<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
TEXAS UTILITIES COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: _/
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
_/ Set forth the amount on which the filing is calculated and state how it was
determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount previously paid:
---------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------
3) Filing Party:
---------------------------------------------------
4) Date Filed:
---------------------------------------------------
Notes:
<PAGE>
TEXAS UTILITIES COMPANY
2001 Bryan Tower
Dallas, Texas 75201
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------
April 1, 1994
To the Shareholders of
Texas Utilities Company:
The annual meeting of shareholders of Texas Utilities Company will be held in
the Grand Ballroom of the Southland Center Hotel, Live Oak and Olive Streets,
Dallas, Texas on Friday, May 20, 1994 at 9:30 a.m. for the following purposes:
1. To elect a Board of Directors for the ensuing year; and
2. To approve the selection of auditors for the year 1994.
The Board of Directors has fixed the close of business on March 21, 1994 as
the time as of which shareholders entitled to notice of, and to vote at, the
meeting and any adjournments shall be determined.
WHETHER OR NOT YOU WILL BE ABLE TO ATTEND THE MEETING, PLEASE SIGN AND RETURN
THE ACCOMPANYING PROXY PROMPTLY. NO POSTAGE NEED BE AFFIXED TO THE REPLY
ENVELOPE WHICH IS ENCLOSED HEREWITH FOR YOUR CONVENIENCE IF IT IS MAILED IN THE
UNITED STATES.
Peter B. Tinkham
Secretary
<PAGE>
TEXAS UTILITIES COMPANY
2001 Bryan Tower
Dallas, Texas 75201
------------------
PROXY STATEMENT
------------------
April 1, 1994
A proxy in the accompanying form is solicited by the Board of Directors of
TEXAS UTILITIES COMPANY for use at the annual meeting of shareholders to be
held in the Grand Ballroom of the Southland Center Hotel, Live Oak and Olive
Streets, Dallas, Texas, on Friday, May 20, 1994, at 9:30 a.m. and any
adjournments thereof for the purposes set forth in the accompanying notice.
The close of business on March 21, 1994 has been fixed as the time as of
which shareholders entitled to notice of, and to vote with respect to, this
solicitation shall be determined. At such date there were outstanding and
entitled to vote 225,841,037 shares of common stock, each share of which is
entitled to one vote on all questions submitted to shareholders.
Any shareholder may exercise the right of cumulative voting in the election
of directors provided the shareholder gives written notice of such intention to
the Secretary of the Company on or before the date preceding the election. When
exercising this right the shareholder is entitled to one vote for each share
held multiplied by the number of directors to be elected and he may cast all of
his votes for a single nominee or spread his votes among the nominees in any
manner desired.
The cost of soliciting proxies will be borne by the Company. In addition to
use of the mails, proxies may be solicited by directors, officers and regular
employees of the Company in person or by telephone. The Company has hired D. F.
King & Co., Inc. to assist in the solicitation of proxies at an estimated cost
of $7,500 plus disbursements. Shareholders may assist the Company in avoiding
expenses in this connection by returning their proxies promptly.
Any proxy delivered pursuant to this solicitation is revocable at the option
of the person executing the same, at any time prior to the exercise thereof.
The shares represented by any proxy duly given as a result of this request will
be voted in the discretion of the persons named in the proxy unless the
shareholder specifies a choice by means of the ballot space on the proxy, in
which case the shares will be voted accordingly. The Company has adopted a
confidential voting policy. Accordingly, tabulation of proxies and votes cast
at the meeting will be conducted by an independent agent and the votes of
individual shareholders will be kept private and not disclosed to the Company,
except in limited circumstances.
1
<PAGE>
The presence in person or by proxy of the holders of a majority of the shares
of the Common Stock entitled to vote shall constitute a quorum entitled to
transact business at the meeting. Directors are elected by plurality vote of
the votes cast at the meeting; abstentions and broker non-votes will have no
effect. Approval of the auditors requires a majority vote of the shares
represented at the meeting; abstentions and broker non-votes will be negative
votes.
This Notice, Proxy Statement and form of proxy are being mailed or given to
shareholders on or about April 1, 1994.
1995 ANNUAL MEETING SHAREHOLDERS' PROPOSALS
All proposals from shareholders to be considered at the next annual meeting
scheduled for May 19, 1995 must be received by the Secretary of the Company,
2001 Bryan Tower, Dallas, Texas 75201, not later than the close of business on
December 2, 1994.
