<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 22, 1995
REGISTRATION STATEMENT NO. 33-61699
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
OGE ENERGY CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
OKLAHOMA 6719 APPLIED FOR
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>
101 NORTH ROBINSON, P.O. BOX 321, OKLAHOMA CITY, OKLAHOMA 73101 (405) 553-3000
(Address, including zip code, and telephone number, including
area code, of principal executive offices)
<TABLE>
<S> <C>
JAMES G. HARLOW, JR. PETER D. CLARKE
PRESIDENT AND CHIEF GARDNER, CARTON & DOUGLAS
EXECUTIVE OFFICER 321 NORTH CLARK STREET
OGE ENERGY CORP. SUITE 3400
101 NORTH ROBINSON CHICAGO, ILLINOIS 60610
P.O. BOX 321 (312) 644-3000
OKLAHOMA CITY, OKLAHOMA 73101
(405) 553-3000
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the Registration Statement becomes effective and all conditions prerequisite
have been satisfied or waived.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM
PROPOSED AMOUNT OFFERING AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER MAXIMUM AGGREGATE REGISTRATION
SECURITIES BEING REGISTERED REGISTERED UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Common Stock, par value $.01 44,874,387
per share.................... shs.(1) $33.875(2) $1,520,119,859(2) $524,180(2)
</TABLE>
(1) Includes 40,374,387 shares (which is estimated to be at least as large as
the number of shares of Oklahoma Gas and Electric Company common stock
expected to be outstanding at the effective date of the exchange described
herein (the "Effective Date")) to be distributed in accordance with the
exchange described herein and 4,500,000 shares to be issued after the
Effective Date pursuant to a dividend reinvestment plan and certain employee
benefit plans. Pursuant to Rule 416(c), this Registration Statement also is
deemed to register an indeterminate amount of interests for the Retirement
Savings Plan. A post-effective amendment on Form S-8 will be filed in
connection therewith.
(2) The amounts are estimates made solely for the purpose of determining the
registration fee pursuant to Rule 457(f)(1) under the Securities Act of
1933, and are based on the average of the high and low prices of the common
stock of Oklahoma Gas and Electric Company as reported by The Wall Street
Journal as New York Stock Exchange Composite Transactions for August 4,
1995.
------------------------
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
OGE ENERGY CORP.
Cross-Reference Sheet showing the location in the Proxy Statement/Prospectus
of information required to be included in the Proxy Statement/Prospectus
pursuant to Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION LOCATION IN PROXY STATEMENT/PROSPECTUS
------------------------------------------------------------- --------------------------------------------------
<C> <C> <S> <C>
A. Information about the Transaction
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus................... Facing page from Form S-4; this cross-reference
sheet; Outside Front Cover Page of Proxy
Statement/Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus....................................... "Documents Incorporated by Reference"; "Available
Information"; "Table of Contents"
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information............................ Outside Front Cover Page of Proxy
Statement/Prospectus; "Summary of Proposed
Holding Company Restructuring"; "Risk Factors";
"Proposed Holding Company Restructuring --
Reasons for the Formation of OGE Energy, --
Certain Pro Forma Financial Information, --
Regulatory Matters, -- Appraisal Rights, --
Federal Tax Consequences"
4. Terms of the Transaction.......................... "Proposed Holding Company Restructuring -- Reasons
for the Formation of OGE Energy -- Restructuring
Plan, -- Comparative Shareowners' Rights, --
Description of OGE Energy Common Stock, --
Agreement and Plan of Share Acquisition, --
Amendment or Termination of Share Acquisition
Agreement, -- Conditions to the Restructuring, --
Federal Tax Consequences, -- Exchange of Stock
Certificates, -- Management of OGE Energy"
5. Pro Forma Financial Information................... "Proposed Holding Company Restructuring -- Certain
Pro Forma Financial Information"
6. Material Contacts With the Company Being
Acquired......................................... "Proposed Holding Company Restructuring --
Management of OGE Energy, -- Regulatory Matters"
7. Additional Information Required for Reoffering by
Persons and Parties Deemed To Be Underwriters.... *
8. Interests of Named Experts and Counsel............ "Legal Opinions"
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities... *
</TABLE>
<PAGE>
<TABLE>
<C> <C> <S> <C>
B. Information about the Registrant
10. Information With Respect to S-3 Registrants....... *
11. Incorporation of Certain Information by
Reference........................................ *
12. Information With Respect to S-2 or S-3
Registrants...................................... *
13. Incorporation of Certain Information by
Reference........................................ *
14. Information With Respect to Registrants Other Than
S-2 or S-3 Registrants........................... "Introduction"; "Proposed Holding Company
Restructuring -- Reasons for the Formation of OGE
Energy"
C. Information about the Company Being Acquired
15. Information With Respect to S-3 Companies......... "Documents Incorporated by Reference"
16. Information With Respect to S-2 or S-3
Companies........................................ *
17. Information With Respect to Companies Other Than
S-2 or S-3 Companies............................. *
D. Voting and Management Information
18. Information if Proxies, Consents or Authorizations
Are To Be Solicited.............................. "Notice of Special Meeting of Shareowners";
"Introduction"; "Voting"; "Proposed Holding
Company Restructuring -- Appraisal Rights, --
Agreement and Plan of Share Acquisition, --
Management of OGE Energy"; "Proposals of
Shareowners"
19. Information if Proxies, Consents or Authorizations
Are Not To Be Solicited in an Exchange Offer..... *
<FN>
------------------------
* Not applicable
</TABLE>
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
September 26, 1995
Dear Shareowner:
You are cordially invited to attend a special meeting of Oklahoma Gas and
Electric Company at 8:00 a.m. on Thursday, November 16, 1995, at the Company's
offices located at 101 North Robinson, Oklahoma City, Oklahoma.
At this meeting, shareowners will be asked to consider and vote on the
formation of a holding company structure for the Company. For the reasons stated
in the accompanying Proxy Statement, the Board of Directors believes that the
formation of the holding company is in the best interests of the Company and its
shareowners and recommends a vote "FOR" the formation of the holding company.
Even though you may own only a few shares, your proxy is important in making
up the total number of shares necessary to hold the meeting. Whether or not you
plan to attend the meeting, please fill out, sign and return your proxy card in
the envelope provided as soon as possible. Your cooperation will be appreciated.
Your continued interest in the Company is most encouraging and, on behalf of
the Board of Directors and employees of the Company, I want to express our
gratitude for your confidence and support.
Very truly yours,
JAMES G. HARLOW, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
NOTICE OF SPECIAL MEETING OF SHAREOWNERS
A Special Meeting of the Shareowners of Oklahoma Gas and Electric Company
(the "Company"), will be held at 8:00 a.m. on Thursday, November 16, 1995 at the
Company's offices located at 101 North Robinson, Oklahoma City, Oklahoma, for
the following purpose:
To approve an Agreement and Plan of Share Acquisition, whereby OGE
Energy Corp. will become the holding company parent of the Company and
the holders of Company Common Stock will become holders of OGE Energy
Corp. Common Stock.
The Board of Directors has fixed the close of business on September 19,
1995, as the record date for determination of shareowners entitled to notice of
and to vote at said meeting or any adjournment thereof. A list of such
shareowners will be available, as required by law, at the principal offices of
the Company at 101 North Robinson, Oklahoma City, Oklahoma 73102. Holders of
record on September 19, 1995, of the Company's Common Stock or 4% Cumulative
Preferred Stock (par value $20 per share) are entitled to vote on all matters
that may properly come before the meeting.
IF THE PROPOSED HOLDING COMPANY RESTRUCTURING IS APPROVED, HOLDERS OF THE
COMPANY'S COMMON STOCK WILL AUTOMATICALLY BECOME HOLDERS OF OGE ENERGY CORP.'S
COMMON STOCK. IT WILL NOT BE NECESSARY FOR YOU TO EXCHANGE YOUR PRESENT STOCK
CERTIFICATES. In the future, as outstanding certificates of the Company's Common
Stock are presented for transfer or exchange, new certificates will be issued
bearing the name "OGE Energy Corp."
As described under "Proposed Holding Company Restructuring -- Appraisal
Rights", holders of the Company's Common Stock are entitled to assert appraisal
rights under the provisions of Section 1091 of the Oklahoma General Corporation
Act included as Appendix C in the accompanying Proxy Statement/Prospectus.
Irma B. Elliott
Secretary
Dated: September 26, 1995
--------------------------------------------------------------------------------
IMPORTANT - YOUR PROXY CARD IS ENCLOSED IN THIS ENVELOPE
Shareowners are requested to complete, sign, date and return the proxy
promptly in the enclosed envelope. No postage is required for mailing in the
United States. Your cooperation will be greatly appreciated.
--------------------------------------------------------------------------------
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
OGE ENERGY CORP.
101 NORTH ROBINSON
P.O. BOX 321
OKLAHOMA CITY, OKLAHOMA 73101
(405) 553-3000
This document is a Proxy Statement for the solicitation of the enclosed
proxy by the Board of Directors of Oklahoma Gas and Electric Company (the
"Company") at a Special Meeting of the Company's Shareowners to be held on
November 16, 1995 or any adjournment thereof. This document is also a Prospectus
of OGE Energy Corp. ("OGE Energy") for 44,874,387 shares of its Common Stock,
par value $.01 per share, offered hereby in connection with the formation of a
holding company structure for the Company, as described herein. This Proxy
Statement/Prospectus and the accompanying proxy were first released to
shareowners on or about September 29, 1995.
The Company proposes to form a holding company structure pursuant to an
Agreement and Plan of Share Acquisition, a copy of which is included as Appendix
A. Under the terms of the Agreement and Plan of Share Acquisition and subject to
the rights of Company common shareowners to exercise their appraisal rights as
described herein, all of the outstanding common stock, par value $2.50 per
share, of the Company (the "Company Common Stock") will be exchanged on a
share-for-share basis for OGE Energy Common Stock (the "Share Acquisition").
Upon consummation of the Share Acquisition, each person that owned Company
Common Stock immediately prior to the Share Acquisition (other than shareowners
who properly exercise their appraisal rights) will own a corresponding number of
shares of the outstanding OGE Energy Common Stock, and OGE Energy will own all
of the outstanding Company Common Stock. See "Proposed Holding Company
Restructuring -- Restructuring Plan."
IF THE SHARE ACQUISITION IS IMPLEMENTED, IT WILL NOT BE NECESSARY FOR
HOLDERS OF COMPANY COMMON STOCK TO SURRENDER THEIR EXISTING STOCK CERTIFICATES
FOR STOCK CERTIFICATES OF OGE ENERGY. SEE "PROPOSED HOLDING COMPANY
RESTRUCTURING -- EXCHANGE OF STOCK CERTIFICATES."
WHILE THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPROVAL OF THE RESTRUCTURING, SHAREOWNERS SHOULD CAREFULLY REVIEW THE
CONSIDERATIONS SET FORTH UNDER THE CAPTION "RISK FACTORS" ON PAGE 4.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS SEPTEMBER 26, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and thus files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "SEC"). Such reports, proxy statements and other information can
be inspected and copied at the public reference offices of the SEC (Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549; Seven World Trade Center, New
York, New York 10048; and Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661); and copies of such materials can be obtained from the
Public Reference Section of the SEC at its principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy
material and other information concerning the Company may be inspected at the
Library of the New York Stock Exchange, 20 Broad Street, New York, New York
10015, and the offices of the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California 94104.
OGE Energy has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering the shares
of OGE Energy's Common Stock offered hereby. This Proxy Statement/Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. For further information, reference is made to the Registration
Statement.
OGE Energy will become subject to the same informational requirements as the
Company following the Share Acquisition, and will file reports, proxy statements
and other information with the SEC in accordance with the Exchange Act. The
Company will continue to be subject to such requirements following the Share
Acquisition.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC (File No. 1-1097)
are incorporated in this Prospectus Proxy/Statement by reference and made a part
hereof: (i) the Annual Report on Form 10-K for the year ended December 31, 1994
as amended by the Form 10-K/A filed April 27, 1995 and the Form 10-K/A-2 filed
May 22, 1995 (the "1994 Form 10-K"); (ii) the Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995 and June 30, 1995; and (iii) the Current
Reports on Form 8-K dated July 26, 1995 and August 3, 1995.
The Company includes with its annual report on Form 10-K an exhibit
containing a description of its Common Stock, including a description of the
Rights to Purchase Series A Cumulative Preferred Stock that accompany each share
of Company Common Stock pursuant to a Rights Agreement, dated December 11, 1990.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the date of this Proxy
Statement/Prospectus and prior to the termination of the offer made by this
Proxy Statement/Prospectus, shall be deemed to be incorporated in this Proxy
Statement/Prospectus by reference and to be a part hereof from the respective
dates of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Proxy
Statement/Prospectus shall be deemed to be modified or superseded for purposes
of this Proxy Statement/Prospectus to the extent that a statement contained in
this Proxy Statement/Prospectus or in any other subsequently filed document
which also is or is deemed to be incorporated by reference in this Proxy
Statement/Prospectus modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement/Prospectus.
AS DESCRIBED ABOVE, THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS
BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS ARE AVAILABLE UPON REQUEST DIRECTED TO MS. IRMA B. ELLIOTT, SECRETARY,
OKLAHOMA GAS AND ELECTRIC COMPANY, 101 NORTH ROBINSON STREET, P.O. BOX 321,
OKLAHOMA CITY, OKLAHOMA 73101; TELEPHONE (405) 553-3000. IN ORDER TO ENSURE
TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY NOVEMBER 9,
1995.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Proxy
Statement/Prospectus has been delivered, upon the written or oral request of
such person, by first class mail or other equally prompt means within one
business day of receipt of such request, a copy (without exhibits, except any
specifically incorporated by reference) of any and all of the documents referred
to above which have been or may be incorporated in this Proxy
Statement/Prospectus by reference. Requests for such documents should be
directed to the person indicated above.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
INTRODUCTION.............................................................................................. 1
VOTING.................................................................................................... 1
SUMMARY OF PROPOSED HOLDING COMPANY RESTRUCTURING......................................................... 2
RISK FACTORS.............................................................................................. 4
PROPOSED HOLDING COMPANY RESTRUCTURING.................................................................... 4
Reasons for the Formation of OGE Energy................................................................. 4
Restructuring Plan...................................................................................... 6
Agreement and Plan of Share Acquisition................................................................. 7
Amendment or Termination of Share Acquisition Agreement................................................. 8
Conditions to the Restructuring......................................................................... 8
Certain Pro Forma Financial Information................................................................. 8
Federal Tax Consequences................................................................................ 10
Treatment of Preferred Stock and Debt Securities........................................................ 10
Reduction of Interest in Arklahoma...................................................................... 11
Regulatory Matters...................................................................................... 11
Appraisal Rights........................................................................................ 12
Exchange of Stock Certificates.......................................................................... 13
Dividend Policy......................................................................................... 13
Management of OGE Energy................................................................................ 14
Employee Benefit Plans.................................................................................. 14
Effective Time of Share Acquisition..................................................................... 15
Dividend Reinvestment and Stock Purchase Plan........................................................... 15
Other Effects of the Restructuring...................................................................... 15
Company Market Prices and Dividends..................................................................... 15
Comparative Shareowners' Rights......................................................................... 15
Description of OGE Energy Common Stock.................................................................. 17
LEGAL OPINIONS............................................................................................ 18
EXPERTS................................................................................................... 18
PROPOSALS OF SHAREOWNERS.................................................................................. 19
OTHER MATTERS............................................................................................. 19
Appendix A -- Agreement and Plan of Share Acquisition..................................................... A-1
Appendix B -- Form of Restated Certificate of Incorporation of OGE Energy Corp............................ B-1
Appendix C -- Provisions of Oklahoma General Corporation Act Relating to Appraisal Rights for
Shareholders............................................................................................. C-1
Appendix D -- Summary of Shareowner Rights Agreement of OGE Energy Corp................................... D-1
</TABLE>
ii
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
PROXY STATEMENT
---------------------
OGE ENERGY CORP.
PROSPECTUS
---------------------
INTRODUCTION
This Prospectus of OGE Energy is furnished in compliance with the Securities
Act with respect to the shares of Common Stock of OGE Energy offered hereby.
This Proxy Statement of the Company is furnished in connection with the
solicitation of the enclosed proxy by the Board of Directors of the Company for
use at a Special Meeting of Shareowners to be held on November 16, 1995 and at
any adjournment thereof. The cost of soliciting proxies will be borne by the
Company. In addition to the use of the mails, proxies may be solicited
personally or by telephone or telegram by officers and regular employees of the
Company. Morrow & Co. Inc., New York, New York, will assist in solicitation of
proxies and the Company will pay Morrow & Co. Inc. approximately $10,000, plus
expenses, for its services.
VOTING
At the meeting, it is intended that only the item in the accompanying notice
be presented. The General Corporation Act of Oklahoma provides that the purposes
of the meeting must be set forth in the notice of the meeting. The owners of the
Company's Common Stock, par value $2.50 per share, and 4% Cumulative Preferred
Stock, par value $20 per share (the "4% Preferred Stock") are entitled to one
vote on each matter presented for a vote at the meeting for each $2.50 of par
value (one vote per share for the Common Stock and eight votes per share for the
4% Preferred Stock) of stock held by such owners of record at the close of
business on September 19, 1995. At September 19, 1995, 40,354,677 shares of the
Company's Common Stock and 423,663 shares of the 4% Preferred Stock were
outstanding. The directors and executive officers of the Company as a group own
less than 0.5% of the issued and outstanding shares of Company Common Stock and
4% Preferred Stock. Any shareowner giving a proxy may revoke it before it is
exercised by giving written notice of its revocation to the Secretary of the
Company, by filing with her another proxy or by attending the Special Meeting
and voting in person. All proxies properly executed by shareowners and received
by the Company prior to the meeting will be voted and will be voted in
accordance with the directions made on the proxy and, if no directions are made,
the proxy will be voted "FOR" approval of the proposed holding company
restructuring.
