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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, 1994
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.
Page No.
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
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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, 1994 and 1993, and the related statements of changes
in net assets available for benefits for each of the two years in
the period ended December 31, 1994. 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, 1994 and 1993, and the changes in net assets
available for benefits for each of the two years in the period
ended December 31, 1994, 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, 1994, and (2) reportable transactions
for the year ended December 31, 1994, 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 1994
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, in 1993 the
Plan changed its method of accounting for distributions payable
to participants who have withdrawn from participation in the
Plan.
DELOITTE & TOUCHE LLP
Dallas, Texas
June 20, 1995
3
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994 AND 1993
ASSETS 1994 1993
- ------- ---------- ---------
<S> <C> <C>
CASH $ 150,254 $ 171,772
COMMON STOCK OF ENSERCH CORPORATION -
At quoted market value (cost:
December 31, 1994, $55,988,421;
December 31, 1993, $82,563,774) 40,208,214 71,254,040
EMPLOYER CONTRIBUTIONS RECEIVABLE 149,231 1,744,314
DIVIDENDS RECEIVABLE 19,598
PARTICIPANT LOANS RECEIVABLE 278,041 579,932
----------- -----------
TOTAL ASSETS 40,805,338 73,750,058
----------- -----------
LIABILITIES
- -----------
ADMINISTRATIVE EXPENSE PAYABLE 9,765 7,360
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $40,795,573 $73,742,698
=========== ===========
<FN>
See notes to financial statements.
</FN>
</TABLE>
4
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1994 AND 1993
1994 1993
---------- ----------
<S> <C> <C>
NET ASSETS, BEGINNING OF YEAR $ 73,742,698 $ 60,600,970
----------- -----------
ADDITIONS (DEDUCTIONS):
Participants' allotments (Notes 2 and 5) 4,394,247 9,215,588
Companies' contributions (decreased
by forfeitures of $44,685 and $35,817,
(Notes 2 and 5) 1,879,909 3,546,878
Dividends on common stock of ENSERCH
Corporation (Note 2) 761,094 873,557
Interest income from participant
loans 25,238 34,708
Unrealized appreciation (depreciation) of
ENSERCH Corporation Common Stock (Note 4) (10,172,726) 8,836,967
Distributions to participants:
Stock distributions (Note 4) (29,000,974) (9,684,745)
Cash distributions (45,326) (67,829)
Cash dividends distributed (737,365) (876,485)
Administrative expenses (48,770) (33,845)
Other (2,452) 355
----------- -----------
Total Additions (Deductions) (32,947,125) 11,845,149
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE (Note 1) 1,296,579
----------- -----------
NET ASSETS, END OF YEAR $ 40,795,573 $ 73,742,698
=========== ===========
<FN>
See notes to financial statements.
</TABLE>
5
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
- ----------------------------------------------
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 - As of December 31,
1994 and 1993, net assets available for benefits included
benefits of $1,839,787 and $3,283,834, respectively, due to
participants who had withdrawn from the Plan.
In 1993, the Plan changed its method of accounting for
distributions payable to participants to comply with the 1993
AICPA Audit and Accounting Guide, Audits of Employee Benefit
Plans. The Guide requires that benefits payable to persons
who have withdrawn from participation in a defined contribu-
tion 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.
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, 1994, and 1993, were $988,704 and $867,845,
respectively, of unclaimed terminated participants' benefits
that have not been allocated to continuing participants.
Through December 31, 1994, 31,086 shares and undistributed
cash of $139,030 have been reallocated to continuing partici-
pants. The Plan remains contingently liable to terminated
participants for unclaimed cash and shares.
Reclassifications - Certain amounts for 1993 have been
reclassified to present such amounts at fair value.
6
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2. THE PLAN
On May 10, 1994, the ENSERCH Corporation Board of Directors
approved the merger of the Plan and the ENSERCH Corporation
Employee Investment Plan (also known as EN$AVE), effective
January 1, 1995, as well as several amendments to the Plan.
The amended Plan contains several enhancements, including
multiple investment options for all employee contributions and
immediate 100% vesting in the Corporation's matching contribu-
tions. The Corporation's matching contribution will continue
to be made in ENSERCH Corporation common stock. The Plan
complies with the requirements of Section 401(k) of the
Internal Revenue Code of 1986 and with applicable provisions
of ERISA.
The following description reflects the status of the Plan
prior to the merger.
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 4,002 and 5,321
employees actively participating in the Plan at December 31,
1994 and 1993, respectively.
