<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission file number 1-3183
EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
(Full Title of Plan)
ENSERCH CORPORATION
(Name of Issuer of Securities Held Pursuant to the Plan)
ENSERCH Center, 300 South St. Paul Street, Dallas, Texas 75201
(Address of Plan and Principal Executive Office of Issuer)
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REQUIRED INFORMATION
The required financial statements and other information required by
Form 11-K are set forth under the headings listed below at the page
numbers indicated.
<TABLE>
<CAPTION>
Page No.
<S> <C>
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . . . 2
Statements of Net Assets Available for Benefits . . . . . . . . . . . 4
Statements of Changes in Net Assets Available
for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 6
Supplemental Schedules:
Assets Held for Investment . . . . . . . . . . . . . . . . . . .13
Reportable Transactions . . . . . . . . . . . . . . . . . . . . .14
Schedules - Schedule I, II and III have been
omitted because of the absence of the
conditions under which they are required
or because the required information is
included in the financial statements or
notes thereto.
Exhibit A - Consent of Independent Public Accountants . . . . . . . .16
</TABLE>
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INDEPENDENT AUDITORS' REPORT
Employee Stock Purchase Plan Committee of ENSERCH
Corporation and Participating Subsidiary Companies:
We have audited the accompanying statements of net assets available
for benefits of the Employee Stock Purchase Plan of ENSERCH
Corporation and Participating Subsidiary Companies as of
December 31, 1993 and 1992, and the related statements of changes
in net assets available for benefits for each of the three years in
the period ended December 31, 1993. These financial statements are
the responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the
Plan at December 31, 1993 and 1992, and the changes in net assets
available for benefits for each of the three years in the period
ended December 31, 1993, in conformity with generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The accompanying
supplemental schedules of (1) assets held for investment at
December 31, 1993, and (2) reportable transactions (transactions in
excess of 5% of the fair value of plan assets) for the year ended
December 31, 1993, are presented for the purpose of additional
analysis and are not a required part of the basic financial
statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing
procedures applied in our audit of the basic 1993 financial
statements and, in our opinion, are fairly stated in all material
respects when considered in relation to the basic financial
statements taken as a whole.
2
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As discussed in Note 1 to the financial statements, the Plan
changed its method of accounting for distributions payable to
participants who have withdrawn from participation in the Plan.
DELOITTE & TOUCHE
Dallas, Texas
June 10, 1994
3
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1993 AND 1992
- - ------------------------------------------------------------------------------
<CAPTION>
ASSETS 1993 1992
- - ------ ----------- ------------
<S> <C> <C>
CASH $ 171,772 $ 175,386
COMMON STOCK OF ENSERCH CORPORATION -
At quoted market value (cost:
December 31, 1993, $82,563,774;
December 31, 1992, $79,503,775) 71,254,040 59,277,823
EMPLOYER CONTRIBUTIONS RECEIVABLE 1,744,314 2,050,103
PARTICIPANT LOANS RECEIVABLE 579,932 419,255
----------- -----------
TOTAL ASSETS 73,750,058 61,922,567
----------- -----------
LIABILITIES
- - -----------
ADMINISTRATIVE EXPENSE PAYABLE 7,360 25,018
DISTRIBUTIONS PAYABLE TO PARTICIPANTS (Note 1) - 1,296,579
----------- -----------
TOTAL LIABILITIES 7,360 1,321,597
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $73,742,698 $60,600,970
=========== ===========
<FN>
See notes to financial statements.
</TABLE>
4
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
- - ------------------------------------------------------------------------------------------
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
NET ASSETS, BEGINNING OF YEAR $ 60,600,970 $ 52,700,504 $ 72,771,940
------------ ------------ ------------
ADDITIONS (DEDUCTIONS):
Participants' allotments (Notes 2 and 5) 9,215,588 9,532,285 8,273,750
Companies' contributions (decreased
by forfeitures of $35,817, $40,036
and $48,676) (Notes 2 and 5) 3,546,878 3,450,169 2,952,634
Dividends on common stock of ENSERCH
Corporation (Note 2) 873,557 3,245,024 2,921,715
Interest income from participant
loans 34,708 35,533 53,499
Net appreciation (depreciation) of
ENSERCH Corporation Common Stock (Note 4) 8,935,412 3,559,475 (23,308,324)
Distributions to participants:
Stock distributions at cost (Note 1) (9,783,190) (7,654,506) (9,184,869)
Cash distributions (67,829) (40,332) (13,084)
Cash dividends distributed (876,485) (3,241,356) (2,891,339)
Change in accrued distributions - (931,401) 1,206,488
Administrative expenses (33,845) (47,046) (72,402)
Other 355 (7,379) (9,504)
------------ ------------ ------------
Total Additions (Deductions) 11,845,149 7,900,466 (20,071,436)
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE (Note 1) 1,296,579 - -
------------ ------------ ------------
NET ASSETS, END OF YEAR $ 73,742,698 $ 60,600,970 $ 52,700,504
============ ============ ============
<FN>
See notes to financial statements.
