange Act, based on a
review of forms filed, or written notice that no annual forms were required,
except for two reports covering two purchases of stock made by Ms. Douglas Ann
Newsom's spouse, which were reported late on a Form 4 filed for April 1999. Ms.
Newsom disclaims ownership of these shares.
Other matters
We do not know of other matters that are likely to be brought before the
meeting.
By order of the Board of Directors,
/s/ Deborah B. Barnes
Deborah B. Barnes
Vice President, Secretary, and Associate General Counsel
Tulsa, OK
March 10, 2000
-28-
<PAGE>
EXHIBIT A
SUMMARY OF MATERIAL FEATURES OF
THE EMPLOYEE STOCK PURCHASE PLAN (the "Plan")
The persons who are eligible to participate in the Plan are employees of the
Corporation and such of its subsidiaries as are designated by the Compensation
Committee of the Board of Directors as participating employers, including
members of the Board of Directors who are employees, whose customary employment
is more than 20 hours per week and 5 months in a calendar year, or who meet
such lesser customary employment and service requirements as the Committee may
specify on a uniform and non-discriminatory basis. Employees who own five
percent (5%) or more of the Corporation's stock or a subsidiary's stock may not
purchase stock under the Plan.
Under the Plan, the Compensation Committee may permit eligible employees to
purchase, through regular payroll deductions, shares of Common Stock at a
purchase price equal to a lesser of (a) eighty-five percent (85%) of the fair
market value of a share of Common Stock at the beginning of an offering period,
or (b) eighty-five percent (85%) of the fair market value of a share of Common
Stock at the end of such offering period. In its discretion, the Compensation
Committee, which will administer the Plan, may set a higher (but not a lower)
purchase price in advance of any offering period and may permit employee
contributions to be made by means in addition to payroll deductions (such as
lump sum payments). Under the Plan, the fair market value of a share of Common
Stock is generally equal to the average of the high and low sale prices of a
share of Common Stock in consolidated trading on the date in question as
reported by The Wall Street Journal or another reputable source designated by
the Committee.
The duration of offering periods are determined by the Compensation
Committee but may not exceed twenty-seven (27) months. The Compensation
Committee also determines the date on which each offering period will begin.
The Plan provides that unless the Compensation Committee determines otherwise,
a new offering period will commence in the first payroll period coinciding with
or next following January 1 of each year and will extend until the next
offering commences. The Compensation Committee may at any time suspend or
accelerate the completion of an offering period, including upon or in
contemplation of a "Change in Control" as defined in the Plan.
An eligible employee may contribute up to a maximum of ten percent (10%) of
his/her base compensation (or such lesser amount as the Compensation Committee
may prescribe) for purchase of shares pursuant to the Plan. Payroll deductions
are accumulated, along with any other employee contributions (e.g. lump sum
contributions), to be used to purchase shares of Common Stock at the end of the
offering period. A participant may generally increase, decrease, or suspend
payroll deductions during an offering period or withdraw from participation in
the Plan at any time. If a participant's employment terminates for any reason
before the end of an offering period, his or her participation in the Plan
ceases immediately, and any accumulated employee contributions are paid to such
participant. No participant may purchase more than $25,000 of Common Stock in
any calendar year, measured by its undiscounted value at the beginning of each
offering or such lesser amount as the Compensation Committee may fix under the
Plan.
The additional 1,400,000 shares of Common Stock when authorized for sale
under the Plan, and any other shares authorized but unissued under the Plan may
be authorized and unissued shares, treasury shares, or any combination thereof.
The Plan authorizes the Corporation to issue or transfer sufficient shares of
Common Stock to a trust (including a grantor trust) at any time (including upon
or in contemplation of a Change in Control) to satisfy its obligations under
any offerings then in progress, in which case the shares may be treated as
authorized and issued shares while held in the trust with full dividend and
voting rights.