<PAGE>
SUMMARY OF PROPOSED
HOLDING COMPANY RESTRUCTURING
THE FOLLOWING SUMMARY IS INTENDED ONLY TO HIGHLIGHT CERTAIN INFORMATION
CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION APPEARING ELSEWHERE
HEREIN.
PROPOSED RESTRUCTURING
OGE Energy, an Oklahoma corporation, has been organized to become the
holding company parent of the Company, also an Oklahoma corporation. The
formation of the holding company structure will be achieved through a share
acquisition and exchange with the result that, if approved by the shareowners as
described herein, all the common shareowners of the Company (other than common
shareowners who properly exercise their appraisal rights as described herein)
will become common shareowners of OGE Energy on a share-for-share basis, and OGE
Energy will become the sole common shareowner of the Company. See "Proposed
Holding Company Restructuring -- Agreement and Plan of Share Acquisition" and
"-- Appraisal Rights." The Company's Common Stock currently trades along with
associated Rights to Purchase Series A Cumulative Preferred Stock of the Company
(the "Company Rights"). OGE Energy Common Stock has similar rights to purchase
Series A Preferred Stock of OGE Energy (the "OGE Energy Rights") that trade
along with the associated OGE Energy Common Stock. See the Summary of
Shareowners Rights Agreement included as Appendix D. In the restructuring, both
the Company Rights and the OGE Energy Rights will be exchanged along with their
respective shares of Common Stock. The Company's issued and outstanding
preferred stock will not be exchanged or converted in the Share Acquisition and
will continue as outstanding shares of preferred stock of the Company.
Following the Share Acquisition, the Company will transfer the common stock
of Enogex Inc. to OGE Energy as a dividend on the Company Common Stock held by
OGE Energy. The reorganization pursuant to the Share Acquisition and the
subsequent transfer of Enogex Inc. to OGE Energy are herein referred to as the
"Restructuring."
REASONS FOR THE RESTRUCTURING
The Board of Directors of the Company has identified the need to increase
the growth potential of the corporation to enhance shareowner value through
related new businesses. The holding company structure will provide greater
flexibility to take advantage of opportunities to develop or acquire other
businesses, thereby providing opportunities for increased earnings in an
increasingly competitive business environment. The holding company structure
also will clearly separate the Company's electric utility business from the
non-utility businesses of the other OGE Energy subsidiaries for regulatory,
capital structure and other purposes. See "Proposed Holding Company
Restructuring -- Reasons for the Formation of OGE Energy."
STOCK CERTIFICATES AND EXCHANGE LISTING
IT WILL NOT BE NECESSARY TO EXCHANGE YOUR COMPANY COMMON STOCK CERTIFICATES
FOR STOCK CERTIFICATES OF OGE ENERGY. COMMON STOCK CERTIFICATES OF THE COMPANY
WILL AUTOMATICALLY REPRESENT THE CORRESPONDING SHARES OF COMMON STOCK OF OGE
ENERGY UPON CONSUMMATION OF THE SHARE ACQUISITION.
Application will be made to list the OGE Energy Common Stock on both the New
York and Pacific Stock Exchange when the Restructuring is complete.
FEDERAL TAX CONSEQUENCES
It is intended that the exchange of the Company's Common Stock for the
Common Stock of OGE Energy in the Share Acquisition will not be taxable under
Federal income tax laws, and the Restructuring will not be consummated unless
the Company receives either an opinion of counsel or a ruling from the Internal
Revenue Service satisfactory to the Board of Directors of the Company with
respect to the tax consequences of the Share Acquisition. See "Proposed Holding
Company Restructuring -- Federal Tax Consequences."
2
<PAGE>
DIVIDEND POLICY
The Board of Directors expects that, following the Share Acquisition, OGE
Energy initially will commence dividend payments on the OGE Energy Common Stock
at a rate equal to the rate then being paid by the Company on the Company's
Common Stock and on approximately the same schedule. For the foreseeable future,
dividend payments will continue to depend primarily on the earnings, financial
condition, cash flow and capital requirements of the Company and Enogex Inc. See
"Proposed Holding Company Restructuring -- Dividend Policy."
REGULATORY MATTERS
Applications for approval of the Share Acquisition have been filed with the
Oklahoma Corporation Commission (the "Oklahoma Commission"), the Arkansas Public
Service Commission (the "Arkansas Commission") and the Federal Energy Regulatory
Commission ("FERC") under the Federal Power Act ("FPA"). No approval is required
from the SEC under the Public Utility Holding Company Act of 1935 (the "Holding
Company Act"), and, following the Restructuring, OGE Energy will qualify for an
exemption from registration under the Holding Company Act. See "Proposed Holding
Company Restructuring -- Regulatory Matters."
VOTE REQUIRED
In order for the Restructuring to be approved, it must receive the favorable
vote of the holders of a majority of the outstanding shares of: (i) the
Company's Common Stock and 4% Preferred Stock voting together as one class and
(ii) the Company's Common Stock voting as a separate class.
APPRAISAL RIGHTS
Holders of the Company's Common Stock will have the right to have their
shares appraised and be paid the fair value of their shares. See "Proposed
Holding Company Restructuring -- Appraisal Rights."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPROVAL OF THE RESTRUCTURING.
3
<PAGE>
RISK FACTORS
NON-UTILITY BUSINESS ACTIVITIES MAY INVOLVE MORE RISK. The future
performance of OGE Energy Common Stock cannot be guaranteed. Following
consummation of the Restructuring, OGE Energy will be able to issue securities
for the purpose of financing non-utility business opportunities without
obtaining the prior approval of the Oklahoma Commission. The Restructuring
therefore will provide OGE Energy with more flexibility to pursue certain
business opportunities that might involve a higher degree of risk than would be
permitted to be pursued by the Company as a regulated electric utility. Pursuit
of business opportunities with greater risk could, in turn, have either a
positive or an adverse effect on the value of a shareowner's investment,
depending upon the return realized from such opportunities. To the extent that
OGE Energy engages in such business activities, the market price of OGE Energy's
stock will be affected to a lesser extent by the performance of the Company. For
a discussion of competitive pressures affecting the utility industry, see
"Proposed Holding Company Reorganization -- Reasons for the Formation of OGE
Energy -- Competition."
ENOGEX'S ACTIVITIES AND NEW NON-UTILITY BUSINESS ACTIVITIES WILL NOT BE
AVAILABLE AS SOURCES FOR DIVIDENDS ON COMPANY PREFERRED STOCK. Currently,
earnings from the Company's non-utility subsidiary, Enogex Inc., are available
as a source for dividends on the Company's preferred stock. As part of the
Restructuring, the Company is expected to transfer Enogex Inc. to OGE Energy, so
that Enogex Inc. will be a direct subsidiary of OGE Energy and not a subsidiary
of the Company. Also, after the Restructuring, OGE Energy expects to engage in
non-utility business activities through Enogex and any new unregulated
subsidiaries of OGE Energy. Such activities, and the assets employed in
connection therewith, will not be available to the holders of the Company's
preferred stock as a source of cash for the payment of dividends or other
amounts. The Company does not believe that these actions will impair the
Company's ability to pay dividends on the Company's preferred stock during the
foreseeable future. The Company's preferred stock will continue to have priority
over the Company's Common Stock as to the payment of dividends and upon any
liquidation, and will be on a parity with any additional preferred stock that
may be issued by the Company.
PROPOSED HOLDING COMPANY RESTRUCTURING
The Board of Directors of the Company unanimously considers it to be in the
best interests of the Company, its customers and its shareowners to change the
corporate structure of the Company with the Company becoming a subsidiary of a
new parent company, OGE Energy, the present holders of the Company's Common
Stock becoming holders of the Common Stock of OGE Energy and the Company's
subsidiary, Enogex Inc. (along with Enogex Inc.'s subsidiaries) being
transferred to, and becoming a subsidiary of, OGE Energy. The holding company
structure is not a new concept. The holding company structure is a
well-established form of organization for companies conducting more than one
line of business, and many utilities have changed their corporate organization
to a holding company structure in the past several years.
OGE Energy was formed as a new Oklahoma corporation with offices located at
101 North Robinson, P.O. Box 321, Oklahoma City, Oklahoma 73101. Its phone
number is (405) 553-3000. OGE Energy was formed for the purpose of becoming the
holding company for the Company and is conducting no business and has only
nominal assets and liabilities at this time. All of the currently outstanding
shares of OGE Energy Common Stock are owned by the Company.
REASONS FOR THE FORMATION OF OGE ENERGY
GENERAL. The Board of Directors of the Company believes that the proposed
Restructuring, which is intended to provide long-term advantages through
increased flexibility, is in the best interests of the Company and its
shareowners and other investors, customers and employees.
The Company has identified the need to increase the growth potential of the
corporation to enhance shareowner value through related new businesses. The
holding company structure will give
4
<PAGE>
OGE Energy greater flexibility to take advantage of opportunities to develop or
acquire other businesses, thereby providing opportunities for increased earnings
in an increasingly competitive business environment. The Company could continue
to pursue non-utility business opportunities through Enogex Inc. or other
unregulated subsidiaries of the Company. The Company believes it is more
desirable in the long-term, however, to conduct such non-utility activities
through a holding company structure.
As described under the subcaption, "Restructuring Plan," the Company's
current non-utility subsidiaries, Enogex Inc. and its subsidiaries (the "Enogex
Subsidiaries," and collectively with Enogex Inc., "Enogex"), will be transferred
to and become subsidiaries of OGE Energy when the Restructuring is completed. In
addition, OGE Energy may establish additional subsidiaries to engage in new
non-utility businesses.
Although the Company presently has not identified any significant investment
activities for OGE Energy, it is expected that OGE Energy will only develop or
acquire other businesses which are closely related to the Company's or Enogex's
core businesses of providing energy related services. These new investments will
offer the opportunity for greater earnings growth and mitigate the limitations
of being predominantly a regulated electric utility.
FLEXIBILITY. The holding company structure, by segregating Enogex and any
other new, non-utility businesses into corporations that will not be
subsidiaries of the Company, will provide greater flexibility to achieve
successful assimilation of such businesses.
The holding company structure will enable OGE Energy to issue securities for
the purpose of financing non-utility businesses without obtaining the approval
of the Oklahoma Commission, thereby allowing OGE Energy to respond to
competitive forces and pursue non-utility businesses in a timely manner. The new
corporate structure also will permit the use of financing techniques that are
more directly suited to the particular requirements, characteristics and risks
of non-utility businesses without affecting the capital structure or
creditworthiness of the Company. Moreover, under a holding company structure,
the capital structure of each non-utility subsidiary may be tailored to suit its
individual business.
SEPARATION. The holding company system will clearly separate the Company's
electric utility business from the non-utility business of the other OGE Energy
subsidiaries. The separation of utility and non-utility activities will (i)
facilitate the allocation of expenses, (ii) mitigate the potential impact on the
Company, its preferred and debt security holders and its customers of the risks
of non-utility businesses, (iii) facilitate the regulation of the Company's
utility operations by the Oklahoma Commission, the Arkansas Commission and FERC
and (iv) permit the capital structure of the Company to be managed efficiently.
COMPETITION. With the passage of the Public Utility Regulatory Policies Act
of 1978 ("PURPA") and the Energy Policy Act of 1992 (the "Energy Act"), the
electric utility industry in general, including the Company, has experienced a
significant increase in the level of competition in the market for the
generation and sale of electricity. The Company has already been required under
PURPA to purchase substantial amounts of output from qualifying non-utility
generators. The Energy Act is designed to promote competition in the development
of wholesale power generation by reducing barriers to market entry under the
Holding Company Act for companies that wish to build, own and operate electric
generating facilities. The Energy Act also promotes competition by authorizing
the FERC to require "wholesale wheeling" by public utilities to provide utility
and non-utility generators access to public utility transmission facilities. The
clear intent of the Energy Act is to permit wholesale buyers of electricity to
reach multiple sellers. The increased competition facing the electric utility
industry has been well documented and is undoubtedly the most significant issue
facing the industry today.
5
<PAGE>
In order to respond effectively to this increased competition, the Company
has determined that it must position itself to explore and take advantage of new
and emerging business opportunities. Pursuit of these new opportunities will
play an important role in maintaining the long-term financial viability
necessary for the Company to continue to provide reliable services to its
customers.
EXISTING UTILITY BUSINESS. The Company's electric utility business is
expected to constitute the predominant part of OGE Energy's earning power for
the foreseeable future. The Company's operations will be conducted with the same
assets and the same management, and will continue to be subject to the
jurisdiction of the Oklahoma Commission, the Arkansas Commission and the FERC.
The management and Board of Directors of the Company believe that the
Restructuring will have no adverse effect on the Company, its customers or the
holders of its preferred stock, first mortgage bonds and other debt securities,
or on the Company's Common Stock, which will be exchanged for OGE Energy Common
Stock in the Share Acquisition.
RESTRUCTURING PLAN
The current corporate structure of the Company is as follows:
<TABLE>
<S> <C> <C>
The Company
Arklahoma Enogex Inc. OGE Energy
(34% owned by
the Company)
Enogex Subsidiaries
</TABLE>
The Company and OGE Energy will enter into an Agreement and Plan of Share
Acquisition (the "Share Acquisition Agreement") under which, subject to
shareowner approval and the satisfaction of certain other conditions discussed
elsewhere (see "Conditions to the Restructuring"), the Company will become a
subsidiary of OGE Energy through a share acquisition and exchange. Under the
Share Acquisition Agreement, the issued shares of the Company's Common Stock
will be exchanged on a share-for-share basis for the Common Stock of OGE Energy,
subject to the rights of common shareowners of the Company to exercise appraisal
rights. See "Proposed Holding Company Restructuring -- Appraisal Rights." A copy
of the Share Acquisition Agreement is included as Appendix A to this Proxy
Statement/Prospectus and is incorporated herein by reference. It is intended
that the Restructuring will not have any Federal income tax consequences to
present holders of the Company's Common Stock who do not exercise their
appraisal rights or to the holders of the Company's Preferred Stock. See
"Federal Tax Consequences."
6
<PAGE>
In order to facilitate the creation of the holding company structure, the
Company will reduce its equity ownership in The Arklahoma Corporation
("Arklahoma") from 34% to below 5% immediately prior to the consummation of the
Restructuring. See "Reduction of Interest in Arklahoma." Immediately following
the Share Acquisition, the Company will transfer the common stock of Enogex Inc.
to OGE Energy as a dividend on the Company Common Stock then held by OGE Energy.
When the Restructuring is complete, the corporate structure will be as
follows:
<TABLE>
<S> <C> <C>
OGE Energy
Enogex The Company
Enogex Subsidiaries Arklahoma
(less than 5% interest)
</TABLE>
AGREEMENT AND PLAN OF SHARE ACQUISITION
The Share Acquisition Agreement has been approved by the Boards of Directors
of the Company and OGE Energy, and these corporations will execute the Share
Acquisition Agreement, subject to its approval by the holders of the outstanding
Common Stock and 4% Preferred Stock of the Company as described below. In the
Share Acquisition:
(1) each share of the Company's Common Stock (including the Company
Rights that trade therewith) issued immediately prior to the effective time
of the Share Acquisition will be exchanged for one share of the Common Stock
of OGE Energy (including the OGE Energy Rights that will trade therewith);
(2) the shares of the Company's Preferred Stock issued and outstanding
immediately prior to the effective time of the Share Acquisition will not be
converted or otherwise affected by the Share Acquisition; and
(3) each share of the Company's Common Stock (including the Compay
Rights that trade therewith) issued and outstanding immediately prior to the
effective time of the Share Acquisition will be owned by OGE Energy after
the Share Acquisition, except in the case of shareowners who properly
exercise their appraisal rights. See "Proposed Holding Company Restructuring
-- Appraisal Rights."
As a result of the Share Acquisition, the Company will become a subsidiary
of OGE Energy, and all of the OGE Energy Common Stock outstanding immediately
after the effective time of the Share Acquisition will be owned by the holders
of the Company's Common Stock outstanding at the effective time of the Share
Acquisition (other than shares owned by shareowners who properly exercise their
appraisal rights) in the same proportion as their present ownership of Company
Common Stock.
7
<PAGE>
In order for the Share Acquisition to be approved under Oklahoma Law and the
Company's Restated Certificate of Incorporation, it must receive the favorable
votes of the holders of at least a majority of the outstanding shares of: (i)
the Company's Common Stock and 4% Preferred Stock, voting together as one class
and (ii) the Company's Common Stock, voting as a separate class.
AMENDMENT OR TERMINATION OF SHARE ACQUISITION AGREEMENT
The Share Acquisition Agreement provides that the Boards of Directors of the
Company and OGE Energy may mutually consent to amend any of the terms of, or to
waive any of the conditions to, the Share Acquisition Agreement before the Share
Acquisition is completed and before or after shareowner approval, provided that
such amendment or waiver will not, in the opinion of the Board of Directors of
the Company, have any materially adverse effect on the shareowners of the
Company.
Pursuant to its terms, the Share Acquisition Agreement may be terminated by
OGE Energy's Board of Directors at any time prior to becoming effective, if the
Board determines that consummation of the Share Acquisition would not be in the
best interests of the shareowners.
CONDITIONS TO THE RESTRUCTURING
The obligations of the Company and OGE Energy to effect the Restructuring
are subject to the satisfaction of the following conditions:
(1) requisite approval of the Share Acquisition by the holders of the
Company's Common Stock and 4% Preferred Stock;
(2) approval for listing the Common Stock of OGE Energy by the New York
Stock Exchange ("NYSE") and the Pacific Stock Exchange ("PSE") upon official
notice of issuance;
(3) reduction by the Company of its equity ownership in Arklahoma from
34% to below 5% (see "Reduction of Interest in Arklahoma"); and
(4) receipt of all consents, approvals and authorizations required from
governmental and regulatory authorities (see "Regulatory Matters").