</TABLE>
5
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<PAGE>
EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The accounts of the Employee Stock Purchase Plan of ENSERCH
Corporation and Participating Subsidiary Companies (the
"Plan") are maintained on the accrual basis of accounting.
Investments are carried at quoted market value (closing prices
as reported by the Composite Tape Associations).
Distributions Payable to Participants - In 1993, the Plan
changed its method of accounting for distributions payable to
participants to comply with the 1993 AICPA Audit and Account-
ing Guide, Audits of Employee Benefit Plans. The new guidance
requires that benefits payable to persons who have withdrawn
from participation in a defined contribution plan remain as a
part of the net assets available for benefits rather than be
recorded as a liability of the Plan. The effect of this
change in accounting increased net assets in 1993 by
$1,296,579 and is reflected in the accompanying statement of
changes in net assets available for benefits as the cumulative
effect of a change in accounting principle. As of December
31, 1993, net assets available for benefits included benefits
of $3,283,834 due to participants who have withdrawn from
participation in the Plan.
Stock Distributions at Cost - Amounts represent actual cost of
stock previously allocated to each withdrawing participant's
account and for the years 1993, 1992 and 1991 includes
$1,296,579, $365,108 and $1,571,667, respectively, of distri-
butions payable to participants who have withdrawn from the
Plan, which were accrued at the end of the prior year and paid
in the current year.
Reallocation of Unclaimed Terminated Participants' Accounts -
The Plan provides for reallocation of amounts payable to
terminated participants whom the Plan administrators have been
unable to locate for more than one year from the date of
termination. Included in net assets available for benefits as
of December 31, 1993, and 1992, were $867,845 and $788,987,
respectively, of unclaimed terminated participants' benefits
that have not been allocated to continuing participants.
Through December 31, 1993, 31,086 shares and undistributed
cash of $139,030 have been reallocated to continuing partici-
pants. The Plan remains contingently liable to terminated
participants for unclaimed cash and shares.
Certain amounts in the 1992 and 1991 financial statements have
been reclassified to conform with the 1993 presentation.
6
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2. THE PLAN
General - Participation in the Plan is offered to all full-
time employees of ENSERCH Corporation and participating
subsidiary companies ("the Companies") who have completed at
least one year of service. There were 5,321, 8,855 and 8,601
employees actively participating in the Plan at December 31,
1993, 1992 and 1991, respectively.
Participants' Allotments - Participants may make Regular
Allotments and/or Salary Deferral Allotments up to a combined
maximum of 16% of base pay. The Tax Reform Act of 1986
("TRA '86") placed an annual limitation of $235,840, effective
January 1, 1993, on the base pay which can be used in comput-
ing benefits for participants under the Plan. The Omnibus
Budget Reduction Act of 1993, subsequently reduces the annual
limitation of recognizable pay for determining benefits in the
Plan to $150,000, effective January 1, 1994. The aggregate of
all allotments under the plan, including Supplemental Salary
Deferral Allotments, is subject to adjustment for participa-
tion in other defined contribution plans, and the total amount
of a participant's allotments and contributions under all
plans may not exceed 25% of total compensation. Under
TRA '86, Salary Deferral Allotments and Supplemental Salary
Deferral Allotments are subject to a separate annual limita-
tion of $8,994, effective January 1, 1993.
The Plan is required to comply with two nondiscrimination
tests imposed by Sections 401(k) and 401(m) of the Internal
Revenue Code, which limit the average percentage of pay that
highly compensated employees may allot to the Plan to the
average percentage of pay being allotted by non-highly
compensated employees, including company matching contribu-
tions.
Companies' Contributions - The Companies' matching contribu-
tions are based on the total of the participants' Regular and
Salary Deferral Allotments, but not Supplemental Salary
Deferral Allotments, with the maximum employee allotments
eligible for matching ranging from 3% to 6%, depending on
length of service. The Companies' matching contributions as
a percentage of employee allotments range from 30% to 60%,
depending on length of service. Employees' vested interests
in the Companies' contributions range from 30% for employees
with three years of applicable service, as defined, to 100%
for employees with seven or more years of applicable service.