The Board of Directors may amend the Plan at any time and in any respect
without shareholder approval unless shareholder approval of the amendment in
question is required under Oklahoma law, the Internal Revenue Code of 1986, as
amended (Code), any applicable exemption from Section 16 of the Securities
Exchange Act of 1934, as amended, for which the Corporation intends
transactions by executive officers or directors of the Corporation to qualify,
any national securities exchange or system on which the Common Stock is then
listed or reported, or under any other applicable laws, rules, or regulations.
The provisions of the Plan that determine the amount, price, and time of stock
purchases by executive officers and directors may not be amended more than once
every six months other than to comply with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended (ERISA), or the rules
thereunder unless the Corporation's General Counsel determines that such
restriction on amendments is not necessary to secure or maintain any exemption
from Section 16 of the Securities Exchange Act of 1934, as amended, for which
the Corporation intends executive officers and directors to qualify. The Plan
will
<PAGE>
continue in effect until all shares authorized to be sold thereunder have been
sold, subject to the right of the Board of Directors to terminate the Plan at
any earlier time.
The Plan is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Code and, as a result, participants will be
afforded favorable tax treatment under Sections 421 and 423 of the Code. A
participant in an offering under the Plan will not recognize income subject to
the Federal income tax at the commencement of an offering period or at the time
shares are purchased. However, any discount from the market price on the
purchase date may be subject to employment taxes (FICA and FUTA). No Federal
income tax consequences result to the Corporation at the commencement of an
offering period under the Plan, upon the subsequent purchases of Common Stock
by participants, or upon the disposition of shares acquired under the Plan
other than with respect to a disqualifying disposition. If no disposition of
the shares purchased in an offering period is made within two years from the
commencement of such offering period nor within one year from the date the
shares are transferred to the employee, then upon subsequent disposition of the
shares, ordinary income may be recognized by the participant, depending upon
the purchase price formula applicable to that offering, on up to fifteen
percent (15%) of the market price of the shares on such commencement date; any
additional gain realized will be capital gain. Any loss realized by an employee
upon disposition of the shares will constitute a capital loss.
If the shares are disposed of within either the two-year or one-year periods
mentioned above (a so-called disqualifying disposition), the participant will
recognize ordinary income at the time of such disposition in an amount equal to
the difference between the fair market value of the shares at the time such
shares were purchased and the purchase price of the shares, and the Corporation
will generally be entitled to a corresponding deduction from its income. Any
difference between such fair market value and the disposition price will be
treated as capital gain or loss to the participant and will not be deductible
by the Corporation.
As of February 22, 2000, a total of approximately 3,100 employees of the
Corporation and its subsidiaries, including all officers, are eligible to
participate in the Plan. However, it is not possible to determine how may
employees will elect to participate, the amount that participating employees
will elect to contribute, or the number of shares which may be purchased and
price thereof under the Plan.
<PAGE>
ONEOK, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
The purpose of this Plan is to provide eligible employees the opportunity to
purchase Common Stock at a discount on a basis that qualifies for the tax
treatment prescribed by Section 423 of the Code.
2. Definitions.
The following terms, when used in the Plan, shall have the following
meanings:
(a) "Base Compensation" means, with respect to any offering period: (i) in
the case of an employee normally paid an hourly rate, the employee's hourly
rate at the inception of the offering period multiplied by 2,080, (ii) in the
case of an employee normally paid at a weekly rate, the employee's weekly rate
at the inception of the offering period multiplied by 52, (iii) in the case of
an employee normally paid at a bi-weekly rate, the employee's bi-weekly rate at
the inception of the offering period multiplied by 26, (iv) in the case of an
employee normally paid at a monthly rate, the employee's monthly rate at the
inception of the offering period multiplied by 12; and (v) in the case of an
employee normally paid at an annual rate, the employee's annual rate at the
inception of the offering period. Base compensation shall be determined by
reference to the applicable rate before any deductions pursuant to a salary
reduction agreement under any plan qualified under Section 401(k) of the Code
or any cafeteria plan under Code Section 125 and shall exclude any bonuses,
commissions, overtime pay, fringe benefits, stock options and other special
compensation payable to an employee.