CERTAIN PRO FORMA FINANCIAL INFORMATION
Pursuant to the Restructuring, Enogex Inc. will become a subsidiary of OGE
Energy and the Company will have no subsidiaries except for its equity interest,
if any, in Arklahoma. As a result, any dividends generated by Enogex Inc. will
be paid to OGE Energy and not the Company. The following
8
<PAGE>
table summarizes certain unaudited pro forma financial effects of the
Restructuring, as of June 30, 1995 and for the twelve months then ended, which
in the opinion of management, reflect all adjustments necessary for a fair
presentation.
<TABLE>
<CAPTION>
THE COMPANY, ADJUSTMENTS AND THE COMPANY, OGE ENERGY,
CONSOLIDATED ELIMINATIONS(1)(2) PRO FORMA CONSOLIDATED
AS REPORTED ------------------- ------------- PRO FORMA
------------- (UNAUDITED) (UNAUDITED) -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
BALANCE SHEET -- AS OF JUNE 30, 1995
Assets
Net property, plant and equipment............ $ 2,330,006 $ (275,115) $ 2,054,891 $ 2,330,006
Other property and investments,
at cost..................................... 8,321 (1,346) 6,975 8,321
Current assets............................... 292,005 3,293 295,298 292,005
Deferred charges............................. 130,482 (13,861) 116,621 130,482
------------- ---------- ------------- -------------
Total Assets............................. $ 2,760,814 $ (287,029) $ 2,473,785 $ 2,760,814
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
Capitalization and Liabilities
Capitalization:
Common Stock and retained earnings......... $ 889,745 $ (103,708) $ 786,037 $ 889,745
Cumulative preferred stock................. 49,973 -- 49,973 49,973
Long-term debt............................. 731,215 (6,100) 725,115 731,215
------------- ---------- ------------- -------------
Total Capitalization..................... 1,670,933 (109,808) 1,561,125 1,670,933
------------- ---------- ------------- -------------
Current liabilities.......................... 427,798 (108,514) (319,284) 427,798
Deferred credits and other liabilities....... 662,083 (68,707) 593,376 662,083
------------- ---------- ------------- -------------
Total Capitalization and Liabilities....... $ 2,760,814 $ (287,029) $ 2,473,785 $ 2,760,814
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
STATEMENTS OF INCOME FOR TWELVE MONTHS ENDED
JUNE 30, 1995
Operating revenues........................... $ 1,275,189 $ (131,389) $ 1,143,800 $ 1,275,189
Operating expenses........................... 1,084,627 (110,574) 974,053 1,084,627
------------- ---------- ------------- -------------
Operating income............................. 190,562 (20,815) 169,747 190,562
------------- ---------- ------------- -------------
Other income and deductions.................. (1,905) 540 (1,365) (1,905)
Interest charges............................. 74,057 (8,584) 65,473 74,057
Net income................................... 114,600 (11,691) 102,909 114,600
Preferred dividend requirements.............. 2,317 -- 2,317 2,317
------------- ---------- ------------- -------------
Earnings available for common................ $ 112,283 $ (11,691) $ 100,592 $ 112,283
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
Ratio of earnings to fixed charges(4).......... 3.36 -- 3.43 3.24
Ratio of earnings to combined fixed charges and
preferred stock dividends(4).................. 3.24 -- 3.30 3.24
<FN>
------------------------
1. Subsidiary assets, liabilities, equity and results of operations have been
eliminated from consolidated Company amounts to reflect the transfer of
ownership and control of all consolidated subsidiaries from the Company to
OGE Energy.
2. After the transaction, the Company will not retain ownership of the
subsidiary currently being consolidated. Consequently, intercompany
transactions between the Company and its current consolidated subsidiary
have not been eliminated in the pro forma financial statements.
</TABLE>
The most significant intercompany transactions are transmission fees and
related charges to the Company from Enogex, its subsidiary whose core
business has been to transport natural gas to the Company power plants. The
amount of these charges were $44.6 million for the 12 months ended June 30,
1995.
9
<PAGE>
<TABLE>
<S> <C>
3. As a part of the Restructuring, the Company is expected to reduce its
equity interest in Arklahoma. This reduction has not been reflected in the
pro forma financial information presented above. As of June 30, 1995, the
Company's investment in Arklahoma was less than $300,000 and, for the
twelve months ended June 30, 1995, the Company derived less than .002% of
its earnings from its share of the earnings of Arklahoma.
4. For purposes of these ratios, "Earnings" consist of the aggregate of net
income, taxes on income, investment tax credit (net) and fixed charges.
"Fixed charges" consist of interest on long-term debt, related
amortization, interest on short term borrowings, a calculated portion of
rents considered to be interest and pre-tax dividend requirements on
subsidiary preferred stock. Following the Restructuring, the Company's
preferred stock will be preferred stock of a subsidiary for purposes of
calculating the fixed charges of OGE Energy. The ratio of earnings to
combined fixed charges and preferred stock dividends is computed by
dividing earnings by the sum of fixed charges plus preferred stock dividend
requirements before income taxes. Preferred stock dividend requirements
before income taxes represent the pre-income tax amount computed at the
effective rate for the applicable period.
</TABLE>
FEDERAL TAX CONSEQUENCES
The Board of Directors does not intend for the Restructuring to occur until
it receives a satisfactory ruling from the Internal Revenue Service ("IRS") or
an opinion of counsel to the effect that for federal income tax purposes:
(1) no gain or loss will be recognized by a non-dissenting holder of the
Company's Common Stock upon the exchange of the Company's Common Stock
(including the Company Rights) solely for OGE Energy's Common Stock
(including the OGE Energy Rights) in the Restructuring;
(2) the basis of OGE Energy's Common Stock received by a holder of the
Company's Common Stock on the date of the Share Acquisition in the aggregate
will be the same as the basis of the Company's Common Stock exchanged for
OGE Energy's Common Stock in the Share Acquisition;
(3) the holding period of OGE Energy's Common Stock received by a holder
of the Company's Common Stock will include the holding period of the
Company's Common Stock exchanged for OGE Energy's Common Stock in the Share
Acquisition, provided that the Company's Common Stock was held as a capital
asset on the date of the Share Acquisition;
(4) no gain or loss will be recognized by OGE Energy in connection with
the Restructuring;
(5) the consummation of the Restructuring will not result in the
termination of the existence of the affiliated group of corporations of
which the Company has been the common parent and the Company will be
included in the affiliated group of corporations of which OGE Energy will
become the common parent corporation; and
(6) the exchange of the Company's Common Stock for cash through the
exercise of appraisal rights by a holder of the Company's Common Stock will
be a taxable transaction with respect to such holder for Federal income tax
purposes.
The preceding discussion of Federal income tax consequences is a general
summary of the anticipated Federal income tax consequences. Shareowners are
urged to consult their own tax advisers with regard to the Federal, state and
local tax consequences of the Restructuring.
TREATMENT OF PREFERRED STOCK AND DEBT SECURITIES
The Restructuring will not result in any change in the outstanding series of
the Company's 4% Preferred Stock or Cumulative Preferred Stock (par value $100
per share) (collectively, the "Preferred Stock"). The Board of Directors'
decision to have the Preferred Stock continue unchanged as securities of the
Company is based, in part, on a desire not to alter the nature of the investment
represented by such stock or possibly foreclose further issuances of such stock
to help meet the Company's future capital requirements. The Company's Preferred
Stock will retain its currently existing preferences for full liquidation value
and accrued dividends.
Since the Company's electric utility operations will continue to constitute
the major part of the consolidated assets and earning power of OGE Energy, it is
believed that the Preferred Stock will
10
<PAGE>
retain its current investment ratings as well as its qualification for legal
investment for certain investors. After the Restructuring is consummated, the
Company will continue to be a reporting company under the Exchange Act. While
annual meetings of the Company's shareowners will continue to be held after the
Restructuring is consummated, proxies from holders of 4% Preferred Stock for the
election of directors and other matters not requiring a class vote of such
holders may not be solicited, because the shares of the Company's Common Stock
held by OGE Energy will have sufficient voting power to take action and any vote
by the holders of 4% Preferred Stock would not affect the outcome of the vote.
The Preferred Stock, outstanding first mortgage bonds and other debt
instruments of the Company and the terms thereof will not be changed in the
Restructuring, will remain the obligations of the Company and will not be
assumed by OGE Energy.
REDUCTION OF INTEREST IN ARKLAHOMA
The Company currently owns approximately 34% of the common stock of
Arklahoma, which was organized by the Company and two other public utilities to
own and lease certain transmission facilities in Arkansas and Oklahoma. The
principal properties of Arklahoma currently consist of electrical transmission
facilities, including a 161KV transmission line extending 166 miles from
Boudinot Tap near Tahlequah, Oklahoma, to Substation "A" located at Lake
Catherine, Arkansas. For each of the three years in the period ended December
31, 1994, the Company derived less than .002% of its income from its share of
the earnings of Arklahoma. The Company intends to reduce its equity ownership in
Arklahoma to below 5%. This disposition will have the benefit of facilitating
OGE Energy's status as an exempt holding company under Section 3(a)(1) of the
Holding Company Act, as the Company will not need to seek approval of the SEC
under the Holding Company Act to effect the Restructuring.
REGULATORY MATTERS
The new holding company structure will provide clear delineation of
regulatory jurisdictions. As a subsidiary of OGE Energy, the Company will
continue to be the same electric utility it is today, serving communities and
contiguous rural and suburban territories in Oklahoma and western Arkansas, and
will continue to be regulated by the Oklahoma Commission, the Arkansas
Commission and the FERC. OGE Energy, as the non-utility parent corporation, will
not be directly regulated by the Oklahoma Commission, the Arkansas Commission or
the FERC. Transactions and contracts between the Company and OGE Energy will be
subject to review by the Oklahoma Commission and possibly other regulatory
bodies.
The Company and OGE Energy believe that upon consummation of the
Restructuring, OGE Energy will be entitled to an exemption from regulation by
the SEC as a "registered holding company" under the Holding Company Act. Prior
approval of the SEC under the Holding Company Act will, however, be required if
OGE Energy proposes to acquire, directly or indirectly, additional utility
subsidiaries. SEC policies regarding the scope of permissible non-utility
activities of a public utility holding company are subject to change (see
below), but guidelines established in prior decisions of the SEC and proposed
rules by the SEC require OGE Energy to remain engaged primarily and
predominantly in the electric business and to limit the size of its activities
outside of such business relative to OGE Energy as a whole.
Under the Holding Company Act and current SEC policies, there are also
limitations on the extent to which OGE Energy could expand the utility business
of the Company (either directly or through a subsidiary) outside of Oklahoma. If
any limitations regarding diversification or location of businesses were
exceeded, OGE Energy's exempt status under the Holding Company Act could be
jeopardized. OGE Energy has no present intention to engage in any activity which
would require it to register as a holding company and thereby subject it to
regulation under the Holding Company Act.
In June 1995, the SEC issued a report recommending significant revisions to,
or limited repeal of, the Holding Company Act. The Company, however, cannot
predict whether Congress will take any
11
<PAGE>
such action. Pending such action, the SEC indicated that it would revise its
rules and interpretations to modernize and simplify holding company regulation.
At this time, however, the Company cannot predict the impact of such actions on
the Company or OGE Energy.
The Company has filed applications with the FERC, the Oklahoma Commission
and the Arkansas Commission requesting approval of the Restructuring. Receipt of
favorable rulings from these regulatory bodies must be obtained in order to
consummate the Restructuring. As part of its application to the Oklahoma
Commission, the Company agreed to provide the Oklahoma Commission access to
certain books and records of OGE Energy and to furnish the Oklahoma Commission
various reports and financial information regarding OGE Energy. In addition, the
Company agreed to establish guidelines regulating intercompany transactions,
whereby distinct and separate accounting and financial records will be
maintained and fully documented for each entity within the holding company
system. This will enable the Company, among other things, to maintain a
separation of costs between the Company and the non-utility businesses. The
structure of intercompany transactions also will be regulated pursuant to these
guidelines to ensure that the non-utility businesses are not subsidized by the
Company and its customers. Accordingly, transfers or sales of assets from the
Company to OGE Energy or other subsidiaries generally would be priced under the
guidelines at the greater of cost or fair market value, while transfers or sales
of assets to the Company from OGE Energy or other subsidiaries generally would
be priced at the lower of cost or fair market value.
APPRAISAL RIGHTS
The following discussion of appraisal rights under the Oklahoma General
Corporation Act (the "OGCA") does not purport to be complete and is qualified in
its entirety by reference to the provisions of Sections 1090.1 and 1091 of the
OGCA included as Appendix C hereto. The Company hereby undertakes to supply a
complete copy of Sections 1090.1 and 1091 upon written request to: Ms. Irma B.
Elliott, Secretary, Oklahoma Gas and Electric Company, P.O. Box 321, 101 North
Robinson, Oklahoma City, Oklahoma 73101.
Any holder of Common Stock who is entitled to vote at the Special Meeting
and who (i) has complied with the procedural steps specified below and (ii) has
neither voted in favor of the Share Acquisition nor consented thereto in
writing, is entitled to an appraisal by an Oklahoma district court of the fair
value of his or her shares. If a shareowner wishes to demand the appraisal of
his or her shares such shareowner must deliver to the Company, before the vote
is taken at the Special Meeting, a written demand for appraisal of his or her
shares (the "Demand"). Such Demand must state the shareowner's identity and the
shareowner's intention to demand appraisal. A PROXY OR VOTE AGAINST THE
RESTRUCTURING IS NOT SUFFICIENT TO CONSTITUTE SUCH A DEMAND; THE DEMAND MUST BE
SEPARATE.
Within ten days after the effective date of the Share Acquisition (the
"Effective Date"), the Company must notify each shareowner who has made a Demand
in compliance with the foregoing requirements and who has not voted in favor of
or consented to the Share Acquisition that the Share Acquisition has become
effective. Any such shareowner who has filed a Demand may withdraw such Demand
at any time within 60 days of the Effective Date and accept the shares of Common
Stock of OGE Energy offered in exchange for his or her Company Common Stock
pursuant to the terms of the Share Acquisition. Any shareowner who has complied
with the foregoing requirements and who is entitled to assert appraisal rights
may request in writing, within 120 days after the Effective Date, a statement
from the Company setting forth (i) the aggregate number of shares not voted in
favor of the Share Acquisition and with respect to which appraisal has been
demanded and (ii) the aggregate number of holders of such shares. The Company is
required to mail such statement to the shareowner within 10 days of the receipt
of the shareowner's written request.
Within 120 days after the Effective Date, the Company or any shareowner who
has made a Demand in compliance with the foregoing requirements and who is
entitled to assert appraisal rights, may file a petition (the "Petition") in an
Oklahoma district court demanding a determination of the value of the Company's
Common Stock. The Company then must file with such court a list (the "List") of
the names and addresses of all shareowners who have submitted Demands and with
whom
12
<PAGE>
agreements as to the value of their shares has not been reached. This List must
be filed within 20 days of being served with a copy of the Petition. Notice of
the time and place for the hearing on the Petition will be sent to each
shareowner on the List and will be published at least one week prior to the
hearing in a newspaper of general circulation in Oklahoma City.
At the hearing, the court will determine which shareowners are entitled to
appraisal rights and may require such shareowners to submit their share
certificates for notation of the pending appraisal proceedings. The court may
dismiss from the appraisal proceedings any shareowner who fails to comply with
such request. After determining who is entitled to appraisal rights, the court
will appraise the shares and determine their fair value and a fair rate of
interest to be paid on such fair value. In determining the fair value, the court
will consider all relevant factors, but will exclude any element of value
arising from the accomplishment or expectation of the Share Acquisition.
Shareowners whose names appear on the List may participate in all proceedings
until such time as the court determines they are not entitled to appraisal
rights. The court will direct the Company to pay such fair value and fair
interest to the shareowners entitled thereto, upon the surrender of their share
certificates.
The court may apportion the costs of the appraisal proceedings among the
parties as it deems equitable, including charging the expenses incurred by any
shareowner pro rata among all the shares entitled to appraisal. From and after
the Effective Date, no shareowner who has submitted a Demand will be entitled to
vote such shares for any purpose or to receive dividends or other distributions
on such shares, except dividends or distributions payable to shareowners of
record as of a date prior to the Effective Date, provided that if no Petition is
filed within the 120-day time period specified above, or if the shareowner
withdraws his or her Demand within the 60-day time period specified above or
with the approval of the Company, then such shareowner's appraisal rights will
cease.
Shareowners contemplating exercising appraisal rights under Oklahoma law are
urged to read carefully the provisions of Sections 1090.1 and 1091 of the OGCA
included as Appendix C hereto.
THE EXCHANGE OF SHARES FOR CASH BY A SHAREOWNER WHO PERFECTS HIS OR HER
RIGHT TO APPRAISAL IS EXPECTED TO BE A TAXABLE TRANSACTION FOR FEDERAL INCOME
TAX PURPOSES. SEE "FEDERAL TAX CONSEQUENCES."
EXCHANGE OF STOCK CERTIFICATES
IF THE RESTRUCTURING IS EFFECTED, IT WILL NOT BE NECESSARY FOR HOLDERS OF
THE COMPANY'S COMMON STOCK TO EXCHANGE EXISTING STOCK CERTIFICATES FOR
CERTIFICATES OF OGE ENERGY'S COMMON STOCK. THE CERTIFICATES WHICH PRESENTLY
REPRESENT OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK WILL AUTOMATICALLY
REPRESENT THE SAME NUMBER OF SHARES OF OGE ENERGY'S COMMON STOCK. FOLLOWING THE
RESTRUCTURING, AS PRESENTLY OUTSTANDING COMPANY COMMON STOCK CERTIFICATES ARE
PRESENTED FOR TRANSFER OR EXCHANGE, NEW CERTIFICATES BEARING THE NAME "OGE
ENERGY CORP." WILL BE ISSUED.