ELECTION OF DIRECTORS
It is the intent of the Board of Directors that the persons named in the
proxy will vote your shares in favor of the nominees for directors listed
below, unless authority is withheld. All of the nominees are at present members
of the Board of Directors and have been nominated by the Nominating Committee.
The persons named in the proxy may cumulate the votes represented thereby and
in case any such nominee shall become unavailable, which the Board of Directors
has no reason to anticipate, may vote for a substitute.
The names of the nominees for the office of director for the ensuing year and
information about them, as furnished by the nominees themselves, are set forth
below:
2
<PAGE>
<TABLE>
<CAPTION>
SERVED AS
NAME AGE DIRECTOR SINCE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
---- --- -------------- ------------------------------------------
<S> <C> <C> <C>
Jack W. Evans
(1)(2)(3)(4)(5)(6)..... 71 1986 Investments. Owner, Jack Evans Investments.
Chairman, Business Resources Inc. Chairman
of the Board, President and Chief Executive
Officer of Cullum Companies, Inc. (food and
drug chain) until October 10, 1990. Mayor,
City of Dallas, 1981-1983. A Director of
Brinker International, Morningstar Group and
Randalls Companies, Inc.
J.S. Farrington
(2)(5)................. 59 1983 Chairman of the Board and Chief Executive of
the Company since February 1987; prior
thereto President of the Company since May
1983. A Director of TU Electric.
Bayard H. Friedman
(1)(3)(4)(6)........... 67 1991 Bayard H. Friedman, Inc., Investment Adviser,
since December 1992. Prior thereto, Senior
Chairman and Director, Team Bank (January
1990-November 1992), and Senior Chairman,
Texas American Bridge Bank (July 1989-
January 1990). Private investments (1987-
July 1989). A Director of Justin Industries.
William M. Griffin
(1)(3)(4)(6)........... 67 1966 President, The WMG Company (investments).
Executive Vice President (until August 1985)
and Chairman of the Finance Committees
(until March 1986) of The Hartford Fire
Insurance Company and Subsidiaries. A
Director of The Hartford Fire Insurance
Company (until March 1991) and Shawmut
National Corporation (until April 1992).
Kerney Laday
(1)(3)(4)(6)........... 52 1993 Vice President, field operations, Southern
Region, U. S. Customer Operations, Xerox
Corporation (office equipment manufacturer)
since January 1991; prior thereto Vice
President and region general manager, Xerox,
1986 to 1991. A Director of NationsBank
Texas Corporation.
Margaret N. Maxey
(1)(2)(3)(4)(6)........ 67 1984 Director, Clint W. Murchison, Sr. Chair of
Free Enterprise and Professor, Biomedical
Engineering Program, College of Engineering,
The University of Texas at Austin since
1982; Assistant Director, Energy Research
Institute, Columbia, South Carolina, 1980-
82.
James A. Middleton
(1)(3)(4)(6)........... 58 1989 Executive Vice President since October 1987
and Senior Vice President (June 1981-October
1987) of Atlantic Richfield Company.
President, ARCO Oil and Gas Company, January
1985-October 1990. A Director of ARCO
Chemical Company and Atlantic Richfield
Company.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SERVED AS
NAME AGE DIRECTOR SINCE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
---- --- -------------- ------------------------------------------
<S> <C> <C> <C>
Erle Nye
(2)(5)................. 56 1987 President of the Company since February 1987;
prior thereto Executive Vice President of
the Company since 1980. Chairman of the
Board and Chief Executive, and a Director of
TU Electric.
Charles R. Perry
(1)(2)(3)(4)(5)(6)..... 64 1985 Oil and gas interests, private investments.
Chairman of Board, Perry Management, Inc.,
Avion Flight Centre, Inc., Rivercourse
Development, Inc. President, Perry Gas
Companies, Inc.
Herbert H. Richardson
(1)(3)(4)(5)(6)........ 63 1992 Associate Vice Chancellor for Engineering and
Director, Texas Transportation Institute,
The Texas A&M University System; Associate
Dean of Engineering, Regents Professor and
Distinguished Professor of Engineering,
Texas A&M University; Chancellor, The Texas
A&M University System, 1991-1993 and Deputy
Chancellor for Engineering, The Texas A&M
University System, 1986-1991.
</TABLE>
- ---------
(1) Member of Audit Committee.
