<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 Section 240.14a-11(c) or Section 240.14a-12
ENSERCH CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ENSERCH CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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>
LOGO
ENSERCH CENTER
300 SOUTH ST. PAUL
DALLAS, TEXAS 75201-5598
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of ENSERCH Corporation:
The Annual Meeting of the Shareholders of ENSERCH Corporation will be held
at 301 South Harwood Street, Dallas, Texas, on Tuesday, May 14, 1996, at 10
a.m., for the following purposes:
1. To elect a Board of Directors;
2. To ratify the Board of Directors' appointment of Deloitte & Touche as
independent auditors of the Corporation;
3. To consider and act upon such other business as may be properly
presented to the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business March 15, 1996, as
the record date for determination of the shareholders of Common Stock entitled
to notice of and to vote at the meeting or any adjournment thereof.
A form of Proxy, a Proxy Statement, and the Corporation's 1995 Annual Report
to Shareholders accompany this Notice of Annual Meeting. The Proxy covers all
shares of Common Stock held by you directly and all shares participating in
the Corporation's Dividend Reinvestment Plan.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE ANNUAL MEETING IN PERSON, PLEASE
PROMPTLY SIGN THE ACCOMPANYING PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
Michael G. Fortado
Vice President and Corporate
Secretary
March 29, 1996
<PAGE>
LOGO
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is being mailed on or about March 29, 1996, to
shareholders in connection with the solicitation of proxies on behalf of the
Board of Directors of the Corporation for use at the Annual Meeting of
Shareholders to be held on May 14, 1996, at 301 South Harwood Street, Dallas,
Texas. The persons named as proxies were selected by the Board of Directors of
the Corporation. The enclosed proxy may be revoked at any time before it is
exercised by filing with the Corporate Secretary an instrument revoking it; by
submitting a subsequently dated proxy; or by appearing at the meeting and
voting in person.
If you do not expect to be present at the Annual Meeting in person, please
promptly sign the accompanying proxy and return it in the enclosed envelope.
The cost of preparing, assembling and mailing the Notice of Annual Meeting,
Proxy Statement, and Proxy, and the cost of further solicitation hereinafter
referred to are to be borne by the Corporation. Solicitations may further be
made by directors, officers, and regular employees of the Corporation, without
additional compensation, by use of the mails, telephone, facsimile
transmission, or by personal interview. The Corporation has retained Hill &
Knowlton, Inc., New York, New York, to assist in the solicitation at a cost of
$6,500 plus expenses.
Holders of the Corporation's Common Stock of record at the close of business
on March 15, 1996, (the "Record Date") are entitled to vote at the meeting. On
the Record Date, the Corporation had outstanding 68,635,469 shares of Common
Stock having a par value of $4.45 per share. Each share of Common Stock is
entitled to vote at the forthcoming Annual Meeting of Shareholders.
The holders of a majority of the shares issued and outstanding and entitled
to vote, present in person or represented by proxy, will constitute a quorum
for the transaction of business at the Annual Meeting. The affirmative vote of
the holders of a majority of the shares present in person or represented by
proxy and entitled to vote at the meeting is required for each item set forth
in the Notice of Annual Meeting.
The inspectors of election will treat shares represented by proxies that
reflect abstentions as shares that are present and entitled to vote both for
purposes of determining the presence of a quorum and for the purposes of
determining the outcome of any matter submitted to the shareholders for a
vote. The inspectors of election will treat broker non-votes on any matter as
to which the broker has indicated on the proxy that it does not have
discretionary authority to vote as shares not entitled to vote with respect to
that matter. However, such shares will be considered present and entitled to
vote for quorum purposes so long as they are entitled to vote on other
matters.
The Corporation had outstanding on the Record Date 100,000 shares of
Adjustable Rate Cumulative Preferred Stock, Series E, and 75,000 shares of
Adjustable Rate Cumulative Preferred Stock, Series F, having no par value. The
holders of the Preferred Stock do not have voting rights except under certain
conditions which are not now present.
1
<PAGE>
ELECTION OF DIRECTORS
Directors are elected to hold office until the next annual election and
until their successors shall have been duly elected and shall qualify. It is
intended that the votes of the persons designated as proxies in the
accompanying proxy will be cast for the nominees named below unless contrary
instructions are set forth on the proxy. In the event any nominee for director
is not available for election as contemplated due to circumstances not now
known, it is the intention of the proxies named in the enclosed proxy to vote
for such other person as the Board of Directors may nominate. In accordance
with the Corporation's Bylaws, the Board of Directors has fixed the number of
directors of the Corporation to be nine. Each of the nominees was elected a
director of the Corporation at the last meeting of shareholders.
The following biographical information sets forth the name, age, principal
occupation or employment during the past five years, Board committee
membership, certain other directorships held by each nominee for director, and
the period during which he or she has served as a director of the Corporation.
D. W. BIEGLER
Chairman and President, Chief Executive Officer, ENSERCH Corporation
Mr. Biegler, age 49, is Chairman and President, Chief Executive Officer of
the Corporation. Prior to his election to his present position in 1993, he
served Lone Star Gas Company, the utility division of the Corporation, as
President from 1985 and as Chairman from 1989 and was elected President and
Chief Operating Officer of the Corporation in 1991. Mr. Biegler is a Director
of Enserch Exploration, Inc., Texas Commerce Bank National Association, and
Trinity Industries, Inc. He has been a Director of the Corporation since 1991.
FREDERICK S. ADDY
Retired Executive Vice President, Amoco Corporation
Mr. Addy, age 64, is retired Executive Vice President, Chief Financial
Officer, and Director of Amoco Corporation, an international integrated oil
and gas company. Mr. Addy has been a Director of the Corporation since 1994
and is Chairman of the Audit Committee and a member of the Compensation
Committee. He is a Director of Enserch Exploration, Inc.; Baker, Fentress &
Company; and The Pierpont Funds.