DIVIDEND POLICY
OGE Energy does not now, nor does it intend after the Restructuring to,
conduct directly any business operations from which it will derive any revenues.
OGE Energy plans to obtain funds for its own operations from dividends paid to
OGE Energy on the stock of its various subsidiaries and possibly from payments
made by the subsidiaries for services rendered by OGE Energy.
Initially, the funds required by OGE Energy to enable it to pay dividends on
its Common Stock are expected to be derived from dividends paid by the Company
on its Common Stock and by Enogex on its common stock. Following the Share
Acquisition, it is anticipated that the quarterly dividends on OGE Energy's
Common Stock will commence at a rate equal to the rate then being paid by the
Company on the Company's Common Stock and will be paid on approximately the same
dates. The ability of OGE Energy to pay dividends on its Common Stock in the
immediate future will continue to be largely dependent upon the financial
condition and capital requirements of the Company and Enogex, as well as the
covenants of debt instruments limiting the ability of the Company to pay
dividends.
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<PAGE>
The Company's Trust Indenture, as supplemented, securing the Company's first
mortgage bonds contains a covenant limiting the Company's ability to pay
dividends. It provides in substance that retained earnings of the Company equal
to the sum of (1) the amount by which the aggregate of (a) provisions for
retirement and depreciation and (b) expenditures for maintenance, during the
period from June 1, 1955 to the last date for which a statement of income is
available, is less than 15% of gross operating revenues (after deducting cost of
electricity purchased for resale, rentals paid for utility property and the
portion of gross operating revenues attributable to increases since January 6,
1975 in the Company's cost of fuel used in electric generation) for that period
and (2) the amount, if any, by which all of the consideration paid by the
Company in acquiring any shares of its Common Stock during the above period
exceeds $217,301,128 plus any consideration received by the Company from the
sale after September 30, 1991 of its Common Stock shall not be available for the
payment of cash dividends on the Common Stock of the Company. At the present
time, the Company does not expect this restriction to affect its payment of
dividends.
In addition, under the Company's Restated Certificate of Incorporation,
unless the capital represented by the Company's Common Stock (including premiums
on capital stock and retained earnings accounts) is 25% or more of total capital
(which also includes debt maturing more than one year after date of issue),
dividends (other than dividends payable in Common Stock) or distributions on, or
acquisitions for value of, Company Common Stock may not exceed 75% of net income
for the preceding twelve-month period after deducting dividends accruing on
Preferred Stock during the period; and if less than 20%, may not exceed 50% of
such net income. No portion of the retained earnings of the Company is presently
restricted by this provision. The Company's Restated Certificate of
Incorporation further provides that no dividend may be declared or paid on the
Common Stock until all amounts required to be paid or set aside for any sinking
fund for the redemption or purchase of Cumulative Preferred Stock, par value $25
per share, have been paid or set aside. Currently, no shares of Cumulative
Preferred Stock, par value $25 per share, are outstanding. At the present time,
the Company does not expect this restriction to affect its payment of dividends.
Payment of dividends on the Company's Preferred Stock is expected to
continue at the specified rates. The payment of these dividends in the future
will continue to be dependent upon the earnings and financial condition of the
Company. Upon consummation of the Restructuring, the activities and assets of
Enogex will not be available as a source for the payment of dividends on the
Company's Preferred Stock.
MANAGEMENT OF OGE ENERGY
The Directors of the Company at the time the Restructuring becomes effective
are expected to become the Directors of OGE Energy. In the future, however, the
Company and OGE Energy may have different directors.
The current executive officers of OGE Energy who will continue to serve as
such following the Restructuring are:
<TABLE>
<S> <C>
President and Chief Executive
J.G. Harlow, Jr....................... Officer
A.M. Strecker......................... Vice President and Treasurer
Irma B. Elliott....................... Secretary
</TABLE>
The current executive officers of the Company will continue to serve as such
following the Restructuring.
EMPLOYEE BENEFIT PLANS
Prior to the consummation of the Restructuring, the Company will take all
necessary action to amend (a) the Company's Directors' Deferred Compensation
Plan to refer to OGE Energy's Common Stock rather than the Company's Common
Stock, (b) the Company's Restricted Stock Plan to refer to OGE Energy's Common
Stock rather than the Company's Common Stock, (c) the Company's Employee Stock
Ownership Plan to refer to OGE Energy's Common Stock rather than the Company's
Common Stock and (d) the Company's Retirement Savings Plan, to refer to OGE
Energy's Common
14
<PAGE>
Stock rather than the Company's Common Stock. The Plans are also expected to be
amended to permit participation by employees of OGE Energy and, if appropriate,
one or more of the Plans, including the Restricted Stock Plan, may be assumed by
OGE Energy.
EFFECTIVE TIME OF SHARE ACQUISITION
The Share Acquisition will be made effective by filing the Certificate of
Share Acquisition with the Secretary of State of Oklahoma when all conditions to
the Share Acquisition have been waived or satisfied.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Following the effectiveness of the Share Acquisition, OGE Energy will assume
the Company's existing Automatic Dividend Reinvestment and Stock Purchase Plan.
Participants in such plan will be able to make initial purchases of shares of
OGE Energy Common Stock, reinvest their dividends on OGE Energy Common Stock and
Company Preferred Stock to purchase additional shares of OGE Energy Common Stock
and to make optional payments to acquire additional shares of such stock.
OTHER EFFECTS OF THE RESTRUCTURING
Approval of the Share Acquisition by the holders of the Company's Common
Stock and 4% Preferred Stock will also be deemed to constitute approval of (a)
the Restated Certificate of Incorporation of OGE Energy included as Appendix B
(see "Comparative Shareowners' Rights"), and (b) the amendments to the Company's
employee benefit plans described under the subcaption "Employee Benefit Plans,"
including the assumption by OGE Energy of the Restricted Stock Plan.
COMPANY MARKET PRICES AND DIVIDENDS
The Company's Common Stock is listed and traded on the NYSE and the PSE. The
following table sets forth the high and low sale prices for the Company's Common
Stock and dividends paid per share for the periods indicated as reported in
published financial sources:
<TABLE>
<CAPTION>
DIVIDENDS
PAID PER
HIGH LOW SHARE
--------- --------- ----------
<S> <C> <C> <C>
1993
First Quarter............................................................. $ 35 7/8 $ 33 $0.66 1/2
Second Quarter............................................................ 37 5/8 33 3/4 0.66 1/2
Third Quarter............................................................. 38 5/8 34 0.66 1/2
Fourth Quarter............................................................ 38 5/8 32 7/8 0.66 1/2
1994
First Quarter............................................................. $ 37 1/4 $ 33 1/2 $0.66 1/2
Second Quarter............................................................ 36 1/2 29 3/8 0.66 1/2
Third Quarter............................................................. 34 3/8 29 5/8 0.66 1/2
Fourth Quarter............................................................ 34 1/4 32 0.66 1/2
1995
First Quarter............................................................. $ 36 1/4 $ 32 9/16 $0.66 1/2
Second Quarter............................................................ 36 3/8 33 1/4 0.66 1/2
Third Quarter (through September 20, 1995)................................ 36 3/8 33 3/8
</TABLE>
COMPARATIVE SHAREOWNERS' RIGHTS
The rights of holders of the Company's Common Stock and OGE Energy's Common
Stock are governed by the Oklahoma General Corporation Act and the respective
certificates of incorporation and by-laws of the corporations. If the
Restructuring is consummated, the rights of the present holders of the Company's
Common Stock thereafter will be determined by the Oklahoma General Corporation
Act and OGE Energy's charter documents. The text of OGE Energy's Restated
Certificate of Incorporation, in the form it will be in as of the effective date
of the Share Acquisition (the "OGE Energy Certificate of Incorporation"), is
included as Appendix B of this Proxy Statement/ Prospectus.
15
<PAGE>
The rights of holders of OGE Energy's Common Stock will be virtually the
same as the present rights of the holders of the Company's Common Stock. The OGE
Energy Certificate of Incorporation contains the same "Fair Price" and
"Classified Board" provisions that were adopted by the Company's shareowners to
address takeover concerns and the same indemnification and limitation on
directors' liability provisions that were adopted by the Company's shareowners
to enhance the Company's ability to attract and retain qualified directors and
officers.
One difference between the Company's Restated Certificate of Incorporation
(the "Company Certificate of Incorporation") and the OGE Energy Certificate of
Incorporation is with respect to capital stock. The OGE Energy Certificate of
Incorporation authorizes the issuance of 125,000,000 shares of Common Stock,
compared to 100,000,000 shares of Common Stock authorized by the Company
Certificate of Incorporation. Additional shares of OGE Energy Common Stock
(including the additional 25,000,000 authorized in the OGE Energy Certificate of
Incorporation) could be issued for any proper corporate purpose authorized by
the Board of Directors of OGE Energy. The availability of additional authorized
shares will enable the OGE Energy Board to act with flexibility when and as the
need arises to issue additional shares in the future without the delays
necessitated by a shareowner vote. Among the reasons for issuing shares would be
to increase OGE Energy's capital through sales of OGE Energy Common Stock, to
undertake acquisitions and to fund dividend reinvestment and employee benefit
plans.
The Company's Certificate of Incorporation authorizes the issuance of: (i)
675,000 shares of 4% Preferred Stock of which 423,663 are issued and
outstanding, (ii) 1,865,000 shares of cumulative preferred stock, par value $100
per share (the "$100 Preferred Stock"), of which 415,000 shares are issued and
outstanding and (iii) 4,000,000 shares of cumulative preferred stock, par value
$25 per share (the "$25 Preferred Stock"), of which no shares are issued and
outstanding. The holders of 4% Preferred Stock are entitled to one vote per
$2.50 par value (eight votes per share) on all matters presented to a vote of
shareowners, while the $25 Preferred Stock and $100 Preferred Stock have limited
voting rights, including the right to elect directors upon a failure to pay
dividends for a continued period of time. The Company's ability to issue
additional preferred stock is restricted by its Certificate of Incorporation.
The Company may not issue additional preferred stock without an affirmative vote
of the holders of two-thirds of each class of the outstanding preferred stock
unless net income available for the payment of interest is at least equal to one
and one-half times the sum of the annual interest and preferred stock dividend
requirements on all preferred stock of the Company that will be outstanding
after the issuance of the preferred stock proposed to be issued.
OGE Energy is authorized to issue 5,000,000 shares of preferred stock,
without par value ("OGE Energy Preferred Stock"). Although OGE Energy has
created a series of preferred stock in connection with the adoption of a
shareowner rights plan (see below), no OGE Energy Preferred Stock will be
outstanding at the time of, or as a result of, the Restructuring, and OGE Energy
has no present plan to issue OGE Energy Preferred Stock. Management of OGE
Energy cannot foresee whether or when OGE Energy might issue any Preferred Stock
authorized in the OGE Energy Certificate of Incorporation.
OGE Energy Preferred Stock may be issued in the future in such series as may
be designated by OGE Energy's Board of Directors. In creating any such series,
OGE Energy's Board of Directors has the authority (as does the Company's Board
of Directors in issuing additional series of $100 Preferred Stock or $25
Preferred Stock) to fix the rights and preferences of each such series with
respect to, among other things, the dividend rate, redemption provisions,
liquidation preferences, and sinking fund provisions. The ability of OGE
Energy's Board of Directors to designate preferential rights of OGE Energy
Preferred Stock as to dividends, sinking funds or redemption or in connection
with any liquidation, dissolution or winding-up of OGE Energy could diminish
funds otherwise available to the holders of OGE Energy's Common Stock to the
same extent that the current ability of the Company's Board of Directors to
designate such preferential rights in issuing additional $100 Preferred Stock or
$25 Preferred Stock could diminish funds otherwise available to the holders of
the Company's Common Stock.
16
<PAGE>
OGE Energy's Board is also given the authority to fix conversion rights and
voting rights for any new series of Preferred Stock (including the right to
elect directors upon a failure to pay dividends), provided that no share of OGE
Energy Preferred Stock can have more than one vote per share. The issuance of
OGE Energy Preferred Stock with voting rights could decrease the relative voting
power of the holders of OGE Energy's Common Stock. The Company's Board of
Directors believes, however, that the additional flexibility in structuring
possible future financings and acquisitions and in meeting other possible future
corporate needs that is provided by delegating to OGE Energy's Board of
Directors the authority to designate varying rights is in the best interests of
the shareowners. Neither the holders of OGE Energy's Common Stock nor any future
holders of OGE Energy Preferred Stock will have any preemptive rights with
respect to future issuance of securities of OGE Energy.
Shares of authorized but unissued OGE Energy Common Stock and/or OGE Energy
Preferred Stock (the rights and preferences of which can be established by the
Board of Directors as described above) could be issued in an effort to dilute
the share ownership and voting power of a shareowner desiring to acquire control
of OGE Energy, which might have the effect of discouraging or making less likely
such a change in control. Such shares could also be issued to purchasers who
would support the Board of Directors in opposing a takeover proposal that the
Board of Directors has determined not to be in the best interests of OGE Energy
and its shareowners. OGE Energy Preferred Stock could also be issued with class
voting rights, conversion rights and preferences that might impede such a
takeover proposal. It should be emphasized, however, that OGE Energy does not
currently have any specific plans to issue any shares of stock other than in
connection with the Restructuring and that many of the actions described in this
paragraph are currently possible through the Company's issuance of additional
Common Stock.
In December 1990, the Company adopted a shareowners rights agreement
designed to protect shareowners' interests in the event that the Company is ever
confronted with an unfair or inadequate acquisition proposal. Pursuant to this
agreement, the Company declared a dividend distribution of one "right" for each
share of Company Common Stock. Each right entitles the holder to purchase from
the Company one one-hundredth of a share of new preferred stock of the Company
under certain circumstances. The rights may be exercised if a person or group
announces its intention to acquire, or does acquire, 20% or more of the
Company's Common Stock. Under certain circumstances, the holders of the rights
will be entitled to purchase either shares of Common Stock of the Company or
common stock of the acquirer at a reduced percentage of market value. The rights
will expire on December 11, 2000. The rights automatically trade with the shares
of Common Stock with which they are associated and will be exchanged along with
the Company Common Stock for shares of OGE Energy Common Stock and the
associated rights to purchase preferred stock of OGE Energy, described below,
pursuant to the Share Acquisition.
OGE Energy has adopted a shareowners rights agreement that is virtually
identical to the Company's rights agreement. A summary of the OGE Energy rights
agreement is included as Appendix D to this Proxy Statement/Prospectus.
DESCRIPTION OF OGE ENERGY COMMON STOCK
The holders of OGE Energy's Common Stock have one vote for each share held.
Subject to the possible prior rights of holders of OGE Energy's Preferred Stock
that may be issued in the future (described above), holders of OGE Energy's
Common Stock are entitled to receive such dividends as may be declared from time
to time by the OGE Energy Board of Directors out of funds legally available
therefor and to share pro-rata in any distribution to shareowners. See "Dividend
Policy." OGE Energy's Common Stock is not subject to redemption and does not
have any conversion or sinking fund provisions. OGE Energy's Common Stock
issuable in the Restructuring will be fully paid and non-assessable.
The OGE Energy Certificate of Incorporation also contains "fair price"
provisions, which require that mergers and certain other business combinations
or transactions involving OGE Energy and any substantial (10% or more) holder of
OGE Energy's Voting Stock (as defined below) must be approved
17
<PAGE>
by the holders of at least 80% of the voting power of OGE Energy's outstanding
Voting Stock unless the transaction is either approved by a majority of the
members of the Board of Directors who are unaffiliated with the substantial
holder or certain minimum price and procedural requirements are met. Any
amendment to the foregoing provisions must be approved by the holders of at
least 80% of the voting power of OGE Energy's outstanding Voting Stock. OGE
Energy's Voting Stock consists of outstanding shares of OGE Energy generally
entitled to vote in the election of directors and, when the Restructuring is
completed, will consist of OGE Energy's Common Stock.
Subject to any voting rights of the holders of OGE Energy Preferred Stock
that may be issued in the future, the OGE Energy Certificate of Incorporation
and By-Laws contain provisions stating that: (a) the Board of Directors shall be
divided into three classes, as nearly equal in number as possible, each of
which, after an interim arrangement, will serve for three years, with one class
being elected each year, (b) directors may be removed only with the approval of
the holders of at least 80% of the voting power of the shares of OGE Energy
generally entitled to vote, (c) any vacancy on the Board of Directors shall be
filled by the remaining directors then in office, though less than a quorum, (d)
advance notice of introduction by shareowners of business at annual shareowners
meetings and of shareowner nominations for the election of directors shall be
given and that certain information be provided with respect to such matters, (e)
shareowner action may be taken only at an annual meeting of shareowners or a
special meeting of shareowners called by the President or the Board of Directors
and, except as otherwise mandated by Oklahoma law, may not be effected without
such a meeting by any consent in writing by such shareowners, and (f) the
foregoing provisions may be amended only by the approval of the holders of at
least 80% of the voting power of the shares of OGE Energy generally entitled to
vote. These provisions along with the "fair price" provisions discussed above,
may deter attempts to change control of OGE Energy (by proxy contest, tender
offer or otherwise) and will make more difficult a change in control of OGE
Energy that is opposed by OGE Energy's Board of Directors. As indicated above,
these provisions are the same provisions that previously were adopted by the
Company's shareowners.