(2) Member of Executive Committee.
(3) Member of Finance Committee.
(4) Member of Nominating Committee.
(5) Member of Nuclear Committee.
(6) Member of Organization and Compensation Committee.
4
<PAGE>
During 1993 the Board of Directors held five meetings. The standing
committees of the Board of Directors and the membership of each committee are
shown on the preceding pages. During 1993 all of the incumbent Directors
attended 75% or more of the aggregate of the Board of Directors meetings and
the meetings of the Committees on which they serve except for Dr. Richardson.
The Audit Committee nominates to the Board, for approval by the shareholders
at each annual meeting, a firm of independent certified public accountants to
audit the books of account and records of the Company and to perform such other
duties as this Committee may prescribe or approve, receives the reports and
comments from such independent accountants, reviews the adequacy of internal
controls, reviews the accounting principles employed in financial reporting and
takes any action with respect thereto as it may deem appropriate, reports to
the Board of Directors upon its findings and recommendations and performs such
other duties as may be assigned to it from time to time by the Board; the Audit
Committee held two meetings during 1993. The Executive Committee exercises the
authority of the Board in the interval between meetings of the Board; the
Executive Committee did not meet during 1993. The Finance Committee reviews and
recommends to the Board, for its consideration, major financial undertakings
and policies and performs such other duties as may be assigned to it from time
to time by the Board; the Finance Committee held three meetings during 1993.
The Nominating Committee selects and recommends to the Board, for its
consideration, persons as nominees for election as directors of the Company and
performs such other duties as may be assigned to it from time to time by the
Board; the Nominating Committee held two meetings in 1993. Shareholders may
recommend nominees for directors to the Nominating Committee by writing to the
Secretary of the Company, 2001 Bryan Tower, Dallas, Texas 75201. The Nuclear
Committee reviews, generally oversees and makes reports and recommendations to
the Board in connection with the construction and operation of the Company's
nuclear generating units; the Nuclear Committee held four meetings during 1993.
The Organization and Compensation Committee reviews and establishes the duties,
titles and remuneration of officers of the Company; this Committee held two
meetings in 1993.
Non-officer directors were compensated in 1993 by a retainer fee at the
annual rate of $25,000 plus $1,500 for each Board meeting attended and $1,000
for each committee meeting attended. Additionally, non-officer directors who
are members of the Nuclear Committee receive an annual retainer fee of $10,000
for their services on that Committee. Directors who are officers of the Company
do not receive fees. All directors are reimbursed for expenses.
Nancy F. King and Sheree Anne Meyer, as custodian for Adam Joseph Davenport,
allegedly as shareholders of the Company, filed suits in May 1990 and November
1991,
5
<PAGE>
respectively, which have now been consolidated in the United States District
Court for the Northern District of Texas, derivatively on behalf of the Company
and the Company's subsidiary, Texas Utilities Electric Company (TU Electric),
against the Company and TU Electric as nominal defendants and, as amended,
against Jack W. Evans, J. S. Farrington, William M. Griffin, Margaret N. Maxey,
James A. Middleton, Erle Nye and Charles R. Perry, Directors of the Company,
James K. Dobey, William H. Seay, James H. Zumberge, Burl B. Hulsey, Jr., Perry
G. Brittain and Charles N. Prothro, former directors of the Company, S. S.
Swiger, a former officer of the Company, and T. L. Baker, an officer of TU
Electric. The plaintiffs allege mismanagement involving gross negligence,
willful misconduct, breaches of fiduciary duty and waste of corporate assets on
the part of the defendants, primarily relating to the Comanche Peak nuclear
generating station owned by TU Electric, which is claimed to have resulted in
damages in an amount not less than $1.381 billion. In January 1993, the Court
entered an order which stays the consolidated suit until thirty days after the
disposition of all appeals from the final order of the Public Utility
Commission of Texas in the TU Electric rate case in which an order was entered
in September 1991.
The Company has received a letter from another person, allegedly as a
shareholder of the Company, demanding that the Company bring suit against
certain present and former directors based on claims similar to those alleged
in the law suit described in the preceding paragraph and a committee of the
Board has been established to make a determination in this regard.