B. A. BRIDGEWATER, JR.
Chairman, President and Chief Executive Officer, Brown Group, Inc.
Mr. Bridgewater, age 62, is Chairman, President and Chief Executive Officer,
and Director, Brown Group, Inc., a footwear company. Mr. Bridgewater has been
a Director of the Corporation since 1987 and serves as Chairman of the Policy
Committee and is a member of the Audit Committee. He is a Director of Enserch
Exploration, Inc., Boatmen's Bancshares, Inc., FMC Corporation, and McDonnell
Douglas Corporation.
ODIE C. DONALD
President, BellSouth Mobility, Inc.
Mr. Donald, age 46, is President, BellSouth Mobility, Inc., a cellular
telecommunications company. Mr. Donald has served in his present position
since 1992. He previously served BellSouth as Vice President, Marketing and
various other positions. He has been a Director of the Corporation since 1995
and is a member of the Compensation Committee and the Directors' Nominating
Committee.
MARVIN J. GIROUARD
President and Chief Operating Officer, Pier 1 Imports, Inc.
Mr. Girouard, age 56, is President and Chief Operating Officer, and
Director, Pier 1 Imports, Inc. Mr. Girouard has been a Director of the
Corporation since 1992 and is Chairman of the Compensation Committee and a
member of the Audit Committee.
2
<PAGE>
J. M. HAGGAR, JR.
Retired Chairman of the Board, Haggar Apparel Company
Mr. Haggar, age 71, is retired Chairman of the Board, Haggar Apparel
Company, a manufacturer of apparel for men. Mr. Haggar has been a Director of
the Corporation since 1988 and is Chairman of the Directors' Nominating
Committee and a member of the Policy Committee. He is a Director of Brinker
International, Inc.
THOMAS W. LUCE, III
Partner, Hughes & Luce
Mr. Luce, age 55, is a partner of Hughes & Luce, a law firm he co-founded in
1973. From October 1991 to July of 1992, he served as Chairman and Chief
Executive Officer of First Southwest Company, a diversified investment banking
services firm. Mr. Luce has been appointed by Governors of Texas to four major
state positions. He is a Director of Dell Computer Corporation. He has been a
Director of the Corporation since 1995 and is a member of the Compensation
Committee and the Policy Committee.
W. C. MCCORD
Retired Chairman and Chief Executive Officer, ENSERCH Corporation
Mr. McCord, age 67, is retired Chairman and Chief Executive Officer of the
Corporation. Mr. McCord has been a Director of the Corporation since 1970 and
is a member of the Audit Committee and the Policy Committee. He is a Director
of Lone Star Technologies, Inc. and Pool Energy Services Co.
DIANA S. NATALICIO
President, University of Texas at El Paso
Dr. Natalicio, age 56, is President, University of Texas at El Paso. Dr.
Natalicio has been a Director of the Corporation since 1993 and is a member of
the Directors' Nominating Committee and the Audit Committee. She is a Director
of Sandia Corporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Corporation is aware of the following beneficial owners, as of December
31, 1995, of more than 5% of its Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENT
OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------- ------------------ --------
<S> <C> <C>
Wellington Management Company 6,411,130(/1/) 9.4%
75 State Street
Boston, MA 02109
FMR Corp. 5,081,701(/2/) 7.4%
82 Devonshire Street
Boston, MA 02109-3614
Travelers Group 3,670,513(/3/) 5.4%
388 Greenwich Street
New York, NY 10013
Prudential Insurance Company of America 3,664,300(/4/) 5.4%
751 Broad Street
Newark, NJ 07102-3777
</TABLE>
- ----------
(1) These common shares were reported as being owned primarily by The
Vanguard/Windsor Fund, Inc. of the Vanguard Group of Investment Companies
whom Wellington Management Company serves as investment adviser.
Wellington Management Company reported the beneficial ownership of 601,100
shares with shared voting power and 6,411,130 shares with shared
dispositive power. The shares beneficially owned by The Vanguard/Windsor
Fund, Inc. include 5,467,700 shares with sole voting power and shared
dispositive power.
3
<PAGE>
(2) Includes 161,776 shares with sole voting power and 5,081,701 shares with
sole dispositive power.
(3) Includes 3,487,110 shares held by Smith Barney Holdings Inc., a Travelers'
subsidiary. Both Travelers and Smith Barney have shared voting and
dispositive power over their beneficially owned shares.
(4) Includes 106,993 shares with sole voting and dispositive power, 3,420,507
shares with shared voting power and 3,557,307 shares with shared
dispositive power.
STOCK OWNERSHIP OF MANAGEMENT AND BOARD OF DIRECTORS
Each director, the named executive officers, and all directors and executive
officers as a group, reported beneficial ownership as of the Record Date of
Common Stock of the Corporation and Enserch Exploration, Inc. as follows:
<TABLE>
<CAPTION>
ENSERCH CORPORATION ENSERCH EXPLORATION, INC.
-------------------------------- ----------------------------------
NUMBER OF NUMBER OF
SHARES SHARES
BENEFICIALLY PERCENT OF BENEFICIALLY PERCENT OF
NAME OWNED(/1/) CLASS OWNED(/2/) CLASS
---- ------------ ---------- -------------- -----------
<S> <C> <C> <C> <C>
D. W. Biegler 293,029(/3/) * 29,816(/4/) *
Frederick S. Addy 4,143 * 2,000 *
B. A. Bridgewater, Jr. 4,643 * 1,000 *
Odie C. Donald 503 * 0
Marvin J. Girouard 2,843 * 0
J. M. Haggar, Jr. 4,131 * 0
Thomas W. Luce, III 1,500 * 0
W. C. McCord 314,249(/3/) * 0
Diana S. Natalicio 2,143 * 0
G. R. Bryan 78,843(/3/)(/5/) * 0
M. T. Hunter 20,031 * 0
W. T. Satterwhite 125,485(/3/) * 5,625(/4/) *
R. B. Williams 114,673(/3/) * 0
S. R. Singer 133,362(/3/) * 4,000(/4/) *
All Directors and Execu-
tive
Officers as a Group 1,137,009(/3/) 1.66 48,792(/4/) *
</TABLE>
- ----------
*Less than 1%
(1) The number of shares owned includes shares held in the Corporation's
Employee Stock Purchase and Savings Plan and restricted shares awarded
under the ENSERCH Corporation 1991 Stock Incentive Plan, where applicable.
