Exhibit 10.03

 

 

 

 

 

 

 

 

 

 

OGE ENERGY CORP.

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(SERP)

 

 

(As Amended and Restated Effective as of January 1, 2005)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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OGE ENERGY CORP.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(As Amended and Restated Effective as of January 1, 2005)

 

Purpose

 

The purpose of this Supplemental Executive Retirement Plan is to promote the
best interests of the Company by enabling the Company: (a) to attract to its key
management positions persons of outstanding ability, and (b) to retain in its
employ those persons of outstanding competence who occupy key executive
positions and who in the past contributed and who continue in the future to
contribute materially to the success of the business by their ability, ingenuity
and industry. This Supplemental Executive Retirement Plan was established to
accomplish such purpose effective January 1, 1993, by Oklahoma Gas and Electric
Company and assumed by the Company on November 18, 1998. OGE Energy Corp. hereby
amends and restates the Supplemental Executive Retirement Plan, as heretofore
amended, effective as of January 1, 2005, as provided herein. It is intended to
be a plan which is unfunded and is maintained by the Company primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees.

 

 

ARTICLE 1

 

 

Definitions

 

The following words and phrases as used herein shall have the following
meanings, unless a different meaning is plainly required from time to time.

 

1.1

“Affiliate” shall mean any corporation, partnership, joint venture, trust,
association or other business enterprise which is a member of the same
controlled group of corporations, trades or businesses as a Company within the
meaning of Code Section 414(b) or (c); provided, however, that for purposes only
of the term “Affiliate” when used in the definition of “Separation from Service”
below, in applying Code Section 1563(a)(1), (2), and (3) in determining a
controlled group of corporations under Code Section 414(b), the language “at
least 50 percent” shall be used instead of “at least 80 percent” each place it
appears in Code Section 1563(a)(1), (2), and (3), and in applying Treasury Reg.
§ 1.414(c)-2 for purposes of determining trades or businesses (whether or not
incorporated) that are under common control for purposes of Code Section 414(c),
“at least 50 percent” shall be used instead of “at least 80 percent” each place
it appears in Treasury Reg. § 1.414(c)-2.

 

1.2

“Board of Directors” means the Board of Directors of OGE Energy Corp. as
constituted from time to time.

 

1.3

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

1.4

“Committee” means the Compensation Committee of the Board of Directors.

 

1.5

“Company” means OGE Energy Corp. and any of its domestic subsidiaries and
divisions, as designated by the Board of Directors, and any successor of OGE
Energy Corp. under the terms of Section 7.3.

 

1.6

“Company’s Pension Plan” means the OGE Energy Corp. Retirement Plan, as amended
from time to time.

 

1.7

“Compensation” means, at any date, the Participant’s Compensation as defined
under the Company’s Pension Plan as in effect with respect to that Participant
on such date, except that (i) such Compensation shall not be limited by Code
Section 401(a)(17) and (ii) such Compensation shall include amounts, if any,
that would have been Compensation as so defined but for the fact such amounts
were deferred by the Participant for the periods in question under the OGE
Energy Corp. Deferred Compensation Plan or any successor thereto.

 

 

 

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1.8

“Effective Date” means January 1, 1993.

 

1.9

“Final Average Compensation” means the monthly average of the Participant’s
Compensation earned during the last 36 consecutive months of employment with the
Company. If the Participant does not have 36 consecutive months of employment,
“Final Average Compensation” shall be the average Compensation for his period of
employment with the Company.

 

1.10

“Normal Retirement Date” means the first day of the month coinciding with or
following the Participant’s 65th birthday.

 

1.11

“Other Pension Benefits” means benefits paid or payable to a Participant from
the Company’s Pension Plan, the Company’s Restoration of Retirement Income Plan,
the qualified or nonqualified pension plans of any prior employer unrelated to
the Company, or any governmental or church pension plan as defined in Sections
3(32) and 3(33) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”); excluding, however, any portion of such benefits attributable
to the Participant’s own contributions as determined by the plan’s administrator
or other responsible agent. Regardless of the form, amount or timing of payment,
“Other Pension Benefits” shall be calculated, based on applicable actuarial
assumptions (including assumptions as to mortality and interest rates) used
under the Company’s Pension Plan, by the Company’s actuary as of the
Participant’s commencement of benefits under this Plan on the basis of a 100%
joint and survivor annuity, payable monthly, for married Participants, and on
the basis of a 10-year certain and life annuity, payable monthly, for unmarried
Participants.

 

1.12

“Participant” means an employee of the Company specifically designated by the
Committee to be covered under this Plan and who continues to fulfill all
requirements for participation.

