Exhibit 10.02

 

OGE ENERGY CORP.

FORM OF PERFORMANCE UNIT AGREEMENT

UNDER 2008 STOCK INCENTIVE PLAN

 

          OGE Energy Corp. (the “Company”) hereby awards, at target, to (____)
(the “Participant”) (#) Performance Units pursuant to the OGE Energy Corp. 2008
Stock Incentive Plan (the “Plan”), the definitions and provisions of which are
incorporated herein by reference.

 

The specific terms and conditions of the award are set forth hereinafter.

1.

Performance Units and Award Cycle. Each Performance Unit represents and is equal
to the value of one share of Company Common Stock. Subject to the provisions of
the Plan, the Performance Units awarded to the Participant may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of during the award cycle established with respect thereto beginning on
____________ and ending on ____________ (the “Award Cycle”).

2.

Performance Goal Condition. The Performance Units are contingently awarded
subject to the condition that the number of Performance Units, if any, earned by
the Participant upon the expiration of the Award Cycle is dependent (in the
manner hereinafter set forth) on the performance of Company’s total shareholder
return relative to the total shareholder return of all of the companies (the
“S&P Companies”) comprising the Standard and Poor’s Utilities Index as of
January 1, ____ and December 31, ____ (or their successors from a merger or
other combination with another company listed in such Index, but excluding any
company subject to a Business Combination, as hereinafter defined on December
31, 2011). Total shareholder return (“TSR”) for any company, including the
Company, shall include both price appreciation (depreciation) and cash
dividends, shall be calculated in the same manner that Standard and Poor’s
calculated total return as of ____________ and shall be measured by the
Company’s total return that shareholders receive over the Award Cycle by
investment at the first day of the Award Cycle.

The number of Performance Units earned is dependent on the performance ranking
of the Company’s total shareholder return for the Award Cycle, as set forth
below (expressed in terms of the Company’s position among the S&P Companies when
ranked by total shareholder return for the Award Cycle):

COMPANY TSR PERCENTILE

RANKING VS. S&P COMPANIES

PERCENT OF TARGET

PERFORMANCE UNITS EARNED

__th percentile

200%

__th percentile

175%

__th percentile

150%

__th percentile

125%

__th percentile

100%

__th percentile

75%

__th percentile

50%

__th percentile

25%

Below __th percentile

0%

Performance Units earned for performance between the percentiles shown above
will be determined by straight-line interpolation; provided, that, in all cases,
the number of Performance Units which the Participant earns shall be a whole
number (disregarding any fraction).

Any Performance Units awarded hereunder that the Participant does not earn at
the end of the Award Cycle pursuant to the foregoing schedule shall be
forfeited.  

The provisions of this Section 2 shall not affect in any way any forfeiture
under Section 4 below or Section 8(b) of the Plan or any provision regarding the
earning of Performance Units at the 100% target level under Section 9 of the
Plan upon the occurrence of a Change of Control.

For purposes of determining whether any of the S&P Companies is subject to a
Business Combination on December 31, ____, a company shall be deemed subject to
a Business Combination on December 31, ____,

--------------------------------------------------------------------------------

if such company is: (i) the subject of a tender offer or exchange offer by a
third party seeking to acquire more than 20% of the outstanding voting
securities of such company or (ii) a party to a merger, consolidation, share
exchange or reorganization agreement or an agreement providing for the sale or
disposition of all or substantially all of its assets.

3.

Payout. Subject to Section 9 of the Plan, as soon as practicable following the
end of the Award Cycle, but in no event later than the 15th day of the third
month thereafter, the Committee shall determine and certify to the number of
Performance Units earned hereunder and, after the Committee certifies in writing
the number of Performance Units earned and that all other material terms of the
award have been satisfied, earned Performance Units, if any, will be paid to the
Participant, or on the Participant’s death, to the Participant’s beneficiary
under the Plan, by issuing a certificate for shares of Common Stock equal in
number to the earned Performance Units (disregarding any fraction).