(2) The number of shares owned includes shares held in the Corporation's
Employee Stock Purchase and Savings Plan and restricted shares awarded
under the Enserch Exploration, Inc. 1994 Stock Incentive Plan, where
applicable.
(3) The totals include shares subject to stock options exercisable within 60
days of the Record Date: D. W. Biegler 201,250 shares; W. C. McCord
300,000 shares; G. R. Bryan 40,525 shares; W. T. Satterwhite 79,775
shares; R. B. Williams 77,800 shares; S. R. Singer 126,806 shares; and all
directors and executive officers as a group 836,843 shares.
(4) The totals include shares subject to stock options exercisable within 60
days of the Record Date: D. W. Biegler 3,750 shares; W. T. Satterwhite 625
shares; S. R. Singer 4,000 shares; and all directors and executive
officers as a group 8,687 shares.
(5) Of the shares listed, 64 are shares deemed beneficially owned by Mr. Bryan
because of sole or shared voting or investment power.
4
<PAGE>
BOARD COMMITTEES
The standing committees of the Board of Directors are the Audit Committee,
Directors' Nominating Committee, Compensation Committee, and Policy Committee.
The Board of Directors has delegated to the Audit Committee the primary
function of oversight of the entire financial reporting and internal control
processes of the Corporation which includes meeting periodically with the
independent and internal auditors; reviewing annual financial statements and
the independent auditors' work and report thereon; reviewing the independent
auditors' report on internal controls and related matters; selecting and
recommending to the Board of Directors the appointment of the independent
auditors, subject to the ratification by shareholders; reviewing the letter of
engagement and statement of fees which pertain to the scope of the annual
audit and certain special audit and non-audit work which may be required or
suggested by the independent auditors; receiving and reviewing information
pertaining to internal audits; directing and supervising special
investigations; and performing any other functions deemed appropriate by the
Board of Directors. The Audit Committee met three times during 1995.
The Directors' Nominating Committee was created to receive and initiate
recommendations of potential candidates, including existing Board members, for
election to the Board of Directors. The Committee is also responsible for
making recommendations to the Board concerning the size of the Board;
qualification guidelines for Directors; and continuation of Board membership
of individual Directors who change their business responsibility after having
been elected to the Board. The Committee will consider persons recommended by
shareholders as potential future nominees for the Board of Directors if
shareholders submit the names of such persons in writing to the Chairman of
the Directors' Nominating Committee in care of the Corporate Secretary of the
Corporation together with a full statement of their qualifications and an
indication of their willingness to serve. The Directors' Nominating Committee
met two times in 1995.
The function of the Compensation Committee is to establish, approve, or
recommend to the Board of Directors, in those instances where its approval is
required, the compensation and major items related to compensation of
directors and of officers and other employees above a specified salary grade.
The Committee also administers the Corporation's stock option and restricted
stock plans. The Compensation Committee met four times in 1995.
The responsibilities of the Policy Committee are to review the Corporate
Statement of Policy and recommend changes that are considered appropriate; to
review the Corporation's procedure for communicating policies, and confirm
that steps to monitor and ensure compliance have been taken; to review the
Corporation's Annual Compliance Reports for its Compliance Programs for
Environmental, Antitrust, Insider Trading, Antiboycott, Foreign Corrupt
Practices Act, and Employment and Human Resources; to review the Corporation's
Corporate Governance Principles and recommend changes that are considered
appropriate; and to review areas of potential conflict of interest between the
Corporation and its executives. The Policy Committee met two times in 1995.
During 1995, the Board of Directors met eight times. No director attended
fewer than 75 percent of the aggregate of the total number of Board meetings
and meetings of a committee on which he or she served.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On the recommendation of the Audit Committee, the Board of Directors has,
subject to ratification by the shareholders, appointed Deloitte & Touche as
Independent Certified Public Accountants of the Corporation for the year 1996.
It is intended that the persons named in the accompanying proxy will vote to
ratify such appointment.