 

1.13

“Plan” means the Supplemental Executive Retirement Plan as herein set forth and
as it may be amended from time to time.

 

1.14

“Service” means, at any date, the Participant’s “Credited Service” as determined
for purposes of calculating the Participant’s benefit under Article V, assuming
it were applicable to the Participant, under the Company’s Pension Plan, as in
effect on that date, plus service with any immediate predecessor company which
was acquired, merged, or consolidated with the Company, as permitted in the sole
discretion of the Committee.

 

1.15

“Separation from Service” means in respect of a Participant, any termination of
employment with the Company employing the Participant and all its Affiliates due
to retirement, death, Total and Permanent Disability or other reason; provided,
however, that, no Separation from Service for reasons other than death shall be
deemed to occur for purposes of the Plan while the Participant is on military
leave, sick leave, or other bona fide leave of absence that does not exceed six
months or, if longer, the period during which the Participant’s right to
reemployment with the Company or its Affiliates is provided either under
applicable statute or by contract; and provided further that, if the period of
leave exceeds six months and the Participant does not retain a right to
reemployment under an applicable statute or by contract, a Separation from
Service will be deemed to have occurred on the first day following such
six-month period. Whether or when a Separation from Service has occurred for
purposes of the Plan shall be determined based on the meaning of “separation
from service” under Code Section 409A and the regulations promulgated thereunder
and, accordingly, shall be based on whether the facts and circumstances indicate
that the Company employing the Participant and its Affiliates and the
Participant reasonably anticipate that no further services will be performed
after a certain date or that the level of bona fide services the Participant
will perform after such date (whether as an employee or as an independent
contractor) will permanently decrease to no more than 20% of the average level
of bona fide services performed (whether as an employee or independent
contractor) over the immediately preceding 36-month period (or the full period
of services to such Company and its Affiliates if the Participant has been
providing services to the Company and its Affiliates less than 36 months). A
Participant shall be presumed for this purpose to have a Separation from Service
where the level of bona fide services decreases to a level equal to 20% or less
of such average level of services.

 

1.16

“Specified Employee” means, during the 12-month period beginning on April 1st of
2005 or of any subsequent calendar year, an employee of a Participant’s
employing Company or its Affiliates who met the

 

 

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requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in
accordance with the regulations thereunder and without regard to Code Section
416(i)(5)) for being a “key employee” at any time during the 12-month period
ending on the December 31st immediately preceding such April 1st.
Notwithstanding the foregoing, a Participant who otherwise would be a Specified
Employee under the preceding sentence shall not be a Specified Employee for
purposes of the Plan unless, as of the date of the Participant’s Separation from
Service, stock of such Company or an Affiliate thereof is publicly traded on an
established securities market or otherwise.

 

1.17

“Social Security Benefits” means 1/12th of the annual primary insurance amount
estimated by the Committee to be payable to the Participant at his social
security retirement age under the Federal Social Security Act.

 

1.18

“Surviving Spouse” means the spouse to whom the Participant is lawfully married
at the time of his death.

 

1.19

“Totally and Permanently Disabled” or “Total and Permanent Disability” means
that the Participant is eligible to receive disability retirement benefits under
the Company’s Pension Plan, determined without regard to Section 6.3(a)(ii)
thereof.

 

ARTICLE 2

 

Retirement Benefits

 

2.1

Normal Retirement Benefit

 

 

(a)

Upon a vested Participant’s Separation from Service on or after his Normal
Retirement Date for reasons other than death, the Company shall pay retirement
benefits to the Participant in such amount and at such time as hereinafter
described.

 

 

(b)

Subject to Section 2.4 relating to delay in payment for Specified Employees and
Section 5.1 relating to the form of payment, the normal retirement benefit
payable to the Participant in monthly amounts during his lifetime and commencing
as of the first day of the month coincident with or next following his
Separation from Service (but subject to Section 7.11) shall equal 65% of the
Participant’s Final Average Compensation, offset or reduced by the following:

 

 

(i)

Other Pension Benefits; and

 

 

(ii)

Social Security Benefits.

 

 

(c)

Benefit payments which have commenced under the terms of this Plan shall not be
affected by any subsequent change in Other Pension Benefits under a plan of the
Company.