6
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK OF THE COMPANY
Each nominee for director and certain executive officers reported beneficial
ownership of common stock of the Company as of the date hereof, as follows:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
NAME COMMON STOCK
---- ------------
<S> <C>
Jack W. Evans............................................... 3,000
J. S. Farrington............................................ 15,972
Bayard H. Friedman.......................................... 2,367(1)
William M. Griffin.......................................... 5,000
Kerney Laday................................................ 200
Margaret N. Maxey........................................... 3,372
James A. Middleton.......................................... 2,000
Erle Nye.................................................... 14,716
Charles R. Perry............................................ 400
Herbert H. Richardson....................................... 1,000
Michael D. Spence........................................... 5,898
T. L. Baker................................................. 2,102
W. M. Taylor................................................ 6,246
All Directors and Executive Officers
as a group (14), including those named above............... 66,512
</TABLE>
- ---------
(1) In addition to the shares reported above, clients of Mr. Friedman's
investment advisory firm own 4,200 shares of the common stock of the
Company. Mr. Friedman disclaims any beneficial interest in such shares.
The named individuals have voting and investment power for the shares of
common stock reported in the table above. Ownership of such common stock
constituted less than 1% of the outstanding shares for each individual director
and executive officer and for all directors and executive officers as a group.
As of December 31, 1993, based on information contained in filings made by
the following person with the Securities and Exchange Commission, the following
person was known to be the beneficial owner of more than 5% of the Company's
common stock:
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS OF BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED OF CLASS
------------------- ------------ --------
<S> <C> <C>
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 13,827,442 6.2%
</TABLE>
7
<PAGE>
Mellon Bank, N.A., a wholly-owned subsidiary of Mellon Bank Corporation, as
trustee under the Employees' Thrift Plan of the Texas Utilities Company System
(Thrift Plan) was the record owner of 11,167,442 shares of the Company's common
stock. Each employee participating in the Thrift Plan is entitled to instruct
the Trustee how to vote all shares of common stock allocated to the employee's
account. To the extent that this right is not exercised or shares are held by
the Trustee which are not allocated to participant accounts, the Trustee may
vote these shares in its discretion. Mellon Bank Corporation (including shares
held by its subsidiaries) reported that it had investment discretion with
respect to an aggregate of 2,660,000 other shares of common stock of the
Company, including 30,000 shares with respect to which it shared voting power
and 291,000 shares with respect to which it shared dispositive power.
EXECUTIVE COMPENSATION
The Company and its subsidiaries have paid or awarded compensation during the
last three calendar years to the following executive officers for services in
all capacities:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION(1)
----------------------- ---------------------------
OTHER AWARDS PAYOUTS ALL
ANNUAL ------------------- ------- OTHER
COMPEN- RESTRICTED LTIP COMPEN-
NAME AND SALARY BONUS SATION STOCK OPTIONS/ PAYOUTS SATION
PRINCIPAL POSITION YEAR ($) ($) ($) AWARDS ($) SARS (#) ($) ($) (2)
------------------ ---- ------- ------- ------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. S. Farrington........ 1993 743,750 125,000 -- 264,500 -- 82,584 82,865
Chairman of the Board 1992 700,000 0 -- 251,000 -- 67,021 78,239
and Chief Executive of 1991 658,333 0 -- 226,000 -- 0 NA
the Company
Erle Nye................ 1993 554,167 100,000 -- 203,500 -- 61,938 63,907
President of the 1992 525,000 0 -- 194,500 -- 50,266 60,739
Company 1991 493,750 0 -- 169,500 -- 0 NA
Michael D. Spence....... 1993 289,083 31,000 -- 67,560 -- 44,034 34,246
Executive Vice 1992 285,000 0 -- 66,300 -- 33,223 22,800
President--TU Electric 1991 285,000 40,000 -- 81,300 -- 0 NA
T. L. Baker............. 1993 237,083 25,000 -- 58,200 -- 29,720 26,042
Executive Vice 1992 233,000 0 -- 56,940 -- 24,404 25,112
President--TU Electric 1991 223,417 0 -- 61,940 -- 0 NA
W. M. Taylor............ 1993 217,250 65,000 -- 60,800 -- 28,815 21,296
Executive Vice 1992 205,000 0 -- 66,900 -- 22,543 12,795
President--TU Electric 1991 198,750 0 -- 51,900 -- 0 NA
</TABLE>
- ---------
(1) Amounts reported as Long-Term Compensation are attributable to the named
officers' participation in the Deferred and Incentive Compensation Plan of
the Texas Utilities
8
<PAGE>
Company System (Plan). Under the Plan, officers of the Company and its
subsidiaries with a title of Vice President or above may defer a percentage
of their compensation not to exceed a maximum percentage determined by the
Organization and Compensation Committee (Committee) for each Plan year and
in any event not to exceed 15% of the participant's compensation. The
Company makes a matching award equal to 150% of the deferred compensation.