Deloitte & Touche has served continuously as auditors of the Corporation
since its formation. Neither the firm nor any of its members has any direct
financial interest or any material indirect financial interest in the
Corporation or any of its affiliates. A representative of Deloitte & Touche is
expected to be present at the annual meeting and will be provided the
opportunity to make a statement and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF DELOITTE & TOUCHE AS INDEPENDENT AUDITORS.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth annual compensation, long-term compensation, and
all other compensation paid by the Corporation and its subsidiaries for
services rendered during the periods shown for each individual serving as the
chief executive officer, each of the other four most highly compensated
executive officers serving in such capacity at the end of 1995, and one
executive officer who retired before year-end (the "named executive
officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------- --------------------- ----------
OTHER RESTRICTED SECURITIES
NAME AND ANNUAL STOCK UNDERLYING LONG-TERM ALL OTHER
PRINCIPAL COMPENSATION AWARDS OPTIONS INCENTIVE COMPENSATION
POSITION YEAR SALARY($) BONUS($) ($)(2) (#) (#) PAYOUTS($) ($)(5)
--------- ---- --------- -------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
D. W. Biegler 1995 593,750 245,822 8,400 (3) 25,000 0 27,525
Chairman and President, 1994 550,000 317,625 4,050 (3) 0 0 28,394
Chief Executive Officer 1993 525,000 210,000 833 0 40,000 5,000(4) 32,919
G. R. Bryan 1995 254,167 51,133 4,040 (3) 10,000 0 1,500
President, Power Group 1994 242,417 11,815 1,530 (3) 0 0 3,000
1993 237,000 94,800 150 0 7,500 0 5,449
M. T. Hunter 1995 175,000 90,035 1,500 (3) 15,000 0 450
President and Chief 1994 0 0 0 0 0 0 0
Operating Officer, Lone 1993 0 0 0 0 0 0 0
Star Pipeline
Company(1)
W. T. Satterwhite 1995 270,667 87,080 1,940 (3) 5,000 0 24,642
Senior Vice President, 1994 265,000 116,600 855 (3) 0 0 25,542
General Counsel 1993 253,333 70,933 563 0 7,500 0 27,663
R. B. Williams 1995 241,250 109,583 2,045 (3) 7,500 0 48,662
President and Chief 1994 203,159 37,148 690 (3) 0 0 19,711
Operating Officer, Lone 1993 190,074 46,217 563 0 7,500 0 13,074
Star Gas Company
S. R. Singer 1995 284,718 85,415 2,098 0 11,000 0 31,251
Senior Vice President, 1994 347,000 145,740 1,770 (3) 0 0 46,908
Finance and Corporate 1993 337,083 94,383 563 0 15,000 0 42,903
Development(1)
</TABLE>
- ----------
(1) S. R. Singer retired as Senior Vice President and Chief Financial Officer
on August 31, 1995. M. T. Hunter joined the Corporation as an executive
officer on June 1, 1995.
(2) For 1993 represents for each individual, except M. T. Hunter, the amounts
earned and paid during the year for Credits (dividend equivalents) under
the Corporation's Management Incentive Program Unit Plan ("MIP-Unit
Plan"). The MIP-Unit Plan was terminated in 1994. For 1994 and 1995,
includes non-preferential dividends paid on non-vested restricted stock.
(3) The restricted stock awards to named executive officers under the 1991
Stock Incentive Plan are subject to performance-based criteria. Restricted
stock awards in 1995 to the named executive officers are reported under
the "Long-Term Incentive Plan Awards" table, and reference is made to such
table for information on the number of restricted shares awarded in 1995.
At December 31, 1995, the number and value of the aggregate restricted
stock holding for each of the persons named above were as follows: D. W.
Biegler: 42,000 shares, $682,500; G. R. Bryan: 20,200 shares, $328,250; M.
T. Hunter: 10,000 shares, $162,500; W. T. Satterwhite: 9,700 shares,
$157,625; R. B. Williams: 12,100 shares, $196,525; and S. R. Singer: 6,556
shares, $106,535. Dividends are paid on restricted shares at the same rate
paid to all shareholders.
(4) Amount paid for the value of Units under the MIP-Unit Plan.
(5) For 1995 includes company contributions to the Employee Stock Purchase and
Savings Plan, respectively, as follows: D. W. Biegler $4,500; G. R. Bryan
$1,500; M. T. Hunter $450; W. T. Satterwhite $4,500; R. B. Williams $4,500
and S. R. Singer $3,600. Also includes accruals for deferred compensation
payable upon retirement, death or disability retirement pursuant (a) to an
expired employment contract for Messrs. Satterwhite, Williams and Singer,
of $20,142, $44,162, and $27,651, respectively, and (b) to a Special
Supplemental Compensation Plan for Mr. Biegler of $23,025.
6
<PAGE>
OPTION GRANTS TABLE
The table below shows, for each of the named executive officers, certain
information with respect to options granted in 1995 under the 1991 Stock
Incentive Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES PERCENTAGE OF TOTAL
UNDERLYING OPTIONS OPTIONS GRANTED GRANT DATE
GRANTED(1) TO EMPLOYEES EXERCISE PRICE EXPIRATION PRESENT
NAME (#) IN FISCAL YEAR PER SHARE($/SH)(2) DATE(3) VALUE(4)
---- ------------------ ------------------- ------------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
D. W. Biegler 25,000 9.5% $13.2500 2/17/05 $162,313
G. R. Bryan 10,000 3.8% 13.2500 2/17/05 64,925
M. T. Hunter 15,000 5.7% 17.4375 6/01/05 120,319
W. T. Satterwhite 5,000 1.9% 13.2500 2/17/05 32,463
R. B. Williams 7,500 2.8% 13.2500 2/17/05 48,694
S. R. Singer 11,000 4.2% 13.2500 8/31/98 42,851
</TABLE>
- ----------
(1) Options are exercisable in stages of 25% on the first through the fourth
anniversaries of the grant. Options become fully vested in the event of a
change in control as defined in the plan.
(2) Fair market value on the date of grant
(3) S. R. Singer retired on August 31, 1995. As a result, his options expire
on August 31, 1998.
(4) Represents the hypothetical present value of the option determined using
Black-Scholes Option Valuation Method based upon the terms of the option
grant and the Corporation's stock price as of the date of the grant. The
actual value, if any, an executive may realize will depend on the excess
of the stock price over the exercise price on the date the option is
exercised and there is no assurance that the value ultimately realized
will be at or near the value estimated by the Black-Scholes Option
Valuation Method. The assumptions used to arrive at the values shown are
as follows: Risk Free Interest Rate of 7.78% (6.63% for Mr. Hunter) based
on the ten year Treasury bond rate on the date of the grant, Stock Price
Volatility of 29.50% (28.60% for Mr. Hunter) based on the historical
return volatility using weekly stock prices over the prior three years,
Dividend Yield of 1.41% (1.33% for Mr. Hunter) based on the annual
dividend rate of twenty cents per share, and Date of Exercise on the
expiration date of February 17, 2005 (June 1, 2005 for M. T. Hunter and
August 31, 1998 for S. R. Singer).