 

2.2

Early Retirement Benefit

 

 

(a)

Subject to Section 2.4 relating to delay in payment for Specified Employees and
Section 5.1 relating to the form of payment, any vested Participant who has a
Separation from Service prior to his Normal Retirement Date for reasons other
than death or Total and Permanent Disability shall be entitled to early
retirement benefits under this Section 2.2. Such benefits shall commence as of
the first day of the month coincident with or next following the Participant’s
Separation from Service but subject to Section 7.11. If early retirement
benefits commence prior to the Participant’s Normal Retirement Date, the amount
of the Participant’s benefit under this Plan shall be reduced according to the
following schedule:

 
 
 
 

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Age at

Commencement of Benefits

 

Benefit as a % of Final

Average Compensation

55

32%

56

38%

57

44%

58

50%

59

54%

60

58%

61

60%

62

62%

63

63%

64

64%

 

 

 

(b)

Benefits payable under Section 2.2(a) shall be reduced or offset as described in
Section 2.1(b).

 

2.3

Disability Retirement Benefit

 

Subject to Section 2.4 relating to delay in payment for Specified Employees and
Section 5.1 relating to the form of payment, a vested Participant who has a
Separation from Service by reason of being Totally and Permanently Disabled
shall be entitled to benefits under this Plan as set forth in Section 2.1.
Disability retirement benefits to which a vested Participant is entitled under
this Section 2.3 shall commence as of the first day of the month coincident with
or next following the date of the Participant’s Separation from Service but
subject to Section 7.11.

 

2.4

Delay in Payment for Specified Employees

 

Notwithstanding the foregoing provisions of this Article 2, if a Participant is
a Specified Employee at the time of his Separation from Service for reasons
other than death and is to commence to receive payment under this Article 2
before the date that is six months after the date of such Separation from
Service, no payment of the Participant’s benefits shall be made to or in respect
of the Participant until the end of such six-month period (or until the
Participant’s death, if earlier). Any such payment to which the Participant
would otherwise be entitled to receive during such six-month period shall
instead be accumulated and paid, with interest at the rate used in determining
the actuarial equivalent lump sum amount of such payment, as of the first day of
the seventh month following the date of Separation from Service or, in the event
of the Participant’s earlier death, as soon as practicable after his death to
his Surviving Spouse, if any, or otherwise to his estate. If a Participant dies
after the date payment of retirement benefits would have commenced under this
Article 2 but for this Section 2.4 and before payments commence due to the
operation of this Section 2.4, he shall be deemed for purposes of Article 3 to
have died after the commencement of benefits under the Plan.

 

ARTICLE 3

 

Death Benefits

 

3.1

The following death benefit shall be payable to a Surviving Spouse under the
Plan:

 

 

(a)

Upon the death of a vested Participant prior to his commencement of benefits
under this Plan, the Participant’s Surviving Spouse, if any, shall receive, as
of the first day of the month following the Participant’s death, but subject to
Section 7.11, a lump sum payment which is the actuarial equivalent of a life
annuity, commencing as of such date, payable monthly in an amount equal to 100%
of the monthly amount of the Participant’s Normal or Early Retirement Benefit as
calculated under Section 2.1 or 2.2, whichever is applicable, based on the
Participant’s age at date of death.

 

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(b)

If the Surviving Spouse is more than ten years younger that the Participant at
the time of the Participant’s death, benefits payable to the Surviving Spouse
under this Section 3.1 shall be reduced by 50%.

 

3.2

The Surviving Spouse’s benefits provided herein shall be in addition to any pre-
or post-retirement life insurance benefits under the Company’s insurance
programs.

 

3.3

Except as provided in Sections 2.4 and 3.1, no other death benefits shall be
payable under this Plan on the death of a Participant, whether or not vested.

 

ARTICLE 4

 

Vesting

 

4.1

Any participant having completed a minimum of 10 years of Service with the
Company and attained age 55 while employed by the Company shall be considered
vested in rights to retirement benefits as provided in this Plan, subject to the
provisions of Section 7.2 of this Plan.

 

4.2

By written action of the Committee and in its sole discretion, the requirement
of 10 years of Service with the Company for vesting purposes under the terms of
this Plan may be partially or fully waived for a specified Participant on such
terms as the Committee may determine.

 

ARTICLE 5

 

Form of Payment of Benefits

 

5.1

Benefits under this Plan for a Participant who is not married when benefits
commence to him under this Plan shall be payable in the form of a lump sum
payment which is the actuarial equivalent of the monthly amount of benefit
determined under Article 2 to which the Participant is entitled if such monthly
amount were payable for the life of the Participant in the form of a 10-year
certain and life annuity. Benefits under this Plan for a Participant who is
married when benefits commence to him under this Plan shall be payable in the
form of a lump sum payment which is the actuarial equivalent of the monthly
amount of benefit determined under Article 2 to which the Participant is
entitled if such monthly amount were payable as a 100% joint and survivor
annuity for the life of the Participant and his spouse to whom he is lawfully
married at the time of commencement of benefits.