The Transfer Agent and Registrar for the Company's Common Stock and OGE
Energy's Common Stock is Liberty Bank and Trust Company of Oklahoma City, N.A.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPROVAL OF THE RESTRUCTURING.
LEGAL OPINIONS
Legal opinions in connection with OGE Energy's Common Stock issued under the
Share Acquisition Agreement will be rendered by Gardner, Carton & Douglas,
Chicago, Illinois, and Rainey, Ross, Rice & Binns, Oklahoma City, Oklahoma,
counsel for the Company and OGE Energy. Matters pertaining to local law will be
passed upon only by Rainey, Ross, Rice & Binns, Oklahoma City, Oklahoma, and as
to these matters, Gardner, Carton & Douglas will rely on their opinion.
As of July 31, 1995, members of the firm of Rainey, Ross, Rice & Binns,
Oklahoma City, Oklahoma owned a beneficial interest in 5,492 shares of Common
Stock of the Company, which upon consummation of the Restructuring will be 5,492
shares of OGE Energy's Common Stock.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Proxy Statement/Prospectus and elsewhere in this Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included or incorporated by reference herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
18
<PAGE>
PROPOSALS OF SHAREOWNERS
Any shareowner proposal intended to be presented at the 1996 Annual Meeting
of the Company (or OGE Energy if the Restructuring is consummated) must be
received by the Company (or OGE Energy) on or before November 30, 1995.
Proposals received by that date that are proper for consideration at the Annual
Meeting and otherwise conforming to the rules of the SEC will be included in the
1996 proxy statement.
OTHER MATTERS
At the Special Meeting, it is intended that only the item set forth in the
accompanying notice and described in this Proxy Statement/Prospectus will be
presented.
ANY SHAREOWNER MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S 1994 FORM
10-K BY SUBMITTING A REQUEST IN WRITING TO: MS. IRMA B. ELLIOTT, SECRETARY,
OKLAHOMA GAS AND ELECTRIC COMPANY, P.O. BOX 321, 101 NORTH ROBINSON, OKLAHOMA
CITY, OKLAHOMA 73101
No person has been authorized to give any information or to make any
representation not contained in this Proxy Statement/Prospectus. If given or
made, such information or representation must not be relied upon as having been
authorized by either OGE Energy or the Company. This Proxy Statement/Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy shares
of OGE Energy's Common Stock by any person in any jurisdiction or in any
circumstance in which such offer would be unlawful. Neither the delivery of this
Proxy Statement/Prospectus nor any distribution of the securities to which this
Proxy Statement/Prospectus relates shall, under any circumstances create any
inference that there has been no change in the affairs of either the Company or
OGE Energy since the date of this Proxy Statement/Prospectus.
19
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF SHARE ACQUISITION
THIS AGREEMENT AND PLAN OF SHARE ACQUISITION (this "Agreement") is between
OKLAHOMA GAS AND ELECTRIC COMPANY, an Oklahoma corporation ("OG&E"), the company
whose shares will be acquired pursuant to the Share Acquisition described
herein, and OGE ENERGY CORP., an Oklahoma corporation ("Holding Company"), the
acquiring company. OG&E and Holding Company are hereinafter referred to,
collectively, as the "Companies."
WITNESSETH:
WHEREAS, the authorized capital stock of OG&E consists of (a) 100,000,000
shares of Common Stock, par value $2.50 per share ("OG&E Common Stock"), of
which shares are issued and outstanding, (b) 675,000 shares of 4%
Cumulative Preferred Stock, par value $20 per share, of which 423,663 shares are
issued and outstanding (the "4% Preferred Stock"), (c) 4,000,000 shares of
Cumulative Preferred Stock, par value $25 per share, of which no shares are
issued and outstanding and (d) 1,865,000 shares of Cumulative Preferred Stock,
par value $100 per share, of which 415,000 shares are issued and outstanding
(the "$100 Preferred Stock");
WHEREAS, Holding Company is a wholly-owned subsidiary of OG&E with
authorized capital stock consisting of (a) 125,000,000 shares of Common Stock,
par value $.01 per share ("Holding Company Common Stock"), of which 10 shares
are issued and outstanding and owned of record by OG&E and (b) 5,000,000 shares
of Preferred Stock, par value $.01 per share, of which no shares are issued and
outstanding;
WHEREAS, each share of OG&E Common Stock also represents a Right to purchase
one-
hundredth of a share of OG&E's Series A Cumulative Preferred Stock, par value
$25 per share, in accordance with the Rights Agreement, dated December 11, 1990,
between OG&E and The Liberty National Bank and Trust Company of Oklahoma City,
and all references herein to OG&E Common Stock shall include such Rights;
WHEREAS, each share of Holding Company Common Stock also represents a Right
to purchase one-hundredth of a share of Holding Company's Series A Preferred
Stock, par value $.01 per share, in accordance with the Rights Agreement, dated
August 7, 1995, between Holding Company and The Liberty Bank and Trust Company
of Oklahoma City, N.A., and all references herein to Holding Company Common
Stock shall include such Rights;
WHEREAS, the Boards of Directors of the respective Companies deem it
desirable and in the best interests of the Companies and their shareowners that
Holding Company acquire each share of issued and outstanding OG&E Common Stock
and that such OG&E Common Stock be exchanged for a share of Holding Company
Common Stock with the result that Holding Company becomes the owner of all
outstanding OG&E Common Stock, all on the terms and conditions hereinafter set
forth;
WHEREAS, the execution and delivery of this Agreement by OG&E and Holding
Company and the Share Acquisition (as hereinafter defined) and the related
transactions have been approved, to the extent required, by orders,
authorizations or approvals, of the Oklahoma Corporation Commission, the
Arkansas Public Service Commission and the Federal Energy Regulatory Commission
under the Federal Power Act;
WHEREAS, the Internal Revenue Service has issued a ruling and the Companies
have received an opinion of tax counsel with respect to certain federal income
tax consequences concerning the Share Acquisition and related transactions;
WHEREAS, OG&E has obtained all necessary regulatory and other approvals to
permit it to own less than 5% of the total outstanding shares of The Arklahoma
Corporation; and
A-1
<PAGE>
WHEREAS, the Boards of Directors of OG&E and Holding Company have
recommended that their respective shareowners approve the Share Acquisition and
this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the agreements,
covenants and conditions hereinafter contained, the parties hereto agree with
respect to the acquisition and exchange provided for herein (the "Share
Acquisition") that at the Effective Time (as hereinafter defined) each share of
OG&E Common Stock issued and outstanding immediately prior to the Effective Time
will be acquired by the Holding Company and exchanged for one share of Holding
Company Common Stock, and that the terms and conditions of the Share Acquisition
and the method of carrying the same into effect are as follows:
ARTICLE I.
Subject to the satisfaction of the conditions and obligations of the parties
hereto, the Share Acquisition will be effective upon the filing with the
Secretary of State of Oklahoma (the "Secretary of State") of a Certificate of
Share Acquisition (the "Certificate") with respect to the Share Acquisition or
at such later time as may be stated in the Certificate (the time at which the
Share Acquisition becomes effective being referred to herein as the "Effective
Time").
ARTICLE II.
At the Effective Time:
1. subject to the provisions of item 4 below, each share of OG&E Common
Stock issued and outstanding immediately prior to the Effective Time shall be
acquired by the Holding Company and shall be exchanged for one share of Holding
Company Common Stock, which shall thereupon be fully paid and non-assessable;
2. the Holding Company shall become the owner and holder of each issued and
outstanding share of OG&E Common Stock so exchanged;
3. each share of Holding Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be cancelled and shall thereupon
constitute an authorized and unissued share of Holding Company Common Stock; and
4. the former owners of OG&E Common Stock shall be entitled only to receive
shares of Holding Company Common Stock as provided herein or to their appraisal
rights under 18 O.S. Section1090.1 and 18 O.S. Section1091.
Outstanding shares of OG&E 4% Preferred Stock and outstanding shares of OG&E
$100 Preferred Stock shall not be exchanged or otherwise affected in connection
with the Share Acquisition. Each share of OG&E 4% Preferred Stock issued and
outstanding immediately prior to the Effective Time shall continue to be issued
and outstanding following the Share Acquisition and to be a share of OG&E 4%
Preferred Stock. Each share of OG&E $100 Preferred Stock issued and outstanding
immediately prior to the Effective Time shall continue to be issued and
outstanding following the Share Acquisition and to be a share of OG&E $100
Preferred Stock of the applicable series designation.
ARTICLE III.
The consummation of the Share Acquisition is subject to the following
conditions precedent:
1. the satisfaction of the respective obligations of the parties hereto in
accordance with the terms and conditions herein contained;
2. the adoption of this Agreement by the requisite vote of the holders of
the OG&E Common Stock and OG&E 4% Preferred Stock and by the requisite vote of
the shareowner of the Holding Company pursuant to the Oklahoma General
Corporation Act (the "Act");
A-2
<PAGE>
3. the execution and filing of the Certificate with the Secretary of State
pursuant to the Act;
4. the approval for listing, upon official notice of issuance, by the New
York Stock Exchange and the Pacific Stock Exchange, of the Holding Company
Common Stock to be issued in accordance with this Agreement;
5. the consummation of the transaction referred to in the eighth Whereas
clause hereof; and
6. the receipt of such orders, authorizations, approvals or waivers from
all jurisdictive regulatory bodies, boards or agencies, in addition to the
orders or approvals referred to in the sixth Whereas clause hereof, which are
required in connection with the Share Acquisition and related transactions.
ARTICLE IV.
This Agreement may be amended, modified or supplemented, or compliance with
any provision or condition hereof may be waived, at any time, before or after
the approval by the shareowners of either or both of the Companies, by the
mutual consent of the Boards of Directors of OG&E and the Holding Company;
provided, however, that no such amendment, modification, supplement or waiver
shall be made or effected subsequent to approval by the shareowners of this
Agreement, if such amendment, modification, supplement or waiver would, in the
judgment of the Board of Directors of OG&E materially and adversely affect the
shareowners of OG&E.
This Agreement may be terminated and the Share Acquisition and related
transactions abandoned at any time prior to the time the Certificate is filed
with the Secretary of State, if the Board of Directors of the Holding Company
determines, in its sole discretion, that consummation of the Share Acquisition
would be inadvisable or not in the best interests of the Holding Company or its
shareowners.
ARTICLE V.
This Agreement shall be submitted to the holders of OG&E Common Stock and
OG&E 4% Preferred Stock and to the shareowner of the Holding Company for
approval as provided by the Act. The affirmative vote of the holders of a
majority of the outstanding OG&E Common Stock and OG&E 4% Preferred Stock voting
together as one voting group and the affirmative vote of the holders of a
majority of the OG&E Common Stock voting as a separate voting group are required
for the adoption of this Agreement. The affirmative vote of the holder of a
majority of the outstanding shares of Holding Company Common Stock is required
for the adoption of this Agreement.
ARTICLE VI.
Following the Effective Time, other than holders of certificates theretofore
representing shares of OG&E Common Stock who perfect their appraisal rights
under 18 O.S. Section1090.1 and 18 O.S. Section1091, each holder of an
outstanding certificate or certificates theretofore representing shares of OG&E
Common Stock may, but shall not be required to, surrender the same to Holding
Company for cancellation and reissuance of a certificate or certificates in such
holder's name or for cancellation and transfer, and each such holder or
transferee will be entitled to receive a certificate or certificates
representing the same number of shares of Holding Company Common Stock as the
shares of OG&E Common Stock previously represented by the certificate or
certificates surrendered. Until so surrendered or presented for transfer, each
outstanding certificate which, immediately prior to the Effective Time,
represented OG&E Common Stock (other than certificates held by holders of OG&E
Common Stock who have perfected their appraisal rights under 18 O.S.
Section1090.1 and 18 O.S. Section1091), shall be deemed and treated for all
corporate purposes to represent the ownership of the same number of shares of
Holding Company Common Stock as though such surrender or transfer and exchange
had taken place. The holders of OG&E Common Stock at the Effective Time shall
have no right to have their shares of OG&E Common Stock transferred on the stock
transfer books of OG&E, and such stock transfer books shall be deemed to be
closed for this purpose at the Effective Time.
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IN WITNESS, both OG&E and Holding Company, pursuant to authorization given
by the Boards of Directors, have caused this Agreement to be executed by a duly
authorized officer and the corporate seals to be affixed and attested by the
Secretaries as of .
OKLAHOMA GAS AND ELECTRIC COMPANY
By:
--------------------------------------
PRESIDENT
ATTEST:
--------------------------------------
SECRETARY
(SEAL)
OGE ENERGY CORP.
By:
--------------------------------------
PRESIDENT
ATTEST:
--------------------------------------
SECRETARY
(SEAL)
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APPENDIX B
FORM OF RESTATED
CERTIFICATE OF INCORPORATION
OF
OGE ENERGY CORP.
I.
The name of this corporation shall be "OGE Energy Corp."
II.
The address of its Registered Office in the State of Oklahoma is 101 North
Robinson, in the City of Oklahoma City, County of Oklahoma and the name of its
Registered Agent at such address is Ms. Irma B. Elliott.
III.
The purpose for which this corporation is formed is to engage in any lawful
act or activity for which corporations may be organized under the general
corporation law of Oklahoma.
IV.
A. AUTHORIZED CAPITAL STOCK. The total number of shares which the
corporation shall have the authority to issue shall be 130,000,000 shares, of
which 125,000,000 shares shall be Common Stock, par value $.01 per share, and
5,000,000 shares shall be Preferred Stock, par value $.01 per share.
B. COMMON STOCK. The Board of Directors is hereby authorized to cause
shares of Common Stock, par value $.01 per share, to be issued from time to time
for such consideration as may be fixed from time to time by the Board of
Directors, or by way of stock split pro rata to the holders of the Common Stock.
The Board of Directors may also determine the proportion of the proceeds
received from the sale of such stock which shall be credited upon the books of
the corporation to Capital or Capital Surplus.
Each share of the Common Stock shall be equal in all respects to every other
share of the Common Stock. Subject to any special voting rights of the holders
of Preferred Stock fixed by or pursuant to the provisions of Section C of this
Article IV, the shares of Common Stock shall entitle the holders thereof to one
vote for each share upon all matters upon which shareholders have the right to
vote.
No holder of shares of Common Stock shall be entitled as such as a matter of
right to subscribe for or purchase any part of any new or additional issue of
stock, or securities convertible into stock, of any class whatsoever, whether
now or hereafter authorized, and whether issued for cash, property, services or
otherwise.
After the requirements with respect to preferential dividends on Preferred
Stock (fixed by or pursuant to the provisions of Section C of this Article IV),
if any, shall have been met and after the corporation shall have complied with
all the requirements, if any, with respect to the setting aside of sums as
sinking funds or redemption or purchase accounts (fixed by or pursuant to the
provisions of Section C of this Article IV) and subject further to any other
conditions which may be fixed by or pursuant to the provisions of Section C of
this Article IV, then, but not otherwise, the holders of Common Stock shall be
entitled to receive dividends, if any, as may be declared from time to time by
the Board of Directors.
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After distribution in full of the preferential amount (fixed by or pursuant
to the provisions of Section C of this Article IV), if any, to be distributed to
the holders of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or winding up of the
corporation, the holders of the Common Stock shall be entitled to receive all
the remaining assets of the corporation, tangible and intangible, of whatever
kind available for distribution to shareholders, ratably in proportion to the
number of shares of Common Stock held by each.
C. PREFERRED STOCK. Shares of Preferred Stock may be divided into and
issued in such series, on such terms and for such consideration as may from time
to time be determined by the Board of Directors of the corporation. Each series
shall be so designated as to distinguish the shares thereof from the shares of
all other series and classes. All shares of Preferred Stock shall be identical,
except as to variations between different series in the relative rights and
preferences as permitted or contemplated by the next succeeding sentence.
Authority is hereby vested in the Board of Directors of the corporation to
establish out of shares of Preferred Stock which are authorized and unissued
from time to time one or more series thereof and to fix and determine the
following relative rights and preferences of shares of each such series:
(1) the distinctive designation of, and the number of shares which shall
constitute, the series and the "stated value" or "nominal value," if any,
thereof;
(2) the rate or rates of dividends applicable to shares of such series,
which rate or rates may be expressed in terms of a formula or other method
by which such rate or rates shall be calculated from time to time, and the
dividend periods, including the date or dates on which dividends are
payable;
(3) the price at and the terms and conditions on which shares of such
series may be redeemed;
(4) the amount payable upon shares of such series in the event of the
involuntary liquidation of the corporation;
(5) the amount payable upon shares of such series in the event of the
voluntary liquidation of the corporation;
(6) sinking fund provisions for the redemption or purchase of shares of
such series;
(7) the terms and conditions on which shares of such series may be
converted, if such shares are issued with the privilege of conversion;
(8) the voting powers, if any, of the holders of shares of the series
which may, without limiting the generality of the foregoing, include (i) the
right to one or less than one vote per share on any or all matters voted
upon by the shareholders and (ii) the right to vote, as a series by itself
or together with other series of Preferred Stock or together with all series
of Preferred Stock as a class, upon such matters, under such circumstances
and upon such conditions as the Board of Directors may fix, including,
without limitation, the right, voting as a series by itself or together with
other series of Preferred Stock or together with all series of Preferred
Stock as a class, to elect one or more directors of this corporation in the
event there shall have been a failure to pay dividends on any one or more
series of Preferred Stock or under such other circumstances and upon such
conditions as the Board of Directors may determine; provided, however, that
in no event shall a share of Preferred Stock have more than one vote; and
(9) any other such rights and preferences as are not inconsistent with
the Oklahoma General Corporation Act.
No holder of any share of any series of Preferred Stock shall be entitled to
vote for the election of directors or in respect of any other matter except as
may be required by the Oklahoma General Corporation Act, as amended, or as is
permitted by the resolution or resolutions adopted by the Board of Directors
authorizing the issue of such series of Preferred Stock.