AGGREGATED OPTION EXERCISE TABLE
The table below shows, for each of the named executive officers, the
information specified with respect to exercised, exercisable and unexercisable
options under all existing stock option plans.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1995 DECEMBER 31, 1995
ACQUIRED ON VALUE (#) ($)
EXERCISE REALIZED ------------------------- -------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
D. W. Biegler 0 0 175,000 55,898 $105,000 $125,596
G. R. Bryan 0 0 34,275 16,300 22,500 46,403
M. T. Hunter 0 0 0 15,000 0 0
W. T. Satterwhite 0 0 74,775 10,625 22,500 23,438
R. B. Williams 0 0 72,175 13,125 22,500 30,938
S. R. Singer 0 0 126,806 0 79,875 0
</TABLE>
7
<PAGE>
LONG-TERM INCENTIVE PLAN ("LTIP") AWARDS TABLE
The table below shows for each of the named executive officers, certain
information with respect to awards of performance-based restricted stock made
pursuant to the Corporation's 1991 Stock Incentive Plan.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE NON-STOCK PRICE BASED PLANS(/1/)
PERIOD ---------------------------------------
NUMBER OF UNTIL MATURATION THRESHOLD(/2/) TARGET(/2/) MAXIMUM(/2/)
NAME SHARES OR PAYOUT(/3/) (#) (#) (#)
---- --------- ----------------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
D. W. Biegler 15,000 01/01/95-12/31/97 750 15,000 15,000
G. R. Bryan 10,000 01/01/95-12/31/97 500 10,000 10,000
M. T. Hunter 10,000 07/01/95-06/30/98 500 10,000 10,000
W. T. Satterwhite 4,000 01/01/95-12/31/97 200 4,000 4,000
R. B. Williams 7,500 07/01/95-06/30/98 375 7,500 7,500
S. R. Singer 0 0 0 0
</TABLE>
- ----------
(1) Performance-based restricted shares have been awarded and will be earned
at the end of a three-year performance period based upon the three year
total shareholder return of the Corporation compared to the weighted
average of the total shareholder return of the peer group of Companies
used in the performance graph in the 1995 Proxy Statement. Regular cash
dividends are paid on the restricted shares prior to vesting at the same
rate as paid to all shareholders. All restrictions are lifted in the event
of a "change in control" and are subject to allocation in the event of
retirement, disability or death during the performance period.
(2) All shares are earned if at the end of the performance term the
Corporation's total shareholder return is at or above 110% of the weighted
average of the peer group. For each percentage point that the
Corporation's total shareholder return is below 110% of the weighted
average of the peer group but above 100%, 2.5% of the shares will be
forfeited and for each percentage point below 100%, 5% of the shares will
be forfeited with no shares earned below 85%.
(3) Shares earned at the end of the three-year performance period will remain
restricted, subject to continued employment for two additional years.
PENSION PLAN TABLE
The table below illustrates the amount of annual compensation benefit
payable on a normal retirement basis beginning at normal retirement age to a
person in specified average salary and years-of-service classifications under
The Retirement and Death Benefit Program of ENSERCH Corporation and
Participating Subsidiaries (the "Program"), the Income Restoration Plan, and
any annuities previously purchased in satisfaction of the Corporation's
pension obligations.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------
REMUNERATION(/1/) 15 20 25 30 35 40 45
- ----------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$275,000 $ 69,272 $ 92,362 $115,453 $138,543 $161,634 $168,509 $175,384
350,000 88,959 118,612 148,265 177,918 207,571 216,321 225,071
425,000 108,647 144,862 181,078 217,293 253,509 264,134 274,759
500,000 128,334 171,112 213,890 256,668 299,446 311,946 324,446
575,000 148,022 197,362 246,703 296,043 345,384 359,759 374,134
650,000 167,709 223,612 279,515 335,418 391,321 407,571 423,821
725,000 187,397 249,862 312,328 374,793 437,259 455,384 473,509
800,000 207,084 276,112 345,140 414,168 483,196 503,196 523,196
</TABLE>
- ----------
(1) Highest average covered compensation over any consecutive five year
period.
8
<PAGE>
Covered compensation under the Program includes base wages and annual
performance-based bonuses. The credited years of service under the Program, as
of February 29, 1996, for Messrs. Biegler, Bryan, Hunter, Satterwhite and
Williams are 27.6, 25.5, 0.7, 29.5, and 34.1 years, respectively, and the
highest average covered compensation during any consecutive five-year period
for each of them is $663,780, $306,766, $317,962, $315,921, and $209,633,
respectively. S. R. Singer began receiving retirement payments following his
retirement on August 31, 1995, with 32.3 credited years of service and a
covered compensation of $409,584. The normal retirement benefit is in the form
of a benefit guaranteed for ten years and life thereafter and is not subject
to any deduction for Social Security or other offset amounts.
COMPENSATION OF DIRECTORS
Directors are compensated by an annual retainer fee of $20,000 plus $1,200
for each board or committee meeting attended with a maximum of $1,800 if more
than one meeting is held on the same day. In addition, a $2,400 per annum fee
is paid for services on a Board Committee, with an additional $1,200 per annum
paid to the Chairman of a Board Committee. Directors who are also officers of
the Corporation do not receive fees. Directors may elect, pursuant to a
Deferred Compensation Plan for Directors, to defer all or part of their
compensation each year. Deferred amounts, including any gain based upon the
experience of investments selected by the Director as provided in the Plan,
will be distributed upon retirement from the Board (or death) in a lump sum or
in equal annual installments over a 10-year period. A participant may elect a
lump sum payment of both principal and interest at any time reduced by a
forfeiture amount as provided in the Plan.