In addition, the Committee can establish incentive awards under the Plan. In
no event will the sum of all incentive awards in any Plan year exceed 25% of
the aggregate compensation of eligible employees. These matching and
incentive awards are subject to forfeiture under certain circumstances.
Under the Plan, a trustee purchases Company common stock with an amount of
cash equal to the deferred compensation, matching award and incentive award
and the Company establishes accounts for each participant containing
performance units equal to such number of common shares. Plan investments,
including reinvested dividends, are restricted to Company common stock. On
the expiration of the applicable maturity period (three years for incentive
awards, and five years for deferrals and matching awards) the value of the
participants' accounts are paid in cash based upon the then current value of
the units; provided, however, that in no event shall a participant's account
be deemed to have a cash value which is less than the sum of such
participant's deferred amount together with a 6% per annum (compounded
annually) interest equivalent thereon. The maturity requirement is waived if
the participant dies or becomes totally and permanently disabled.
Compensation deferred under the Plan is included in amounts reported as
Salary in the Summary Compensation Table. Amounts shown in the table below
represent the number of shares purchased under the Plan with such deferred
salaries for 1993:
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE
OR OTHER
PERIOD
NUMBER OF UNTIL
SHARES, UNITS OR MATURATION
NAME OTHER RIGHTS (#) OR PAYOUT
---- ---------------- -----------
<S> <C> <C>
J. S. Farrington................................ 2,025 5 Years
Erle Nye........................................ 1,502 5 Years
Michael D. Spence............................... 763 5 Years
T. L. Baker..................................... 627 5 Years
W. M. Taylor.................................... 590 5 Years
</TABLE>
Incentive and matching awards under the Plan are included under Restricted
Stock Awards in the Summary Compensation Table. As a result of these awards
and undistributed awards made under the Plan in prior years, at December
31, 1993 the
9
<PAGE>
number and market value of performance units (each of which is equal to one
share of common stock) held in the Plan accounts for Messrs. Farrington,
Nye, Spence, Baker and Taylor were 20,069 ($867,984), 15,336 ($663,282),
6,208 ($268,496), 4,910 ($212,358) and 4,934 ($213,396), respectively.
Amounts reported as LTIP Payouts in the Summary Compensation Table
represent payouts maturing during such years of earnings on salary deferred
under the Plan in prior years.
(2) Amounts reported as All Other Compensation are attributable to the named
officers' participation in certain plans hereinafter described in this
footnote. Pursuant to the transition rules promulgated by the Securities
and Exchange Commission with respect to the disclosure of executive
compensation, such amounts for 1991 are omitted.
Under the Employees' Thrift Plan of the Texas Utilities Company System, as
amended effective January 1, 1993, all employees with at least six months
of full time service with the Company or any of its subsidiaries may invest
up to 16% of their regular salary or wages in common stock of the Company,
or in a variety of selected mutual funds. The amounts reported under All
Other Compensation in the Summary Compensation Table include contributions
by employer-corporations to each participant's account of 40%, 50% or 60%
of the employee's savings, up to 6% of the employee's regular salary or
wages, depending upon length of service, which amount is invested in the
common stock of the Company. During 1993, these employer contributions for
Messrs. Farrington, Nye, Spence, Baker and Taylor amounted to $8,490,
$8,490, $6,763, $2,334 and $3,671, respectively.
The Company established a Salary Deferral Program (Program) effective April
1, 1991 under which each employee of the Company and its subsidiaries whose
annual salary is $80,000 ($84,870 for the Program Year beginning April
1993) or more may elect to defer a percentage of annual salary for a period
of seven years, a period ending with the retirement of such employee, or
for a combination thereof. Such deferrals may not exceed in the aggregate
10% of such annual salary, provided that no more than 6% may be deferred
under the retirement option for the period ending with the retirement of
such employee. Deferred compensation is included in amounts reported under
Salary in the Summary Compensation Table. The Company makes a matching
award, subject to forfeiture under certain circumstances, equal to 100% of
the deferred compensation. A trustee will distribute at the end of the
applicable maturity period cash equal to the amounts deferred and matching
awards plus earnings equal to the greater of the actual earnings of Program
assets, or the average interest rate during the applicable maturity period
of U.S. Treasury Notes with a maturity of ten years. The distribution of
the amounts due under the Program will be in a lump sum if the maturity
period is seven
10
<PAGE>
years or, if the retirement option is elected, in twenty annual
installments. The Company is financing the retirement portion of the
Program through the purchase of corporate owned life insurance on the lives
of the participants and the proceeds from such insurance are expected to
allow the Company to fully recover the cost of the retirement option.