 

5.2

The undertakings of the Company herein constitute an unsecured promise of the
Company to make the payments as provided in the Plan. This Plan is unfunded and
no current beneficial interest in any asset of the Company shall accrue to any
Participant or other person under the terms of this Plan. All Participants shall
be entitled to the benefits provided by the Plan. It is the intent of the
Company that the total cost of providing the benefits under this Plan will be
borne by the Company.

 

ARTICLE 6

 

Administration

 

6.1

The Committee shall have sole and absolute discretionary power and authority to
interpret, construe and administer this Plan, to adopt appropriate procedures
and to make all decisions, including deciding all questions of fact, necessary
or proper in its judgment to carry out the terms of this Plan. The Committee’s
interpretation and construction hereof, and actions hereunder, including any
valuation of the amount or recipient of the payments to be made thereunder,
shall be binding and conclusive on all persons for all purposes. The Company’s
Chief Accounting Officer, shall act as the Committee’s agent in administering
this Plan. Neither the Company, or its officers, employees or directors, nor the
Committee or any member thereof shall be liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this Plan.

 

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6.2

Each Participant shall furnish to the Committee such information as it may from
time to time request for the purpose of the proper administration of this Plan.

 

6.3

The OGE Energy Corp., by action of the Board of Directors, reserves the
exclusive right to amend, modify, alter or terminate this Plan in whole or in
part without notice to the Participants. Except to the extent necessary to
comply with Section 409A of the Code, no such termination, modification or
amendment shall terminate or diminish the amount of benefits then being paid, or
to be paid on subsequent termination of employment, to any Participant or
Surviving Spouse. Notwithstanding the foregoing, no benefits may be distributed
on termination of the Plan other than as provided in Articles 2 and 3 except to
the extent acceleration of the time and form of payment is permitted under
Section 409A of the Code and the regulations and guidance issued thereunder.

 

6.4

OGE Energy Corp. shall be the “Administrator” of the Plan for purposes of ERISA.

 

ARTICLE 7

 

General Provisions

 

7.1

This Plan shall not be deemed to give any Participant or other person in the
employ of the Company any right to be retained in the employment of the Company,
or to interfere with the right of the Company to terminate any Participant or
such other person at any time and to treat him without regard to the effect
which such treatment might have upon him as a Participant in the Plan.

 

7.2

In the event a Participant is discharged for cause involving illegal or
fraudulent acts, such discharge may result in forfeiture of all benefits and
rights under the Plan, in the sole discretion of the Committee.

 

7.3

The rights, privileges, benefits and obligations under this Plan are intended to
be, and shall be treated as, legal obligations of the Company and binding upon
the Company, its successors and assigns, including successors by corporate
merger, consolidation, reorganization or otherwise.

 

7.4

Copies of this Plan, together with copies of any approved procedures for
administration will be furnished to each Participant together with an annual
statement of benefits over the signature of the Chairman of the Board or his
designee.

 

7.5

This Plan was approved initially by resolution of the Board of Directors of
Oklahoma Gas and Electric Company at a regular meeting on November 9, 1993 to be
effective as of January 1, 1993 and was subsequently assumed and amended by
resolutions of the Board of Directors.

 

7.6

The provisions of this Plan shall be construed according to the law of the State
of Oklahoma excluding the provisions of any such laws that would require the
application of the laws of another jurisdiction.

 

7.7

The masculine pronoun wherever used shall include the feminine. Wherever any
words are used herein in the singular, they shall be construed as though they
were also used in the plural in all cases where they shall so apply.

 

7.8

The titles to articles and headings of sections of this Plan are for convenience
of reference and in case of any conflict the text of this Plan, rather than such
titles and headings, shall control.

 

7.9

Amounts payable under the Plan shall be reduced to the extent of amounts
required to be withheld by the Company under Federal, state, or local law.

 

7.10

Whenever and as often as any person is entitled to payments under the Plan shall
be under a legal disability or, in the sole judgment of the Committee, shall
otherwise be unable to apply such payments to his own best interest and
advantage, the Committee, in the exercise of its discretion may direct all or
any portion of such payments to be made in any one or more of the following
ways: (i) directly to him; (ii) to his legal guardian or conservator; or (iii)
to his spouse or to any other person, to be expended for his benefit; and the
decision of the Committee shall in each case be final and binding upon all
person in interest.