Each non-employee director with one or more full years of service on May 9,
1994, will be provided with deferred compensation following retirement from
the Board (or upon his or her death while serving as a member of the Board)
payable in installments totaling $25,000 annually for a period of years equal
to years of service on the Board prior to May 9, 1994, not to exceed ten. A
Directors' Deferred Compensation Trust has been established, and an amount
sufficient to pay all amounts payable under the deferred compensation
arrangement is placed in the trust from time to time. Upon the replacement of
a director or the elimination of his or her position following a specified
change in control, a director may elect to receive in a lump sum the principal
amount discounted at 4% per annum over the number of years payments would have
otherwise been made. For service following May 9, 1994, each non-employee
director with less than ten full years of service on May 9, 1994, will receive
restricted stock following the completion of each full year of service for a
maximum of ten years (reduced by the number of full years of service on May 9,
1994). Any year in which a previous award of restricted stock is forfeited is
not counted in computing such maximum number of years. The number of shares of
restricted stock awarded is determined by dividing $25,000 by the average of
the closing price of the Common Stock for the last twenty trading days in
April (the "Award Value"). The restricted period applicable to restricted
stock awarded to non-employee directors is ten years during which time the
restrictions will be lifted if the director dies, the market value of the
Common Stock increases to 1.5 times the Award Value, or if the average closing
price for the twenty trading days immediately preceding the tenth anniversary
of the award date is equal to or greater than the Award Value. If the
restrictions have not been lifted by the end of such ten year period, the
stock will be forfeited.
Mr. McCord represents the Corporation's interest in a foreign company in
which the Corporation once had an investment and has continuing obligations
for which he is paid a fee by the Corporation of $5,000 for each board meeting
of the foreign company attended. During 1995 such Board met once.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
W. T. Satterwhite, R. B. Williams and S. R. Singer are beneficiaries under a
trust holding deferred compensation amounts accrued under an expired
employment contract. Upon retirement, they will receive deferred compensation
payable over a 10-year period equal to a total of 150% of their salary at the
time of retirement. The amount so payable may be accelerated following a
specified change in control of the Corporation. Dr. Singer began receiving
payments pursuant to such arrangement following his retirement on August 31,
1995. Mr. Biegler is a participant in a Special Supplemental Compensation Plan
providing for a continuation of salary
9
<PAGE>
for six months in the event of involuntary termination other than by
retirement, death, or disability and having similar provisions for deferred
compensation. Amounts accrued under such arrangements with these individuals
are disclosed in the Summary Compensation Table.
Each named executive officer has executed a change in control agreement with
the Corporation that provides certain benefits in the event their employment
is terminated subsequent to a change in control of the Corporation (as defined
in the Agreements). The Agreements are for continuous three-year terms until
terminated by the Corporation upon specified notice and continue for three
years following a change in control of the Corporation. The Agreements provide
that if the officer is terminated or if the officer elects to terminate
employment under certain circumstances, within three years following a change
in control of the Corporation, the officer shall be entitled to a lump-sum
severance payment of three times the sum of the officer's base salary and
target bonus (but not in excess of the aggregate base salary that could be
earned up to the officer's normal retirement date), a prorated bonus in the
year of termination, any unpaid balance in the Unit Plan, the value over
exercise price of certain unexercised stock options, deferred compensation
payable from previous employment contracts or under the Special Supplemental
Compensation Plan, a three-year continuation of employee benefits, the
equivalent of two years of service credit under the retirement program, and
reimbursement of certain legal fees, expenses, and any excise taxes.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
The Board of Directors delegates responsibility for executive compensation
to the Compensation Committee, except compensation matters relating to the
Chairman and President, Chief Executive Officer are decided by the full Board,
after recommendation by the Committee. No member of the Committee is a former
officer or employee of the Corporation or any of its subsidiaries and no
member of the Committee participates in the compensation described in the
following report. The Committee retains its own consultant to advise on
matters related to executive compensation. The Corporation has used a
consultant since 1981 to assist in such matters. The following is the
Committee's report on executive compensation for 1995.
In determining executive compensation, the Committee is guided by three
primary objectives:
.Offer incentive for business success by putting a significant portion of
each executive's total pay at risk, based on company performance
(observing in the short term desirable operating results and, in the long
term, total shareholder return).
.Attract and keep outstanding executives by providing compensation
opportunities consistent with those observed in the Corporation's
industry for similar positions.
.Encourage career service by providing retirement income consistent with
industry practice.
Salary levels for the named executive officers are based upon assessment of
each individual's performance, experience and value in attaining corporate
financial and strategic objectives and are set within salary ranges based on
surveys of prevailing practice with the mid-point targeted for the expected
level of performance, experience and value. The Committee, in its salary
decisions, is guided by these comparative data, and by the annual rate of
salary movement in industries in which the Corporation competes for
executives. The Corporation compares its annual cash payments (salary and
performance incentive) for named executive officers to recognized annual
surveys both in its industry and in industry generally. The Corporation also
uses comparisons with such surveys for guidance in hiring executives. (Mr. M.
T. Hunter was hired during 1995 at a compensation level within observed survey
guidance.) General industry practice is observed, as it has been for over a
decade, from Management Compensation Service's (MCS) annual survey of
executive compensation (385 companies participated in 1995). Gas and petroleum
industry practice is observed from surveys conducted by the American
10
<PAGE>
Gas Association and by a major national consulting firm. Together they
constitute a statistically valid data base for this purpose and the Committee
is guided by it. Many of the companies in the MCS survey are in the S&P 500;
the industry specific surveys used include many of those companies found in
the performance graph's gas industry peer group. The sole use of the smaller
number of companies in that peer group would produce pay data comparisons that
are not statistically meaningful or useful for the purpose of salary
comparisons, nor does the group of companies in that peer group include
necessarily all of the companies that are the most direct competitors for
executive talent.