(b) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to the Code or to a particular section of the Code shall
include references to any related Treasury Regulations and rulings and to
successor provisions.
(d) "Committee" means the committee appointed by the Board of Directors to
administer the Plan pursuant to the provisions of Section 3(a) below.
(e) "Common Stock" means common stock, par value $0.01, of the Company.
(f) "Company" means ONEOK, Inc., an Oklahoma corporation, its successors and
assigns.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
(h) "Fair Market Value" on a particular date means the average of the high
and low sale prices of the Common Stock in consolidated trading on the date in
question as reported by The Wall Street Journal or another reputable source
designated by the Committee; provided that if there were no sales on such date
reported as provided above, the respective prices on the most recent prior day
for which a sale was so reported. If the foregoing method of determining fair
market value should be inconsistent with Section 423 of the Code, "Fair Market
Value" shall be determined by the Committee in a manner consistent with such
section of the Code and shall mean the value as so determined.
(i) "General Counsel" means the General Counsel of the Company serving from
time to time.
(j) "Plan" means the ONEOK, Inc. Employee Stock Purchase Plan set forth in
these pages, as amended from time to time.
(k) "SEC Rule 16b-3" means Rule 16b-3 of the Securities and Exchange
Commission promulgated under the Exchange Act, as such rule or any successor
rule may be in effect from time to time.
(l) "Section 16 Person" means a person subject to Section 16(b) of the
Exchange Act with respect to transactions involving equity securities of the
Company.
<PAGE>
(m) "Subsidiary" means a subsidiary as defined in Section 424(f) of the
Code, including a corporation which becomes such a subsidiary in the future.
3. Administration.
(a) The Plan shall be administered by a committee of the Board consisting of
two or more directors appointed from time to time by the Board. No person shall
be appointed to or shall serve as a member of such committee unless at the time
of such appointment and service he or she shall be a "Non-Employee Director",
as defined in SEC Rule 16b-3.
(b) Subject to the provisions of the Plan, the powers of the Committee shall
include having the authority, in its discretion, to:
(i) define, prescribe, amend and rescind rules, regulations,
procedures, terms and conditions relating to the Plan; and
(ii) make all other determinations necessary or advisable for the
administration of the Plan, including but not limited to interpreting the Plan,
correcting defects, reconciling inconsistencies and resolving ambiguities.
(iii) approve any transaction involving a grant, award or other
transaction from the Company to a Section 16 Person (other than a Discretionary
Transaction, as defined in SEC Rule 16b-3), so as to exempt such transaction
under SEC Rule 16b-3; provided, that any transaction under the Plan involving a
Section 16 Person also may be approved by the Board of Directors, or may be
approved or ratified by the stockholders of the Company, in the manner that
exempts such transaction under SEC Rule 16b-3.
(c) The interpretation by the Committee of the terms and provisions of the
Plan, and its administration of the Plan, and all action taken by the
Committee, shall be final, binding and conclusive on the Company, its
stockholders, Subsidiaries, all participants and employees, and upon their
respective successors and assigns, and upon all other persons claiming under or
through any of them.
(d) Members of the Board and members of the Committee acting under this Plan
shall be fully protected in relying in good faith upon the advice of counsel
and shall incur no liability except for gross or willful misconduct in the
performance of their duties.
4. Stock Subject to the Plan.
(a) Subject to paragraph (c) below, the aggregate number of shares of Common
Stock which may be sold under the Plan is 1,400,000.
(b) If the number of shares of Common Stock that participating employees
become entitled to purchase is greater than the number of shares of Common
Stock that are offered in a particular offering or that remain available under
the Plan, the available shares of Common Stock shall be allocated by the
Committee among such participating employees in such manner as it deems fair
and equitable.