4.

Forfeiture. All Performance Unit awards are subject to the terms and conditions
of the Plan relating to Performance Units. If the Participant incurs a
Termination of Employment for any reason on or before the end of the Award
Cycle, all rights to or in respect of Performance Units awarded hereunder shall
be forfeited except as provided in Section 8(b)(iii) or Section 9(a)(iii) of the
Plan.

5.

Acceptance of Award. By execution of this Agreement, the Participant accepts the
award, acknowledges receipt of a copy of the Plan (a copy of which is attached
as Annex I), and represents that the Participant is familiar with the terms and
provisions thereof and agrees to be bound thereby. Participant further agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee with respect to any questions arising under the Plan, including any
calculation of, or in connection with, the total shareholder return of the
Company or any other company for the Award Cycle.

6.

Taxes and Other Matters.

 

(a)

By execution of this Agreement, the Participant agrees to pay all withholding
and other taxes payable by the Participant with respect to Performance Units
earned under this Agreement at such times and in such manner as the Company may
request, and the Participant further agrees to comply with all Federal and State
securities laws.

 

(b)

The Participant may elect, subject to approval of the Board of Directors or a
committee composed of two or more non-employee directors within the meaning of
Rule 16b-3(b)(3) of the Securities Exchange Act of 1934 or any successor
provision thereto, to satisfy Participant’s minimum tax withholding requirements
under Federal, State and local laws and regulations thereunder, in whole or in
part, by having the Company withhold shares having a fair market value equal to
all or a portion of the amount so required to be withheld. The value of the
shares to be withheld is to be based upon the same price of the shares that is
utilized to determine the amount of withholding tax that the Participant owes.
All elections under this Section 6(b) shall be (i) irrevocable, (ii) made in
writing and signed by the Participant on the form prescribed by the Company and
(iii) submitted to the Board of Directors prior to the date on which the
Committee will determine the number of Performance Units earned hereunder or
such earlier date as the Company shall prescribe.

7.

Other Condition. The award of Performance Units evidenced by this Agreement
shall be subject to delivery to the Company of an executed copy of this
Agreement.

 

OGE ENERGY CORP.

 

By: _____________________________________________

Chairman of the Board, President and Chief Executive Officer

ACCEPTED AND AGREED TO this _____ day of _______.

                                                                                

Participant

--------------------------------------------------------------------------------

OGE ENERGY CORP.

PERFORMANCE UNIT AGREEMENT

 

          OGE Energy Corp. (the “Company”) hereby awards, at target, to (____)
(the “Participant”) (#) Performance Units pursuant to the OGE Energy Corp. 2008
Stock Incentive Plan (the “Plan”), the definitions and provisions of which are
incorporated herein by reference.

The specific terms and conditions of the award are set forth hereinafter.

1.

Performance Units and Award Cycle. Each Performance Unit represents and is equal
to the value of one share of Company Common Stock. Subject to the provisions of
the Plan, the Performance Units awarded to the Participant may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of during the award cycle established with respect thereto beginning on
____________ and ending on ____________ (the “Award Cycle”).

2.

Performance Goal Condition. The Performance Units are contingently awarded
subject to the condition that the number of Performance Units, if any, earned by
the Participant upon the expiration of the Award Cycle is dependent (in the
manner hereinafter set forth) on the Company’s Average Earnings Per Share Growth
during the Award Cycle. Average Earnings Per Share Growth shall mean the amount
obtained by multiplying one-third times the percentage increase or decrease in
the Company’s earnings per share for the year ended December 31, ____ as
compared to the Company’s earnings per share for the year ended December 31,
____, of $____. Thus, for example, if the Company’s earnings per share were
$____ for the year ended December 31, ____, the Company’s Average Earnings Per
Share Growth would be ____% [1/3 x ($____)]. For purposes of the foregoing, all
percentages shall be calculated to the nearest one-hundredth of one percent and
the Company’s earnings per share for any year shall be the consolidated diluted
earnings per average common share of the Company as reported on the Company’s
Consolidated Statement of Income for such year. The number of Performance Units
earned for the Award Cycle shall be determined in accordance with the following
chart:

 

COMPANY’S AVERAGE EARNINGS PER SHARE GROWTH

PERCENT OF TARGET PERFORMANCE UNITS EARNED

____%

200%

____%

175%

____%

150%

____%

125%

____%

100%

____%

75%

____%

50%

Below ____%

0%

 

Performance Units earned for performance between the percentiles shown above
will be determined by straight-line interpolation; provided, that, in all cases,
the number of Performance Units which the Participant earns shall be a whole
number (disregarding any fraction).

 

Any Performance Units awarded hereunder that the Participant does not earn at
the end of the Award Cycle pursuant to the foregoing chart shall be forfeited.

The provisions of this Section 2 shall not affect in any way any forfeiture
under Section 4 below or Section 8(b) of the Plan or any provision regarding the
earning of Performance Units at the 100% target level under Section 9 of the
Plan upon the occurrence of a Change of Control.

3.

Payout. Subject to Section 9 of the Plan, as soon as practicable following the
end of the Award Cycle, but in no event later than the 15th day of the third
month thereafter, the Committee shall determine and certify to the number of
Performance Units earned hereunder and, after the Committee certifies in writing
the number of Performance Units earned and that other material terms of the
award have been satisfied, earned Performance Units, if any, will be paid to the
Participant, or on the Participant’s death, to the Participant’s beneficiary
under the Plan, by issuing a certificate for shares of Common Stock equal in
number to the earned Performance Units (disregarding any fraction).

--------------------------------------------------------------------------------

4.

Forfeiture. All Performance Unit awards are subject to the terms and conditions
of the Plan relating to Performance Units. If the Participant incurs a
Termination of Employment for any reason on or before the end of the Award
Cycle, all rights to or in respect of Performance Units awarded hereunder shall
be forfeited except as provided in Section 8(b)(iii) or Section 9(a)(iii) of the
Plan.

5.

Acceptance of Award. By execution of this Agreement, the Participant accepts the
award, acknowledges receipt of a copy of the Plan (a copy of which is attached
as Annex I), and represents that the Participant is familiar with the terms and
provisions thereof and agrees to be bound thereby. Participant further agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Committee with respect to any questions arising under the Plan, including any
calculation of, or in connection with, earnings per share of the Company or any
other company for the any period.

6.

Taxes and Other Matters.

 

(a)

By execution of this Agreement, the Participant agrees to pay all withholding
and other taxes payable by the Participant with respect to Performance Units
earned under this Agreement at such times and in such manner as the Company may
request, and the Participant further agrees to comply with all Federal and State
securities laws.

 

(b)

The Participant may elect, subject to approval of the Board of Directors or a
committee composed of two or more non-employee directors within the meaning of
Rule 16b-3(b)(3) of the Securities Exchange Act of 1934 or any successor
provision thereto, to satisfy Participant’s minimum tax withholding requirements
under Federal, State and local laws and regulations thereunder, in whole or in
part, by having the Company withhold shares having a fair market value equal to
all or a portion of the amount so required to be withheld. The value of the
shares to be withheld is to be based upon the same price of the shares that is
utilized to determine the amount of withholding tax that the Participant owes.
All elections under this Section 6(b) shall be (i) irrevocable, (ii) made in
writing and signed by the Participant on the form prescribed by the Company and
(iii) submitted to the Board of Directors prior to the date on which the
Committee will determine the number of Performance Units earned hereunder or
such earlier date as the Company shall prescribe.

7.

Other Condition. The award of Performance Units evidenced by this Agreement
shall be subject to delivery to the Company of an executed copy of this
Agreement.

 

OGE ENERGY CORP.

 

By: _____________________________________________

Chairman of the Board, President and Chief Executive Officer

ACCEPTED AND AGREED TO this _____ day of ______.

                                                                           

Participant