During 1995, the aggregate salaries of the named executive officers summed
to an amount equal to 1.4% below the sum of the size-adjusted median survey
salaries for their positions. Four of the named executive officers received
salary increases during 1995, which, on an annualized basis, amounted to 8.8%
of the named executive officers' aggregate salaries.
It is the practice of the Corporation, which is endorsed and effected by the
Committee, to encourage both desirable annual operating results and long term
total shareholder return by annual incentive opportunities that put an
important portion of total pay at risk subject to the achievement of financial
and operating goals. The portion of compensation at risk is intentionally
higher at higher levels in the Corporation. Consequently much of a named
executive officer's compensation is at risk, with potential annual and long-
term incentives, at target levels, placing up to 50% of total compensation
opportunity at risk. The Committee also considers comparative data when
determining the size of both annual and long-term incentive awards.
The named executive officers participate in the Corporation's Performance
Incentive Plan. The level of this opportunity is designed to be consistent
with industry practice. Their target awards in 1995 ranged from 40% to 55% of
salary. In 1995, Plan funding required the achievement of goals set by our
Committee at the beginning of the year including earnings per share (operating
income from their respective operations for Messrs. Bryan, Hunter and
Williams), relative total shareholder return and specific operating
performance criteria. Earnings per share (or operating income goals) were
weighted between 50% and 70%. The weightings of the other goals were varied to
adopt goals most important for the individual position. Funding, based on
results, could have ranged from zero to 150% of the target awards.
Named executive officers at the corporate level received incentive awards
for 1995 for meeting certain goals established by the Committee. Because the
total shareholder return goal was not met, no payment was made for that goal.
Attainment of the corporate earnings goal, taking into account the effects of
less than normal heating weather and lowered natural gas prices, produced
incentive awards for the named executive officers that ranged from 50% to 103%
of target. Messrs. Bryan, Hunter and Williams also earned awards for achieving
operating income goals at the unit level. Total annual cash payments (salary
plus annual incentive) for the named executives summed to 92% of the median
survey observations, a decrease over the prior year primarily due to a
reduction in annual incentive awards.
The Corporation in 1995 offered additional incentive for stock price growth
and total shareholder return through the award of Performance-Based restricted
stock and stock options under the 1991 Stock Incentive Plan, in which all
named executive officers participated. Performance-Based restricted stock and
stock option awards to them in 1995 and options held by them at year end are
described in the Tables. The awards of Performance-Based restricted stock are
subject to forfeiture in whole or in part unless specific performance goals
which have been determined by the Compensation Committee are achieved. The
goals compare the three year total shareholder return of the Corporation to
the weighted average of the peer group of companies used in the performance
graph in the proxy statement. In addition, after the three year goals are met,
the Performance-Based restricted stock is subject to a requirement of
continued employment for two more years. Awards in 1995 were made to achieve
the earlier stated objective of causing a significant portion of each
executive's total pay to be at risk and dependent on total shareholder return
primarily through stock price growth as well as the objective of keeping
outstanding executives by providing compensation opportunities similar to
those provided in the Corporation's industry. In doing so, the Committee
considered the number of options already owned by each named executive, if
any, and the objective that he have an important incentive for stock price
gain. In
11
<PAGE>
determining the size of Performance-Based restricted stock and stock option
awards, the Committee used its discretion and was not bound by any pre-adopted
formulas. For Messrs. Biegler, Satterwhite and Singer, it took into account
the size of awards of Performance-Based restricted stock and stock options
awarded to them by Enserch Exploration, Inc., an 83%-owned subsidiary.
The Corporation encourages career employment and it is endorsed by our
Committee. Its retirement benefits are an essential part of that policy. They
are described, for the named executive officers, in the Retirement Benefit
Table and its footnotes. The Committee periodically reviews executive
retirement benefits to ensure that they continue to meet the Corporation's
needs and are consistent with good corporate practice.
No formal policy has been adopted by the Corporation with respect to
qualifying compensation paid to its executive officers for deductibility under
Section 162(m) of the Internal Revenue Code. In the event that any new
compensation programs are proposed in the future, it is expected that they
will be structured with a view toward qualifying for deductibility just as
were the amendments to the 1991 Stock Option Plan as approved by shareholders
in 1994. The Committee does not anticipate that current compensation levels
will result in loss of any tax deductibility.
Mr. Biegler has served as Chief Executive Officer since May 1993. He has had
a major influence on the Company's results which are judged by the Board to be
a constructive response to difficult circumstances. Major restructuring goals
were accomplished and meaningful improvement in performance is occurring. Mr.
Biegler's salary was increased by 9.1% early in 1995 (21 months after his last
increase). Mr. Biegler's salary remains 7% below the market median observed
for that position. A portion of the annual incentive award was earned for 1995
based on partial achievement of target goals established by the Committee.
Total annual compensation (salary plus incentives) is 23% below the adjusted
observed median salary for his position. He received a Performance-Based
restricted stock award and stock option award in keeping with the Committee's
judgment as described above. The size of the award of Performance-Based
restricted stock and stock options was based on comparative data and with
consideration of the number of restricted shares and stock options held,
including restricted shares and stock options awarded by Enserch Exploration,
Inc. Mr. Biegler exercised no options in 1995 and realized no option gain. Mr.
Biegler made important contributions during the year to achievement of the
Corporation's financial goals and to its restructuring for the future. The
Committee considers his compensation appropriate given these achievements.