(c) In the event of any change in the Common Stock, through
recapitalization, merger, consolidation, stock dividend or split, combination
or exchange of shares, spinoff or otherwise, the Committee may make such
equitable adjustments in the Plan and the then outstanding offerings as it
deems necessary and appropriate including, but not limited to, changing the
number of shares of Common Stock reserved under the Plan, and the price of the
current offering; provided that any such adjustments shall be consistent with
Sections 423 and 424 of the Code.
(d) Shares of Common Stock which are to be delivered under the Plan may be
obtained by the Company from its treasury, by purchases on the open market or
from private sources, or by issuing authorized but unissued shares of its
Common Stock. Shares of authorized but unissued Common Stock may not be
delivered under the Plan if the purchase price thereof is less than the par
value (if any) of the Common Stock at the time. The Committee may (but need
not) provide at any time or from time to time (including without limitation
upon or in contemplation of a change in control) for a number of shares of
Common Stock equal in number to the number of shares then subject to options
under this Plan, or expected to be subject to options under this Plan in the
then
<PAGE>
pending offering(s), to be issued or transferred to, or acquired by, a trust
(including but not limited to a grantor trust) for the purpose of satisfying
the Company's obligations under such options, and, unless prohibited by
applicable law, such shares held in trust shall be considered authorized and
issued shares with full dividend and voting rights, notwithstanding that the
options to which such shares relate might not be exercisable at the time. No
fractional shares of Common Stock shall be issued or sold under the Plan.
5. Eligibility.
All employees of the Company and any Subsidiaries designated by the
Committee from time to time will be eligible to participate in the Plan, in
accordance with and subject to such rules and regulations as the Committee may
prescribe; provided, however, that (a) such rules shall neither permit nor deny
participation in the Plan contrary to the requirements of the Code (including
but not limited to Section 423(b)(3), (4) and (8) thereof), (b) no employee
shall be eligible to participate in the Plan if his or her customary employment
is 20 hours or less per week or for not more than 5 months in any calendar
year, unless the Committee determines otherwise on a uniform and non-
discriminatory basis, (c) no employee may be granted an option under the Plan
if such employee, immediately after the option is granted, owns stock
possessing 5% or more of the total combined voting power or value of all
classes of stock of his or her employer corporation or any parent or Subsidiary
corporation (within the meaning of Section 423(b)(3) of the Code). For purposes
of the preceding sentence, the rules of Section 424(d) of the Code shall apply
in determining the stock ownership of an employee, and stock which the employee
may purchase under outstanding options (whether or not such options qualify for
the special tax treatment afforded by Code Section 421(a)) shall be treated as
stock owned by the employee; and (d) all participating employees shall have the
same rights and privileges except as otherwise permitted by Section 423(b)(5)
of the Code.
6. Offerings; Participation.
The Company may make offerings of up to 27 months' duration each, to
eligible employees to purchase Common Stock under the Plan, until all shares
authorized to be delivered under the Plan have been exhausted or until the Plan
is sooner terminated by the Board. Subject to the preceding sentence, the
duration and commencement date of any offerings shall be determined by the
Committee in its sole discretion; provided that, unless the Committee
determines otherwise, a new offering shall commence on the first day of the
Company's first payroll period coinciding with or next following each January 1
after the effective date of this Plan and shall extend through and include the
payroll period immediately preceding the payroll period in which the next
offering commences. Subject to such rules, procedures and forms as the
Committee may prescribe, an eligible employee may participate in an offering at
such time(s) as the Committee may permit by authorizing a payroll deduction for
such purpose of up to a maximum of ten percent of his or her Base Compensation
or such lesser amount as the Committee may prescribe. The Committee may (but
need not) permit employee contributions to be made by means other than payroll
deductions, provided that in no event shall an employee's contributions from
all sources in any offering exceed ten percent of his or her Base Compensation
or such lesser amount as the Committee may prescribe. The Committee may at any
time suspend or accelerate the completion of an offering if required by law or
deemed by the Committee to be in the best interests of the Company, including
in the event of a change in ownership or control of the Company or any
Subsidiary. The Company's obligation to sell and deliver Common Stock under
this Plan shall be subject to the approval of any governmental authority whose
approval the General Counsel determines is necessary or advisable to obtain in
connection with the authorization, issuance or sale of such Common Stock.