During 1993, matching awards, which are included under All Other
Compensation in the Summary Compensation Table, were made for Messrs.
Farrington, Nye, Spence, Baker and Taylor in the amounts of $74,375,
$55,417, $27,483, $23,708 and $17,625, respectively.
PENSION TABLE
The Company and its subsidiaries maintain retirement plans qualified under
applicable provisions of the Internal Revenue Code (Code). Annual retirement
benefits are computed as follows: for each year of accredited service up to a
total of 40 years of service, 1.3% of the first $7,800, plus 1.5% of the excess
over $7,800 of average annual salary received by the participant during his
three years of highest earnings. Retirement benefits are computed with respect
to base salaries only and amounts reported under Salary for the named officers
in the Summary Compensation Table herein approximate earnings as defined by the
retirement plans. Such benefits are not subject to any reduction for Social
Security payments. Benefits payable from a qualified retirement plan are
limited by provisions of the Code and the Company maintains a Supplemental
Retirement Plan which provides for the payment of retirement benefits
calculated in accordance with the retirement plan formula which would otherwise
be limited by the provisions of the Code. As of February 28, 1994, years of
accredited service under the plans for Messrs. Farrington, Nye, Spence, Baker
and Taylor were 34, 31, 27, 23 and 25, respectively. The table illustrates the
total annual benefit payable at retirement under these retirement plans.
<TABLE>
<CAPTION>
3-YEAR
AVERAGE
ANNUAL 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
EARNINGS SERVICE SERVICE SERVICE SERVICE SERVICE
- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 50,000 $ 14,688 $ 18,360 $ 22,032 $ 25,704 $ 29,376
100,000 29,688 37,110 44,532 51,954 59,376
200,000 59,688 74,610 89,532 104,454 119,376
400,000 119,688 149,610 179,532 209,454 239,376
500,000 149,688 187,110 224,532 261,954 299,376
600,000 179,688 224,610 269,532 314,454 359,376
800,000 239,688 299,610 359,532 419,454 479,376
900,000 269,688 337,110 404,532 471,954 539,376
</TABLE>
11
<PAGE>
The following information contained under the headings Organization and
Compensation Committee Report on Executive Compensation and Performance Graph
is not to be deemed to be (i) incorporated by reference into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934 or (ii)
soliciting material or filed with the Securities and Exchange Commission (SEC)
within the meaning of Item 402(a)(9) of SEC Regulation S-K.
ORGANIZATION AND COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Organization and Compensation Committee of the Board of Directors is
responsible under the Company's Bylaws for establishing the level of
compensation of the executive officers of the Company. The Committee consists
of all of the nonemployee directors of the Company and is chaired by James A.
Middleton. The Committee has directed the preparation of this report and has
approved its contents and its submission to the shareholders.
The Committee normally considers executive compensation matters at its May
meeting held in connection with the Annual Meeting of Shareholders. At that
meeting, the Committee reviews and recommends to the full Board the amounts of
executive officers' base salaries and bonuses, if any, and establishes the
maximum deferral percentage and incentive awards, if any, under the Deferred
and Incentive Compensation Plan (Plan) which is described on pages 8, 9 and 10
of this proxy statement. Although Company management may be present during
Committee discussions of officers' compensation, Committee decisions with
respect to the compensation of the Chairman of the Board and Chief Executive
and the President are reached in private session without the presence of any
member of Company management.
Levels of executive compensation, in the opinion of the Committee, should be
based upon an evaluation of the performance of the Company and its officers
generally and in comparison to persons with comparable responsibilities in
similar business enterprises. Compensation plans should align executive
compensation with returns to shareholders with due consideration accorded to
balancing both long-term and short-term objectives. Such compensation
principles and practices have allowed, and should continue to allow, the
Company to attract, retain and motivate its key executives.