Compensation Committee
Marvin G. Girouard, Chairman
Frederick S. Addy
Odie C. Donald
Thomas W. Luce, III
12
<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing for the last five fiscal years the
yearly percentage change in the cumulative total shareholder return on the
Corporation's Common Stock against the cumulative total return of the S&P 500
Composite Stock Index and the American Gas Association Diversified/Integrated
Companies Index (the "AGA Index"). The graph assumes that the value of the
investment in the Corporation's Common Stock and each index was $100 at
December 31, 1990, and that all dividends are reinvested. The AGA Index is a
self-constructed peer index that has been calculated by the American Gas
Association. The returns of each component company have been weighted
according to their respective stock market capitalization at the beginning of
each period for which a return is indicated.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
DECEMBER 31, 1990 1991 1992 1993 1994 1995
- ----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ENSERCH 100 71 77 90 74 93
S&P 500 100 130 140 155 157 215
AGA Diversified/Integrated(/1/) 100 87 92 104 91 123
</TABLE>
- ----------
(1) Companies included in the American Gas Association Diversified/Integrated
company index are Chesapeake Utilities, Columbia Gas System, Consolidated
Natural Gas, Eastern Enterprises, Energen Corporation, ENSERCH
Corporation, Equitable Resources, K N Energy Inc., National Fuel & Gas,
National Gas & Oil, Noram Energy Corporation, ONEOK Inc., Pennsylvania
Enterprises, Questar Corporation, South Jersey Industries, Southwest Gas
Corporation, Southwestern Energy, UGI Corporation, Valley Resources,
Washington Energy, and Wicor Inc.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
At various times during 1995, the following individuals (none of whom was or
has been an officer or employee of the Corporation or any of its subsidiaries)
served as a member of the Corporation's Compensation Committee: Mr. Frederick
S. Addy, Mr. William B. Boyd, Mr. Odie C. Donald, Mr. Lawrence E. Fouraker,
Mr. Marvin J. Girouard, Mr. Thomas W. Luce, III and Mr. W. Ray Wallace. Mr. D.
W. Biegler, an executive officer of ENSERCH Corporation, serves on the Board
of Directors of Trinity Industries, Inc., a company for which W. Ray Wallace
serves as an executive officer. Mr. Wallace was on the Board of ENSERCH
Corporation from 1978 until his retirement on May 8, 1995, and served on the
Compensation Committee from 1980 through May 8, 1995. Mr. Biegler joined the
Trinity Board in 1992. The Board of Directors of ENSERCH Corporation was fully
informed of these positions and believed that no conflict of interest was
created thereby.
SHAREHOLDER PROPOSALS
In order to be considered for inclusion in the Corporation's proxy statement
relating to the 1996 Annual Meeting of Shareholders, a shareholder proposal
must be received by the Corporation no later than November 28, 1996. The date
of the 1997 Annual Meeting of Shareholders will be May 13, 1997.
The Corporation's Bylaws provide that in addition to any other applicable
requirements, in order for a shareholder to properly bring business before the
annual meeting or nominate a person for election to the Board, the shareholder
must give timely written notice to the Corporate Secretary and provide certain
specified information. Details regarding the procedural requirements for
presenting a matter before a shareholders meeting are available upon written
request to the Corporate Secretary.
OTHER MATTERS
The Board of Directors does not intend to bring any other business before
the meeting and has no reason to believe any will be presented to the meeting.
If, however, any other business should be properly presented at the meeting,
the proxies named in the enclosed form of proxy will vote the proxy in
accordance with their best judgment.
By Order of the Board of
Directors,
Michael G. Fortado
Vice President and
Corporate
Secretary
Dallas, Texas
March 29, 1996
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K TO THE SECURITIES AND
EXCHANGE COMMISSION, EXCLUDING CERTAIN OF THE EXHIBITS THERETO, MAY BE
OBTAINED WITHOUT CHARGE BY WRITING TO MICHAEL G. FORTADO, VICE PRESIDENT AND
CORPORATE SECRETARY, ENSERCH CORPORATION, ENSERCH CENTER, 300 SOUTH ST. PAUL
STREET, DALLAS, TEXAS 75201-5598.
14
<PAGE>
PROXY PROXY
ENSERCH
CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE CORPORATION FOR ANNUAL MEETING MAY 14, 1996
The undersigned hereby appoints D. W. Biegler, B. A. Bridgewater, Jr. and
J. M. Haggar, Jr., or any of them, the attorneys and proxies of the undersigned,
each with full power of substitution, to vote on behalf of the undersigned at
the Annual Meeting of Shareholders of ENSERCH Corporation, to be held at 301
South Harwood Street, Dallas, Texas, on Tuesday, May 14, 1996, at 10 a.m., and
at any adjournments of said meeting, all the shares of Common Stock of said
Corporation in the name of the undersigned or which the undersigned may be
entitled to vote; hereby revoking any proxy or proxies heretofore given by the
undersigned.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3. IT IS REVOCABLE AT ANY TIME BEFORE IT IS
EXERCISED.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE>
ENSERCH CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
1. Election of Directors--Nominees:
D. W. Biegler, F. S. Addy, B. A. Bridgewater, Jr., O. C. Donald, M. J.
Girouard, J. M. Haggar, Jr., T. W. Luce, III, W. C. McCord and D. S.
Natalicio.
FOR WITHHELD FOR ALL EXCEPT NOMINEE(S) LISTED BELOW:
[_] [_] [_]
2. Ratification of auditors.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. In their discretion, upon such other matters as may properly come before the
meeting.
Dated: _________________________, 1996
--------------------------------------------------
--------------------------------------------------
Signature of Shareholder(s)
THIS PROXY MUST BE SIGNED EXACTLY AS NAME APPEARS
HEREON. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC.,
SHOULD GIVE FULL TITLE AS SUCH. IF THE SIGNER IS A
CORPORATION, PLEASE SIGN FULL CORPORATE NAME BY
DULY AUTHORIZED OFFICER.