7. Payroll Deductions.
(a) The Company will maintain payroll deduction accounts on its books for
all participating employees. All employee contributions shall be credited to
such accounts. Employee contributions credited to the payroll deduction
accounts of participating employees need not be segregated from other corporate
funds and may be used for any corporate purpose.
(b) At such times as the Committee may permit and subject to such rules,
procedures and forms as the Committee may prescribe, an employee may increase,
decrease or suspend his or her payroll deduction during an offering, or may
withdraw the balance of his or her payroll deduction account and thereby
withdraw from participation in an offering. However, an employee may at any
time waive in writing the right or privilege to decrease or suspend his or her
payroll deductions or withdraw from participation in a particular offering for
a
<PAGE>
period of at least six months. Any such waiver shall be irrevocable with
respect to the period ending six months after the employee files a superseding
written revocation of such waiver with the Company.
(c) No employee shall make any elective contribution or employee
contribution to the Plan (within the meaning of Treasury Regulation Section
1.401(k)-1(d)(2)(iv)(B)(4)) during the balance of the calendar year after the
employee's receipt of a hardship distribution from a plan of the Company or a
related party within the provisions of Code Section 414(b), (c), (m) or (o)
containing a cash or deferred arrangement under Section 401(k) of the Code, or
during the following calendar year. The foregoing sentence shall not apply if
and to the extent the General Counsel determines it is not necessary to qualify
any such plan as a cash or deferred arrangement under Section 401(k) of the
Code.
(d) Any balance remaining in any employee's payroll deduction account at the
end of an offering period will be carried forward into the employee's payroll
deduction account for the following offering period. In no event will the
balance carried forward be equal to or greater than the purchase price of one
share of Common Stock as determined under Section 8(c) below. Any excess shall
be refunded to the participant. Upon termination of the Plan, all amounts in
the accounts of participating employees shall be carried forward into their
payroll deduction accounts under a successor plan, if any, or refunded to them,
as the Committee may decide.
(e) In the event of the termination of a participating employee's employment
for any reason, his or her participation in any offering under the Plan shall
cease, no further amounts shall be deducted pursuant to the Plan and the
balance in the employee's account shall be paid to the employee, or, in the
event of the employee's death, to the employee's beneficiary under the
Company's basic group life insurance program.
8. Purchase; Limitations.
(a) Within the limitations of Section 8(d) below, each employee
participating in any offering under the Plan will be granted an option, upon
the effective date of such offering, for as many full shares of Common Stock as
the amount of his or her payroll deduction account (including any contributions
made by means other than payroll deductions) at the end of the offering can
purchase.
(b) As of the last day of the offering period, the payroll deduction account
of each participating employee shall be totaled. Subject to the provisions of
Section 7(b) above and 8(d) below, if such account contains sufficient funds as
of that date to purchase one or more full shares of Common Stock at the price
determined under Section 8(c) below, the employee shall be deemed to have
exercised an option to purchase the largest number of full shares of Common
Stock at the price determined under Section 8(c) below that his or her payroll
deduction account will permit; such employee's account will be charged for the
amount of the purchase and for all purposes under the Plan the employee will be
deemed to have acquired the shares on that date; and either a stock certificate
representing such shares will be issued to him or her, or the Company's
registrar will make an entry on its books and records evidencing that such
shares have been duly issued or transferred as of that date, as the Committee
may direct. Notwithstanding any provision of the Plan to the contrary, the
Committee may but need not permit fractional shares to be purchased under the
Plan.