In establishing levels of executive compensation, the Committee regularly
reviews Company performance data and its officers' compensation compared to the
performance of companies in similar businesses and the compensation levels of
the management of such companies, including companies generally comparable in
size represented in the Moody's 24 Utilities whose comparative investment
return is depicted in the graph on page 15. Information is gathered from
industry sources and other published and private materials
12
<PAGE>
which provides a basis for comparing the largest electric and gas utilities and
other survey groups representing a large variety of business organizations.
Included in the data considered was that, in 1992, TU Electric, the Company's
principal subsidiary, was the largest electric utility in the United States as
measured by megawatt hour sales; and compared to other electric utilities in
the United States, it was 5th in electric revenues, 3rd in total assets, 2nd in
net generating capability, 6th in number of customers and 15th in number of
employees. The Committee also reviews a variety of industry financial and
operating performance comparisons (including productivity indicators, service
reliability indexes and measures of efficiency and service quality) throughout
the year and at the time salaries are established in May of each year. These
industry comparisons constitute an important component of the Committee's
review of executive compensation. The Committee's decisions, however, are
subjective because it has not adopted or approved a specific formula or other
criteria linking any target level or performance measure, or the aggregate of
all measures, to the levels of executive compensation.
The compensation of the officers of the Company consists primarily of base
salaries, cash bonuses and the opportunity to participate in the Plan. Benefits
provided under the Plan represent a substantial portion of the officers'
compensation and the value of the future payment thereof is directly related to
the future performance of the Company's common stock. The named executive
officers participate to the fullest extent permissible in the elective feature
of the Plan. The officers are also eligible to participate in the Salary
Deferral Program and the Employees' Thrift Plan, both of which are described on
pages 10 and 11 of this proxy statement. The officers also participate in the
retirement plan, the benefits payable under which are described on page 11 of
this proxy statement. Except for benefits under these plans, the officers do
not receive any other form of direct or indirect compensation from the Company.
At its meeting held in May 1993, the Committee established the Chief
Executive's salary at an annual rate of $775,000 representing a $75,000 or
eleven percent, increase over the annual rate established in May 1992. Also,
the Committee provided for a cash bonus to the Chief Executive of $125,000 and
an incentive award under the Plan of $125,000. This amount of compensation was
established based upon the Committee's subjective evaluation of the information
described herein. In addition to the Committee's evaluation of such comparative
performance and compensation information, specific accomplishments considered
by the Committee in establishing the compensation, specifically the salary
increase, bonus and incentive award of the Chief Executive, included the
progress made in the redirection of the Company's business through its
Competitive Action Plan which was implemented to reduce costs on a System-wide
basis, and the receipt of an operating license for Unit 2 of the Comanche Peak
nuclear generating station. The Committee also recognized that the base salary
of the Chief Executive was not increased in 1992, nor was a bonus awarded.
13
<PAGE>
Section 162(m) of the Internal Revenue Code, which was enacted as a part of
the Omnibus Budget Reconciliation Act of 1993, limits, effective January 1,
1994, the amount of compensation which a publicly traded corporation can deduct
for federal income tax purposes. Various exceptions to the limitation are
provided. These exceptions relate generally to types of compensation plans and
programs which the Company does not maintain. Nevertheless, the Company does
not expect to provide compensation in 1994 which would not be deductible for
federal income tax purposes. The Company expects to continue to maintain a
competitive compensation program in future years, and it is not possible to
predict the impact which Section 162(m) may have on such future compensation or
the deductibility thereof.
Shareholder comments to the Committee are welcomed and should be addressed to
the Corporate Secretary of the Company at the Company's offices.
ORGANIZATION AND COMPENSATION COMMITTEE
James A. Middleton, Chair Kerney Laday
Jack W. Evans Margaret N. Maxey
Bayard H. Friedman Charles R. Perry
William M. Griffin Herbert H.
Richardson
14
<PAGE>
PERFORMANCE GRAPH
The following graph compares the performance of the Company's common stock to
the S&P 500 Index and to the Moody's 24 Utilities for the last five years. The
graph assumes the investment of $100 at December 31, 1988 and that all
dividends were reinvested. The amount of the investment at the end of each year
is shown in the graph and in the table which follows.