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D. OTHER PROVISIONS
(1) The relative powers, preferences, and rights of each series of Preferred
Stock in relation to the powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time to time by the Board
of Directors in the resolution or resolutions adopted pursuant to authority
granted in Section C of this Article IV, and the consent by class or series vote
or otherwise, of the holders of the Preferred Stock or such of the series of the
Preferred Stock as are from time to time outstanding shall not be required for
the issuance by the Board of Directors of any other series of Preferred Stock
whether the powers, preferences and rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them, provided,
however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of the holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
(2) Subject to the provisions of paragraph 1 of this Section D, shares of
any series of Preferred Stock may be issued from time to time as the Board of
Directors shall determine and on such terms and for such consideration as shall
be fixed by the Board of Directors.
(3) Common Stock may be issued from time to time as the Board of Directors
shall determine and on such terms and for such consideration as shall be fixed
by the Board of Directors.
(4) No holder of any of the shares of any class or series of shares or
securities convertible into such shares of any class or series of shares, or of
options, warrants or other rights to purchase or acquire shares of any class or
series of shares or of other securities of the corporation shall have any
preemptive right to purchase, acquire, subscribe for any unissued shares of any
class or series or any additional shares of any class or series to be issued by
reason of any increase of the authorized capital stock of the corporation of any
class or series, or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for shares of any class or series,
or carrying any right to purchase or acquire shares of any class or series, but
any such unissued shares, additional authorized issue of shares of any class or
series of shares or securities convertible into or exchangeable for shares, or
carrying any right to purchase or acquire shares, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations, and upon such terms, as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(5) The corporation reserves the right to increase or decrease its
authorized capital shares, or any class or series thereof or to reclassify the
same and to amend, alter, change or repeal any provision contained in the
Certificate of Incorporation or in any amendment thereto, in the manner now or
hereafter prescribed by law, but subject to such conditions and limitations as
are hereinbefore prescribed, and all rights conferred upon shareholders in the
Certificate of Incorporation of this corporation, or any amendment thereto, are
granted subject to this reservation.
V.
The name and mailing address of the sole incorporator is:
Ms. Nina Zalenski
321 North Clark Street, Suite 3300
Chicago, Illinois 60610
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VI.
A. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS.
(1) In addition to any affirmative vote required by law or this Article VI
or any other Article hereof, and except as otherwise expressly provided in
Section B of this Article VI:
(a) any merger or consolidation of the corporation or any Subsidiary (as
hereinafter defined) with (i) any Interested Shareholder (as hereinafter
defined) or (ii) any other corporation (whether or not itself an Interested
Shareholder) which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Shareholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets of the corporation or any Subsidiary having an aggregate Fair Market
Value of $25,000,000 or more; or
(c) the issuance or transfer by the corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
corporation or any Subsidiary to any Interested Shareholder or any Affiliate
of any Interested Shareholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate Fair Market Value of
$25,000,000 or more, other than the issuance of securities upon the
conversion of convertible securities of the corporation or any Subsidiary
which were not acquired by such Interested Shareholder (or such Affiliate)
from the corporation or a Subsidiary; or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested Shareholder; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the corporation, or any merger or
consolidation of the corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an
Interested Shareholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class or
series of stock or securities convertible into stock of the corporation or
any Subsidiary which is directly or indirectly owned by any Interested
Shareholder or any Affiliate of any Interested Shareholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then outstanding shares of stock of the corporation entitled to
vote generally in the election of directors (the "Voting Stock"), voting
together as a single class (it being understood that for purposes of this
Article VI, each share of the Voting Stock shall have the number of votes
granted to it pursuant to Article IV hereof). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law, by any provision hereof, or in any
agreement with any national securities exchange or otherwise.
(2) The term "Business Combination" as used in this Article VI shall mean
any transaction which is referred to in any one or more subparagraphs (a)
through (e) of paragraph 1 of this Section A.
B. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of Section A of this
Article VI shall not be applicable to any particular Business Combination, and
such Business Combination shall require only such affirmative vote as is
required by law and any other provision of any Article hereof, if all of the
conditions specified in either of the following paragraphs 1 and 2 are met:
(1) The Business Combination shall have been approved by a majority of the
Disinterested Directors (as hereinafter defined).
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(2) All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market Value (as
hereinafter defined) as of the date of the consummation of the Business
Combination of any consideration other than cash to be received per share by
holders of Common Stock in such Business Combination shall be at least equal
to the higher of the following:
I. (if applicable) the Highest Per Share Price (as hereinafter
defined) (including the brokerage commissions, transfer taxes and
soliciting dealers' fees) paid in order to acquire any shares of Common
Stock beneficially owned by the Interested Shareholder which were
acquired beneficially by such Interested Shareholder (X) within the
two-year period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or (Y) in
the transaction in which it became an Interested Shareholder, whichever
is higher; and
II. the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Shareholder
became an Interested Shareholder (such later date is referred to in this
Article VI as the "Determination Date"), whichever is higher.
(b) The aggregate amount of the cash and the Fair Market Value as of the
date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of shares of any class or
series of outstanding Voting Stock other than the Common Stock shall be at
least equal to the highest of the following (it being intended that the
requirements of this subparagraph (b) shall be required to be met with
respect to every such class or series of outstanding Voting Stock, whether
or not the Interested Shareholder beneficially owns any shares of a
particular class or series of Voting Stock):
I. (if applicable) the Highest Per Share Price (as hereinafter
defined) (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid in order to acquire any shares of such
class or series of Voting Stock beneficially owned by the Interested
Shareholder which were acquired beneficially by such Interested
Shareholder (X) within the two-year period immediately prior to the
Announcement Date or (Y) in the transaction in which it became an
Interested Shareholder, whichever is higher;
II. (if applicable) the highest preferential amount per share to
which the holders of shares of such class or series of Voting Stock are
entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation; and
III. the Fair Market Value per share of such class or series of
Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher.
(c) The consideration to be received by holders of a particular class or
series of outstanding Voting Stock (including Common Stock) shall be in cash
or in the same form as was previously paid in order to acquire beneficially
shares of such class or series of Voting Stock that are beneficially owned
by the Interested Shareholder and, if the Interested Shareholder
beneficially owns shares of any class or series of Voting Stock that were
acquired with varying forms of consideration, the form of consideration to
be received by holders of such class or series of Voting Stock shall be
either cash or the form used to acquire beneficially the largest number of
shares of such class or series of Voting Stock beneficially acquired by it
prior to the Announcement Date.
(d) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination: (i)
except as approved by a majority of the Disinterested Directors, there shall
have been no failure to declare and pay at the regular dates therefor the
full amount of any dividends (whether or not cumulative) payable on any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation; (ii) there shall have been (x) no reduction
in the annual rate of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common Stock), except as
approved by
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a majority of the Disinterested Directors, and (y) an increase in such
annual rate of dividends (as necessary to prevent any such reduction) in the
event of any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the
effect of reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate was approved by a
majority of the Disinterested Directors; and (iii) such Interested
Shareholder shall have not become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction which results in
such Interested Shareholder becoming an Interested Shareholder.
(e) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionally as a stockholder), of
any loans, advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantages provided by the corporation, whether
in anticipation of or in connection with such Business Combination or
otherwise.
(f) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to
public shareholders of the corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
C. CERTAIN DEFINITIONS. For the purposes of this Article VI:
(1) A "person" shall mean any individual, firm, corporation or other entity.
(2) "Interested Shareholder" shall mean any person (other than the
corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of more than 10% of
the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the corporation and at any time within the
two-year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of 10% or more of the voting power of the
then outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares of Voting
Stock that were at any time within the two-year period immediately prior to
the date in question beneficially owned by any Interested Stockholder, if
such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within
the meaning of the Securities Act of 1933.
(3) A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly; or
(b) which such person or any of its Affiliates or Associates has (i) the
right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote or direct the
vote pursuant to any agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purposes of acquiring,
holding, voting or disposing of any shares of Voting Stock.
(4) For the purposes of determining whether a person is an Interested
Shareholder pursuant to paragraph 2 of this Section C, the number of shares of
Voting Stock deemed to be outstanding shall
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include shares deemed owned through application of paragraph 3 of this Section C
but shall not include any other shares of Voting Stock which may be issuable
pursuant to any agreement, arrangement or understanding or upon exercise of
conversion rights, warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations, under the
Securities Exchange Act of 1934, as in effect on November 16, 1995.
(6) "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the corporation or by a
Subsidiary of the corporation or by the corporation and one or more
Subsidiaries; provided, however, that for the purposes of the definition of
Interested Shareholder set forth in paragraph 2 of this Section C, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the corporation.
(7) "Disinterested Director" means any member of the Board of Directors of
the corporation who is unaffiliated with, and not a nominee or representative
of, the Interested Shareholder and was a member of the Board of Directors prior
to the time that the Interested Shareholder became an Interested Shareholder,
and any successor of a Disinterested Director who is unaffiliated with, and not
a nominee or representative of, the Interested Shareholder and who is
recommended to succeed a Disinterested Director by a majority of Disinterested
Directors then on the Board of Directors.
(8) "Fair Market Value" means: (a) in the case of stock, the highest closing
sale price during the 30-day period immediately preceding the date in question
of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape on
the New York Stock Exchange, or, if such stock is not listed on such Exchange,
on the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such stock
is not listed on any such exchange, the highest closing sales price or bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use, or if no
such quotations are available, the fair market value on the date in question of
a share of such stock as determined by a majority of the Disinterested Directors
in good faith, in each case with respect to any class of stock, appropriately
adjusted for any dividend or distribution in shares of such stock or any stock
split or reclassification of outstanding shares of such stock into a greater
number of shares of such stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of such stock;
and (b) in the case of stock of any class or series which is not traded on any
United States registered securities exchange nor in the over-the-counter market
or in the case of property other than cash or stock, the fair market value of
such property on the date in question as determined by a majority of the
Disinterested Directors in good faith.
(9) References to "Highest Per Share Price" shall in each instance, with
respect to any class of stock, reflect an appropriate adjustment for any
dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such stock.
(10) In the event of any Business Combination in which the corporation
survives, the phrase "consideration other than cash to be received" as used in
subparagraphs (a) and (b) of paragraph 2 of Section B of this Article VI shall
include the shares of Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such shares.
D. POWERS OF THE BOARD OF DIRECTORS. A majority of the Disinterested
Directors of the corporation shall have the power and duty to determine, on the
basis of information known to them after reasonable inquiry, all facts necessary
to determine compliance with this Article VI, including without limitation, (a)
whether a person is an Interested Shareholder, (b) the number of shares of
Voting Stock
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beneficially owned by any person, (c) whether a person is an Affiliate or
Associate of another, (d) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $25,000,000 or more and (e)
whether the requirements of Section B of this Article VI have been met.
E. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED SHAREHOLDERS. Nothing
contained in this Article VI shall be construed to relieve any Interested
Shareholder from any fiduciary obligation imposed by law.
F. AMENDMENT OR REPEAL. Notwithstanding any other provisions of this
Article VI or of any other Article hereof, or of the By-laws of the corporation
(and notwithstanding the fact that a lesser percentage may be specified from
time to time by law, this Article VI, any other Article hereof, or the By-laws
of the corporation), the provisions of this Article VI may not be altered,
amended or repealed in any respect, nor may any provision inconsistent therewith
be adopted, unless such alteration, amendment, repeal or adoption is approved by
the affirmative vote of the holders of at least 80% of the combined voting power
of the then outstanding Voting Stock, voting together as a single class.
VII.
A. ELECTION AND TERMS OF DIRECTORS. Except as may otherwise be provided in
or fixed by or pursuant to the provisions of Article IV hereof relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect directors under
specified circumstances, the directors shall be classified, with respect to the
time for which they severally hold office, into three classes, as nearly equal
in number as possible, as shall be provided in the manner specified in the
By-laws of the corporation, one class to be originally elected for a term
expiring at the annual meeting of shareholders to be held in 1996, another class
to be originally elected for a term expiring at the annual meeting of
shareholders to be held in 1997, and another class to be originally elected for
a term expiring at the annual meeting of shareholders to be held in 1998, with
each class to hold office until its successor is elected and qualified. At each
annual meeting of shareholders of the corporation and except as may otherwise be
provided in or fixed by or pursuant to the provisions of Article IV hereof
relating to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
directors under specified circumstances, the successors of the class of
directors whose term expires at that meeting shall be elected to hold office for
a term expiring at the annual meeting of shareholders held in the third year
following the year of their election.
B. SHAREHOLDER NOMINATION OF DIRECTOR CANDIDATES AND INTRODUCTION OF
BUSINESS. Advance notice of shareholder nominations for the election of
directors, and advance notice of business to be brought by shareholders before
an annual meeting of shareholders, shall be given in the manner provided in the
By-laws of the corporation.
C. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as may otherwise be
provided in or fixed by or pursuant to the provisions of Article IV hereof
relating to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
directors under specified circumstances: (i) newly created directorships
resulting from any increase in the number of directors and any vacancies on the
Board of Directors resulting from death, resignation, disqualification, removal
or other cause shall be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the Board
of Directors; (ii) any director elected in accordance with the preceding clause
(i) shall hold office for the remainder of the full term of the class of
directors in which the new directorship was created or the vacancy occurred and
until such director's successor shall have been elected and qualified; and (iii)
no decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
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D. REMOVAL. Except as may otherwise be provided in or fixed by or pursuant
to the provisions of Article IV hereof relating to the rights of the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under specified circumstances,
any director may be removed from office, with or without cause, only by the
affirmative vote of the holders of at least 80% of the combined voting power of
the then outstanding shares of the corporation's stock entitled to vote
generally, voting together as a single class. Whenever in this Article VII or in
Article VIII hereof or in Article IX hereof, the phrase "the then outstanding
shares of the corporation's stock entitled to vote generally" is used, such
phrase shall mean each then outstanding share of Common Stock and of any other
class or series of the corporation's stock that is entitled to vote generally in
the election of directors and whose voting privileges are not generally
restricted by any of the provisions of any Article hereof.
E. AMENDMENT OR REPEAL. Notwithstanding any other provisions of this
Article VII or of any other Article hereof or of the By-laws of the corporation
(and notwithstanding the fact that a lesser percentage may be specified from
time to time by law, this Article VII, any other Article hereof, or the By-laws
of the corporation), the provisions of this Article VII may not be altered,
amended or repealed in any respect, nor may any provision inconsistent therewith
be adopted, unless such alteration, amendment, repeal or adoption is approved by
the affirmative vote of the holders of at least 80% of the combined voting power
of the then outstanding shares of the corporation's stock entitled to vote
generally, voting together as a single class.
VIII.
Any action required or permitted to be taken by the shareholders of the
corporation must be effected at a duly called annual or special meeting of such
holders and, except as otherwise mandated by Oklahoma law, may not be effected
without such a meeting by any consent in writing by such holders. Except as
otherwise mandated by Oklahoma law and except as may otherwise be provided in or
fixed by or pursuant to the provisions of Article IV hereof relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect directors under
specified circumstances, special meetings of shareholders of the corporation may
be called only by the Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors or by the President of the
corporation. Notwithstanding any other provisions of this Article VIII or of any
other Article hereof or of the By-laws of the corporation (and notwithstanding
the fact that a lesser percentage may be specified from time to time by law,
this Article VIII, any other Article hereof, or the By-laws of the corporation),
the provisions of this Article VIII may not be altered amended or repealed in
any respect, nor may any provision inconsistent therewith be adopted, unless
such alteration, amendment, repeal or adoption is approved by the affirmative
vote of the holders of at least 80% of the combined voting power of the then
outstanding shares of the corporation's stock entitled to vote generally, voting
together as a single class.
IX.
The Board of Directors shall have power to adopt, amend and repeal the
By-laws of the corporation to the maximum extent permitted from time to time by
Oklahoma law; provided, however, that any By-laws adopted by the Board of
Directors under the powers conferred hereby may be amended or repealed by the
Board of Directors or by the shareholders having voting power with respect
thereto, except that, and notwithstanding any other provisions of this Article
IX or of any other Article hereof or of the By-laws of the corporation (and
notwithstanding the fact that a lesser percentage may be specified from time to
time by law, this Article IX, any other Article hereof or the By-laws of the
corporation), no provision of Section 1.1 of Article 1 of the By-Laws, or of
Section 4.2, Section 4.12 or Section 4.14 of Article IV of the By-laws, or of
Section 5.2 or Section 5.3 of the By-laws may be altered, amended or repealed in
any respect, nor may any provision inconsistent therewith be adopted, unless
such alteration, amendment, repeal or adoption is approved by the affirmative
vote of the holders of at least 80% of the combined voting power of the then
outstanding shares of the corporation's stock
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entitled to vote generally, voting together as a single class. Notwithstanding
any other provisions of this Article IX or of any other Article hereof or of the
By-laws of the corporation (and notwithstanding the fact that a lesser
percentage may be specified from time to time by law, this Article IX, any other
Article hereof or the By-laws of the corporation), the provisions of this
Article IX may not be altered, amended or repealed in any respect, nor may any
provision inconsistent therewith be adopted, unless such alteration, amendment,
repeal or adoption is approved by the affirmative vote of the holders of at
least 80% of the combined voting power of the then outstanding shares of the
corporation's stock entitled to vote generally, voting together as a single
class.
X.
A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 1053 of the Oklahoma General Corporation
Act, or (iv) for any transaction from which the director derived any improper
personal benefit. If the Oklahoma General Corporation Act is amended after
approval by the shareholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Oklahoma General Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders of
the corporation shall not adversely affect any right or protection of a director
of the corporation existing at the time of such repeal or modification.
XI.
A. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director, officer or employee of the corporation or is or was serving at the
request of the corporation as a director, officer or employee of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer or employee or in any other capacity
while serving as a director, officer or employee, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the Oklahoma
General Corporation Act, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the corporation to provide broader indemnification rights than such law
permitted the corporation to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith and such indemnification
shall continue as to an indemnitee who had ceased to be a director, officer or
employee and shall inure to the benefit of the indemnitee's heirs, executor and
administrators; provided, however, that, except as provided in Section B of this
Article XI with respect to proceedings to enforce rights to indemnification, the
corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the corporation. Any person
who is or was a director or officer of a subsidiary of the corporation shall be
deemed to be serving in such capacity at the request of the corporation for
purposes of this Article XI. The right to indemnification conferred in this
Article shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Oklahoma General Corporation Act requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a director or officer (and
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not in any other capacity in which service was or is rendered by such
indemnitee, including, without limitation, service with respect to an employee
benefit plan) shall be made only upon delivery to the corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter, a
"final adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this Article or otherwise. The rights to indemnification and
advancement of expenses conferred in this Section A shall be a contract right.
B. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section A of this
Article XI is not paid in full by the corporation within sixty days after a
written claim has been received by the corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall
be twenty days, the indemnitee may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim. If successful in whole or
in part in any such suit or in a suit brought by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
also shall be entitled to be paid the expense of prosecuting or defending such
suit. In (i) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
in (ii) any suit by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the corporation shall be entitled to
recover such expenses upon a final adjudication that, the indemnitee has not met
the applicable standard of conduct set forth in the Oklahoma General Corporation
Act. Neither the failure of the corporation (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Oklahoma General Corporation Act, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel, or its shareholders) that the indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified or to such
advancement of expenses under this Article XI or otherwise shall be on the
corporation.
C. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the
advancement of expenses conferred in this Article XI shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, these Articles of Incorporation, any By-law, any agreement, any vote of
shareholders or disinterested directors or otherwise.
D. INSURANCE. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the Oklahoma General Corporation Act.
E. INDEMNIFICATION OF AGENTS. The corporation may, to the extent authorized
from time to time by the Board of Directors, grant rights to indemnification and
to the advancement of expenses to any agent of the corporation and to any person
serving at the request of the corporation as an agent of another corporation or
of a partnership, joint venture, trust or other enterprise to the fullest extent
of the provisions of this Article XI with respect to the indemnification and
advancement of expenses of directors, officers and employees of the corporation.
F. REPEAL OR MODIFICATION. Any repeal or modification of any provision of
this Article XI by the shareholders of the corporation shall not adversely
affect any rights to indemnification and to advancement of expenses that any
person may have at the time of such repeal or modification with respect to any
acts or omissions occurring prior to such repeal or modification.
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XII.
Of the then unallotted shares of Preferred Stock described in Article IV
hereof, the Board of Directors on August 7, 1995, established a series of
Preferred Stock in the amount and with the designation, voting powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated "Series A Preferred Stock" and the number of shares constituting such
series shall be 1,250,000. Shares of Series A Preferred Stock shall have a par
value of $.01 per share.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the possible prior and superior rights of the holders of any
shares of preferred stock of the Company ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, each holder of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for that purpose: (i)
quarterly dividends payable in cash on January 20, April 20, July 20 and October
20 in each year (each such date being a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of such share of Series A Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $5.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends declared on shares of the Common Stock of the
Company, par value $.01 per share (the "Common Stock"), since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of a share of Series A
Preferred Stock, and (ii) subject to the provision for adjustment hereinafter
set forth, quarterly distributions (payable in kind) on each Quarterly Dividend
Payment Date in an amount per share equal to 100 times the aggregate per share
amount of all non-cash dividends or other distributions (other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock, by reclassification or otherwise) declared on shares of Common
Stock since the immediately preceding Quarterly Dividend Payment Date, or with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of a share of Series A Preferred Stock. If the Quarterly Dividend Payment Date
is a Saturday, Sunday or legal holiday, then such Quarterly Dividend Payment
Date shall be the first immediately preceding calendar day which is not a
Saturday, Sunday or legal holiday. In the event that the Company shall at any
time after August 7, 1995 (the "Rights Declaration Date") (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, then in each
such case, the amount to which the holder of a share of Series A Preferred Stock
was entitled immediately prior to such event pursuant to the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which shall be the number of shares of Common Stock that are outstanding
immediately after such event, and the denominator of which shall be the number
of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on shares of
Series A Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the shares of Common Stock (other than a
dividend payable in shares of Common Stock); PROVIDED, HOWEVER, that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $5.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding share of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such share of Series A
Preferred Stock, unless the date of issuance of such share is prior to the
record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such share shall begin
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to accrue from the date of issuance of such share, or unless the date of
issuance is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on shares of Series A Preferred Stock in an
amount less than the aggregate amount of all such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis
among all shares of Series A Preferred Stock at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
(D) Dividends payable on the Series A Preferred Stock for the initial
dividend period and for any period less than a full quarterly period, shall be
computed on the basis of a 360-day year of 30-day months.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the holder thereof
to one vote on all matters submitted to a vote of the shareholders of the
Company.
(B) Except as otherwise provided herein or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of shareholders of the
Company.
(C) If at the time of any annual meeting of shareholders for the election
of directors a "default in preference dividends" on the Series A Preferred Stock
shall exist, the holders of the Series A Preferred Stock shall have the right at
such meeting, voting together as a single class, to the exclusion of the holders
of Common Stock, to elect two (2) directors of the Company. Such right shall
continue until there are no dividends in arrears upon the Series A Preferred
Stock. Either or both of the two directors to be elected by the holders of the
Series A Preferred Stock may be to fill a vacancy or vacancies created by an
increase by the Board of Directors in the number of directors constituting the
Board of Directors. Each director elected by the holders of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the full term
for which he or she shall have been elected, notwithstanding that prior to the
end of such term a default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed except by, the
vote of the holders of record of the outstanding Series A Preferred Stock voting
together as a single class, at a meeting of the shareholders or of the holders
of Preferred Stock called for the purpose. So long as a default in preference
dividends on the Series A Preferred Stock shall exist, (i) any vacancy in the
office of a Preferred Director may be filled (except as provided in the
following clause (ii)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Company and (ii) in the case of the
removal of any Preferred Director, the vacancy may be filled by the vote of the
holders of the outstanding Series A Preferred Stock voting together as a single
class, at the same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be deemed, for
all purposes hereof, to be a Preferred Director. For the purposes hereof, a
"default in preference dividends" on the Preferred Stock shall be deemed to have
occurred whenever the amount of accrued and unpaid dividends upon the Series A
Preferred Stock shall be equivalent to six (6) full quarterly dividends or more,
and having so occurred, such default shall be deemed to exist thereafter until,
but only until, all accrued dividends on all Series A Preferred Stock then
outstanding shall have been paid to the end of the last preceding quarterly
dividend period. The provisions of this paragraph (C) shall govern the election
of Directors by holders of Series A Preferred Stock during any default in
preference dividends notwithstanding any provisions of the Company's Certificate
of Incorporation to the contrary.
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(D) Except as set forth herein, holders of shares of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of shares
of Common Stock as set forth herein) for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Until all accrued and unpaid dividends and distributions, whether or
not declared, on outstanding shares of Series A Preferred Stock shall have been
paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
junior stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of parity stock, except dividends paid ratably on shares of Series A
Preferred Stock and shares of all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of such Series A Preferred Stock and all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any junior stock, PROVIDED, HOWEVER, that the Company may at any time
redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any other junior stock;
(iv) purchase or otherwise acquire for consideration any shares of Series
A Preferred Stock or any shares of parity stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. REQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth in the Certificate of
Incorporation of the Company creating a series of Preferred Stock or any similar
shares or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, no distributions shall be made (i) to the holders of shares
of junior stock unless the holders of Series A Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $100.00 per share plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, or (b) an amount per share equal to 100 times the aggregate per
share amount to be distributed to holders of shares of Common Stock or (ii) to
the holders of shares of parity stock, unless simultaneously therewith
distributions are made ratably on shares of Series A Preferred Stock and all
other shares of such parity stock in proportion to the total amounts to which
the holders of shares of Series A Preferred Stock are entitled under clause
(i)(a) of this Sentence and to which the holders of shares of such parity stock
are entitled, in each case, upon such liquidation, dissolution or winding up.
(B) In the event the Company shall at any time after the Rights Declaration
Date (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock, or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case, the aggregate amount to which holders of Series
A
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Preferred Stock were entitled immediately prior to such event pursuant to clause
(i)(b) of paragraph (A) of this Section 6 shall be adjusted by multiplying such
amount by a fraction, the numerator of which shall be the number of shares of
Commons Stock that are outstanding immediately after such event, and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case, each share of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the amount set forth in the immediately
preceding sentence with respect to the exchange or conversion of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event, and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. RANKING. The shares of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Company as to the payment of
dividends and the distribution of assets, unless the terms of any such series or
class shall provide otherwise.
Section 10. AMENDMENT. The provisions of this Certificate of Designation
shall not hereafter be amended, either directly or indirectly, or through merger
or consolidation with another corporation, in any manner that would alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series A Preferred Stock, voting
separately as a class.
Section 11. FRACTIONAL SHARES. The Series A Preferred Stock may be issued
in fractions of a share, which fractions shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions, and to have the benefit of all other
rights of holders of Series A Preferred Stock.
Section 12. CERTAIN DEFINITIONS. As used herein with respect to the Series
A Preferred Stock, the following terms shall have the following meanings:
(A) The term "junior stock" (i) as used in Section 4, shall mean the Common
Stock and any other class or series of capital stock of the Company hereafter
authorized or issued over which the Series A Preferred Stock has preference or
priority as to the payment of dividends, and (ii) as used in Section 6, shall
mean the Common Stock and any other class or series of capital stock of the
Company over which the Series A Preferred Stock has preference or priority in
the distribution of assets on any liquidation, dissolution or winding up of the
Company.
(B) The term "parity stock" (i) as used in Section 4, shall mean any class
or series of stock of the Company hereafter authorized or issued ranking PARI
PASSU with the Series A Preferred Stock as to dividends, and (ii) as used in
Section 6, shall mean any class or series of stock of the Company ranking PARI
PASSU with the Series A Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up.
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APPENDIX C
PROVISIONS OF OKLAHOMA GENERAL CORPORATION ACT
RELATING TO APPRAISAL RIGHTS FOR SHAREHOLDERS
1090.1 SHARE ACQUISITION
G. Any shareholder whose shares are to be acquired pursuant to an agreement
of acquisition adopted and approved in accordance with this section and who has
complied with the procedural steps specified in subsection D of Section 1091 of
this title for mergers and consolidations and who has neither voted in favor of
the share acquisition nor consented thereto in writing shall be entitled to an
appraisal by the district court of the fair value of his shares in compliance
with the same provisions and procedures and with the same rights and limitations
as set out in subsections E through K of Section 1091 of this title.
1091 APPRAISAL RIGHTS
A. Any shareholder of a corporation of this state who holds shares of stock
on the date of the making of a demand pursuant to the provisions of subsection D
of this section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with the provisions of subsection D of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to the provisions of Section 1073 of this title shall be entitled to an
appraisal by the district court of the fair value of his shares of stock under
the circumstances described in subsections B and C of this section. As used in
this section, the word "shareholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation. The provisions of this subsection shall be effective only with
respect to mergers or consolidations consummated pursuant to an agreement of
merger or consolidation entered into after November 1, 1988.
B. 1. Except as otherwise provided for in this subsection, appraisal
rights shall be available for the shares of any class or series of stock of a
constituent corporation in a merger or consolidation or of the acquired
corporation in a share acquisition, to be effected pursuant to the provisions of
Sections 1081, 1082, 1086, 1087, or 1091.1 of this title or Section 12 of this
act.
2. a. No appraisal rights under this section shall be available for the
shares of any class or series of stock which, at the record date fixed to
determine the shareholders entitled to receive notice of and to vote at the
meeting of shareholders to act upon the agreement of merger or consolidation,
were either:
(1) listed on a national securities exchange; or
(2) held of record by more than two thousand shareholders.
b. In addition, no appraisal rights shall be available for any shares
of stock of the constituent corporation surviving a merger if the merger did
not require for its approval the vote of the shareholders of the surviving
corporation as provided for in subsection F of Section 1081 of this title.
3. Notwithstanding the provisions of paragraph 2 of this subsection,
appraisal rights provided for in this section shall be available for the shares
of any class or series of stock of a constituent corporation if the holders
thereof are required by the terms of an agreement of merger or consolidation
pursuant to the provisions of Sections 1081, 1082, 1086 or 1087 of this title to
accept for such stock anything except:
a. shares of stock of the corporation surviving or resulting from such
merger or consolidation; or
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b. shares of stock of any other corporation which at the effective date
of the merger or consolidation will be either listed on a national
securities exchange or held of record by more than two thousand
shareholders; or
c. cash in lieu of fractional shares of the corporations described in
subparagraphs a and b of this paragraph; or
d. any combination of the shares of stock and cash in lieu of the
fractional shares described in subparagraphs a, b and c of this paragraph.
4. In the event all of the stock of a subsidiary Oklahoma corporation party
to a merger effected pursuant to the provisions of Section 1083 of this title is
not owned by the parent corporation immediately prior to the merger, appraisal
rights shall be available for the shares of the subsidiary Oklahoma corporation.
C. Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections D and E
of this section, shall apply as nearly as is practicable.
D. Appraisal rights shall be perfected as follows:
1. If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
shareholders, the corporation, not less than twenty (20) days prior to the
meeting, shall notify each of its shareholders entitled to such appraisal rights
that appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each shareholder electing to demand the appraisal of the shares of the
shareholder shall deliver to the corporation, before the taking of the vote on
the merger or consolidation, a written demand for appraisal of the shares of the
shareholder. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the shareholder and that the shareholder intends
thereby to demand the appraisal of the shares of the shareholder. A proxy or
vote against the merger or consolidation shall not constitute such a demand. A
shareholder electing to take such action must do so by a separate written demand
as herein provided. Within ten (10) days after the effective date of such merger
or consolidation, the surviving or resulting corporation shall notify each
shareholder of each constituent corporation who has complied with the provisions
of this subsection and has not voted in favor of or consented to the merger or
consolidation as of the date that the merger or consolidation has become
effective; or
2. If the merger or consolidation was approved pursuant to the provisions
of Section 1073 or 1083 of this title, the surviving or resulting corporation,
either before the effective date of the merger or consolidation or within ten
(10) days thereafter, shall notify each of the shareholders entitled to
appraisal rights of the effective date of the merger or consolidation and that
appraisal rights are available for any or all of the shares of the constituent
corporation, and shall include in such notice a copy of this section. The notice
shall be sent by certified or registered mail, return receipt requested,
addressed to the shareholder at the address of the shareholder as it appears on
the records of the corporation. Any shareholder entitled to appraisal rights
may, within twenty (20) days after the date of mailing of the notice, demand in
writing from the surviving or resulting corporation the appraisal of the shares
of the shareholder. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the shareholder and that the shareholder intends
to demand the appraisal of the shares of the shareholder.
E. Within one hundred twenty (120) days after the effective date of the
merger or consolidation, the surviving or resulting corporation or any
shareholder who has complied with the provisions of subsections A and D of this
section and who is otherwise entitled to appraisal rights, may file a petition
in district court demanding a determination of the value of the stock of all
such shareholders.
C-2
<PAGE>
Provided, however, at any time within sixty (60) days after the effective date
of the merger or consolidation, any shareholder shall have the right to withdraw
the demand of the shareholder for appraisal and to accept the terms offered upon
the merger or consolidation. Within one hundred twenty (120) days after the
effective date of the merger or consolidation, any shareholder who has complied
with the requirements of subsections A and D of this section, upon written
request, shall be entitled to receive from the corporation surviving the merger
or resulting from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or consolidation and with
respect to which demands for appraisal have been received and the aggregate
number of holders of such shares. Such written statement shall be mailed to the
shareholder within ten (10) days after the shareholder's written request for
such a statement is received by the surviving or resulting corporation or within
ten (10) days after expiration of the period for delivery of demands for
appraisal pursuant to the provisions of subsection D of this section, whichever
is later.
F. Upon the filing of any such petition by a shareholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which, within
twenty (20) days after such service, shall file in the office of the court clerk
of the district court in which the petition was filed a duly verified list
containing the names and addresses of all shareholders who have demanded payment
for their shares and with whom agreements as to the value of their shares have
not been reached by the surviving or resulting corporation. If the petition
shall be filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The court clerk, if so ordered by the
court, shall give notice of the time and place fixed for the hearing of such
petition by registered or certified mail to the surviving or resulting
corporation and to the shareholders shown on the list at the addresses therein
stated. Such notice shall also be given by one or more publications at least (1)
week before the day of the hearing, in a newspaper of general circulation
published in the City of Oklahoma City, Oklahoma, or such publication as the
court deems advisable. The forms of the notices by mail and by publication shall
be approved by the court, and the costs thereof shall be borne by the surviving
or resulting corporation.
G. At the hearing on such petition, the court shall determine the
shareholders who have complied with the provisions of this section and who have
become entitled to appraisal rights. The court may require the shareholders who
have demanded an appraisal for their shares and who hold stock represented by
certificates to submit their certificates of stock to the court clerk for
notation thereon of the pendency of the appraisal proceedings; and if any
shareholder fails to comply with such direction, the court may dismiss the
proceedings as to such shareholder.
H. After determining the shareholders entitled to an appraisal, the court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
court shall take into account all relevant factors. In determining the fair rate
of interest, the court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any shareholder entitled to participate
in the appraisal proceeding, the court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the shareholder entitled to an appraisal. Any
shareholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to the provisions of subsection F of this section and who
has submitted the certificates of stock of the shareholder to the court clerk,
if such is required, may participate fully in all proceedings until it is
finally determined that the shareholder is not entitled to appraisal rights
pursuant to the provisions of this section.