(c) Unless the Committee determines before the effective date of an offering
that a higher price that complies with Section 423 of the Code shall apply, the
purchase price of the shares of Common Stock which are to be sold under the
offering shall be the lesser of (i) an amount equal to 85 percent of the Fair
Market Value of the Common Stock at the time such option is granted, or (ii) an
amount equal to 85 percent of the Fair Market Value of the Common Stock at the
time such option is exercised.
(d) In addition to any other limitations set forth in the Plan, (i) no
employee may purchase in any offering period more than the number of shares of
Common Stock determined by dividing the employee's annual Base Compensation as
of the first day of the offering period, or $25,000, whichever is less, by the
Fair Market Value of a share of Common Stock at such day, and (ii) no employee
may be granted an option under the Plan which permits his or her rights to
purchase stock under the Plan, and any other stock purchase plan of his or her
employer corporation and its parent and subsidiary corporations that is
qualified under Section 423 of the Code, to accrue at a rate which exceeds
$25,000 of the Fair Market Value of such stock (determined at the time such
option is granted) for each calendar year in which the option is outstanding at
any time. The Committee may further limit the amount of Common Stock which may
be purchased by any employee during an offering period in accordance with
Section 423(b)(5) of the Code.
<PAGE>
9. No Transfer.
(a) No option, right or benefit under the Plan (including any derivative
security within the meaning of paragraph (a)(2) of SEC Rule 16b-3) may be
transferred by a participating employee, whether by will, the laws of descent
and distribution, or otherwise, and all options, rights and benefits under the
Plan may be exercised during the participating employee's lifetime only by such
employee.
(b) Book entry accounts and certificates for shares of Common Stock
purchased under the Plan may be maintained or registered, as the case may be,
only in the name of the participating employee or, if such employee so
indicates on his or her payroll deduction authorization form, in his or her
name jointly with a member of his or her family, with right of survivorship. An
employee who is a resident of a jurisdiction which does not recognize such a
joint tenancy may have book entry accounts maintained and certificates
registered in the employee's name as tenant in common with a member of the
employee's family, without right of survivorship.
10. Effective Date and Duration of Plan.
The Plan shall become effective when adopted by the Board, provided that the
stockholders of the Company approve it within 12 months thereafter at a duly
held stockholders' meeting. If not so approved by shareholders, the Plan shall
be null, void and of no force or effect. If so approved, the Plan shall remain
in effect until all shares authorized to be issued or transferred hereunder
have been exhausted or until the Plan is sooner terminated by the Board of
Directors, and may continue in effect thereafter with respect to any options
outstanding at the time of such termination if the Board of Directors so
provides.
11. Amendment and Termination of the Plan.
The Plan may be amended by the Board of Directors, without shareholder
approval, at any time and in any respect, unless shareholder approval of the
amendment in question is required under Oklahoma law, the Code (including
without limitation Code Section 423 and Treasury Regulation Section 1.423-
2(c)(4) thereunder), any exemption from Section 16 of the Exchange Act
(including without limitation SEC Rule 16b-3) for which the Company intends
Section 16 Persons to qualify, any national securities exchange or system on
which the Stock is then listed or reported, by any regulatory body having
jurisdiction with respect to the Plan, or under any other applicable laws,
rules or regulations. The Plan provisions that determine the amount, price and
timing of option grants to Section 16 Persons may not be amended more than once
every six months, other than to comport with changes in the Internal Revenue
Code, the Employee Retirement Income Security Act of 1974, or the rules
thereunder, unless the General Counsel determines that such restriction on
amendments is not necessary to secure or maintain any exemption from Section 16
of the Exchange Act for which the Company intends Section 16 Persons to
qualify. The Plan may also be terminated at any time by the Board of Directors.
12. General Provisions.
(a) Nothing contained in this Plan shall be deemed to confer upon any person
any right to continue as an employee of or to be associated in any other way
with the Company for any period of time or at any particular rate of
compensation.