CUMULATIVE TOTAL RETURNS
FOR THE FIVE YEARS ENDED 12/31/93
<TABLE>
---------------------------------
<CAPTION>
1988 1989 1990 1991 1992 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Texas Utilities................................... 100 137 155 192 210 229
- --------------------------------------------------------------------------------
S&P 500 Index..................................... 100 132 127 166 179 197
- --------------------------------------------------------------------------------
Moody's 24 Utilities.............................. 100 129 135 174 182 200
- --------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
SELECTION OF AUDITORS
The Audit Committee has nominated to the Board of Directors for its
consideration the firm of Deloitte & Touche to act as independent auditors for
the Company for the year 1994 and, subject to the approval of shareholders at
the annual meeting, the Board has selected that firm to audit the books of
account and records of the Company and to make a report thereon to the
shareholders. The persons named in the proxy will, unless otherwise instructed
thereon, vote your shares in favor of the following resolution which will be
submitted for consideration:
RESOLVED that the selection of the firm of Deloitte & Touche, independent
auditors, to audit the books of account and records of the Company for the year
1994, to make a report thereon "To the Shareholders of Texas Utilities
Company," and to perform other services, be, and it hereby is, approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF AUDITORS.
---
The firm of Deloitte & Touche, independent auditors, has been the outside
auditors for the Company since its organization in 1945 and for certain of the
subsidiaries since 1932, including the last fiscal year. Representatives of
Deloitte & Touche are expected to be present at the annual meeting and will
have the opportunity to make a statement, if they desire to do so, and to
respond to appropriate questions.
OTHER BUSINESS
Other than as stated herein, the Board of Directors does not intend to bring
any business before the meeting and it has not been informed of any matters
that may be presented to the meeting by others. However, if any other matters
properly come before the meeting, it is the intent of the Board of Directors
that the persons named in the proxy will vote pursuant to the proxy in
accordance with their judgment in such matters.
Dated: April 1, 1994.
-------------------------------------------------------
Whether or not you will be able to attend the meeting,
please sign and return the accompanying proxy promptly.
-------------------------------------------------------
16
<PAGE>
(LOGO OF TEXAS UTILITIES COMPANY APPEARS HERE)
------------------------------------------------
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
------------------------------------------------
TIME
FRIDAY, MAY 20, 1994, AT 9:30 A.M.
PLACE
GRAND BALLROOM
SOUTHLAND CENTER HOTEL
LIVE OAK AND OLIVE STREETS
DALLAS, TEXAS 75201
-------------------------------
Whether or not you will be able
to attend the meeting, please
sign and return the enclosed
proxy promptly so that you may
be represented at the meeting.
-------------------------------
<PAGE>
P TEXAS UTILITIES COMPANY
R 2001 Bryan Tower
Dallas, TX 75201
O
This Proxy is Solicited on Behalf of the Board of Directors
X
The undersigned hereby appoints J.S. Farrington and Erle Nye, and each
Y of them, Proxies with power to appoint a substitute, and hereby authorizes
them to represent and to vote all shares of common stock of Texas Utilities
Company held of record by the undersigned on March 21, 1994, at the annual
meeting of shareholders of the Company to be held in the Grand Ballroom of
the Southland Center Hotel, Live Oak and Olive Streets, Dallas, Texas, on
Friday, May 20, 1994, and at any adjournments thereof, and to vote, as
directed on the reverse side of this card, on all specified matters coming
before said meeting, and in their discretion, upon such other matters not
specified as may come before said meeting.
Election of Directors
Nominees: Jack W. Evans, J.S. Farrington, Bayard H. Friedman, William
M. Griffin, Kerney Laday, Margaret N. Maxey, James A.
Middleton, Erle Nye, Charles R. Perry, Herbert H. Richardson
<PAGE>
THE PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2.
[ ]
1. ELECTION OF DIRECTORS Directors recommend a vote FOR all nominee(s) and
FOR Item 2. FOR, except vote withheld from the
following nominee(s):
FOR WITHHELD -------------------------------------------------
[ ] [ ]
2. APPROVAL OF AUDITORS - Deloitte & Touche
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
NOTE: Please sign names exactly as
printed hereon. Joint owners
should each sign. In signing
as attorney, administration,
executor, guardian or trustee,
please give full title as
said. Receipt is acknowledged
of the Annual Report of the
Company for 1993, the notice
of meeting and proxy statement.
"PLEASE MARK INSIDE BLUE BOXES SO THAT Signatures ____________________
DATA PROCESSING EQUIPMENT WILL RECORD
YOUR VOTES" Date __________________________