Participants' allotments and Companies' contributions are
credited to individual accounts and are invested by the
trustee in common stock of ENSERCH Corporation. Upon
termination of the Plan, all shares of stock purchased for the
participant's account, any cash held in the participant's
7
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account, and 100% of the shares in the individual's Company
account without regard to earned vesting service will be
distributed to the participant.
Dividends - Cash dividends paid on common stock held in the
Plan are distributed directly to participants. Participants
may elect to make Supplemental Salary Deferral Allotments in
an amount equal to the dividends distributed under the Plan.
This allows participants to effectively defer the taxable
income from the dividends distributed directly to them.
In February 1993, ENSERCH Corporation announced a reduction in
the quarterly dividend rate payable to ENSERCH common share-
holders from 20 cents per share to 5 cents per share.
Participant Loans - After participants have made Salary
Deferral Allotments for at least 18 months, they may apply for
a loan from their Salary Deferral Allotment Account. Under
the provisions of the Plan, participants may borrow up to 50%
of the market value of the shares in their account attribut-
able to salary deferral allotments; however, the loan may not
exceed $50,000. The interest rate on the loan is equal to the
prime interest rate of Bank One Texas, N. A., that is in
effect on the date the loan is made. The funds to be loaned
are generated by the sale of whole shares of stock in the
participant's Salary Deferral Allotment Account. The maximum
term of a loan may not exceed 5 years, or the earlier of
severance from service or withdrawal of the participant.
Investment Diversification - Participants who have attained
age 55 and completed ten years of participation in the Plan
are eligible to withdraw a percentage of the stock allocated
to their account after December 31, 1986. Such stock (or
cash) withdrawn may be transferred to a self-directed rollover
Individual Retirement Account. The percentage that may be
withdrawn is 25% per year during the first five years of
eligibility and 50% in the sixth (or final) year of eligibili-
ty.
3. TAX STATUS OF THE PLAN
ENSERCH Corporation has been advised by the Internal Revenue
Service that the Plan, as amended to June 19, 1990, meets the
requirements of Section 401(a) of the Internal Revenue Code.
The Board of Directors of ENSERCH Corporation approved
amendments to the Plan, which were effective September 10,
1991, February 11, 1992 and January 1, 1994. The Corporation
believes these amendments meet the requirements of Section
401(a) and that the Plan continues to be a qualified plan
within the meaning of Section 401(a). Employer contributions
and dividends received constitute taxable income to partici-
pants at the time such amounts are distributed.
8
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4. TRANSACTIONS IN COMMON STOCK OF ENSERCH CORPORATION
The following information summarizes the number of shares,
cost, quoted market value, and unrealized appreciation
(depreciation) of investment in common stock of ENSERCH
Corporation.
<TABLE>
<CAPTION>
Quoted Unrealizd
Market Appreciation
Shares Cost Value (Depreciation)
--------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
December 31, 1990 3,558,586 $ 72,627,449 $ 72,061,366 $ (566,083)
--------- ------------ ------------ ------------
Change during 1991
plan year:
Acquired 680,139 12,108,967 12,108,967 -
Sold for or
distributed to
participants (449,582) (9,191,085) (8,551,923) 639,162
Sold to fund
participant
loans (9,469) (193,177) (172,866) 20,311
Unrealized
depreciation - - (23,947,486) (23,947,486)
--------- ------------ ------------ ------------
December 31, 1991 3,779,674 75,352,154 51,498,058 (23,854,096)
--------- ------------ ------------ ------------
Change during 1992
plan year:
Acquired 849,309 12,125,568 12,125,568 -
Sold for or
distributed to
participants (415,602) (7,654,506) (6,057,735) 1,596,771
Sold to fund
participant
loans (16,721) (319,441) (250,772) 68,669
Unrealized
appreciation - - 1,962,704 1,962,704
--------- ------------ ------------ ------------
December 31, 1992 4,196,660 79,503,775 59,277,823 (20,225,952)
--------- ------------ ------------ ------------
Change during 1993
plan year:
Acquired 745,980 13,303,343 13,303,343 -
Sold for or
distributed to
participants (532,515) (9,783,190) (9,684,745) 98,445
Sold to fund
participant
loans (25,261) (460,154) (479,348) (19,194)
Unrealized
appreciation - - 8,836,967 8,836,967
--------- ------------ ------------ ------------
December 31, 1993 4,384,864 $ 82,563,774 $ 71,254,040 $(11,309,734)
========= ============ ============ ============
</TABLE>
9
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5. CONTRIBUTIONS
Companies' contributions, after giving effect to forfeitures,
and participants' allotments are as follows:
<TABLE>
<CAPTION>
1993 1992
--------------------------- ---------------------------