 
 

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7.11

Notwithstanding any provision of the Plan to the contrary, a distribution to be
made as of a specified date in Article 2 or 3 shall be treated for purposes of
Code Section 409A as made on the date specified if the distribution is made at
such date specified or a later date in the same calendar year or, if later and
provided that the Participant or other recipient is not permitted, directly or
indirectly, to designate the year in which distribution is made, by the 15th day
of the third calendar month following the specified date. In addition, if
calculation of the amount of a payment is not administratively practicable due
to events beyond the control of the Participant or his estate, a payment will be
treated as made on the specified date for purposes of Code Section 409A if the
payment is made during the first calendar year in which payment is
administratively practicable.

 

7.12

The provisions of this Plan are not intended, and should not be construed to be
legal, business or tax advice. The Company, Participants and any other party
having any interest herein are hereby informed that the U.S. federal tax advice
contained in this document (if any) is not intended or written to be used, and
cannot be used, for the purpose of (i) avoiding penalties under the Code or (ii)
promoting, marketing or recommending to any party any transaction or matter
addressed herein.

 

7.13

To the extent applicable, it is intended that this Plan be in full compliance
with the provisions of Section 409A of the Code. The Plan shall be interpreted,
construed and administered in a manner consistent with this intent.

 

7.14

In determining actuarially equivalent values for purposes of the Plan, the
corresponding actuarial assumptions (including assumptions as to mortality and
interest rates) used from time to time under the Company’s Pension Plan shall be
used for purposes of the Plan.

 

ARTICLE 8

 

Claims Procedure

 

8.1

Initial Claims Procedure

 

The Participant or his Surviving Spouse or any other person shall follow such
procedures for making a claim as are provided by the Committee. The Committee
shall make a decision upon each claim within 90 days of its receipt of such
claim. If the claim is approved, the Committee shall determine the extent of
benefits and initiate payment thereof. In the event that no action is taken on
the applicant’s initial application for benefits within the period specified in
this Section 8.1, the claim shall be deemed denied, and the applicant’s appeal
rights under Section 8.3 will be in effect as of the end of such period.

 

8.2

Notice of Denial of Claim

 

If an application for benefits under Section 8.1 is denied in whole or in part,
the Committee shall provide the applicant with a written notice of denial,
setting forth: (a) the specific reason or reasons the claim was denied, (b) a
specific reference to pertinent provisions of the Plan upon which the denial was
based, (c) a description of the additional material or information (if any)
necessary to perfect the claim, together with an explanation of why such
material or information is necessary, and (d) an explanation of the Plan’s
review procedure and the time limits applicable including a statement of the
applicant’s rights to bring a civil action under Section 502(a) of ERISA
following an adverse determination or review. This written notice of denial
shall be furnished within 90 days after receipt of the claim by the Committee
unless specific circumstances require an extension of time for processing. If an
extension is required, written notice of the extension shall be furnished prior
to the termination of the initial 90-day period. In no event shall such
extension exceed a period of 90 days from the end of such initial period. The
extension notice shall indicate the special circumstances requiring an extension
of time and the date by which the Committee expects the render the final
decision.

 

 

8.3

Claims Review Procedure

 
 

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Within 60 days after receipt of a notice of denial, the applicant or his duly
authorized representative may file a written notice of appeal of such denial
with the Committee. Such notice of appeal must set forth the specific reasons
for the appeal. In addition, within such appeal period the applicant or his duly
authorized representative shall be provided, upon written request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claim for benefits and may submit written comments,
documents, records and other information relating to the claim. The 60-day
period within which the request for review must be filed may be extended if the
nature of the benefit which is the subject of the claim and other attendant
circumstances so warrant and the 60-day limitations period would otherwise be
unreasonable. In its sole discretion, the Committee may grant the applicant an
oral hearing on his appeal. In considering the claim on review, the Committee
will take into account all documents and information related to the claim that
were submitted by the applicant and shall deliver to the applicant, or
authorized representative, a written decision on the claim within 60 days after
the receipt of the request for review, except that if there are special
circumstances which require an extension of time, the 60 period may be extended
to 120 days. If such extension is required, written notice shall be furnished to
the applicant, or authorized representative, prior to the termination of the
initial 60 day period. The decision shall be written in a manner calculated to
be understood by the claimant, include the specific reason or reasons for the
decision and contain a specific reference to the pertinent Plan provisions upon
which the decision is based, a statement that a applicant, or his/her authorized
representative, shall have reasonable access to, and be entitled to receive,
upon request and free of charge, copies of, all documents, records, and other
information relevant to the applicant’s claim for benefits, and a statement
describing the claimant’s right to bring an action under Section 502(a) of
ERISA.

 

Dated: April 17, 2008

 

 

OGE ENERGY CORP.

 

 

 

By: /s/ Peter B. Delaney                                              

Its: Chairman, Chief Executive Officer and President

 

Attest:

 

/s/ Carla D. Brockman

Secretary