Participants' Allotments - Participants may make Regular
Allotments and/or Salary Deferral Allotments up to a combined
maximum of 16% of base pay. The Omnibus Budget Reconciliation
Act of 1993 placed an annual limitation of $150,000, effective
January 1, 1994, on the base pay which can be used in comput-
ing benefits for participants under the Plan. For the plan
year 1993 the limitation was $235,840. 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 the Tax
Reform Act of 1986, Salary Deferral Allotments and Supplemen-
tal Salary Deferral Allotments are subject to a separate
annual limitation of $9,240. The limitation for plan year
1993 was $8,994.
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.
7
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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.
Termination of Plan - Upon termination of the Plan, all
shares of stock purchased for the participant's account, any
cash held in the participant's 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.
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
eligibility.
8
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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, January 1, 1993 and January 1, 1994.
The Corporation believes these amendments meet the require-
ments 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 participants at the time such amounts are distributed.
9
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4. TRANSACTIONS IN COMMON STOCK OF ENSERCH CORPORATION
The following information summarizes changes in the number of
shares, cost, quoted market value, and appreciation (deprecia-
tion) of the investment in common stock of ENSERCH Corpora-
tion.
<TABLE>
<CAPTION>
Quoted
Market Appreciation
Shares Cost Value (Depreciation)
--------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
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)
Change during 1994
plan year:
Acquired 530,568 8,183,576 8,183,576
Sold for or
distributed to
participants (1,848,300) (34,693,948) (29,000,974) 5,692,974
Sold to fund
participant
loans (3,649) (64,981) (55,702) 9,279
Unrealized
depreciation (10,172,726) (10,172,726)
--------- ----------- ----------- -----------
December 31, 1994 3,063,483 $ 55,988,421 $ 40,208,214 $(15,780,207)
========= =========== =========== ===========
</TABLE>
10
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5. CONTRIBUTIONS
Companies' contributions, after giving effect to forfeitures,
and participants' allotments are as follows:
<TABLE>
<CAPTION>
1994 1993
----------------------------- -----------------------------
Companies' Participants' Companies' Participants'
Contributions Allotments Contributions Allotments
<S> <C> <C> <C> <C>
ENSERCH
Corporation $1,479,077 $3,262,664 $1,509,943 $3,401,653
Ebasco Services
Incorporated 165,190 556,305 1,782,548 5,188,218
Enserch
Exploration,
Inc. 235,642 575,278 254,387 625,717
---------- ---------- ---------- ----------
Total $1,879,909 $4,394,247 $3,546,878 $9,215,588
========== ========== ========== ==========
</TABLE>
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 actual 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>
1994 1993
------- -------
<S> <C> <C>
Aggregate
proceeds $ 55,702 $479,348
Aggregate cost 64,981 460,154
-------- --------
Net realized
gains (losses) $ (9,279) $ 19,194
======== ========
</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, received
a distribution either in the form of a stock certificate or
cash.
11
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SUPPLEMENTAL SCHEDULES
12
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1994
Identity of Issue Description of Investment Cost Fair Value
- ---------------------- ------------------------------ ----------- -----------
<S> <C> <C> <C>
ENSERCH Corporation * 3,063,483 shares, par value
common stock of $4.45 per $55,988,421 $40,208,214
share
Plan participant Interest Rate - At Prime
loans * (on date of loan) which
ranged from 6% - 12%
Maturity Dates - Various -
from February 1995 to
October 1999
Term of Loans - Not less
than one year or more
than five years $ 278,041 $ 278,041
<FN>
* Party-in-Interest
</TABLE>
13
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EMPLOYEE STOCK PURCHASE PLAN OF ENSERCH CORPORATION
AND PARTICIPATING SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1994
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 * 38 $8,183,576 55 $29,056,676 $ (5,702,253)
<FN>
* Party-in-Interest
</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 26, 1995 By /s/ W. T. Satterwhite
-----------------------------
W. T. Sattershite, Member of
the Employee Stock Purchase
Plan Committee
15
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Exhibit A
INDEPENDENT AUDITORS' CONSENT
ENSERCH Corporation:
We consent to the incorporation by reference in Registration
Statement No. 33-47911 of ENSERCH Corporation on Form S-8 of
our report dated June 20, 1995, appearing in this Annual
Report on Form 11-K of the Employee Stock Purchase Plan of
ENSERCH Corporation and Participating Subsidiary Companies
for the year ended December 31, 1994.
DELOITTE & TOUCHE LLP
Dallas, Texas
June 26, 1995
16
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