Companies' Participants' Companies' Participants'
Contributions Allotments Contributions Allotments
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
ENSERCH
Corporation $1,509,943 $3,401,653 $1,408,248 $3,306,075
Ebasco Services
Incorporated 1,782,548 5,188,218 1,782,327 5,546,233
Enserch
Exploration,
Inc. 254,387 625,717 259,594 679,977
---------- ---------- ---------- ----------
Total $3,546,878 $9,215,588 $3,450,169 $9,532,285
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
1991
----------------------------
Companies' Participants'
Contributions Allotments
------------- -------------
<S> <C> <C>
ENSERCH
Corporation $1,238,771 $2,794,343
Ebasco Services
Incorporated 1,386,651 4,655,241
Enserch
Exploration,
Inc. 327,212 824,166
---------- ----------
Total $2,952,634 $8,273,750
========== ==========
</TABLE>
10
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6. REALIZED GAINS AND LOSSES FROM THE SALE OF INVESTMENTS
The Plan has made loans to participants which were funded by
the sale of whole and fractional shares of ENSERCH Corpora-
tion common stock held in the participants' Salary Deferral
Allotment Accounts. The cost of the shares sold is based on
the average cost of the shares held in the participant's
Salary Deferral Allotment Account at the date of sale. The
aggregate proceeds, cost and net realized gains (losses) on
the sale of these shares are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Aggregate
Proceeds $479,348 $250,772 $172,866
Aggregate Cost 460,154 319,441 193,177
-------- -------- --------
Net realized
gains (losses) $ 19,194 $(68,669) $(20,311)
======== ======== ========
</TABLE>
7. WITHDRAWAL OF EBASCO EMPLOYEES
In December 1993, ENSERCH Corporation completed the sale of
the principal operating assets of Ebasco Services Incorpo-
rated. Plan participants whose employment with Ebasco ended
as a result of the sale are no longer eligible to participate
in the Plan. However, according to the terms of the Plan,
those with an account value in excess of $3,500 may elect to
leave their shares in the Plan. Those with an account value
of less than $3,500, and others electing to withdraw, will
receive a distribution either in the form of a stock certifi-
cate or cash.
8. SUBSEQUENT EVENTS
On May 10, 1994, the ENSERCH Corporation Board of Directors
approved the merger of the Plan and the Employee Investment
Plan (also known as EN$AVE), as well as several amendments to
the Plan. The amended Plan will contain several enhancements,
including multiple investment options for all employee
contributions and immediate 100% vesting in the Corporation's
matching contributions. The Corporation's matching contribu-
tion will continue to be made in ENSERCH Corporation common
stock. Upon the merger, the Plan will comply with the
requirements of Section 401(k) of the Internal Revenue Code of
1986.
11
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SUPPLEMENTAL SCHEDULES
12
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1993
- - ------------------------------------------------------------------------------
<CAPTION>
Identity of Issue Description of Investment Cost Fair Value
- - ----------------- ------------------------- ---- ----------
<S> <C> <C> <C>
ENSERCH Corporation 4,384,864 shares, par value
common stock of $4.45 per share $82,563,774 $71,254,040
Plan participant Interest Rate - At Prime
loans ranging from 6% - 12.5%
Maturity Dates - Various -
from February 1994 to
October 1998
Term of Loans - Not less
than one year or more
than five years $ 579,932 $ 579,932
</TABLE>
13
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1993
- - ---------------------------------------------------------------------------------------
<CAPTION>
Transactions involving an amount in excess of 5% of the fair value of plan assets:
Purchases Sales
---------------------- -----------------------------------
Transactions by Number of Number of Gain
Security Transactions Amount Transactions Amount (Loss)
- - --------------- ------------ ------ ------------ ------ ------
Series of Transactions
- - ----------------------
<S> <C> <C> <C> <C> <C>
ENSERCH Corporation
common stock 25 $13,303,343 114 $10,164,093 $ 19,194
</TABLE>
14
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees (or other persons who administer the
employee benefit plan) have duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly
authorized.
EMPLOYEE STOCK PURCHASE PLAN
Date: June 29, 1994 By /s/ D. W. Biegler
-----------------------------
D. W. Biegler, Member of
the Employee Stock Purchase
Plan Committee
15
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Exhibit A
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
ENSERCH Corporation:
We hereby consent to the incorporation by reference in Post
Effective Amendment No. 1 to Registration Statement No. 33-
12983 on Form S-8 of our report dated June 10, 1994, appearing
in the 1993 Annual Report on Form 11-K of the Employee Stock
Purchase Plan of ENSERCH Corporation and Participating
Subsidiary Companies.
DELOITTE & TOUCHE
Dallas, Texas
June 29, 1994