I. The court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
shareholders entitled thereto. Interest may be simple or compound, as the court
may direct. Payment shall be so made to each such shareholder, in the case of
holders of uncertificated stock immediately, and in the case of holders of
shares represented by
C-3
<PAGE>
certificates upon the surrender to the corporation of the certificates
representing such stock. The court's decree may be enforced as other decrees in
the district court may be enforced, whether such surviving or resulting
corporation be a corporation of this state or of any other state.
J. The costs of the proceeding may be determined by the court and taxed
upon the parties as the court deems equitable in the circumstances. Upon
application of a shareholder, the court may order all or a portion of the
expenses incurred by any shareholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all of
the shares entitled to an appraisal.
K. From and after the effective date of the merger or consolidation, no
shareholder who has demanded the appraisal rights of the shareholder as provided
for in subsection D of this section shall be entitled to vote such stock for any
purpose or to receive payment of dividends or other distributions on the stock,
except dividends or other distributions payable to shareholders of record at a
date which is prior to the effective date of the merger or consolidation;
provided, however, that if no petition for an appraisal shall be filed within
the time provided for in subsection E of this section, or if such shareholder
shall deliver to the surviving or resulting corporation a written withdrawal of
the shareholder's demand for an appraisal and an acceptance of the merger or
consolidation, either within sixty (60) days after the effective date of the
merger or consolidation as provided for in subsection E of this section or
thereafter with the written approval of the corporation, then the right of such
shareholder to an appraisal shall cease. Provided, however, no appraisal
proceeding in the district court shall be dismissed as to any shareholder
without the approval of the court, and such approval may be conditioned upon
such terms as the court deems just.
L. The shares of the surviving or resulting corporation into which the
shares of such objecting shareholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
C-4
<PAGE>
APPENDIX D
SUMMARY OF SHAREOWNERS RIGHTS AGREEMENT
OF OGE ENERGY
On August 7, 1995, the Board of Directors of OGE Energy declared a dividend
of one Preferred Stock purchase right (a "Right" or "Rights") for each
outstanding share of Common Stock of OGE Energy. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") between
OGE Energy and Liberty Bank and Trust Company of Oklahoma City, N.A., as Rights
Agent (the "Rights Agent"). Initially, (i) the Rights will not be exercisable,
(ii) certificates will not be sent to shareowners, (iii) the Rights will be
evidenced by the OGE Energy Common Stock certificates, (iv) the Rights will
automatically trade with the OGE Energy Common Stock, (v) the Rights will be
transferred with and only with such OGE Energy Common Stock certificates, (vi)
new OGE Energy Common Stock certificates will contain a notation incorporating
the Rights Agreement by reference and (vii) the surrender for transfer of any
certificates for OGE Energy Common Stock outstanding will also constitute the
transfer of the Rights associated with the OGE Energy Common Stock represented
by such certificate. The Rights will become exercisable on the "Distribution
Date," which is the close of business on the earlier of:
(i) the tenth day after a public announcement (or, if earlier, the date a
majority of the Board of Directors of OGE Energy becomes aware) that a
person or group of affiliated or associated persons acquired, or obtained
the right to acquire, beneficial ownership of Common Stock or other
securities of OGE Energy representing 20% or more of the voting power of
all securities of OGE Energy then outstanding generally entitled to vote
for the election of directors ("Voting Power") (such person or group
being called an "Acquiring Person" and such date of first public
announcement being called the "Stock Acquisition Date"), or
(ii) the tenth day after the commencement of, or public announcement of an
intention to commence, a tender or exchange offer the consummation of
which would result in the ownership of 20% or more of the outstanding
Voting Power (the earlier of the dates in clause (i) or (ii) being called
the "Distribution Date").
When the Rights initially become exercisable, each Right will entitle the
holder of record to purchase from OGE Energy one one-hundredth of a share of
Series A Preferred Stock, par value $.01 per share ("Preferred Stock"), of OGE
Energy, at a price of $95 per one one-hundredth of a share (the "Purchase
Price"), although the price and the securities to be purchased are subject to
adjustment as described below. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of OGE Energy Common Stock as of the close of
business on the Distribution Date, and such separate certificates alone will
evidence the Rights from and after the Distribution Date.
Even if they have acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the Voting Power of OGE Energy, each of the
following persons (an "Exempt Person") will not be deemed to be an Acquiring
Person: (i) the Company, any subsidiary of OGE Energy, any employee benefit plan
or employee stock plan of OGE Energy, of any subsidiary of OGE Energy or of the
Company; and (ii) any person who becomes an Acquiring Person solely by virtue of
a reduction in the number of outstanding shares of OGE Energy Common Stock,
unless and until such person shall become the beneficial owner of, or make a
tender offer for any additional shares of OGE Energy Common Stock.
As stated above, the Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on December 11, 2000, unless
earlier redeemed or exchanged by OGE Energy as described below. In order to
protect the value of the Rights to the holders, the Purchase Price and the
number of shares of Preferred Stock (or other securities or property) issuable
upon exercise of the Rights are subject to adjustment from time to time (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, OGE Energy's Common Stock or Preferred Stock,
D-1
<PAGE>
(ii) upon the grant to holders of the OGE Energy Preferred Stock of certain
rights or warrants to subscribe for OGE Energy Preferred Stock or convertible
securities at less than the current market price of the OGE Energy Preferred
Stock or (iii) upon the distribution to holders of the OGE Energy Preferred
Stock of evidences of indebtedness or assets (excluding dividends payable in OGE
Energy Preferred Stock) or of subscription rights or warrants (other than those
referred to above). These adjustments are called anti-dilution provisions and
are intended to ensure that a holder of Rights will not be adversely affected by
the occurrence of such events. With certain exceptions, OGE Energy is not
required to adjust the Purchase Price until cumulative adjustments require a
change of at least 1% in the Purchase Price.
In the event (i) any person (other than an Exempt Person) becomes an
Acquiring Person (except pursuant to an offer for all outstanding shares of OGE
Energy Common Stock that the independent directors determine prior to the time
such offer is made to be fair to and otherwise in the best interest of OGE
Energy and its shareowners) or (ii) any Exempt Person who is the beneficial
owner of 20% or more of the outstanding Voting Power of OGE Energy fails to
continue to qualify as an Exempt Person, then each holder of record of a Right,
other than the Acquiring Person, will thereafter have the right to receive, upon
payment of the Purchase Price, OGE Energy Common Stock (or, in certain
circumstances, cash, property or other securities of OGE Energy) having a market
value at the time of the transaction equal to twice the Purchase Price. Rights
are not exercisable following such event, however, until such time as the Rights
are no longer redeemable by OGE Energy as set forth below. Any Rights that are
or were at any time, on or after the Distribution Date, beneficially owned by an
Acquiring Person shall become null and void.
For example, at a Purchase Price of $95 per Right, each Right not owned by
an Acquiring Person (or by certain related parties) following an event set forth
in the preceding paragraph would entitle its holder to purchase $190 worth of
OGE Energy Common Stock (or other consideration, as noted above) for $95.
Assuming that the OGE Energy Common Stock had a per share value of $40 at such
time, the holder of each valid Right would be entitled to purchase 4.75 shares
of OGE Energy Common Stock for $95.
Subject to certain limited exceptions, if (i) OGE Energy is acquired after
the Stock Acquisition Date in a merger or other business combination (in which
any shares of OGE Energy's Common Stock are changed into or exchanged for other
securities or assets) or (ii) more than 50% of the assets or earning power of
OGE Energy and its subsidiaries (taken as a whole) are sold or transferred after
the Stock Acquisition Date in one or a series of related transactions, the
Rights Agreement provides that proper provision shall be made so that each
holder of record of a Right will have the right to receive, upon payment of the
Purchase Price, that number of shares of common stock of the acquiring company
having a market value at the time of such transaction equal to two times the
Purchase Price.
To the extent that insufficient shares of Common Stock are available for the
exercise in full of the Rights, holders of Rights will receive upon exercise
shares of OGE Energy Common Stock to the extent available and then other
securities of OGE Energy, including units of shares of Preferred Stock with
terms substantially comparable to those of the OGE Energy Common Stock,
property, debt securities, or cash, in proportions determined by OGE Energy, so
that the aggregate value received is equal to twice the Purchase Price. OGE
Energy, however, shall not be required to issue any cash, property or debt
securities upon exercise of the Rights to the extent their aggregate value would
exceed the amount of cash OGE Energy would otherwise be entitled to receive upon
exercise in full of the then exercisable Rights.
No fractional shares of OGE Energy Preferred Stock or OGE Energy Common
Stock will be required to be issued upon exercise of the Rights and, in lieu
thereof, a payment in cash may be made to the holder of such Rights equal to the
same fraction of the current market value of a share of OGE Energy Preferred
Stock or, if applicable, OGE Energy Common Stock.
At any time until the earlier of (i) ten days after the Stock Acquisition
Date (subject to extension by the OGE Energy Board of Directors) or (ii) the
date the Rights are exchanged pursuant to the
D-2
<PAGE>
Rights Agreement, OGE Energy may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right (the "Redemption Price"). Immediately upon the action
of the Board of Directors of OGE Energy authorizing redemption of the Rights,
the right to exercise the Rights will terminate, and the only right of the
holders of Rights will be to receive the Redemption Price without any interest
thereon.
At any time after any person becomes an Acquiring Person, the OGE Energy
Board of Directors may, at its option, exchange all or part of the outstanding
Rights (other than Rights held by the Acquiring Person and certain related
parties) for shares of OGE Energy Common Stock at an exchange ratio of one share
of OGE Energy Common Stock per Right (subject to certain anti-dilution
adjustments). The OGE Energy Board may not effect such an exchange, however, at
any time any person or group owns 50% or more of the Voting Power of OGE Energy.
Immediately after the OGE Energy Board orders such an exchange, the right to
exercise the Rights shall terminate and the holders of Rights shall thereafter
only be entitled to receive shares of OGE Energy Common Stock at the applicable
exchange ratio.
Under presently existing federal income tax law, the issuance of the Rights
is not taxable to OGE Energy or to shareowners and will not change the way in
which shareowners can presently trade OGE Energy shares of Common Stock. If the
Rights should become exercisable, shareowners, depending on then existing
circumstances, may recognize taxable income.
The Rights Agreement may be amended by the Board of Directors of OGE Energy.
After the Distribution Date, however, the provisions of the Rights Agreement may
be amended by the OGE Energy Board only to cure any ambiguity, to make changes
which do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person or an affiliate or associate of an Acquiring
Person), or to shorten or lengthen any time period under the Rights Agreement;
PROVIDED, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable. In
addition, no supplement or amendment may be made which changes the Redemption
Price, the final expiration date, the Purchase Price or the number of one one-
hundredths of a share of OGE Energy Preferred Stock for which a Right is
exercisable, unless at the time of such supplement or amendment there has been
no occurrence of a Stock Acquisition Date and such supplement or amendment does
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an associate or affiliate of an Acquiring Person).
Until a Right is exercised, the holder, as such, will have no rights as a
shareowner of the Company, including, without limitation, the right to vote or
to receive dividends. A copy of the Rights Agreement has been filed as an
exhibit to the Registration Statement of which this Proxy Statement/Prospectus
is a part. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated in this summary description herein by reference.
D-3
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1031 of Title 18 of the Annotated Oklahoma Statutes provides that
the Company and OGE Energy may, and in some circumstances must, indemnify the
directors and officers of the Company and OGE Energy against liabilities and
expenses incurred by any such person by reason of the fact that such person was
serving in such capacity, subject to certain limitations and conditions set
forth in the statute. Substantially similar provisions that require such
indemnification are contained in the Company's Restated Certificate of
Incorporation (filed as Exhibit 4.01 to the Company's Registration Statement No.
33-59805) and the OGE Energy Certificate of Incorporation (included as Appendix
B to this Proxy Statement/Prospectus), which are incorporated herein by this
reference. The Company's Restated Certificate of Incorporation and the OGE
Energy Certificate of Incorporation also contain provisions limiting the
liability of their officers and directors in certain instances. The Company and
OGE Energy each have an insurance policy covering its directors and officers
against certain personal liability which may include liabilities under the
Securities Act of 1933, as amended.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-----------
<C> <S>
2.01 Plan and Agreement of Share Acquisition (included as Appendix A to the Proxy Statement/ Prospectus)
3(i) Certificate of Incorporation of OGE Energy Corp.*
3(ii) By-Laws of OGE Energy Corp.*
4.01 Rights Agreement, dated August 7, 1995 between OGE Energy Corp. and Liberty Bank and Trust Company
of Oklahoma City, N.A., as Rights Agent.*
5.01 Opinion of counsel as to legality of stock offered hereby*
12.01 Computation of ratios*
23.01 Consent of counsel*
23.02 Consent of accountants*
23.03 Consent of individuals named to become directors of OGE Energy
99.01 Form of Proxy card to be furnished to the shareowners of the Company (revised and filed herewith)
99.02 Restated Certificate of Incorporation of OGE Energy Corp. as of the effective date of the
Restructuring (included as Appendix B to the Proxy Statement/Prospectus)
(b) No Financial Statement Schedules are required to be filed in connection with the registration
statement.
(c) No information provided pursuant to Item 4(b) is required to be filed in connection with this
registration statement.
<FN>
------------------------
* Previously filed
</TABLE>
II-1
<PAGE>
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is part of this registration statement, by any person or party
who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by the
other Items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in the documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Oklahoma City and State of Oklahoma on the day of September, 1995.
OGE ENERGY CORP.
(Registrant)
By James G. Harlow, Jr.
Pursuant to the Requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
------------------------------------------------------ -------------------------------- -----------------------
<C> <S> <C>
James G. Harlow, Jr. Principal Executive Officer and September , 1995
Director
A. M. Strecker Principal Accounting and September , 1995
Financial Officer and Director
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER PAGE
----------- -----
<C> <S> <C>
2.01 Plan and Agreement of Share Acquisition (included as Appendix A to the Proxy Statement/
Prospectus)................................................................................
3(i) Certificate of Incorporation of OGE Energy Corp.*...........................................
3(ii) By-Laws of OGE Energy Corp.*................................................................
4.01 Rights Agreement, dated August 7, 1995 between OGE Energy Corp. and Liberty Bank and Trust
Company of Oklahoma City, N.A., as Rights Agent*...........................................
5.01 Opinion of counsel as to legality of stock offered hereby*..................................
12.01 Computation of ratios*......................................................................
23.01 Consent of counsel*.........................................................................
23.02 Consent of accountants*.....................................................................
23.03 Consent of individuals named to become directors of OGE Energy..............................
99.01 Form of Proxy card to be furnished to the shareowners of the Company (revised and filed
herewith)..................................................................................
99.02 Restated Certificate of Incorporation of OGE Energy Corp. as of the effective date of the
Restructuring (included as Appendix B to the Proxy Statement/ Prospectus)..................
</TABLE>
<PAGE>
EXHIBIT 23.03
Each of the undersigned hereby consents to the filing by OGE Energy Corp. of
a Registration Statement on Form S-4 designating the undersigned as a person
who will become a director of OGE Energy Corp. Each of the undersigned
understands that this consent will be filed as an exhibit to the
aforementioned Registration Statement or an amendment thereto.
/s/ James G. Harlow, Jr. /s/ Steven E. Moore
----------------------------- ---------------------------
James G. Harlow, Jr. Steven E. Moore
/s/ Herbert H. Champlin /s/ Bill Swisher
----------------------------- ---------------------------
Herbert H. Champlin Bill Swisher
/s/ William E. Durrett /s/ John A. Taylor
----------------------------- ---------------------------
William E. Durrett John A. Taylor
/s/ Martha W. Griffin /s/ Ronald H. White, M.D.
----------------------------- ---------------------------
Martha W. Griffin Ronald H. White, M.D.
/s/ Hugh L. Hembree, III
-----------------------------
Hugh L. Hembree, III
Dated: September 20, 1995
<PAGE>
EXHIBIT 99.01
OKLAHOMA GAS AND ELECTRIC COMPANY
SPECIAL MEETING OF SHAREOWNERS
NOVEMBER 16, 1995
P
The undersigned hereby appoints James G. Harlow, Jr., Herbert H.
Champlin, and Bill Swisher, and each of them severally, with full power of
substitution and with full power to act with or without the other, as the
R proxies of the undersigned to represent and to vote all shares of stock of
Oklahoma Gas and Electric Company held of record by the undersigned on
September 19, 1995, at a Special Meeting of Shareowners of the Company to
be held on November 16, 1995, and at all adjournments thereof, on all
O matters coming before said meeting.
THIS PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, WILL BE
X VOTED AS DIRECTED, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE PROPOSAL ON THE REVERSE SIDE OF THIS PROXY CARD.
Y
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, DATE, SIGN
AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS BELOW. EACH JOINT OWNER SHOULD
SIGN. ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR OTHERS SIGNING IN A
REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL TITLES.
PROXY NUMBER TOTAL COMMON 4% PREFERRED THE BOARD RECOMMENDS A VOTE FOR
SHARES INCLUDING SHARES THE PROPOSAL IDENTIFIED BELOW.
REINVESTMENT PLAN
AND CUSTOMER
STOCK PLAN
X________________________/____/95___ 1. Proposal to approve an Agreement and
SIGNATURE OF SHAREOWNERS DATE Plan of Share Acquisition, whereby
OGE Energy Corp. will become the
X________________________/____/95___ Holding Company parent of the Company
SIGNATURE OF SHAREOWNERS DATE and the holders of Company Common Stock
will become holders of OGE Energy
common stock.
/ / FOR / / AGAINST / / ABSTAIN