(b) No person shall have any rights as a stockholder of the Company with
respect to any shares optioned under the Plan until such shares are issued or
transferred to him or her.
(c) All expenses of adopting and administering the Plan shall be borne by
the Company, and none of such expenses shall be charged to any participant.
(d) The Plan shall be governed by and construed under the laws of the State
of Oklahoma, without giving effect to the principles of conflicts of laws of
that State.
(e) The Plan and each offering under the Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the Code.
Transactions under the Plan by or with respect to Section 16 Persons are also
intended to qualify for exemption under SEC Rule 16b-3, unless the Committee
specifically determines otherwise. Every provision of the Plan shall be
administered, interpreted and construed to carry out those intentions, and any
provision that cannot be so administered, interpreted and construed shall to
that extent be disregarded.
<PAGE>
- --------------------------------------------------------------------------------
Solicited on Behalf of the Board of Directors of
ONEOK, Inc.
100 West Fifth Street
Tulsa, Oklahoma 74103-4298
Annual Meeting of Shareholders - April 20, 2000
P LARRY W. BRUMMETT and DAVID L. KYLE, jointly or individually and with
R full power of substitution, are authorized to represent and vote the
O shares of common stock, $0.01 par value, of ONEOK, Inc. held of record
X by the undersigned on February 22, 2000, at the Annual Meeting of
Y Shareholders, and at any adjournment or postponement thereof, as
indicated on the reverse side.
This card also provides voting instructions for shares held in the
ONEOK, Inc. Direct Stock Purchase and Dividend Reinvestment Plan and the
Thrift Plan for Employees of ONEOK, Inc. and Subsidiaries as described
under "Voting Methods" in the accompanying Proxy Statement.
(Change of address/Comments)
Election of four Directors in Class C
-------------------------------
Nominees:
-------------------------------
01. Edwyna G. Anderson
-------------------------------
02. William L. Ford
-------------------------------
03. Bert H. Mackie
04. Gary D. Parker (If you have written in the
above space, please mark the
corresponding box on the reverse
side of this card)
Trustee's Authorization. The Undersigned Authorizes First Chicago Trust
Company of New York, a Division of EquiServe, to tabulate all shares of
Common Stock of the Company credited to the undersigned's account and
the Trustee to vote all shares of Common Stock under The Thrift Plan for
Employees of ONEOK, Inc. and Subsidiaries at the annual meeting in
accordance with the instructions on the reverse side.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
X Please mark your
vote as in this
example.
This Proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder(s).
If no direction is made, this Proxy will be voted FOR Items 1, 2, and 3.
- --------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" proposals 1, 2, and 3.
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. Election of 2. Approval of Common 3. Ratify KPMG LLP as
four Directors. shares of Stock for the principal independent
in Class C ONEOK, Inc. Employee Auditor
(see reverse) Stock Purchase Plan
For, except vote withheld from the following nominee(s):
- -------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Yes, I plan to attend the Annual
Meeting.
Comments/Address
Change.
Please sign exactly as name appears on this proxy card. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If signer is a
corporation, please sign full corporate name by duly authorized officer.
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SIGNATURE(S) DATE
- ---------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
ONEOK, Inc. encourages you to take advantage of a new and convenient way by
which you can vote your shares - by either telephone or the Internet.
. By Telephone. On a touch-tone telephone call 1-877-PRX-VOTE (1-877-779-8683).
Listen to the recorded instructions, use the control number printed in the box
in the upper right corner of this proxy card to access the system, and use your
telephone key pad to vote.
. Over the Internet. Access the web site at http://www.eproxyvote.com/oke and
follow the instructions posted on the web site.
Your vote by telephone or over the Internet authorizes the proxies named on the
front of this proxy card in the same manner as if you marked, signed, dated and
returned the proxy card. If you choose to vote your shares by either of these
electronic means, there is no need for you to mail back your proxy card.
Your vote is important. Thank you for voting.
